Recovery without Jobs, Stagnating Real Disposable per Capita Income and World Economy Growth Standstill with Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2010, 2011, 2012
Executive Summary
I Twenty Eight Million Unemployed and Underemployed and Stagnating Real Wages
IA Twenty Eight Million Unemployed or Underemployed
IA1 Summary of the Employment Situation
IA2 Number of People in Job Stress
IA3 Long-term and Cyclical Comparison of Employment
IA4 Job Creation
IB Stagnating Real Wages
II Stagnating Real Disposable Income and Consumption Expenditures and Financial Repression
IIA Stagnating Real Disposable Income and Consumption Expenditures
IIB Financial Repression
III World Financial Turbulence
IIIA Financial Risks
IIIB Appendix on Safe Haven Currencies
IIIC Appendix on Fiscal Compact
IIID Appendix on European Central Bank Large Scale Lender of Last Resort
IIIE Appendix Euro Zone Survival Risk
IIIF Appendix on Sovereign Bond Valuation
IIIG Appendix on Deficit Financing of Growth and the Debt Crisis
IIIGA Monetary Policy with Deficit Financing of Economic Growth
IIIGB Adjustment during the Debt Crisis of the 1980s
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendix I The Great Inflation
IV Global Inflation. There is inflation everywhere in the world economy, with slow growth and persistently high unemployment in advanced economies. Table IV-1, updated with every blog comment, provides the latest annual data for GDP, consumer price index (CPI) inflation, producer price index (PPI) inflation and unemployment (UNE) for the advanced economies, China and the highly-indebted European countries with sovereign risk issues. The table now includes the Netherlands and Finland that with Germany make up the set of northern countries in the euro zone that hold key votes in the enhancement of the mechanism for solution of sovereign risk issues (Peter Spiegel and Quentin Peel, “Europe: Northern Exposures,” Financial Times, Mar 9, 2011 http://www.ft.com/intl/cms/s/0/55eaf350-4a8b-11e0-82ab-00144feab49a.html#axzz1gAlaswcW). Newly available data on inflation is considered below in this section. Data in Table IV-1 for the euro zone and its members are updated from information provided by Eurostat but individual country information is provided in this section as soon as available, following Table IV-1. Data for other countries in Table IV-1 are also updated with reports from their statistical agencies. Economic data for major regions and countries is considered in Section V World Economic Slowdown following with individual country and regional data tables.
Table IV-1, GDP Growth, Inflation and Unemployment in Selected Countries, Percentage Annual Rates
| GDP | CPI | PPI | UNE | |
| US | 2.0 | 1.7 | 1.9 | 8.2 |
| Japan | 2.8 | 0.2 | -0.5 | 4.4 |
| China | 8.9 | 3.0 | -1.4 | |
| UK | -0.2 | 2.8* | 2.3* output | 8.2 |
| Euro Zone | -0.1 | 2.4 | 2.3 | 11.1 |
| Germany | 1.2 | 2.2 | 2.1 | 5.6 |
| France | 0.3 | 2.3 | 2.2 | 10.1 |
| Nether-lands | -1.3 | 2.5 | 2.6 | 5.1 |
| Finland | 1.7 | 3.1 | 2.1 | 7.6 |
| Belgium | 0.5 | 2.6 | 2.5 | 7.2 |
| Portugal | -2.2 | 2.7 | 3.2 | 15.2 |
| Ireland | NA | 1.9 | 2.1 | 14.6 |
| Italy | -1.3 | 3.5 | 2.3 | 10.1 |
| Greece | -6.2 | 0.9 | 5.1 | NA |
| Spain | -0.4 | 1.9 | 3.2 | 24.6 |
Notes: GDP: rate of growth of GDP; CPI: change in consumer price inflation; PPI: producer price inflation; UNE: rate of unemployment; all rates relative to year earlier
*Office for National Statistics http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/may-2012/index.html **Core
PPI http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
Source: EUROSTAT; country statistical sources http://www.census.gov/aboutus/stat_int.html
Table IV-1 shows the simultaneous occurrence of low growth, inflation and unemployment in advanced economies. The US grew at 2.0 percent in IQ2012 relative to IQ2011 (Table 8, p 11 in http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp1q12_3rd.pdf See http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states.html). Japan’s GDP fell 0.6 percent in IVQ2011 relative to IVQ2010 and contracted 1.8 percent in IIQ2011 relative to IIQ2010 because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 but grew at the seasonally-adjusted annual rate (SAAR) of 7.8 percent in IIIQ2011, increasing at the SAAR of 0.1 percent in IVQ 2011 and 4.7 percent in IQ2012 (see Section VB at http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs_04.html); the UK grew at minus 0.3 percent in IQ2012 relative to IVQ2011 and GDP fell 0.2 percent in IQ2012 relative to IQ2011 (see Section VB http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states_03.html); and the Euro Zone grew at 0.0 percent in IQ2012 relative to IVQ2011 and fell 0.1 percent in IQ2012 relative to IQ2011 (see Section VD http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities_10.html and http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-06062012-AP/EN/2-06062012-AP-EN.PDF). These are stagnating or “growth recession” rates, which are positive or about nil growth rates instead of contractions but insufficient to recover employment. The rates of unemployment are quite high: 8.2 percent in the US but 17.8 percent for unemployment/underemployment or job stress of 28.6 million (see Table I-4 in Section I and earlier http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html http://cmpassocregulationblog.blogspot.com/2012/05/recovery-without-jobs-twenty-eight.html http://cmpassocregulationblog.blogspot.com/2012/04/thirty-million-unemployed-or.html), 4.4 percent for Japan (see Section VB http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states_03.html), 8.2 percent for the UK with high rates of unemployment for young people (see the labor statistics of the UK in Subsection VH http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of_24.html) and 11.1 percent in the Euro Zone (section VD and earlier http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs_04.html http://cmpassocregulationblog.blogspot.com/2012/05/recovery-without-jobs-twenty-eight_06.html). Twelve-month rates of inflation have been quite high, even when some are moderating at the margin: 1.7 percent in the US, 0.2 percent for Japan, 3.0 percent for China, 2.4 percent for the Euro Zone and 2.8 percent for the UK (see Section IV http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of_24.html). Stagflation is still an unknown event but the risk is sufficiently high to be worthy of consideration (see http://cmpassocregulationblog.blogspot.com/2011/06/risk-aversion-and-stagflation.html). The analysis of stagflation also permits the identification of important policy issues in solving vulnerabilities that have high impact on global financial risks. There are six key interrelated vulnerabilities in the world economy that have been causing global financial turbulence: (1) sovereign risk issues in Europe resulting from countries in need of fiscal consolidation and enhancement of their sovereign risk ratings (see Section III in this post and the earlier post http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states.html); (2) the tradeoff of growth and inflation in China now with change in growth strategy to domestic consumption instead of investment and political developments in a decennial transition; (3) slow growth by repression of savings with de facto interest rate controls (see section I http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html and earlier http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-growth-with-high-unemployment.html), weak hiring with the loss of 10 million full-time jobs (see http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of.html) and continuing job stress of 24 to 30 million people in the US and stagnant wages in a fractured job market (see Section IB); (4) the timing, dose, impact and instruments of normalizing monetary and fiscal policies (see IV Budget/Debt Quagmire in http://cmpassocregulationblog.blogspot.com/2012/02/thirty-one-million-unemployed-or.html http://cmpassocregulationblog.blogspot.com/2011/08/united-states-gdp-growth-standstill.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html http://cmpassocregulationblog.blogspot.com/2011/03/global-financial-risks-and-fed.html http://cmpassocregulationblog.blogspot.com/2011/02/policy-inflation-growth-unemployment.html) in advanced and emerging economies; (5) the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 that had repercussions throughout the world economy because of Japan’s share of about 9 percent in world output, role as entry point for business in Asia, key supplier of advanced components and other inputs as well as major role in finance and multiple economic activities (http://professional.wsj.com/article/SB10001424052748704461304576216950927404360.html?mod=WSJ_business_AsiaNewsBucket&mg=reno-wsj); and (6) geopolitical events in the Middle East.
In the effort to increase transparency, the Federal Open Market Committee (FOMC) provides both economic projections of its participants and views on future paths of the policy rate that in the US is the federal funds rate or interest on interbank lending of reserves deposited at Federal Reserve Banks. These projections and views are discussed initially followed with appropriate analysis.
The statement of the FOMC at the conclusion of its meeting on Jun 25, 2012, revealed the following policy intentions (http://www.federalreserve.gov/newsevents/press/monetary/20120125a.htm):
“Release Date: January 25, 2012
For immediate release
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.”
There are several important issues in this statement.
1. Mandate. The FOMC pursues a policy of attaining its “dual mandate” of (http://www.federalreserve.gov/aboutthefed/mission.htm):
“Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates”
2. Extending Average Maturity of Holdings of Securities. The statement of Apr 25, 2012, invokes the mandate that inflation is subdued but employment below maximum such that further accommodation is required. Accommodation consists of low interest rates. The new “Operation Twist” (http://cmpassocregulationblog.blogspot.com/2011_09_01_archive.html http://cmpassocregulationblog.blogspot.com/2011/09/collapse-of-household-income-and-wealth.html) or restructuring the portfolio of securities of the Fed by selling short-dated securities and buying long-term securities has the objective of reducing long-term interest rates.
3. Continuing Maturity Extension Program. This program is discussed in Section II Twist Again Extension. The statement affirms: “The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative.”
4. Target of Fed Funds Rate. The FOMC continues to maintain the target of fed funds rate at 0 to ¼ percent.
5. Advance Guidance. The FOMC increases transparency by advising on the expectation of the future path of fed funds rate. This guidance is the view that conditions such as “low rates of resource utilization and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
6. Monitoring and Policy Focus. The FOMC reconsiders its policy continuously in accordance with available information: “The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.”
Table IV-2 provides economic projections of governors of the Board of Governors of the Federal Reserve and regional presidents of Federal Reserve Banks released at the meeting of Jun 20, 2012. The Fed releases the data with careful explanations (http://www.federalreserve.gov/newsevents/press/monetary/20120620b.htm). Columns “∆% GDP,” “∆% PCE Inflation” and “∆% Core PCE Inflation” are changes “from the fourth quarter of the previous year to the fourth quarter of the year indicated.” The GDP report for IQ2012 is analyzed in a prior blog post together with the PCE inflation data from the report on personal income and outlays (http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html). The Bureau of Economic Analysis (BEA) provides the second estimate of IQ2012 GDP with the third estimate to be released on Jun 28 (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm). PCE inflation is the index of personal consumption expenditures (PCE) of the report of the Bureau of Economic Analysis (BEA) on “Personal Income and Outlays” (http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm), which is analyzed in this blog as soon as available (for the latest report for Apr see http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm and http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html). The next report on “Personal Income and Outlays” for May will be released at 8:30 AM on Jun 29, 2012. PCE core inflation consists of PCE inflation excluding food and energy. Column “UNEMP %” is the rate of unemployment measured as the average civilian unemployment rate in the fourth quarter of the year. The Bureau of Labor Statistics (BLS) provides the Employment Situation Report with the civilian unemployment rate in the first Friday of every month, which is analyzed in this blog (the May report is analyzed at http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html). The report for Jun will be released on July 6, 2012 (http://www.bls.gov/cps/). “Longer term projections represent each participant’s assessment of the rate to which each variable would be expected to converge under appropriate monetary policy and in the absence of further shocks to the economy” (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120620.pdf).
It is instructive to focus on 2012, as 2013, 2014 and longer term are too far away, and there is not much information on what will happen in 2013 and beyond. The central tendency should provide reasonable approximation of the view of the majority of members of the FOMC but the second block of numbers provides the range of projections by FOMC participants. The first row for each year shows the projection introduced after the meeting of Jun 20, 2012, and the second row “PR” the projection of the Apr 25, 2012 meeting. There are three major changes in the view.
1. Growth “∆% GDP.” The FOMC has reduced the forecast of GDP growth in 2012 from 3.3 to 3.7 percent in Jun 2011 to 2.5 to 2.9 percent in Nov 2011 and 2.2 to 2.7 percent at the Jan 25 meeting but increased it to 2.4 to 2.9 percent at the Apr 25, 2012 meeting, reducing it to 1.9 to 2.4 percent at the Jun 20, 2012 meeting.
2. Rate of Unemployment “UNEM%.” The FOMC increased the rate of unemployment from 7.8 to 8.2 percent in Jun 2011 to 8.5 to 8.7 percent in Nov 2011 but has reduced it to 8.2 to 8.5 percent at the Jan 25 meeting and further down to 7.8 to 8.0 percent at the Apr 25, 2012 meeting but increased it to 8.0 to 8.2 percent at the Jun 20, 2012 meeting.
3. Inflation “∆% PCE Inflation.” The FOMC changed the forecast of personal consumption expenditures (PCE) inflation from 1.5 to 2.0 percent in Jun 2011 to virtually the same of 1.4 to 2.0 percent in Nov 2011 but has reduced it to 1.4 to 1.8 percent at the Jan 25 meeting but increased it to 1.9 to 2.0 percent at the Apr 25, 2012 meeting, reducing it to 1.2 to 1.7 percent at the Jun 20, 2012 meeting.
4. Core Inflation “∆% Core PCE Inflation.” Core inflation is PCE inflation excluding food and energy. There is again not much of a difference of the projection for 2012 in Jun 2011 of 1.4 to 2.0 percent and the Nov 2011 projection of 1.5 to 2.0 percent, which has been reduced slightly to 1.5 to 1.8 percent at the Jan 25 meeting but increased to 1.8 to 2.0 percent at the Apr 25, 2012 meeting, reducing it to 1.7 to 2.0 percent at the Jun 20, 2012 meeting.
