Recovery without Hiring, Ten Million Fewer Full-time Jobs with Thirteen Million More Population, World Inflation Waves, Balance of Payments and Fiscal Deficits Threatening Premium on Treasury Securities, Loss of Inflation Adjusted Household Wealth, Squeeze of Economic Activity by Carry Trades, World Economic Slowdown and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2010, 2011, 2012, 2013
Executive Summary
I Recovery without Hiring
IA1 Hiring Collapse
IA2 Labor Underutilization
IA3 Ten Million Fewer Full-time Job
IA4 Youth and Middle-Aged Unemployment
IB Destruction of Household Wealth for Inflation Adjusted Loss
IC Unresolved US Balance of Payments Deficits and Fiscal Imbalance Threatening Risk Premium on Treasury Securities
II World Inflation Waves
IIA Appendix: Transmission of Unconventional Monetary Policy
IIA1 Theory
IIA2 Policy
IIA3 Evidence
IIA4 Unwinding Strategy
IIB United States Inflation
IIC Long-term US Inflation
IID Current US Inflation
IIE Theory and Reality of Economic History and Monetary Policy Based on Fear of Deflation
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
China is experiencing similar inflation behavior as the advanced economies in prior months in the form of declining commodity prices but differs in decreasing inflation of producer prices recently as in Feb 2013 and in declining prices relative to a year earlier. As shown in Table IV-8, inflation of the price indexes for industry in Feb 2013 is 0.2 percent; 12-month inflation is minus 1.6 percent in Feb; and cumulative inflation in Jan-Feb 2013 relative to Jan-Feb 2012 is minus 1.6 percent. Inflation of segments in Feb 2013 in China is provided in Table IV-8 in column “Month Feb 2013 ∆%.” There were increases of prices of mining & quarrying of 0.5 percent in Feb but decrease of 5.2 percent in 12 months. Prices of consumer goods increased 0.0 percent in Feb and increased 0.7 percent in 12 months. Prices of inputs in the purchaser price index increased 0.2 percent in Feb and declined 1.9 percent in 12 months. Fuel and power increased 0.2 percent in Feb and declined 2.9 percent in 12 months. An important category of inputs for exports is textile raw materials, increasing 0.2 percent in Feb and declining 0.9 percent in 12 months.
Table IV-8, China, Price Indexes for Industry ∆%
| Month Feb 2013 ∆% | 12-Month Feb 2013 ∆% | Jan-Feb 2013/Jan-Feb 2012 ∆% | |
| I Producer Price Indexes | 0.2 | -1.6 | -1.6 |
| Means of Production | 0.2 | -2.4 | -2.4 |
| Mining & Quarrying | 0.5 | -5.2 | -5.1 |
| Raw Materials | 0.3 | -2.6 | -2.4 |
| Processing | 0.1 | -2.0 | -2.1 |
| Consumer Goods | 0.0 | 0.7 | 0.7 |
| Food | 0.1 | 1.6 | 1.4 |
| Clothing | 0.0 | 1.5 | 1.5 |
| Daily Use Articles | -0.1 | 0.6 | 0.8 |
| Durable Consumer Goods | -0.2 | -0.8 | -0.9 |
| II Purchaser Price Indexes | 0.2 | -1.9 | -1.9 |
| Fuel and Power | 0.2 | -2.9 | -2.7 |
| Ferrous Metals | 0.8 | -5.3 | -5.9 |
| Nonferrous Metals | 0.3 | -2.4 | -2.0 |
| Raw Chemical Materials | 0.3 | -2.9 | -3.0 |
| Wood & Pulp | 0.0 | -0.5 | -0.5 |
| Building Materials | -0.3 | -1.7 | -1.6 |
| Other Industrial Raw Materials | 0.0 | -0.9 | -0.9 |
| Agricultural | 0.0 | 2.6 | 2.5 |
| Textile Raw Materials | 0.2 | -0.9 | -0.9 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
China’s producer price inflation follows waves similar to those around the world but with declining trend since May 2012, as shown in Table IV-9. In the first wave, annual equivalent inflation was 6.4 percent in Jan-Jun 2011, driven by carry trades from zero interest rates to commodity futures. In the second wave, risk aversion unwound carry trades, resulting in annual equivalent inflation of minus 3.1 percent in Jul-Nov 2011. In the third wave, renewed risk aversion resulted in annual equivalent inflation of minus 2.4 percent in Dec 2011-Jan 2012. In the fourth wave, new carry trades resulted in annual equivalent inflation of 2.4 percent in Feb-Apr 2012. In the fifth wave, annual equivalent is minus 5.8 percent in May-Sep 2012. There are declining producer prices in China in Aug-Sep 2012 in contrast with increases worldwide. In a sixth wave, producer prices increased 0.2 percent in Oct 2012, which is equivalent to 2.4 percent in a year. In an eighth wave, annual equivalent inflation was minus 1.2 percent in Nov-Dec 2012. In the ninth wave, annual equivalent inflation in Jan-Feb 2013 is 2.4 percent.
Table IV-9, China, Month and 12-Month Rate of Change of Producer Price Index, ∆%
| 12-Month ∆% | Month ∆% | |
| Feb 2013 | -1.6 | 0.2 |
| Jan 2013 | -1.6 | 0.2 |
| AE ∆% Jan-Feb | 2.4 | |
| Dec 2012 | -1.9 | -0.1 |
| Nov | -2.2 | -0.1 |
| AE ∆% Nov-Dec | -1.2 | |
| Oct | -2.8 | 0.2 |
| AE ∆% Oct | 2.4 | |
| Sep | -3.6 | -0.1 |
| Aug | -3.5 | -0.5 |
| Jul | -2.9 | -0.8 |
| Jun | -2.1 | -0.7 |
| May | -1.4 | -0.4 |
| AE ∆% May-Sep | -5.8 | |
| Apr | -0.7 | 0.2 |
| Mar | -0.3 | 0.3 |
| Feb | 0.0 | 0.1 |
| AE ∆% Feb-Apr | 2.4 | |
| Jan | 0.7 | -0.1 |
| Dec 2011 | 1.7 | -0.3 |
| AE ∆% Dec-Jan | -2.4 | |
| Nov | 2.7 | -0.7 |
| Oct | 5.0 | -0.7 |
| Sep | 6.5 | 0.0 |
| Aug | 7.3 | 0.1 |
| Jul | 7.5 | 0.0 |
| AE ∆% Jul-Nov | -3.1 | |
| Jun | 7.1 | 0.0 |
| May | 6.8 | 0.3 |
| Apr | 6.8 | 0.5 |
| Mar | 7.3 | 0.6 |
| Feb | 7.2 | 0.8 |
| Jan | 6.6 | 0.9 |
| AE ∆% Jan-Jun | 6.4 | |
| Dec 2010 | 5.9 | 0.7 |
AE: Annual Equivalent
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart IV-3 of the National Bureau of Statistics of China provides monthly and 12-month rates of inflation of the price indexes for the industrial sector. Negative monthly rates in Oct, Nov, Dec 2011, Jan, Mar, Apr, May, Jun, Jul, Aug, Sep, Nov and Dec 2012 pulled down the 12-month rates to 5.0 percent in Oct 2011, 2.7 percent in Nov, 1.7 percent in Dec, 0.7 percent in Jan 2012, 0.0 percent in Feb, minus 0.3 percent in Mar, minus 0.7 percent in Apr, minus 1.4 percent in May, 2.1 in Jun, minus 2.9 percent in Jul, minus 3.5 percent in Aug, minus 3.6 percent in Sep. The increase of 0.2 percent in Oct 2012 pulled up the 12-month rate to minus 2.8 percent and the rate eased to minus 2.2 percent in Nov 2012 and minus 1.9 percent in Dec 2012. Increases of 0.2 percent in Jan and Feb 2013 pulled the 12-month rate to minus 1.6 percent.
Chart IV-9, China, Producer Prices for the Industrial Sector Month and 12 months ∆%
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart IV-4 of the National Bureau of Statistics of China provides monthly and 12-month inflation of the purchaser product indices for the industrial sector. Decreasing monthly inflation with four successive contractions from Oct 2011 to Jan 2012 and May-Aug 2012 pulled down the 12-month rate to minus 4.1 percent in Aug and Sep. Consecutive increases of 0.1 percent in Sep and Oct 2012 raised the 12-month rate to minus 3.3 percent in Oct 2012. The rate eased to minus 2.8 in Nov 2012 with decrease of 0.2 percent in Nov 2012 and minus 2.4 percent in Dec 2012 with monthly decrease of 0.1 percent. Increase of 0.3 percent in Jan 2013 and 0.2 in Feb 2013 pulled the 12-month rate to minus 1.9 percent.
Chart IV-10, China, Purchaser Product Indices for Industrial Sector
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
China is highly conscious of food price inflation because of its high weight in the basket of consumption of the population. Consumer price inflation in China in Feb 2013 was 1.1 percent and 3.2 percent in 12 months, as shown in Table IV-10. Food prices increased 1.0 percent in Jan 2013, increasing 2.0 percent in 12 months because of inclement winter weather. Another area of concern is housing inflation which was 0.3 in Feb but increased 2.8 percent in 12 months. Prices of services increased 0.8 percent in Feb and gained 3.1 percent in 12 months.
Table IV-10, China, Consumer Price Index
| 2013 | Feb 2013 Month ∆% | Feb 2013 12-Month ∆% | Jan-Feb 2013 ∆% Jan-Feb 2012 |
| Consumer Prices | 1.1 | 3.2 | 2.6 |
| Urban | 1.1 | 3.2 | 2.6 |
| Rural | 1.0 | 3.3 | 2.7 |
| Food | 2.7 | 6.0 | 4.4 |
| Non-food | 0.2 | 1.9 | 1.7 |
| Consumer Goods | 1.2 | 3.3 | 2.6 |
| Services | 0.8 | 3.1 | 2.6 |
| Commodity Categories: | |||
| Food | 2.7 | 6.0 | 4.4 |
| Tobacco, Liquor | -0.1 | 1.1 | 1.3 |
| Clothing | -0.7 | 2.1 | 2.3 |
| Household | 0.2 | 1.6 | 1.5 |
| Healthcare & Personal Articles | 0.3 | 1.8 | 1.8 |
| Transportation & Communication | 0.5 | 0.2 | 0.0 |
| Recreation, Education, Culture & Services | 0.6 | 2.0 | 1.2 |
| Residence | 0.3 | 2.8 | 2.9 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Month and 12-month rates of change of consumer prices are provided in Table IV-11. There are waves of consumer price inflation in China similar to those around the world (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html). In the first wave, consumer prices increased at the annual equivalent rate of 8.3 percent in Jan-Mar 2011, driven by commodity price increases resulting from unconventional monetary policy of zero interest rates. In the second wave, risk aversion unwound carry trades with annual equivalent inflation falling to the rate of 2.0 percent in Apr-Jun 2011. In the third wave, inflation returned at 2.9 percent with renewed interest in commodity exposures in Jul-Nov 2011. In the fourth wave, inflation returned at a high 5.8 percent annual equivalent in Dec 2011 to Mar 2012. In the fifth wave, annual equivalent inflation was minus 3.9 percent in Apr to Jun 2012. In the sixth wave, annual equivalent inflation rose to 4.1 percent in Jul-Sep 2012. In the seventh wave, inflation was minus 1.2 percent annual equivalent in Oct 2012 and 0.0 percent in Oct-Nov 2012. In the eighth wave, annual equivalent inflation was 12.2 percent in Dec 2012-Feb 2013 primarily because of winter weather that caused increases in food prices. Inflation volatility originating in unconventional monetary policy clouds investment and consumption decisions by business and households.
Table IV-11, China, Month and 12-Month Rates of Change of Consumer Price Index ∆%
| Month ∆% | 12-Month ∆% | |
| Feb 2013 | 1.1 | 3.2 |
| Jan | 1.0 | 2.0 |
| Dec 2012 | 0.8 | 2.5 |
| AE ∆% Dec-Feb | 12.2 | |
| Nov | 0.1 | 2.0 |
| Oct | -0.1 | 1.7 |
| AE ∆% Oct-Nov | 0.0 | |
| Sep | 0.3 | 1.9 |
| Aug | 0.6 | 2.0 |
| Jul | 0.1 | 1.8 |
| AE ∆% Jul-Sep | 4.1 | |
| Jun | -0.6 | 2.2 |
| May | -0.3 | 3.0 |
| Apr | -0.1 | 3.4 |
| AE ∆% Apr to Jun | -3.9 | |
| Mar | 0.2 | 3.6 |
| Feb | -0.1 | 3.2 |
| Jan | 1.5 | 4.5 |
| Dec 2011 | 0.3 | 4.1 |
| AE ∆% Dec to Mar | 5.8 | |
| Nov | -0.2 | 4.2 |
| Oct | 0.1 | 5.5 |
| Sep | 0.5 | 6.1 |
| Aug | 0.3 | 6.2 |
| Jul | 0.5 | 6.5 |
| AE ∆% Jul to Nov | 2.9 | |
| Jun | 0.3 | 6.4 |
| May | 0.1 | 5.5 |
| Apr | 0.1 | 5.3 |
| AE ∆% Apr to Jun | 2.0 | 2.0 |
| Mar | -0.2 | 5.4 |
| Feb | 1.2 | 4.9 |
| Jan | 1.0 | 4.9 |
| AE ∆% Jan to Mar | 8.3 | |
| Dec 2010 | 0.5 | 4.6 |
AE: Annual Equivalent
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart IV-3 of the National Bureau of Statistics of China provides monthly and 12-month rates of consumer price inflation. In contrast with producer prices, consumer prices had not moderated at the monthly marginal rates. Consumer prices fell 0.2 percent in Nov 2011 after increasing only 0.1 percent in Oct but increased 0.3 percent in Dec and a high 1.5 percent in Jan 2012, declining 0.1 percent in Feb, rising 0.2 percent in Mar and declining 0.1 percent in Apr, 0.3 percent in May and 0.6 percent in Jun 2012 but increasing 0.1 percent in Jul, 0.6 percent in Aug 2012 and 0.3 percent in Sep 2012. Consumer prices fell 0.1 percent in Oct 2012. The decline of 0.1 percent in Feb 2012 pulled down the 12-month rate to 3.2 percent, which bounced back to 3.6 percent in Mar with the monthly increase of 0.2 percent and fell to 2.2 percent in Jun with increasing pace of monthly decline from Apr to Jun 2012. Even with increase of 0.1 percent in Jul 2012, consumer price inflation in 12 months fell to 1.8 percent in Jul 2012 but bounced back to 2.0 percent with increase of 0.6 percent in Aug. In Sep, increase of 0.3 percent still maintained 12-month inflation at 1.9 percent. The decline of 0.1 percent in Oct 2012 pulled down the 12-month rate to 1.7 percent, which is the lowest in Chart IV-3. Increase of 0.1 percent in Nov 2012 pulled up the 12-month rate to 2.0 percent. Abnormal increase of 0.8 percent in Dec 2012 because of winter weather pulled up the 12-month rate to 2.5 percent. Even with increase of 1.0 percent in Jan 2013 12-month inflation fell to 2.0 percent. Inflation of 1.1 percent in Feb 2013 pulled the 12-month rate to 3.2 percent.
Chart IV-11, China, Consumer Prices ∆% Month and 12 Months Oct 2011 to Oct 2012
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
The harmonized index of consumer prices of the euro area in Table IV-12 has similar inflation waves as in most countries (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html). In the first wave, consumer prices in the euro area increased at the annual equivalent rate of 5.2 percent in Jan-Apr 2011. In the second wave, risk aversion caused unwinding of commodity carry trades with inflation decreasing at the annual equivalent rate of minus 2.4 percent in May-Jul 2011. In the third wave, improved risk appetite resulted in annual equivalent inflation in Aug-Nov at 4.3 percent. In the fourth wave, return of risk aversion caused decline of consumer prices at the annual equivalent rate of minus 3.0 percent in Dec 2011 to Jan 2012. In the fifth wave, improved attitudes toward risk aversion resulted in higher consumer price inflation at the high annual equivalent rate of 9.6 percent in Feb-Apr 2012. In the sixth wave, annual equivalent inflation fell to minus 2.8 percent in May-Jul 2012. In the seventh wave, increasing risk appetite caused new carry trade exposures that resulted in annual equivalent inflation of 6.8 percent in Aug-Sep 2012 and 5.3 percent in Aug-Oct 2012. In the eighth wave, annual-equivalent inflation was minus 2.4 percent in Nov 2012. In the ninth wave, annual equivalent inflation was 4.9 percent in Dec 2012. In the tenth wave, annual equivalent inflation was minus 11.4 percent in Jan 2013. Inflation volatility around the world is confusing the information required in investment and consumption decisions. In the eleventh wave, inflation returned at annual equivalent 4.9 percent in Feb 2013.
Table IV-12, Euro Area Harmonized Index of Consumer Prices Month and 12 Months ∆%
| Month ∆% | 12 Months ∆% | |
| Feb 2013 | 0.4 | 1.8 |
| AE ∆% Feb | 4.9 | |
| Jan | -1.0 | 2.0 |
| AE ∆% Jan | -11.4 | |
| Dec 2012 | 0.4 | 2.2 |
| AE ∆% Dec | 4.9 | |
| Nov | -0.2 | 2.2 |
| AE ∆% Nov | -2.4 | |
| Oct | 0.2 | 2.5 |
| Sep | 0.7 | 2.6 |
| Aug | 0.4 | 2.6 |
| AE ∆% Aug-Oct | 5.3 | |
| Jul 2012 | -0.5 | 2.4 |
| Jun | -0.1 | 2.4 |
| May | -0.1 | 2.4 |
| AE ∆% May-Jul | -2.8 | |
| Apr | 0.5 | 2.6 |
| Mar | 1.3 | 2.7 |
| Feb | 0.5 | 2.7 |
| AE ∆% Feb-Apr | 9.6 | |
| Jan | -0.8 | 2.7 |
| Dec 2011 | 0.3 | 2.7 |
| AE ∆% Dec-Jan | -3.0 | |
| Nov | 0.1 | 3.0 |
| Oct | 0.4 | 3.0 |
| Sep | 0.7 | 3.0 |
| Aug | 0.2 | 2.6 |
| AE ∆% Aug-Nov | 4.3 | |
| Jul | -0.6 | 2.6 |
| Jun | 0.0 | 2.7 |
| May | 0.0 | 2.7 |
| AE ∆% May-Jul | -2.4 | |
| Apr | 0.6 | 2.8 |
| Mar | 1.4 | 2.7 |
| Feb | 0.4 | 2.4 |
| Jan | -0.7 | 2.3 |
| AE ∆% Jan-Apr | 5.2 | |
| Dec 2010 | 0.6 | 2.2 |
AE: annual equivalent
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table IV-13 provides weights and inflation of selected components of the HICP of the euro area. Inflation of all items excluding energy increased 1.8 percent in Feb 2013 relative to Feb 2012 and increased 0.4 percent in Feb 2013 relative to Jan 2013. Prices of non-energy industrial goods increased 0.8 percent in Feb 2013 relative to a year earlier and increased 0.2 percent in Feb 2013. Inflation of services was 1.5 percent in Feb 2013 relative to a year earlier and increased 0.4 percent in Feb 2013.
Table IV-13, Euro Area, HICP Inflation and Selected Components, ∆%
| Weight | Feb 2013/ Feb 2012 | 12-month Average Rate Feb 2013-2012/ Feb 2012-2011 | ∆% Feb 2013/Jan 2013 | |
| All Items | 1000.0 | 1.8 | 2.4 | 0.4 |
| All Items ex Energy | 890.4 | 1.6 | 1.8 | 0.3 |
| All Items ex Energy, Food, Alcohol & Tobacco | 696.7 | 1.3 | 1.5 | 0.3 |
| All Items ex Energy & Unprocessed Food | 816.9 | 1.4 | 1.7 | 0.3 |
| All Items ex Seasonal Food | 852.7 | 1.5 | 1.8 | 0.3 |
| All Items ex Tobacco | 975.8 | 1.8 | 2.3 | 0.4 |
| Energy | 109.6 | 3.9 | 6.7 | 1.2 |
| Food, Alcohol & Tobacco | 193.7 | 2.7 | 3.0 | 0.1 |
| Non-energy Industrial Goods | 273.6 | 0.8 | 1.2 | 0.2 |
| Services | 423.0 | 1.5 | 1.7 | 0.4 |
Source: Eurostat http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table IV-14 provides weights and inflation of selected components of the HICP of the euro area with highest annual impact. Inflation of electricity with weight of 25.9 percent increased 8.2 percent in Feb 2013 relative to a year earlier and contributed 0.17 percentage points. Fruit and tobacco had equal contributions of 0.07 percentage points while garments deducted 0.07 percentage points and medical and paramedical services deducted 0.08 percentage points.
Table IV-14, Euro Area, Components with Highest Impact on Annual Inflation
| Weight % 2013 | Annual Rate Feb 2013 ∆% | Impact Percentage Points | |
| Electricity | 25.9 | 8.2 | 0.17 |
| Fruit | 11.8 | 7.6 | 0.07 |
| Tobacco | 24.2 | 4.6 | 0.07 |
| Garments | 49.1 | -0.1 | -0.07 |
| Medical & Paramedical Services | 11.3 | -4.8 | -0.08 |
| Telecommunications | 29.4 | -5.2 | -0.22 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
The estimate of consumer price inflation in Germany in Table IV-15 is 1.5 percent in 12 months ending in Feb 2013, 0.6 percent NSA in Feb 2013 relative to Jan 2013 and 0.1 percent SA in Feb 2013 relative to Dec 2012. There are waves of consumer price inflation in Germany similar to those worldwide (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html), as shown in Table IV-15. In the first wave, annual equivalent inflation was 3.0 percent in Feb-Apr 2011 NSA and 2.4 percent SA during risk appetite in carry trades from zero interest rates to commodity futures. In the second wave, annual equivalent consumer price inflation collapsed to 0.6 percent NSA and 3.0 percent SA in May-Jun 2011 because of risk aversion caused by European sovereign debt event. In the third wave, annual equivalent consumer price inflation was 1.7 percent NSA and 1.9 percent SA in Jul-Nov 2011 as a result of relaxed risk aversion. In the fourth wave, annual equivalent inflation was 0.6 percent NSA and 1.8 percent SA in Dec 2011 to Jan 2012. In the fifth wave, annual equivalent inflation rose to 4.5 percent NSA and 2.0 percent SA in Feb-Apr 2012 during another energy-commodity carry trade shock. In the sixth wave, annual equivalent inflation in May-Jun 2012 is minus 1.2 percent NSA and 1.2 percent SA. In the seventh wave, annual equivalent inflation NSA is 4.9 percent in Jul-Aug 2012 and 3.7 percent SA. In the eighth wave in Sep-Dec 2012, annual equivalent inflation is 1.5 percent NSA and 1.2 percent SA. In the ninth wave, annual equivalent inflation fell to minus 5.8 percent NSA in Jan 2013 and minus 1.2 percent SA. In the eleventh wave, annual equivalent inflation rose to 7.4 percent NSA in Feb 2013 and 1.2 percent CSA. Under unconventional monetary policy of zero interest rates and quantitative easing inflation becomes highly volatile during alternative shocks of risk aversion and risk appetite, preventing sound investment and consumption decisions.
Table IV-15, Germany, Consumer Price Index ∆%
| 12-Month ∆% | Month ∆% NSA | Month ∆% CSA | |
| Feb 2013 | 1.5 | 0.6 | 0.1 |
| AE ∆% Feb | 7.4 | 1.2 | |
| Jan | 1.7 | -0.5 | -0.1 |
| AE ∆% Jan | -5.8 | -1.2 | |
| Dec 2012 | 2.0 | 0.3 | 0.1 |
| Nov | 1.9 | 0.1 | 0.1 |
| Oct | 2.0 | 0.0 | 0.1 |
| Sep | 2.0 | 0.1 | 0.1 |
| AE ∆% Sep-Dec | 1.5 | 1.2 | |
| Aug | 2.2 | 0.4 | 0.3 |
| Jul | 1.9 | 0.4 | 0.3 |
| AE ∆% Jul-Aug | 4.9 | 3.7 | |
| Jun | 1.7 | -0.2 | 0.0 |
| May | 2.0 | 0.0 | 0.2 |
| AE ∆% May-Jun | -1.2 | 1.2 | |
| Apr | 2.0 | -0.2 | 0.1 |
| Mar | 2.2 | 0.6 | 0.2 |
| Feb | 2.2 | 0.7 | 0.2 |
| AE ∆% Feb-Apr | 4.5 | 2.0 | |
| Jan | 2.1 | -0.1 | 0.3 |
| Dec 2011 | 2.0 | 0.2 | 0.0 |
| AE ∆% Dec-Jan | 0.6 | 1.8 | |
| Nov | 2.4 | 0.2 | 0.2 |
| Oct | 2.3 | 0.0 | 0.1 |
| Sep | 2.4 | 0.2 | 0.3 |
| Aug | 2.1 | 0.1 | 0.1 |
| Jul | 2.1 | 0.2 | 0.1 |
| AE ∆% Jul-Nov | 1.7 | 1.9 | |
| Jun | 2.1 | 0.1 | 0.3 |
| May | 2.0 | 0.0 | 0.2 |
| AE ∆% May-Jun | 0.6 | 3.0 | |
| Apr | 1.9 | 0.0 | 0.2 |
| Mar | 2.0 | 0.6 | 0.2 |
| Feb | 1.9 | 0.6 | 0.2 |
| Jan | 1.7 | -0.2 | 0.2 |
| AE ∆% Feb-Apr | 3.0 | 2.4 | |
| Dec 2010 | 1.3 | 0.6 | 0.2 |
| Nov | 1.5 | 0.1 | 0.2 |
| Oct | 1.3 | 0.1 | 0.2 |
| Sep | 1.2 | -0.1 | 0.1 |
| Aug | 1.0 | 0.1 | 0.1 |
| Annual Average ∆% | |||
| 2012 | 2.0 | ||
| 2011 | 2.1 | ||
| 2010 | 1.1 | ||
| 2009 | 0.4 | ||
| 2008 | 2.6 | ||
| Dec 2009 | 0.8 | ||
| Dec 2008 | 1.1 | ||
| Dec 2007 | 3.2 | ||
| Dec 2006 | 1.4 | ||
| Dec 2005 | 1.4 | ||
| Dec 2004 | 2.2 | ||
| Dec 2003 | 1.1 | ||
| Dec 2002 | 1.1 | ||
| Dec 2001 | 1.6 |
AE: Annual Equivalent
Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart IV-12 of the Statistisches Bundesamt Deutschland, or federal statistical office of Germany, provides the unadjusted consumer price index of Germany from 2005 to 2013. There is evident acceleration in the form of sharper slope in the first months of 2011 and then a flattening in subsequent months with renewed strength in Dec, decline in Jan 2012 and another upward spike from Feb to Apr 2012, new drop in May-Jun 2012 and increases in Jul and Aug 2012 relaxed in Sep-Nov 2012. Inflation returned in Dec 2012 and fell in Jan 2013, rebounding in Feb 2013 If risk aversion declines, new carry trades from zero interest rates to commodity futures could again result in higher inflation.
Chart IV-12, Germany, Consumer Price Index, Unadjusted, 2005=100
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart IV-13, of the Statistisches Bundesamt Deutschland, or Federal Statistical Agency of Germany, provides the unadjusted consumer price index and trend of Germany from 2009 to 2013. Chart IV-13 captures inflation waves with alternation of periods of positive and negative slopes resulting from zero interest rates with shocks of risk appetite and risk aversion. For example, the negative slope of decline of inflation by 0.2 percent in Jun 2012 and 0.0 percent in May 2012 follows an upward slope of price increases in Feb-Apr 2012 after decline of inflation by 0.1 percent in Jan 2012. The final segment shows another positive slope caused by inflation of 0.4 percent in Jul 2012, which is followed by 0.4 percent in Aug 2012 and flattening segment as inflation remains almost unchanged with 0.1 percent in Sep 0.0 percent in Oct 2012, increasing 0.1 percent in Nov 2012 and increasing 0.3 percent in Dec 2012. Inflation fell 0.5 percent in Jan 2013 and jumped 0.6 percent in Feb 2013. The waves occur around an upward trend of prices, disproving the proposition of fear of deflation.
Chart IV-13, Germany, Consumer Price Index, Unadjusted and Trend, 2005=100
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Table IV-16 provides the monthly and 12-month rate of inflation for segments of the consumer price index of Germany in Feb 2013. Inflation excluding energy increased 0.6 percent in Feb 2013 and rose 1.3 percent in 12 months. Excluding household energy inflation was 0.6 percent in Feb and rose 1.2 percent in 12 months. Food prices decreased 0.1 percent in Feb and increased 3.1 percent in 12 months. There were differences in inflation of energy-related prices. Heating oil fell 3.5 percent in 12 months and increased 2.4 percent in Feb. Motor fuels increased 2.3 percent in Feb and increased 0.4 percent in 12 months.
Table IV-16, Germany, Consumer Price Index ∆%
| Feb 2013 | Weight | 12- Month ∆% | Month ∆% |
| Total | 1,000.00 | 1.5 | 0.6 |
| Excluding heating oil and motor fuels | 950.52 | 1.7 | 0.5 |
| Excluding household energy | 931.81 | 1.2 | 0.6 |
| Excluding Energy | 893.44 | 1.3 | 0.6 |
| Total Goods | 479.77 | 2.0 | 0.6 |
| Nondurable Consumer Goods | 307.89 | 2.8 | 0.5 |
| Medium-Term Life Consumer Goods | 91.05 | 1.3 | 1.3 |
| Durable Consumer Goods | 80.83 | -0.5 | 0.3 |
| Services | 520.23 | 1.1 | 0.7 |
| Energy Components | |||
| Motor Fuels | 38.37 | 0.4 | 2.3 |
| Household Energy | 68.19 | 5.4 | 0.6 |
| Heating Oil | 11.11 | -3.5 | 2.4 |
| Food | 90.52 | 3.1 | -0.1 |
Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/Homepage.html
Table IV-17 provides monthly and 12 months consumer price inflation in France. There are the same waves as in inflation worldwide (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html). In the first wave, annual equivalent inflation in Jan-Apr 2011 was 4.3 percent driven by the carry trade from zero interest rates to commodity futures positions in an environment of risk appetite. In the second wave, risk aversion caused the reversal of carry trades into commodity futures, resulting in the fall of the annual equivalent inflation rate to minus 0.8 percent in May-Jul 2011. In the third wave, annual equivalent inflation rose to 2.7 percent in Aug-Nov 2011 with alternations of risk aversion and risk appetite. In the fourth wave, risk aversion originating in the European debt crisis caused annual equivalent inflation of 0.0 percent from Dec 2011 to Jan 2012. In the fifth wave, annual equivalent inflation increased to 5.3 percent in Feb-Apr 2012. In the sixth wave, annual equivalent inflation was minus 2.0 percent in May-Jul 2012 during another bout of risk aversion causing reversal of carry trades from zero interest rates to commodity price futures exposures. In the seventh wave, annual equivalent inflation jumped to 8.7 percent in Aug 2012, 2.4 percent in Aug-Sep 2012 and 2.4 percent in Aug-Oct 2012. In the eighth wave, annual equivalent inflation was minus 2.4 percent in Nov 2012 and minus 1.6 percent in Nov 2012 to Jan 2013. In the ninth wave, annual equivalent inflation was 3.7 percent in Feb 2013.
Table IV-17, France, Consumer Price Index, Month and 12-Month ∆%
| Month ∆% | 12-Month ∆% | |
| Feb 2013 | 0.3 | 1.0 |
| AE ∆% Feb | 3.7 | |
| Jan | -0.5 | 1.2 |
| Dec 2012 | 0.3 | 1.3 |
| Nov | -0.2 | 1.4 |
| AE ∆% Nov-Jan | -1.6 | |
| Oct | 0.2 | 1.9 |
| Sep | -0.3 | 1.9 |
| Aug | 0.7 | 2.1 |
| AE ∆% Aug-Oct | 2.4 | |
| Jul | -0.4 | 1.9 |
| Jun | 0.0 | 1.9 |
| May | -0.1 | 2.0 |
| AE ∆% May-Jul | -2.0 | |
| Apr | 0.1 | 2.1 |
| Mar | 0.8 | 2.3 |
| Feb | 0.4 | 2.3 |
| AE ∆% Feb-Apr | 5.3 | |
| Jan | -0.4 | 2.3 |
| Dec 2011 | 0.4 | 2.5 |
| AE ∆% Dec-Jan | 0.0 | |
| Nov | 0.3 | 2.5 |
| Oct | 0.2 | 2.3 |
| Sep | -0.1 | 2.2 |
| Aug | 0.5 | 2.2 |
| AE ∆% Aug-Nov | 2.7 | |
| Jul | -0.4 | 1.9 |
| Jun | 0.1 | 2.1 |
| May | 0.1 | 2.0 |
| AE ∆% May-Jul | -0.8 | |
| Apr | 0.3 | 2.1 |
| Mar | 0.8 | 2.0 |
| Feb | 0.5 | 1.7 |
| Jan | -0.2 | 1.8 |
| AE ∆% Jan-Apr | 4.3 | |
| Dec 2010 | 0.5 | 1.8 |
| Annual | ||
| 2012 | 2.0 | |
| 2011 | 2.1 | |
| 2010 | 1.5 | |
| 2009 | 0.1 | |
| 2008 | 2.8 | |
| 2007 | 1.5 | |
| 2006 | 1.6 | |
| 2005 | 1.8 | |
| 2004 | 2.1 | |
| 2003 | 2.1 | |
| 2002 | 1.9 | |
| 2001 | 1.7 | |
| 2000 | 1.7 | |
| 1999 | 0.5 | |
| 1998 | 0.7 | |
| 1997 | 1.2 | |
| 1996 | 2.0 | |
| 1995 | 1.8 | |
| 1994 | 1.6 | |
| 1993 | 2.1 | |
| 1992 | 2.4 | |
| 1991 | 3.2 |
AE: Annual Equivalent
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=29&date=20130313
Table IV-18 provides consumer price inflation in France and of various items in Feb 2013 and in the 12 months ending in Feb 2013. Inflation of all items was 0.3 percent in Feb 2013 and 1.0 percent in 12 months. Energy inflation increased 1.5 percent in Feb 2013 and increased 2.4 percent in 12 months. Transport and communications decreased 1.7 percent in Jan 2013 and fell 7.4 percent in 12 months. Food, energy and rentals and dwellings show the higher 12-month increases of 1.7 percent, 2.4 percent and 2.1 percent, respectively.
Table IV-18, France, Consumer Price Index, Month and 12-Month Percentage Changes of Index and Components, ∆%
| Feb 2013 | Weights | Month ∆% | 12-Month ∆% |
| All Items | 10000 | 0.3 | 1.0 |
| Food | 1658 | 0.1 | 1.7 |
| Manufactured Products | 2378 | 0.1 | -0.2 |
| Energy | 822 | 1.5 | 2.4 |
| Petroleum Products | 495 | 2.5 | 0.2 |
| Services | 4576 | 0.2 | 1.0 |
| Rentals, Dwellings | 748 | 0.5 | 2.1 |
| Transport and Communications | 506 | -1.7 | -7.4 |
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=29&date=20130313
Chart IV-14 of the Institut National de la Statistique et des Études Économiques (INSEE) of France shows headline and core consumer price inflation of France. Inflation rose during the commodity price shock of unconventional monetary policy. Risk aversion in late 2008 and beginning of 2009 caused collapse of valuation of commodity futures with resulting decline in inflation. Unconventional monetary policy with alternations of risk aversion resulted in higher inflation in France that stabilized in recent months until the increase of 0.2 percent in Oct 2011, 0.3 percent in Nov and 0.4 percent in Dec that were followed by decline of 0.4 percent in Jan 2012 and increases of 0.4 percent in Feb and 0.8 percent in Mar followed by 0.1 percent in Apr minus 0.1 percent in May and no change in Jun 2012 with marginal decline of 0.4 percent in Jul. Inflation returned with 0.7 percent in Aug 2012 but decline of 0.3 percent in Sep 2012 followed with increase of 0.2 percent in Oct 2012 and decrease of 0.2 percent in Nov 2012. Inflation in Dec 2012 was 0.3 percent and minus 0.5 percent in Jan 2013. Inflation returned at 0.3 percent in Feb 2013. Both the headline and core indexes are showing negative slopes in the new environment of risk aversion that causes reversals of carry trades into commodity futures prices. The 12-month rate of inflation has declined from 2.5 percent in Dec 2011 to 1.3 percent in Dec 2012.
Chart IV-14, France, Consumer Price Index (IPC) and Core Consumer Price Index (ISJ) 12 Months Rates of Change
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=29&date=20130313
The first wave of commodity price increases in the first four months of Jan-Apr 2011 also influenced the surge of consumer price inflation in Italy shown in Table IV-19. Annual equivalent inflation in the first four months of 2011 was 4.9 percent. The crisis of confidence or risk aversion resulted in reversal of carry trades on commodity positions. Consumer price inflation in Italy was subdued in the second wave in Jun and May 2011 at 0.1 percent for annual equivalent 1.2 percent. In the third wave in Jul-Sep 2011, annual equivalent inflation increased to 2.4 percent. In the fourth wave, annual equivalent inflation in Oct-Nov 2011 jumped again at 3.0 percent. Inflation returned in the fifth wave from Dec 2011 to Jan 2012 at annual equivalent 4.3 percent. In the sixth wave, annual equivalent inflation rose to 5.7 percent in Feb-Apr 2012. In the seventh wave, annual equivalent inflation was 1.2 percent in May-Jun 2012. In the eighth wave, annual equivalent inflation increased to 3.0 percent in Jul-Aug 2012. In the ninth wave, inflation collapsed to zero in Sep-Oct 2012 and was minus 0.8 percent in annual equivalent in Sep-Nov 2012. In the tenth wave, annual equivalent inflation in Dec 2012 to Feb 2013 was 2.0 percent. Economies are shocked worldwide by intermittent waves of inflation originating in combination of zero interest rates and quantitative easing with alternation of risk appetite and risk aversion (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html).
Table IV-19, Italy, Consumer Price Index
| Month | 12 Months | |
| Feb 2013 | 0.1 | 1.9 |
| Jan | 0.2 | 2.2 |
| Dec 2012 | 0.2 | 2.3 |
| AE ∆% Dec 2012-Feb 2013 | 2.0 | |
| Nov 2012 | -0.2 | 2.5 |
| Oct | 0.0 | 2.6 |
| Sep | 0.0 | 3.2 |
| AE ∆% Sep-Nov | -0.8 | |
| Aug | 0.4 | 3.2 |
| Jul | 0.1 | 3.1 |
| AE ∆% Jul-Aug | 3.0 | |
| June | 0.2 | 3.3 |
| May | 0.0 | 3.2 |
| AE ∆% May-Jun | 1.2 | |
| Apr | 0.5 | 3.3 |
| Mar | 0.5 | 3.3 |
| Feb | 0.4 | 3.3 |
| AE ∆% Feb-Apr | 5.7 | |
| Jan | 0.3 | 3.2 |
| Dec 2011 | 0.4 | 3.3 |
| AE ∆% Dec-Jan | 4.3 | |
| Nov | -0.1 | 3.3 |
| Oct | 0.6 | 3.4 |
| AE ∆% Oct-Nov | 3.0 | |
| Sep | 0.0 | 3.0 |
| Aug | 0.3 | 2.8 |
| Jul | 0.3 | 2.7 |
| AE ∆% Jul-Sep | 2.4 | |
| Jun | 0.1 | 2.7 |
| May | 0.1 | 2.6 |
| AE ∆% May-Jun | 1.2 | |
| Apr | 0.5 | 2.6 |
| Mar | 0.4 | 2.5 |
| Feb | 0.3 | 2.4 |
| Jan | 0.4 | 2.1 |
| AE ∆% Jan-Apr | 4.9 | |
| Dec 2010 | 0.4 | 1.9 |
| Annual | ||
| 2012 | 3.0 | |
| 2011 | 2.8 | |
| 2010 | 1.5 | |
| 2009 | 0.8 | |
| 2008 | 3.3 | |
| 2007 | 1.8 | |
| 2006 | 2.1 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/84665
Consumer price inflation in Italy by segments in the estimate by ISTAT for Feb 2013 is provided in Table IV-20. Total consumer price inflation in Feb 2013 was 0.1 percent and 1.9 percent in 12 months. Inflation of goods was 0.2 percent in Feb 2013 and 2.0 percent in 12 months. Prices of durable goods decreased 0.2 percent in Feb and decreased 0.1 percent in 12 months, as typical in most countries. Prices of energy increased 0.6 percent in Feb and increased 5.0 percent in 12 months. Food prices increased 0.1 percent in Feb and increased 2.5 percent in 12 months. Prices of services decreased 0.1 percent in Feb and rose 1.7 percent in 12 months. Transport prices, also influenced by commodity prices, increased 0.0 percent in Feb and increased 3.0 percent in 12 months. Carry trades from zero interest rates to positions in commodity futures cause increases in commodity prices. Waves of inflation originate in periods when there is no risk aversion and commodity prices decline during periods of risk aversion (Section II and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html).
