US household cash ratio at six-year low

• • • • Broad money holdings of US households fell to the lowest share of their total financial assets since 2019 as equity exposure reached another new record (see charts).
      • US private jobs are barely growing, while a lower-than-expected unemployment number conceals rises in labour force exits and involuntary part-time working (see charts).
      • US productivity is showing signs of acceleration but year-on-year growth is still close to the pre-pandemic 25-year average (see charts).
      • Global services PMI new business echoed a decline in manufacturing new orders, while services employment fell to a 20-month low (see charts).
      • The RMB reached its highest level vs. the basket since Liberation Day (see charts).
      • Japanese wage growth was lower than expected (see charts).
      • Eurozone headline and core consumer prices rose at a sub-2% annualised pace in the latest three months (see charts).

The share of broad money holdings in total financial assets of US households fell to 14.0% in September, the lowest since June 2019:

Equity exposure rose to another new record of 47.1%.

The broad money share reached a similar level before the GFC bear market and corrections in 2015 and 2018.

The share fell below the current level in the late 1990s; however, equity exposure was then significantly lower.

US private payrolls barely grew in December, with October / November numbers revised down:

The unemployment rate unexpectedly fell back to slightly below its September level but an expanded measure including people not in the labour force but wanting a job rose over the same period:

Involuntary part-time working – a leading indicator – also increased:

The job-finding probability in the New York Fed consumer survey fell to a new low (gold line, inverted):

US productivity (output per hour) is showing signs of acceleration but year-on-year growth is still close to the pre-pandemic 25-year average:

Global services PMI new business echoed a decline in manufacturing new orders, with both series below pre-pandemic averages:

Services employment fell to a 20-month low:

As previously noted, however, money trends suggest PMI stabilisation / recovery into Q2:

An alternative manufacturing indicator based on national surveys is weaker than PMI new orders but moved sideways last month:

The RMB reached its highest level vs. the basket since Liberation Day, hinting at a shift in exchange rate policy towards allowing gradual appreciation:

Producer prices have stopped falling, reflecting firmer commodity prices:

Japanese wage growth was lower than expected, though headline weakness likely reflects bonus timing:

Still, scheduled annual wage growth of 2.0% is below a level consistent with the 2% inflation target.

Eurozone headline and core consumer prices rose at a sub-2% annualised pace in the latest three months:

The German Sentix survey – the first to be released each month – recovered slightly, suggesting a stable / firmer Ifo:

EAFE growth and quality have recovered slightly since year-end:

US growth and quality have similarly started the year with minor reversals of 2025 – growth down, quality up: