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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

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 with interruptions by events of risk aversion.

Chart IV-3, US, Percentage Change of PCE Price Index Food from Prior Month, 1999-2012

Source: US Bureau of Economic Analysis

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

Table IV-6 provides 12-month rates of PCE inflation. Headline PCE inflation has increased from 1.5 percent in Jan 2011 to 2.8 percent in Aug 2011 and 2.9 percent in Sep 2012, declining to 1.7 percent in Sep 2012. PCE inflation excluding food and energy (PCEX), used as indicator in monetary policy, has increased from 1.1 percent in Jan 2011 to 1.9 percent in Dec 2011 and 1.7 percent in Aug 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 -D	PCES	PCEX	PCEF	PCEE
2012
Sep	1.7	1.1	-1.6	2.0	1.7	0.9	3.2
Aug	1.5	0.6	-1.8	2.0	1.6	1.5	0.0
Jul	1.3	0.1	-1.8	2.0	1.7	2.0	-4.7
Jun	1.5	0.4	-1.6	2.1	1.8	2.4	-3.6
May	1.5	0.6	-1.3	2.0	1.7	2.4	-3.3
Apr	1.9	1.6	-1.2	2.1	1.9	2.9	1.5
Mar	2.2	2.5	-0.8	2.1	2.0	3.2	5.4
Feb	2.4	2.9	-0.7	2.2	1.9	3.9	8.0
Jan	2.4	3.0	-0.5	2.2	1.9	4.6	6.8
2011
Dec	2.4	3.1	-0.5	2.1	1.9	5.1	7.4
Nov	2.6	4.0	-0.6	1.9	1.7	5.0	13.5
Oct	2.6	4.2	-0.5	1.8	1.6	5.2	15.1
Sep	2.9	4.9	-0.7	1.9	1.6	5.1	20.7
Aug	2.8	4.9	-0.4	1.8	1.6	4.8	19.8
Jul	2.8	4.8	-0.2	1.8	1.5	4.3	20.6
Jun	2.7	4.7	-0.4	1.7	1.4	4.0	21.6
May	2.6	4.5	-0.9	1.7	1.4	3.6	22.0
Apr	2.4	3.8	-1.2	1.6	1.2	3.2	19.4
Mar	2.1	3.0	-1.6	1.6	1.1	3.0	16.1
Feb	1.8	2.1	-1.6	1.7	1.2	2.4	11.5
Jan	1.5	1.3	-2.0	1.7	1.1	1.8	7.7
2010
Dec	1.5	1.1	-2.2	1.7	1.1	1.3	8.6
Nov	1.4	0.6	-2.0	1.7	1.2	1.3	4.4
Oct	1.5	0.8	-1.7	1.8	1.2	1.3	6.3
Sep	1.6	0.5	-1.3	2.1	1.5	1.2	4.1
Aug	1.7	0.6	-0.9	2.2	1.6	0.7	4.0

Source: US Bureau of Economic Analysis 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

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

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

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

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

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 in 2012.

Chart IV-10, US, Consumer Price Index, Food, NSA, 1999-2012

Source: US Bureau of Labor Statistics

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

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 and increases during risk appetite.

Chart IV-12, US, Consumer Price Index, Energy, NSA, 1999-2012

Source: US Bureau of Labor Statistics

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D

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

There are waves of inflation of producer prices in France as everywhere in the world economy (http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united_5113.html), as shown in Table IV-7. There was a first wave of sharply increasing inflation in the first four months of 2011 originating in the surge of commodity prices driven by carry trades from zero interest rates to commodity futures risk positions. Producer price inflation in the first four months of 2011 was at the annual equivalent rate of 11.7 percent. In the second wave, producer prices fell 0.5 percent in May and another 0.1 percent in Jun for annual equivalent inflation in May-Jun of minus 3.5 percent. In the third wave from Jul to Sep, annual equivalent producer price inflation was 2.8 percent. In the fourth wave Oct-Dec 2011, annual equivalent producer price inflation was 2.4 percent. In the fifth wave Jan-Mar 2012, average annual inflation rose to 8.3 percent during carry trades from zero interest rates to commodity futures. In the sixth wave in Apr-Jun 2012, annual equivalent inflation fell at the rate of 7.7 percent during unwinding of carry trades because of increasing risk aversion. In the seventh wave, carry trades returned under more relaxed risk aversion with producer price inflation in France at 9.2 percent in annual equivalent in Jul-Sep 2012. The bottom part of Table IV-11 shows producer price inflation at 3.5 percent in the 12 months ending in Dec 2005 and again at 5.2 percent in the 12 months ending in Dec 2007. Producer prices fell in 2008 and 2009 during the global contraction and decline of commodity prices but returned at 5.4 percent in the 12 months ending in Dec 2010.

Table IV-7, France, Producer Price Index for the French Market, ∆%

	Month	12 Months
Sep 2012	0.3	2.9
Aug	1.4	2.8
Jul	0.5	1.4
AE ∆% Jul-Sep	9.2
Jun	-0.8	1.3
May	-1.1	2.1
Apr	-0.1	2.7
AE ∆% Apr-Jun	-7.7
Mar	0.5	3.8
Feb	0.8	4.2
Jan	0.7	4.2
AE ∆% Jan-Mar	8.3
Dec 2011	-0.2	4.6
Nov	0.4	5.6
Oct	0.4	5.7
AE ∆% Oct-Dec	2.4
Sep	0.3	6.1
Aug	0.0	6.2
Jul	0.4	6.3
AE ∆% Jul-Sep	2.8
Jun	-0.1	6.1
May	-0.5	6.2
AE ∆% May-Jun	-3.5
Apr	1.0	6.7
Mar	0.9	6.7
Feb	0.8	6.3
Jan	1.0	5.6
AE ∆% Jan-Apr	11.7
Dec 2010	0.8	5.4
Dec 2009	0.1	-2.9
Dec 2008	-1.5	-0.2
Dec 2007	0.6	5.2
Dec 2006	-0.2	2.9
Dec 2005	0.2	3.5

Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/default.asp

Chart IV-14 of the Institut National de la Statistique et des Études Économiques of France provides the behavior of the producer price index of France for the various segments: import prices, foreign markets, domestic market and all markets. All the components exhibit the rise to the peak in 2008 driven by carry trades from zero interest rates of unconventional monetary policy that was of such an impulse as to drive increases in commodity prices during the global recession. Prices collapsed with the flight out of financial risk assets such as commodity positions to government obligations. Commodity price increases returned with zero interest rates and subdued risk aversion. The shock of confidence of the current European sovereign risk moderated exposures to financial risk that influenced the flatter curve of France’s producer prices followed by another mild trend of increase and moderation in Dec 2011 and then renewed inflation in the first quarter of 2012 with a new pause in Apr 2012, decline in May-Jun 2012 and the jump in Jul-Sep 2012.

Chart IV-14, France, Producer Price Index (PPI)

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/default.asp

France’s producer price index for the domestic market is shown in Table IV-8 for Jun 2012. The segment of prices of coke and refined petroleum increased 0.1 percent in Sep 2012 and increased 13.4 percent in 12 months. Manufacturing prices, with the highest weight in the index, increased 0.3 percent in Sep and rose 2.4 percent in 12 months. Mining prices increased 0.3 percent in Sep and increased 5.4 percent in 12 months.

Table IV-8, France, Producer Price Index for the Domestic Market, %

Sep 2012	Weight	Month ∆%	12 Months ∆%
Total	1000	0.3	2.9
Mining	130	0.3	5.4
Mfg	870	0.3	2.4
Food Products, Beverages, Tobacco	188	0.9	4.0
Coke and Refined Petroleum	70	0.1	13.4
Electrical, Electronic	92	0.0	0.9
Transport	79	-0.1	0.6
Other Mfg	441	0.3	0.0

Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/default.asp

Italy’s producer price inflation in Table IV-9 also has the same waves in 2011 and into 2012 observed for many countries (http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united_5113.html). The annual equivalent producer price inflation in the first wave Jan-Apr 2011 was 10.7 percent, which was driven by increases in commodity prices resulting from the carry trades from zero interest rates to risk financial assets, in particular leveraged positions in commodities. In the second wave, producer price inflation was minus 0.2 percent in May and flat in Jun for annual equivalent inflation rate in May-Jun 2011 of minus 1.2 percent. In the third wave, annual equivalent inflation was 2.4 percent in Jul-Sep 2011 in a pause of risk aversion. With the return of risk aversion in the fourth wave coinciding with worsening sovereign debt crisis in Europe, annual equivalent inflation was 0.4 percent in Oct-Dec 2011. Inflation accelerated in the fifth wave in Jan and Feb 2012 to annual equivalent 7.4 percent and annual equivalent of 6.6 percent in Jan-Mar. In the sixth wave, annual equivalent inflation in Mar-Apr was at 4.3 percent. In the seventh wave, risk aversion originating in world economic slowdown and financial turbulence softened carry trades with annual equivalent inflation falling to minus 2.4 percent in May-Jun 2012. In the eighth wave, more aggressive carry trades into commodity futures exposures resulted in increase of inflation at annual equivalent 4.1 percent in Jul-Sep 2012 and 6.8 percent in Jul-Aug 2012.

Table IV-9, Italy, Industrial Prices, Internal Market

	Month ∆%	12-Month ∆%
Sep 2012	-0.1	2.8
Aug	0.9	3.0
Jul	0.2	2.2
AE ∆% Jul-Sep	4.1
Jun	-0.1	2.2
May	-0.3	2.3
AE ∆% May-Jun	-2.4
Apr	0.3	2.5
Mar	0.4	2.8
AE ∆% Mar-Apr	4.3
Feb	0.4	3.2
Jan	0.8	3.5
AE ∆% Jan-Feb	7.4
Dec 2011	0.0	3.9
Nov	0.3	4.7
Oct	-0.2	4.7
AE ∆% Oct-Dec	0.4
Sep	0.2	4.7
Aug	0.1	4.8
Jul	0.3	4.9
AE ∆% Jul-Sep	2.4
Jun	0.0	4.6
May	-0.2	4.8
AE ∆% May-Jun	-1.2
Apr	0.7	5.6
Mar	0.8	6.2
Feb	0.7	5.8
Jan	1.2	5.3
AE ∆% Jan-Apr	10.7
Dec 2010	0.7	4.7
Year
2011		5.0
2010		3.0
2009		-5.4
2008		5.9
2007		3.3
2006		5.2
2005		4.0
2004		2.7
2003		1.6
2002		0.2
2001		1.9

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/73757

Chart IV-15 of the Istituto Nazionale di Statistica provides 12-month percentage changes of the producer price index of Italy. Rates of change in 12 months stabilized from Jul to Nov 2011 and then fell to 3.5 percent in Jan 2012 with increases of 0.8 percent in the month of Jan 2012 and 0.4 percent in Feb. Inflation was 0.4 percent in Mar 2012 and 2.8 percent in 12 months. The decline of annual equivalent inflation from 7.4 percent in Jan-Feb 2012 to 4.3 percent in Mar-Apr pulled down 12-month inflation to 2.8 percent in Mar and 2.5 percent in Apr. Percentage declines of inflation of 0.3 percent in May and 0.1 percent in Jun pulled down the 12-month rate of inflation to 2.2 percent in Jun 2012. Renewed inflation of 0.2 percent in Jul 2012 and 0.9 percent in Aug 2012 pulled up the 12-month rate to 3.0 percent. The decline of producer prices by 0.1 percent in Sep 2012 pulled down the 12-month rate to 2.8 percent.

Chart IV-15, Italy, Producer Price Index 12-Month Percentage Changes

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/73741

Monthly and 12-month inflation of the producer price index of Italy and individual components is provided in Table IV-10. Energy prices decreased 0.6 percent in Sep 2012 and rose 11.5 percent in 12 months. Producer-price inflation is positive for all components in the month of Sep with the exception of no change in consumer goods and decline of durable goods by 0.1 percent and energy by 0.6 percent. There is higher inflation in 12 months of 2.2 percent for nondurable goods than 0.9 percent for durable goods

Table IV-10, Italy, Industrial Prices, Internal Market, ∆%

	Sep 2012/ Aug 2012	Sep 2012/ Sep 2011
Total	-0.1	2.8
Consumer Goods	0.0	2.0
Durable Goods	-0.1	0.9
Nondurable	0.0	2.2
Capital Goods	0.2	0.6
Intermediate	0.2	0.2
Energy	-0.6	11.5

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/73757

The first wave of commodity price increases in the first four months of Jan-Apr 2011 also influenced the surge of consumer price inflation in Italy shown in Table IV-11. Annual equivalent inflation in the first four months of 2011 was 4.9 percent. The crisis of confidence or risk aversion resulted in reversal of carry trades on commodity positions. Consumer price inflation in Italy was subdued in the second wave in Jun and May 2011 at 0.1 percent for annual equivalent 1.2 percent. In the third wave in Jul-Sep 2011, annual equivalent inflation increased to 2.4 percent. In the fourth wave, annual equivalent inflation in Oct-Nov 2011 jumped again at 3.0 percent. Inflation returned in the fifth wave from Dec 2011 to Jan 2012 at annual equivalent 4.3 percent. In the sixth wave, annual equivalent inflation rose to 5.7 percent in Feb-Apr 2012. In the seventh wave, annual equivalent inflation was 1.2 percent in May-Jun 2012. In the eighth wave, annual equivalent inflation increased to 3.0 percent in Jul-Aug 2012. In the ninth wave, inflation collapsed to zero in Sep-Oct 2012. Economies are shocked worldwide by intermittent waves of inflation originating in combination of zero interest rates and quantitative easing with alternation of risk appetite and risk aversion.

Table IV-11, Italy, Consumer Price Index

	Month	12 Months
Oct 2012	0.0	2.6
Sep	0.0	3.2
AE ∆% Sep-Oct	0.0
Aug	0.4	3.2
Jul	0.1	3.1
AE ∆% Jul-Aug	3.0
June	0.2	3.3
May	0.0	3.2
AE ∆% May-Jun	1.2
Apr	0.5	3.3
Mar	0.5	3.3
Feb	0.4	3.3
AE ∆% Feb-Apr	5.7
Jan	0.3	3.2
Dec 2011	0.4	3.3
AE ∆% Dec-Jan	4.3
Nov	-0.1	3.3
Oct	0.6	3.4
AE ∆% Oct-Nov	3.0
Sep	0.0	3.0
Aug	0.3	2.8
Jul	0.3	2.7
AE ∆% Jul-Sep	2.4
Jun	0.1	2.7
May	0.1	2.6
AE ∆% May-Jun	1.2
Apr	0.5	2.6
Mar	0.4	2.5
Feb	0.3	2.4
Jan	0.4	2.1
AE ∆% Jan-Apr	4.9
Dec 2010	0.4	1.9
Annual
2011		2.8
2010		1.5
2009		0.8
2008		3.3
2007		1.8
2006		2.1

Source: Istituto Nazionale di Statistica

Consumer price inflation in Italy by segments in the estimate by ISTAT for Oct 2012 is provided in Table IV-12. Total consumer price inflation in Oct 2012 was unchanged and 2.6 percent in 12 months. Inflation of goods was 0.1 percent and 3.3 percent in 12 months. Prices of durable goods decreased 0.2 percent in Oct and decreased 0.3 percent in 12 months, as typical in most countries. Prices of energy decreased 0.2 percent in Oct and increased 13.6 percent in 12 months. Food prices increased 0.4 percent in Oct and increased 2.7 percent in 12 months. Prices of services fell 0.1 percent in Oct and rose 1.7 percent in 12 months. Transport prices, also influenced by commodity prices, decreased 0.1 percent in Oct and increased 3.5 percent in 12 months. Carry trades from zero interest rates to positions in commodity futures cause increases in commodity prices. Waves of inflation originate in periods when there is no risk aversion and commodity prices decline during periods of risk aversion (http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html).

Table IV-12, Italy, Consumer Price Index and Segments, Month and 12-Month ∆%

Oct 2012	Month ∆%	12-Month ∆%
General Index	0.0	2.6
I Goods	0.1	3.3
Food	0.4	2.7
Energy	-0.2	13.6
Durable	-0.2	-0.3
Nondurable	-0.1	0.4
II Services	-0.1	1.7
Housing	0.2	2.8
Communications	-1.1	0.0
Transport	-0.1	3.5

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/73741

Chart IV-16 of the Istituto Nazionale di Statistica shows moderation in 12-month percentage changes of the consumer price index of Italy with marginal increase followed by stability.

Chart, IV-16, Italy, Consumer Price Index, 12-Month Percentage Changes

Source: Istituto Nazionale di Statistica

http://www.bea.gov/national/index.htm#gdp

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/datamapper/index.php?db=WEO) to show GDP in dollars in 2011 and the growth rate of real GDP of the world and selected regional countries from 2012 to 2015. 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 3.3 percent in 2012 but accelerating to 3.6 percent in 2013, 4.2 percent in 2014 and 4.4 percent in 2015. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $33,697 billion of world output of $69,899 billion, or 48.2 percent, but are projected to grow at much lower rates than world output, 1.9 percent on average from 2012 to 2015 in contrast with 3.9 percent for the world as a whole. While the world would grow 16.4 percent in the four years from 2012 to 2015, the G7 as a whole would grow 7.8 percent. The difference in dollars of 2011 is rather high: growing by 16.4 percent would add $11.5 trillion of output to the world economy, or roughly two times the output of the economy of Japan of $5,867 but growing by 7.8 percent would add $5.2 trillion of output to the world, or somewhat below 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 $25,438 billion, or 36.4 percent of world output. The EMDEs would grow cumulatively 24.9 percent or at the average yearly rate of 5.7 percent, contributing $6.3 trillion from 2012 to 2015 or the equivalent of 86.8 percent of $7,298 billion of China in 2011. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output adds to $13,468 billion, or 19.3 percent of world output, which is equivalent to 39.9 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 ∆% 2012	Real GDP ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015
World	69,899	3.3	3.6	4.2	4.4
G7	33,697	1.4	1.5	2.2	2.5
Canada	1,739	1.9	2.0	2.4	2.4
France	2,778	0.1	0.4	1.1	1.5
DE	3,607	0.9	0.9	1.4	1.4
Italy	2,199	-2.3	-0.7	0.5	1.2
Japan	5,867	2.2	1.2	1.1	1.2
UK	2,431	-0.4	1.1	2.2	2.6
US	15,076	2.2	2.1	2.9	3.4
Euro Area	13,114	-0.4	0.2	1.2	1.5
DE	3,607	0.9	0.9	1.4	1.4
France	2,778	0.1	0.4	1.1	1.5
Italy	2,199	-2.3	-0.7	0.5	1.2
POT	238	-3.0	-1.0	1.2	1.9
Ireland	221	0.4	1.4	2.5	2.9
Greece	299	-6.0	-4.0	0.0	2.8
Spain	1,480	-1.5	-1.3	1.0	1.6
EMDE	25,438	5.3	5.6	5.9	6.1
Brazil	2,493	1.5	3.9	4.2	4.2
Russia	1,850	3.7	3.8	3.9	3.9
India	1,827	4.9	6.0	6.4	6.7
China	7,298	7.8	8.2	8.5	8.5

Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries); POT: Portugal

Source: IMF World Economic Outlook databank http://www.imf.org/external/datamapper/index.php?db=WEO

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/datamapper/index.php?db=WEO). 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 V-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. Estimated rates of unemployment for 2012 are particularly high for the countries with sovereign debt difficulties in Europe: 15.5 percent for Portugal (POT), 14.8 percent for Ireland, 23.8 percent for Greece, 24.9 percent for Spain and 10.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is estimated at 7.5 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	7.5	7.5	7.3	6.9
Canada	7.5	7.3	7.3	7.1	6.9
France	9.6	10.1	10.5	10.3	9.8
DE	6.0	5.2	5.3	5.2	5.2
Italy	8.4	10.6	11.1	11.3	11.0
Japan	4.6	4.5	4.4	4.5	4.4
UK	8.0	8.1	8.1	7.9	7.6
US	8.9	8.2	8.1	7.7	7.1
Euro Area	10.2	11.2	11.5	11.2	10.8
DE	6.0	5.2	5.3	5.2	5.2
France	9.6	10.1	10.5	10.3	9.8
Italy	8.4	10.6	11.1	11.3	11.0
POT	12.7	15.5	16.0	15.3	14.7
Ireland	14.4	14.8	14.4	13.7	13.1
Greece	17.3	23.8	25.4	24.5	22.4
Spain	21.7	24.9	25.1	24.1	23.2
EMDE	NA	NA	NA	NA	NA
Brazil	6.0	6.0	6.5	7.0	7.0
Russia	6.5	6.0	6.0	6.0	6.0
India	NA	NA	NA	NA	NA
China	4.1	4.1	4.1	4.1	4.1

Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries)

Source: IMF World Economic Outlook databank http://www.imf.org/external/datamapper/index.php?db=WEO

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog for IQ2012, IIQ2012 and IIIQ2012 available now for the United States, China and United Kingdom. Growth is weak throughout most of the world. Japan’s GDP increased 1.3 percent in IQ2012 and 2.9 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. Japan’s GDP grew 0.2 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of 0.7 percent, which is much lower than 5.3 percent in IQ2012. Growth of 3.2 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. China grew at 1.8 percent in IIQ2012, which annualizes to 7.4 percent. China grew at 2.2 percent in IIIQ2012, which annualizes at 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). China’s GDP grew 7.6 percent in IIQ2012 relative to IIQ2011. Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2012. China’s GDP grew 8.1 percent in IQ2012 relative to a year earlier but only 7.6 percent in IIQ2012 relative to a year earlier and 7.4 percent in IIIQ2012 relative to IIIQ2011. GDP was flat in the euro area in IQ2012 and also in IQ2012 relative to a year earlier. Euro area GDP contracted 0.2 percent IIQ2012 and fell 0.4 percent relative to a year earlier. Germany’s GDP increased 0.5 percent in IQ2012 and 1.7 percent relative to a year earlier. In IIQ2012, Germany’s GDP increased 0.3 percent and 0.5 percent relative to a year earlier but 1.0 percent relative to a year earlier when adjusted for calendar (CA) effects. Growth of US GDP in IQ2012 was 0.5 percent, at SAAR of 2.0 percent and higher by 2.4 percent relative to IQ2011. US GDP increased 0.3 percent in IIQ2012, 1.3 percent at SAAR and 2.1 percent relative to a year earlier. In IIIQ2012, GDP grew 0.5 percent, 2.0 percent at SAAR and 2.3 percent relative to IIIQ2011 (Section IA Mediocre and Decelerating United States Economic Growth and earlier at http://cmpassocregulationblog.blogspot.com/2012/09/historically-sharper-recoveries-from.html) but with substantial unemployment and underemployment (Section I at http://cmpassocregulationblog.blogspot.com/2012/10/twenty-nine-million-unemployed-or.html) and weak hiring (Section I at http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html). UK GDP fell 0.4 percent in IIQ2012, declining 0.5 percent relative to IIQ2011. In IQ2012, UK GDP fell 0.3 percent, declining 0.1 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and 0.5 percent relative to a year earlier. UK GDP increased 1.0 percent in IIIQ2012 and was unchanged relative to a year earlier. Italy has experienced decline of GDP in four consecutive quarters from IIIQ2011 to IIQ2012. Italy’s GDP fell 0.8 percent in IIQ2012 and declined 2.6 percent relative to IIQ2011. France’s GDP stagnated in both IQ2012 and IIQ2012 and increased 0.3 percent relative to a year earlier in IIQ2012.

Table V-3, Percentage Changes of GDP Quarter on Prior Quarter and on Same Quarter Year Earlier, ∆%

	IQ2012/IVQ2011	IQ2012/IQ2011
United States	QOQ: 0.5 SAAR: 2.0	2.4
Japan	QOQ: 1.3 SAAR: 5.3	2.9
China	1.8	8.1
Euro Area	0.0	0.0
Germany	0.5	1.7
France	0.0	0.4
Italy	-0.8	-1.4
United Kingdom	-0.3	-0.1
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.3 SAAR: 1.3	2.1
Japan	QOQ: 0.2 SAAR: 0.7	3.2
China	1.8	7.6
Euro Area	-0.2	-0.4
Germany	0.3	0.5 1.0 CA
France	0.0	0.3
Italy	-0.8	-2.6
United Kingdom	-0.4	-0.5
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.5 SAAR: 2.0	2.3
China	2.2	7.4
United Kingdom	1.0	0.0

QOQ: Quarter relative to prior quarter; SAAR: seasonally adjusted annual rate

Source: Country Statistical Agencies

There is evidence of deceleration of growth of world trade and even contraction in more recent data. Table V-4 provides two types of data: growth of exports and imports in the latest available months and in the past 12 months; and contributions of net trade (exports less imports) to growth of real GDP. Japan provides the most worrisome data (Section VB http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states_28.html and earlier at http://cmpassocregulationblog.blogspot.com/2012/09/collapse-of-united-states-creation-of_23.html and for GDP http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation_16.html). Japan’s exports decreased 10.3 percent in the 12 months ending in Sep, 5.8 percent in the 12 months ending in Aug and 8.1 percent in 12 months ending in Jul while imports increased 4.1 in the 12 months ending in Sep, decreased 5.4 percent in the 12 months ending in Aug and increased 2.1 percent in the 12 months ending in Jul. The second part of Table V-4 shows that net trade deducted 0.3 percentage points from Japan’s growth of GDP in IIQ2012. China’s exports fell 1.8 percent in the month of Jul and increased 1.0 percent in 12 months. In Aug 2012, China’s exports increased 0.6 percent and increased 2.7 percent in 12 months. Trade rebounded in China in Sep with growth of exports of 9.9 percent in the 12 months ending in Sep and 2.4 percent for imports. Germany’s exports increased 2.4 percent in the month of Aug and increased 5.8 percent in the 12 months ending in Aug while imports increased 0.3 percent in the month of Aug and increased 0.4 percent in the 12 months ending in Aug. Net trade contributed 1.1 percentage points to growth of Germany’s GDP in IIQ2012. The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing output, fell from 47.4 in Sep to 46.0 in Oct for the eighth consecutive month in contraction territory below 50.0 and much lower than the long-term average of the index of 52.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10278). New export orders fell for sixteen consecutive months at the fastest rate of decline since Apr 2009. UK’s exports fell 2.4 percent in Aug and 1.3 percent in Jun-Aug 2012 relative to a year earlier while imports increased 3.4 percent in Aug and 0.8 percent in Jun-Aug 2012 relative to a year earlier. Net trade deducted 1.0 percentage points from UK GDP growth in IIQ2012. France’s exports increased 3.6 percent in Aug while imports increased 6.3 percent and net trade deducted 0.4 percentage points from GDP growth in IIQ2012. US exports decreased 1.0 percent in Aug 2012 and increased 5.6 percent in Jan-Aug relative to a year earlier but net trade added 0.23 percentage points to GDP growth in IIQ2012. The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) declined to 51.0 in Oct from 51.1 in Sep, which is the weakest reading since Oct 2009 when recovery began (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10255). New export orders declined at the highest rate in 12 months with the index of new exports orders falling from 48.0 in Sep to 47.2 in Oct while total new orders decreased from 52.3 in Sep to 51.1 in Oct because of orders from the internal market. In the six months ending in Sep, United States national industrial production accumulated increase of 0.6 percent at the annual equivalent rate of 1.2 percent, which is much lower than 2.8 percent growth in 12 months. Capacity utilization for total industry in the United States fell 1.1 percentage points in Sep to 78.2 percent from 79.2 percent in Jul, which is 2.0 percentage points lower than the long-run average from 1972 to 2011. Manufacturing increased 0.2 percent in Sep seasonally adjusted, increasing 3.2 percent not seasonally adjusted in 12 months, and increased 0.1 percent in the six months ending in Sep or at the annual equivalent stagnating rate of 0.2 percent (Section VA http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states_28.html). Trade values incorporate both price and quantity effects that are difficult to separate. Data do suggest that world trade slowdown is accompanying world economic slowdown.

Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	-1.0 Aug	5.6 Jan-Aug	-0.1 Aug	4.7 Jan-Aug
Japan Sep Aug Jul		-10.3 -5.8 -8.1		4.1 -5.4 2.1
China	-1.8 Jul 0.6 Aug 4.7 Sep	1.0 Jul 7.8 Jan-Jul 2.7 Aug 7.1 Jan-Aug 9.9 Sep Jan-Sep 7.4	2.2 Jul -0.3 Aug 4.9 Sep	4.7 Jul 6.5 Jan-Jul -2.6 Aug 5.2 Jan-Aug 2.4 Sep 4.8 Jan-Sep
Euro Area	10.4 12-M Aug	9.0 Jan-Aug	1.3 12-M Aug	2.5 Jan-Aug
Germany	2.4 Aug CSA	5.8 Aug	0.3 Aug CSA	0.4 Aug
France Aug	3.6	2.8	6.3	3.4
Italy Aug	3.9	8.4	4.4	-1.1
UK	-2.4 Aug	-1.3 Jun-Aug 12/Jun-Aug 11	3.4 Aug	0.8 Jun-Aug 12/Jun-Aug 11
Net Trade % Points GDP Growth	% Points
USA IIIQ2012	-0.18
Japan IIQ2012	-0.3
Germany IIQ2012	1.1
France IIQ2012	-0.4
UK IIQ2012	-1.0

Sources: http://www.census.gov/foreign-trade/ http://www.bea.gov/iTable/index_nipa.cfm

http://www.customs.go.jp/toukei/latest/index_e.htm http://www.esri.cao.go.jp/en/sna/sokuhou/sokuhou_top.html

http://english.customs.gov.cn/publish/portal191/ http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home

https://www.destatis.de/EN/PressServices/Press/pr/2012/08/PE12_287_811.html;jsessionid=A761BC574543A771416A9CF81034F7BA.cae1 http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

http://www.insee.fr/en/

http://www.istat.it/it/

http://www.statistics.gov.uk/hub/index.html

The geographical breakdown of exports by imports of Japan with selected regions and countries is provided in Table VB-5 for Sep 2012. The share of Asia in Japan’s trade is more than one half, 54.9 percent of exports and 43.8 percent of imports. Within Asia, exports to China are 17.8 percent of total exports and imports from China 21.7 percent of total imports. The second largest export market for Japan in Aug 2012 is the US with share of 17.4 percent of total exports and share of imports from the US of 8.6 percent in total imports. Western Europe has share of 10.9 percent in Japan’s exports and of 9.7 percent in imports. Rates of growth of exports of Japan in Sep are sharply negative for all countries and regions with the exception of 0.9 percent for exports to the US. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity, which could be part of the explanation for the decline of Japan’s exports by 10.3 percent in Sep 2012 while imports increased by 4.1 percent but higher levels after the earthquake and declining prices may be another factor. Growth rates of imports in the 12 months ending in Sep are negative for some trading partners: minus 32.7 percent for the UK, minus 9.7 percent for Brazil, minus 7.9 percent for Germany and minus 3.0 percent for Western Europe. Imports from Asia increased 0.7 percent in the 12 months ending in Sep while imports from China increased 3.8 percent.

Table V-5, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yens

Sep 2012	Exports Millions Yens	12 months ∆%	Imports Millions Yens	12 months ∆%
Total	5,359,752	-10.3	5,918,307	4.1
Asia	2,944,304	-8.3	2,591,029	0.7
China	953,834	-14.1	1,283,316	3.8
USA	933,372	0.9	506,328	3.8
Canada	65,567	-5.6	76,417	-5.5
Brazil	41,698	-12.0	77,533	-9.7
Mexico	72,939	-11.0	28,427	9.4
Western Europe	585,936	-26.0	573,723	-3.0
Germany	144.224	-12.9	154,489	-7.9
France	43,882	-24.4	79,496	7.7
UK	101,960	-31.2	43,575	-32.7
Middle East	181,035	-0.3	1,242,800	20.8
Australia	121,160	-21.0	385,551	2.0

Source: http://www.customs.go.jp/toukei/latest/index_e.htm

Table V-6 of the World Trade Organization provides actual volume of world trade from 2008 to 2011 and projections of the World Trade Organization Secretariat for 2012 and 2013. Trade was weak during the global recession, increasing 2.3 percent in 2008 and decreasing 12.5 percent in 2009. Trade growth was 13.8 percent in 2010 and 5.0 percent in 2011. The World Trade Organization has reduced its projection of growth of world trade in 2012 to 2.5 percent.

Table V-6, World Trade Organization Projections of Growth of Volume of World Merchandise Trade and GDP, ∆%, 2008-2013

	2008	2009	2010	2011	2012*	2013*
World Trade Volume	2.3	-12.5	13.9	5.0	2.5	4.5
Exports
DE	0.9	-15.2	13.0	4.6	1.5	3.3
DINGE	4.3	-7.8	15.3	5.3	3.5	5.7
Imports
DE	-1.1	-14.4	11.0	2.9	0.4	3.4
DINGE	8.6	-10.5	18.3	8.3	5.4	6.1
Real GDP**	1.3	-2.4	3.8	2.4	2.1	2.4
DE	0.0	-3.8	2.7	1.5	1.2	1.5
DINGE	5.6	2.2	7.3	5.3	4.9	5.2

Notes: World Trade Volume: average of exports and imports; *Projections; **At market exchange rates; DE: Developed economies; DINGE: developing economies

Source: World Trade Organization Secretariat for trade, Consensus estimates of GDP forecasts

http://www.wto.org/english/news_e/pres12_e/pr676_e.htm

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, increased to 52.5 in Sep from 50.9 in Aug, indicating expansion at a moderate rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10177). This index has remained above the contraction territory of 50.0 during 36 months. Both global manufacturing and services have slowed down considerably with services increasing marginally because of activity in the US while manufacturing deepened its decline. The average of the reading in IIIQ2012 at 51.7 was almost unchanged relative to 51.6 in IIQ2012, which is a thee-year low and below the trend started with recovery in Aug 2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10177). Stronger service activity in the US supported expansion of global output with increases also in the UK, Brazil, Russia and Ireland. The employment index fell from 50.9 in Aug to 49.9 in Sep under constraint by sharp increases in input prices. The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 49.2 in Oct from 48.8 in Sep, for five consecutive months of contraction but at a milder rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10286). New export orders declined for the sixth consecutive month in Oct at a firm rate. The HSBC Brazil Composite Output Index, compiled by Markit, increased away from contraction territory to 52.8 in Sep from 48.1 in Aug with stronger demand for services than for manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10159). Andre Loes, Chief Economist, Brazil, at HSBC, finds that increasing activity in services could signal the rebound of economic activity expected for the second half of 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10159). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased slightly to 50.2 in Oct from 49.8 in Sep, indicating marginal improvement of business conditions in Brazilian manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10252). Andre Loes, Chief Economist, Brazil at HSBC, finds recovery improving with gains in both output and new orders (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10252).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted increased marginally to 51.3 in Oct from 51.1 in Sep that was the third weakest reading since Oct 2009 in the beginning of the current recovery with the lowest in Dec 2010; the PMI average in the three months ending in Sep was 51.5, which is lower than 54.2 in the three months ending in Jun and the lowest quarterly reading since IIIQ2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10213).

New export orders registered 48.1 in Oct still in contraction territory with 48.1 in Sep, which wass the fastest decline in new export orders since Oct 2011. Chris Williams, Chief Economist at Markit, finds that the survey data are consistent with the official indicators showing mild contraction of manufacturing that is restraining overall economic growth and weakening labor markets (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10213). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) declined to 51.0 in Oct from 51.1 in Sep, which is the weakest reading since Oct 2009 when recovery began (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10255). New export orders declined at the highest rate in 12 months with the index of new exports orders falling from 48.0 in Sep to 47.2 in Oct while total new orders decreased from 52.3 in Sep to 51.1 in Oct because of orders from the internal market. Trevor Balchin, Senior Economist at Markit, finds that the index began IVQ2012 at a weak pace that can restrain overall economic growth with export orders being an important source of weakness in the private goods-producing sector (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10255). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 0.2 percentage points from 51.5 in Sep to 51.7 in Oct, (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 1.9 percentage points from 52.3 in Sep to 54.2 in Oct. The index of exports decreased 0.5 percentage points from 48.5 in Sep to 48.0 in Oct, remaining in mild contraction territory. The Non-Manufacturing ISM Report on Business^® PMI increased 1.4 percentage points from 53.7 in Aug to 53.7 in Sep, indicating growth during 38 consecutive months, while the index of new orders increased 4.3 percentage points from 55.6 in Aug to 59.9 in Sep (http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	Sep 12 months NSA ∆%: 2.0; ex food and energy ∆%: 2.0 Sep month ∆%: 0.6; ex food and energy ∆%: 0.1 Blog10/21/12
Producer Price Index	Sep 12-month NSA ∆%: 2.1; ex food and energy ∆% 2.3 Sep month SA ∆% = 1.1; ex food and energy ∆%: 0.0 Blog 10/21/12
PCE Inflation	Sep 12-month NSA ∆%: headline 1.7; ex food and energy ∆% 1.7 Blog 11/4/12
Employment Situation	Household Survey: Oct Unemployment Rate SA 7.9% Blog calculation People in Job Stress Oct: 28.1 million NSA, 17.4% of Labor Force Establishment Survey: Oct Nonfarm Jobs +171,000; Private +184,000 jobs created Sep 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.6 Blog 11/4/12
Nonfarm Hiring	Nonfarm Hiring fell from 63.8 million in 2006 to 50.1 million in 2011 or by 13.7 million Private-Sector Hiring Aug 2012 4.345 million lower by 1.042 million than 5.387 million in Aug 2005 Blog 10/14/12
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.4 IIQ2012/IIQ2011 2.1 IIIQ2012/IIIQ2012 2.3 IQ2012 SAAR 2.0 IIQ2012 SAAR 1.3 IIIQ2012 SAAR 2.0 Blog 10/28/12
Personal Income and Consumption	Sep month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.0 Real Personal Consumption Expenditures (RPCE): 0.4 12-month Sep NSA ∆%: RDPI: 1.9; RPCE ∆%: 2.1 Blog 11/4/2012
Quarterly Services Report	IQ12/IQ11 SA ∆%: Information 3.8 Professional 10.3 Administrative 4.9 Hospitals 5.2 Blog 6/10/12
Employment Cost Index	Compensation Private IIIQ2012 SA ∆%: 0.5 Sep 12 months ∆%: 2.0 Blog 11/4/12
Industrial Production	Sep month SA ∆%: 0.4 Sep 12 months SA ∆%: 2.8 Manufacturing Sep SA ∆% 0.2 Sep 12 months SA ∆% 3.2, NSA 3.2 Capacity Utilization: 78.3 Blog 10/21/12
Productivity and Costs	Nonfarm Business Productivity IIIQ2012∆% SAAE 1.9; IIIQ2012/IIIQ2011 ∆% 1.5; Unit Labor Costs SAAE IIQ2012 ∆% -0.1; IIIQ2012/IIIQ2011 ∆%: 1.1 Blog 11/4/2012
New York Fed Manufacturing Index	General Business Conditions From Sep -10.41 to Oct -6.16 New Orders: From Sep -14.03 to Oct -8.97 Blog 10/21/12
Philadelphia Fed Business Outlook Index	General Index from Sep minus 1.9 to Oct 5.7 New Orders from Sep 1.0 to Oct minus 0.6 Blog 10/21/12
Manufacturing Shipments and Orders	New Orders SA Sep ∆% 4.8 Ex Transport 1.4 Jan-Sep NSA New Orders 3.3 Ex transport 2.5 Blog 11/4/12
Durable Goods	Sep New Orders SA ∆%: 9.9; ex transport ∆%: 2.0 Jan-Sep New Orders NSA ∆%: 4.8; ex transport ∆% 3.4 Blog 10/28/12
Sales of New Motor Vehicles	Jan-Oct 2012 11,992,114; Jan-Oct 2011 10,539,485. Oct SAAR 14.29 million, Sep SAAR 14.94 million, Oct 2011 SAAR 13.34 million Blog 11/4/12
Sales of Merchant Wholesalers	Jan-Aug 2012/Jan-Aug 2011 NSA ∆%: Total 6.1; Durable Goods: 7.6; Nondurable Goods: 4.9 Blog 10/14/12
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Aug 12/Aug 11 NSA ∆%: Sales Total Business 3.2; Manufacturers 2.5 Retailers 5.7; Merchant Wholesalers 1.8 Blog 10/21/12
Sales for Retail and Food Services	Jan-Sep 2012/Jan-Sep 2011 ∆%: Retail and Food Services 5.6; Retail ∆% 5.3 Blog 10/21/12
Value of Construction Put in Place	Sep SAAR month SA ∆%: 0.6 Sep 12-month NSA: 6.1 Jan-Sep 2012 ∆% 8.9 Blog 11/4/12
Case-Shiller Home Prices	Aug 2012/Aug 2011 ∆% NSA: 10 Cities 1.3; 20 Cities: 2.0 ∆% Aug SA: 10 Cities 0.4 ; 20 Cities: 0.5 Blog 11/4/12
FHFA House Price Index Purchases Only	Aug SA ∆% 0.7; 12 month ∆%: 4.8 Blog 10/28/12
New House Sales	Sep 2012 month SAAR ∆%: +5.7 Jan-Sep 2012/Jan-Sep 2011 NSA ∆%: 21.8 Blog 10/28/12
Housing Starts and Permits	Sep Starts month SA ∆%: 15.0 ; Permits ∆%: -11.6 Jan-Sep 2012/Jan-Sep 2011 NSA ∆% Starts 26.7; Permits ∆% 31.5 Blog 10/21/12
Trade Balance	Balance Aug SA -$44217 million versus Jul -$42466 million Exports Aug SA ∆%: -1.0 Imports Aug SA ∆%: -0.1 Goods Exports Jan-Aug 2012/2011 NSA ∆%: 5.6 Goods Imports Jan-Aug 2012/2011 NSA ∆%: 4.7 Blog 10/14/12
Export and Import Prices	Sep 12-month NSA ∆%: Imports -0.6; Exports -0.5 Blog 10/14/12
Consumer Credit	Aug ∆% annual rate: 8.0 Blog 10/7/12
Net Foreign Purchases of Long-term Treasury Securities	Aug Net Foreign Purchases of Long-term Treasury Securities: $90.0 billion Major Holders of Treasury Securities: China $1154 billion; Japan $1122 billion; Total Foreign US Treasury Holdings Aug $5430 billion Blog 10/21/12
Treasury Budget	Fiscal Year 2012/2011 ∆%: Receipts 6.4; Outlays -1.7; Individual Income Taxes 3.7 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,089,353 million CBO Forecast 2012FY Deficit $1.171 trillion Blog 10/14/2012
CBO Budget and Economic Outlook	2012 Deficit $1128 B 7.3% GDP Debt 11,318 B 72.8% GDP 2013 Deficit $614 B, Debt 12,064 B 76.1% GDP Blog 8/26/12
Commercial Banks Assets and Liabilities	Sep 2012 SAAR ∆%: Securities 6.7 Loans 2.2 Cash Assets -65.1 Deposits 7.7 Blog 10/28/12
Flow of Funds	IIQ2012 ∆ since 2007 Assets -$4193B Real estate -$4451B Financial $-157 MM Net Worth -$3389B Blog 9/23/12
Current Account Balance of Payments	IIQ2012 -$1285 B %GDP 3.0 Blog 9/23/12

Links to blog comments in Table USA:

10/28/12 http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states.html

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

10/7/12 http://cmpassocregulationblog.blogspot.com/2012/10/twenty-nine-million-unemployed-or.html

9/30/12 http://cmpassocregulationblog.blogspot.com/2012/09/historically-sharper-recoveries-from.html

9/23/12 http://cmpassocregulationblog.blogspot.com/2012/09/collapse-of-united-states-creation-of.html

8/26/12 http://cmpassocregulationblog.blogspot.com/2012/08/expanding-bank-cash-and-deposits-with_26.html

The Bureau of Labor Statistics (BLS) of the US Department of Labor provides the quarterly employment cost index (ECI). The ECI is highly useful in several ways including: (1) how costs of employees may affect hiring decisions and thus the overall economy; (2) impact of employment costs on inflation and thus monetary policy; and (3) relation of employee costs to inflation on issues such as welfare of the working population and their ability to consume that could affect economic growth. The BLS estimates total compensation composed of wages and salaries, which are about 70 percent of total compensation, and benefits, accounting for the remaining 30 percent (http://www.bls.gov/news.release/pdf/eci.pdf 1). There is vast theoretical and empirical literature on how benefits interact with wage determination. The ECI is considered initially with current data in Table VA-1 and subsequently with charts of the BLS on evolution over the past decade. The BLS provides data for the entire civilian population, the private sector and state/local government. The data are available quarterly and for the 12 months of the ending month of the quarter. Total compensation 12-month percentage changes have moderated for the entire civilian population, the private sector and state and local government. In the 12 months ending in Sep 2012, total compensation increased 2.0 percent for the private sector, which is equal to inflation of 2.0 percent in the 12 months ending in Sep 2012 (http://www.bls.gov/cpi/data.htm), 2.0 percent for the entire civilian population and 1.8 percent for state and local government. Wages and salaries in the 12 months ending in Sep 2012 increased at relatively subdued rates of 1.8 percent for the private sector, which is below inflation of 2.0 percent in the 12 months ending in Sep 2012 (http://www.bls.gov/cpi/data.htm), 1.7 percent for the entire civilian population and only 1.1 percent for state/local workers. Wages have been losing relative to headline CPI inflation of 2.0 percent in the 12 months ending in Sep 2012 (http://www.bls.gov/cpi/data.htm). Compensation benefits of the private sector increased at 2.3 percent in the 12 months ending in Sep, which is higher than 1.8 percent for wages and salaries.

Table VA-1, Employment Cost Index Quarterly and 12 Months Changes %

	IIIQ 12 SA	IIIQ12 SA	12 M Sep 11 NSA	12 M Dec 11 NSA	12 M Mar 12 NSA	12 M Jun 12 NSA	12 M Sep 12 NSA
Civilian
Comp	0.5	0.4	2.0	2.0	1.9	1.7	2.0
Wages/ Salaries	0.4	0.3	1.6	1.4	1.7	1.7	1.7
Benefits	0.6	0.8	3.2	3.2	2.7	2.1	2.6
Private
Comp	0.5	0.4	2.1	2.2	2.1	1.8	2.0
Wages/ Salaries	0.4	0.4	1.7	1.6	1.9	1.8	1.8
Benefits	0.6	0.7	3.3	3.6	2.8	1.9	2.3
State local Govt
Comp	0.5	0.3	1.5	1.3	1.5	1.6	1.8
Wages/ Salaries	0.3	0.2	1.0	1.0	1.0	1.1	1.1
Benefits	0.9	0.8	2.5	2.1	2.3	2.7	3.2

Notes: Civilian includes private industry plus state and local government; SA: seasonally adjusted; NSA: not seasonally adjusted; Comp: compensation; Govt: government

Source: US Bureau of Labor Statistics http://www.bls.gov/ncs/ect/

A series of charts of the BLS provides evolution of the ECI during the past decade. Percentage changes in 12 months of total civilian compensation in Chart VA-1 were in a range of around 3 to 4 percent before the global recession, declining to less than 2 percent with the contraction and increasing above 2 percent in the expansion. Recently, rates have fallen, stagnated, fell again and recovered.

Chart VA-1, US, ECI, Total Compensation, All Civilian, 12-Month Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

Chart VA-2 provides the 12 months percentage rates of change of wages and salaries for the entire civilian population. The rates collapsed with the global recession and have flattened around 1.5 percent since 2010 while inflation has accelerated and decelerated following world inflation waves (http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html).

Chart VA-2, US, ECI, Wages and Salaries, All Civilian 12-Month Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

Twelve-month percentage changes of benefits of the total civilian population in Chart VA-3 were much higher in the first part of the 2000s, surpassing relatively subdued inflation but declined to less than 2 percent with the global recession. After 2010, there is a clear rising trend of benefit above 3 percent with decline in recent months of 2011 and then stagnation followed by decline in the first half of 2012.

Chart VA-3, US, ECI, Total Benefits, All Civilian 12 Months Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

ECI total compensation 12-months percentage changes from 2001 to 2011 for the private sector are shown in Chart VA-4. Behavior is similar as for total civilian compensation. Private-sector compensation had stabilized somewhat above 2 percent with inflation rising to 2.7 percent in the 12 months ending in Mar but fell to 1.8 percent in Jun that is almost equal to 1.7 percent consumer price inflation. Compensation and CPI inflation converged to 2.0 percent in Sep 2012.

Chart VA-4, US, ECI, Total Compensation, Private Industry 12 Months Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

There is different behavior of 12 months percentage rates of private-sector wages and salaries in Chart VA-5. Rates fell in the first part of the decade and then rose into 2007. Rates of change in 12 months of wages and salaries in the private sector fell during the global contraction to barely above 1 percent and have not rebounded while inflation has returned.

Chart VA-5, US, ECI, Wages and Salaries, Private Industry, 12 Months Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

Chart VA-6 provides 12-month percentage rates of change of the consumer price index of the US. Inflation has risen sharply into 2011 with 3.0 percent in the 12 months ending in Dec while wage and salary increases in the private sector have risen by 1.6 percent in the 12 months ending in Dec. Wages and salaries rose 1.9 percent in the 12 months ending in Mar while inflation was 2.7 percent in the 12 months ending in Mar. Wage and salaries of the private sector increased 1.8 percent in the 12 months ending in Jun, which is almost equal to inflation of 1.7 percent. Wages and salaries increased 1.8 percent in the 12 months ending in Sep 2012 while inflation was 2.0 percent.

Chart VA-6, US, Consumer Price Index, 12-Month Percentage Change, NSA, 2001-2012

Source: US Bureau of Labor Statistics

Growth of benefits has been more dynamic than total compensation and wages and salaries, as shown in Chart VA-7. In 2004, the 12 month rate of change exceeded 7 percent. Rates of increase of benefits costs then fell even before the global recession, touching 1 percent in late 2010, rose sharply above 3 percent in 2011 and have fallen in recent months.

Chart VA-7, US, ECI, Total Benefits, Private Industry, 12 Months Percent Change, 2001-2012

Source: US Bureau of Labor Statistics

Behavior at the margin is provided by rates of change in a quarter relative to the prior quarter, as shown in Chart VA-8. Quarterly rates of change of total civilian compensation were high in the early 2000s, fell sharply with the global recession and collapsed in recent quarters.

Chart VA-8, US, Employment Cost Index All Civilian Total Compensation Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

Chart VA-9 provides the quarterly rates of change of wages and salaries of the entire civilian population. The rates of change sank below 0.5 percent per quarter and have remained subdued since the global recession.

Chart VA-9, US, ECI, Wages and Salaries, All Civilian, Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

Quarterly rates of change of benefits of the total civilian population in Chart VA-10 had declined before the global recession. The rate collapsed in recent quarters.

Chart VA-10, US, ECI, Total Benefits, All Civilian, Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

Quarterly rates of change of total compensation of the private sector in Chart VA-11 have not returned to the levels before the contraction except with sporadic jump in 2011 followed by contraction and stagnation in recent quarters.

Chart VA-11, US, ECI, Total Compensation, Private Industry, Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

Quarterly rates of change of wages and salaries of the private sector in Chart VA-12 show significant fluctuation. Quarterly rates of change have fallen below 0.5 percent in the current expansion.

Chart VA-12, US, ECI, Wages and Salaries, Private Industry, Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

The 12-month rates of change of benefits of private industry in Chart VA-13 have fluctuated widely with the only negative change in 2007. The 12-month rate of private-sector benefits fell in past months.

VA-13, US, ECI, Total Benefits, Private Industry, Three-Month % Change, 2001-2012

Source: US Bureau of Labor Statistics

http://www.census.gov/briefrm/esbr/www/esbr022.html

The Bureau of Labor Statistics (BLS) of the Department of Labor provides the quarterly report on productivity and costs. The operational definition of productivity used by the BLS is (http://www.bls.gov/news.release/pdf/prod2.pdf 1): “Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.” The BLS has revised the estimates for productivity and unit costs. Table VA-2 provides revised data for nonfarm business sector productivity and unit labor costs for the first three quarters of 2012 in seasonally adjusted annual equivalent (SAAE) rate and the percentage change from the same quarter a year earlier. Reflecting increases in output of 3.2 percent and of 1.3 percent in hours worked, nonfarm business sector labor productivity increased at a SAAE rate of 1.9 percent in IIIQ2012, as shown in column 2 “IIIQ2012 SAEE.” The increase of labor productivity from IIIQ2011 to IIIQ2012 was 1.5 percent, reflecting increases in output of 3.3 percent and of hours worked of 1.8 percent, as shown in column 3 “IIIQ2012 YoY.” Hours worked increased from 2.1 percent in IIQ2012 in SAAE to 3.2 percent in IIIQ2012 while output rose from 2.1 percent in IIQ2011 to 3.2 percent in IIIQ2012. The BLS defines unit labor costs as (http://www.bls.gov/news.release/pdf/prod2.pdf 2): “BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.” Unit labor costs decreased at the SAAE rate of 0.1 percent in IIIQ2012 and rose 1.1 percent in IIIQ2012 relative to IIIQ2011. Hourly compensation in IIIQ2012 increased at the SAAE rate of 1.8 percent, which deflating by the estimated consumer price increase SAAE rate in IIIQ2012 results in decrease of real hourly compensation by 0.4 percent. Real hourly compensation increased 0.9 percent in IIIQ2012 relative to IIIQ2011.

Table VA-2, US, Nonfarm Business Sector Productivity and Costs %

	IIIQ 2012 SAAE	IIIQ 2012 YoY	IIQ 2012 SAAE	IIQ 2012 YoY	IQ 2012 SAAE	IQ 2012 YoY
Productivity	1.9	1.5	1.9	1.2	-0.5	1.0
Output	3.2	3.3	2.1	2.9	2.7	3.2
Hours	1.3	1.8	0.2	1.7	3.2	2.2
Hourly Comp.	1.8	2.6	3.6	2.1	5.8	1.2
Real Hourly Comp.	-0.4	0.9	2.8	0.2	3.3	-1.6
Unit Labor Costs	-0.1	1.1	1.7	1.0	6.4	0.2
Unit Nonlabor Payments	6.9	2.3	1.5	2.9	-4.0	4.7
Implicit Price Deflator	2.8	1.6	1.6	1.8	1.9	2.1

Notes: SAAE: seasonally adjusted annual equivalent; Comp.: compensation; YoY: Quarter on Same Quarter Year Earlier

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

In 2011, productivity increased 0.7 percent in the annual average, as shown in Table VA-3. Increases in productivity were revised to 3.1 percent in the 2010 annual average and 2.9 percent in the 2009 annual average. The contraction period and the recovery period have been characterized by savings of labor inputs. Real hourly compensation fell 0.5 percent in 2011, interrupting increases of 1.8 percent in 2009 and 0.4 percent in 2010. Unit labor costs fell 1.5 percent in 2009 and 1.0 percent in 2010 but increased 2.0 percent in 2011.

Table VA-3, US, Revised Nonfarm Business Sector Productivity and Costs Annual Average, ∆% Annual Average

	2011 ∆%	2010 ∆%	2009 ∆%	2008 ∆%	2007 ∆%
Productivity	0.7	3.1	2.9	0.6	1.5
Real Hourly Compensation	-0.5	0.4	1.8	-0.4	1.1
Unit Labor Costs	2.0	-1.0	-1.5	2.8	2.4

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Productivity jumped in the recovery after the recession from Mar IQ2001 to Nov IVQ2001 (http://www.nber.org/cycles.html). Table VA-4 provides quarter on quarter and annual percentage changes in nonfarm business output per hour, or productivity, from 1999 to 2012. The annual average jumped from 2.9 percent in 2001 to 4.6 percent in 2002. Nonfarm business productivity increased at the SAAE rate of 8.8 percent in the first quarter after the recession in IQ2002. Productivity increases decline later in the expansion period. Productivity increases were mediocre during the recession from Dec IVQ2007 to Sep IIIQ2009 (http://www.nber.org/cycles.html) and increased during the first phase of expansion from IIQ2009 to IQ2010, trended lower and collapsed in 2011 and 2012.

Table VA-4, US, Nonfarm Business Output per Hour, Percent Change from Prior Quarter at Annual Rate, 1999-2012

Year	Qtr1	Qtr2	Qtr3	Qtr4	Annual
1999	3.9	0.3	3.3	7.1	3.3
2000	-1.5	9.4	0.1	4.0	3.4
2001	-1.3	7.4	2.5	5.8	2.9
2002	8.8	0.5	3.8	-0.2	4.6
2003	3.7	5.5	9.5	1.5	3.7
2004	0.6	3.3	0.7	0.5	2.6
2005	4.2	-0.8	3.1	-0.2	1.6
2006	2.5	0.4	-2.2	2.7	0.9
2007	-0.2	3.4	4.8	1.9	1.5
2008	-2.6	2.4	-0.8	-3.4	0.6
2009	5.5	6.8	5.2	5.0	2.9
2010	2.7	-0.5	3.3	1.9	3.1
2011	-2.0	1.2	0.6	2.8	0.7
2012	-0.5	1.9	1.9

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-14 of the Bureau of Labor Statistics (BLS) provides SAAE rates of nonfarm business productivity from 1999 to 2012. There is a clear pattern in both episodes of economic cycles in 2001 and 2007 of rapid expansion of productivity in the transition from contraction to expansion followed by more subdued productivity expansion. Part of the explanation is the reduction in labor utilization resulting from adjustment of business to the sudden shock of collapse of revenue. Productivity rose briefly in the expansion after 2009 but then collapsed and moved to negative change with some positive changes recently at lower rates.

Chart VA-14, US, Nonfarm Business Output per Hour, Percent Change from Prior Quarter at Annual Rate, 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Percentage changes from prior quarter at SAAE rates and annual average percentage changes of nonfarm business unit labor costs are provided in Table VA-4. Unit labor costs fell during the contractions with continuing negative percentage changes in the early phases of the recovery. Weak labor markets partly explain the decline in unit labor costs. As the economy moves toward full employment, labor markets tighten with increase in unit labor costs. The expansion beginning in IIIQ2009 has been characterized by high unemployment and underemployment. Table VA-5 shows continuing subdued increases in unit labor costs in 2011 but with increase of 6.4 percent in IQ2012 and 1.7 percent in IIQ2012 followed by decline of 0.1 percent in IIIQ2012.

Table VA-5, US, Nonfarm Business Unit Labor Costs, Percent Change from Prior Quarter at Annual Rate 1999-2012

Year	Qtr1	Qtr2	Qtr3	Qtr4	Annual
1999	3.0	0.5	0.1	1.6	0.9
2000	17.4	-7.4	8.6	-1.6	3.9
2001	10.9	-5.8	-1.1	-1.7	1.5
2002	-4.1	3.4	-1.6	2.2	-1.3
2003	2.8	1.4	-3.5	1.8	1.0
2004	-2.5	2.4	5.8	2.7	0.7
2005	-1.0	3.5	2.6	2.6	2.3
2006	2.9	1.3	3.6	6.8	2.8
2007	4.0	-1.8	-1.9	4.3	2.4
2008	8.7	-3.4	4.3	5.7	2.8
2009	-8.2	-0.2	-3.1	-3.9	-1.5
2010	-1.3	3.3	-1.4	-1.4	-1.0
2011	11.3	-1.3	-0.6	-3.3	2.0
2012	6.4	1.7	-0.1

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-2 provides percentage changes quarter on quarter at SAAE rates of nonfarm business unit labor costs. With the exception of 3.3 percent in IIQ2010, a jump of 11.3 percent in IQ2011, 6.4 percent in IQ2012 and 1.5 percent in IIQ2012, changes in nonfarm business unit labor costs have been negative.

Chart VA-15, US, Nonfarm Business Unit Labor Costs, Percent Change from Prior Quarter at Annual Rate 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Table VA-6 provides percentage change from prior quarter at annual rates for nonfarm business real hourly worker compensation. The expansion after the contraction of 2001 was followed by strong recovery of real hourly compensation. Real hourly compensation increased at the rate of 4.4 percent in IQ2011 but fell at annual rates of 4.4 percent in IIQ2011, 3.1 percent in IIIQ2011 and 1.9 percent in IVQ2011 but increased at 3.3 percent in IQ2012 and at 2.8 percent in IIQ2012, declining at 0.4 percent in IIIQ2012. In 2011, real hourly compensation fell 0.5 percent.

Table VA-6, Nonfarm Business Real Hourly Compensation, Percent Change from Prior Quarter at Annual Rate 1999-2012

Year	Qtr1	Qtr2	Qtr3	Qtr4	Annual
1999	5.4	-2.0	0.2	5.6	2.2
2000	11.4	-1.8	4.7	-0.4	4.0
2001	5.4	-1.5	0.2	4.5	1.6
2002	2.8	0.6	0.0	-0.6	1.5
2003	2.4	7.7	2.5	1.8	2.4
2004	-5.2	2.6	3.7	-1.1	0.6
2005	1.3	-0.1	-0.3	-1.3	0.6
2006	3.1	-1.8	-2.6	11.6	0.5
2007	-0.2	-3.0	0.3	1.3	1.1
2008	1.4	-6.1	-2.8	12.2	-0.4
2009	-0.7	4.7	-1.6	-2.1	1.8
2010	0.5	3.1	0.4	-2.4	0.4
2011	4.4	-4.4	-3.1	-1.9	-0.5
2012	3.3	2.8	-0.4

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-16 provides percentage change from prior quarter at annual rate of nonfarm business real hourly compensation from 1999 to 2012. There are significant fluctuations in quarterly percentage changes oscillating between positive and negative. There is no clear pattern in the two contractions in the 2000s.

Chart VA-16, US, Nonfarm Business Real Hourly Compensation, Percent Change from Prior Quarter at Annual Rate 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-17 provides percentage change of nonfarm business output per hour in a quarter relative to the same quarter a year earlier. As in most series of real output, productivity increased sharply in 2010 but the momentum was lost after 2011 as with the rest of the real economy.

Chart VA-17, US, Nonfarm Business Output per Hour, Percent Change from Same Quarter a Year Earlier 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-18 provides percentage changes of nonfarm business unit labor costs relative to the same quarter a year earlier. Softening of labor markets caused relatively high yearly percentage changes in the recession of 2001 repeated in the recession in 2009. Recovery was strong in 2010 but then weakened.

Chart VA-18, US, Nonfarm Business Unit Labor Costs, Percent Change from Same Quarter a Year Earlier 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Chart VA-19 provides percentage changes in a quarter relative to the same quarter a year earlier for nonfarm business real hourly compensation. Labor compensation eroded sharply during the recession with brief recovery in 2010 and another fall until recently.

Chart VA-19, US, Nonfarm Business Real Hourly Compensation, Percent Change Same Quarter a Year Earlier 1999-2012

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Rapid increase of US labor productivity in the 1990s is shown in Chart VA-20 with the index of nonfarm business labor productivity from 1947 to 2012. The rate of productivity increase continued in the early part of the 2000s but then softened and fell during the global recession.

Chart VA-20, US, Nonfarm Business Labor Productivity, Output per Hour, 1947-2012, Index 2005=100

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Unit labor costs increased sharply during the Great Inflation from the late 1960s to 1981 as shown by sharper slope in Chart VA-21. Unit labor costs continued to increase but at a lower rate.

Chart VA-21, US, Nonfarm Business, Unit Labor Costs, 1947-2012, Index 2005=100

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Real hourly compensation increased at relatively high rates after 1947 to the early 1970s but reached a plateau that lasted until the early 1990s, as shown in Chart VA-22. There were rapid increases until the global recession.

Chart VA-22, US, Nonfarm Business, Real Hourly Compensation, 1947-2012, Index 2005=100

Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/

Motor vehicle sales and production in the US have been in long-term structural change. Table VA-7 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-Oct 2012, light vehicle sales accumulated to 11,992,114, which is higher by 13.8 percent relative to 10,539,485 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally-adjusted annual rate of light vehicle sales in the US reached 14.29 million in Oct 2012, lower than 14.94 million in Sep 2012 and higher than 13.34 million in Oct 2011 (http://motorintelligence.com/m_frameset.html).

Table VA-7, 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

Chart VA-23 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2012. Output has stagnated since the late 1990s.

Chart VA-23, US, Motor Vehicles and Parts Output, 1972-2012

Source: Board of Governors of the Federal Reserve System http://www.federalreserve.gov/releases/G17/Current/default.htm

Manufacturers’ shipments increased 0.9 percent in Sep 2012 after decreasing 0.2 percent in Aug 2012 and increasing 1.9 percent in Jul 2012. New orders increased 4.8 percent in Sep following decrease by 5.1 percent in Aug, as shown in Table VA-8. These data are very volatile. Volatility is illustrated by increase of 2649.7 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.12 percent in Aug. New orders excluding transportation equipment increased 1.4 percent in Sep. Capital goods new orders, indicating investment, increased 25.7 percent in Sep after decreasing 25.8 percent in Aug. New orders of nondefense capital goods increased 23.9 percent in Sep after falling 23.9 percent in Aug. Excluding more volatile aircraft, capital goods orders increased 0.2 percent in Sep.

Table VA-8, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%

	Sep 2012 ∆%	Aug 2012 ∆%	Jul 2012 ∆%
Total
S	0.9	-0.2	1.9
NO	4.8	-5.1	2.6
Excluding Transport
S	0.8	1.1	0.9
NO	1.4	0.7	0.7
Excluding Defense
S	0.9	-0.3	2.1
NO	4.4	-4.5	3.2
Durable Goods
S	0.8	-2.9	1.8
NO	9.8	-13.1	3.3
Machinery
S	-0.1	-1.1	-1.4
NO	9.2	-6.1	-6.1
Computers & Electronic Products
S	2.2	-3.5	-2.0
NO	-1.1	-4.0	-2.1
Computers
S	16.6	-0.6	-13.0
NO	12.9	15.0	-21.5
Transport Equipment
S	1.1	-8.0	8.0
NO	31.3	-33.7	13.2
Automobiles
S	3.2	-2.8	-3.3
Motor Vehicles
S	-0.8	-15.8	20.1
NO	-1.6	-15.7	20.5
Nondefense Aircraft
S	12.6	-5.9	6.3
NO	2649.7	-97.2	51.1
Capital Goods
S	1.9	-1.8	-0.8
NO	25.7	-25.8	1.8
Nondefense Capital Goods
S	1.5	-1.8	-0.3
NO	23.9	-23.9	4.4
Capital Goods ex Aircraft
S	-0.2	-1.1	-1.6
NO	0.2	0.3	-5.6
Nondurable Goods
S	1.0	2.2	1.9
NO	1.0	2.2	1.9

Note:Mfg: manufacturing; S: shipments; NO: new orders; Transport: transportation

Source: US Census Bureau http://www.census.gov/manufacturing/m3/

Chart VA-24 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-24, US, Manufacturers’ New Orders 2010-2011 Seasonally Adjusted, Month ∆%

Source: US Census Bureau

Chart VA-2 of the US Bureau of the Census provides total value of manufacturers’ new orders, seasonally adjusted, from 1992 to 2012. Seasonal adjustment reduces sharp oscillations. The series dropped nearly vertically during the global recession but rose along a path even steeper than in the high-growth period before the recession. The final segment suggests deceleration but similar segments are found in earlier periods followed with continuing growth interrupted by the 5.1 percent drop in Aug but recovery of 4.8 percent in Sep.

Chart VA-25, US, Value of Total Manufacturers’ New Orders, Seasonally Adjusted, 1992-2012

Source: US Census Bureau

http://www.census.gov/manufacturing/m3/

Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-9. Values are cumulative millions of dollars in Jan-Sep 2012 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Sep 2012 total $4296.1 billion and new orders total $4238.3 billion, growing respectively by 4.6 percent and 3.3 percent relative to the same period in 2011. Excluding transportation equipment, shipments grew 3.6 percent and new orders increased 2.5 percent. Excluding defense, shipments grew 4.8 percent and new orders grew 3.8 percent. Durable goods shipments reached $2015.3 billion in Jan-Sep 2012, or 46.9 percent of the total, growing by 7.6 percent, and new orders $1957.5 billion, or 46.2 percent of the total, growing by 4.9 percent. Important information in Table VA-9 is the large share of nondurable goods: with shipments of $2280.8 billion or 53.2 percent of the total, growing by 2.0 percent. Capital goods have relatively high value of $700.7 billion for shipments, growing 5.8 percent, and new orders $712.4 billion, growing 0.4 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $571.5 billion, growing by 5.6 percent, and new orders $570.8 billion, growing 0.8 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.0 percent of US national income in IQ2012.

Table VA-9, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars

Jan-Sep 2012	Shipments	∆% 2012/ 2011	New Orders	∆% 2012/ 2011
Total	4,296,090	4.6	4,238,258	3.3
Excluding Transport	3,724,083	3.6	3,657,888	2.5
Excluding Defense	4,199,837	4.8	4,143,397	3.8
Durable Goods	2,015,325	7.6	1,957,493	4.9
Machinery	290,672	9.4	282,092	-2.9
Computers & Electronic Products	251,338	-0.7	194,483	0.9
Computers	10,275	-23.2	10,308	-22.3
Transport Equipment	572,007	11.1	580,370	8.4
Automobiles	78,156	25.1
Motor Vehicles	169,228	4.7	167,797	4.1
Nondefense Aircraft	83,583	22.4	98,518	15.7
Capital Goods	700,726	5.8	712,423	0.4
Nondefense Capital Goods	626,132	7.8	638,915	3.0
Capital Goods ex Aircraft	571,457	5.6	570,819	0.8
Nondurable Goods	2,280,765	2.0	2,280,765	2.0
Food Products	538,986	2.7
Petroleum Refineries	617,403	4.7
Chemical Products	572,715	-1.5

Note: Transport: transportation Source: US Census Bureau http://www.census.gov/manufacturing/m3/

Chart VA-26 of the US Census Bureau provides value of manufacturer’s new orders not seasonally adjusted from Jan 1992 to Sep 2012. Fluctuations are evident, which are smoothed by seasonal adjustment in the earlier Chart VA-25. The series drops nearly vertically during the global contraction and then resumes growth in a steep upward trend, flattening recently.

Chart VA-26, US, Value of Total Manufacturers’ New Orders, Not Seasonally Adjusted, 1992-2012

Source: US Census Bureau

http://www.census.gov/manufacturing/m3/

Construction spending at seasonally-adjusted annualized rate (SAAR) reached $851.6 billion in Sep, which was higher by 0.6 percent than in the prior month of Aug, as shown in Table VA-10. Residential investment, with $292.2 billion accounting for 34.3 percent of total value of construction, increased 2.7 percent in Sep and nonresidential investment, with $559.4 billion accounting for 65.7 percent of the total, fell 0.4. Public construction fell 0.8 percent while private construction increased 1.3 percent. Data in Table VA-10 show that nonresidential construction at $559.4 billion is much higher in value than residential construction at $292.2 billion while total private construction at $580.5 billion is much higher than public construction at $271.1 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in IQ2012 and IIQ2012 but nonresidential investment deducted from GDP growth in IIIQ2012 (http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states.html).

Table VA-10, US, Value of Construction Put in Place in the United States Seasonally Adjusted Annual Rate Billion Dollars and Month and 12-Month ∆%

	Sep 2012 SAAR $ Millions	Month ∆%	12-Month ∆%
Total	851,563	0.6	7.8
Residential	292,163	2.7	19.2
Nonresidential	559,400	-0.4	2.6
Total Private	580,467	1.3	14.4
Private Residential	285,855	2.8	20.9
New Single Family	137,085	3.9	25.7
New Multi-Family	22,580	1.3	48.9
Private Nonresidential	294,612	-0.1	8.8
Total Public	271,095	-0.8	-4.2
Public Residential	6,307	-1.5	-26.1
Public Nonresidential	264,788	-0.8	-3.6

SAAR: seasonally adjusted annual rate; B: billions

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Further information on construction spending is provided in Table VA-11. 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 3.0 percent in Jul 2011. 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 0.9 percent in Apr, 1.7 percent in May and 0.8 percent in Jun but declining 0.1 percent in Aug 2012 and increasing 0.6 percent in Sep 2012. 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 10.9 percent in Jul 2012 and 6.1 percent in Sep 2012.

Table VA-11, US, Value and Percentage Change in Value of Construction Put in Place, Dollars Millions and ∆%

	Value NSA Month $ Millions	12-Month ∆% NSA	Value SAAR $ Millions	Month ∆% SA*
Sep 2012	77,971	6.1	851,653	0.6
Aug	80,839	7.6	846,167	-0.1
Jul	78,070	11.6	846,645	0.2
Jun	76,491	7.3	845,072	0.8
May	71,635	8.8	838,778	1.7
Apr	66,201	9.1	825,133	0.9
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	-3.0
Jun	71,297	-3.7	786,784	1.4
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	746,056	-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-12. Construction spending in Jan-Sep 2012, not seasonally adjusted, reached $624.8 billion, which is higher by 8.9 percent than $573.7 billion in the same period in 2011. The depth of the contraction is shown by the decline of construction spending from $900.9 billion in Jan-Sep 2006 to only $624.8 billion in the same period in 2012, or decline by minus 30.7 percent. The comparable decline from Jan-Sep 2005 to Jan-Sep 2012 is minus 26.2 percent. Construction spending in Jan-Sep 2012 fell by 7.8 percent relative to the same period in 2003. Construction spending is lower by 9.4 percent in Jan-Sep 2012 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

Table VA-12, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%

Jan-Sep 2012 $ MM	624,789
Jan-Sep 2011 $ MM	573,654
∆% to 2012	8.9
Jan-Sep 2010 $ MM	602,013
∆% to 2012	3.8
Jan-Sep 2009 $MM	689,875
∆% to 2012	-9.4
Jan-Sep 2006 $ MM	900,985
∆% to 2012	-30.7
Jan-Sep 2005 $ MM	847,096
∆% to 2012	-26.2
Jan-Sep 2003 $ MM	677,791
∆% to 2012	-7.8

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Chart VA-27 of the US Census Bureau provides value of construction spending in the US not seasonally adjusted from Jan 2002 to Sep 2012. There are wide oscillations requiring seasonal adjustment to compare adjacent data. There was sharp decline during the global recession followed in recent periods by a stationary series that may be moving upward again.

Chart VA-27, Value of Construction Spending not Seasonally Adjusted, Millions of Dollars, 2002-2012

Source: US Census Bureau

http://www.census.gov/construction/c30/c30index.html

Monthly construction spending in the US in the seven months Apr-Sep not seasonally adjusted is shown in Table VA-13 for the years between 2002 and 2012. The values of $77.9 billion in Sep 2012, $73.5 billion in Sep 2011 and $74.8 billion in Sep 2010 are lower than $76.5 billion in Sep 2002 with only marginally higher value for Sep 2012. Construction in Sep 2012 fell by 25.9 percent from the peak of $105.2 billion Sep 2007 to $77.9 billion in Sep 2012. The data are not adjusted for inflation or changes in quality.

Table VA-13, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars

Year	Apr	May	Jun	Jul	Aug	Sep
2002	69,504	73,384	77,182	78,863	79,460	76,542
2003	69,638	74,473	80,377	82,971	85,191	83,841
2004	78,354	83,736	89,932	93,614	96,164	92,538
2005	85,485	92,959	99,632	103,158	106,706	103,269
2006	95,324	102,495	107,607	108,423	110,434	104,191
2007	93,375	100,534	105,399	107,090	110,430	105,150
2008	87,743	92,781	96,338	98,483	99,786	96,755
2009	75,187	76,808	81,429	83,379	84,368	81,213
2010	66,422	68,906	74,035	73,077	75,834	74,764
2011	60,682	65,845	71,297	69,929	75,101	73,515
2012	66,201	71,635	76,491	78,070	80,839	77,971

Source: US Census Bureau

http://www.census.gov/construction/c30/c30index.html

Chart VA-28 of the US Census Bureau 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-28 shows a trend of increase in the final segment but it is difficult to assess if it will be sustained.

Chart VA-28, 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 Jun to Sep is shown in Table VA-14 for the years between 2002 and 2012. There is a peak in 2006 to 2007 with subsequent collapse of SAARs and rebound in 2012.

Table VA-14, US, Value of Construction Spending SAAR Millions of Dollars

Year	Jun	Jul	Aug	Sep
2002	846,777	847,129	839,008	832,134
2003	880,865	891,264	901,839	911,589
2004	983,072	1,006,119	1,013,724	1,012,290
2005	1,089,505	1,109,691	1,119,782	1,131,739
2006	1,172,932	1,165,093	1,158,193	1,151,104
2007	1,166,892	1,154,018	1,160,593	1,165,162
2008	1,074,637	1,066,919	1,057,459	1,056,666
2009	901,987	899,601	889,643	880,259
2010	816,302	788,524	791,653	798,916
2011	786,784	763,468	786,308	790,294
2012	845,072	846,645	846,167	851,563

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Chart VA-29 of the US Census Bureau provides SAARs of value of construction from Jan 2002 to Sep 2012. There is clear acceleration after 2003 when fed funds rates were fixed in at 1.0 percent in Jun 2003 until Jun 2004. Construction peaked in 2005-2006, stabilizing in 2007 at a lower level and then collapsed in a nearly vertical drop until 2011 with increases into 2012.

Chart VA-29, US, Construction Expenditures SAAR 2002-2012

Source: US Census Bureau http://www.census.gov/construction/c30/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-15. 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-15, Annual Value of Construction Put in Place 1993-2011, 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: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Table VA-16 shows the euphoria of prices during the boom and the subsequent decline. House prices rose 94.5 percent in the 10-city composite of the Case-Shiller home price index and 79.5 percent in the 20-city composite between Aug 2000 and Aug 2005. Prices rose around 100 percent from Aug 2000 to Aug 2006, increasing 104.9 percent for the 10-city composite and 89.8 percent for the 20-city composite. House prices rose 39.4 percent between Aug 2003 and Aug 2005 for the 10-city composite and 34.9 percent for the 20-city composite propelled by low fed funds rates of 1.0 percent between Jun 2003 and Jun 2004 and then only increasing by 0.25 basis points at every meeting of the Federal Open Market Committee (FOMC) until Jun 2006, reaching 5.25 percent. Simultaneously, the suspension of auctions of the 30-year Treasury bond caused decline of yields of mortgage-backed securities with intended decrease in mortgage rates. Similarly, between Aug 2003 and Aug 2006 the 10-city index gained 46.8 percent and the 20-city index increased 42.6 percent. House prices have fallen from Aug 2006 to Aug 2012 by 29.7 percent for the 10-city composite and 29.3 percent for the 20-city composite. Measuring house prices is quite difficult because of the lack of homogeneity that is typical of standardized commodities. In the 12 months ending in Aug 2012, house prices increased 1.3 percent in the 10-city composite and increased 2.0 percent in the 20-city composite. Table VA-16 also shows that house prices increased 44.1 percent between Aug 2000 and Aug 2012 for the 10-city composite and increased 34.3 percent for the 20-city composite. House prices are close to the lowest level since peaks during the boom before the financial crisis and global recession. The 10-city composite fell 29.9 percent from the peak in Jun 2006 to Aug 2012 and the 20-city composite fell 29.4 percent from the peak in Jul 2006 to Aug 2012. The final part of Table VA-16 provides average annual percentage rates of growth of the house price indexes of Standard & Poor’s Case-Shiller. The average annual growth rate between Dec 1987 and Dec 2011 for the 10-city composite was 3.2 percent. Data for the 20-city composite are available only beginning in Jan 2000. House prices accelerated in the 1990s with the average rate of the 10-city composite of 5.0 percent between Dec 1992 and Dec 2000 while the average rate for the period Dec 1987 to Dec 2000 was 3.8 percent. Although the global recession affecting the US between IVQ2007 (Dec) and IIQ2009 (Jun) caused decline of house prices of slightly above 30 percent, the average annual growth rate of the 10-city composite between Dec 2000 and Dec 2011 was 2.5 percent while the rate of the 20-city composite was 1.9 percent.

Table VA-16, US, Percentage Changes of Standard & Poor’s Case-Shiller Home Price Indices, Not Seasonally Adjusted, ∆%

	10-City Composite	20-City Composite
∆% Aug 2000 to Aug 2003	39.6	33.1
∆% Aug 2000 to Aug 2005	94.5	79.5
∆% Aug 2003 to Aug 2005	39.4	34.9
∆% Aug 2000 to Aug 2006	104.9	89.8
∆% Aug 2003 to Aug 2006	46.8	42.6
∆% Aug 2005 to Aug 2012	-25.9	-25.2
∆% Aug 2006 to Aug 2012	-29.7	-29.3
∆% Aug 2009 to Aug 2012	0.3	-0.2
∆% Aug 2010 to Aug 2012	-2.1	-1.8
∆% Aug 2011 to Aug 2012	1.3	2.0
∆% Aug 2000 to Aug 2012	44.1	34.3
∆% Peak Jun 2006 Aug 2012	-29.9
∆% Peak Jul 2006 Aug 2012		-29.4
Average ∆% Dec 1987-Dec 2011	3.2	NA
Average ∆% Dec 1987-Dec 2000	3.8	NA
Average ∆% Dec 1992-Dec 2000	5.0	NA
Average ∆% Dec 2000-Dec 2011	2.5	1.9

Source: http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

With the exception of Apr 2011, house prices seasonally-adjusted declined in every month for both the 10-city and 20-city Case-Shiller composites from Dec 2010 to Jan 2012, as shown in Table VA-17. The most important seasonal factor in house prices is school changes for wealthier homeowners with more expensive houses. Without seasonal adjustment, house prices fell from Dec 2010 throughout Mar 2011 and then increased in every month from Apr to Aug 2011 but fell in every month from Sep 2011 to Feb 2012 with exception of 0.1 percent increase for the 20-city composite in Feb 2012. The not seasonally adjusted index increases from Apr 2012 to Aug 2012 for both the 10- and 20-city composites while the seasonally adjusted index also increases in every month from Apr 2012 to Aug 2012. Declining house prices cause multiple adverse effects of which two are quite evident. (1) There is a disincentive to buy houses in continuing price declines. (2) More mortgages could be losing fair market value relative to mortgage debt. Another possibility is a wealth effect that consumers restrain purchases because of the decline of their net worth in houses.

Table VA-17, US, Monthly Percentage Change of S&P Case-Shiller Home Price Indices, Seasonally Adjusted and Not Seasonally Adjusted, ∆%

	10-City Composite SA	10-City Composite NSA	20-City Composite SA	20-City Composite NSA
Aug 2012	0.4	0.9	0.5	0.9
Jul 2012	0.3	1.5	0.3	1.6
Jun	0.9	2.1	0.9	2.3
May	1.0	2.2	1.0	2.4
Apr	0.7	1.4	0.8	1.4
Mar	0.6	-0.1	0.6	0.0
Feb	0.0	-0.9	0.1	-0.8
Jan	-0.2	-1.1	-0.1	-1.0
Dec 2011	-0.5	-1.2	-0.4	-1.2
Nov	-0.7	-1.4	-0.6	-1.3
Oct	-0.6	-1.3	-0.6	-1.3
Sep	-0.5	-0.6	-0.6	-0.7
Aug	-0.3	0.1	-0.3	0.1
Jul	-0.2	0.9	-0.2	1.0
Jun	-0.1	1.0	-0.1	1.2
May	-0.2	1.0	-0.2	1.0
Apr	0.0	0.6	0.0	0.6
Mar	-0.3	-1.0	-0.4	-1.0
Feb	-0.3	-1.3	-0.3	-1.2
Jan	-0.3	-1.1	-0.2	-1.1
Dec 2010	-0.2	-0.9	-0.2	-0.9

Source: http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

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/gor1210a.pdf). For fiscal 2013, the forecast is of growth of GDP between 1.3 and 1.8 percent, with domestic producer price inflation (Corporate Goods Price Index, CGPI) in the range of 0.1 to 0.7 percent and the all items CPI less fresh food of 0.2 to 0.6 percent. These forecasts are biannual in Apr and Oct.

Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year

Fiscal Year Date of Forecast	Real GDP	Domestic CGPI	CPI All Items Less Fresh Food
2011
Apr 2012	-0.2 to –0.2 [-0.2]	+1.7	0.0
Jan 2012	-0.4 to –0.3 [-0.4]	+1.8 to +1.9 [+1.8]	-0.1 to 0.0 [-0.1]
2012
Oct 2012	+1.4 to +1.6 [+1.5]	-1.2 to -0.9 [-1.1]	-0.1 to -0.1 [-0.1]
Jul 2012	+2.2 to +2.4 [+2.2]	-0.3 to 0.0 [-0.2]	+0.1 to +0.3 [+0.2]
Apr 2012	+2.1 to +2.4 [+2.3]	+0.4 to +0.7 [+0.6]	+0.1 to +0.4 [+0.3]
Jan 2012	+1.8 to +2.1 [+2.0]	-0.1 to +0.2 [+0.1]	0.0 to +0.2 [+0.1]
2013
Oct 2012	+1.3 to +1.8 [+1.6]	+0.1 to +0.7 [+0.5]	+0.2 to +0.6 [+0.4]
Jul 2012	+1.6 to +1.8 [+1.7]	+0.6 to +0.8 [+0.6]	+0.5 to +0.7 [+0.7]
Apr 2012	+1.6 to +1.8 [+1.7]	+0.7 to +0.9 [+0.8]	+0.5 to +0.7 [+0.7]
Jan 2012	+1.4 to +1.7 [+1.6]	+0.6 to 1.0 [+0.8]	+0.4 to +0.5 [+0.5]
2014
Oct 2012	+0.2 to +0.7] [+0.6]	+3.7 to +4.4 [+4.2]	+2.4 to +3.0 [+2.8]

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/gor1210a.pdf

Private-sector activity in Japan contracted at a moderate rate with the Markit Composite Output PMI^™ Index decreasing from 48.6 in Aug to 48.4 in Sep, which is still below 50 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10143). Paul Smith, economist at Markit and author of the report, finds that manufacturing and services data suggest stagnation of GDP in Japan in IIIQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10143). The Markit Business Activity Index of Services decreased from 49.3 in Aug to 48.9 in Sep, also showing contraction at slower pace, also declining in IIIQ2012 to the lowest level in a year (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10143). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 48.0 in Sep to 46.9 in Oct for the lowest reading in 18 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10214). Foreign orders fell for the seventh consecutive months. Paul Smith, economist at Markit and author of the report, finds the data consistent with quarterly contraction of manufacturing output at a quarterly rate in excess of 3 percent with shipments overseas falling at a quarterly rate of about 4 percent because of weak world growth especially in export markets including China (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10214).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 Blog 8/9/11 Table 26
Corporate Goods Prices	Sep ∆% +0.3 12 months ∆% minus 1.4 Blog 10/14/12
Consumer Price Index	Sep NSA ∆% 0.1; Sep 12 months NSA ∆% -0.3 Blog 10/28/12
Real GDP Growth	IIQ2012 ∆%: 0.3 on IQ2012; IIQ2012 SAAR 0.7; ∆% from quarter a year earlier: 3.2 % Blog 9/16/12
Employment Report	Sep Unemployed 2.75 million Change in unemployed since last year: minus 20 thousand Unemployment rate: 4.2% Blog 11/4/12
All Industry Indices	Aug month SA ∆% 0.1 12-month NSA ∆% -0.1 Blog 10/21/12
Industrial Production	Sep SA month ∆%: -4.1 12-month NSA ∆% -8.1 Blog 11/4/12
Machine Orders	Total Aug ∆% -12.6 Private ∆%: -13.7 Jul ∆% Excluding Volatile Orders -3.3 Blog 10/14/12
Tertiary Index	Aug month SA ∆% 0.4 Aug 12 months NSA ∆% 0.8 Blog 10/14/12
Wholesale and Retail Sales	Sep 12 months: Total ∆%: -3.5 Wholesale ∆%: -4.8 Retail ∆%: 0.4 Blog 11/4/12
Family Income and Expenditure Survey	Sep 12-month ∆% total nominal consumption -1.2, real -0.9 Blog 11/4/12
Trade Balance	Exports Sep 12 months ∆%: -10.3 Imports Sep 12 months ∆% 4.1 Blog 10/28/12

Links to blog comments in Table JPY:

10/28/12 http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states.html

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

9/16/12 http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation.html

8/9/11 http://cmpassocregulationblog.blogspot.com/2011/08/turbulence-in-world-financial-markets.html

In Sep 2012, industrial production in Japan decreased 4.1 percent and decreased 8.1 percent in the 12 months ending in Sep 2012, as shown in Table VB-1. In the six months Apr-Sep 2012, industrial production fell cumulative 9.6 or at the annual equivalent rate of 18.2 percent. As a result, growth of industrial production in 12 months fell from 14.2 percent in Mar 2012 to minus 8.1 percent in Sep 2012. Japan’s industrial production increased during two consecutive months by revised 2.3 percent in Dec 2011 and revised 0.9 percent in Jan 2012, reducing the percentage decline in 12 months from minus 3.0 percent in Dec to minus 1.6 percent in Jan 2012 and positive 1.5 percent in Feb. Monthly industrial production had climbed in every month since the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011, with exception of Sep 2011 but fell again in Nov by 1.7 percent. Industrial production was higher in 12 months for the first month in Aug 2011 by 1.6 percent and again in Oct by 0.9 percent but fell 2.9 percent in Nov and 3.0 percent in Dec 2011 relative to a year earlier. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 16.4 percent in 2010. The annual average in calendar year 2011 fell 2.3 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011.

Table VB-1, Japan, Industrial Production ∆%

	∆% Month SA	∆% 12 Months NSA
Sep 2012	-4.1	-8.1
Aug	-1.6	-4.6
Jul	-1.0	-0.8
Jun	0.4	-1.5
May	-3.4	6.0
Apr	-0.2	12.9
Mar	1.3	14.2
Feb	-1.6	1.5
Jan	0.9	-1.6
Dec 2011	2.3	-3.0
Nov	-1.7	-2.9
Oct	1.8	0.9
Sep	-1.9	-2.4
Aug	0.9	1.6
Jul	1.1	-1.7
Jun	3.8	-0.6
May	5.8	-4.6
Apr	2.4	-12.7
Mar	-16.2	-12.4
Feb	1.1	4.5
Jan	1.2	6.1
Dec 2010	2.4	5.9
Calendar Year
2011		-2.3
2010		16.4
2009		-21.9
2008		-3.4

Source: http://www.meti.go.jp/english/statistics/index.html

The employment report for Japan in Sep 2012 is in Table VB-2. The rate of unemployment seasonally adjusted decreased to 4.2 percent in Sep 2012 from 4.3 percent in Jul 2012. The rate of unemployment not seasonally adjusted fell to 4.2 in Sep 2012, which is equal to 4.2 percent a year earlier. The employment rate at 56.8 percent in Sep 2012 fell 0.1 percent from a year earlier.

Table VB-2, Japan, Employment Report Sep 2012

Unemployed	2.75 million
Change since last year	-20 thousand; ∆% –0.7
Unemployment rate	4.2% SA -0.1; NSA 4.2%, -0.0 from earlier year
Population ≥ 15 years	110.97 million
Change since last year	∆% -0.1
Labor Force	65.83 million
Change since last year	∆% –0.2
Employed	62.08 million
Change since last year	% -0.2
Labor force participation rate	59.3
Change since last year	-0.1
Employment rate	56.8%
Change since last year	-0.1

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications http://www.stat.go.jp/english/data/roudou/154.htm

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2012. The sharp decline in Sep 2011 was the best reading in 2011 but the rate increased in the final quarter of the year, declining in Feb 2012 and stabilizing in Mar 2012 but increasing to 4.6 percent in Apr 2012 and declining again to 4.4 percent in May 2012 and 4.3 percent in both Jun and Jul 2012 with further decline to 4.2 percent in both Aug and Sep 2012.

Chart VB-1, Japan, Unemployment Rate

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/154.htm

During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid 1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for 1968, 1975, 1980 and 1985 and yearly from 1990 to 2011. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.4 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011, while the participation rate fell from 60.4 percent to 59.6 percent, falling to 59.3 percent in 2011, and the employment rate fell from 58.1 percent to 56.6 percent in 2010 and 56.5 percent in 2011. The global recession adversely affected labor markets in advanced economies.

Table VB-3, Japan, Rates of Unemployment, Participation in Labor Force and Employment, %

	Unemployment Rate	Participation Rate	Employment Rate
1968	1.2	65.9	65.1
1975	1.9	63.0	61.9
1980	2.0	63.3	62.0
1985	2.6	63.0	61.4
1990	2.1	63.3	61.9
1991	2.1	63.8	62.4
1992	2.2	64.0	62.6
1993	2.5	63.8	62.2
1994	2.9	63.8	61.8
1995	3.2	63.4	61.4
1996	3.4	63.5	61.4
1997	3.4	63.7	61.5
1998	4.1	63.3	60.7
1999	4.7	62.9	59.9
2000	4.7	62.4	59.5
2001	5.0	62.0	58.9
2002	5.4	61.2	57.9
2003	5.3	60.8	57.6
2004	4.7	60.4	57.6
2005	4.4	60.4	57.7
2006	4.1	60.4	57.9
2007	3.9	60.4	58.1
2008	4.0	60.2	57.8
2009	5.1	59.9	56.9
2010	5.1	59.6	56.6
2011	4.6	59.3	56.5

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications http://www.stat.go.jp/english/data/roudou/154.htm

The survey of household income and consumption of Japan in Table VB-4 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 but sharp decline into Jun 2012 with recovery in Jul and Aug 2012, interrupted in Sep 2012 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption decreased 0.9 percent in real terms in Sep 2012 and decreased 1.2 percent in nominal terms. There are several segments of decreasing real consumption: clothing and footwear declining 2.9 percent in real terms and 3.1 percent in nominal terms, fuel, light and water charges declining 3.6 percent in real terms but increasing 0.5 percent in nominal terms and culture and recreation declining 3.6 percent in real terms and 5.6 percent in nominal terms. Real household income increased 0.1 percent; real disposable income decreased 0.1 percent; and real consumption expenditures increased

Table VB-4, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier

Sep 2012	Nominal	Real
Households of Two or More Persons
Total Consumption	-1.2	-0.9
Excluding Housing, Vehicles & Remittance		-2.0
Food	0.4	1.4
Housing	-14.8	-14.5
Fuel, Light & Water Charges	0.5	-3.6
Furniture & Household Utensils	-0.9	1.2
Clothing & Footwear	-3.1	-2.9
Medical Care	-0.5	0.1
Transport and Communications	12.6	12.3
Education	-23.4	-23.7
Culture & Recreation	-5.6	-3.6
Other Consumption Expenditures	0.8	1.1*
Workers’ Households
Income	-0.2	0.1
Disposable Income	-0.4	-0.1
Consumption Expenditures	0.3	0.6

*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-5. 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 2012 through Aug 2012. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 5.3 percent in IQ2012 with private consumption contributing 3.0 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation_16.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of 0.7 percent and contribution of 0.3 percentage points of personal consumption. Nominal consumption increased 4.3 percent in May 2012 but at a lower 1.5 percent in Jun 2012, 1.2 percent in Jul 2012 and 1.4 percent in Aug 2012, decreasing 1.2 percent in Sep 2012. Real consumption expenditures increased 4.0 percent in May 2012 but at a lower 1.6 percent in Jun 2012, 1.7 percent in Jul 2012 and 1.8 percent in Aug 2012, declining 0.9 percent in Sep 2012. Both nominal and real consumption expenditures increased in 2009, 0.3 percent and 2.1 percent, respectively.

Table VB-5, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier

	Nominal Consumption Expenditures ∆% Relative to a Year Earlier	Real Consumption Expenditures ∆% Relative to a Year Earlier
Sep 2012	-1.2	-0.9
Aug	1.4	1.8
Jul	1.2	1.7
Jun	1.5	1.6
May	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 but renewed weakening at the end of IIQ2012 and beginning of IIIQ2012. Table VB-6 provides Japan’s wholesale and retail sales. Retail sales increased 0.4 percent in the 12 months ending in Sep 2012. Total sales decreased 3.5 percent in the 12 months ending in Sep 2012. Retail sales are recovering from deep drops in Mar and Apr 2011 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 Jun 2012 but fell again by 0.7 percent in Jul 2012, increasing 1.7 percent in Aug 2012 and 0.4 percent in Sep 2012.

Table VB-6, Japan, Wholesale and Retail Sales 12 Month ∆%

	Total	Wholesale	Retail
Sep 2012	-3.5	-4.8	0.4
Aug	-2.6	-4.2	1.7
Jul	-3.1	-4.0	-0.7
Jun	-2.8	-3.8	0.2
May	2.5	2.1	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/index.html

VC China. China estimates an index of nonmanufacturing purchasing managers on the basis of a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components from Jan to Sep 2012. The index fell from 58.0 in Mar to 55.2 in May but climbed to 56.7 in Jun, which is lower than 58.0 in Mar and 57.3 in Feb but higher than in any other of the months in 2012. In Jul 2012 the index fell marginally to 55.6 and then to 56.3 in Aug and 53.7 in Sep.

Table CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, %, Seasonally Adjusted

2012	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Sep	53.7	51.8	57.5	51.3	60.9
Aug	56.3	52.7	57.6	51.2	63.2
Jul	55.6	53.2	49.7	48.7	63.9
Jun	56.7	53.7	52.1	48.6	65.5
May	55.2	52.5	53.6	48.5	65.4
Apr	56.1	52.7	57.9	50.3	66.1
Mar	58.0	53.5	60.2	52.0	66.6
Feb	57.3	52.7	59.0	51.2	63.8
Jan	55.7	52.2	58.2	51.1	65.3

Notes: Interm.: Intermediate; Subs: Subscription; Exp: Business Expectations

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm

Chart CIPMNM provides China’s nonmanufacturing purchasing managers’ index from Sep 2011 to Sep 2012. There was slowing of the general index in Apr 2012 after the increase in Jan-Mar 2012 and further decline to 55.2 in May 2012 but increase to 56.7 in Jun 2012 with marginal decline to 55.6 in Jul 2012 and 56.3 in Aug 2012 and sharper drop to 53.7 in Sep 2012.

Chart CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/pressrelease/t20121009_402841100.htm

Table CIPMMFG provides the index of purchasing managers of manufacturing seasonally adjusted of the National Bureau of Statistics of China. The general index (IPM) rose from 50.5 in Jan 2012 to 53.3 in Apr and declined to 50.1 in Jul and to the contraction zone at 49.2 in Aug. The index of new orders (NOI) fell from 54.5 in Apr 2012 to 49.0 in Jul and 48.7 in Aug. The index of employment also fell from 51.0 in Apr to 49.1 in Aug. There is mild rebounding to 49.8 in Sep 2012 and movement to 50.2 in Oct 2012 into positive territory.

Table CIPMMFG, China, Manufacturing Index of Purchasing Managers, %, Seasonally Adjusted

2012	IPM	PI	NOI	INV	EMP	SDEL
Oct	50.2	52.1	50.4	47.3	49.2	50.1
Sep	49.8	51.3	49.8	47.0	48.9	49.5
Aug	49.2	50.9	48.7	45.1	49.1	50.0
Jul	50.1	51.8	49.0	48.5	49.5	49.0
Jun	50.2	52.0	49.2	48.2	49.7	49.1
May	50.4	52.9	49.8	45.1	50.5	49.0
Apr	53.3	57.2	54.5	48.5	51.0	49.6
Mar	53.1	55.2	55.1	49.5	51.0	48.9
Feb	51.0	53.8	51.0	48.8	49.5	50.3
Jan	50.5	53.6	50.4	49.7	47.1	49.7

IPM: Index of Purchasing Managers; PI: Production Index; NOI: New Orders Index; EMP: Employed Person Index; SDEL: Supplier Delivery Time Index

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/pressrelease/t20121102_402847908.htm

China estimates the manufacturing index of purchasing managers on the basis of a sample of 820 enterprises (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Chart CIPMMFG provides the index from Sep 2011 to Sep 2012. There is deceleration from 51.2 in Sep 2011 to marginal contraction at 49.0 in Nov 2011. Manufacturing activity recovered to 53.3 in Apr 2012 but then declined to 50.4 in May 2012 and 50.1 in Jun 2012, which is the lowest in a year with exception of contraction at 49.0 in Nov 2011. The index then fell to contraction at 49.2 in Aug 2012 and improved to 49.8 in Sep with movement to 50.2 in Oct 2012 above the neutral zone of 50.0.

Chart CIPMMFG, China, Manufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm

The HSBC Flash China Manufacturing Purchasing Managers’ Index^™ (PMI^™) compiled by Markit (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10204 ) is mildly improving. The overall Flash China Manufacturing PMI^™ increased marginally from 47.9 in Sep to 49.1 in Oct for a three-month high while the Flash China Manufacturing Output Index increased from 47.3 in Sep to 48.4 in Oct, both in contraction territory below 50.0. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that new easing policies implemented in recent weeks should help in improving the economy with initial manifestation in mild improvement in new orders but that continuing easing policy is required to ensure sound recovery (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10204).The HSBC China Services PMI^™, compiled by Markit, shows improving business activity in China with the HSBC Composite Output, combining manufacturing and services, increasing from 49.9 in Aug to 50.3 in Sep growth in services compensating decline in manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10187). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds marginal improvement in business conditions in China but that increasing demand requires further easing measures (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10187). The HSBC Business Activity index increased from 52.0 in Aug to 54.3 in Sep with improving activity in services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10187). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 49.5 in Oct from 47.9 in Sep, indicating moderate reduction of activity and the twelfth monthly deterioration of the index (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10259). New exports orders registered declines for the sixth consecutive month at a slower but strong rate of decline. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds stabilization of the decline with increase in new orders but weak exports, requiring further stimulus measures (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10259).

Wang Xiaotian, writing on China Daily, on “China cuts its reserve ratio again,” published by Xinhuanet on May 13, 2012 (http://news.xinhuanet.com/english/china/2012-05/13/c_131584252.htm), informs that the People’s Bank of China (PBC) (http://www.pbc.gov.cn/publish/english/963/index.html) reduced the reserve requirement imposed on Chinese lenders by 50 basis points with the objective of injecting liquidity to strengthen the economy. This is the second such reduction of reserve requirements in 2012. The reduction is estimated to release CNY 400 in China’s money market. The reserve requirement will be 20 percent for larger banks and 16.5 percent for smaller banks. The measures are intended to strengthen the economy. Xinhuanet, writing on “China announces surprise rate cuts amid economic downshift,” on Jun 5, 2012 (http://news.xinhuanet.com/english/china/2012-07/05/c_131697843.htm), informs that the central bank of China People’s Bank of China reduced the one year deposit rate by 25 basis points and the one year lending rate by 31 basis points effective Jun 6, 2012. The People’s Bank of China posts the new rates (http://www.pbc.gov.cn/publish/english/955/2012/20120608171005950734495/20120608171005950734495_.html). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Sep 12-month ∆%: minus 3.6 Sep month ∆%: minus 0.1 Blog 10/21/12
Consumer Price Index	Sep month ∆%: 0.3 Sep 12 months ∆%: 1.9 Blog 10/21/12
Value Added of Industry	Sep month ∆%: 0.79 Jan-Sep 2012/Jan-Sep 2011 ∆%: 10.0 Blog 10/21/12
GDP Growth Rate	Year IIIQ2012 ∆%: 7.4 Quarter IIQ2012 ∆%: 2.2 Blog 10/21/12
Investment in Fixed Assets	Sep month ∆%: 1.63 Total Jan-Sep 2012 ∆%: 20.5 Real estate development: 15.4 Blog 10/21/12
Retail Sales	Sep month ∆%: 1.46 Sep 12 month ∆%: 14.2 Jan-Sep ∆%: 14.1 Blog 10/21/12
Trade Balance	Sep balance $27.67 billion Exports ∆% 9.9 Imports ∆% 2.4 Cumulative Sep: $148.43 billion Blog 10/14/12

Links to blog comments in Table CNY:

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.2 percent in 2006 and 3.0 percent in 2007. The global recession had strong impact with growth of only 0.4 percent in 2008 and decline of 4.4 percent in 2009. Recovery was at lower growth rates of 2.0 percent in 2010 and 1.4 percent in 2011. EUROSTAT forecasts growth of GDP of the euro area of minus 0.3 percent in 2012 but growth of 1.0 percent in 2013.

Table VD-EUR, Euro Area, Yearly Percentage Change of Harmonized Index of Consumer Prices, ∆%

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	9.6	2.9
2000	2.2	8.7	3.8
2001	2.4	8.1	2.0
2002	2.3	8.5	0.9
2003	2.1	9.0	0.7
2004	2.2	9.3	2.2
2005	2.2	9.2	1.7
2006	2.2	8.5	3.2
2007	2.1	7.6	3.0
2008	3.3	7.6	0.4
2009	0.3	9.6	-4.4
2010	1.6	10.1	2.0
2011	2.7	10.1	1.4
2012*			-0.3
2013*			1.0

*EUROSTAT forecast Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database

The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI^®, combining activity in manufacturing and services, fell from 46.1 in Sep to 45.8 in Oct, for nine consecutive declines and thirteen drops in fourteen months, registering the lowest reading in 40 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10202). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index is consistent with decline of GDP of 0.5 percent in IIIQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10202). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP, decreased from 46.3 in Aug to 46.1 in Sep, which is the eighth consecutive contraction; the index average of 46.3 in IIIQ2012 is lower than 46.4 in IIQ2012 and the lowest reading since IIQ2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10168). Chris Williamson, Chief Economist at Markit, finds that the data are consistent with likely decline of GDP at a higher rate in IIIQ2012 with the euro area falling again into recession (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10168). The Markit Eurozone Services Business Activity Index declined from 47.2 in Aug to 46.1 in Sep, which is the lowest reading since Jul 2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10168). The Markit Eurozone Manufacturing PMI^® fell to 45.4 in Oct from 46.1 in Sep (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10253). New export orders declined in Oct for sixteenth consecutive month, with declines for the two largest economies of France and Germany. Rob Dobson, Chief Economist at Markit, finds that manufacturing output declined through all sectors of consumer, intermediate and investment goods with constraint of demand by internally and from abroad, including trade within the euro area and with third regions (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10253). Table EUR provides the regional data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IIQ2012 ∆% -0.2; IIQ2012/IIQ2011 ∆% -0.4 Blog 10/7/12
Unemployment	Sep 2012: 11.6% unemployment rate Sep 2012: 18.490 million unemployed Blog 11/4/12
HICP	Sep month ∆%: 0.7 12 months Sep ∆%: 2.6 Blog 10/21/12
Producer Prices	Euro Zone industrial producer prices Aug ∆%: 0.9 Aug 12-month ∆%: 2.7 Blog 10/7/12
Industrial Production	Aug month ∆%: 0.6; Aug 12 months ∆%: -2.9 Blog 10/14/12
Retail Sales	Aug month ∆%: 0.1 Aug 12 months ∆%: -1.3 Blog 10/7/12
Confidence and Economic Sentiment Indicator	Sentiment 84.5 Oct 2012 Consumer minus 25.7 Oct 2012 Blog 11/4/12
Trade	Jan-Aug 2012/Jan-Aug 2011 Exports ∆%: 9.0 Imports ∆%: 2.5 Aug 2012 12-month Exports ∆% 10.4 Imports ∆% 1.3 Blog 10/21/12

Links to blog comments in Table EUR:

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

10/7/12 http://cmpassocregulationblog.blogspot.com/2012/10/twenty-nine-million-unemployed-or.html

EUROSTAT estimates the rate of unemployment in the euro area at 11.6 percent in Sep 2012, as shown in Table VD-1. The number of unemployed in Sep 2012 was 18.490 million, which was 2.174 million higher than 16.316 million in Sep 2011. The rate of unemployment jumped from 10.3 percent in Sep 2011 to 11.6 percent in Sep 2012.

Table VD-1, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA

	Unemployment Rate %	Number Unemployed Millions
Sep 2012	11.6	18.490
Aug	11.5	18.344
Jul	11.5	18.275
Jun	11.4	18.133
May	11.3	17.911
Apr	11.2	17.719
Mar	11.0	17.469
Feb	10.9	17.248
Jan	10.8	17.064
Dec 2011	10.7	16.889
Nov	10.6	16.796
Oct	10.5	16.535
Sep	10.3	16.316
Aug	10.2	16.058
Jul	10.1	15.923
Jun	10.0	15.740
May	9.9	15.666
Apr	9.9	15.556
Mar	9.9	15.600
Feb	9.9	15.625
Jan	10.0	15.696
Dec 2010	10.1	15.799

Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database

Table VD-1 shows the disparity in rates of unemployment in the euro area with 11.6 percent for the region as a whole and 18.490 million unemployed but 5.4 percent in Germany and 2.282 million unemployed. At the other extreme is Spain with rate of unemployment of 25.8 percent and 5.979 million unemployed. The rate of unemployment of the European Union in Sep is 10.6 percent with 25.751 million unemployed.

Table VD-2, Unemployed and Unemployment Rate in Countries and Regions, Millions and %

Sep 2012	Unemployment Rate %	Unemployed Millions
Euro Zone	11.6	18.490
Germany	5.4	2.282
France	10.8	3.177
Netherlands	5.4	0.481
Finland	7.9	0.213
Portugal	15.7	0.855
Ireland	15.1	0.312
Italy	10.8	2.774
Greece	NA	NA
Spain	25.8	5.979
Belgium	7.4	0.355
European Union	10.6	25.751

Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database

Chart VD-1 provides Eurosat estimates of unemployment rates in the European Union. There is significant diversity in the rates of unemployment in members of the euro zone and the European Union.

Chart VD-1, Unemployment Rate in Various Countries and Regions

Source: EUROSTAT

http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database

The Economic Sentiment Indicator of the European Economic Commission, Economic and Financial Affairs, provides correlation with the economic cycle since 1990, capturing all three recessions in the period and even the threat of recession from 1994 to 1995. The latest chart of this index accessible in the link in parenthesis shows trend of decline in 2011 and 2012 that has punctured the historical average of 100 and resumed downward trend in 2012 (http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm). This deterioration is shown in Table VD-3 with the index falling from 102.5 in Jul 2011 to 84.5 in Oct 2012. There is downward trend in 2012 with the index still above the minimum value of 69.1 reached in Mar 2009 but still below the average of 100.

Table VD-3, Euro Area, Indicators of Confidence and Economic Sentiment SA

	ESI	IND	SERV	CON	RET	CONS
Historical Average	100.0	-6.8	10.3	-13.0	-9.1	-17.7
Maximum	117.9 05-00	7.8 04-07	35.3 08-98	2.5 05-00	5.3 06-90	6.1 02-90
Minimum	69.1 03-09	-38.2 03-09	-27.3 03-09	-34.3 03-09	-24.9 01-93	-46.3 09-93
Oct 2012	84.5	-18.0	-12.1	-25.7	-17.4	-33.0
Sep	85.2	-15.9	-11.9	-25.9	-18.5	-31.7
Aug	86.1	-15.4	-10.8	-24.6	-17.2	-33.1
Jul	87.9	-15.1	-8.5	-21.5	-15.0	-28.5
Jun	89.9	-12.8	-7.4	-19.8	-14.4	-28.1
May	90.5	-11.4	-5.2	-19.3	-18.1	-30.2
Apr	92.8	-9.0	-2.4	-19.9	-11.1	-27.5
Mar	94.4	-7.1	-0.3	-19.1	-12.0	-26.7
Feb	94.5	-5.7	-0.9	-20.3	-14.0	-24.6
Jan	93.5	-7.0	-0.7	-20.7	-15.5	-28.1
Dec 2011	92.8	-7.2	-2.6	-21.3	-12.2	-28.9
Nov	93.5	-7.3	-2.0	-20.5	-11.2	-26.0
Oct	94.4	-6.6	-0.2	-20.1	-9.9	-27.3
Sep	94.6	-6.0	-0.3	-19.3	-9.9	-29.8
Aug	98.1	-2.9	3.4	-16.8	-8.8	-26.0
Jul	102.5	0.5	7.5	-11.5	-3.7	-27.2
Jun	104.9	3.1	9.7	-10.0	-2.7	-26.8

ESI: Economic Sentiment Index; IND: Industry; SERV: Services; CON: Consumer; RET: Retail Trade; CONS: Construction

Source: European Commission Services

ESI: Economic Sentiment Index; IND: Industry; SERV: Services; CON: Consumer; RET: Retail Trade; CONS: Construction

Source: European Commission Services http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 2011, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economy. The German economy grew at 3.7 percent in 2010 and at 3.0 percent in 2011. Growth slowed in 2011 from 1.3 percent in IQ2011, 0.3 percent in IIQ2011 and 0.6 percent in IIIQ2011 to decline of 0.2 percent in IVQ2011 and growth of 0.5 percent in IQ2012. The Federal Statistical Agency of Germany analyzes the fall and recovery of the German economy (http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Content/Statistics/VolkswirtschaftlicheGesamtrechnungen/Inlandsprodukt/Aktuell,templateId=renderPrint.psml):

“The German economy again grew strongly in 2011. The price-adjusted gross domestic product (GDP) increased by 3.0% compared with the previous year. Accordingly, the catching-up process of the German economy continued during the second year after the economic crisis. In the course of 2011, the price-adjusted GDP again exceeded its pre-crisis level. The economic recovery occurred mainly in the first half of 2011. In 2009, Germany experienced the most serious post-war recession, when GDP suffered a historic decline of 5.1%. The year 2010 was characterised by a rapid economic recovery (+3.7%).”

Table VE-DE, Germany, GDP Annual ∆%

	Price Adjusted Chain-Linked	Price- and Calendar-Adjusted Chain Linked
2011	3.0	3.1
2010	4.2	4.0
2009	-5.1	-5.1
2008	1.1	0.8
2007	3.3	3.4
2006	3.7	3.9
2005	0.7	0.8
2004	1.2	0.7
2003	-0.4	-0.4
2002	0.0	0.0
2001	1.5	1.6
2000	3.1	3.3
1999	1.9	1.8
1998	1.9	1.7
1997	1.7	1.8
1996	0.8	0.8
1995	1.7	1.8
1994	2.5	2.5
1993	-1.0	-1.0
1992	1.9	1.5

Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/PressServices/Press/pr/2012/08/PE12_287_811.html;jsessionid=A761BC574543A771416A9CF81034F7BA.cae1

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 49.2 in Sep to 48.1 in Oct, which is the sixth consecutive reading below 50, indicating mild contraction (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10203). Respondents to the survey mentioned weakness in export business, especially in southern Europe. The pace of decline of new export orders for manufacturing was at the second fastest rhythm since Apr 2009 and was only worst in Aug 2012. Tim Moore, Senior Economist at Markit, finds that output stabilization was attained by executing existing orders because of the lack of new business (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10203). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, increased from 47.0 in Aug to 49.2 in Sep, indicating only moderate reduction in output (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10203). Tim Moore, Senior Economist at Markit and author of the report, finds that the economy of Germany lost strength in Oct, with declining manufacturing affected especially by weakness in automobiles and export orders from southern Europe (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10203). There was marginal improvement in the Germany Services Business Activity Index from 48.3 in Aug to 49.7 in Sep, which is the second worst reading in a year and significantly lower than the long-term average of 53.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10171). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing output, fell from 47.4 in Sep to 46.0 in Oct for the eighth consecutive month in contraction territory below 50.0 and much lower than the long-term average of the index of 52.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10278). New export orders fell for sixteen consecutive months at the fastest rate of decline since Apr 2009. Tim Moore, Senior Economist at Markit and author of the report, continuing weakness in orders from major export sectors with output declining in part because of lower demand from the south of Europe together with deteriorating investment throughout Asia (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10278).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IIQ2012 0.3 ∆%; II/Q2012/IIQ2011 ∆% 0.5 1.0 CA 2011/2010: 3.0% GDP ∆% 1992-2011 Blog 8/26/12 5/27/12
Consumer Price Index	Sep month NSA ∆%: 0.3 Sep 12-month NSA ∆%: 1.7 Blog 10/14/12
Producer Price Index	Sep month ∆%: 0.5 CSA, 0.6 NSA 12-month NSA ∆%: 1.6 Blog 10/21/12
Industrial Production	Mfg Jul month CSA ∆%: -0.4 12-month NSA: -1.7 Blog 10/14/12
Machine Orders	MFG Aug month ∆%: -1.3 Aug 12-month ∆%: -4.8 Blog 10/7/12
Retail Sales	Sep Month ∆% 1.5 12-Month ∆% -3.1 Blog 11/4/12
Employment Report	Unemployment Rate Sep 5.4% Blog 11/4/12
Trade Balance	Exports Aug 12-month NSA ∆%: 5.8 Imports Aug 12 months NSA ∆%: 0.4 Exports Aug month SA ∆%: 2.4; Imports Aug month SA 0.3 Blog 10/14/12

Links to blog comments in Table DE:

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

10/7/12 http://cmpassocregulationblog.blogspot.com/2012/10/twenty-nine-million-unemployed-or.html

8/26/12 http://cmpassocregulationblog.blogspot.com/2012/08/expanding-bank-cash-and-deposits-with_26.html

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-1. The number unemployed, not seasonally adjusted, fell from 2.25 million in Sep 2011 to 2.20 million in Sep 2012, or 2.2 percent, while the unemployment rate fell from 5.3 percent in Sep 2011 to 5.1 percent in Sep 2012. The number of persons in employment, not seasonally adjusted, increased from 40.38 million in Sep 2011 to 40.63 million in Sep 2012, or 0.6 percent, while the employment rate increased from 64.1 percent in Sep 2011 to 64.5 percent in Sep 2012. The number unemployed, seasonally adjusted, fell from 2.30 million in Aug 2012 to 2.28 million in Sep 2012, while the unemployment rate was unchanged from 5.4 percent in Aug 2012 to 5.4 percent in Sep 2012. The number of persons in employment, seasonally adjusted, increased from 40.11 million in Aug 2012 to 40.18 million in Sep 2012, or 0.2 percent.

Table VE-1, Germany, Unemployment Labor Force Survey

	Sep 2012	Aug 2012	Jul 2011
NSA
Number Unemployed Millions	2.20 ∆% Sep 2012/Aug 2012: -4.8 ∆% Sep 2012/Sep 2011: -2.2	2.31	2.25
% Rate Unemployed	5.1	5.4	5.3
Persons in Employment Millions	40.63 ∆% Sep 2012/Aug 2012: 0.6 ∆% Sep 2012/Sep 2011: 0.6	40.38	40.38
Employment Rate	64.5	64.2	64.1
SA
Number Unemployed Millions	2.28 ∆% Sep 2012/Aug 2012: -0.9 ∆% Sep 2012/Sep 2011: –6.2	2.30	2.43
% Rate Unemployed	5.4	5.4	5.8
Persons in Employment Millions	40.18 ∆% Sep 2012/Aug 2012: 0.2 ∆% Sep 2012/Sep 2011: 1.0	40.11	39.77

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland https://www.destatis.de/DE/PresseService/Presse/Pressemitteilungen/2012/10/PD12_377_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-2 stood at 6.5 percent in Sep and Oct 2012. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

Table VE-2, Germany, Unemployment Rate in Percent of Labor Force

	Percent of Labor Force
Oct 2012	6.5
Sep	6.5
Aug	6.8
Jul	6.8
Jun	6.6
May	6.7
Apr	7.0
Mar	7.2
Feb	7.4
Jan	7.3
Dec 2011	6.6
Nov	6.4
Oct	6.5
Sep	6.6
Aug	7.0
Jul	7.0
Jun	6.9
May	7.0
Apr	7.3
Mar	7.6
Feb	7.9
Jan	7.9
Dec 2010	7.1
Dec 2009	7.8
Dec 2008	7.4
Dec 2007	8.1
Dec 2006	9.6
Dec 2005	11.1

Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

Chart VE-1 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, 6.6 percent in Jun 2012, 6.8 percent in Jul and Aug 2012 and 6.5 percent in Sep and Oct 2012.

Chart VE-1, Germany, Unemployment Rate, Unadjusted, Percent

Source: Statistisches Bundesamt Deutschland (Destatis)https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

Retail sales in Germany adjusted for inflation are provided in Table VE-3. There have been sharp fluctuations in monthly and 12 months percentage changes. Retail sales increased 0.1 percent in Aug and 1.5 percent in Sep after declines in multiple months in 2012. The 12-month percentage change is minus 3.1 percent in Sep 2012.

Table VE-3, Retail Sales in Germany Adjusted for Inflation

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Sep 2012	-3.1	1.5
Aug	-1.1	0.1
Jul	-1.7	-1.3
Jun	3.7	0.6
May	-1.4	-0.1
Apr	-5.1	-0.4
Mar	3.7	0.9
Feb	1.8	-0.3
Jan	1.5	-0.9
Dec 2011	0.6	0.5
Nov	0.9	-0.6
Oct	-0.1	0.0
Sep	1.5	0.3
Aug	3.6	-0.4
Jul	-2.1	0.3
Jun	-2.0	2.9
May	4.7	-2.1
Apr	4.8	0.8
Mar	-2.8	-2.8
Feb	3.0	0.8
Jan	3.1	1.1
Dec 2010	0.6	0.7
Dec 2009	-2.2
Dec 2008	3.3
Dec 2007	-6.2
Dec 2006	1.3

Source: Statistisches Bundesamt Deutschland (Destatis) https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

Chart VE-2 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2007 to 2012. There appear to be fluctuations without trend.

Chart VE-2, Germany, Turnover in Retail Trade at Constant Prices 2005=100

Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany

https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

Chart VE-3 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at current prices from 2007 to 2011. There are also sharp fluctuations but without trend.

Chart VE-3, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2005=100

Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany

https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IIQ1949 to IIQ2012 is quite high at 3.3 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.1 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 1.8 percent in the 1990s and 1.7 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using second quarter data, is 1.1 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. Cobet and Wilson (2002) provide estimates of output per hour and unit labor costs in national currency and US dollars for the US, Japan and Germany from 1950 to 2000 (see Pelaez and Pelaez, The Global Recession Risk (2007), 137-44). The average yearly rate of productivity change from 1950 to 2000 was 2.9 percent in the US, 6.3 percent for Japan and 4.7 percent for Germany while unit labor costs in USD increased at 2.6 percent in the US, 4.7 percent in Japan and 4.3 percent in Germany. From 1995 to 2000, output per hour increased at the average yearly rate of 4.6 percent in the US, 3.9 percent in Japan and 2.6 percent in Germany while unit labor costs in US fell at minus 0.7 percent in the US, 4.3 percent in Japan and 7.5 percent in Germany. There was increase in productivity growth in the G7 in Japan and France in the second half of the 1990s but significantly lower than the acceleration of 1.3 percentage points per year in the US. Lucas (2011May) compares growth of the G7 economies (US, UK, Japan, Germany, France, Italy and Canada) and Spain, finding that catch-up growth with earlier rates for the US and UK stalled in the 1970s.

Table VF-FR, France, Average Growth Rates of GDP Fourth Quarter, 1949-2012

Period	Average ∆%
1949-2012*	3.3
2000-2012*	1.1
2000-2011	1.1
2000-2007	1.7
1990-1999	1.9
1980-1989	2.6
1970-1979	3.8
1960-1969	5.7
1950-1959	4.2

*Second Quarter on Second Quarter

Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28

The Markit Flash France Composite Output Index increased marginally from 43.2 in Sep to 44.8 in Oct; the Sep reading at 43.2 was the lowest in 41 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10201). Jack Kennedy, Senior Economist at Markit and author of the report, finds weakness in IIIQ2012 GDP with possible contraction extending into IVQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10201).

The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 48.0 in Aug to 43.2 in Sep, indicating significant contraction of private sector activity at the highest rate since mar 2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10156). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds that combined manufacturing and services weakness suggests that the French GDP may have contracted in IIIQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10156). The Markit France Services Activity index fell from 49.2 in Aug to 45.0 in Sep for the lowest reading in eleven months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10156). The Markit France Manufacturing Purchasing Managers’ Index^® increased to 43.7 in Oct from 42.7 in Sep (which was the sharpest decline of the manufacturing economy since Apr 2009), remaining deeply below the neutral level of 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10247). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds continuing weakness in manufacturing with export orders falling at the fastest rate since the middle of 2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10247). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Sep month ∆% -0.3 12 months ∆%: 1.9 10/14/12
PPI	Sep month ∆%: 0.3 Sep 12 months ∆%: 2.9 Blog 4/11/12
GDP Growth	IIQ2012/IQ2012 ∆%: 0.0 IIQ2012/IIQ2011 ∆%: 0.3 Blog 9/30/12
Industrial Production	Aug ∆%: Manufacturing 1.8 12-Month ∆%: Manufacturing -0.4 Blog 10/14/12
Consumer Spending	Sep Manufactured Goods ∆%: 0.2 Aug 12-Month Manufactured Goods ∆%: -0.5 Blog 11/4/12
Employment	IIQ2012 Unemployed 2.785 million Unemployment Rate: 9.7% Employment Rate: 63.9% Blog 9/9/12
Trade Balance	Aug Exports ∆%: month 3.6, 12 months 2.8 Aug Imports ∆%: month 6.3, 12 months 3.4 Blog 10/14/12
Confidence Indicators	Historical averages 100 Oct Mfg Business Climate 85 Blog 10/28/12

Links to blog comments in Table FR:

10/28/12 http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-dec elerating-united-states.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

9/30/12 http://cmpassocregulationblog.blogspot.com/2012/09/historically-sharper-recoveries-from.html

9/9/12 http://cmpassocregulationblog.blogspot.com/2012/09/twenty-eight-million-unemployed-or_10.html

The Aug monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption increased 0.1 percent in Sep 2012 after decreasing 0.8 percent in Aug. Consumption of manufactured products increased 0.2 percent in Sep 2012 after decreasing 0.8 percent in Aug. Total consumption decreased 0.3 percent in Sep 2012 relative to Sep 2011 and consumption of manufactured goods decreased 0.5 percent in Sep 2012 relative to Sep 2011. Internal demand is weak throughout most advanced economies.

Table VF-1, France, Household Expenditures in Consumption Goods, Month ∆% Chained Billion Euros Trading-Days SA

	Total	Food	Eng. Goods	Energy	Mfg Goods
Sep	0.1	-0.1	0.5	-0.4	0.2
Sep 2012/Sep 2011	-0.3	-0.8	-0.1	0.4	-0.5
Aug	-0.8	-0.2	-0.7	-2.1	-0.8
Jul	0.4	0.1	0.6	0.3	0.4
Jun	0.3	1.1	-0.1	-0.4	0.4
May	0.3	0.1	2.1	-3.1	1.4
Apr	0.5	-0.6	-2.3	10.2	-1.3
Mar	-2.7	-2.1	0.7	-11.4	-0.6
Feb	2.2	1.2	-0.8	11.6	0.5
Jan	-0.3	1.3	-2.5	2.3	-0.8
Dec 2011	-0.2	-0.9	1.2	-2.5	0.0
Nov	-0.1	0.0	0.3	-1.3	0.0
Oct	0.0	-0.6	0.9	-0.7	0.2
Sep	-0.3	0.4	0.2	-2.8	-0.2
Aug	0.8	0.3	0.5	2.9	0.9
Jul	-0.3	0.3	-0.8	-0.2	-0.3
Jun	0.5	-1.0	0.9	2.8	0.5
May	0.2	-0.5	-0.4	3.3	-0.6
Apr	-1.6	1.0	-2.0	-6.2	-1.0
Mar	-0.7	-0.3	-1.1	-0.2	-0.8
Feb	0.3	0.5	1.2	-2.2	0.8
Jan	-1.2	-0.4	-0.5	-4.3	-0.5
Dec 2010	0.6	0.3	0.4	2.0	0.3

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/default.asp

Chart VF-1 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. Internal demand is not supporting overall economic growth. Two-thirds of the increase of consumption in Feb 2012 is attributed to higher consumption of energy during bitter cold weather and the drop in Mar reversed expenditures in energy under milder weather. There is downward trend of monthly consumption with fluctuations.

Chart VF-1, France, Total Consumption of Goods, Billions of Euros Trading and Seasonally Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/default.asp

VG Italy. Table VG-IT provides annual percentage changes of Italy’s GDP and expenditure components. Growth of Italy’s economy was relatively strong in 2007 with GDP growth of 1.7 percent, growth of Gross Domestic Investment (GDI) of 1.8 percent and growth of exports of 6.2 percent. There was sharp impact of the contraction on the economy of Italy with decline of GDP of 1.2 percent in 2008 followed by sharper decline of 5.5 percent in 2009. GDI fell sharply by 11.7 percent in 2009. Exports (EXP) also contracted sharply by 17.5 percent. Recovery was strong in 2010 with growth of GDP of 1.8 percent, GDI 2.1 percent and EXP 11.4 percent. Recovery stalled in 2011 with growth of GDP of 0.4 percent moving toward contraction at the end of the year and contraction of GDI of 1.8 percent while EXP grew 6.0 percent.

Table VG-IT, Italy, Gross Domestic Product and Expenditure Components, Annual ∆%

	2007	2008	2009	2010	2011
GDP	1.7	-1.2	-5.5	1.8	0.4
NCE	1.1	-0.5	-1.0	0.7	-0.1
GDI	1.8	-3.7	-11.7	2.1	-1.8
EXP	6.2	-2.8	-17.5	11.4	6.0
IMP	5.2	-3.0	-13.4	12.5	0.6

Notes: NCE: National Consumption Expenditures; GDI: Gross Domestic Investment; EXP: Exports; IMP: Imports

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/71887

The Markit/ADACI Business Activity Index increased from 44.0 in Aug to 44.5 in Sep, indicating sharp contraction of output of Italy’s services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10167). Phil Smith, economist at Markit and author of the Italy Services PMI^®, finds that the data suggest contraction of GDP in Italy in IIIQ2012 at a rate close to the contraction in IIQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10167). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased from 45.7 in Sep to 45.5 in Oct for 15 consecutive months of contraction of Italy’s manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10273). There was more moderate increase in new foreign orders than sharper decline in domestic new orders. Phil Smith, economist at Markit and author of the Italian Manufacturing PMI^®, finds that growth of foreign orders was moderate because of weakness in the economies of France and Germany (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10273). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Oct month ∆%: 0.0 Oct 12-month ∆%: 2.6 Blog 11/4/12
Producer Price Index	Sep month ∆%: -0.1 Sep 12-month ∆%: 2.8 Blog 11/4/12
GDP Growth	IIQ2012/IQ2012 SA ∆%: minus 0.8 IIQ2012/IIQ2011 NSA ∆%: minus 2.6 Blog 10/14/12
Labor Report	Sep 2012 Participation rate 63.7% Employment ratio 56.9% Unemployment rate 10.8% Blog 11/4/12
Industrial Production	Jul month ∆%: -0.2 12 months ∆%: minus 7.3 Blog 9/16/12
Retail Sales	Aug month ∆%: 0.0 Aug 12-month ∆%: -1.0 Blog 10/28/12
Business Confidence	Mfg Oct 87.6, Jun 88.8 Construction Oct 81.4, Jun 85.4 Blog 10/28/12
Trade Balance	Balance Aug SA €507 million versus Jul €708 Exports Aug month SA ∆%: 3.9; Imports Aug month ∆%: 4.4 Exports 12 months Aug NSA ∆%: +8.4 Imports 12 months NSA ∆%: minus 1.1 Blog 10/21/12

Links to blog comments in Table IT:

10/28/12 http://cmpassocregulationblog.blogspot.com/2012/10/mediocre-and-decelerating-united-states.html

10/21/12 http://cmpassocregulationblog.blogspot.com/2012/10/world-inflation-waves-stagnating-united.html

10/14/12 http://cmpassocregulationblog.blogspot.com/2012/10/recovery-without-hiring-imf-view-united.html

9/16/12 http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation.html

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.1 percent in Dec 2006 to 10.8 percent in Sep 2012. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %
Sep 2012	63.7	56.9	10.8
Aug	63.7	57.0	10.6
Jul	63.9	57.1	10.6
Jun	63.8	57.0	10.6
May	63.7	57.0	10.5
Apr	63.6	56.8	10.5
Mar	63.5	56.8	10.3
Feb	63.4	56.9	10.0
Jan	63.1	56.9	9.7
Dec 2011	62.9	56.9	9.4
Nov	62.7	56.8	9.3
Oct	62.6	56.9	8.9
Sep	62.4	56.8	8.8
Aug	62.4	57.1	8.4
Jul	62.3	57.1	8.3
Jun	62.0	57.0	8.0
May	62.1	56.9	8.0
Apr	61.9	56.9	7.8
Mar	62.2	57.1	7.9
Feb	61.9	56.8	8.0
Jan	61.9	56.8	8.1
Dec 2010	62.1	56.9	8.2
Dec 2009	62.3	57.0	8.3
Dec 2008	62.5	58.0	6.9
Dec 2007	63.1	58.9	6.5
Dec 2006	62.5	58.6	6.2
Dec 2005	62.5	57.8	7.5
Dec 2004	62.5	57.4	7.9

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/73714

Table VG-2 provides more detail on the labor report for Italy in Sep 2012. The level of employment decreased 57,000 from Aug to Sep 2012 and was unchanged from Sep 2011 to Sep 2012. Unemployment increased 62,000 in Sep 2012 and increased 554,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 35.1 percent in Sep 2012 for ages 15 to 24.

Table VG-2, Italy, Labor Report

Sep 2012	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22.937	-57	-0.2	0	0.0
UNE	2.774	62	2.3	554	24.9
INA 15-64	14.358	-5	0.0	-552	-3.7
EMP %	56.9		-0.1		0.0
UNE %	10.8		0.2		2.0
Youth UNE % 15-24	35.1		1.3		4.7
INA % 15-64	36.3		0.0		-1.3

Notes: EMP: Employed; UNE: Unemployed; INA 15-64: Inactive aged 15 to 64; EMP %: Employment Rate; UNE %: Unemployment Rate; Youth UNE % 15-24: Youth Unemployment Rate aged 15 to 24; INA % 15-64: Inactive Rate aged 15 to 64.

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/73714

Chart VG-1 of the Istituto Nazionale di Statistica provides the rate of unemployment in Italy. The rate stabilized in 2011 at around 8 percent until mid year and then climbed to 10.8 percent in both Sep 2012

Chart VG-1, Italy, Rate of Unemployment, %

Source: Istituto Nazionale di Statistica

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level dropped from slightly above 23 million in 2011, climbing back to 23 million May-Jul 2012 and fell to 22.9 million in Sep 2012.

Chart VG-2, Italy, Total Number of Employed Persons, Millions, SA

Source: Istituto Nazionale di Statistica