United States Unsustainable Fiscal Deficit/Government Debt Threatening Prosperity, United States International Trade, Peaking Valuations of Risk Financial Assets and Uncertain World Economic Growth and International Finance: Part II

 

United States Unsustainable Fiscal Deficit/Government Debt Threatening Prosperity, United States International Trade, Peaking Valuations of Risk Financial Assets and Uncertain World Economic Growth and International Finance

Carlos M. Pelaez

© Carlos M. Pelaez, 2010, 2011, 2012, 2013

Executive Summary

I United States Unsustainable Fiscal Deficit/Debt Threatening Prosperity

IB Collapse of United States Dynamism of Income Growth and Employment Creation

II United States International Trade

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

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) and the update of Jan 2013 (http://www.imf.org/external/pubs/ft/weo/2013/update/01/index.htm) 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 3.2 percent in 2012 but accelerating to 3.5 percent in 2013, 4.1 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 3.8 percent for the world as a whole. While the world would grow 16.1 percent in the four years from 2012 to 2015, the G7 as a whole would grow 7.6 percent. The difference in dollars of 2011 is rather high: growing by 16.1 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 7.6 percent would add $5.3 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 24.6 percent or at the average yearly rate of 5.7 percent, contributing $6.3 trillion from 2012 to 2015 or the equivalent of 86.3 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

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 all countries. Growth is weak throughout most of the world. Japan’s GDP increased 1.4 percent in IQ2012 and 3.4 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 0.0 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 0.1 percent, which is much lower than 5.7 percent in IQ2012. Growth of 3.9 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. Japan’s GDP contracted 0.9 percent in IIIQ2012 at the SAAR of minus 3.5 percent and increased 0.5 percent relative to a year earlier. 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. In IVQ2012, China grew at 2.0 percent, which annualizes at 8.2 percent, and 7.9 percent in IVQ2012 relative to IVQ2011. 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). There is decennial change in leadership in China (http://www.xinhuanet.com/english/special/18cpcnc/index.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 fell 0.1 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.2 percent IIQ2012 and fell 0.5 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.1 percent and declined 0.6 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. In IIIQ2012, Germany’s GDP increased 0.2 percent and 0.4 percent relative to a year earlier. 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 0.8 percent, 3.1 percent at SAAR and 2.6 percent relative to IIIQ2011. In IVQ2012, GDP grew 0.0 percent, -0.1 percent at SAAR and 1.5 percent relative to IVQ2011 (http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html) but with substantial unemployment and underemployment (http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/01/thirty-million-unemployed-or.html) and weak hiring (http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html). In IQ2012, UK GDP fell 0.2 percent, increasing 0.2 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and decreased 0.3 percent relative to a year earlier. UK GDP increased 0.9 percent in IIIQ2012 and fell 0.0 percent relative to a year earlier. UK GDP fell 0.3 percent in IVQ2012 relative to IIIQ2012 and was flat relative to a year earlier. Italy has experienced decline of GDP in five consecutive quarters from IIIQ2011 to IIIQ2012. Italy’s GDP fell 0.8 percent in IQ2012 and declined 1.4 percent relative to IQ2011. Italy’s GDP fell 0.7 percent in IIQ2012 and declined 2.4 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.2 percent and declined 2.4 percent relative to a year earlier. France’s GDP stagnated in IQ2012 and increased 0.2 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIQ2012 and increased 0.1 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.1 percent and increased 0.0 percent relative to a year earlier.

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: 1.4 SAAR: 5.7	3.4
China	1.8	8.1
Euro Area	0.0	-0.1
Germany	0.5	1.7
France	0.0	0.2
Italy	-0.8	-1.4
United Kingdom	-0.2	0.2
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.3         SAAR: 1.3	2.1
Japan	QOQ: 0.0 SAAR: -0.1	3.9
China	1.8	7.6
Euro Area	-0.2	-0.5
Germany	0.3	0.5 1.0 CA
France	-0.1	0.1
Italy	-0.7	-2.4
United Kingdom	-0.4	-0.3
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.8  SAAR: 3.1	2.6
Japan	QOQ: –0.9 SAAR: –3.5	0.5
China	2.2	7.4
Euro Area	-0.1	-0.6
Germany	0.2	0.4
France	0.1	0.0
Italy	-0.2	-2.4
United Kingdom	0.9	0.0
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: –0.1	1.5
China	2.0	7.9
United Kingdom	-0.3	0.0

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

Source: Country Statistical Agencies http://www.bea.gov/national/index.htm#gdp

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 (http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP Section VB at http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/united-states-unsustainable-fiscal_18.html). Japan’s exports decreased 5.8 percent in the 12 months ending in Dec, 4.1 percent in the 12 months ending in Nov, 6.5 percent in the 12 months ending in Oct, 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 1.9 percent in the 12 months ending in Dec, 0.8 percent in the 12 months ending in Nov, decreased 1.6 percent in the 12 months ending in Oct, 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 and deducted 2.9 percentage points from GDP growth in IIIQ2012. 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. There was further growth in China’s exports of 11.6 percent in the 12 months ending in Oct while imports increased 2.4 percent. In Nov 2012, China’s exports increased 2.9 percent in 12 months and 7.3 percent in Jan-Nov 2012 while imports were unchanged in Nov 2012 and increased 4.1 percent in Jan-Nov 2012. In the 12 months ending in 2012, China’s exports increased 14.1 percent and imports 6.0 while in Jan-Dec 2012 exports increased 7.9 percent and imports increased 4.3 percent. In Jan 2013, China exports increased 17.3 percent relative to a year earlier and imports 19.6 percent. Germany’s exports increased 0.3 percent in the month of Dec 2012 and decreased 6.9 percent in the 12 months ending in Dec 2012 while imports decreased 7.3 percent in the month of Dec and decreased 1.3 percent in the 12 months ending in Dec. Net trade contributed 1.4 percentage points to growth of Germany’s GDP in IIQ2012 and contributed 1.4 percentage points in IIIQ2012. 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 increased 1.7 percent in Nov 2012 and decreased 1.0 percent in Sep-Nov 2012 relative to a year earlier while imports increased 1.0 percent in Nov and decreased 0.9 percent in Sep-Nov 2012 relative to a year earlier. Net trade deducted 0.9 percentage points from UK GDP growth in IIQ2012 and added 0.5 percentage points in IIIQ2012. France’s exports increased 3.1 percent in Dec while imports increased 3.8 percent and net trade deducted 0.4 percentage points from GDP growth in IIQ2012, adding 0.3 percentage points in IIIQ2012. US exports increased 2.1 percent in Dec 2012 and goods exports increased 4.5 percent in Jan-Dec relative to a year earlier but net trade added 0.38 percentage points to GDP growth in IIIQ2012 and deducted 0.25 percentage points in IVQ2012. US imports decreased 2.7 percent in Dec 2012 and goods imports increased 3.0 percent in Jan-Dec 2012 relative to a year earlier. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted increased to 56.1 in Jan from 54.0 in Dec, which was the highest reading since Mar 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10595).

New export orders registered 51.3 in Jan from 52.6 in Dec, indicating expansion at a slower rate. Chris Williams, Chief Economist at Markit, finds that the survey data with highest rate of expansion in about two years are consistent with impulse to US economic growth at a rate of 1.5 percent for quarter and increase of 15,000 manufacturing jobs per month (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10595).

In the six months ending in Dec 2012, United States national industrial production accumulated increase of 0.9 percent at the annual equivalent rate of 1.8 percent, which is lower than 2.2 percent growth in 12 months. Capacity utilization of total industry is analyzed by the Fed in its report (http://www.federalreserve.gov/releases/g17/current/): “Capacity utilization for total industry moved up 0.1 percentage point to 78.8 percent, a rate 1.5 percentage points below its long-run (1972-2011) average.” United States industry is decelerating but the effects of hurricane Sandy prevent accurate evaluation. Manufacturing increased 0.8 percent in Dec 2012 seasonally adjusted, increasing 1.8 percent not seasonally adjusted in 12 months, and increased 0.7 percent in the six months ending in Dec or at the annual equivalent rate of 1.4 percent (http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.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	2.1 Dec	4.5 Jan-Dec	-2.7 Dec	3.0 Jan-Dec
Japan		Dec -5.8 Nov -4.1 Oct -6.5 Sep -10.3 Aug -5.8 Jul -8.1		Dec 1.9 Nov 0.8 Oct -1.6 Sep 4.1 Aug -5.4 Jul 2.1
China	-1.8 Jul 0.6 Aug 4.7 Sep -5.7 Oct 2.2 Nov 11.1 Dec -11.7 Jan 13	1.0 Jul 7.8 Jan-Jul 2.7 Aug 7.1 Jan-Aug 9.9 Sep Jan-Sep 7.4 11.6 Oct 7.8 Jan-Oct 2.9 Nov 7.3 Jan-Nov 14.1 Dec 17.3 Jan 13 7.9 Jan-Dec	2.2 Jul -0.3 Aug 4.9 Sep -9.4 Oct 11.3 Oct 4.9 Dec -12.5 Jan 13	4.7 Jul 6.5 Jan-Jul -2.6 Aug 5.2 Jan-Aug 2.4 Sep 4.8 Jan-Sep 2.4 Oct 4.6 Jan-Oct 0.0 Nov 4.1 Jan-Nov 6.0 Dec 19.6 Jan 13 4.3 Jan-Dec
Euro Area	5.4 12-M Nov	8.3 Jan-Nov	-0.3 12-M Nov	2.0 Jan-Nov
Germany	0.3 Dec CSA	-6.9 Dec	-1.3 Dec CSA	-7.3 Dec
France Dec	3.1	4.7	5.4	3.8
Italy Nov	0.4	3.6	-2.2	-8.2
UK	1.9 Dec	-3.9 Oct-Dec 12/Oct-Dec 11	0.9 Dec	-0.4 Oct-Dec 12/Oct-Dec 11
Net Trade % Points GDP Growth	% Points
USA	IVQ2012 -0.25 IIIQ2012 +0.38
Japan	-0.3 IIQ2012 -2.9 IIIQ2012
Germany	1.4 IIQ2012 1.4 IIIQ2012
France	-0.4 IIQ2012   0.3 IIIQ2012
UK	-0.9 IIQ2012 0.5 IIIQ2012

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 and imports of Japan with selected regions and countries is provided in Table V-5 for Nov 2012. The share of Asia in Japan’s trade is more than one half, 54.7 percent of exports and 44.2 percent of imports. Within Asia, exports to China are 17.1 percent of total exports and imports from China 20.8 percent of total imports. The second largest export market for Japan in Oct 2012 is the US with share of 18.9 percent of total exports and share of imports from the US of 8.1 percent in total imports. Western Europe has share of 10.6 percent in Japan’s exports and of 9.8 percent in imports. Rates of growth of exports of Japan in Dec are sharply negative for all countries and regions with the exception of minus 0.8 percent for exports to the US, 9.6 percent for Mexico and 4.7 percent for the Middle East. 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 5.8 percent in Dec 2012 while imports increased 1.9 percent but higher levels after the earthquake and declining prices may be another factor. Growth rates of imports in the 12 months ending in Dec are negative for some trading partners: minus 23.0 percent for Brazil, minus 7.8 percent for the Australia and minus 12.8 percent for Canada. Imports from Asia increased 1.5 percent in the 12 months ending in Dec while imports from China decreased 2.1 percent.

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

Dec 2012	Exports Millions Yens	12 months ∆%	Imports Millions Yens	12 months ∆%
Total	5,300,269	-5.8	5,941,799	1.9
Asia	2,898,370	-5.6	2,625,794	1.5
China	906,068	-15.8	1,237,933	-2.1
USA	999,867	-0.8	480,237	2.8
Canada	62,133	-16.2	76,220	-12.8
Brazil	35,562	-19.6	69,076	-23.0
Mexico	73,067	9.6	31,169	27.9
Western Europe	561,585	-12.3	581,703	6.2
Germany	138,631	-9.2	150,737	-2.4
France	42,566	-16.8	77,603	7.4
UK	94,643	-10.2	46,201	4.9
Middle East	196,273	4.7	1,251,587	2.1
Australia	130,850	-2.0	355,690	-7.8

Source: Japan, Ministry of Finance http://www.customs.go.jp/toukei/info/index_e.htm

World trade projections of the IMF are in Table V-6. There is significantly slower growth of the volume of world trade of goods and services from 5.9 percent in 2011 to 2.8 percent in 2012 and 3.8 percent in 2013, increasing to 5.5 percent in 2014. World trade would slow sharply for advanced economies while emerging and developing economies (EMDE) experience slower growth. World economic slowdown is more challenging with lower growth of world trade.

Table V-6, IMF, Projections of World Trade, ∆%

	2011	2012	2013	2014
World Trade Volume (Goods and Services)	5.9	2.8	3.8	5.5
Imports
AE	4.6	1.2	2.2	4.1
EMDE	8.4	6.1	6.5	7.8
Exports
AE	5.6	2.1	2.8	4.5
EMDE	6.6	3.6	5.5	6.9

Source: International Monetary Fund World Economic Outlook databank update http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx http://www.imf.org/external/pubs/ft/survey/so/2013/NEW012313A.htm http://www.imf.org/external/pubs/ft/weo/2013/update/01/index.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, decreased to 53.3 in Jan from 53.7 in Dec, indicating expansion at a moderate rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10694). This index has remained above the contraction territory of 50.0 during 42 consecutive months. Output increased in both index services and manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10694). The employment index increased from 51.8 in Dec to 52.5 in Jan with continuing increases in input prices but at a marginally faster pace. David Hensley, Director of Global Economic Coordination at JP Morgan, finds encouraging signs in the beginning of 2012 in new business, backlog of orders and increasing employment (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10694). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 51.5 in Jan from 50.1 in Dec, which is the second reading above 50 since May 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10666). New export business declined for the tenth consecutive month in Jan, but at the lowest rate of contraction since May 2012. David Hensley, Director of Global Economics Coordination at JP Morgan, finds improving global manufacturing in the new year that could improve in coming months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10666). The HSBC Brazil Composite Output Index, compiled by Markit, increased to 54.9 in Jan from 53.2 in Dec, indicating solid expansion at the fastest rate in eleven months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10643). The HSBC Brazil Services Business Activity index, compiled by Markit, increased from 53.5 in Dec to 54.5 in Jan (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10643). Andre Loes, Chief Economist, Brazil, at HSBC, finds improving expectations of economic activity in Brazil with the index at the highest reading since Feb 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10643). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased from 51.1 in Dec to 53.2 in Jan, indicating the highest output reading in 23 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10628). Andre Loes, Chief Economist, Brazil at HSBC, finds continuing expansion in Brazil’s manufacturing in the new year with strength in output and new orders (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10628).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted increased to 56.1 in Jan from 54.0 in Dec, which was the highest reading since Mar 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10595).

New export orders registered 51.3 in Jan from 52.6 in Dec, indicating expansion at a slower rate. Chris Williams, Chief Economist at Markit, finds that the survey data with highest rate of expansion in about two years are consistent with impulse to US economic growth at a rate of 1.5 percent for quarter and increase of 15,000 manufacturing jobs per month (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10595). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 55.8 in Jan from 54.0 in Dec, which is the fastest growth rate since May 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10663). The index of new exports orders increased from 47.2 in Oct to 50.3 in Nov while total new orders increased from 51.1 in Oct to 53.6 in Nov. The index of new export orders decreased from 52.6 in Dec to 51.5 in Jan, indicating expansion at a slower rate. Chris Williamson, Chief Economist at Markit, finds that manufacturing in the US is improving and could support growth of the US economy in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10663). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 2.9 percentage points from 50.2 in Dec to 53.1 in Jan (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 3.6 percentage points from 49.7 in Dec to 53.3 in Jan. The index of exports decreased 1.0 percentage points from 51.5 in Dec to 50.5 in Jan, remaining in expansion territory. The Non-Manufacturing ISM Report on Business^® PMI decreased 0.5 percentage points from 55.7 in Dec to 52.2 in Jan, indicating growth during 42 consecutive months, while the index of new orders decreased 3.9 percentage points from 58.3 in Dec to 54.4 in Jan (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	Dec 12 months NSA ∆%: 1.7; ex food and energy ∆%: 2.22 Dec month ∆%: 0.0; ex food and energy ∆%: 0.1 Blog 1/20/13
Producer Price Index	Dec 12-month NSA ∆%: 1.3; ex food and energy ∆% 2.0 Dec month SA ∆% = -0.2; ex food and energy ∆%: 0.1 Blog 1/20/13
PCE Inflation	Dec 12-month NSA ∆%: headline 1.3; ex food and energy ∆% 1.4 Blog 2/3/13
Employment Situation	Household Survey: Nov Unemployment Rate SA 7.9% Blog calculation People in Job Stress Jan: 31.4 million NSA, 19.4% of Labor Force Establishment Survey: Nov Nonfarm Jobs +157,000; Private +166,000 jobs created  Dec 12-month Average Hourly Earnings Inflation Adjusted ∆%: 1.0 Blog 2/3/13
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 Nov 2012 3.248 million lower by 0.914 million than 4.162 million in Nov 2006 Blog 1/20/13
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.4 IIQ2012/IIQ2011 2.1 IIIQ2012/IIIQ2011 2.6 IVQ2012/IVQ2011 1.5 IQ2012 SAAR 2.0 IIQ2012 SAAR 1.3 IIIQ2012 SAAR 3.1 IVQ2012 SAAR -0.1 Blog 2/3/12
Real Private Fixed Investment	SAAR IVQ2012 9.7 ∆% IVQ2007 to IIIQ2012: minus 10.6% Blog 2/3/13
Personal Income and Consumption	Dec month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 2.7 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Dec NSA ∆%: RDPI: 5.6; RPCE ∆%: 1.3 Blog 2/3/2013
Quarterly Services Report	IIIQ12/IIIQ11 SA ∆%: Information 2.1 Professional 6.0 Administrative 3.9 Hospitals 7.4 Financial & Insurance 6.5 Blog 12/9/12
Employment Cost Index	Compensation Private IVQ2012 SA ∆%: 0.5 Dec 12 months ∆%: 2.2 Blog 2/10/13
Industrial Production	Dec month SA ∆%: 0.3 Dec 12 months SA ∆%: 2.2 Manufacturing Nov SA ∆% 0.8 Dec 12 months SA ∆% 2.4, NSA 1.8 Capacity Utilization: 78.8 Blog 1/20/13
Productivity and Costs	Nonfarm Business Productivity IVQ2012∆% SAAE -1.9; IVQ2012/IVQ2011 ∆% 0.5; Unit Labor Costs SAAE IVQ2012 ∆% 4.6; IVQ2012/IVQ2011 ∆%: 2.1 Blog 2/10/2013
New York Fed Manufacturing Index	General Business Conditions From Dec -7.30 to Jan -7.78 New Orders: From Dec -3.44 to Jan -7.18 Blog 1/20/13
Philadelphia Fed Business Outlook Index	General Index from Dec 4.6 to Jan -5.8 New Orders from Dec 4.9 to Jan -4.3 Blog 1/20/13
Manufacturing Shipments and Orders	New Orders SA Dec ∆% 1.8 Ex Transport 0.2 Jan-Dec NSA New Orders 3.0 Ex transport 2.1 Blog 2/10/13
Durable Goods	Dec New Orders SA ∆%: 4.6; ex transport ∆%: 1.3 Jan-Dec New Orders NSA ∆%: 4.1; ex transport ∆% 2.2 Blog 2/3/13
Sales of New Motor Vehicles	Jan 2013 1,043,103; Jan 2012 913,287. Jan 13 SAAR 15.29 million, Dec 12 SAAR 15.37 million, Jan 2012 SAAR 13.98 million Blog 2/10/13
Sales of Merchant Wholesalers	Jan-Dec 2012/Jan-Dec 2011 NSA ∆%: Total 5.1; Durable Goods: 5.5; Nondurable Goods: 4.8 Blog 2/10/13
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Nov 12/Nov 11 NSA ∆%: Sales Total Business 4.5; Manufacturers 3.3 Retailers 4.8; Merchant Wholesalers 5.7 Blog 1/20/13
Sales for Retail and Food Services	Jan-Dec 2012/Jan-Dec 2011 ∆%: Retail and Food Services 5.2; Retail ∆% 4.9 Blog 1/20/13
Value of Construction Put in Place	Dec SAAR month SA ∆%: 0.9 Dec 12-month NSA: 7.4 Jan-Dec 2012 ∆% 9.2 Blog 2/10/13
Case-Shiller Home Prices	Nov 2012/Nov 2011 ∆% NSA: 10 Cities 4.5; 20 Cities: 5.5 ∆% Nov SA: 10 Cities 0.5 ; 20 Cities: 0.6 Blog 2/3/13
FHFA House Price Index Purchases Only	Nov SA ∆% 0.6; 12 month NSA ∆%: 5.7 Blog 1/27/13
New House Sales	Dec 2012 month SAAR ∆%: minus 7.3 Jan-Dec 2012/Jan-Dec 2011 NSA ∆%: 19.9 Blog 1/27/13
Housing Starts and Permits	Dec Starts month SA ∆%: 12.1 ; Permits ∆%: 0.3 Jan-Dec 2012/Jan-Dec 2011 NSA ∆% Starts 28.1; Permits  ∆% 30.3 Blog 1/20/13
Trade Balance	Balance Dec SA -$38539 million versus Nov -$48613 million Exports Dec SA ∆%: 2.1 Imports Dec SA ∆%: -2.7 Goods Exports Jan-Dec 2012/2011 NSA ∆%: 4.5 Goods Imports Jan-Dec 2012/2011 NSA ∆%: 3.0 Blog 2/10/13
Export and Import Prices	Dec 12-month NSA ∆%: Imports -1.5; Exports 1.1 Blog 1/13/13
Consumer Credit	Dec ∆% annual rate: 6.3 Blog 2/10/13
Net Foreign Purchases of Long-term Treasury Securities	Nov Net Foreign Purchases of Long-term Treasury Securities: $52.3 billion Major Holders of Treasury Securities: China $1170 billion; Japan $1133 billion; Total Foreign US Treasury Holdings Oct $5557 billion Blog 1/20/13
Treasury Budget	Fiscal Year 2013/2012 ∆% Dec: Receipts 10.8; Outlays 15.5; Individual Income Taxes 15.5 Deficit Fiscal Year 2011 $1,297 billion Deficit Fiscal Year 2012 $1,089,353 million Blog 1/13/2013
CBO Budget and Economic Outlook	2012 Deficit $1089 B 7.0% GDP Debt 11,280 B 72.5% GDP 2013 Deficit $845 B, Debt 12,229 B 76.3% GDP Blog 8/26/12 11/18/12 2/10/13
Commercial Banks Assets and Liabilities	Dec 2012 SAAR ∆%: Securities 22.6 Loans 6.3 Cash Assets -19.1 Deposits 20.7 Blog 1/27/13
Flow of Funds	IIIQ2012 ∆ since 2007 Assets -$2059B Real estate -$4035B Financial +$1529 MM Net Worth -$1232B Blog 12/9/12
Current Account Balance of Payments	IIIQ2012 -$128 B %GDP 3.3 Blog 12/23-24/12

Links to blog comments in Table USA: 2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

1/13/13 http://cmpassocregulationblog.blogspot.com/2013/01/peaking-valuation-of-risk-financial.html

1/6/13 http://cmpassocregulationblog.blogspot.com/2013/01/thirty-million-unemployed-or.html

12/23-24/12 http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html

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

11/18/12 http://cmpassocregulationblog.blogspot.com/2012/11/united-states-unsustainable-fiscal.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 Dec 2012, total compensation increased 2.2 percent for the private sector, which is marginally higher than inflation of 1.7 percent in the 12 months ending in Dec 2012 (http://www.bls.gov/cpi/data.htm), 2.0 percent for the entire civilian population and 1.3 percent for state and local government. Wages and salaries in the 12 months ending in Dec 2012 increased at relatively subdued rates of 1.6 percent for the private sector, which is slightly below inflation of 1.7 percent in the 12 months ending in Dec 2012 (http://www.bls.gov/cpi/data.htm), 1.4 percent for the entire civilian population and only 1.0 percent for state/local workers. Wages have been losing or gaining slightly relative to headline CPI inflation of 1.7 percent in the 12 months ending in Dec 2012 (http://www.bls.gov/cpi/data.htm). Compensation benefits of the private sector increased at 2.2 percent in the 12 months ending in Sep, which is higher than 1.6 percent for wages and salaries

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

	IIIQ 12 SA	IVQ12 SA	12 M Dec 11 NSA	12 M Mar 12 NSA	12 M Jun 12 NSA	12 M  Sep 12 NSA	12 M  Dec 12 NSA
Civilian
Comp	0.4	0.5	2.0	1.9	1.7	2.0	1.9
Wages/ Salaries	0.3	0.3	1.4	1.7	1.7	1.7	1.7
Benefits	0.8	0.6	3.2	2.7	2.1	2.6	2.5
Private
Comp	0.4	0.5	2.2	2.1	1.8	2.0	1.9
Wages/ Salaries	0.4	0.3	1.6	1.9	1.8	1.8	1.7
Benefits	0.7	0.6	3.6	2.8	1.9	2.3	2.2
State local Govt
Comp	0.3	0.4	1.3	1.5	1.6	1.8	1.9
Wages/ Salaries	0.2	0.3	1.0	1.0	1.1	1.1	1.1
Benefits	0.8	0.6	2.1	2.3	2.7	3.2	3.4

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

http://www.bls.gov/ncs/ect/

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/2013/01/recovery-without-hiring-world-inflation.html).

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

Source: US Bureau of Labor Statistics

http://www.bls.gov/ncs/ect/

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 and declines in 2012.

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

Source: US Bureau of Labor Statistics

http://www.bls.gov/ncs/ect/

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 1.7 percent in Dec 2012.

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

Source: US Bureau of Labor Statistics

http://www.bls.gov/ncs/ect/

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 sufficiently inflation has returned in waves.

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

Source: US Bureau of Labor Statistics

http://www.bls.gov/ncs/ect/

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 1.7 percent in the 12 months ending in Sep 2012 while inflation was 2.0 percent. Wages and salaries increased 1.6 percent in the 12 months ending in Dec 2012 while inflation was 1.7 percent.

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

Source: US Bureau of Labor Statistics

http://www.bls.gov/ncs/ect/

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

http://www.bls.gov/ncs/ect/

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, recovered mildly and stagnated 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

http://www.bls.gov/ncs/ect/

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

http://www.bls.gov/ncs/ect/

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

http://www.bls.gov/ncs/ect/

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

http://www.bls.gov/ncs/ect/

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

http://www.bls.gov/ncs/ect/

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.bls.gov/ncs/ect/

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 final 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 0.0 percent and of 1.9 percent in hours worked, nonfarm business sector labor productivity increased at a SAAE rate of minus 1.9 percent in IVQ2012, as shown in column 2 “IVQ2012 SAEE.” The increase of labor productivity from IVQ2011 to IVQ2012 was 0.2 percent, reflecting increases in output of 2.2 percent and of hours worked of 1.7 percent, as shown in column 3 “IVQ2012 YoY.” Hours worked increased from 0.2 percent in IIQ2012 in SAAE to 1.3 percent in IIIQ2012 and 1.9 percent in IVQ2012 while output rose from 1.9 percent in IIQ2011 to 4.2 percent in IIIQ2012 and 0.0 percent in IVQ2012. The BLS defines unit labor costs as (http://www.bls.gov/news.release/pdf/prod2.pdf 1): “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 increased at the SAAE rate of 4.6 percent in IVQ2012 and rose 2.1 percent in IVQ2012 relative to IVQ2011. Hourly compensation increased at the SAAE rate of 2.7 percent in IVQ2012, which deflating by the estimated consumer price increase SAAE rate in IVQ2012 results in increase of real hourly compensation by 0.6 percent. Real hourly compensation increased 0.7 percent in IVQ2012 relative to IVQ2011.

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

	IVQ 2012 SAAE	IVQ 2012 YoY	IIIQ 2012 SAAE	IIIQ 2012 YoY	IIQ 2012 SAAE	IIQ 2012 YoY
Productivity	-1.9	0.5	2.9	1.7	1.7	1.1
Output	0.0	2.2	4.2	3.6	1.9	2.9
Hours	1.9	1.7	1.3	1.8	0.2	1.8
Hourly Comp.	2.7	2.6	0.9	1.8	1.3	1.5
Real Hourly Comp.	0.6	0.7	-1.3	0.1	0.6	-0.4
Unit Labor Costs	4.6	2.1	-1.9	0.1	-0.4	0.4
Unit Nonlabor Payments	-5.9	0.9	10.2	3.5	4.2	3.4
Implicit Price Deflator	0.0	1.6	3.1	1.5	1.5	1.6

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 2012, productivity increased 1.0 percent in the annual average, as shown in Table VA-3. Increases in productivity were 0.7 percent in 2011, 3.1 percent in 2010 and 2.9 percent in 2008. The contraction period and the recovery period have been characterized by savings of labor inputs. Real hourly compensation fell 0.4 percent in 2012 and 0.5 percent in 2011, interrupting increases of 0.4 percent in 2010 and 1.8 percent in 2009. Unit labor costs fell 1.5 percent in 2009 and 1.0 percent in 2010 but increased 2.0 percent in 2011 and 0.7 percent in 2012.

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

	2012 ∆%	2011 ∆%	2010 ∆%	2009 ∆%	2008  ∆%	2007 ∆%
Productivity	1.0	0.7	3.1	2.9	0.6	1.5
Real Hourly Compensation	-0.4	-0.5	0.4	1.8	-0.4	1.1
Unit Labor Costs	0.7	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 with sporadic jumps.

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	3.2	-2.0	1.0

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-5. 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 followed by decrease of 0.5 percent in IIQ2012, decline of 1.9 percent in IIIQ2012 and increase of 4.5 percent in IVQ2012.

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	-0.5	-2.3	4.5	0.7

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

Chart VA-15 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 4.5 percent in IVQ2012, 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 0.6 percent in IIQ2012, declining at 1.5 percent in IIIQ2012 and increasing at 0.3 percent in IVQ2012. Real hourly compensation fell 0.5 percent in 2011 and 0.4 percent in 2012 .

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	0.6	-1.5	0.3	-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-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan 2013, light vehicle sales accumulated to 1,043,103, which is higher by 14.2 percent relative to 913,287 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally-adjusted annual rate of light vehicle sales in the US reached 15.29 million in Jan 2013, lower than 15.37 million in Dec 2012 and higher than 13.98 million in Jan 2012 (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

Manufacturing jobs increased 4,000 in Jan 2013 relative to Dec 2012, seasonally adjusted but decreased 90,000 in Jan 2013 relative to Dec 2012, not seasonally adjusted because of the weaker economy and international trade together with the yearly adjustment of labor statistics. In the six months ending in Dec 2012, United States national industrial production accumulated increase of 0.9 percent at the annual equivalent rate of 1.8 percent, which is lower than 2.2 percent growth in 12 months. Capacity utilization for total industry in the United States increased 0.1 percentage points in Dec to 78.8 percent from 78.7 percent in Nov, which is 1.5 percentage points lower than the long-run average from 1972 to 2011. Manufacturing increased 0.8 percent in Dec seasonally adjusted, increasing 1.8 percent not seasonally adjusted in 12 months, and increased 0.7 percent in the six months ending in Dec or at the annual equivalent rate of 1.4 percent (Section VA at http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/united-states-commercial-banks-assets.html). Table VA-8 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.3 percent in US national income in IIQ2012 and 86.4 percent in IIIQ2012. Most of US national income is in the form of services. In Jan 2013, there were 132.705 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html). Total private jobs of 110.965 million NSA in Jan 2013 accounted for 82.6 percent of total nonfarm jobs of 132.705 million, of which 11.846 million, or 10.7 percent of total private jobs and 8.9 percent of total nonfarm jobs, were in manufacturing. Private service-producing jobs were 92.929 million NSA in Jan 2013, or 70.0 percent of total nonfarm jobs and 83.8 percent of total private-sector jobs. Manufacturing has share of 11.2 percent in US national income in IIQ2011 and 11.1 percent in IIIQ2012, as shown in Table VA-8. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

Table VA-8, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total

	SAAR IIQ2012	% Total	SAAR IIIQ2012	% Total
National Income WCCA	13,833.6	100.0	13,969.4	100.0
Domestic Industries	13,586.3	98.2	13,726.2	98.3
Private Industries	11,933.2	86.3	12,067.6	86.4
Agriculture	131.7	0.9	138.7	1.0
Mining	208.3	1.5	203.2	1.5%
Utilities	214.6	1.6	216.8	1.6
Construction	583.7	4.2	592.7	4.2
Manufacturing	1548.1	11.2	1552.5	11.1
Durable Goods	894.3	6.5	895.6	6.4
Nondurable Goods	653.8	4.7	656.9	4.7
Wholesale Trade	853.5	6.2	837.9	6.0
Retail Trade	951.9	6.9	959.8	6.9
Transportation & WH	414.5	3.0	414.9	3.0
Information	499.1	3.6	499.6	3.6
Finance, Insurance, RE	2237.5	16.2	2324.6	16.6
Professional, BS	1971.7	14.3	1997.2	14.3
Education, Health Care	1378.1	10.0	1385.7	9.9
Arts, Entertainment	540.4	3.9	540.5	3.9
Other Services	400.0	2.9	403.6	2.9
Government	1653.0	11.9	1658.6	11.9
Rest of the World	247.3	1.8	243.1	1.7

Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services

Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm

Manufacturers’ shipments increased 0.4 percent in Dec 2012 after increasing 0.3 percent in Nov 2012 and increasing 0.3 percent in Nov 2012. New orders increased 1.8 percent in Dec following decrease by 0.3 percent in Nov and increase by 0.8 percent in Oct, as shown in Table VA-9. These data are very volatile. Volatility is illustrated by increase of 2642.2 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.2 percent in Aug. New orders excluding transportation equipment increased 0.2 percent in Nov. Capital goods new orders, indicating investment, increased 13.9 percent in Dec after decreasing 1.7 percent in Nov and and increasing 1.4 percent in Oct. New orders of nondefense capital goods increased 3.3 percent in Dec after decreasing 2.2 percent in Nov and increasing 2.6 in Oct. Excluding more volatile aircraft, capital goods orders decreased 0.3 percent in Dec after increasing 3.3 percent in Dec and 3.0 percent in Oct.

Table VA-9, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%

	Dec 2012  ∆%	Nov 2012 ∆%	Oct 2012  ∆%
Total
S	0.4	0.3	0.3
NO	1.8	-0.3	0.8
Excluding Transport
S	0.2	0.0	0.4
NO	0.2	-0.2	1.0
Excluding Defense
S	0.3	0.2	0.3
NO	0.3	-0.3	0.8
Durable Goods
S	1.1	1.8	0.0
NO	4.3	0.6	1.1
Machinery
S	-1.1	3.2	1.2
NO	-1.1	2.3	3.5
Computers & Electronic Products
S	3.3	-0.5	-0.4
NO	4.1	0.8	1.8
Computers
S	23.6	11.9	-23.2
NO	6.4	19.9	-20.4
Transport Equipment
S	1.4	2.4	-0.3
NO	11.7	-0.7	-0.6
Automobiles
S	2.4	8.9	2.7
Motor Vehicles
S	-0.1	2.3	2.3
NO	-1.2	1.6	3.5
Nondefense Aircraft
S	2.4	0.5	0.5
NO	10.1	-12.8	0.2
Capital Goods
S	1.2	1.7	-0.1
NO	13.9	-1.7	1.4
Nondefense Capital Goods
S	0.6	1.6	0.2
NO	3.3	-2.2	2.6
Capital Goods ex Aircraft
S	0.2	2.2	0.4
NO	-0.3	3.3	3.0
Nondurable Goods
S	-0.3	-1.0	0.5
NO	-0.3	-1.0	0.5

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 provides new orders of manufacturers from Jan 2012 to Dec 2012. There is significant volatility that prevents discerning clear trends.

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

Source: US Census Bureau

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

Chart VA-25 of the US Census Bureau 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.

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-3. Values are cumulative millions of dollars in Jan-Dec 2012 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Dec 2012 total $5727.5 billion and new orders total $5664.5 billion, growing respectively by 4.3 percent and 3.0 percent relative to the same period in 2011. Excluding transportation equipment, shipments grew 3.3 percent and new orders increased 2.1 percent. Excluding defense, shipments grew 4.5 percent and new orders grew 3.1 percent. Durable goods shipments reached $2691.1 billion in Jan-Dec 2012, or 47.0 percent of the total, growing by 7.0 percent, and new orders $2628.1 billion, or 46.4 percent of the total, growing by 4.1 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $3036.4 billion or 53.0 percent of the total, growing by 2.0 percent. Capital goods have relatively high value of $944.2 billion for shipments, growing 5.7 percent, and new orders $971.9 billion, growing 0.4 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $764.7 billion, growing 4.9 percent, and new orders $759.4 billion, decreasing 0.3 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.1 percent of US national income in IIIQ2012.

Table VA-10, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars 

Jan-Dec 2012	Shipments	∆% 2012/ 2011	New Orders	∆% 2012/ 2011
Total	5,727,500	4.3	5,664,517	3.0
Excluding Transport	4,956.032	3.3	4,860,273	2.1
Excluding Defense	5,596,916	4.5	5,527,303	3.1
Durable Goods	2,691,061	7.0	2,628,078	4.1
Machinery	389,244	9.1	374,169	-3.7
Computers & Electronic Products	338,981	-0.5	260,142	-0.1
Computers	13,637	-26.3	13,830	-24.8
Transport Equipment	771,468	11.2	802,244	8.6
Automobiles	107,311	25.6
Motor Vehicles	225,202	5.1	223,859	4.2
Nondefense Aircraft	117,754	22.7	150,432	7.3
Capital Goods	944,201	5.7	971,865	0.4
Nondefense Capital Goods	843,068	7.2	865,420	0.9
Capital Goods ex Aircraft	764,695	4.9	759,368	-0.3
Nondurable Goods	3,036,439	2.0	3,036,439	2.0
Food Products	730,312	2.6
Petroleum Refineries	821,479	4.8
Chemical Products	753,049	-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 Dec 2012. Fluctuations are evident, which are smoothed by seasonal adjustment in the earlier Chart VA-3. 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/

Sales and inventories of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-11 for Dec 2012 and percentage changes from the prior month and for Jan-Dec 2012 relative to Jan-Dec 2011. These data are volatile aggregating diverse categories of durable and nondurable goods without adjustment for price changes. Total sales for the US rose 5.1 percent in Jan-Dec 2012 relative to Jan-Dec 2011 and increased 0.0 percent in Dec 2012 relative to Nov 2012. The value of total sales is quite high at $4915.9 billion, approaching five trillion dollars in a year. Value in the breakdown is useful in identifying relative importance of individual categories. Sales of durable goods in Jan-Dec 2012 reached $2208.9 billion, over two trillion dollars for a year, decreasing 0.9 percent in Dec relative to Nov and increasing 5.5 percent in Jan-Dec 2012 relative to Jan-Dec 2011. Sales of automotive products reached $406.7 billion in Jan-Dec 2012, decreasing 0.7 percent in the month and increasing 20.3 percent relative to a year earlier. There is strong performance of 8.4 percent in machinery but much lower of 1.8 percent in electrical products. Sales of nondurable goods rose 4.8 percent over a year earlier. The influence of commodity prices returned as suggested by decrease of 6.1 percent in Dec and increase of 2.2 percent in Jan-Dec 2012 relative to a year earlier in farm products but increase of 7.0 percent in petroleum products with increase of 1.5 percent in Dec. The final three columns in Table VA-11 provide the value of inventories and percentage changes from the prior month and relative to the same month a year earlier. US total inventories of wholesalers decreased 0.1 percent in Dec and increased 5.4 percent relative to a year earlier. Inventories of durable goods of $290.8 billion are 58.2 percent of total inventories of $499.5 billion and rose 7.6 percent relative to a year earlier. Automotive inventories decreased 1.8 percent relative to a year earlier. Machinery inventories of $80.7 billion rose 17.2 percent relative to a year earlier. Inventories of nondurable goods of $208.7 billion are 41.8 percent of the total and increased 2.6 percent relative to a year earlier. Inventories of farm products decreased 6.0 percent in Dec relative to Nov and increased 9.6 percent relative to a year earlier. Inventories of petroleum products decreased 0.2 percent in Dec and increased 0.4 percent relative to a year earlier.

Table VA-11, US, Sales and Inventories of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, Month ∆%

2012	Sales $ Billions Jan-Dec 2012 NSA	Sales Dec ∆% SA	Sales∆% Jan-Dec 2012 from Jan-Dec 2011  NSA	INV $ Billions Dec 2012 NSA	INV  Nov ∆% SA	INV  ∆% Dec 2012 from Dec 2011 NSA
US Total	4915.9	0.0	5.1	499.5	-0.1	5.4
Durable	2208.9	-0.9	5.5	290.8	0.2	7.6
Automotive	406.7	-0.7	20.3	44.4	-3.8	-1.8
Prof. Equip.	381.8	-2.3	1.6	32.8	1.0	6.2
Computer Equipment	193.4	-2.8	-1.1	12.5	0.9	8.6
Electrical	378.7	0.0	1.8	42.6	2.6	5.8
Machinery	383.0	-0.1	8.4	80.7	0.2	17.2
Not Durable	2707.1	0.8	4.8	208.7	-0.6	2.6
Drugs	426.6	4.8	0.1	36.8	-4.3	-0.2
Apparel	143.4	-0.2	5.8	21.1	3.4	-1.7
Groceries	576.8	-0.4	6.0	36.4	0.0	5.7
Farm Products	225.4	-6.1	2.2	26.5	-6.0	9.6
Petroleum	769.2	1.5	7.0	27.9	-0.2	0.4

Note: INV: inventories

Source: US Census Bureau http://www.census.gov/wholesale/index.html

Chart VA-27 of the US Census Bureau provides wholesale trade sales without adjustment for seasonality or price changes from Jan 1992 to Dec 2012. The jagged curve of wholesale trade sales without adjustment shows strong seasonal variations. There is a strong long-term trend interrupted by sharp drop during the global recession. Growth resumed along a stronger upward trend and the level in Dec 2012 surpasses the peak before the global recession.

Chart VA-27, US, Wholesale Trade Sales, Monthly, NSA, Jan 1992-Dec 2012, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Chart VA-28 of the US Census Bureau provides US wholesale trade sales with seasonal adjustment from Jan 1992 to Dec 2012. The elimination of seasonality permits enhanced comparison of adjacent sales. The final segment identifies another drop followed by increase to a higher level.

Chart VA-28, US, Wholesale Trade Sales, Monthly, SA, Jan 1992-Dec 2012, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Inventory/sales ratios of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-12. The total for the US has remained almost without change at 1.19 in Dec 2012, 1.19 in Nov 2012 and 1.17 in Dec 2011. Inventory/sales ratios are higher in durable goods industries but still remain relatively stable with 1.59 in Dec 2012, 1.57 in Nov 2012 and 1.49 in Dec 2011. Computer equipment operates with low inventory/sales ratios of 0.81 in Dec 2012, 0.78 in Nov 2012 and 0.73 in Dec 2011 because of the capacity to fill orders on demand. As expected because of perishable nature, nondurable inventory/sales ratios are quite low with 0.87 in Dec 2012 and 0.88 in Nov 2012 which are almost equal to 0.90 in Dec 2011. There are exceptions such as 1.78 in Dec 2012 in apparel that is almost equal to 1.72 in Nov 2012 and lower than 1.89 in Dec 2011.

Table VA-12, Inventory/Sales Ratios of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, % SA

	Dec 2012	Nov 2012	Dec 2011
US Total	1.19	1.19	1.17
Durable	1.59	1.57	1.49
Automotive	1.31	1.35	1.41
Prof. Equip.	1.06	1.02	1.00
Comp. Equip.	0.81	0.78	0.73
Electrical	1.32	1.29	1.29
Machinery	2.57	2.56	2.15
Not Durable	0.87	0.88	0.90
Drugs	0.92	1.00	0.95
Apparel	1.78	1.72	1.89
Groceries	0.73	0.73	0.71
Farm Products	1.11	1.11	1.20
Petroleum	0.41	0.42	0.45

Source: US Census Bureau http://www.census.gov/wholesale/index.html

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars NSA are provided in Chart VA-29 of the US Census Bureau. Inventories resumed growth at a sharper rate after the global recession and are substantially higher than the peak before the contraction.

Chart VA-29, US, Inventories of Merchant Wholesalers, Millions of Dollars, NSA, Jan 1992-Dec 2012

http://www.census.gov/wholesale/index.html

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-30 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a much sharper slope than before the global recession.

Chart VA-30, US, Inventories of Merchant Wholesalers, Millions of Dollars, SA, Jan 1992-Nov 2012

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Chart VA-31 provides the chart of the US Census Bureau with inventories/sales ratios of merchant wholesalers from 2002 to 2012 seasonally adjusted. Inventory/sales ratios rise during contractions as merchants are caught with increasing inventories because of weak sales and fall during expansions as merchants attempt to fill sales with existing stocks. There is an increase in the inventory/sales ratio in 2012 but not yet significantly higher with declining trend in the final segment followed by an increase and another decline.

Chart VA-31, US, Monthly Inventories/Sales Ratios of Merchant Wholesalers, SA, 2003-2012

Source: US Census Bureau

http://www2.census.gov/wholesale/img/mwtsbrf.jpg

Construction spending at seasonally-adjusted annualized rate (SAAR) reached $884.9 billion in Dec, which was higher by 0.9 percent than in the prior month of Nov, as shown in Table VA-13. Residential investment, with $314.6 billion accounting for 35.6 percent of total value of construction, increased 0.3 percent in Dec and nonresidential investment, with $570.4 billion accounting for 65.4 percent of the total, increased 0.3 percent. Public construction decreased 1.4 percent while private construction increased 2.0 percent. Data in Table VA-13 show that nonresidential construction at $570.4 billion is much higher in value than residential construction at $314.6 billion while total private construction at $614.9 billion is much higher than public construction at $270.1 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in IQ2012 and IIQ2012, nonresidential investment deducted 0.19 percentage points from GDP growth in IIIQ2012 while residential construction added 0.31 percentage points and nonresidential construction added 0.86 percentage points in IVQ2012 with residential construction adding 0.36 percentage points (http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html).

Table VA-13, US, Value of Construction Put in Place in the United States Seasonally Adjusted Annual Rate Billion Dollars and Month and 12-Month ∆%  

	Dec 2012   SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	884,980	0.9	7.8
Residential	314,567	2.1	22.3
Nonresidential	570,413	0.3	1.2
Total Private	614,884	2.0	15.0
Private Residential	308,153	2.2	23.6
New Single Family	144,825	0.8	28.3
New Multi-Family	25,777	6.2	57.4
Private Nonresidential	306,731	1.8	7.6
Total Public	270,096	-1.4	-5.6
Public Residential	6,414	-2.6	-17.3
Public Nonresidential	263,682	-1.4	-5.3

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-14. 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 with strong 1.1 percent in Aug and 1.6 percent in Oct 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 2011 and further improvement with 11.1 percent in Oct 2012 and 7.4 percent in Dec 2012.

Table VA-14, 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*
Dec 2012	67,475	7.4	884,980	0.9%
Nov	74,490	8.8	876,942	0.1
Oct	81,438	11.1	876,213	1.6
Sep	79,357	7.9	862,220	0.7
Aug	81,457	8.5	855,916	1.1
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

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

The sharp contraction of the value of construction in the US is revealed by Table VA-15. Construction spending in Jan-Dec 2012, not seasonally adjusted, reached $850.2 billion, which is higher by 9.2 percent than $778.2 billion in the same period in 2011. The depth of the contraction is shown by the decline of construction spending from $1,192.2 billion in Jan-Dec 2006 to only $850.2 billion in the same period in 2012, or decline by minus 28.7 percent. The comparable decline from Jan-Dec 2005 to Jan-Dec 2012 is minus 25.7 percent. Construction spending in Jan-Dec 2012 fell by 7.2 percent relative to the same period in 2003. Construction spending is lower by 6.3 percent in Jan-Dec 2012 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

Table VA-15, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%

Jan-Dec 2012 $ MM	850,198
Jan-Dec 2011 $ MM	778,238
∆% to 2012	9.2
Jan-Dec 2010 $ MM	803,621
∆% to 2012	5.8
Jan-Dec 2009 $MM	907,784
∆% to 2012	-6.3
Jan-Dec 2006 $ MM	1,192,238
∆% to 2012	-28.7
Jan-Dec 2005 $ MM	1,143,655
∆% to 2012	-25.7
Jan-Dec 2003 $ MM	915,742
∆% to 2012	-7.2

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

Chart VA-32 of the US Census Bureau provides value of construction spending in the US not seasonally adjusted from 2002 to 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-32, 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 five months Aug-Dec not seasonally adjusted is shown in Table VA-16 for the years between 2002 and 2012. The values of $67.5 billion in Dec 2012, $62.8 billion in Dec 2011 and $60.2 billion in Dec 2010 are lower than $71.1 billion in Dec 2003 and also lower than $63.9 billion in Dec 2002 with only marginally higher value for Dec 2012. Construction fell by 23.5 percent from the peak of $88.2 billion Dec 2005 to $67.5 billion in Dec 2012. The data are not adjusted for inflation or changes in quality.

Table VA-16, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars

Year	Aug	Sep	Oct	Nov	Dec
2002	79,460	76,542	75,710	71,362	63,984
2003	85,191	83,841	83,133	77,915	71,050
2004	96,164	92,538	90,582	86,394	77,733
2005	106,706	103,269	102,339	97,549	88,172
2006	110,434	104,191	101,582	95,339	86,436
2007	110,430	105,150	103,847	94,822	84,218
2008	99,786	96,755	95,612	86,067	76,645
2009	84,368	81,213	79,949	71,906	64,098
2010	75,834	74,764	73,470	68,019	60,202
2011	75,101	73,515	73,282	68,476	62,825
2012	81,457	79,357	81,438	74,490	67,475

Source: US Census Bureau

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

Chart VA-33 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-33 shows a trend of increase in the final segment but it is difficult to assess if it will be sustained.

Chart VA-33, 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 Sep to Dec is shown in Table VA-17 for the years between 2002 and 2012. There is a peak in 2005 to 2007 with subsequent collapse of SAARs and rebound in 2012.

Table VA-17, US, Value of Construction Spending SAAR Millions of Dollars

Year	Sep	Oct	Nov	Dec
2002	832,134	839,690	844,697	855,921
2003	911,589	925,732	925,985	948,491
2004	1,012,290	1,015,562	1,023,210	1,037,684
2005	1,131,739	1,145,663	1,156,977	1,178,305
2006	1,151,104	1,139,292	1,137,488	1,153,491
2007	1,165,162	1,152,511	1,127,558	1,108,958
2008	1,056,666	1,050,690	1,029,211	993,515
2009	880,259	869,374	850,732	832,565
2010	798,916	800,266	798,328	779,895
2011	790,294	795,733	804,046	820,614
2012	862,220	876,213	876,942	884,980

Source: US Census Bureau

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

Chart VA-34 of the US Census Bureau provides SAARs of value of construction from 2002 to 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-34, 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 2012 are provided in Table VA-18. 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 75.1 percent between 1993 and 2012 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 5.9 percent between 2000 and 2012. Total value of construction increased 0.3 percent between 2002 and 2012 with value of nonresidential construction increasing 27.1 percent while value of residential construction fell 29.5 percent. Value of total construction fell 25.4 percent between 2005 and 2012, with value of residential construction declining 54.1 percent while value of nonresidential construction rose 16.5 percent. Value of total construction fell 27.2 percent between 2006 and 2012, with value of nonresidential construction increasing 3.5 percent while value of residential construction fell 54.3 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 2012, the share of nonresidential construction in total value rose to 66.7 percent while that of residential construction fell to 33.3 percent.

Table VA-18, 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
2012	850,198	566,794	283,404
∆% 1993-2012	75.1
∆% 1993-2000	65.3
∆% 2000-2012	5.9
∆% 2002-2012	0.3	27.1	-29.5
∆% 2005-2012	-25.4	16.5	-54.1
∆% 2006-2012	-27.2	3.5	-54.3

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

Chart VA-35 shows sharp growth of residential construction spending in the US from 2002 to 2006. The value of construction spending dropped sharply during the global recession and has remained at a low plateau with an apparent increase in the final segment

Chart, VA-35, US, Residential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2012

Source: US Census Bureau

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

Nonresidential construction has been more resilient. Chart VA-35 provides the value of nonresidential construction not seasonally adjusted. There was more moderate growth of nonresidential construction with more prudent business management and fewer subsidies. Nonresidential construction also declined during the global recession but less sharply than residential construction and has remained at a lower plateau.

Chart, VA-36, US, Nonresidential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2012

Source: US Census Bureau

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

The report of consumer credit outstanding of the Board of Governors of the Federal Reserve System is provided in Table VA-19. The data are in seasonally-adjusted annual rates both percentage changes and billions of dollars. The estimate of consumer credit “covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate (http://www.federalreserve.gov/releases/g19/current/default.htm). Consumer credit is divided into two categories. (1) Revolving consumer credit (REV in Table VA-19) consists mainly of unsecured credit cards. (2) Non-revolving consumer credit (NREV in Table VA-19) “includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers or vacations” (http://www.federalreserve.gov/releases/g19/current/default.htm). In Dec 2012, revolving credit was $850 billion, or 30.6 percent of total consumer credit of $2778 billion, and non-revolving credit was $1928 billion, or 669.4 percent of total consumer credit outstanding. Consumer credit grew at relatively high rates before the recession beginning in IVQ2007 (Dec) and extending to IIQ2009 (Jun) as dated by the National Bureau of Economic Research or NBER (http://www.nber.org/cycles/cyclesmain.html). Percentage changes of consumer credit outstanding fell already in 2009. Rates were still negative in 2010 with decline of 1.3 percent in annual data and sharp decline of 7.4 percent in revolving credit. Consumer credit rebounded in Oct 2012 with increase of total consumer credit at 6.1 percent, revolving credit at 4.8 percent and non-revolving credit at 6.8 percent. In Nov 2012, total consumer credit grew at 6.9 percent with increase of revolving credit at 0.8 percent and increase of non-revolving credit at 9.7 percent. Consumer credit rebounded in Dec 2012 with total credit growing at 6.3 percent, revolving credit at minus 5.1 percent and non-revolving credit at 11.4 percent.

Table VA-19, US, Consumer Credit Outstanding, SA, Annual Rate and Billions of Dollars

	Total ∆%	REV ∆%	NRV ∆%	Total $B	REV $B	NREV $B
2012
Dec	6.3	-5.1	11.4	2778	850	1928
Nov	6.9	0.8	9.7	2764	853	1910
Oct	6.1	4.8	6.8	2752	858	1895
IVQ	6.5	4.6	6.7	2778	850	1928
IIIQ	4.2	-1.0	6.6	2734	850	1884
IIQ	6.4	1.3	8.7	2705	852	1854
IQ	5.7	0.8	8.1	2665	849	1816
2011
IVQ	5.8	1.5	7.8	2627	847	1780
2012	5.8	0.3	8.4	2778	850	1928
2011	3.4	0.1	5.0	2627	847	1780
2010	-1.3	-7.4	2.5	2542	847	1695
2009	-4.5	-8.8	-1.8	2439	922	1517
2008	0.8	0.2	1.2	2549	1010	1539
2007	5.9	8.5	4.3	2529	1008	1521

Note: REV: Revolving; NREV: Non-revolving; ∆%: simple annual rate from unrounded data; Total may not add exactly because of rounding

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

Chart VA-37 of the Board of Governors of the Federal Reserve System total consumer credit outstanding in millions of dollars measured in the right axis and the finance rate on consumer installment loans at commercial banks, new autos 48 month loans, not seasonally adjusted. There was sharp decline of total consumer loans outstanding during the global recession followed by strong recovery. There is long-term decline of the financing rate.

Chart VA-37, US, Total Consumer Credit Owned and Securitized NSA and Financing Rate on Consumer Installment Loans at Commercial Banks NSA, Millions of Dollars and Percent, Jan 1972-Dec 2012

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

Chart VA-38 of the Board of Governors of the Federal Reserve System provides percentage changes of total consumer credit outstanding in the US and the financing rate on consumer installment loans at commercial banks, new autos 48 month loan, since 1972. The shaded bars are the cyclical contraction dates of the National Bureau of Economic Research (http://www.nber.org/cycles/cyclesmain.html). Consumer credit is cyclical, declining during contractions as shown by negative percentage changes during economic contractions. There is clear upward trend in 2012 but with significant fluctuations.

Chart VA-38, US, Percent Change of Total Consumer Credit, Seasonally Adjusted at an Annual Rate and Finance Rate on Consumer Installment Loans at Commercial Banks NSA, Feb 1972-Nov 2012

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

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. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

“The Bank of Japan conducts monetary policy based on the principle that the policy shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy, and is responsible for maintaining financial system stability. The Bank aims to achieve price stability on a sustainable basis, given that there are various factors that affect prices in the short run.

The Bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of Japan's economy make progress. Based on this recognition, the Bank sets the price stability target at 2 percent in terms of the year-on-year rate of change in the consumer price index.

Under the price stability target specified above, the Bank will pursue monetary easing and aim to achieve this target at the earliest possible time. Taking into consideration that it will take considerable time before the effects of monetary policy permeate the economy, the Bank will ascertain whether there is any significant risk to the sustainability of economic growth, including from the accumulation of financial imbalances.”

The Bank of Japan also provided explicit analysis of its view on price stability in a “Background note regarding the Bank’s thinking on price stability” (http://www.boj.or.jp/en/announcements/release_2013/data/rel130123a1.pdf http://www.boj.or.jp/en/announcements/release_2013/rel130123a.htm/). The Bank of Japan also amended “Principal terms and conditions for the Asset Purchase Program” (http://www.boj.or.jp/en/announcements/release_2013/rel130122a.pdf): “Asset purchases and loan provision shall be conducted up to the maximum outstanding amounts by the end of 2013. From January 2014, the Bank shall purchase financial assets and provide loans every month, the amount of which shall be determined pursuant to the relevant rules of the Bank.”

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 expanded at a marginal rate with the Markit Composite Output PMI^™ Index increasing from 49.3 in Dec to 50.4 in Jan, which is the first reading above the no-change 50.0 since May 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10632). Paul Smith, economist at Markit and author of the report, finds that growth in services but with weakness in manufacturing could provide some support for marginal growth in the beginning of 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10632). The Markit Business Activity Index of Services remained unchanged at 51.5 in Jan and also 51.5 in Dec, indicating moderate growth of the private services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10632). Paul Smith, Senior Economist at Markit and author of the report, finds signs of moderate growth in the beginning of 2013 with demand for services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10632). Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased from 45.0 in Dec to 47.7 in Jan for the eighth consecutive month of contraction below 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10609). Foreign orders fell for the tenth consecutive month with weakness in markets in China. Paul Smith, economist at Markit and author of the report, finds weakness in the beginning of 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10609).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	Dec ∆% 0.3 12 months ∆% minus 0.6 Blog 1/13/13
Consumer Price Index	Dec NSA ∆% 0.1; Dec 12 months NSA ∆% -0.1 Blog 1/27/13
Real GDP Growth	IIIQ2012 ∆%: minus 0.9 on IIQ2012;  IIIQ2012 SAAR minus 3.5; ∆% from quarter a year earlier: 0.5 % Blog 12/16/12
Employment Report	Dec Unemployed 2.59 million Change in unemployed since last year: minus 170 thousand Unemployment rate: 4.2% Blog 2/3/13
All Industry Indices	Nov month SA ∆% -0.3 12-month NSA ∆% 0.1 Blog 1/27/13
Industrial Production	Dec SA month ∆%: 2.5 12-month NSA ∆% -7.8 Blog 2/3/13
Machine Orders	Total Dec ∆% -1.6 Private ∆%: -9.8 Dec ∆% Excluding Volatile Orders 2.8 Blog 2/10/13
Tertiary Index	Nov month SA ∆% minus 0.3 Nov 12 months NSA ∆% 1.1 Blog 1/20/13
Wholesale and Retail Sales	Dec 12 months: Total ∆%: -1.7 Wholesale ∆%: -2.5 Retail ∆%: 0.4 Blog 2/3/13
Family Income and Expenditure Survey	Dec 12-month ∆% total nominal consumption -0.8, real -0.7 Blog 2/3/13
Trade Balance	Exports Dec 12 months ∆%: minus 5.8 Imports Dec 12 months ∆% 1.9 Blog 1/27/13

Links to blog comments in Table JPY:

2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

12/16/12 http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html

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

Japan’s total machinery orders seasonally adjusted in Table VB-1 decreased 1.6 percent in Dec 2012 after increasing 5.3 percent in Nov 2012, decreasing 1.6 percent in Oct, increasing 9.6 percent in Dec and falling in three of the four months May-Aug 2012. Total private sector orders decreased 9.8 percent in Dec 2012, increased 15.2 percent in Nov 2012 after falling 10.7 percent in Oct 2012, increasing 15.4 percent in Sep and falling 13.7 percent in Aug. Private-sector orders excluding volatile orders, which are closely watched, increased 2.8 percent in Dec 2012, increased 3.9 percent in Nov and 2.6 percent in Oct but decreased 4.3 percent in Sep after decreasing 3.3 percent in Aug. Orders for manufacturing increased 3.0 percent in Dec and 3.9 percent in Nov after decreasing 3.6 percent in Oct, growing 2.8 percent in Sep 2012, falling 15.1 percent in Aug following increase of 12.0 percent in Jul with declines 2.9 percent in Jun and 8.0 percent in May. Overseas orders decreased 12.6 percent in Dec 2012, increased 17.0 percent in Nov, and 9.4 percent in Oct and were unchanged in Sep 2012 but decreased 14.7 percent in Aug and 9.8 percent in Jun and increased 3.0 percent in Jul. There is significant volatility in industrial orders in advanced economies.

Table VB-1, Japan, Machinery Orders, Month ∆%, SA 

2012	Dec	Nov	Oct	Sep
Total	-1.6	5.3	-1.6	9.6
Private Sector	-9.8	15.2	-10.7	15.4
Excluding Volatile Orders	2.8	3.9	2.6	-4.3
Mfg	3.0	3.9	-3.6	2.8
Non Mfg ex Volatile	-8.0	6.2	2.8	1.3
Government	16.4	-2.6	-18.7	22.4
From Overseas	-12.6	17.0	9.4	0.0
Through Agencies	3.4	6.4	-2.5	4.0

Note: Mfg: manufacturing http://www.esri.cao.go.jp/index-e.html

Total orders for machinery and total private-sector orders excluding volatile orders for Japan are shown in Chart VB-1 of Japan’s Economic and Social Research Institute at the Cabinet Office. The trend of private-sector orders excluding volatile orders was showing recovery from the drop after Mar 2011 because of the earthquake/tsunami. There was reversal of the trend of increase in total orders with recent decreases and an upward movement in the final data point. Fluctuations still prevent detecting longer term trends but recovery is still evident from the global recession. There was a major setback by the declines in May 2012 shown in the final segment of Chart VB-1 with partial recovery in Jun 2012, decline again in Jul and Aug 2012 and rebound in total orders in Nov reversed in Dec but decline in orders excluding volatile segments with increase in Nov-Dec 2012.

Chart VB-1, Japan, Machinery Orders

Source: Japan Economic and Social Research Institute, Cabinet Office

http://www.esri.cao.go.jp/index-e.html

Table VB-4 provides values and percentage changes from a year earlier of Japan’s machinery orders without seasonal adjustment. Total orders of JPY 2,007,600 million in Dec 2012 are divided between JPY 780,945 million overseas orders, or 38.8 percent of the total, and domestic orders of JPY 1,138,266 million, or 56.7 percent of the total, with orders through agencies of JPY 88,389 million, or 4.4 percent of the total. Orders through agencies are not shown in the table because of the minor value. Twelve-month percentages changes in Dec 2012 continued to reverse increases in Jul 2012: minus 12.5 percent for total orders, minus 24.1 percent for overseas orders, minus 3.3 percent for domestic orders and minus 3.4 percent for private orders excluding volatile items. Nov 2012 was also weak with declines of 8.6 percent of total orders, 9.6 percent of overseas orders, 8.5 percent of domestic orders and increase of 0.3 percent of private orders excluding volatile items. Total orders fell 18.6 percent in the 12 months ending in Aug with declines of 31.1 percent in overseas orders and 10.2 percent of domestic orders. Performance was strong in Apr with growth of total orders of 7.5 percent mostly because of growth of domestic orders by 23.0 percent and also in Mar with growth of total orders of 8.1 percent and of domestic orders of 19.0 percent. Percentage growth of overseas orders was negative in eleven consecutive months from Feb to Dec 2012. Performance in Feb 2012 was weak with growth of total orders of minus 9.3 percent, minus 8.9 percent of overseas orders, minus 11.2 percent of domestic orders and increase of 8.9 percent of private orders excluding volatile items. Jan 2012 was quite strong with growth of total orders of 9.8 percent driven by growth of overseas orders of 18.3 percent. There is sharp reversal of 12-month percentage changes in Nov 2011 with increase of 11.0 percent in total orders, 8.0 percent in overseas orders, 13.5 percent in domestic orders and 12.5 percent in private orders excluding volatile items. The pace of increase declined in Dec with growth in 12 months of 0.8 percent for total orders, 12.6 percent for overseas orders, decline of 8.5 percent for domestic orders and growth of private orders excluding volatile items of 6.3 percent. There was strong impact from the global recession with total orders falling 23.3 percent in 2008, overseas orders dropping 29.4 percent and domestic orders decreasing 17.4 percent. Recovery was vigorous in 2010 with increase of total orders by 9.4 percent, overseas orders by 3.5 percent and domestic orders by 14.1 percent. The heavy impact of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 also affected machinery orders.

Table VB-2, Japan, Machinery Orders, 12 Months ∆% and Million Yen, Original Series  

	Total	Overseas	Domestic	Private ex Volatile
Value Dec 2012	2,007,600	780,945	1,138,266	743,330
% Total	100.0	38.9	56.7	37.0
Value Dec 2011	2,295,585	1,028,849	1,177,247	769,303
% Total	100.0	44.8	51.2	33.5
12-month ∆%
Dec 2012	-12.5	-24.1	-3.3	-3.4
Nov 2012	-8.6	-9.6	-8.5	0.3
Oct 2012	-6.9	-12.8	-2.6	1.2
Sep 2012	-7.8	-18.4	-1.8	-7.8
Aug 2012	-18.6	-31.1	-10.2	-6.1
Jul 2012	2.6	-1.9	3.2	1.7
Jun 2012	-10.9	-11.3	-12.4	-9.9
May 2012	-6.8	-7.0	-8.6	1.0
Apr 2012	7.5	-9.6	23.0	6.6
Mar 2012	8.1	-10.0	19.0	-1.1
Feb 2012	-9.3	-8.9	-11.2	8.9
Jan 2012	9.8	18.3	0.5	5.7
Dec 2011	0.8	12.6	-8.5	6.3
Nov 2011	11.0	8.0	13.5	12.5
Oct 2011	-6.8	-15.6	-1.0	1.5
Dec 2010	9.4	3.5	14.1	-0.6
Dec 2009	1.8	0.4	3.6	-1.9
Dec 2008	-23.3	-29.4	-17.4	-24.7
Dec 2007	1.3	9.8	-4.3	-6.4
Dec 2006	0.8	0.9	-0.1	0.1

Note: Total machinery orders = overseas + domestic demand + orders through agencies. Orders through agencies in Dec 2012 were JPY 88,389 million, or 4.4 percent of the total and 3.9 percent of the total in Dec 2011, and are not shown in the table. The data are the original numbers without any adjustments and differ from the seasonally-adjusted data.

Source: Japan Economic and Social Research Institute, Cabinet Office

http://www.esri.cao.go.jp/index-e.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 No 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 but rebounded to 55.5 in Oct and 55.6 in Nov 2012. Improvement continued with 56.1 in Dec 2012 and 56.2 in Jan 2013.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Jan 2013	56.2	53.7	58.2	50.9	61.4
Dec 2012	56.1	54.3	53.8	50.0	64.6
Nov	55.6	53.2	52.5	48.4	64.6
Oct	55.5	51.6	58.1	50.5	63.4
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/

Chart CIPMNM provides China’s nonmanufacturing purchasing managers’ index from Nov 2011 to Nov 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, rebounding to 55.5 in Oct 2012, 55.6 in Nov 2012, 56.1 in Dec 2012 and 56.2 in Jan 2013.

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

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/

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 and 49.8 in Sep, climbing above 50.0 to 50.2 in Oct, 50.6 in Nov-Dec 2012 and 50.4 in Jan 2013. The index of new orders (NOI) fell from 54.5 in Apr 2012 to 49.0 in Jul and 48.7 in Aug, climbing above 50.0, 51.2 in Nov 2012-Dec 2012 and 51.6 in Jan 2013. The index of employment also fell from 51.0 in Apr to 49.1 in Aug and further down to 48.7 in Nov 2012, 49.9 in Dec 2012 and 47.8 in Jan 2013.

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

	IPM	PI	NOI	INV	EMP	SDEL
Jan 2013	50.4	51.3	51.6	50.1	47.8	50.0
Dec 2012	50.6	52.0	51.2	47.3	49.9	48.8
Nov	50.6	52.5	51.2	47.9	48.7	49.9
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/

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 manufacturing index of purchasing managers from Nov 2011 to Nov 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, 50.6 in Nov 2012 and 50.4 in Jan 2013 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/

Cumulative growth of China’s GDP in the four quarters of 2012 relative to the same period in 2011 was 7.8 percent, as shown in Table VC-GDP. Secondary industry accounts for 45.3 percent of GDP of which industry alone for 40.1 percent in the first three quarters of 2012 and construction with the remaining 6.7 percent in the first three quarters of 2012. Tertiary industry accounts for 43.8 percent of GDP in the first three quarters of 2012 and primary industry for 9.4 percent in the first three quarters of 2012. China’s growth strategy consisted of rapid increases in productivity in industry to absorb population from agriculture where incomes are lower (Pelaez and Pelaez, The Global Recession Risk (2007), 56-80). The bottom block of Table VC-GDP provides quarter-on-quarter growth rates of GDP and their annual equivalent. China’s GDP growth decelerated significantly from annual equivalent 9.9 percent in IIIQ2011 to 7.0 percent in IVQ2011 and 6.1 percent in IQ2012, rebounding to 8.2 percent in IIQ2012, 9.1 percent in IIIQ2012 and 8.2 percent in IVQ2012.

Table VC-GDP, China, Cumulative and Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted ∆%

Cumulative GDP 2012	Value Current CNY Billion	2012 Year-on-Year ∆%
GDP	51,932.2	7.8
Primary Industry	5,237.7	4.5
Farming IIIQ	33,088.0	4.2
Secondary Industry	23,531.9	8.1
Industry IIIQ	141,641.5	7.9
Construction IIIQ	23,787.0	9.2
Tertiary Industry	23,162.6	8.1
Transport, Storage, Post IIIQ	18,941.0	6.7
Wholesale, Retail Trades IIIQ	31,651.2	11.8
Hotel & Catering Services IIIQ	7,015.6	7.6
Financial Intermediation IIIQ	22,465.2	9.5
Real Estate IIIQ	20,789.6	2.7
Other IIIQ	54,101.0	7.7
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2012
IVQ2012	2.0	8.2
IIIQ2012	2.2	9.1
IIQ2012	2.0	8.2
IQ2012	1.5	6.1
2011
IVQ2011	1.7	7.0
IIIQ2011	2.4	9.9
IIQ2011	2.5	10.4
IQ2011	2.2	9.1

Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/

Table VC-GDPb provides growth of GDP in China relative to a year earlier and relative to prior quarter. Growth of GDP relative to a year earlier decelerated from 12.1 percent in IQ2010 to 7.4 percent in IIIQ2012 and 7.9 percent in IVQ2012. Growth of secondary industry decelerated from 14.5 percent in IQ2010 to 7.4 percent in IIIQ2012 and 7.9 percent in IVQ2012.

Table VC-GDPb, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter

	IQ 2011	IIQ 2011	IIIQ 2011	IVQ 2011	IQ     2012	IIQ 2012	IIIQ 2012	IVQ 2012
GDP	9.7	9.5	9.1	8.9	8.1	7.6	7.4	7.9
Primary Industry	3.5	3.2	3.8	4.5	3.8	4.3	4.2	4.5
Secondary Industry	11.1	11.0	10.8	10.6	9.1	8.3	8.1	8.1
Tertiary Industry	9.1	9.2	9.0	8.9	7.5	7.7	7.9	8.1
GDP ∆% Relative to a Prior Quarter	2.2	2.3	2.4	1.9	1.8	1.8	2.2	2.0
	IQ 2010	IIQ 2010	IIIQ 2010	IVQ 2010
GDP	12.1	11.2	10.7	12.1
Primary Industry	3.8	3.6	4.0	3.8
Secondary Industry	14.5	13.3	12.6	14.5
Tertiary Industry	10.5	9.9	9.7	10.5

Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/

The HSBC Flash China Manufacturing Purchasing Managers’ Index^™ (PMI^™) compiled by Markit (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10587) is improving. The overall Flash China Manufacturing PMI^™ increased marginally from 51.5 in Dec to 51.9 in Jan for a high in 24 months while the Flash China Manufacturing Output Index increased from 51.9 in Dec to 52.2 in Jan, both in expansion territory above 50.0. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the economy of China is improving because of internal demand even with weak foreign demand (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10587).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 51.8 in Dec to 53.5 in Jan for the highest rate in two years (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10685). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that combined manufacturing and services data suggest growth (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10685). The HSBC Business Activity index increased from 51.7 in Dec to 54.0 in Jan with continuing growth in services at a faster rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10685). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds strength in services and recovery in manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10685). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 52.3 in Jan from 51.5 in Dec, indicating moderate activity, which is the highest reading in two years (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10652). New orders increased with respondents of the survey finding strengthening demand in Europe and the US. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds manufacturing is gaining traction following improving domestic demand (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10652).

Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Dec 12-month ∆%: minus 1.9 Dec month ∆%: minus 0.1 Blog 1/13/13
Consumer Price Index	Dec month ∆%: 0.8 Dec 12 months ∆%: 2.5 Blog 1/13/13
Value Added of Industry	Dec month ∆%: 0.87 Jan-Dec 2012/Jan-Dec 2011 ∆%: 10.0 Blog 1/20/13
GDP Growth Rate	Year IVQ2012 ∆%: 7.9 Quarter IIQ2012 ∆%: 2.0 Blog 1/20/13
Investment in Fixed Assets	Dec month ∆%: 1.24 Total Jan-Dec 2012 ∆%: 20.6 Real estate development: 16.2 Blog 1/20/13
Retail Sales	Dec month ∆%: 1.53 Dec 12 month ∆%: 15.2 Jan-Dec ∆%: 14.3 Blog 1/20/13
Trade Balance	Jan balance $29.15 billion Exports 12M ∆% 17.3 Imports 12M ∆% 19.6 Cumulative Jan: $29.15 billion Blog 2/10/13

Links to blog comments in Table CNY:

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

1/13/13 http://cmpassocregulationblog.blogspot.com/2013/01/peaking-valuation-of-risk-financial.html

Table VC-1 provides China’s exports, imports, trade balance and percentage changes from Dec 2010 to Jan 2013. China’s trade growth was stronger in Jan 2013 with growth of exports of 17.3 percent in 12 months and of imports of 19.6 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.67 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the New Year holidays.

Table VC-1, China, Exports, Imports and Trade Balance USD Billion and ∆%

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jan 2013	175.88	17.3	146.73	19.6	29.15
Dec 2012	199.23	14.1	167.61	6.0	31.62
Nov	179.38	2.9	159.75	0.0	19.63
Oct	175.57	11.6	143.58	2.4	31.99
Sep	186.35	9.9	158.68	2.4	27.67
Aug	177.97	2.7	151.31	-2.6	26.66
Jul	176.94	1.0	151.79	4.7	25.15
Jun	180.20	11.3	148.48	6.3	31.72
May	181.14	15.3	162.44	12.7	18.70
Apr	163.25	4.9	144.83	0.3	18.42
Mar	165.66	8.9	160.31	5.3	5.35
Feb	114.47	18.4	145.95	39.6	-31.48
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	174.72	13.4	158.20	11.8	16.52
Nov	174.46	13.8	159.94	22.1	14.53
Oct	157.49	15.9	140.46	28.7	17.03
Sep	169.67	17.1	155.16	20.9	14.51
Aug	173.32	24.5	155.56	30.2	17.76
Jul	175.13	20.4	143.64	22.9	31.48
Jun	161.98	17.9	139.71	19.3	22.27
May	157.16	19.4	144.11	28.4	13.05
Apr	155.69	29.9	144.26	21.8	11.42
Mar	152.20	35.8	152.06	27.3	0.14
Feb	96.74	2.4	104.04	19.4	-7.31
Jan	150.73	37.7	144.27	51.0	6.46
Dec 2010	154.15	17.9	141.07	25.6	13.08

Source: http://english.mofcom.gov.cn/article/statistic/

Table VC-2 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports. There is strong beginning of 2013 with trade surplus of $29.15 in Jan 2013 and growth of exports of 17.3 percent and imports of 19.6 percent. The trade balance of $231.1 billion in 2012 is stronger than the trade balance of $155.14 billion in 2011. The trade balance in 2011 of $155.14 billion is lower than those from 2008 to 2010. China’s trade balance reached $231.1 billion in Jan-Dec 2012 with cumulative growth of exports of 7.9 percent and 4.3 percent of imports, which is much lower than 20.3 percent for exports and 24.9 percent for imports in 2011 and 31.3 percent for exports and 38.7 percent for imports in 2010. There is a rare cumulative deficit of $4.2 billion in Feb 2012 reversed to a small surplus in Mar 2012 and a higher surplus of $19.3 billion in Apr 2012, increasing to $37.9 billion in May, $68.9 billion in Jun 2012, $94.1 billion in Jul 2012, $120.8 billion in Aug 2012, $148.3 billion in Sep 2012, $180.24 billion in Oct 2012, $199.54 billion in Nov 2012 and $231.1 billion in Dec 2012. More observations are required to detect trends of Chinese trade but available data suggest deceleration that would be expected from the large share of trade with Europe.

Table VC-2, China, Year to Date Exports, Imports and Trade Balance USD Billion and ∆%

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jan 2013	175.88	17.3	146.73	19.6	29.15
Dec 2012	2049.93	7.9	1817.83	4.3	231.11
Nov	1849.91	7.3	1650.37	4.1	199.54
Oct	1670.90	7.8	1490.67	4.6	180.24
Sep	1495.39	7.4	1347.08	4.8	148.31
Aug	1309.11	7.1	1188.51	5.1	120.61
Jul	1131.24	7.8	1037.14	6.4	94.10
Jun	954.38	9.2	885.46	6.7	68.91
May	774.40	8.7	736.49	6.7	37.92
Apr	593.24	6.9	573.94	5.1	19.3
Mar	430.02	7.6	429.36	6.6	0.66
Feb	264.40	6.9	268.64	7.7	-4.24
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	1,898.60	20.3	1,743.46	24.9	155.14
Nov	1,724.01	21.1	1585.61	26.4	138.40
Oct	1,549.71	22.0	1,425.68	26.9	124.03
Sep	1,392.27	22.7	1,285.17	26.7	107.10
Aug	1,222.63	23.6	1,129.90	27.5	92.73
Jul	1,049.38	23.4	973.17	26.9	76.21
Jun	874.3	24.0	829.37	27.6	44.93
May	712.37	25.5	689.41	29.4	22.96
Apr	555.30	27.4	545.02	29.6	10.28
Mar	399.64	26.5	400.66	32.6	-1.02
Feb	247.47	21.3	248.36	36.0	-0.89
Jan	150.7	37.7	144.27	51.0	6.46
Dec 2010	1577.93	31.3	1394.83	38.7	183.10

Source: http://english.mofcom.gov.cn/article/statistic/

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 0.4 percent in 2012 and 0.1 percent in 2013 but 1.4 percent in 2014.

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

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*	2.5	11.4	-0.4
2013*			0.1
2014*			1.4

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

The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI^®, combining activity in manufacturing and services, increased from 47.2 in Dec to 48.2 in Jan, for twelve consecutive declines and fifteen drops in sixteen months but with Oct registering the highest reading in ten months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10586). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index is consistent with GDP declining but improving outlook for return to growth in the first half of 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10586). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP, increased from 47.2 in Dec to 48.6 in Jan, which is the twelfth consecutive contraction; contraction but at a slower rate in three consecutive months spread in manufacturing and services throughout France, Italy and Spain but with growth in Germany (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10671). Chris Williamson, Chief Economist at Markit, finds that the data are consistent with sharp reduction in contraction and likely stabilization in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10671). The Markit Eurozone Services Business Activity Index increased from 47.8 in Dec to 48.6 in Jan (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10671). The Markit Eurozone Manufacturing PMI^® increased to 47.9 in Jan from 46.1 in Dec, which indicates contraction in eighteen consecutive months of deterioration of manufacturing business in the euro zone but with the index at a high in eleven months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10641). New export orders declined in Jan for the nineteenth consecutive month but only at a marginal pace with increases in Italy, Spain, Ireland and the Netherlands. Chris Williamson, Chief Economist at Markit, finds that the survey data are consistent with likely stabilization following contraction throughout most of 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10641). Table EUR provides the regional data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IIIQ2012 ∆% 0.1; IIIQ2012/IIIQ2011 ∆% 0.0 Blog 12/30/12
Unemployment	Dec 2012: 11.7% unemployment rate Dec 2012: 18.715 million unemployed Blog 2/10/13
HICP	Dec month ∆%: 0.4 12 months Dec ∆%: 2.2 Blog 1/20/13
Producer Prices	Euro Zone industrial producer prices Dec ∆%: -0.2 Dec 12-month ∆%: 2.1 Blog 2/10/13
Industrial Production	Nov month ∆%: -0.3; Nov 12 months ∆%: -3.7 Blog 1/20/13
Retail Sales	Dec month ∆%: -0.8 Dec 12 months ∆%: minus 3.4 Blog 2/10/13
Confidence and Economic Sentiment Indicator	Sentiment 87.8 Jan 2013 Consumer minus 23.9 Jan 2013 Blog 2/3/13
Trade	Jan-Nov 2012/Jan-Nov 2011 Exports ∆%: 8.3 Imports ∆%: 2.0 Nov 2012 12-month Exports ∆% 5.4 Imports ∆% -0.3 Blog 1/20/13

Links to blog comments in Table EUR:

2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

12/30/12 http://cmpassocregulationblog.blogspot.com/2012/12/united-states-commercial-banks-assets.html

EUROSTAT estimates the rate of unemployment in the euro area at 11.7 percent in Dec 2012, as shown in Table VD-1. The number of unemployed in Dec 2012 was 18.715 million, which was 1.796 million higher than 16.919 million in Dec 2011. The rate of unemployment jumped from 10.7 percent in Dec 2011 to 11.7 percent in Dec 2012.

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

	Unemployment Rate %	Number Unemployed Millions
Dec 2012	11.7	18.715
Nov	11.7	18.699
Oct	11.7	18.636
Sep	11.6	18.435
Aug	11.5	18.271
Jul	11.4	18.209
Jun	11.4	18.103
May	11.3	17.921
Apr	11.2	17.757
Mar	11.0	17.490
Feb	10.9	17.275
Jan	10.8	17.090
Dec 2011	10.7	16.919
Nov	10.6	16.805
Oct	10.4	16.526
Sep	10.3	16.340
Aug	10.2	16.078
Jul	10.1	15.926
Jun	10.0	15.722
May	9.9	15.650
Apr	9.9	15.536
Mar	9.9	15.585
Feb	9.9	15.618
Jan	10.0	15.705
Dec 2010	10.0	15.813

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

Table VD-2 shows the disparity in rates of unemployment in the euro area with 11.7 percent for the region as a whole and 18.715 million unemployed but 5.3 percent in Germany and 2.236 million unemployed. At the other extreme is Spain with rate of unemployment of 26.1 percent and 5.972 million unemployed. The rate of unemployment of the European Union in Dec is 10.7 percent with 25.926 million unemployed.

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

Dec 2012	Unemployment Rate %	Unemployed Millions
Euro Zone	11.7	18.715
Germany	5.3	2.236
France	10.6	3.123
Netherlands	5.8	0.520
Finland	7.7	0.206
Portugal	16.5	0.897
Ireland	14.7	0.316
Italy	11.2	2.875
Greece	NA	NA
Spain	26.1	5.972
Belgium	7.5	0.368
European Union	10.7	25.926

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

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/eurostat/home/

Advanced economies are experiencing weak demand. Table VD-3 provides month and 12-month percentage changes of the volume of retail sales in the euro zone from Jan 2011 to Dec 2012. Retail sales decreased 0.8 percent in Dec 2012 and fell 3.4 percent in 12 months. The 12-month rates of growth have become negative since Mar 2011 with exception of 1.1 percent in Apr 2011, stability in Aug 2011 and 0.1 percent in Mar 2012. The lower part of Table VD-3 provides annual percentage changes of inflation-adjusted retail sales in the euro zone since 1999. Retail sales fell 2.4 percent in 2009 after falling 0.8 percent in 2008 and fell again by 0.6 percent in 2011. The average yearly rate of increase of retail sales from 1999 to 2007 was 2.0 percent but growth has not recovered. The average yearly rate of increase for the entire period 1999 to 2011 is lower at 1.1 percent.

Table VD-3, Euro Zone, Volume of Retail Sales, Deflated ∆%

	Month ∆%	12-Month ∆%
Dec 2012	-0.8	-3.4
Nov	-0.1	-1.9
Oct	-0.7	-2.9
Sep	-0.7	-1.7
Aug	-0.2	-0.7
Jul	0.0	-1.3
Jun	0.1	-0.7
May	0.8	-0.5
Apr	-1.4	-3.4
Mar	0.2	0.1
Feb	-0.2	-2.0
Jan	0.0	-1.0
Dec 2011	-0.1	-1.8
Nov	-0.4	-1.5
Oct	0.2	-0.7
Sep	-0.3	-1.1
Aug	0.0	0.0
Jul	0.1	-0.5
Jun	0.8	-0.7
May	-1.6	-1.8
Apr	1.0	1.1
Mar	-1.4	-1.4
Feb	0.5	1.3
Jan	-0.1	0.7
Annual ∆%
2011		-0.6
2010		0.9
2009		-2.4
2008		-0.8
2007		1.6
2006		2.2
2005		2.0
2004		1.5
2003		0.9
2002		1.2
2001		2.1
2000		2.5
1999		2.3
Average ∆% 1999-2007		2.0
Average ∆% 1999-2011		1.1

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

Growth rates of retail sales of the euro zone by major segments are in Table VD-4. Total sales decreased 0.8 percent in Dec 2012 and declined 3.4 percent in the 12 months ending in Dec 2012. All 12-month and monthly percentage changes are negative.

Table VD-4, Euro Zone, Volume of Retail Sales by Products, ∆%

Dec 2012	Month ∆%	12-Month ∆%
Total	-0.8	-3.4
Food, Drinks, Tobacco	-0.8	-2.1
Nonfood Products ex Automotive Fuel	-1.0	-4.2
Automotive Fuel in Specialized Stores	0.3	-5.9

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

Month and 12-month percentage rates of change of retail sales by member countries of the euro zone are shown in Table VD-5 for Dec 2012. Retail sales are weak throughout the euro zone. The 12-month percentage changes are negative for all members in Table VD-5 with the exception of 2.2 percent for France, 1.6 percent for Finland and 0.8 percent for Ireland. The 12-month percentage change for the UK, which is not a member of the euro zone, was 1.9 percent. The European Union’s 12-month percentage change was minus 2.0 percent.

Table VD-5, Euro Zone, Volume of Retail Sales by Member Countries, ∆%

Dec 2012	Month ∆%	12-Month ∆%
Euro Zone	-0.8	-3.4
Germany	-1.7	-4.7
France	-0.2	2.2
Netherlands	NA	NA
Finland	0.0	1.6
Belgium	-0.6	-2.2
Portugal	-1.8	-8.6
Ireland	0.3	0.8
Italy	NA	NA
Greece	NA	NA
Spain	-2.2	-12.3
UK	-0.4	1.9
European Union	-0.6	-2.0

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

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, increased from 50.3 in Dec to 53.6 in Jan, which is the highest reading in twelve months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10688). The pace of decline of new export orders for manufacturing was at significantly lower rate than in Dec, with some respondents finding enhanced demand in Asia but continuing weakness in Southern Europe. Tim Moore, Senior Economist at Markit and author of the report, finds strength in Germany’s private sector with potential to provide impulse to GDP growth (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10588). 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 50.3 in Dec to 54.4 in Jan, which is the fastest rate of since Jun 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10560). Tim Moore, Senior Economist at Markit and author of the report, finds that the economy of Germany has moved away from contraction to expansion with growth in both manufacturing and services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10688). The Germany Services Business Activity Index increased from 52.0 in Dec to 55.7 in Jan (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10688). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 46.0 in Dec to 49.8 in Jan for the eleventh consecutive month in contraction territory below 50.0 but at the slowest rate of deterioration and with modest increase in output after nine consecutive months of contraction (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10655). New export orders fell in Jan for nineteen consecutive months but at rate well below that in Dec with some respondents indicating improving demand for Asia that compensates declines in southern Europe. Tim Moore, Senior Economist at Markit and author of the report, finds strength in Germany’s return to manufacturing growth (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10655).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IIIQ2012 0.2 ∆%; III/Q2012/IIIQ2011 ∆% 0.4 2011/2010: 3.0% GDP ∆% 1992-2011 Blog 8/26/12 5/27/12 11/25/12
Consumer Price Index	Dec month NSA ∆%: 0.9 Dec 12-month NSA ∆%: 2.1 Blog 1/20/13
Producer Price Index	Dec month ∆%: -0.3 CSA, 0.1 NSA 12-month NSA ∆%: 1.5 Blog 1/27/13
Industrial Production	Mfg Dec month CSA ∆%: 1.2 12-month NSA: minus 9.9 Blog 2/10/13
Machine Orders	MFG Dec month ∆%: 0.8 Dec 12-month ∆%: 9.2 Blog 2/10/13
Retail Sales	Dec Month ∆% -1.7 12-Month ∆% -4.7 Blog 2/3/13
Employment Report	Unemployment Rate Dec 5.3% Blog 2/3/13
Trade Balance	Exports Dec 12-month NSA ∆%: -6.9 Imports Dec 12 months NSA ∆%: -7.3 Exports Dec month CSA ∆%: -0.3; Imports Dec month SA -1.3 Blog 2/10/13

Links to blog comments in Table DE:

2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

11/25/12 http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real.html

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

The production industries index of Germany in Table VE-1 shows increase of 0.3 percent in Dec 2012 and decrease of 9.1 percent in the 12 months ending in Dec 2012. Germany’s production industries suffered decline of 7.3 percent in Dec 2008 relative to Dec 2007 and decline of 2.3 percent in 2009. Recovery was vigorous with 14.2 percent in the 12 months ending in Dec 2010. The first quarter of 2011 was quite strong when the German economy outperformed the other advanced economies. The performance of Germany’s production industries from 2002 to 2006 was vigorous with average rate of 4.5 percent. Data for the production industries index of Germany fluctuate sharply from month to month and also in 12-month rates.

Table VE-1, Germany, Production Industries, Month and 12-Month ∆%

	12-Month ∆% NSA	Month ∆% Calendar SA
Dec 2012	-9.1	0.3
Nov	-3.2	-0.2
Oct	3.9	-2.0
Sep	-7.3	-1.2
Aug	-1.3	-0.4
Jul	2.2	1.2
Jun	3.9	-0.2
May	-6.8	1.6
Apr	-1.0	-2.2
Mar	-1.0	2.1
Feb	1.9	-0.5
Jan	4.3	0.5
Dec 2011	1.2	-2.0
Nov	4.6	0.2
Oct	0.4	0.4
Sep	5.5	-2.1
Aug	11.3	-0.2
Jul	6.5	3.0
Jun	0.0	-1.0
May	18.9	0.9
Apr	5.8	-0.3
Mar	10.3	0.8
Feb	16.4	1.2
Jan	16.0	0.8
Dec 2010	14.2
Dec 2009	-2.3
Dec 2008	-7.3
Dec 2007	-0.1
Dec 2006	2.5
Dec 2005	4.9
Dec 2004	5.3
Dec 2003	5.1
Dec 2002	2.0
Average ∆% per Year
Dec 1993 to Dec 2011	1.4
Dec 1993 to Dec 2000	1.5
Dec 1993 to Dec 2006	1.6
Dec 2002 to Dec 2006	4.5
Dec 2007 to Dec 2011	1.2

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

Table VE-2 provides monthly percentage changes of the German production industries index by components from May to Dec 2012. There was recovery in Dec 2012 with growth of 0.3 percent in production industries, 1.2 percent in manufacturing, 1.9 percent in capital goods, 1.9 percent in durable goods and 4.2 percent in nondurable goods but declines of 0.7 percent in intermediate goods and 3.4 percent of energy. There were four sharp declines in the monthly production industries index of 2.0 percent in Dec 2011, 2.2 percent in Apr 2012, 1.2 percent in Sep 2012 and 2.0 percent in Oct 2012. The declines of investment or capital goods were quite sharp with 1.4 percent in Dec 2011, 3.6 percent in Apr 2012, recovery by 2.2 percent in May 2012 but decline of 1.5 percent in Jul 2012, sharp decline of 3.3 percent in Sep 2012 and even sharper decline of 4.1 percent in Oct 2012. Durable goods fell in seven of eleven months from Dec 2011 to Oct 2012 and nondurable goods also fell in multiple months.

Table VE-2, Germany, Production Industries, Industry and Components, Month ∆%

	Dec	Nov	Oct	Sep	Aug	Jul	Jun	May
Production Industries	0.3	-0.2	-2.0	-1.2	-0.4	1.2	-0.2	1.6
Industry	1.2	0.0	-2.0	-2.0	-0.3	1.5	-0.7	1.9
Mfg	1.2	0.0	-2.0	-2.0	-0.3	1.5	-0.8	1.9
Intermediate Goods	-0.7	-1.2	-0.1	-1.9	-1.0	-0.1	0.0	0.7
Capital Goods	1.9	2.0	-4.1	-3.3	0.1	3.9	-1.5	2.2
Durable Goods	1.9	-1.8	-6.4	-1.1	-2.5	2.3	-0.1	3.0
Nondurable Goods	4.2	-2.3	0.0	1.1	0.9	-1.0	-0.6	3.8
Energy	-3.4	-3.2	-1.7	4.9	0.3	-3.7	8.7	-2.5

Seasonally Calendar Adjusted

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

Table VE-3 provides 12-month unadjusted percentage changes of industry and components in Germany. Percentage declines in 12 months are quite sharp in Dec 2012; with exception of growth of 4.4 percent in energy all percentage changes are negative around two-digits. Although there are sharp fluctuations in the data there is suggestion of deceleration that would be expected from much higher earlier rates. The deceleration is quite evident in single-digit percentage changes from Sep 2011 to Dec 2012 relative to high double-digit percentage changes in Jan-Mar 2011. There are multiple negative 12-month percentage changes across many segments. Growth rates in the recovery from the global recession from IVQ2007 to IIQ2009 were initially very vigorous in comparison with the growth rates before the contraction that are shown in the bottom part of Table VE-3.

Table VE-3, Germany, Industry and Components, 12-Month ∆% Unadjusted

	IND	MFG	INTG	CG	DG	NDG	EN
2012
Dec	-10.1	-9.9	-12.7	-8.6	-12.5	-8.1	4.4
Nov	-3.6	-3.6	-4.7	-2.8	-9.0	-2.1	0.6
Oct	3.1	3.2	2.3	3.2	0.0	5.9	7.0
Sep	-8.4	-8.3	-10.4	-7.3	-10.8	-5.7	7.6
Aug	-1.6	-1.5	-3.7	-0.1	-0.7	0.0	1.8
Jul	1.9	2.0	0.4	4.7	-3.5	-0.5	3.3
Jun	3.5	3.5	2.0	5.9	7.0	0.0	8.3
May	-7.0	-7.0	-6.7	-6.9	-11.0	-8.2	0.0
Apr	-1.1	-1.0	-1.2	1.1	-6.0	-6.0	0.8
Mar	-0.5	-0.4	-2.3	2.7	-6.5	-3.3	-6.2
Feb	3.2	3.3	1.4	7.1	-0.7	-2.1	0.2
Jan	5.9	5.7	4.2	9.5	4.3	1.1	-11.9
2011
Dec	1.4	1.4	2.5	1.0	-0.4	0.2	-16.4
Nov	4.9	5.1	3.9	7.9	1.9	0.0	-4.0
Oct	1.1	1.2	0.4	3.6	-2.7	-2.8	-7.2
Sep	6.4	6.5	6.4	8.9	3.6	0.2	-6.3
Aug	12.8	12.6	10.8	20.2	4.5	1.2	-3.5
Jul	8.0	8.1	6.5	13.1	7.7	-0.5	-8.1
Jun	0.9	0.9	1.6	2.0	-10.5	-2.0	-7.4
May	21.4	21.4	17.7	28.3	21.7	13.4	-12.0
Apr	7.4	7.5	5.9	11.1	4.9	2.2	-8.2
Mar	10.7	10.9	10.0	14.9	8.5	2.1	1.2
Feb	16.8	17.0	16.1	22.4	11.0	6.1	-2.2
Jan	16.8	17.1	16.7	23.2	11.2	4.2	-1.8
2010
Dec	17.5	17.6	14.5	26.3	9.1	2.9	4.8
Nov	13.8	13.8	13.1	19.0	7.9	3.6	2.9
Oct	9.9	10.1	10.1	13.9	6.5	0.9	0.2
Sep	9.5	9.3	12.1	10.0	7.9	1.7	-2.4
Aug	17.2	17.2	19.0	20.3	19.5	6.9	-2.1
Jul	9.1	8.8	12.7	8.7	7.2	0.9	-0.2
Jun	16.2	16.1	20.5	16.0	20.5	5.3	-2.5
May	13.3	13.3	20.2	11.6	10.7	1.7	12.8
Apr	14.9	14.8	21.8	15.3	8.5	0.0	9.9
Mar	14.2	14.5	20.4	11.7	11.8	6.4	7.2
Feb	7.1	7.5	10.8	7.0	7.4	-1.2	5.4
Jan	0.6	0.9	6.7	-3.4	-0.4	-3.9	3.3
Dec 2010	17.5	17.6	14.5	26.3	9.1	2.9	4.8
Dec 2009	-3.3	-3.2	3.3	-9.9	-0.1	1.1	3.8
Dec 2008	-7.6	-7.4	-14.4	-5.5	-11.2	3.7	-9.0
Dec 2007	0.1	-0.3	-0.6	2.5	-10.0	-2.6	1.7
Dec 2006	3.1	3.1	5.2	2.3	8.7	-1.0	-5.4
Dec 2005	5.8	5.8	3.5	8.9	3.2	2.2	0.6
Dec 2004	5.2	5.6	7.6	3.4	0.9	5.7	9.6
Dec 2003	5.5	5.3	5.6	6.3	1.6	4.6	0.3
Dec 2002	3.7	3.4	5.3	3.4	-5.9	2.2	-2.6

Note: IND: Industry; MFG: Manufacturing; INTG: Intermediate Goods; CG: Capital Goods; DG: Durable Goods; NDG: Nondurable Goods; EN: Energy

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

Broader perspective since 2002 is provided by Chart VE-1 of the Statistisches Bundesamt Deutschland, Federal Statistical Agency of Germany. The index of production industries not seasonally adjusted rises by more than one third between 2003 and 2008 with sharp fluctuations and then collapses during the global recession in 2008. Recovery has been in a steep upward trajectory that has recovered at the more recent peaks the losses during the contraction. Recovery was reversed by the drop in Dec 2011 with strong rebound into 2012 and another sharp drop in Apr 2012 with recovery in May 2012 and drops in Jun, Aug, Sep, Oct and Dec 2012.

Chart VE-1, Germany, Production Industries, Not Adjusted, 2005=100

Source: Statistiche Bundesamt Deutschland

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

More detail is provided by Chart VE-2 of the Statistiche Bundesamt Deutschland, or Federal Statistical Agency of Germany, with the unadjusted production industries index and trend from 2008 to 2012. There could be some flattening in recent months probably leading into mild downturn as depicted by trend.

Chart VE-2, Germany, Production Index, Production Industries, Not Adjusted Index and Trend, 2005=100

Source: Statistiche Bundesamt Deutschland

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

Table VE-4 provides month and 12-month rates of growth of manufacturing in Germany from Dec 2010 to Dec 2012. There are fluctuations in both monthly rates and in the past 12 months. Recovery is strong in Jan-Mar 2012 with cumulative growth of 1.8 percent at the high annual equivalent rate of 7.4 percent but the drop in Apr 2012 of 2.1 percent results in decline of 0.3 percent in the first four months of 2012 that pulls down the 12-month rate of Apr 2012 to minus 1.0 percent. Growth of 1.9 percent in May 2012 is insufficient to prevent decline of 7.0 percent in 12 months because production was quite strong in the first part of 2011. Manufacturing decreased 0.8 percent in Jun 2011 but the 12-month change was 3.5 percent. In Jul 2012, manufacturing grew 1.5 percent in the month and 2.0 percent in 12 months. Declining of manufacturing by 0.3 percent in Aug 2012 brought down the 12-month percentage change to minus 1.5 percent. In Oct, manufacturing output fell 2.0 percent, pulling down the 12-month rate to minus 8.3 percent. Manufacturing decreased 2.0 percent in Oct but increased 3.2 percent in 12 months. In Nov 2012, manufacturing increased 0.0 percent but fell 3.6 percent in 12 months. Manufacturing increased 1.2 percent in Dec 2012 but fell 9.9 percent in 12 months.

Table VE-4, Germany, Manufacturing Month and 12-Month ∆%

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Dec 2012	-9.9	1.2
Nov	-3.6	0.0
Oct	3.2	-2.0
Sep	-8.3	-2.0
Aug	-1.5	-0.3
Jul	2.0	1.5
Jun	3.5	-0.8
May	-7.0	1.9
Apr	-1.0	-2.1
Mar	-0.4	1.1
Feb	3.3	0.3
Jan	5.7	0.4
Dec 2011	1.4	-1.5
Nov	5.1	-0.2
Oct	1.2	0.4
Sep	6.5	-2.1
Aug	12.6	-0.2
Jul	8.1	3.1
Jun	0.9	-1.1
May	21.4	1.3
Apr	7.5	0.4
Mar	10.9	0.6
Feb	17.0	1.4
Jan	17.1	-0.5
Dec	17.6	1.9

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

Chart VE-3 of the Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, provides the manufacturing index of Germany from 2008 to 2012. Manufacturing was already flattening in 2007 and fell sharply in 2008 to the beginning of 2010. Manufacturing grew sharply in the initial phase of recovery but has flattened in recent months as revealed by the trend that may be turning downward.

Chart VE-3, Germany, Production Index, Manufacturing, Not Adjusted Index and Trend, 2005=100

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

Several tables and charts facilitate analysis of machinery orders in Germany. Table VE-5 reveals strong fluctuations in an evident deceleration of total orders for industry of Germany. The same behavior is observed for total, foreign and domestic orders with decline in 12-month rates from two-digit levels to single digits and negative changes. An important aspect of Germany is that the bulk of orders is domestic or from other European countries while foreign orders have been growing rapidly. Total orders increased 0.8 percent in Dec 2012 with decrease of 1.2 percent in domestic orders and increase of 2.4 percent of foreign orders. Total orders decreased 9.2 percent in the 12 months ending in Dec 2012 with declines of 13.1 percent in domestic orders and 6.3 percent in Dec 2012. As in other countries, data on orders for manufacturing are highly volatile. All 12-month percentage changes from Jan 2012 to Sep 2012 in Table VE-5, with exception of 0.1 percent for Jan 2012 for domestic orders, are negative largely because of the unusual strength of the Germany economy in the beginning of 2011 but more recently because of slowing world economy in 2012. Oct 2012 was stronger with growth of total orders of 3.3 percent but decline of 1.0 percent in Nov 2012.

Table VE-5, Germany, Volume of Orders Received in Manufacturing, Total, Domestic and Foreign, ∆%  

	Total 12 M	Total M	Foreign 12 M	Foreign M	Home 12 M	Home M
2012
Dec	-9.2	0.8	-6.3	2.4	-13.1	-1.2
Nov	-1.0	-1.8	2.1	-4.2	-4.5	1.5
Oct	3.3	3.9	6.4	6.4	-0.3	0.6
Sep	-9.3	-2.2	-6.6	-2.4	-12.5	-1.9
Aug	-4.5	-1.1	-2.2	-0.3	-7.3	-2.1
Jul	-1.9	0.0	-0.6	-0.3	-3.4	0.5
Jun	-5.0	-0.8	-7.1	-0.8	-1.9	-0.9
May	-10.5	0.3	-3.1	1.5	-18.4	-1.3
Apr	-3.4	-1.7	-4.0	-3.0	-2.5	0.1
Mar	-2.0	3.0	-0.9	4.3	-3.3	1.4
Feb	-4.5	0.6	-4.9	2.1	-3.9	-1.0
Jan	-3.1	-2.6	-5.7	-4.6	0.1	-0.2
2011
Dec	-0.2	1.7	-0.8	4.1	0.6	-1.0
Nov	-4.2	-3.1	-7.6	-5.1	0.0	-0.8
Oct	0.6	2.3	2.2	3.5	-1.3	0.8
Sep	2.4	-3.4	1.2	-3.8	3.8	-2.9
Aug	6.8	-1.1	4.3	-0.9	10.1	-1.4
Jul	5.6	-2.9	5.7	-6.7	5.6	2.3
Jun	3.8	2.0	8.0	12.3	-1.6	-9.1
May	22.7	1.8	16.2	-5.0	30.2	10.2
Apr	6.9	1.9	9.9	2.1	3.4	1.5
Mar	9.1	-3.0	11.9	-2.8	5.8	-3.2
Feb	21.5	0.7	24.8	-0.1	17.8	1.6
Jan	22.4	3.4	26.5	3.1	17.6	3.9
2010
Dec	22.2	-2.5	27.3	-3.2	15.8	-1.7
Nov	21.5	5.3	26.8	8.4	15.6	1.6
Oct	14.1	0.7	17.7	-0.4	10.4	2.2
Sep	13.9	-1.8	16.0	-3.4	11.6	0.2
Aug	23.5	3.1	31.9	5.3	14.4	0.3
Jul	14.2	-1.8	21.7	-2.1	6.3	-1.3
Jun	28.5	4.1	32.0	6.0	24.3	1.9
May	24.4	0.1	28.9	0.2	19.9	-0.1
Apr	29.3	2.1	33.0	2.3	25.2	1.9
Mar	29.4	5.6	32.3	6.1	26.4	5.0
Feb	23.4	-0.3	27.6	-0.1	18.6	-0.6
Jan	16.7	3.8	23.6	4.0	9.7	3.4
Dec 2009	9.2	-1.7	10.6	-2.5	7.4	-0.6
Dec 2008	-28.2	-6.7	-31.5	-9.6	-23.7	-3.1
Dec 2007	7.1	-1.0	9.1	-2.1	4.5	0.2
Dec 2006	2.9	0.7	3.4	0.5	2.2	1.0
Dec 2005	4.9	-0.5	10.5	-1.0	-1.5	0.1
Dec 2004	12.7	6.6	12.9	8.4	12.7	4.9
Dec 2003	10.7	2.4	16.4	5.4	5.1	-0.8
Dec 2002	-0.2	-3.4	-0.8	-6.6	0.2	-0.3
Average ∆% 2003-2007	7.6		10.4		4.5
Average ∆% 2003-2011	3.6		5.1		1.9

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally-adjusted; 12 M: Non-adjusted

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

Orders for capital goods of Germany are shown in Table VE-6. Total capital goods orders increased 3.6 percent in Dec 2012 with growth of 2.6 percent of domestic orders and 4.2 percent of foreign orders. The rates of decline in 12 months are quite high: minus 7.0 percent for total, minus 11.9 percent for domestic and minus 4.1 percent for foreign. Total capital goods orders increased 4.2 percent in Oct 2012 with foreign orders increasing 5.1 percent and domestic orders increasing 0.9 percent. There has been evident deceleration from 2010 and early 2011 with growth rates falling from two digit levels to single digits and multiple negative changes. An important aspect of Germany’s economy shown in Tables VE-5 and VE-6 is the success in increasing the competitiveness of its economic activities as shown by rapid growth of orders for industry after the recession of 2001 in the period before the global recession beginning in late 2007. Germany adopted fiscal and labor market reforms to increase productivity.

Table VE-6, Germany, Volume of Orders Received of Capital Goods Industries, Total, Foreign and Domestic, ∆%

	Total 12 M	Total M	Foreign 12 M	Foreign M	Domestic 12 M	Domestic M
2012
Dec	-7.0	3.6	-4.1	4.2	-11.9	2.6
Nov	-0.5	-3.0	2.6	-5.4	-5.3	1.1
Oct	3.2	4.2	5.1	6.2	0.2	0.9
Sep	-7.7	-0.7	-4.5	-0.3	-12.4	-1.4
Aug	-4.8	-2.4	-2.5	-1.1	-8.3	-4.2
Jul	0.0	-0.3	1.0	-0.9	-1.5	0.9
Jun	-7.5	-0.2	-10.9	0.2	-1.1	-0.8
May	-11.1	-0.3	-1.9	0.9	-22.9	-2.0
Apr	-2.3	-2.9	-3.7	-5.2	0.0	0.9
Mar	1.9	5.6	3.8	9.2	-1.1	0.1
Feb	-5.9	1.5	-7.4	1.5	-3.6	1.5
Jan	-3.6	-4.8	-6.0	-5.8	0.6	-3.2
2011
Dec	1.6	3.0	0.5	4.4	3.5	1.0
Nov	-5.9	-4.3	-9.4	-7.3	-0.1	0.6
Oct	3.6	3.7	7.5	6.0	-2.3	0.3
Sep	2.9	-3.6	1.8	-3.8	4.9	-3.3
Aug	6.3	0.0	3.5	0.4	11.1	-0.7
Jul	7.7	-7.6	6.9	-12.6	8.9	1.5
Jun	8.9	4.5	13.6	19.5	1.0	-14.7
May	26.8	3.3	18.0	-6.3	40.3	19.1
Apr	11.3	3.3	14.7	4.2	6.2	1.8
Mar	11.0	-5.5	13.7	-4.9	7.0	-6.3
Feb	29.4	2.7	33.1	1.5	23.9	4.6
Jan	26.4	3.1	32.4	3.2	17.5	2.9
2010
Dec	27.3	-4.8	31.0	-6.1	21.3	-2.7
Nov	30.1	8.9	35.9	13.4	21.5	2.1
Oct	20.6	0.0	23.9	-2.3	16.0	3.9
Sep	18.1	-2.9	20.4	-4.6	14.6	-0.1
Aug	29.3	6.4	42.8	8.6	12.0	2.9
Jul	14.1	-3.9	28.4	-4.8	-2.3	-2.6
Jun	33.5	6.2	41.3	9.8	22.2	0.7
May	25.9	1.5	35.6	0.7	13.6	2.7
Apr	30.1	1.2	40.1	1.7	17.4	0.4
Mar	26.2	7.7	33.8	9.0	16.1	5.9
Feb	20.3	-1.3	30.3	-0.2	8.1	-2.8
Jan	16.9	4.4	29.5	2.4	2.5	7.2
Dec 2009	8.1	-1.4	13.6	-1.5	0.5	-1.2
Dec 2008	-32.2	-7.2	-36.7	-9.9	-24.4	-3.5
Dec 2007	9.6	-0.6	11.6	-2.4	6.3	2.2
Dec 2006	3.6	2.3	3.8	2.9	3.1	1.4
Dec 2005	1.9	-2.2	9.8	-2.5	-8.5	-1.7
Dec 2004	19.4	11.2	18.6	12.2	20.5	9.8
Dec 2003	11.7	2.1	17.2	5.0	5.4	-1.6
Dec 2002	-2.8	-4.3	-3.7	-8.1	-1.8	0.2
Average ∆% 2003-2007	9.1		12.1		4.9
Average ∆% 2003-2011	4.3		5.9		2.2

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally-adjusted; 12 M: Non-adjusted

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

Chart VE-4 of the German Statistisches Bundesamt Deutschland shows the sharp upward trend of total orders in manufacturing before the global recession. There is also an obvious upward trend in the recovery from the recession with Germany’s economy being among the most dynamic in the advanced economies until the slowdown beginning in the final months of 2011 and what could be stationary series from late 2011 into 2012 but risk of decline.

Chart VE-4, Germany, Volume of Total Orders in Manufacturing, Non-Adjusted, 2005=100

Source:  Statistisches Bundesamt Deutschland

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

Chart VE-5 of the German Statistisches Bundesamt Deutschland provides unadjusted volume of total orders in manufacturing and a trend curve. The final segment on the right could be the beginning of declining trend but it may be early to reach conclusions.

Chart VE-5, Germany, Volume of Total Orders in Manufacturing and Trend, Non-Adjusted, 2005=100

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

Twelve-month rates of growth Germany’s exports and imports are shown in Table VE-7. There was sharp decline in the rates in Jun and Jul 2011 to single-digit levels especially for exports. In the 12 months ending in Aug 2011, exports rose 14.6 percent and imports 13.2 percent. In Sep 2011, exports grew 10.5 percent relative to a year earlier and imports grew 11.7 percent. Growth rates in 12 months ending in Oct 2011 fell significantly to 3.6 percent for exports and 9.2 percent for imports. Lower prices may explain part of the decline in nominal values. Exports fell 3.4 percent in 12 months ending in Sep 2012, rebounding to growth of 10.5 percent in Oct 2012 and flat and minus 0.1 percent in Nov 2012 but sharp decline of 6.9 percent in Dec 2012. Imports decreased 3.6 percent in the 12 months ending in Sep 2012, rebounding to growth of 6.0 percent in Oct 2012 and decreasing 1.1 percent in Nov 2012 and 7.3 percent in Dec 2012. Growth was much stronger in the recovery during 2010 and 2011 from the fall from 2007 to 2009. Germany’s trade grew at high rates in 2006 and 2005.

Table VE-7, Germany, Exports and Imports NSA Euro Billions and 12-Month ∆%

	Exports EURO Billions	12- Month ∆%	Imports EURO Billions	12-Month ∆%
Dec 2012	79.0	-6.9	67.0	-7.3
Nov	94.0	-0.1	77.1	-1.1
Oct	98.4	10.5	82.7	6.0
Sep	91.7	-3.4	74.8	-3.6
Aug	90.2	5.7	73.9	0.5
Jul	93.5	9.2	76.6	2.1
Jun	94.7	7.5	76.8	2.1
May	92.7	0.4	77.2	-0.5
Apr	87.1	3.1	72.7	-1.3
Mar	98.8	0.1	81.4	2.0
Feb	91.2	7.9	76.3	5.4
Jan	86.0	8.4	72.8	4.9
Dec 2011	84.8	4.7	72.3	5.6
Nov	94.1	7.4	78.0	5.8
Oct	89.1	3.6	78.1	9.2
Sep	95.0	10.5	77.7	11.7
Aug	85.3	14.6	73.5	13.2
Jul	85.6	5.2	75.0	9.7
Jun	88.1	3.3	75.2	5.6
May	92.4	21.2	77.5	17.4
Apr	84.5	12.4	73.7	18.5
Mar	98.7	15.3	79.8	15.1
Feb	84.5	20.8	72.4	27.6
Jan	79.3	25.2	69.4	26.0
Dec 2010	81.0	20.0	68.4	24.3
Nov	87.6	21.2	73.7	30.9
Oct	86.0	18.7	71.5	19.2
Sep	86.0	21.2	69.5	17.0
Aug	74.4	23.8	64.9	27.1
Jul	81.4	15.3	68.4	24.4
Jun	85.3	27.5	71.2	33.9
May	76.2	25.6	66.1	31.2
Apr	75.2	16.7	62.2	14.5
Mar	85.6	22.0	69.3	18.0
Feb	70.0	9.7	56.8	3.2
Jan	63.4	-0.3	55.1	-1.9
Dec 2009	67.5	1.2	55.0	-7.3
Dec 2008	66.7	-8.6	59.4	-5.0
Dec 2007	73.0	-0.6	62.5	-0.1
Dec 2006	73.4	10.2	62.6	8.5
Dec 2005	66.6	11.5	57.7	18.1
Dec 2004	59.7	9.2	48.9	10.8
Dec 2003	54.7	7.6	44.1	3.9
Dec 2002	50.8	5.5	42.5	6.4
Dec 2001	48.2	-3.7	39.9	-17.5
Dec 2000	50.0		48.4

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

Chart VE-6 of the Statistisches Bundesamt Deutschland shows exports and trend of German exports. Growth has been with fluctuations around a strong upward trend that is milder than earlier in the recovery but could be flattening.

Chart VE-6, Germany, Exports Original Value and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Chart VE-7 of the Statistisches Bundesamt Deutschland provides German imports and trend. Imports also fell sharply and have been recovering with fluctuations around a strong upward trend that could be flattening.

Chart VE-7, Germany, Imports Original Value and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Chart VE-8 of the Statistisches Bundesamt Deutschland shows the trade balance of Germany since 2008. There was sharp decline during the global recession and fluctuations around a mild upward trend during the recovery with stabilization followed by stronger trend in recent months and flattening recently.

Chart VE-8, Germany, Trade Balance Original and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Table VE-8 provides monthly rates of growth of exports and imports of Germany. Exports decreased 2.0 percent in Sep 2012 after increasing 1.8 percent in Aug 2012, remaining unchanged percent in Oct 2012, decreasing 2.2 percent in Nov 2012 and increasing 0.3 percent in Dec 2012. Imports decreased 0.8 percent in Sep 2012 after being flat in Aug 2012, growing 2.8 percent in Oct 2012 and declining 3.8 percent in Nov 2012 and 1.3 percent in Dec 2012. Export growth and import growth were vigorous in Jan-Mar 2011 when Germany’s economy outperformed most advanced economies but less dynamic and consistently in following months as world trade weakens.

Table VE-8, Germany, Exports and Imports Month ∆% Calendar and Seasonally Adjusted 

	Exports	Imports
Dec 2012	0.3	-1.3
Nov	-2.2	-3.8
Oct	0.0	2.8
Sep	-2.0	-0.8
Aug	1.8	0.0
Jul	0.0	0.2
Jun	-0.6	-2.0
May	3.4	5.0
Apr	-1.1	-4.0
Mar	0.4	0.6
Feb	1.4	2.9
Jan	1.9	0.2
Dec 2011	-2.9	-1.8
Nov	2.8	-0.2
Oct	-3.4	-0.3
Sep	1.8	0.1
Aug	2.7	-0.1
Jul	-1.4	0.3
Jun	-0.1	0.1
May	1.6	1.1
Apr	-3.1	-0.3
Mar	5.2	2.1
Feb	1.2	1.7
Jan	0.4	3.3
Dec 2010	-0.2	-1.9

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

There is extremely important information in Table VE-9 for the current sovereign risk crisis in the euro zone. Table VE-9 provides the structure of regional and country relations of Germany’s exports and imports with newly available data for Dec 2012. German exports to other European Union (EU) members are 55.9 percent of total exports in Dec 2012 and 57.1 percent in Jan-Dec 2012. Exports to the euro area are 37.1 percent in Dec and 37.5 percent in Jan-Dec. Exports to third countries are 44.1 percent of the total in Dec and 43.0 percent in Jan-Dec. There is similar distribution for imports. Exports to non-euro countries are decreasing 4.5 percent in Dec 2012 and increasing 3.3 percent in Jan-Dec 2012 while exports to the euro area are decreasing 7.3 percent in Dec and decreasing 2.1 percent in Jan-Dec 2012. Exports to third countries, accounting for 44.1 percent of the total in Dec 2012, are decreasing 7.5 percent in Dec and increasing 8.8 percent in Jan-Dec, accounting for 43.0 percent of the cumulative total in Jan-Dec 2012. Price competitiveness through devaluation could improve export performance and growth. Economic performance in Germany is closely related to its high competitiveness in world markets. Weakness in the euro zone and the European Union in general could affect the German economy. This may be the major reason for choosing the “fiscal abuse” of the European Central Bank considered by Buiter (2011Oct31) over the breakdown of the euro zone. There is a tough analytical, empirical and forecasting doubt of growth and trade in the euro zone and the world with or without maintenance of the European Monetary Union (EMU) or euro zone. Germany could benefit from depreciation of the euro because of high share in its exports to countries not in the euro zone but breakdown of the euro zone raises doubts on the region’s economic growth that could affect German exports to other member states.

Table VE-9, Germany, Structure of Exports and Imports by Region, € Billions and ∆%

	Dec 2012  € Billions	Dec 12-Month ∆%	Jan–Dec 2012 € Billions	Jan-Dec 2012/ Jan-Dec 2011 ∆%
Total Exports	79.0	-6.9	1,097.4	3.4
A. EU Members	44.2 % 55.9	-6.4	625.7 % 57.0	-0.3
Euro Area	29.3 % 37.1	-7.3	411.9 % 37.5	-2.1
Non-euro Area	14.9 % 18.9	-4.5	213.8 % 19.5	3.3
B. Third Countries	34.8 % 44.1	-7.5	471.7 % 43.0	8.8
Total Imports	67.0	-7.3	909.2	0.7
C. EU Members	42.6 % 63.6	-7.1	577.1 % 63.5	0.9
Euro Area	29.9 % 44.6	-6.8	402.4 % 44.3	0.7
Non-euro Area	12.8 % 19.1	-7.9	172.9 % 19.0	1.4
D. Third Countries	24.4 % 36.4	-7.6	332.1 % 36.5	0.4

Notes: Total Exports = A+B; Total Imports = C+D

Source:

Statistisches Bundesamt Deutschland https://www.destatis.de/EN/PressServices/Press/pr/2013/02/PE13_050_51.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 IIIQ1949 to IIIQ2012 is quite high at 3.2 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 1.9 percent in the 1990s and 1.7 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using third 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*	3.2
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

*Third Quarter on Third Quarter

Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20121228

The Markit Flash France Composite Output Index fell from 44.6 in Dec to 42.7 in Jan for the lowest reading in 46 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10584). Jack Kennedy, Senior Economist at Markit and author of the report, finds that the data suggest the sharpest decline of overall output in about four years with increasing reduction of employment (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10584).

The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, fell from 44.6 in Dec to 42.7 in Jan, which is at a low in 46 months since Mar 2009, indicating significant contraction of private sector activity for an eleventh consecutive month at faster rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10682). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds generalized deteriorating conditions in the French private sector (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10682). The Markit France Services Activity index decreased from 45.2 in Dec to 43.6 in Jan, which is the weakest reading in 46 months since Mar 2009 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10682). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 42.9 in Jan from 44.6 in Dec, remaining deeply below the neutral level of 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10631). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds continuing weakness in manufacturing with new orders declining at the sharpest pace in about four years that suggest further sharp declines in output (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10631). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Dec month ∆% 0.3 12 months ∆%: 1.3 1/13/13
PPI	Dec month ∆%: -0.3 Dec 12 months ∆%: 1.7 Blog 2/3/13
GDP Growth	IIIQ2012/IIQ2012 ∆%: 0.1 IIIQ2012/IIIQ2011 ∆%: 0.0 Blog 12/30/12
Industrial Production	Nov ∆%: Manufacturing 0.2 12-Month ∆%: Manufacturing minus 4.6 Blog 1/13/13
Consumer Spending	Manufactured Goods Dec ∆%: 0.3 Dec 12-Month Manufactured Goods ∆%: -0.6 Blog 2/3/13
Employment	IIIQ2012 Unemployed 2.826 million Unemployment Rate: 9.9% Employment Rate: 63.9% Blog 12/16/12
Trade Balance	Dec Exports ∆%: month 3.1, 12 months 4.7 Dec Imports ∆%: month 5.4, 12 months 3.8 Blog 2/10/13
Confidence Indicators	Historical averages 100 Jan Mfg Business Climate 86 Blog 1/27/13

Links to blog comments in Table FR:

2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/13/13 http://cmpassocregulationblog.blogspot.com/2013/01/peaking-valuation-of-risk-financial.html

12/30/12 http://cmpassocregulationblog.blogspot.com/2012/12/united-states-commercial-banks-assets.html

12/16/12 http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html

France has been running a trade deficit fluctuating around €6,000 million, as shown in Table VF-1. Exports increased 3.1 percent in Dec 2012 while imports increased 5.4 percent, resulting in increase of the trade deficit from revised €4289 million in Nov 2012 to €5349 million in Dec 2012.

Table VF-1, France, Exports, Imports and Trade Balance, € Millions 

	Exports	Imports	Trade Balance
Dec	37,788	43,137	-5,349
Nov	36,651	40,940	-4,289
Oct	37,551	42,509	-4,958
Sep	37,346	42,564	-5,218
Aug	38,160	44,086	-5,926
Jul	36,763	41,482	-4,719
Jun	36,288	42,814	-6,526
May	37,438	43,131	-5,693
Apr	36,552	42,765	-6,213
Mar	36,168	41,912	-5,744
Feb	36,873	43,379	-6,506
Jan	36,544	42,329	-5,785
Dec 2011	36,083	41,556	-5,473
Nov	37,586	42,017	-4,431
Oct	35,886	42,089	-6,203
Sep	35,660	42,575	-6,915
Aug	36,946	42,154	-5,208
Jul	35,286	41,891	-6,605
Jun	35,265	40,915	-5,650
May	34,885	41,762	-6,877
Apr	34,676	41,691	-7,015
Mar	35,266	41,679	-6,413
Feb	34,712	41,336	-6,624
Jan	34,394	41,159	-6,765
Dec 2010	33,883	39,525	-5,642

Source: France, Direction générale des douanes et droits indirects http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

Monthly and 12-month rates of growth of exports and imports of France are provided in Table VF-2. Exports increased 3.1 percent in Dec 2012 and increased 4.7 percent in the 12 months ending in Dec. Imports increased 5.4 percent in Dec and increased 3.8 percent in 12 months. Growth of exports and imports has fluctuated in 2011 and 2012 as a result of price surges of commodities and raw materials.

Table VF-2, France, Exports and Imports, Month and 12-Month ∆%

	Exports Month ∆%	Exports 12-Month ∆%	Imports Month ∆%	Imports 12-Month ∆%
Dec 2012	3.1	4.7	5.4	3.8
Nov	-2.4	-2.5	-3.7	-2.6
Oct	0.5	4.6	-0.1	1.0
Sep	-2.1	4.7	-3.5	0.0
Aug	3.8	3.3	6.3	4.6
Jul	1.3	4.2	-3.1	-1.0
Jun	-3.1	2.9	-0.7	4.6
May	2.4	7.3	0.9	3.3
Apr	1.1	5.4	2.0	2.6
Mar	-1.9	2.6	-3.4	0.6
Feb	0.9	6.2	2.5	4.9
Jan	1.3	6.3	1.9	2.8
Dec 2011		6.5		5.1
Dec 2011		6.5		5.1
Dec 2010		13.6		14.8
Dec 2009		-9.8		-2.0
Dec 2008		-6.7		-10.8
Dec 2007		6.0		8.2
Dec 2006		6.3		6.6
Dec 2005		11.4		15.1
Dec 2004		-3.7		5.8
Dec 2003		7.1		1.6

Source: France, Direction générale des douanes et droits indirects

http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

Annual data for France’s exports, imports and trade balance are provided in Table VF-3. France’s trade balance deteriorated sharply from 2007 to 2011 with the deficit increasing from €42,494 million in 2007 to €74,021 million in 2011. Annual growth rates of exports have not been sufficiently high to compensate for growth of imports driven in part by commodity price increases. In 2012, the trade deficit declined to €67,157 million with growth exports of 3.2 percent and of imports of 1.3 percent.

Table VF-3, France, Exports, Imports and Balance Year € Millions and ∆%

	Exports € Millions	∆%	Imports € Millions	∆%	Balance € Millions
Dec 2012 12 Months	441,657	3.2	508,814	1.3	-67,157
Year
2011	428,054	8.4	502,075	12.3	-74,021
2010	394,766	13.9	447,070	14.1	-52,304
2009	346,481	-17.0	391,872	-17.3	-45,391
2008	417,636	2.7	473,853	5.5	-56,217
2007	406,487	3.0	448,981	5.8	-42,494
2006	394,621	9.5	424,549	10.4	-29,928
2005	360,376	4.4	384,588	9.6	-24,212
2004	345,256	5.4	350,996	7.0	-5,740
2003	327,653		327,884		-231

Source: France, Direction générale des douanes et droits indirects

http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

VG Italy. Table VG-IT provides percentage changes in a quarter relative to the same quarter of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 0.5 percent in IQ2012 to minus 2.4 percent in IIIQ2012. The aggregate demand components of consumption and gross fixed capital formation (GFCF) have been declining at faster rates.

Table VG-IT, Italy, GDP and Expenditure Components, Chained Volume Measures, Quarter ∆% on Same Quarter Year Earlier

	GDP	Imports	Consumption	GFCF	Exports
2012
IIIQ	-2.4	-7.8	-3.7	-9.8	1.6
IIQ	-2.3	-7.6	-3.5	-9.6	2.5
IQ	-1.3	-9.0	-2.8	-7.9	1.9
2011
IVQ	-0.5	-6.8	-1.6	-3.7	3.3
IIIQ	0.4	0.3	-0.5	-2.2	5.9
IIQ	1.0	3.4	0.6	-0.2	7.1
IQ	1.3	8.9	0.9	0.7	10.9
2010
IVQ	2.2	15.4	0.8	2.3	13.3
IIIQ	1.9	13.0	1.0	4.3	12.2
IIQ	1.9	13.2	0.5	2.3	12.0
IQ	1.1	7.3	0.5	-0.8	7.3
2009
IVQ	-3.5	-6.4	-0.1	-7.5	-9.3
IIIQ	-5.0	-12.1	-0.9	-12.6	-16.3
IIQ	-6.6	-17.8	-1.3	-13.7	-21.4
IQ	-6.9	-17.2	-1.6	-12.7	-22.9
2008
IVQ	-3.0	-8.2	-0.9	-8.3	-10.3
IIIQ	-1.9	-5.0	-0.8	-4.5	-3.9
IIQ	-0.2	-0.1	-0.3	-1.5	0.4
IQ	0.5	1.7	0.1	-1.0	2.9

GFCF: Gross Fixed Capital Formation

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/77009

The Markit/ADACI Business Activity Index decreased from 45.6 in Dec to 43.9 in Jan, indicating significant contraction of output of Italy’s for 20 consecutive months of decline (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10681). Phil Smith, economist at Markit and author of the Italy Services PMI^®, finds difficult conditions of the private sector with good signs in slower rate of decline of new orders and improvement in future business expectations (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10681). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 46.7 in Dec to 47.8 in Jan for 18 consecutive months of contraction of Italy’s manufacturing but the highest reading in ten months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10635). An encouraging sign was reduction of the pace of contraction of output to the lowest in the current period of contraction since Oct 2011. Phil Smith, economist at Markit and author of the Italian Manufacturing PMI^®, finds a more encouraging reading with softer declines in output and growth of new export orders but total new orders restrained by weak domestic demand (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10635). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Jan month ∆%: 0.2 Jan 12-month ∆%: 2.2 Blog 2/10/13
Producer Price Index	Dec month ∆%: -0.2 Dec 12-month ∆%: 2.0 Blog 2/3/13
GDP Growth	IIIQ2012/IIQ2012 SA ∆%: minus 0.2 IIIQ2012/IIIQ2011 NSA ∆%: minus 2.4 Blog 12/16/12
Labor Report	Nov 2012 Participation rate 63.9% Employment ratio 56.8% Unemployment rate 11.1% Blog 1/13/13
Industrial Production	Dec month ∆%: minus 0.4 12 months ∆%: minus 6.6 Blog 2/10/13
Retail Sales	Nov month ∆%: -0.4 Nov 12-month ∆%: -3.1 Blog 1/27/13
Business Confidence	Mfg Jan 88.2, Sep 88.4 Construction Jan 80.3, Sep 85.8 Blog 2/3/13
Trade Balance	Balance Nov SA €2261 million versus Oct €1442 Exports Nov month SA ∆%: 0.4; Imports Nov month ∆%: minus 2.2 Exports 12 months Nov NSA ∆%: 3.6 Imports 12 months NSA ∆%: -8.2 Blog 1/20/13

Links to blog comments in Table IT:

2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

1/13/13 http://cmpassocregulationblog.blogspot.com/2013/01/peaking-valuation-of-risk-financial.html

12/16/12 http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html

Italy’s industrial production increased 0.4 percent in Dec 2012, reducing the decline of the 12-month rate of growth to minus 6.6 percent from 7.7 percent in Nov 2012 with monthly decline of 1.1 percent, as shown in Table VG-1. In the quarter Sep-Nov 2012, industrial production fell cumulative 3.4 percent, at the annual equivalent rate of 12.8 percent. Industrial production recovered with growth of 0.7 percent in May 2012 but growth in the 12 months ending in May 2012 was minus 6.7 percent. Industrial production fell 7.9 percent in the 12 months ending in Jun 2012. There have been negative changes with oscillations in monthly industrial production. Industrial production fell 18.8 percent in 2009 after falling 3.2 percent in 2008.