Table IV-2, US, Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents in FOMC, June 2012 and April 2012
| ∆% GDP | UNEM % | ∆% PCE Inflation | ∆% Core PCE Inflation | |
| Central | ||||
| 2012 Apr PR | 1.9 to 2.4 2.4 to 2.9 | 8.0 to 8.2 7.8 to 8.0 | 1.2 to 1.7 1.9 to 2.0 | 1.7 to 2.0 1.8 to 2.0 |
| 2013 | 2.2 to 2.8 | 7.5 to 8.0 | 1.5 to 2.0 | 1.6 to 2.0 1.7 to 2.0 |
| 2014 | 3.0 to 3.5 | 7.0 to 7.7 | 1.5 to 2.0 | 1.6 to 2.0 |
| Longer Run Apr PR | 2.3 to 2.5 2.3 to 2.6 | 5.2 to 6.0 5.2 to 6.0 | 2.0 2.0 | |
| Range | ||||
| 2012 | 1.6 to 2.5 | 7.8 to 8.4 | 1.2 to 2.0 | 1.7 to 2.0 |
| 2013 | 2.2 to 3.5 | 7.0 to 8.1 | 1.5 to 2.1 | 1.4 to 2.1 |
| 2014 | 2.8 to 4.0 | 6.3 to 7.7 | 1.5 to 2.2 | 1.5 to 2.2 |
| Longer Run Apr PR | 2.2 to 3.0 2.2 to 3.0 | 4.9 to 6.3 4.9 to 6.0 | 2.0 2.0 |
Notes: UEM: unemployment; PR: Projection
Source: http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120620.pdf
Another important decision at the FOMC meeting on Jan 25, 2012, is formal specification of the goal of inflation of 2 percent per year but without specific goal for unemployment (http://www.federalreserve.gov/newsevents/press/monetary/20120125c.htm):
“Following careful deliberations at its recent meetings, the Federal Open Market Committee (FOMC) has reached broad agreement on the following principles regarding its longer-run goals and monetary policy strategy. The Committee intends to reaffirm these principles and to make adjustments as appropriate at its annual organizational meeting each January.
The FOMC is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates. The Committee seeks to explain its monetary policy decisions to the public as clearly as possible. Such clarity facilitates well-informed decisionmaking by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.
Inflation, employment, and long-term interest rates fluctuate over time in response to economic and financial disturbances. Moreover, monetary policy actions tend to influence economic activity and prices with a lag. Therefore, the Committee's policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee's goals.
The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the Committee's ability to promote maximum employment in the face of significant economic disturbances.
The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market. These factors may change over time and may not be directly measurable. Consequently, it would not be appropriate to specify a fixed goal for employment; rather, the Committee's policy decisions must be informed by assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision. The Committee considers a wide range of indicators in making these assessments. Information about Committee participants' estimates of the longer-run normal rates of output growth and unemployment is published four times per year in the FOMC's Summary of Economic Projections. For example, in the most recent projections, FOMC participants' estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 6.0 percent, roughly unchanged from last January but substantially higher than the corresponding interval several years earlier.
In setting monetary policy, the Committee seeks to mitigate deviations of inflation from its longer-run goal and deviations of employment from the Committee's assessments of its maximum level. These objectives are generally complementary. However, under circumstances in which the Committee judges that the objectives are not complementary, it follows a balanced approach in promoting them, taking into account the magnitude of the deviations and the potentially different time horizons over which employment and inflation are projected to return to levels judged consistent with its mandate. ”
The probable intention of this specific inflation goal is to “anchor” inflationary expectations. Massive doses of monetary policy of promoting growth to reduce unemployment could conflict with inflation control. Economic agents could incorporate inflationary expectations in their decisions. As a result, the rate of unemployment could remain the same but with much higher rate of inflation (see Kydland and Prescott 1977 and Barro and Gordon 1983; http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html). Strong commitment to maintaining inflation at 2 percent could control expectations of inflation.
The FOMC continues its efforts of increasing transparency that can improve the credibility of its firmness in implementing its dual mandate. Table IV-3 provides the views by participants of the FOMC of the levels at which they expect the fed funds rate in 2012, 2013, 2014 and the in the longer term. Table IV-3 is inferred from a chart provided by the FOMC with the number of participants expecting the target of fed funds rate (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120620.pdf). There are 16 participants expecting the rate to remain at 0 to ¼ percent in 2012 and only three to be higher. Not much change is expected in 2013 either with 13 participants anticipating the rate at the current target of 0 to ¼ percent and only six expecting higher rates. The rate would still remain at 0 to ¼ percent in 2014 for six participants with five expecting the rate to be in the range of 0.5 to 1 percent and five participants expecting rates from 1 to 2.0 percent but only three with rates exceeding 2.0 percent. This table is consistent with the guidance statement of the FOMC that rates will remain at low levels until late in 2014.
Table IV-3, US, Views of Target Federal Funds Rate at Year-End of Federal Reserve Board Members and Federal Reserve Bank Presidents Participating in FOMC, June 20, 2012
| 0 to 0.25 | 0.5 to 1.0 | 1.0 to 1.5 | 1.0 to 2.0 | 2.0 to 3.0 | 3.0 to 4.5 | |
| 2012 | 16 | 3 | ||||
| 2013 | 13 | 2 | 3 | 1 | ||
| 2014 | 6 | 5 | 5 | 3 | ||
| Longer Run | 19 |
Source: http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120620.pdf
Additional information is provided in Table IV-4 with the number of participants expecting increasing interest rates in the years from 2012 to 2015. It is evident from Table IV-4 that the prevailing view in the FOMC is for interest rates to continue at low levels in future years. This view is consistent with the economic projections of low economic growth, relatively high unemployment and subdued inflation provided in Table IV-2.
Table IV-4, US, Views of Appropriate Year of Increasing Target Federal Funds Rate of Federal Reserve Board Members and Federal Reserve Bank Presidents Participating in FOMC, June 20, 2012
| Appropriate Year of Increasing Target Fed Funds Rate | Number of Participants |
| 2012 | 3 |
| 2013 | 3 |
| 2014 | 7 |
| 2015 | 6 |
Source: http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20120620.pdf
There are waves of inflation similar to those worldwide (http://cmpassocregulationblog.blogspot.com/2012/06/destruction-of-three-trillion-dollars.html) in inflation of personal consumption expenditures (PCE) in Table IV-5. These waves are in part determined by commodity price shocks originating in the carry trade from zero interest rates to positions in risk financial assets, in particular in commodity futures, which increase the prices of food and energy when there is relaxed risk aversion. Return of risk aversion causes collapse in prices. The first wave is in Jan-Apr 2011 when headline PCE inflation grew at the average annual equivalent rate of 4.6 percent and PCE inflation excluding food and energy at 2.1 percent. The drivers of inflation were increases in food prices at the annual equivalent rate of 8.7 percent and of energy prices at 41.7 percent. This behavior will prevail under zero interest rates and relaxed risk aversion because of carry trades from zero interest rates to leveraged positions in commodity futures. The second wave occurred in May and Jun 2011 when risk aversion from the European sovereign risk crisis interrupted the carry trade. PCE prices rose 0.6 percent in annual equivalent and 3.0 percent excluding food and energy. The third wave is captured by the annual equivalent rates in Jul-Sep 2011 of headline PCE inflation of 3.7 percent with subdued PCE inflation excluding food and energy of 1.6 percent while PCE food rose at 6.2 percent and PCE energy increased at 27.3 percent. In the fourth wave in Oct-Dec 2011, increased risk aversion explains the fall of the annual equivalent rate of inflation to 0.8 for headline PCE inflation and 1.6 percent for PCEX excluding food and energy. PCEF of prices of food rose at the annual equivalent rate of 1.6 percent in Oct-Dec 2011 while PCEE of prices of energy fell at the annual equivalent rate of 13.5 percent. In the fifth wave in Jan-Mar 2012, headline PCE in annual equivalent was 3.2 percent and 2.8 percent excluding food and energy (PCEX). Energy prices of personal consumption (PCEE) increased at the annual equivalent rate of 21.3 percent because of the jump of 3.6 percent in Feb followed by 1.0 percent in Mar. In the sixth wave, renewed risk average caused reversal of carry trade with headline PCE inflation falling at the annual equivalent rate of 1.2 percent in May-Apr 2012 while PCE inflation excluding food and energy increased at the annual equivalent rate of 1.2 percent.
Table IV-5, US, Percentage Change from Prior Month of Prices of Personal Consumption Expenditures, Seasonally Adjusted Monthly ∆%
| PCE | PCEG | PCEG | PCES | PCEX | PCEF | PCEE | |
| 2012 | |||||||
| May | -0.2 | -0.8 | 0.1 | 0.1 | 0.1 | -0.1 | -4.6 |
| Apr | 0.0 | -0.3 | -0.1 | 0.2 | 0.1 | 0.1 | -1.8 |
| ∆% AE Apr- May | -1.2 | -6.4 | 0.0 | 1.8 | 1.2 | 0.0 | -32.4 |
| Mar | 0.2 | 0.3 | -0.1 | 0.2 | 0.2 | 0.1 | 1.0 |
| Feb | 0.3 | 0.6 | 0.0 | 0.2 | 0.2 | 0.0 | 3.6 |
| Jan | 0.3 | 0.3 | 0.1 | 0.2 | 0.3 | 0.1 | 0.3 |
| ∆% AE Jan- Mar | 3.2 | 4.9 | 0.0 | 2.4 | 2.8 | 0.8 | 21.3 |
| 2011 | |||||||
| Dec | 0.1 | -0.2 | -0.2 | 0.2 | 0.2 | 0.2 | -1.4 |
| Nov | 0.1 | -0.1 | -0.3 | 0.2 | 0.1 | 0.0 | -0.5 |
| Oct | 0.0 | -0.2 | -0.1 | 0.1 | 0.1 | 0.2 | -1.7 |
| ∆% AE Oct- Dec | 0.8 | -2.0 | -2.4 | 2.0 | 1.6 | 1.6 | -13.5 |
| Sep | 0.2 | 0.3 | -0.4 | 0.1 | 0.0 | 0.5 | 2.1 |
| Aug | 0.3 | 0.4 | -0.1 | 0.2 | 0.2 | 0.6 | 1.2 |
| Jul | 0.4 | 0.7 | -0.1 | 0.2 | 0.2 | 0.4 | 2.8 |
| ∆% AE Jul-Sep | 3.7 | 5.7 | -2.4 | 2.0 | 1.6 | 6.2 | 27.3 |
| Jun | -0.1 | -0.5 | 0.2 | 0.1 | 0.2 | 0.1 | -4.5 |
| May | 0.2 | 0.0 | 0.1 | 0.3 | 0.3 | 0.3 | -1.2 |
| ∆% AE May-Jun | 0.6 | -3.0 | 1.8 | 2.4 | 3.0 | 2.4 | -29.4 |
| Apr | 0.3 | 0.6 | 0.2 | 0.2 | 0.2 | 0.4 | 2.3 |
| Mar | 0.4 | 0.8 | 0.0 | 0.2 | 0.1 | 0.9 | 3.7 |
| Feb | 0.4 | 0.8 | 0.2 | 0.2 | 0.2 | 0.8 | 3.5 |
| Jan | 0.4 | 0.8 | 0.1 | 0.2 | 0.2 | 0.7 | 2.3 |
| ∆% AE Jan-Apr | 4.6 | 9.4 | 1.5 | 2.4 | 2.1 | 8.7 | 41.7 |
| 2010 | |||||||
| Dec | 0.3 | 0.6 | -0.4 | 0.1 | 0.0 | 0.1 | 4.1 |
| Nov | 0.1 | 0.0 | -0.2 | 0.1 | 0.1 | 0.0 | 0.1 |
| Oct | 0.2 | 0.4 | -0.2 | 0.1 | 0.1 | 0.1 | 2.8 |
| Sep | 0.1 | 0.2 | -0.2 | 0.1 | 0.0 | 0.3 | 1.2 |
| Aug | 0.2 | 0.3 | 0.1 | 0.1 | 0.1 | 0.1 | 1.7 |
| Jul | 0.2 | 0.5 | -0.3 | 0.1 | 0.0 | 0.1 | 3.4 |
| Jun | -0.2 | -0.6 | -0.3 | 0.1 | 0.1 | -0.2 | -3.6 |
| May | -0.1 | -0.6 | -0.2 | 0.2 | 0.1 | 0.0 | -2.9 |
| Apr | 0.0 | -0.2 | -0.2 | 0.2 | 0.1 | 0.2 | -0.5 |
| Mar | 0.2 | -0.1 | 0.0 | 0.3 | 0.2 | 0.2 | -0.4 |
| Feb | 0.1 | -0.1 | -0.3 | 0.2 | 0.1 | 0.2 | -0.2 |
| Jan | 0.2 | 0.5 | -0.2 | 0.1 | 0.1 | 0.2 | 2.7 |
Notes: percentage changes in price index relative to the same month a year earlier of PCE: personal consumption expenditures; PCEG: PCE goods; PCEG-D: PCE durable goods; PCES: PCE services; PCEX: PCE excluding food and energy; PCEF: PCE food; PCEE: PCE energy goods and services
Source: http://www.bea.gov/iTable/index_nipa.cfm
The charts of PCE inflation are also instructive. Chart IV-1 provides the monthly change of headline PCE price index. There is significant volatility in the monthly changes but excluding outliers fluctuations have been in a tight range between 1999 and 2012 around 0.2 percent per month.
Chart IV-1, US, Percentage Change of PCE Price Index from Prior Month, 1999-2012
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
There is similar behavior in the monthly fluctuations of the PCE price index excluding food and energy in Chart IV-2. The exclusion of commodity components does not eliminate negative changes. Fluctuations have been in a tight range from 0.0 percent to 0.4 percent, excluding a few outliers.
Chart IV-2, US, Percentage Change of PCE Price Index Excluding Food and Energy from Prior Month, 1999-2012
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
As with all commodity prices, oscillations of the PCE price index of food in Chart IV-3 are quite wide. Monetary policy of zero interest rates has caused trends of increase such as from 2007 into the global recession and in the current expansion phase after 2010.
Chart IV-3, US, Percentage Change of PCE Price Index Food from Prior Month, 1999-2012
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
The band of fluctuation of the PCE price index of energy in Chart IV-4 is much wider. An interesting feature is the abundance of negative changes.
Chart IV-4, US, Percentage Change of PCE Price Index Energy from Prior Month, 1999-2012
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
Table IV-6 provides 12-month rates of PCE inflation. While headline PCE inflation has increased from 1.5 percent in Jan 2011 to 2.9 percent in Sep and Aug, declining to 1.5 percent in May 2012, PCE inflation excluding food and energy (PCEX), used as indicator in monetary policy, has increased from 1.0 percent in Jan 2011 to 1.9 percent in Dec 2011 and Jan and Feb 2012 with 2.0 percent in Jan-Apr 2012 and 1.8 percent in May 2012, which is still below or at the tolerable maximum of 2.0 percent in monetary policy. The unintended effect of shocks of commodity prices from zero interest rates captured by PCE food prices (PCEF) and energy (PCEE) in the absence of risk aversion should be weighed in design and implementation of monetary policy.
Table IV-6, US, Percentage Change in 12 Months of Prices of Personal Consumption Expenditures ∆%
| PCE | PCEG | PCEG | PCES | PCEX | PCEF | PCEE | |
| 2012 | |||||||
| May | 1.5 | 0.5 | -1.2 | 2.0 | 1.8 | 2.3 | -3.8 |
| Apr | 1.9 | 1.3 | -1.1 | 2.2 | 2.0 | 2.8 | -0.4 |
| Mar | 2.2 | 2.2 | -0.7 | 2.2 | 2.0 | 3.1 | 3.7 |
| Feb | 2.3 | 2.7 | -0.7 | 2.2 | 2.0 | 3.9 | 6.5 |
| Jan | 2.4 | 2.9 | -0.4 | 2.2 | 2.0 | 4.7 | 6.5 |
| 2011 | |||||||
| Dec | 2.5 | 3.4 | -0.4 | 2.1 | 1.9 | 5.3 | 8.6 |
| Nov | 2.7 | 4.2 | -0.6 | 2.0 | 1.8 | 5.1 | 14.6 |
| Oct | 2.7 | 4.3 | -0.5 | 1.9 | 1.7 | 5.2 | 15.4 |
| Sep | 2.9 | 4.9 | -0.7 | 2.0 | 1.6 | 5.1 | 20.7 |
| Aug | 2.9 | 4.8 | -0.5 | 1.9 | 1.7 | 4.8 | 19.6 |
| Jul | 2.8 | 4.7 | -0.2 | 1.8 | 1.6 | 4.3 | 20.2 |
| Jun | 2.6 | 4.5 | -0.5 | 1.7 | 1.4 | 3.9 | 20.8 |
| May | 2.6 | 4.4 | -1.0 | 1.7 | 1.3 | 3.6 | 21.9 |
| Apr | 2.4 | 3.9 | -1.4 | 1.6 | 1.2 | 3.3 | 19.8 |
| Mar | 2.0 | 3.0 | -1.8 | 1.5 | 1.0 | 3.1 | 16.5 |
| Feb | 1.8 | 2.1 | -1.8 | 1.6 | 1.1 | 2.4 | 11.9 |
| Jan | 1.5 | 1.2 | -2.3 | 1.6 | 1.0 | 1.8 | 7.9 |
| 2010 | |||||||
| Dec | 1.4 | 1.0 | -2.5 | 1.5 | 0.9 | 1.3 | 8.3 |
| Nov | 1.2 | 0.4 | -2.4 | 1.5 | 1.0 | 1.3 | 4.1 |
| Oct | 1.3 | 0.6 | -2.1 | 1.6 | 1.0 | 1.3 | 6.3 |
| Sep | 1.4 | 0.4 | -1.7 | 1.9 | 1.2 | 1.3 | 4.2 |
| Aug | 1.5 | 0.4 | -1.4 | 1.9 | 1.4 | 0.7 | 3.8 |
Notes: percentage changes in price index relative to the same month a year earlier of PCE: personal consumption expenditures; PCEG: PCE goods; PCEG-D: PCE durable goods; PCES: PCE services; PCEX: PCE excluding food and energy; PCEF: PCE food; PCEE: PCE energy goods and services
Source:
http://www.bea.gov/iTable/index_nipa.cfm
The headline PCE index is shown in Chart IV-5 from 1999 to 2012. There is an evident upward trend with the bump of the global recession after IVQ2008.
Chart IV-5, US, Price Index of Personal Consumption Expenditures 1999-2012
Source: http://www.bea.gov/iTable/index_nipa.cfm
The headline consumer price index is shown in Chart IV-6. There is also an upward trend but with fluctuations and the 2008 bump.
Chart IV-6, US, Consumer Price Index, NSA, 1999-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
The PCE price index excluding food and energy is shown in Chart IV-7. There is less pronounced long-term trend with fewer bumps because of excluding more volatile commodity items.
Chart IV-7, US, Price Index of Personal Consumption Expenditures Excluding Food and Energy 1999-2012
Source: http://www.bea.gov/iTable/index_nipa.cfm
The core consumer price index, excluding food and energy, is shown in Chart IV-8. There is also an upward trend but with fluctuations.
Chart IV-8, US, Consumer Price Index Excluding Food and Energy, NSA, 1999-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
The PCE price index of food is shown in Chart IV-9. There is a more pronounced upward trend and sharper fluctuations.
Chart IV-9, US, Price Index of Personal Consumption Expenditures Food 1999-2012
Source: http://www.bea.gov/iTable/index_nipa.cfm
There is similar behavior in the consumer price index of food in Chart IV-10. There is an upward trend from 1999 to 2011 with a major bump in 2009 when commodity futures positions were unwound. Zero interest rates with bouts of risk aversion dominate the trend into 2011. Risk aversion softens the trend toward the end of 2011 and beginning of 2012.
Chart IV-10, US, Consumer Price Index, Food, NSA, 1999-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
The most pronounced trend of PCE price indexes is that of energy in Chart IV-11. It is impossible to explain the hump in 2008 in the middle of the global recession without the carry trade from zero interest rates to leveraged positions in commodity futures. Risk aversion after Sep 2008 caused flight to the safe haven of government obligations. The return of risk appetite with zero interest rates caused a first wave of carry trades with another upward trend interrupted by the first European sovereign risk crisis in Apr-Jul 2010. Zero interest rates with risk appetite caused another sharp upward trend of commodity prices interrupted by risk aversion from the second sovereign crisis. In the absence of risk aversion, carry trades from zero interest rates to positions in risk financial assets will continue to cause distortions such as commodity price trends and fluctuations.
Chart IV-11, US, Price Index of Personal Consumption Expenditures Energy Goods and Services 1999-2012
Source: http://www.bea.gov/iTable/index_nipa.cfm
Chart IV-12 provides the consumer price index of energy commodities. Unconventional monetary policy of zero or near zero interest rates causes upward trends in commodity prices reflected in (1) increase from 2003 to 2007; (2) sharp increase during the global contraction in 2008; (3) collapse from 2008 into 2009 as positions in commodity futures were unwound in a flight to government obligations; (4) new upward trend after 2010; and (5) episodes of decline during risk aversion shocks such as the more recent segment during the worsening European debt crisis in Nov and Dec of 2011 and with new strength of commodity prices in the beginning of 2012 followed by softness in another episode of risk aversion.
Chart IV-12, US, Consumer Price Index, Energy, NSA, 1999-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
Chart IV-13 of the US Energy Information Administration provides prices of the crude oil futures contract. Unconventional monetary policy of very low interest rates and quantitative easing with suspension of the 30-year bond to lower mortgage rates caused a sharp upward trend of oil prices. There is no explanation for the jump of oil prices to $149/barrel in 2008 during a sharp global recession other than carry trades from zero interest rates to commodity futures. Prices collapsed in the flight to government obligations. Risk appetite with zero interest rates resulted in another upward trend of commodity prices after 2009 with fluctuations during periods of risk aversion. All price indexes are affected by unconventional monetary policy.
Chart IV-13, US, Crude Oil Futures Contract
Source: US Energy Information Administration
Source: Energy Information Administration
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D
Unconventional monetary policy of zero interest rates and quantitative easing has been used in Japan and now also in the US. Table IV-7 provides the consumer price index of Japan, with inflation of 0.2 percent in 12 months ending in May and declines of 0.3 percent NSA (not-seasonally-adjusted) and 0.4 percent SA (seasonally-adjusted) in the month of May. Inflation of consumer prices in the first four months of 2012 annualizes at 2.1 percent SA and 3.0 percent NSA. Annual equivalent inflation in the first three months of 2012 is 2.8 percent SA and 3.7 percent NSA. There are negative percentage changes in most of the 12-month rates in 2011 with the exception of Jul and Aug both with 0.2 percent and stability in Sep. All monthly and 12-month rates of inflation are positive in the first five months of 2012. There are eight years of deflation and one of zero inflation in the 12-month rate of inflation in Dec from 1995 to 2010. This experience is entirely different from that of the US that shows long-term inflation. It is difficult to justify unconventional monetary policy because of risks of deflation similar to that experienced in Japan.
Table IV-7, Japan, Consumer Price Index, All Items ∆%
| ∆% Month SA | ∆% Month NSA | ∆% 12-Month NSA | |
| May 2012 | -0.4 | -0.3 | 0.2 |
| Apr | 0.0 | 0.1 | 0.4 |
| Mar | 0.1 | 0.5 | 0.5 |
| Feb | 0.3 | 0.2 | 0.3 |
| Jan | 0.3 | 0.2 | 0.1 |
| Dec 2011 | 0.1 | 0.0 | -0.2 |
| Nov | -0.1 | -0.6 | -0.5 |
| Oct | 0.0 | 0.1 | -0.2 |
| Sep | -0.1 | 0.0 | 0.0 |
| Aug | -0.2 | 0.1 | 0.2 |
| Jul | 0.3 | 0.0 | 0.2 |
| Jun | -0.1 | -0.2 | -0.4 |
| May | -0.1 | 0.0 | -0.4 |
| Apr | -0.1 | 0.1 | -0.4 |
| Mar | 0.0 | 0.3 | -0.5 |
| Feb | 0.1 | 0.0 | -0.5 |
| Jan | 0.0 | -0.1 | -0.6 |
| Dec 2010 | -0.2 | –0.3 | 0.0 |
| Dec 2009 | -1.7 | ||
| Dec 2008 | 0.4 | ||
| Dec 2007 | 0.7 | ||
| Dec 2006 | 0.3 | ||
| Dec 2005 | -0.1 | ||
| Dec 2004 | 0.2 | ||
| Dec 2003 | -0.4 | ||
| Dec 2002 | -0.3 | ||
| Dec 2001 | -1.2 | ||
| Dec 2000 | -0.2 | ||
| Dec 1999 | -1.1 | ||
| Dec 1998 | 0.6 | ||
| Dec 1997 | 1.8 | ||
| Dec 1996 | 0.6 | ||
| Dec 1995 | -0.3 | ||
| Dec 1994 | 0.7 | ||
| Dec 1993 | 1.0 | ||
| Dec 1992 | 1.2 | ||
| Dec 1991 | 2.7 | ||
| Dec 1990 | 3.8 | ||
| Dec 1989 | 2.6 | ||
| Dec 1988 | 1.0 | ||
| Dec 1987 | 0.8 | ||
| Dec 1986 | -0.3 | ||
| Dec 1985 | 1.9 | ||
| Dec 1984 | 2.6 | ||
| Dec 1983 | 1.7 | ||
| Dec 1982 | 2.0 | ||
| Dec 1981 | 4.3 | ||
| Dec 1980 | 6.9 | ||
| Dec 1979 | 5.6 | ||
| Dec 1978 | 3.9 | ||
| Dec 1977 | 5.0 | ||
| Dec 1976 | 10.5 | ||
| Dec 1975 | 7.8 | ||
| Dec 1974 | 21.0 | ||
| Dec 1973 | 18.3 | ||
| Dec 1972 | 5.7 | ||
| Dec 1971 | 4.8 |
Source: http://www.stat.go.jp/english/data/cpi/1581.htm
Chart IV-14 provides the US consumer price index NSA from 1960 to 2012. The dominating characteristic is the increase in slope during the Great Inflation from the middle of the 1960s through the 1970s. There is long-term inflation in the US and no evidence of deflation risks.
Chart IV-14, US, Consumer Price Index, All Items, NSA, 1960-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
Chart IV-15 provides 12-month percentage changes of the US consumer price index from 1960 to 2012. There are actually three waves of inflation in the second half of the 1960s, in the mid 1970s and again in the late 1970s. Table IV-15 provides similar inflation waves in the economy of Japan with 18.3 percent in 1973 and 21.0 percent in 1974. Inflation rates then stabilized in the US in a range with only two episodes above 5 percent.
Chart IV-15, US, Consumer Price Index, All Items, NSA, 12-Month Percentage Change 1960-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
Chart IV-16 provides the US consumer price index excluding food and energy from 1960 to 2012. There is long-term inflation in the US without episodes of deflation.
IV-16, US, Consumer Price Index Excluding Food and Energy, NSA, 1960-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
Chart IV-17 provides 12-month percentage changes of the consumer price index excluding food and energy from 1960 to 2012. There are three waves of inflation in the 1970s during the Great Inflation. There is no episode of deflation.
Chart IV-17, US, Consumer Price Index Excluding Food and Energy, 12-Month Percentage Change, NSA, 1960-2012
Source: US Bureau of Labor Statistics
http://www.bls.gov/cpi/data.htm
More detail on the consumer price index of Japan in May is shown in Table IV-8. Inflation in the 12 months ending in May has been driven by items rich in commodities such as 3.9 percent in fuel, light and water charges with no change in the month of May. There is similar behavior in the preliminary estimate for Jun for the Ku Area of Tokyo with increase of 0.6 percent of fuel, light and water charges and increase of 5.5 percent in 12 months. There is decline in most items in the consumer price index in May with exception flat prices in services and fuel, light and water charges. There is mild deflation in the CPI excluding food, alcoholic beverages and energy with minus 0.6 percent in the 12 months ending in May and decrease of 0.1 percent in the month of May. The CPI excluding imputed rent decreased 0.3 percent in May and increased 0.3 percent in 12 months. The all-items CPI estimate for May of the Ku-Area of Tokyo fell 0.4 percent in May and 0.6 percent in 12 months.
Table IV-8, Japan, Consumer Price Index, ∆%
| 2012 | May 2012/Apr 2012 ∆% | Year ∆% |
| CPI All Items | -0.3 | 0.2 |
| CPI Excluding Fresh Food | -0.2 | -0.1 |
| CPI Excluding Food, Alcoholic Beverages and Energy | -0.1 | -0.6 |
| CPI Goods | -0.6 | 0.3 |
| CPI Services | 0.0 | 0.0 |
| CPI Excluding Imputed Rent | -0.3 | 0.3 |
| CPI Fuel, Light, Water Charges | 0.0 | 3.9 |
| CPI Transport & Communications | -0.6 | 0.3 |
| CPI Ku-Area Tokyo All Items | -0.4 | -0.6 |
| Fuel, Light, Water Charges Ku Area Tokyo | 0.6 | 5.2 |
Note: Ku-area Tokyo CPI data preliminary for Jun 2012
http://www.stat.go.jp/english/data/cpi/1581.htm
The producer price index of the euro zone fell 0.5 percent in May 2012 after increasing 2.6 percent cumulative from Jan to Apr 2012 or at the equivalent annual rate of 6.5 percent, as shown in Table IV-9. Producer price inflation has moderated since May 2011. Energy inflation has oscillated with the shocks of risk aversion that cause unwinding of carry trade positions from zero interest rates to commodity futures. Energy prices fell 1.4 percent in May 2012 and 0.3 percent in Apr 2012 after increasing 5.2 cumulative in Jan-Mar 2012 or at the annual equivalent rate of 22.4 percent. During periods of relaxed risk aversion, carry trades from zero interest rates to commodity exposures drive high inflation waves. Prices of capital goods have barely moved. Prices of durable consumer goods accelerated at annual equivalent rate of 3.2 percent in Jan-Mar 2012 but then fell 0.1 percent in Apr and were flat in May.
Table IV-9, Euro Zone, Industrial Producer Prices Month ∆%
| May | Apr | Mar 2012 | Feb 2012 | Jan 2012 | Dec 2011 | Nov 2011 | |
| Industry ex | -0.5 | 0.1 | 0.5 | 0.6 | 0.9 | -0.2 | 0.3 |
| Industry ex | 0.0 | 0.2 | 0.2 | 0.4 | 0.3 | -0.1 | -0.1 |
| Intermediate | 0.0 | 0.3 | 0.3 | 0.5 | 0.4 | -0.2 | -0.4 |
| Energy | -1.4 | -0.2 | 1.3 | 1.2 | 2.6 | -0.5 | 1.0 |
| Capital Goods | 0.0 | 0.1 | 0.1 | 0.1 | 0.3 | -0.1 | 0.0 |
| Durable Consumer Goods | 0.0 | -0.1 | 0.1 | 0.3 | 0.4 | 0.0 | 0.2 |
| Nondurable Consumer Goods | -0.1 | 0.1 | 0.2 | 0.3 | 0.3 | 0.1 | 0.3 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Although moderating significantly in recent months, 12-month rates of increase of producer prices in the euro zone continue at relatively high levels in some segments, as shown in Table IV-10. The 12-month percentage change of industrial prices excluding construction fell from 5.4 percent in Nov 2011 to 2.3 percent in May 2012. Energy prices increased 12.4 percent in Nov 2011 and 6.4 percent in May 2012. There is major vulnerability in producer price inflation that can return together with long positions in commodity futures with carry trades from zero interest during relaxation of risk aversion.
Table IV-10, Euro Zone, Industrial Producer Prices 12-Month ∆%
| May 2012 | Apr | Mar 2012 | Feb 2012 | Jan 2012 | Dec 2011 | Nov | |
| Industry ex | 2.3 | 2.6 | 3.5 | 3.7 | 3.9 | 4.3 | 5.4 |
| Industry ex | 1.1 | 1.3 | 1.6 | 1.7 | 2.0 | 2.5 | 3.0 |
| Intermediate | 0.5 | 0.6 | 0.9 | 1.1 | 1.6 | 2.7 | 3.5 |
| Energy | 6.4 | 6.7 | 9.0 | 9.9 | 9.7 | 9.5 | 12.4 |
| Capital Goods | 1.2 | 1.2 | 1.2 | 1.2 | 1.3 | 1.4 | 1.4 |
| Durable Consumer Goods | 1.9 | 2.0 | 2.3 | 2.4 | 2.3 | 2.3 | 2.5 |
| Nondurable Consumer Goods | 1.9 | 2.3 | 2.8 | 3.0 | 3.1 | 3.3 | 3.6 |
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Industrial producer prices in the euro area are following similar inflation waves as in the rest of the world (http://cmpassocregulationblog.blogspot.com/2012/06/destruction-of-three-trillion-dollars.html), as shown in Table IV-11. In the first wave in Jan-Apr 2011, annual equivalent producer price inflation was 12.0 percent driven by carry trades from zero interest rates into commodity futures. In the second wave in May-Jun 2011, annual equivalent producer price inflation declined at minus 1.2 percent. In the third wave in Jul-Sep 2011, annual equivalent inflation increased at 2.0 percent. In the third wave in Oct-Dec 2011, risk aversion resulting from the European sovereign debt crisis interrupted commodity carry trades, resulting in annual equivalent inflation of only 0.8 percent. In the fifth wave in Jan-Mar 2012, annual equivalent inflation jumped to 8.3 percent with a high annual equivalent rate of 9.4 percent in Jan-Feb 2012. In the sixth wave, risk aversion from the European sovereign debt event caused reversal commodity carry trades with equivalent annual inflation of minus 2.4 percent in Apr-May 2012. Producer price inflation in the euro zone excluding construction fell 0.5 percent in May and increased 2.3 percent in 12 months. The bottom part of Table IV-11 provides 12-month percentage changes from 1999 to 2010. The final row of Table IV-11 provides the average annual rate of producer-price inflation in the euro area at 2.6 percent in Dec from 1999 to 2011.
Table IV-11, Euro Area, Industrial Producer Prices Excluding Construction, Month and 12-Month ∆%
| Month ∆% | 12-Month ∆% | |
| May 2012 | -0.5 | 2.3 |
| Apr | 0.1 | 2.6 |
| AE ∆% Apr-May | -2.4 | |
| Mar | 0.5 | 3.5 |
| Feb | 0.6 | 3.7 |
| Jan | 0.9 | 3.9 |
| AE ∆% Jan-Mar | 8.3 | |
| Dec 2011 | -0.2 | 4.3 |
| Nov | 0.3 | 5.4 |
| Oct | 0.1 | 5.5 |
| AE ∆% Oct-Dec | 0.8 | |
| Sep | 0.3 | 5.8 |
| Aug | -0.2 | 5.8 |
| Jul | 0.4 | 6.1 |
| AE ∆% Jul-Sep | 2.0 | |
| Jun | 0.0 | 5.9 |
| May | -0.2 | 6.2 |
| AE ∆% May-Jun | -1.2 | |
| Apr | 0.9 | 6.8 |
| Mar | 0.8 | 6.8 |
| Feb | 0.8 | 6.6 |
| Jan | 1.3 | 5.9 |
| AE ∆% Jan-Apr | 12.0 | |
| Dec 2010 | 0.8 | 5.4 |
| Dec 2009 | -2.9 | |
| Dec 2008 | 1.1 | |
| Dec 2007 | 4.7 | |
| Dec 2006 | 3.8 | |
| Dec 2005 | 4.5 | |
| Dec 2004 | 3.8 | |
| Dec 2003 | 0.8 | |
| Dec 2002 | 1.5 | |
| Dec 2001 | -0.6 | |
| Dec 2000 | 4.6 | |
| Dec 1999 | 2.6 | |
| Average ∆% 1999-2011 | 2.6 |
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Inflation in the UK is somewhat higher than in many advanced economies, deserving more detailed analysis. Table IV-12 provides 12-month percentage changes of UK output prices for all manufactured products, excluding food, beverage and petroleum and excluding duty. The 12-month rates rose significantly in 2011 in all three categories, reaching 6.3 percent for all manufactured products in Sep 2011 but declining to 5.7 percent in Oct, 5.4 in Nov and down to 2.3 percent in Jun 2012. Output price inflation is highly sensitive to commodity prices as shown by the increase by 6.7 percent in 2008 when oil prices rose over $140/barrel even in the midst of a global recession driven by the carry trade from zero interest rates to oil futures. The mirage episode of false deflation in 2001 and 2002 is also captured by output prices for the UK, which was originated in decline of commodity prices but was used as an argument for the unconventional monetary policy of zero interest rates and quantitative easing during the past decade.
Table IV-12, UK Output Prices 12 Months ∆% NSA
| All Manufactured Products | Excluding Food, Beverage and | All Excluding Duty | |
| Jun 2012 | 2.3 | 2.0 | 1.9 |
| May | 2.9 | 2.3 | 2.7 |
| Apr | 3.3 | 2.3 | 3.1 |
| Mar | 3.7 | 2.5 | 3.5 |
| Feb | 4.1 | 3.0 | 4.1 |
| Jan | 4.0 | 2.4 | 4.0 |
| Dec 2011 | 4.8 | 3.0 | 4.8 |
| Nov | 5.4 | 3.1 | 5.6 |
| Oct | 5.7 | 3.3 | 5.9 |
| Sep | 6.3 | 3.7 | 6.4 |
| Aug | 6.0 | 3.5 | 6.2 |
| Jul | 6.1 | 3.4 | 6.2 |
| Jun | 5.8 | 3.2 | 5.9 |
| May | 5.4 | 3.4 | 5.5 |
| Apr | 5.6 | 3.6 | 5.8 |
| Mar | 5.6 | 3.1 | 5.5 |
| Feb | 5.3 | 3.1 | 5.2 |
| Jan | 5.0 | 3.3 | 5.0 |
| Dec 2010 | 4.2 | 2.7 | 4.0 |
| Year ∆% | Ex Food | ||
| 2011 | 5.6 | 3.4 | 5.7 |
| 2010 | 4.2 | 3.0 | 3.9 |
| 2009 | 1.6 | 2.5 | 1.0 |
| 2008 | 6.7 | 3.7 | 6.7 |
| 2007 | 2.3 | 1.4 | 2.1 |
| 2006 | 2.0 | 1.5 | 2.0 |
| 2005 | 1.9 | 1.0 | 1.9 |
| 2004 | 1.0 | -0.3 | 0.6 |
| 2003 | 0.6 | 0.1 | 0.5 |
| 2002 | -0.1 | -0.4 | -0.1 |
| 2001 | -0.3 | -0.6 | -0.3 |
| 2000 | 1.4 | -0.5 | 0.8 |
| 1999 | 0.6 | -1.0 | -0.3 |
| 1998 | 0.0 | -0.8 | -0.9 |
| 1997 | 0.9 | 0.3 | 0.1 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
Monthly and annual equivalent rates of change of output prices are shown in Table IV-13. There are waves of inflation similar to those in other countries (http://cmpassocregulationblog.blogspot.com/2012/06/destruction-of-three-trillion-dollars.html). In the first wave, annual equivalent inflation was 12.0 percent in Jan-Apr 2011 with relaxed risk aversion in commodity markets. In the second wave, intermittent risk aversion resulted in annual equivalent inflation of 2.0 percent in May-Oct 2011. In the third wave, alternation of risk aversion resulted in annual equivalent inflation of 1.6 percent in Nov-Jan. In the fourth wave, the energy commodity shock caused by carry trades caused the jump of annual equivalent inflation to 7.9 percent in Feb-Apr 2012. A fifth wave has begun in May-Jun 2012 with decline of output inflation by 3.5 percent annual equivalent in an environment of risk aversion that is causing decline of commodity prices.
Table IV-13, UK Output Prices Month ∆% NSA
| All Manufactured Products | Excluding Food, Beverage and | All Excluding Duty | |
| Jun 2012 | -0.4 | -0.2 | -0.5 |
| May | -0.2 | 0.2 | -0.2 |
| ∆% AE May-Jun | -3.5 | 0.0 | -4.1 |
| Apr | 0.7 | 0.6 | 0.5 |
| Mar | 0.6 | 0.1 | 0.5 |
| Feb | 0.6 | 0.5 | 0.6 |
| ∆% AE Feb-Apr | 7.9 | 4.9 | 6.6 |
| Jan | 0.4 | 0.3 | 0.3 |
| Dec 2011 | -0.2 | -0.1 | -0.2 |
| Nov | 0.2 | -0.1 | 0.2 |
| ∆% AE Nov-Jan | 1.6 | 0.4 | 1.2 |
| Oct | 0.0 | -0.1 | 0.1 |
| Sep | 0.3 | 0.3 | 0.2 |
| Aug | 0.0 | 0.1 | 0.1 |
| Jul | 0.3 | 0.4 | 0.3 |
| Jun | 0.2 | 0.2 | 0.2 |
| May | 0.2 | 0.2 | 0.2 |
| ∆% AE May-Oct | 2.0 | 2.2 | 2.2 |
| Apr | 1.1 | 0.8 | 0.9 |
| Mar | 1.1 | 0.5 | 1.1 |
| Feb | 0.5 | 0.0 | 0.5 |
| Jan | 1.1 | 0.8 | 1.1 |
| Jan-Apr | 12.0 | 6.5 | 11.4 |
| Dec 2010 | 0.5 | 0.0 | 0.6 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
Input prices in the UK have been more dynamic than output prices, as shown by Table IV-14, but with sharp oscillations because of the commodity and raw material content. The 12-month rates of increase of input prices, even excluding food, tobacco, beverages and petroleum, are very high, reaching 18.1 percent in Sep 2011 for materials and fuels purchased and 13.3 percent excluding food, beverages and petroleum. Inflation in 12 months of materials and fuels purchased moderated to 5.4 percent in Mar 2012 and 4.1 percent excluding food, tobacco, beverages and petroleum with the rates falling further in Apr to 1.0 percent for materials and fuels purchased and 2.2 percent excluding food, tobacco, beverages and petroleum. Input-price inflation collapsed to minus 2.3 percent for materials and fuels purchased and minus 0.1 percent excluding food, beverages and tobacco. There is only comparable experience with 22.2 percent inflation of materials and fuels purchased in 2008 and 16.9 percent excluding food, beverages and petroleum followed in 2009 by decline of 3.8 percent by materials and fuels purchased and increase of 1.6 percent for the index excluding items. UK input and output inflation is sensitive to commodity price increases driven by carry trades from zero interest rates. The mirage of false deflation is also observed in input prices in 1997-9 and then again from 2001 to 2003.
Table IV-14, UK Input Prices 12-Month ∆% NSA
| Materials and Fuels Purchased | Excluding Food, Tobacco, Beverages and Petroleum | |
| Jun 2012 | -2.3 | -0.1 |
| May | 0.0 | 1.0 |
| Apr | 1.0 | 2.2 |
| Mar | 5.4 | 4.1 |
| Feb | 7.7 | 5.7 |
| Jan | 6.5 | 5.6 |
| Dec 2011 | 8.9 | 7.2 |
| Nov | 13.8 | 10.2 |
| Oct | 14.5 | 11.0 |
| Sep | 18.1 | 13.3 |
| Aug | 16.3 | 13.0 |
| Jul | 18.5 | 13.3 |
| Jun | 16.8 | 12.6 |
| May | 16.3 | 11.4 |
| Apr | 17.9 | 12.2 |
| Mar | 14.8 | 10.3 |
| Feb | 14.9 | 10.7 |
| Jan | 14.2 | 10.5 |
| Dec 2010 | 13.1 | 9.0 |
| Year ∆% | ||
| 2011 | 15.4 | 11.4 |
| 2010 | 9.9 | 5.7 |
| 2009 | -3.8 | 1.6 |
| 2008 | 22.2 | 16.9 |
| 2007 | 2.9 | 2.3 |
| 2006 | 9.8 | 7.3 |
| 2005 | 10.9 | 6.9 |
| 2004 | 3.3 | 1.6 |
| 2003 | 1.2 | -0.6 |
| 2002 | -4.4 | -4.8 |
| 2001 | -1.2 | -1.2 |
| 2000 | 7.4 | 3.7 |
| 1999 | -1.3 | -3.6 |
| 1998 | -9.1 | -4.6 |
| 1997 | -8.2 | -6.3 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
Table IV-15 provides monthly percentage changes of UK input prices for materials and fuels purchased and excluding food, tobacco, beverages and petroleum. There are strong waves of inflation of input prices in the UK similar to those worldwide (http://cmpassocregulationblog.blogspot.com/2012/06/destruction-of-three-trillion-dollars.html). In the first wave, input prices rose at the high annual equivalent rate of 35.6 percent in Jan-Apr 2011, driven by carry trades from unconventional monetary policy into commodity exposures. In the second wave, alternating risk aversion caused annual equivalent inflation of minus 3.1 percent in May-Oct 2011. In the third wave, renewed risk aversion resulted in annual equivalent inflation of minus 1.2 percent in Nov-Dec 2011. In the fourth wave, annual equivalent inflation of input prices in the UK surged at 18.1 percent in Jan-Mar 2012 under relaxed risk aversion. In the fifth wave, annual equivalent inflation was minus 22.5 percent in Apr-Jun 2012 because of collapse of commodity prices during increasing risk aversion.
Table IV-15, UK Input Prices Month ∆%
| Materials and Fuels Purchased NSA | Excluding Food, Tobacco, Beverages and Petroleum SA | |
| Jun 2012 | -2.2 | -0.1 |
| May | -2.6 | -0.8 |
| Apr | -1.5 | 0.1 |
| ∆% Apr-Jun | -22.5 | -3.2 |
| Mar | 1.6 | -0.6 |
| Feb | 2.5 | 1.0 |
| Jan | 0.1 | -0.1 |
| ∆% AE Jan-Mar | 18.1 | 1.2 |
| Dec 2011 | -0.6 | -0.7 |
| Nov | 0.4 | 0.1 |
| ∆% AE Nov-Dec | -1.2 | -3.6 |
| Oct | -0.8 | -0.4 |
| Sep | 2.1 | 0.7 |
| Aug | -1.9 | 0.2 |
| Jul | 0.6 | 0.6 |
| Jun | 0.1 | 1.0 |
| May | -1.6 | -0.1 |
| ∆% AE May-Oct | -3.1 | 4.1 |
| Apr | 2.8 | 2.0 |
| Mar | 3.8 | 1.0 |
| Feb | 1.4 | 1.0 |
| Jan | 2.3 | 1.5 |
| ∆% AE Jan-Apr | 35.6 | 17.8 |
| Dec 2010 | 3.9 | 1.9 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
The UK Office for National Statistics also provides contributions in percentage points to the monthly and 12-month rates of inflation of manufactured products, shown in Table IV-16. There are high contributions of 0.46 percentage points by food products, 0.81 percentage points by tobacco and alcohol, 0.28 percentage points by computer, electrical and optical and 0.56 percentage points by other manufactured products. There are diversified sources of contributions to 12 months output price inflation such as 0.20 percentage points by clothing, textile and leather and 0.18 percentage points by transport equipment. In general, contributions by products rich in commodities are the drivers of inflation. There were diversified contributions in percentage points to monthly inflation: 0.02 by tobacco and alcohol and 0.03 percentage points by other manufactured products. The collapse of petroleum prices by 3.3 percent deducted 0.36 percentage points from monthly inflation of manufactured products.
Table IV-16, Contributions to Month and 12-Month Change in Prices of All Manufactured Products, Percentage Points
| Jun 2012 | 12 Months | 12 Months ∆% | Month % Points | Month ∆% |
| Total % | 2.3 | -0.4 | ||
| Food Products | 0.46 | 2.8 | 0.00 | 0.0 |
| Tobacco & Alcohol | 0.81 | 7.7 | 0.02 | 0.2 |
| Clothing, Textile & Leather | 0.20 | 1.8 | -0.02 | -0.2 |
| Paper and Printing | 0.00 | 0.1 | 0.00 | -0.1 |
| Petroleum | -0.26 | -2.2 | -0.36 | -3.3 |
| Chemical & Pharmaceutical | 0.03 | 0.4 | -0.08 | -1.0 |
| Metal, Machinery & Equipment | 0.05 | 1.3 | 0.00 | 0.0 |
| Computer, Electrical & Optical | 0.28 | 3.3 | 0.00 | 0.1 |
| Transport Equipment | 0.18 | 1.7 | 0.01 | 0.0 |
| Other Manufactured Products | 0.56 | 3.3 | 0.03 | 0.2 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
The UK Office for National Statistics also provides contributions in percentage points to the monthly and 12-month rates of inflation of input prices, shown in Table IV-17. Fuel is the large contributor with deduction of 2.88 percentage points from the 12-month rate and deduction of 2.47 percentage points from the monthly rate in Jun. Inflation also transfers to the domestic economy through the prices of imported inputs: other imported materials contributed 0.42 percentage points to the 12-month rate and added 0.06 percentage points to the Jun rate. Crude oil price fell 9.1 percent in Jun and deducted 2.47 percentage points from the monthly rate. Reversals of commodity exposures in carry trades during risk aversion are a major source of financial instability.
Table IV-17, UK, Contributions to Month and 12-Month Change in Prices of Inputs, Percentage Points
| Jun 2012 | 12 Months | 12 Months ∆% | Month % Points | Month ∆% |
| Total | -2.3 | -2.2 | ||
| Fuel | 0.56 | 6.3 | -0.08 | -0.8 |
| Crude Oil | -2.88 | -10.4 | -2.47 | -9.1 |
| Domestic Food Materials | 0.38 | 3.7 | 0.37 | 3.7 |
| Imported Food Materials | 0.15 | 2.9 | 0.01 | 0.2 |
| Other Domestic Produced Materials | 0.04 | 1.1 | 0.01 | 0.3 |
| Imported Metals | -0.84 | -10.0 | -0.11 | -1.4 |
| Imported Chemicals | 0.08 | 0.6 | 0.03 | 0.3 |
| Imported Parts and Equipment | -0.22 | -1.4 | -0.02 | -0.6 |
| Other Imported Materials | 0.42 | 4.3 | 0.06 | 0.6 |
Source: http://www.ons.gov.uk/ons/rel/ppi2/producer-price-index/june-2012/index.html
V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/index.aspx) to show GDP in dollars in 2010 and the growth rate of real GDP of the world and selected regional countries from 2011 to 2014. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has lowered its forecast of the world economy to 3.5 percent in 2012 but accelerating to 4.1 percent in 2013, 4.4 percent in 2014 and 4.5 percent in 2015. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $33,670 billion of world output of $69,660 billion, or 48.3 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2012 to 2015 in contrast with 4.1 percent for the world as a whole. While the world would grow 17.6 percent in the four years from 2012 to 2015, the G7 as a whole would grow 8.5 percent. The difference in dollars of 2011 is rather high: growing by 17.6 percent would add $12.3 trillion of output to the world economy, or roughly two times the output of the economy of Japan of $5,869 but growing by 8.5 percent would add $5.9 trillion of output to the world, or about the output of Japan in 2011. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2011 of $25,237 billion, or 36.2 percent of world output. The EMDEs would grow cumulatively 26.5 percent or at the average yearly rate of 6.1 percent, contributing $6.7 trillion from 2012 to 2015 or the equivalent of somewhat less than the GDP of $7,298 billion of China in 2011. The final four countries in Table 1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output adds to $13,317 billion, or 19.1 percent of world output, which is equivalent to 39.6 percent of the combined output of the major advanced economies of the G7.
Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth
| GDP USD 2011 | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| World | 69,660 | 3.5 | 4.1 | 4.4 | 4.5 |
| G7 | 33,670 | 1.5 | 1.9 | 2.3 | 2.5 |
| Canada | 1,737 | 2.1 | 2.2 | 2.4 | 2.4 |
| France | 2,776 | 0.5 | 1.1 | 1.9 | 1.9 |
| DE | 3,577 | 0.6 | 1.5 | 1.3 | 1.3 |
| Italy | 2,199 | -1.9 | -0.3 | 0.5 | 1.0 |
| Japan | 5,869 | 2.0 | 1.7 | 1.5 | 1.3 |
| UK | 2,418 | 0.8 | 2.0 | 2.5 | 2.6 |
| US | 15,094 | 2.1 | 2.4 | 2.9 | 3.3 |
| Euro Area | 13,115 | -0.3 | 0.9 | 1.4 | 1.6 |
| DE | 3,577 | 0.6 | 1.5 | 1.3 | 1.3 |
| France | 2,776 | 0.5 | 1.1 | 1.9 | 1.9 |
| Italy | 2,199 | -1.9 | -0.3 | 0.5 | 1.0 |
| POT | 239 | -3.3 | 0.3 | 2.1 | 1.9 |
| Ireland | 218 | 0.5 | 2.1 | 2.5 | 2.8 |
| Greece | 303 | -4.7 | 0.0 | 2.5 | 3.1 |
| Spain | 1,494 | -1.8 | 0.1 | 1.6 | 1.6 |
| EMDE | 25,237 | 5.7 | 6.0 | 6.2 | 6.3 |
| Brazil | 2,493 | 3.0 | 4.2 | 4.0 | 4.1 |
| Russia | 1,850 | 4.0 | 3.9 | 3.9 | 3.9 |
| India | 1,676 | 6.9 | 7.3 | 7.5 | 7.7 |
| China | 7,298 | 8.2 | 8.8 | 8.7 | 8.7 |
Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries); POT: Portugal
Source: IMF World Economic Outlook databank
http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/index.aspx
Table V-2 is constructed with the WEO database to provide rates of unemployment from 2011 to 2015 for major countries and regions. In fact, unemployment rates for 2011 in Table ESV-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high for the countries with sovereign debt difficulties in Europe: 12.7 percent for Portugal (POT), 14.4 percent for Ireland, 17.3 percent for Greece, 21.6 percent for Spain and 8.4 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.7 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.
Table V-2, IMF World Economic Outlook Database Projections of Unemployment Rate as Percent of Labor Force
| % Labor Force 2011 | % Labor Force 2012 | % Labor Force 2013 | % Labor Force 2014 | % Labor Force 2015 | |
| World | NA | NA | NA | NA | NA |
| G7 | 7.7 | 7.4 | 7.3 | 7.0 | 6.7 |
| Canada | 7.5 | 7.4 | 7.3 | 7.1 | 6.9 |
| France | 9.7 | 9.9 | 10.1 | 9.8 | 9.4 |
| DE | 6.0 | 5.6 | 5.5 | 5.3 | 5.3 |
| Italy | 8.4 | 9.5 | 9.7 | 9.8 | 9.5 |
| Japan | 4.5 | 4.5 | 4.4 | 4.3 | 4.2 |
| UK | 8.0 | 8.3 | 8.2 | 7.8 | 7.4 |
| US | 8.9 | 8.2 | 7.9 | 7.5 | 6.9 |
| Euro Area | 10.1 | 10.9 | 10.8 | 10.5 | 10.1 |
| DE | 6.0 | 5.6 | 5.5 | 5.3 | 5.3 |
| France | 9.7 | 9.9 | 10.1 | 9.8 | 9.4 |
| Italy | 8.4 | 9.5 | 9.7 | 9.8 | 9.5 |
| POT | 12.7 | 14.3 | 13.9 | 13.2 | 12.4 |
| Ireland | 14.4 | 14.5 | 13.8 | 12.9 | 12.0 |
| Greece | 17.3 | 19.4 | 19.4 | 18.2 | 16.8 |
| Spain | 21.6 | 24.2 | 23.9 | 22.8 | 21.9 |
| EMDE | NA | NA | NA | NA | NA |
| Brazil | 6.0 | 6.0 | 6.5 | 7.0 | 7.0 |
| Russia | 7.5 | 6.5 | 6.0 | 6.0 | 6.0 |
| India | NA | NA | NA | NA | NA |
| China | 4.1 | 4.0 | 4.0 | 4.0 | 4.0 |
Notes: DE: Germany; EMDE: Emerging and Developing Economies (150 countries)
Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2012/01/weodata/weoselgr.aspx
Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog. Growth is weak throughout most of the world. Japan’s GDP increased 1.2 percent in IQ2012 and 2.8 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. China grew at 1.8 percent in IQ2012, which annualizes to 7.4 percent. Xinhuanet informs that Premier Wen Jiabao considers the need for macroeconomic stimulus, arguing that “we should continue to implement proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth” (http://news.xinhuanet.com/english/china/2012-05/20/c_131599662.htm). Premier Wen elaborates that “the country should properly handle the relationship between maintaining growth, adjusting economic structures and managing inflationary expectations” (http://news.xinhuanet.com/english/china/2012-05/20/c_131599662.htm). GDP was flat in the euro area in IQ2012 and fell 0.1 percent relative to a year earlier. Germany’s GDP increased 0.5 percent in IQ2012 and 1.7 percent relative to a year earlier. US GDP increased 0.5 percent in IQ2012 and 2.0 percent relative to a year earlier (Section I) but with substantial underemployment and underemployment (http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html) and weak hiring (Section I http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of.html
Table V-3, Percentage Changes of GDP Quarter on Prior Quarter and on Same Quarter Year Earlier, ∆%
| IQ2012/IVQ2011 | IQ2012/IQ2011 | |
| United States | 0.5 | 2.0 |
| Japan | 1.2 | 2.8 |
| China | 1.8 | 8.1 |
| Euro Area | 0.0 | -0.1 |
| Germany | 0.5 | 1.7 |
| France | 0.0 | 0.3 |
| Italy | -0.8 | -1.4 |
| United Kingdom | -0.3 | -0.1 |
Source: Country Statistical Agencies
http://www.bea.gov/national/index.htm#gdp http://www.esri.cao.go.jp/en/sna/sokuhou/sokuhou_top.html http://www.stats.gov.cn/enGliSH/ http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html http://www.insee.fr/en/ http://www.istat.it/en/ http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q1-2012/index.html
The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, fell from 52.1 in May to 50.3 in Jun, indicating expansion at a lower rate but close to stagnation and to the contraction zone at 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9795). This index has remained above the contraction territory of 50.0 during 34 months. Both global manufacturing and services have slowed down considerably. David Hensley, Director of Global Economic Coordination at JP Morgan, finds that the PMI data suggest world GDP growth in IIQ2012 could be the slowest in three years (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9795). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, fell to 48.9 in Jun from 50.6 in May, for the lowest reading in three years and the first change of direction to contraction since Nov 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9762). David Hensley, Director of Global Economics Coordination at JPMorgan, finds that inventory adjustment is the driver of the only second change to contraction in the current expansion (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9762). The HSBC Brazil Composite Output Index, compiled by Markit, rose from marginal contraction of 49.6 in May to moderate expansion at 51.5 in Jun (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9775). Andre Loes, Chief Economist, Brazil, at HSBC, finds that PMI data for IIQ2012 could signal weaker activity in services, which can restrain growth of GDP in the year, although the HSBC Services PMI Business Activity Index increased from 49.7 in May to 53.0 in Jun (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9775). The HSBC Brazil Purchasing Managers’ IndexTM (PMI™) fell to 48.5 in Jun from 49.3 in May, indicating modest business conditions in Brazilian manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9733). Andre Loes, Chief Economist, Brazil at HSBC, finds that the manufacturing index average of 49.0 in IIQ2012 is lower than the prior quarter’s average of 51.0 with Brazil experiencing competitive pressures (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9733).
VA United States. The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® fell 3.8 percentage points from 53.5 in May to 49.7 in Jun, for the first contraction since Jul 2009 (http://www.ism.ws/ISMReport/MfgROB.cfm). The index of new orders fell 12.3 percentage points from 60.1 in May to 47.8 in Jun, interrupting growth in 37 months for the first contraction since Apr 2009. The Non-Manufacturing ISM Report on Business® PMI fell 1.6 percentage points from 53.7 in May to 52.1 in Jun while the index of new orders decreased 3.9 percentage points from 55.6 in May to 55.3 in Jun (http://www.ism.ws/ISMReport/NonMfgROB.cfm). Table USA provides the country economic indicators for the US.
Table USA, US Economic Indicators
| Consumer Price Index | May 12 months NSA ∆%: 1.7; ex food and energy ∆%: 2.3 May month ∆%: -0.3; ex food and energy ∆%: 0.2 |
| Producer Price Index | May 12-month NSA ∆%: 0.7; ex food and energy ∆% 2.7 |
| PCE Inflation | May 12-month NSA ∆%: headline 1.5; ex food and energy ∆% 1.8 |
| Employment Situation | Household Survey: Jun Unemployment Rate SA 8.2% |
| Nonfarm Hiring | Nonfarm Hiring fell from 69.4 million in 2004 to 50.1 million in 2011 or by 19.3 million |
| GDP Growth | BEA Revised National Income Accounts back to 2003 IIIQ2011 SAAR ∆%: 1.8 IVQ2011 SAAR ∆%: 3.0 IQ2012 SAAR ∆%: 1.9 IQ2012/IQ2011 ∆%: 2.0 |
| Personal Income and Consumption | May month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.3 |
| Quarterly Services Report | IQ12/IQ11 SA ∆%: |
| Employment Cost Index | IQ2012 SA ∆%: 0.4 |
| Industrial Production | May month SA ∆%: -0.1 Manufacturing May SA ∆% -0.4 May 12 months SA ∆% 5.2, NSA 5.4 |
| Productivity and Costs | Nonfarm Business Productivity IQ2012∆% SAAE -0.9; IQ2012/IQ2011 ∆% 0.4; Unit Labor Costs SAAE IQ2012 ∆% 1.3; IQ2012/IQ2011 ∆%: 0.9 Blog 6/10/2012 |
| New York Fed Manufacturing Index | General Business Conditions From May 17.09 to Jun 2.29 |
| Philadelphia Fed Business Outlook Index | General Index from May minus 5.8 to Jun minus 16.6 |
| Manufacturing Shipments and Orders | May New Orders SA ∆%: 0.7; ex transport ∆%: 0.4 |
| Durable Goods | May New Orders SA ∆%: 1.1; ex transport ∆%: 0.4 |
| Sales of New Motor Vehicles | Jun 2012 7,272,160; Jun 2011 6,332,566. Jun SAAR 14.08 million, May SAAR 13.78 million, Jun 2011 SAAR 11.56 million Blog 7/8/12 |
| Sales of Merchant Wholesalers | Jan-Apr 2012/Jan-Apr 2011 NSA ∆%: Total 8.4; Durable Goods: 10.3; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Apr 12/Apr 11 NSA ∆%: Sales Total Business 4.9; Manufacturers 4.3 |
| Sales for Retail and Food Services | Jan-May 2012/Jan-May 2011 ∆%: Retail and Food Services 7.0; Retail ∆% 6.8 |
| Value of Construction Put in Place | May SAAR month SA ∆%: 0.9 May 12-month NSA: 7.4 |
| Case-Shiller Home Prices | Apr 2012/Apr 2011 ∆% NSA: 10 Cities minus 2.2; 20 Cities: minus 1.9 |
| FHFA House Price Index Purchases Only | Apr SA ∆% 0.8; |
| New House Sales | May 2012 month SAAR ∆%: |
| Housing Starts and Permits | May Starts month SA ∆%: minus 4.8 ; Permits ∆%: 7.9 |
| Trade Balance | Balance Apr SA -$50,062 million versus Mar -$52617 million |
| Export and Import Prices | May 12-month NSA ∆%: Imports -0.3; Exports -0.1 |
| Consumer Credit | Apr ∆% annual rate: 3.1 |
| Net Foreign Purchases of Long-term Treasury Securities | Apr Net Foreign Purchases of Long-term Treasury Securities: $25.6 billion |
| Treasury Budget | Fiscal Year Oct-May 2012/2011 ∆%: Receipts 5.4; Outlays -0.1; Individual Income Taxes 4.2 Deficit Fiscal Year 2012 Oct-May $844,494 million CBO Forecast 2012FY Deficit $1.171 trillion Blog 6/17/2012 |
| Flow of Funds | IQ2012 ∆ since 2007 Assets -$4113B Real estate -$4916B Financial $367.3MM Net Worth -$3300B Blog 6/17/12 |
| Current Account Balance of Payments | IQ2012 -$137B %GDP 3.6 Blog 06/17/12 |
Links to blog comments in Table USA:
7/2/12 http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states_03.html
6/24/12 http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of_24.html
6/10/12 http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities_10.html
4/29/12 http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-growth-with-high-unemployment_29.html
Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan-Jun 2012, light vehicle sales accumulated to 7,272,160, which is higher by 14.8 percent relative to 6,332,566 a year earlier (http://www.motorintelligence.com/m_frameset.html). The seasonally-adjusted annual rate of light vehicle sales in the US reached 14.08 million in Jun 2012, higher than 13.78 million in May 2012 and higher than 11.56 million in Jun 2011 (http://www.motorintelligence.com/m_frameset.html).
Table VA-1, US, New Motor Vehicle Sales and Car Production, Thousand Units
| New Motor Vehicle Sales | New Car Sales and Leases | New Truck Sales and Leases | Domestic Car Production | |
| 1990 | 14,137 | 9,300 | 4,837 | 6,231 |
| 1991 | 12,725 | 8,589 | 4,136 | 5,454 |
| 1992 | 13,093 | 8,215 | 4,878 | 5,979 |
| 1993 | 14,172 | 8,518 | 5,654 | 5,979 |
| 1994 | 15,397 | 8,990 | 6,407 | 6,614 |
| 1995 | 15,106 | 8,536 | 6,470 | 6,340 |
| 1996 | 15,449 | 8,527 | 6,922 | 6,081 |
| 1997 | 15,490 | 8,273 | 7,218 | 5,934 |
| 1998 | 15,958 | 8,142 | 7,816 | 5,554 |
| 1999 | 17,401 | 8,697 | 8,704 | 5,638 |
| 2000 | 17,806 | 8,852 | 8,954 | 5,542 |
| 2001 | 17,468 | 8,422 | 9,046 | 4,878 |
| 2002 | 17,144 | 8,109 | 9,036 | 5,019 |
| 2003 | 16,968 | 7,611 | 9,357 | 4,510 |
| 2004 | 17,298 | 7,545 | 9,753 | 4,230 |
| 2005 | 17,445 | 7,720 | 9,725 | 4,321 |
| 2006 | 17,049 | 7,821 | 9,228 | 4,367 |
| 2007 | 16,460 | 7,618 | 8,683 | 3,924 |
| 2008 | 13,494 | 6,814 | 6.680 | 3,777 |
| 2009 | 10,601 | 5,456 | 5,154 | 2,247 |
| 2010 | 11,772 | 5,729 | 6,044 | 2,840 |
Source: US Census Bureau http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html
Manufacturers’ shipments increased 0.5 percent in May after decreasing 0.2 percent in Apr. New orders increased 0.7 percent in May following decline by 0.7 percent in Apr, as shown in Table VA-2. These data are very volatile. Volatility is illustrated by increase of 88.1 percent of new orders of nondefense aircraft in Nov and revised 21.0 percent in Dec followed by decline of 17.2 percent in Jan and revised increase by 2.7 percent in Feb but sharp decline of 46.6 percent in Mar with increase of 4.9 percent in May. New orders excluding transportation equipment increased 0.4 percent in May. Capital goods new orders, indicating investment, increased 2.3 percent in May but fell 3.4 percent in Apr and 10.7 percent in Mar. New orders of nondefense capital goods increased 1.8 percent in May but fell 12.2 percent in Mar and 0.9 percent in Apr. Excluding more volatile aircraft, capital goods orders increased 2.1 percent in May but fell 1.5 percent in Apr and 2.3 percent in Mar.
Table VA-2, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%
| May 2012 ∆% | Apr 2012 | Mar 2012 | |
| Total | |||
| S | 0.5 | -0.2 | 0.1 |
| NO | 0.7 | -0.7 | -2.1 |
| Excluding | |||
| S | 0.3 | -0.8 | -0.3 |
| NO | 0.4 | -0.9 | -0.7 |
| Excluding | |||
| S | 0.3 | 0.0 | -0.1 |
| NO | 0.5 | -0.2 | -2.1 |
| Durable Goods | |||
| S | 0.8 | 0.7 | 0.9 |
| NO | 1.3 | -0.3 | -3.7 |
| Machinery | |||
| S | -0.1 | -3.2 | 4.8 |
| NO | 4.2 | -3.4 | -5.1 |
| Computers & Electronic Products | |||
| S | 1.7 | 1.4 | -2.5 |
| NO | -0.1 | 1.6 | -0.8 |
| Computers | |||
| S | 3.0 | -1.0 | -10.8 |
| NO | 7.6 | -4.6 | -5.6 |
| Transport | |||
| S | 1.6 | 3.5 | 2.4 |
| NO | 2.7 | 0.8 | -10.5 |
| Automobiles | |||
| S | 1.4 | 8.5 | 2.8 |
| Motor Vehicles | |||
| S | 1.1 | -0.1 | 2.3 |
| NO | 1.3 | -0.9 | 2.0 |
| Nondefense | |||
| S | 2.3 | 5.8 | -2.7 |
| NO | 4.9 | 0.1 | -46.6 |
| Capital Goods | |||
| S | 1.5 | -1.5 | 2.0 |
| NO | 2.3 | -3.4 | -10.7 |
| Nondefense Capital Goods | |||
| S | 0.6 | -0.6 | 1.3 |
| NO | 1.8 | -0.9 | -12.2 |
| Capital Goods ex Aircraft | |||
| S | 0.6 | -1.5 | 1.8 |
| NO | 2.1 | -1.5 | -2.3 |
| Nondurable Goods | |||
| S | 0.2 | -1.1 | -0.7 |
| NO | 0.2 | -1.0 | -0.7 |
Note:Mfg: manufacturing; S: shipments; NO: new orders; Transport: transportation
Source: US Census Bureau
http://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf
Chart VA-1 of the US Census Bureau shows monthly changes in manufacturers’ new orders in the past 12 months. Trends are difficult to discern for these data because of the significant volatility.
Chart VA-1, US, Manufacturers’ New Orders 2010-2011 Seasonally Adjusted, Month ∆%
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr022.html
Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-3. Values are cumulative millions of dollars in Jan-May 2012 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-May 2012 total $2364.8 billion and new orders total $2358.7 billion, growing respectively by 6.7 percent and 6.1 percent relative to the same period in 2011. Excluding transportation equipment, shipments grew 6.0 percent and new orders increased 5.6 percent. Excluding defense, shipments grew 7.1 percent and new orders grew 6.9 percent. Durable goods shipments reached $1101.7 billion in Jan-May 2012, or 46.6 percent of the total, growing by 9.5 percent, and new orders $1095.6 billion, or 46.4 percent of the total, growing by 8.1 percent. Important information in Table VA-8 is the large share of nondurable goods: with shipments of $1263.1 billion or 53.4 percent of the total, growing by 4.4 percent, and new orders also of $1263.1 billion or 53.6 percent of the total. Capital goods have relatively high value of $380.5 billion for shipments, growing 7.7 percent, and new orders $402.6 billion, growing 4.6 percent, which could be a favorable sign of future investment. Excluding aircraft, capital goods shipments reached $311.7 billion, growing by 8.4 percent, and new orders $327.1 billion, growing 6.9 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 10.4 percent of US national income.
Table VA-3, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars
| Jan-May 2012 | Shipments | ∆% 2012/ | New Orders | ∆% 2012/ |
| Total | 2,364,751 | 6.7 | 2,358,673 | 6.1 |
| Excluding Transport | 2,051,101 | 6.0 | 2,040,710 | 5.6 |
| Excluding Defense | 2,312,747 | 7.1 | 2,308,513 | 6.9 |
| Durable Goods | 1,101,673 | 9.5 | 1,095,595 | 8.1 |
| Machinery | 157,479 | 11.2 | 164,805 | 2.7 |
| Computers & Electronic Products | 135,277 | -0.6 | 109,301 | 6.1 |
| Computers & Related Products | 65,767 | -11.3 | 5,791 | -9.9 |
| Transport Equipment | 313,650 | 12.0 | 317,963 | 9.1 |
| Automobiles | 42,903 | 26.9 | ||
| Motor Vehicles | 95,181 | 6.2 | 94,669 | 5.8 |
| Nondefense Aircraft | 44,271 | 28.0 | 53,936 | 29.7 |
| Capital Goods | 380,488 | 7.7 | 402,594 | 4.6 |
| Nondefense Capital Goods | 339,959 | 10.7 | 363,980 | 10.0 |
| Capital Goods ex Aircraft | 311,662 | 8.4 | 327,066 | 6.9 |
| Nondurable Goods | 1,263,078 | 4.4 | 1,263,078 | 4.4 |
| Food Products | 296,671 | 4.2 | ||
| Petroleum Refineries | 340,532 | 7.4 | ||
| Chemical Products | 324,137 | 1.7 |
Note: Transport: transportation
Source: http://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf
Construction spending at seasonally-adjusted annualized rate (SAAR) reached $830 billion in May, which was higher by 0.9 percent than in the prior month of Apr, as shown in Table VA-4. Residential investment, with $267.7 billion accounting for 32.3 percent of total value of construction, increased 2.9 percent in May and nonresidential investment, with $562.3 billion accounting for 67.7 percent of the total, was unchanged. Public construction fell 0.4 percent while private construction increased 3.0 percent. Data in Table VA-4 show that nonresidential construction at $562.3 billion is much higher in value than residential construction at $267.7 billion while total private construction at $560.4 billion is much higher than public construction at $269.6 billion, all in SAAR. Residential construction contributed positively to growth of GDP in the US in IQ2012 (http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states.html).
Table VA-4, US, Value of Construction Put in Place in the United States Seasonally Adjusted Annual Rate Billion Dollars and Month and 12-Month ∆%
| May 2012 SAAR $ Billions | Month ∆% | 12-Month ∆% | |
| Total | 830.0 | 0.9 | 7.0 |
| Residential | 267.7 | 2.9 | 6.2 |
| Nonresidential | 562.3 | 0.0 | 7.4 |
| Total Private | 560.4 | 1.6 | 13.1 |
| Private Residential | 261.3 | 3.0 | 7.5 |
| New Single Family | 121.3 | 1.8 | 14.8 |
| New Multi-Family | 20.5 | 6.3 | 50.3 |
| Private Nonresidential | 299.1 | 0.4 | 18.6 |
| Total Public | 269.6 | -0.4 | -3.9 |
| Public Residential | 6.4 | -0.8 | -29.4 |
| Public Nonresidential | 263.2 | -0.4 | -3.0 |
SAAR: seasonally adjusted annual rate; B: billions
Source: US Census Bureau
http://www.census.gov/construction/c30/pdf/release.pdf
Further information on construction spending is provided in Table VA-5. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAAR and their monthly changes are provided in the final two columns. There has been improvement in construction in the US in 2011 but another bump in early 2012. On a monthly basis, construction fell three consecutive months from Dec 2010 to Feb 2011, increasing in ten of the eleven months from Mar 2011 to Jan 2012, with sole decline of 4.2 percent in Jul. Improvement was interrupted in 2012 with decline of 0.5 percent in Feb 2012, further decline of 0.3 percent in Mar and recovery of 0.6 percent in Apr and 0.9 percent in May. The 12 months rates of change improved from minus 8.6 percent in Apr 2011 to the first positive 12-month percentage change of 0.7 percent in Nov and further improvement with 7.4 percent in May 2012.
Table VA-5, US, Value and Percentage Change in Value of Construction Put in Place, Dollars Millions and ∆%
| Value NSA | 12-Month ∆% NSA | Value | Month ∆% SA* | |
| May 2012 | 70,734 | 7.4 | 830,013 | 0.9 |
| Apr | 66,164 | 9.0 | 822,497 | 0.6 |
| Mar | 60,939 | 8.6 | 817,842 | -0.3 |
| Feb | 56,108 | 11.8 | 820,677 | -0.5 |
| Jan | 56,535 | 10.9 | 824,687 | 0.5 |
| Dec 2011 | 62,825 | 4.4 | 820,614 | 2.1 |
| Nov | 68,476 | 0.7 | 804,046 | 1.0 |
| Oct | 73,282 | -0.3 | 795,733 | 0.7 |
| Sep | 73,515 | -1.7 | 790,294 | 0.5 |
| Aug | 75,101 | -1.0 | 786,308 | 3.0 |
| Jul | 69,929 | -4.3 | 763,468 | -4.2 |
| Jun | 71,297 | -3.7 | 796,784 | 2.7 |
| May | 65,845 | -4.4 | 775,837 | 2.7 |
| Apr | 60,682 | -8.6 | 755,420 | 0.3 |
| Mar | 56,130 | -6.8 | 753,433 | 1.0 |
| Feb | 50,184 | -7.1 | 746,065 | -0.9 |
| Jan | 50,971 | -8.3 | 752,638 | -3.5 |
| Dec 2010 | 60,202 | -6.1 | 779,895 | -2.3 |
SAAR: Seasonally-adjusted Annual Rate
*Percentages are calculated with values without numbers and may differ from rounded numbers Source: US Census Bureau
http://www.census.gov/construction/c30/c30index.html
The strong contraction of the value of construction in the US is revealed by Table VA-6. Construction spending in Jan-May 2012, not seasonally adjusted, reached $310.5 billion, which is higher by 9.4 percent than $283.8 billion in the same period in 2011. The depth of the contraction is shown by the decline of construction spending from $460.1 billion in Jan-May 2006 to only $310.5 billion in the same period in 2012, or decline by minus 32.5 percent. The comparable decline from Jan-May 2005 to Jan-May 2012 is minus 26.3 percent. Construction spending in Jan-May 2012 fell by 8.4 percent relative to the same period in 2003. Construction spending is lower by 13.0 percent in Jan-May 2012 relative to the same period in 2009. Construction has been weaker than the economy as a whole.
Table VA-6, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Billions and ∆%
| Jan-May 2012 $ B | 310,480 |
| Jan-May 2011 $ B | 283,811 |
| ∆% to 2012 | 9.4 |
| Jan-May 2010 | 304,386 |
| ∆% to 2012 | 2.0 |
| Jan-May 2009 | 356,865 |
| ∆% to 2012 | -13.0 |
| Jan-May 2006 $ B | 460,082 |
| ∆% to 2012 | -32.5 |
| Jan-May 2005 $ B | 421,055 |
| ∆% to 2012 | -26.3 |
| Jan-May 2003 | 338,822 |
| ∆% to 2012 | -8.4 |
Source: US Census Bureau http://www.census.gov/const/www/c30index.html
Monthly construction spending in the US in the four months Jan-May not seasonally adjusted is shown in Table VA-8 for the years between 2002 and 2012. The values of $70.7 billion in May 2012 and $65.8 billion in May 2011 are lower than $73.4 billion in May 2002. Construction in May 2012 fell by 31.0 percent from the peak of $102.5 billion in May 2006 to $70.7 billion in May 2012. The data are not adjusted for inflation or changes in quality.
Table VA-7, US, Value of Construction Spending NSA Millions of Dollars
| Year | Jan | Feb | Mar | Apr | May |
| 2002 | 59,516 | 58,588 | 63,782 | 69,504 | 73,384 |
| 2003 | 59,877 | 58,526 | 64,506 | 69,638 | 74,473 |
| 2004 | 64,934 | 64,138 | 73,238 | 78,354 | 83,736 |
| 2005 | 71,474 | 72,048 | 81,345 | 85,485 | 92,959 |
| 2006 | 81,058 | 81,478 | 92,855 | 95,324 | 102,495 |
| 2007 | 79,406 | 79,177 | 88,905 | 93,375 | 100,534 |
| 2008 | 77,349 | 77,227 | 82,779 | 87,743 | 92,781 |
| 2009 | 66,944 | 66,296 | 71,624 | 75,187 | 76,808 |
| 2010 | 55,586 | 54,019 | 60,228 | 66,422 | 68,906 |
| 2011 | 50,971 | 50,184 | 56,130 | 60,682 | 65,845 |
| 2012 | 56,535 | 56,108 | 60,939 | 66,164 | 70,734 |
Source: US Census Bureau http://www.census.gov/const/www/c30index.html
Chart VA-2 of the US Bureau of the Census shows SAARs of construction spending for the US since 1993. Construction spending surged in nearly vertical slope after the stimulus of 2003 combining near zero interest rates and subsequent slow adjustment in 17 doses of increases by 25 basis points between Jun 2004 and Jun 2006 together with other housing subsidies. Construction spending collapsed after subprime mortgages defaulted with the fed funds rate increasing from 1.00 percent in Jun 2004 to 5.25 percent in Jun 2006. Subprime mortgages were programmed for refinancing in two years after increases in homeowner equity in the assumption that fed funds rates would remain low forever or increase in small increments (Gorton 2009EFM see http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html). Price declines of houses or even uncertainty prevented refinancing of subprime mortgages that defaulted, causing the financial crisis that eventually triggered the global recession. Chart VA-2 shows a trend of increase in the final segment but it is difficult to assess if it will be sustained.
Chart VA-2, US, Construction Expenditures SAAR 1993-2012
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr050.html
Construction spending at SAARs in the four months Jan to Apr is shown in Table VA-8 for the years between 2002 and 2012. There is a peak in 2005 to 2006 with subsequent collapse of SAARs and rebound in 2012.
Table VA-8, US, Value of Construction Spending Seasonally Adjusted Annual Rate Millions of Dollars
| Year | Jan | Feb | Mar | Apr | May |
| 2002 | 858,654 | 862,338 | 844,551 | 858,240 | 850,935 |
| 2003 | 863,855 | 859,225 | 851,132 | 859,459 | 866,814 |
| 2004 | 938,826 | 938,656 | 960,946 | 967,761 | 974,158 |
| 2005 | 1,036,187 | 1,056,492 | 1,065,262 | 1,058,365 | 1,078,586 |
| 2006 | 1,183,861 | 1,199,767 | 1,213,270 | 1,183,485 | 1,180,059 |
| 2007 | 1,149,899 | 1,156,008 | 1,167,402 | 1,159,124 | 1,168,195 |
| 2008 | 1,106,047 | 1,092,331 | 1,094,910 | 1,091,142 | 1,091,008 |
| 2009 | 962,704 | 959,907 | 954,984 | 929,593 | 911,241 |
| 2010 | 816,132 | 795,808 | 805,985 | 824,008 | 816,318 |
| 2011 | 752,638 | 746,056 | 753,433 | 755,420 | 775,837 |
| 2012 | 824,687 | 820,677 | 817,842 | 822,497 | 830,013 |
Source: US Census Bureau http://www.census.gov/const/www/c30index.html
Annual available data for the value of construction put in place in the US between 1993 and 2011 are provided in Table VA-9. Data from 1993 to 2001 are available for public and private construction with breakdown in residential and nonresidential only for private construction. Data beginning in 2002 provide aggregate residential and nonresidential values. Total construction value put in place in the US increased 60.3 percent between 1993 and 2011 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with decline of 3.1 percent between 2000 and 2011. Total value of construction fell 8.2 percent between 2002 and 2011 with value of nonresidential construction increasing 19.4 percent while value of residential construction fell 38.9 percent. Value of total construction fell 31.7 percent between 2005 and 2011, with value of residential construction declining 60.2 percent while value of nonresidential construction rose 9.4 percent. Value of total construction fell 33.3 percent between 2006 and 2011, with value of nonresidential construction decreasing 2.7 percent while value of residential construction fell 60.4 percent. In 2002, nonresidential construction had a share of 52.6 percent in total construction while the share of residential construction was 47.4 percent. In 2011, the share of nonresidential construction in total value rose to 68.4 percent while that of residential construction fell to 31.6 percent.
Table VA-9, Annual Value of Construction Put in Place 1993-2010, Millions of Dollars and ∆%
| Total | Private Nonresidential | Private Residential | |
| 1993 | 485,548 | 150,006 | 208,180 |
| 1994 | 531,892 | 160,438 | 241,033 |
| 1995 | 548,666 | 180,534 | 228,121 |
| 1996 | 599,693 | 195,523 | 257,495 |
| 1997 | 631,853 | 213,720 | 264,696 |
| 1998 | 688,515 | 237,394 | 296,343 |
| 1999 | 744,551 | 249,167 | 326,302 |
| 2000 | 802,756 | 275,293 | 346,138 |
| 2001 | 840,249 | 273,922 | 364,414 |
| Total | Total Nonresidential | Total Private Residential | |
| 2002 | 847,874 | 445,914 | 401,960 |
| 2003 | 891,497 | 440,246 | 451,251 |
| 2004 | 991,356 | 452,948 | 538,408 |
| 2005 | 1,140,136 | 486,629 | 617,507 |
| 2006 | 1,167,222 | 547,408 | 619,814 |
| 2007 | 1,152,351 | 651,883 | 500,468 |
| 2008 | 1,067,564 | 709,818 | 357,746 |
| 2009 | 903,201 | 649,273 | 253,928 |
| 2010 | 804,561 | 555,449 | 249,112 |
| 2011 | 778,238 | 532,552 | 245,686 |
| ∆% 1993-2011 | 60.3 | ||
| ∆% 1993-2000 | 65.3 | ||
| ∆% 2000-2011 | -3.1 | ||
| ∆% 2002-2011 | -8.2 | 19.4 | -38.9 |
| ∆% 2005-2011 | -31.7 | 9.4 | -60.2 |
| ∆% 2006-2011 | -33.3 | -2.7 | -60.4 |
Source: http://www.census.gov/const/www/c30index.html
VB Japan. Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (http://www.boj.or.jp/en/mopo/outlook/gor1204a.pdf
http://www.boj.or.jp/en/mopo/outlook/gor1204b.pdf). For fiscal 2012, the forecast is of growth of GDP between 2.1 and 2.4 percent, with domestic producer price inflation (Corporate Goods Price Index, CGPI) in the range of 0.4 to 0.7 percent and the all items CPI less fresh food of 0.1 to 0.4 percent.
Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year
| Fiscal Year | Real GDP | Domestic CGPI | CPI All Items Less Fresh Food |
| 2011 | |||
| Apr 2012 | -0.2 to –0.2 | +1.7 | 0.0 |
| Jan 2012 | -0.4 to –0.3 | +1.8 to +1.9 | -0.1 to 0.0 |
| 2012 | |||
| Apr 2012 | +2.1 to +2.4 | +0.4 to +0.7 | +0.1 to +0.4 |
| Jan 2012 | +1.8 to +2.1 | -0.1 to +0.2 | 0.0 to +0.2 |
| 2013 | |||
| Apr 2012 | +1.6 to +1.8 | +0.7 to +0.9 | +0.5 to +0.7 |
| Jan 2012 | +1.4 to +1.7 | +0.6 to 1.0 | +0.4 to +0.5 |
Figures in brackets are the median of forecasts of Policy Board members
Source: Policy Board, Bank of Japan
http://www.boj.or.jp/en/mopo/outlook/gor1204a.pdf
http://www.boj.or.jp/en/mopo/outlook/gor1204b.pdf
Private-sector activity in Japan contracted at a moderate rate with the Markit Composite Output PMI™ Index declining from 50.1 in May to 49.1 in Jun in the first contraction of activity of the private sector since Nov 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9789). Alex Hamilton, economist at Markit and author of the report, finds deceleration originating in combination of doubts on the global economy and internal reconstruction (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9789). The Markit Business Activity Index of Services decreased from 49.8 in May to 49.3 in Jun, also showing slower pace and the second reading below 50.0 in six months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9789). The Markit/JMMA Purchasing Managers’ Index™, seasonally adjusted, fell from 50.7 in May to 49.9 in Jun, indicating virtual standtill in manufacturing in Japan in the weakest reading in seven months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9713). Alex Hamilton, economist at Markit and author of the report, finds reduction in work originating from the reconstruction effort from the Tōhoku Hurricane and Tsunami of Mar 11, 2011 with simultaneous decline of output and new business (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=9713).Table JPY provides the country data table for Japan.
Table JPY, Japan, Economic Indicators
| Historical GDP and CPI | 1981-2010 Real GDP Growth and CPI Inflation 1981-2010 |
| Corporate Goods Prices | May ∆% -0.4 |
| Consumer Price Index | May NSA ∆% -0.3; May 12 months NSA ∆% 0.2 |
| Real GDP Growth | IQ2012 ∆%: 1.2 on IVQ2011; IQ2012 SAAR 4.7; |
| Employment Report | May Unemployed 2.97 million Change in unemployed since last year: minus 170 thousand |
| All Industry Indices | Apr month SA ∆% 0.1 Blog 6/24/12 |
| Industrial Production | May SA month ∆%: -3.1 |
| Machine Orders | Total Apr ∆% -4.0 Private ∆%: 16.4 |
| Tertiary Index | Apr month SA ∆% -0.3 |
| Wholesale and Retail Sales | May 12 months: |
| Family Income and Expenditure Survey | May 12-month ∆% total nominal consumption 4.3, real 4.0 Blog 7/8/12 |
| Trade Balance | Exports May 12 months ∆%: +10.0 Imports May 12 months ∆% +9.3 Blog 6/24/12 |
Links to blog comments in Table JPY:
7/2/12 http://cmpassocregulationblog.blogspot.com/2012/07/mediocre-economic-growth-united-states_03.html
06/24/12 http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of_24.html
6/17/12 http://cmpassocregulationblog.blogspot.com/2012/05/world-financial-turbulence-global_27.html
6/10/12 http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities_10.html
7/31/11: http://cmpassocregulationblog.blogspot.com/2011/07/growth-recession-debt-financial-risk.html
The survey of household income and consumption of Japan in Table VB-1 is showing noticeable improvement in recent months relative to earlier months, which can be appreciated in the chart in the link in parentheses but followed by decline in Nov, renewed strength in Dec, another decline in Jan 2012 and increase in Feb and Mar 2012 with stabilization in Apr and May 2012 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption increased 4.0 percent in real terms in May 2012 and 4.3 percent in nominal terms. There are three segments of decreasing real consumption: clothing and footwear declining 2.5 percent in real terms and 2.6 percent in nominal terms, food declining 0.4 percent in real terms but increasing 0.6 percent in nominal terms and other consumption expenditures declining 0.8 percent in real terms but increasing 1.1 percent in nominal terms. Real household income increased 0.7 percent; real disposable income decreased 0.4 percent; and real consumption expenditures increased 0.9 percent.
Table VB-1, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| May 2012 | Nominal | Real |
| Households of Two or More Persons | ||
| Total Consumption | 4.3 | 4.0 |
| Excluding Housing, Vehicles & Remittance | 2.7 | |
| Food | 0.6 | -0.4 |
| Housing | 9.5 | 9.7 |
| Fuel, Light & Water Charges | 5.2 | 1.3 |
| Furniture & Household Utensils | 0.5 | 4.6 |
| Clothing & Footwear | -2.6 | -2.5 |
| Medical Care | 1.0 | 2.3 |
| Transport and Communications | 15.2 | 14.9 |
| Education | 3.4 | 3.1 |
| Culture & Recreation | 8.1 | 9.4 |
| Other Consumption Expenditures | 1.1 | -0.8* |
| Workers’ Households | ||
| Income | 1.0 | 0.7 |
| Disposable Income | -0.1 | -0.4 |
| Consumption Expenditures | 1.2 | 0.9 |
*Real: nominal deflated by CPI excluding imputed rent
Source: http://www.stat.go.jp/english/data/kakei/156.htm
Percentage changes in 12 months of nominal and real consumption expenditures in Japan are provided in Table VB-2. There was sharp decline in nominal consumption of 8.8 percent in Mar 2011 and 8.2 percent in real consumption because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Dec was the first month in 2011 with increases in 12 months in both nominal and real consumption expenditures followed by Feb through May 2012. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 4.1 percent in IQ2012 with private consumption growing at 2.6 for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2012/05/world-inflation-waves-monetary-policy_20.html). Nominal consumption increased 4.3 percent in May 2012 and real consumption expenditures increased 4.0 percent in May 2012. Both nominal and real consumption expenditures increased in 2009, 0.3 percent and 2.1 percent, respectively.
Table VB-2, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| Nominal Consumption Expenditures | Real Consumption Expenditures | |
| May 2012 | 4.3 | 4.0 |
| Apr | 3.2 | 2.6 |
| Mar | 4.1 | 3.4 |
| Feb | 2.7 | 2.3 |
| Jan | -2.1 | -2.3 |
| Dec 2011 | 0.3 | 0.5 |
| Nov | -3.8 | -3.2 |
| Oct | -0.6 | -0.4 |
| Sep | -1.9 | -1.9 |
| Aug | -3.9 | -4.1 |
| Jul | -1.8 | -2.1 |
| Jun | -3.9 | -3.5 |
| May | -1.6 | -1.2 |
| Apr | -2.5 | -2.0 |
| Mar | -8.8 | -8.2 |
| Feb | -0.1 | 0.5 |
| Jan | -0.9 | -0.3 |
| Dec 2010 | -3.2 | -3.3 |
| Dec 2009 | 0.3 | 2.1 |
Source: http://www.stat.go.jp/english/data/kakei/156.htm
Japan is experiencing weak internal demand as in most advanced economies, interrupted by strong growth in IQ2012. Table VB-3 provides Japan’s wholesale and retail sales. Retail sales increased 3.6 percent in the 12 months ending in May 2012. Total sales increased 2.3 percent in the 12 months ending in May 2012. Retail sales are recovering from the deep drops in Mar and Apr 2012 following the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Retail sales have been increasing in 12-month percentage changes from Dec 2011 through May 2012.
Table VB-3, Japan, Wholesale and Retail Sales 12 Month ∆%
| Total | Wholesale | Retail | |
| May 2012 | 2.3 | 1.8 | 3.6 |
| Apr | 1.7 | 0.3 | 5.7 |
| Mar | 2.9 | 0.5 | 10.3 |
| Feb | -0.1 | -1.3 | 3.4 |
| Jan | -2.0 | -3.5 | 1.8 |
| Dec 2011 | -0.8 | -2.0 | 2.5 |
| Nov | -2.3 | -2.4 | -2.2 |
| Oct | 1.1 | 0.8 | 1.9 |
| Sep | 0.3 | 0.8 | -1.1 |
| Aug | 3.1 | 5.2 | -2.6 |
| Jul | 2.3 | 3.0 | 0.6 |
| Jun | 3.1 | 3.8 | 1.2 |
| May | 1.3 | 2.3 | -1.3 |
| Apr | -2.6 | -1.7 | -4.8 |
| Mar | -1.3 | 1.2 | -8.3 |
| Feb | 5.3 | 7.2 | 0.1 |
| Jan | 3.3 | 4.6 | 0.1 |
| Dec 2010 | 3.5 | 5.7 | -2.1 |
| Calendar Year | |||
| 2011 | 1.0 | 1.8 | -1.2 |
| 2010 | 1.5 | 1.1 | 2.5 |
| 2009 | -20.5 | -25.6 | -2.3 |
| 2008 | 1.2 | 1.5 | 0.3 |
Source:
http://www.meti.go.jp/english/statistics/tyo/syoudou/index.html
© Carlos M. Pelaez, 2010, 2011, 2012
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