Table VG-1, Italy, Industrial Production ∆% 

	Month ∆% SA	12-Month ∆% Calendar Adjusted
Dec 2012	0.4	-6.6
Nov	-1.1	-7.7
Oct	-1.1	-6.1
Sep	-1.2	-5.0
Aug	1.1	-5.2
Jul	-0.2	-7.1
Jun	-1.2	-7.9
May	0.7	-6.7
Apr	-1.9	-9.3
Mar	0.4	-5.5
Feb	-1.1	-7.0
Jan	-2.0	-4.6
Dec 2011	0.1	-1.8
Nov	0.3	-4.1
Oct	-0.5	-3.8
Sep	-2.9	-2.6
Aug	1.2	4.8
Jul	-1.0	-1.1
Jun	-0.2	0.4
May	-1.4	2.1
Apr	1.3	3.9
Mar	-0.3	3.2
Feb	1.3	2.5
Jan	-0.8	0.2
Dec 2010	-0.6	6.8
Nov	0.8	5.5
Oct	-0.1	4.1
Sep	0.9	5.8
Aug	-0.8	11.4
Jul	0.6	7.5
Jun	1.0	9.9
May	0.9	8.9
Apr	0.9	9.5
Mar	-0.2	8.5
Feb	-0.3	4.5
Jan	4.0	0.6
Dec 2009	-1.3	-6.6
Year		Not CA
2012		-6.2
2011		-0.7
2010		7.0
2009		-18.8
2008		-3.2

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/81576

Chart VG-2 of Italy’s Istituto Nazionale di Statistica provides 12-month percentage changes of Italy’s industrial production. There is worsening trend after Aug 2011, sharply deteriorating after Dec 2011 into 2012 with marginal recovery in May 2012 and further drops in Jun-Jul 2012 followed by marginal improvement in Aug and decline in Sep-Nov 2012 deeper in negative territory with marginal improvement in Dec 2012.

Chart VG-1, Italy, Industrial Production, 12-Month Percentage Changes

Source: Istituto Nazionale di Statistica

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

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 4.0 percent in 2009 after dropping 1.0 percent in 2008. Recovery of 1.8 percent in 2010 is relatively low compared to annual growth rates in 2007 and earlier years. Growth was only 0.9 percent in 2011 and 0.0 percent in 2012. The bottom part of Table VH-UK provides average growth rates of UK GDP since 1948. The UK economy grew at 2.6 percent on average between 1948 and 2012, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.0 percent. Growth in the current cyclical expansion has been only at 0.9 percent as advanced economies struggle with weak internal demand and world trade.

Table VH-UK, UK, Gross Domestic Product, ∆%

	∆% on Prior Year
1998	3.5
1999	3.2
2000	4.2
2001	2.9
2002	2.4
2003	3.8
2004	2.9
2005	2.8
2006	2.6
2007	3.6
2008	-1.0
2009	-4.0
2010	1.8
2011	0.9
2012	0.0
Average ∆% per Year
1948-2012	2.6
1948-1959	2.9
1960-1969	3.3
1970-1979	2.5
1980-1989	3.2
1990-1999	2.6
2000-2012	1.5
2000-2007	3.0
2009-2012	0.9

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2012/index.html

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 48.9 in Dec to 51.5 in Jan, indicating moderate increase in activity in the best reading since Sep 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10686). Chris Williamson, Chief Economist at Markit, finds that new growth in services reduces the possibility of a third recession in the United Kingdom (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10686). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) decreased marginally from 51.2 in Dec to 50.8 in Jan with the second reading above 50 after seven consecutive months of contraction (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10657). Rob Dobson, Senior Economist at Markit and author of the Markit/CIPS Manufacturing PMI^®, finds that output reached a 16 month high that could support the economy from falling in recession but manufacturing is only about 10 percent of the economy (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10657). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Dec month ∆%: 0.5 Dec 12-month ∆%: 2.7 Blog 1/20/13
Output/Input Prices	Output Prices: Dec 12-month NSA ∆%: 2.2; excluding food, petroleum ∆%: 1.5 Input Prices: Dec 12-month NSA ∆%: 0.3 Excluding ∆%: 0.0 Blog 1/20/13
GDP Growth	IVQ2012 prior quarter ∆% -0.3; year earlier same quarter ∆%: 0.0 Blog 1/27/13
Industrial Production	Dec 2012/Dec 2011 ∆%: Production Industries minus 1.7; Manufacturing minus 1.5 Blog 2/10/13
Retail Sales	Dec month ∆%: -0.1 Nov 12-month ∆%: 0.3 Blog 1/20/13
Labor Market	Sep-Nov Unemployment Rate: 7.7%; Claimant Count 4.8%; Earnings Growth 1.5% Blog 1/27/13
Trade Balance	Balance Dec minus ₤3201 million Exports Dec ∆%: 1.9; Oct-Dec ∆%: -3.9 Imports Dec ∆%: 0.9 Oct-Dec ∆%: -0.4 Blog 2/10/13

Links to blog comments in Table UK:

1/27/13 http://cmpassocregulationblog.blogspot.com/2013/01/united-states-commercial-banks-assets.html

1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html

The UK Office for National Statistics provides the output of production industries with revisions. Table VH-1 incorporates the revisions released in Dec, 2011(http://www.ons.gov.uk/ons/rel/iop/index-of-production/november-2012/index.html) and the latest available data for Dec 2012. Manufacturing accounts for 67.0 percent of the production industries of the UK and decreased 1.5 percent in the 12 months ending in Dec 2012. Capital goods industries grew 4.2 percent in the 12 months ending in Dec 2012 and had been growing at very high rates during the current cyclical recovery but falling from the unsustainable high of 11.6 percent in the 12 months ending in Feb 2011. Mining and quarrying fell 9.3 percent in the 12 months ending in Dec 2012. The 12-month rates of growth of the entire index of production industries registered declines for all 12 months from Apr 2011 to Dec 2012. With exception of most months for capital goods and Sep to Dec 2012 for consumer durables, 12-month percentage changes of all segments are negative from Jan to Dec 2012. Energy and mining have been drivers of decline. The lower part of Table VH-1 provides rates of change of yearly values. Manufacturing output fell 9.7 percent in 2009 after falling 2.5 percent in 2008 but grew at 3.8 percent in the initial phase of the recovery in 2010 and 2.0 percent in 2011.

Table VH-1, UK, Output of the Production Industries, Chained Volume Indices of Gross Value Added, 12-Month ∆%

	PROD IND	MNG	MFG	ENGY	CON DUR	CON NDUR	CAP
2012
Dec	-1.7	-9.3	-1.5	-4.3	1.3	-6.0	4.2
Nov	-2.4	-12.8	-2.0	-6.2	0.0	-5.6	1.9
Oct	-3.0	-20.5	-1.9	-8.8	4.1	-5.1	2.1
Sep	-3.2	-16.3	-1.6	-10.3	1.0	-2.5	1.5
Aug	-1.1	1.6	-1.8	-0.5	-3.5	-5.0	2.9
Jul	-0.9	-1.1	-1.0	-2.1	-3.4	-4.8	5.3
Jun	-4.0	-5.0	-4.2	-4.6	-9.9	-6.2	1.0
May	-1.5	-7.5	-1.4	-3.2	-4.9	-5.4	3.2
Apr	-2.2	-13.2	-1.8	-5.5	-3.6	-5.7	3.0
Mar	-2.7	-8.5	-1.5	-8.3	-7.6	-2.0	0.9
Feb	-2.3	-7.9	-2.2	-3.8	-7.6	-1.1	-0.9
Jan	-3.7	-19.5	-0.5	-14.1	-6.5	0.6	3.1
2011
Dec	-2.6	-14.5	0.7	-14.4	-4.2	-0.6	6.2
Nov	-3.0	-13.8	-1.2	-11.6	0.2	-1.4	4.3
Oct	-2.4	-13.2	-0.6	-11.3	-1.7	-2.0	4.3
Sep	-1.7	-17.4	0.6	-11.4	-1.0	-1.5	6.4
Aug	-1.4	-16.4	0.6	-10.1	-0.6	0.4	4.0
Jul	-0.9	-16.0	1.9	-10.3	2.6	3.1	3.9
Jun	-0.2	-15.8	2.9	-9.7	7.8	1.3	7.3
May	-1.0	-20.7	3.3	-13.1	1.9	3.2	6.0
Apr	-0.9	-14.7	2.6	-11.2	1.2	4.0	5.3
Mar	0.1	-16.1	3.5	-10.4	2.5	0.4	9.9
Feb	2.0	-11.6	5.0	-7.2	1.0	0.9	11.6
Jan	3.5	-3.9	5.6	-3.4	3.7	-0.6	10.2
2012/2011	-2.4	-10.1	-1.8	-6.0	-3.5	-4.1	2.3
2011/ 2010	-0.7	-14.5	2.0	-10.3	1.1	0.6	6.5
2010/ 2009	2.1	-4.3	3.8	-3.0	-4.1	-0.5	10.2
2009/ 2008	-9.1	-9.0	-9.7	-6.6	-6.7	-0.8	-10.2
2008/ 2007	-2.8	-6.2	-2.5	-3.1	-5.6	-1.6	-3.0
2007/2006	0.5	-2.7	0.9	-1.5	1.1	-1.6	2.6

Notes: PROD IND: Production Industries; MNG: Mining; MFG: Manufacturing; ENGY: Energy; CON DUR: Consumer Durables; CONS NDUR: Consumer Nondurables; CAP: Capital Good

Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/iop/index-of-production/december-2012/index.html

Percentage changes in the production industries and major components in a month relative to the prior month are shown in Table VH-2. The production industries were relatively weak in Sep 2012 after strong performance in Jul 2012 and weakness in Aug 2012 with growth in Dec 2012. The overall index of production industries increased 1.1 percent in Dec 2012 with improvement in mining increasing 8.0 percent in Nov 2012 and 1.2 percent in Dec 2012. Manufacturing fell 1.3 percent in Oct and fell 0.3 percent in Nov but rebounded 1.6 percent in Dec 2012 and capital goods increased 1.0 percent in Nov and 2.9 percent in Dec 2012. There was sharp recovery in Jul 2012 with high rates for all components such as 2.9 percent for the production index, 3.0 percent for manufacturing and 3.2 percent for capital goods.

Table VH-2, UK, Output of the Production Industries, Chained Volume Indices of Gross Value Added, Latest Month on Previous Month ∆%

		PROD IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENGY
2010	Dec	0.1	-1.9	-0.8	3.6	0.4	-1.2	1.9
2011	Jan	0.5	4.3	0.8	3.3	-1.4	1.8	-1.6
	Feb	-1.2	-9.2	0.3	-1.0	0.7	1.9	-6.1
	Mar	0.1	-1.4	0.3	1.0	0.9	1.1	-0.6
	Apr	-1.2	0.5	-0.9	-2.1	0.8	-3.0	-1.9
	May	0.5	-5.2	1.1	0.9	0.1	2.3	-1.2
	Jun	0.2	-0.1	-0.1	1.9	-0.3	0.6	0.5
	Jul	-0.2	0.8	-0.3	-2.3	0.2	-1.0	-0.1
	Aug	-0.3	-0.5	-0.5	-1.9	-0.2	-0.1	-0.3
	Sep	-0.1	-0.6	-0.1	-3.1	-2.1	1.9	-0.6
	Oct	-1.1	0.8	-0.9	-1.1	-0.1	-1.2	-1.6
	Nov	-0.4	-1.6	-0.3	1.3	-0.4	1.2	-0.4
	Dec	0.5	-2.7	1.1	-0.9	1.2	0.6	-1.4
2012	Jan	-0.5	-1.8	-0.4	0.8	-0.2	-1.1	-1.2
	Feb	0.2	3.9	-1.3	-2.2	-0.9	-2.1	5.2
	Mar	-0.4	-2.0	1.0	1.0	-0.1	2.9	-5.3
	Apr	-0.7	-4.6	-1.1	2.0	-3.0	-1.0	1.1
	May	1.2	1.0	1.5	-0.4	0.5	2.5	1.2
	Jun	-2.3	2.6	-3.0	-3.4	-1.1	-1.6	-0.9
	Jul	2.9	4.8	3.0	4.7	1.8	3.2	2.5
	Aug	-0.5	2.4	-1.3	-2.0	-0.4	-2.3	1.4
	Sep	-2.1	-18.2	0.1	1.4	0.5	0.5	-10.4
	Oct	-0.8	-4.1	-1.3	2.0	-2.8	-0.6	-
	Nov	0.2	8.0	-0.3	-2.7	-1.0	1.0	2.5
	Dec	1.1	1.2	1.6	0.3	0.8	2.9	0.7

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/december-2012/index.html

Weights of components of the production index and contributions by components to the monthly and 12-month percentage changes of volume are provided by the UK Office for National Statistics and shown in Table VH-3. The 12-month rate of output of the production industries of minus 1.7 percent was driven by negative contribution of 1.10 percentage points of mining with the subcomponent of oil and gas deducting 1.05 percentage points. Manufacturing deducted 1.07 percentage points. The contribution of manufacturing is strong because of its share of 67.0 percent in the production index with growth of minus 1.5 percent in 12 months. The contributions do not add exactly because of rounding. Manufacturing increased 1.6 percent in Dec 2012, adding 1.11 percentage points. Increase of mining by 1.2 percent in Dec added 0.13 percentage points.

Table VH-3, UK, Weights of Components, Volume 12-Month and Month ∆% and Percentage Point Contributions of Production Industries by Components

	Weight %	Volume 12-Month ∆% Ending in Dec 2012	% Point Contrib.	Volume Month ∆% Dec 2012	% Point Contrib.
PROD IND	100.0	-1.7	-1.7	1.1	1.1
MNG	15.4	-9.3	-1.10	1.2	0.13
MNG 06	12.6	-11.9	-1.05	3.2	0.25
MFG	67.0	-1.5	-1.07	1.6	1.11
ELEC	9.6	2.5	0.23	-0.9	-0.09
WATER & SEW	8.0	2.4	0.20	-0.2	-0.02

Notes: Contrib: Contribution; PROD IND: Index of Production; MNG: Mining and Quarrying (of which 14.4 percent of the total weight in oil and gas extraction); MNG 06: Subdivision of Mining including oil and gas extraction; MFG: Manufacturing; ELEC: Electricity, gas, steam and air conditioning; WATER & SEW: water supply, sewerage and waste management

Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/iop/index-of-production/december-2012/index.html

Table VH-4 provides the breakdown of manufacturing 12-month and monthly growth and percentage contributions. Several negative contributions to 12-month growth were by: wood and paper products (CC) deducted 0.56 percentage points with growth in 12 months of minus 11.0 percent; chemical and chemicals products (CE) deducted 0.11 percentage points with growth in 12 months of minus 1.8 percent; rubber and plastic products (CG) deducted 0.16 percentage points with growth in 12 months of minus 3.5 percent; basic pharmaceutical products and preparations (CF), deducting 0.31 percentage points with 12-month growth of minus 6.4 percent; manufacture of food products, beverages and tobacco (CA) deducted 0.54 percentage points with 12-month growth of minus 4.1 percent. The highest positive contribution was 0.52 percentage points by machinery and equipment (CK) with growth of 8.2 percent followed by 0.28 percentage points contributed by computer, electronic and optimal product (CI) with growth of 7.2 percent and 0.25 percentage points by transport equipment (CL), growing 3.0 percent in 12 months. Electrical products (CJ) added 0.16 percentage points with growth of 7.4 percent in 12 months.

Table VH-4, UK, Growth Rates of Manufacturing and Percentage Point Contributions to the Index of Production

Sub-sector	% of production	Month on same month a year ago growth (%) Dec 12	Contribution to production (% points)	Month on prior month growth (%)   Dec 12	Contribution to production (% points)
CA	11.9	-4.1	-0.54	1.5	0.19
CB	2.0	-7.6	-0.16	-1.2	-0.02
CC	5.5	-11.0	-0.56	-1.4	-0.07
CD	0.8	-11.7	-0.09	7.3	0.05
CE	6.1	-1.8	-0.11	5.6	0.33
CF	6.1	-6.4	-0.31	-0.8	-0.04
CG	4.7	-3.5	-0.16	-1.2	-0.06
CH	8.6	0.0	0.00	0.2	0.02
CI	4.3	7.2	0.28	1.6	0.06
CJ	2.1	7.4	0.16	4.3	0.10
CK	4.8	8.2	0.52	8.0	0.52
CL	5.7	3.0	0.25	0.0	0.00
CM	4.5	-7.4	-0.36	0.6	0.03

Notes: CA Manufacture of food products, beverages and tobacco; CB Textiles, wearing apparel and le ather products; CC Wood and paper products and printing; CD Coke and refined petroleum products; CE Chemicals and chemical products; CF Basic pharmaceutical products and preparations; CG Rubber and plastic products and nonmetallic mineral products; CH Basic metals and metal products; CI Computer, electronic and optical products; CJ Electrical equipment; CK Machinery and equipment not elsewhere classified; CL Transport equipment; CM Other manufacturing and repair.

Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/iop/index-of-production/december-2012/index.html

The UK’s trade account is shown in Table VH-5. In Dec 2012, the UK ran a deficit in trade of goods and services (total trade) of ₤3201 million. The deficit in trade of goods was ₤8897 million and ₤6918 million in goods excluding oil. A surplus in services of ₤5696 million contributed to the smaller overall deficit in goods and services (-₤8897 million plus ₤5696 million equal to -₤3201 million). Services have contributed to lower trade account deficits and also softened the impact of the global recession on the UK economy. Exports of goods and services increased 1.9 percent in Dec 2012 and fell 3.9 percent in the quarter Oct-Dec 2012 relative to the same quarter a year earlier with imports increasing 0.9 percent in Dec and decreasing 0.4 percent in Oct-Dec 2012 relative to the same quarter a year earlier. Excluding oil, UK exports of goods increased 1.4 percent in Dec 2012 and decreased 3.1 percent in Oct-Dec 2012 relative to a year earlier while imports decreased 1.1 percent in Dec and decreased 0.7 percent in Oct-Dec 2012 relative to a year earlier. The great advantage of the UK similar to the US is the substantial surplus in services. Services exports increased 0.2 percent in Dec and fell 4.2 percent in Oct-Dec 2012 relative to a year earlier and imports increased 0.4 percent in Dec and decreased 0.7 percent in Oct-Dec 2012 relative to a year earlier.

Table VH-5, Value of UK Trade in Goods and Services, Balance of Payments Basis, ₤ Million  and ∆%

	₤ Million SA Dec 2012	Month ∆%    Dec 2012	Oct-Dec 2012 ∆% Oct-Dec 2011
Total Trade
Exports	40,679	1.9	-3.9
Imports	43,880	0.9	-0.4
Balance	-3,201
Trade in Goods
Exports	25,133	3.0	-3.7
Imports	34,030	1.1	-0.4
Balance	-8,897
Trade in Goods Excluding Oil
Exports	22,072	1.4	-3.1
Imports	28,990	-1.1	-0.7
Balance	-6,918
Trade in Services
Exports	15,546	0.2	-4.2
Imports	9,850	0.4	-0.7
Balance	5,696

Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/december-2012/index.html

© Carlos M. Pelaez, 2010, 2011, 2012, 2013