Table IV-20, Italy, Consumer Price Index and Segments, Month and 12-Month ∆%
| Feb 2013 | Weights | Month ∆% | 12-Month ∆% |
| General Index | 1,000,000 | 0.1 | 1.9 |
| I Goods | 559,402 | 0.2 | 2.0 |
| Food | 168,499 | 0.1 | 2.5 |
| Energy | 94,758 | 0.6 | 5.0 |
| Durable | 89,934 | -0.2 | -0.1 |
| Nondurable | 71,031 | 0.5 | 0.7 |
| II Services | 440,598 | -0.1 | 1.7 |
| Housing | 71,158 | 0.2 | 2.2 |
| Communications | 20,227 | -4.2 | -4.2 |
| Transport | 81,266 | 0.0 | 3.0 |
Source: Istituto Nazionale di Statistica
http://www.istat.it/it/archivio/84665
Chart IV-15 of the Istituto Nazionale di Statistica shows moderation in 12-month percentage changes of the consumer price index of Italy with marginal increase followed by decline to 2.5 percent in Nov 2012, 2.3 percent in Dec 2012, 2.2 percent in Jan 2013 and 1.9 percent in Feb 2013.
Chart, IV-15, Italy, Consumer Price Index, 12-Month Percentage Changes
Source: Istituto Nazionale di Statistica
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 ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| 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 IVQ2012 available now for all countries. Growth is weak throughout most of the world. Japan’s GDP increased 1.5 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 fell 0.2 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 0.9 percent, which is much lower than 6.1 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 3.7 percent and increased 0.4 percent relative to a year earlier. Japan’s GDP grew 0.0 percent in IVQ2012 at the SAAR of 0.2 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 relative to a year earlier. China grew at 2.2 percent in IIIQ2012, which annualizes at 9.1 percent and 7.4 percent relative to a year earlier. 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 7.9 percent in IVQ2012 relative to IVQ2011. 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, 7.4 percent in IIIQ2012 relative to IIIQ2011 and 7.9 percent in IVQ2012 relative to year earlier. GDP fell 0.1 percent in the euro area in IQ2012 and increased 0.3 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.2 percent IIQ2012 and fell 0.8 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.1 percent and declined 0.8 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.6 percent relative to the prior quarter and fell 0.9 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. Germany’s GDP contracted 0.6 percent in IVQ2012 and increased 0.1 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 0.5 percent in IQ2012 at the SAAR of 2.0 percent and grew 5.4 percent relative to a year earlier. 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 1.6 percent relative to IVQ2011 (Section I at http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html and earlier http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html) and weak hiring (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In IQ2012, UK GDP fell 0.1 percent, increasing 0.3 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and decreased 0.2 percent relative to a year earlier. UK GDP increased 1.0 percent in IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP fell 0.3 percent in IVQ2012 relative to IIIQ2012 and increased 0.3 percent relative to a year earlier. Italy has experienced decline of GDP in six consecutive quarters from IIIQ2011 to IVQ2012. Italy’s GDP fell 0.9 percent in IQ2012 and declined 1.6 percent relative to IQ2011. Italy’s GDP fell 0.7 percent in IIQ2012 and declined 2.6 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.2 percent and declined 2.6 percent relative to a year earlier. The GDP of Italy contracted 0.9 percent in IVQ2012 and fell 2.8 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. France’s GDP fell 0.3 percent in IVQ2012 and declined 0.3 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: 1.5 SAAR: 6.1 | 3.4 |
| China | 1.8 | 8.1 |
| Euro Area | -0.1 | 0.3 |
| Germany | 0.5 | 1.7 |
| France | 0.0 | 0.2 |
| Italy | -0.9 | -1.6 |
| United Kingdom | -0.1 | 0.3 |
| IIQ2012/IQ2012 | IIQ2012/IIQ2011 | |
| United States | QOQ: 0.3 SAAR: 1.3 | 2.1 |
| Japan | QOQ: -0.2 | 3.9 |
| China | 1.8 | 7.6 |
| Euro Area | -0.2 | -0.8 |
| Germany | 0.3 | 0.5 1.0 CA |
| France | -0.1 | 0.1 |
| Italy | -0.7 | -2.6 |
| United Kingdom | -0.4 | -0.2 |
| IIIQ2012/ IIQ2012 | IIIQ2012/ IIIQ2011 | |
| United States | QOQ: 0.8 | 2.6 |
| Japan | QOQ: –0.9 | 0.4 |
| China | 2.2 | 7.4 |
| Euro Area | -0.1 | -0.8 |
| Germany | 0.2 | 0.4 |
| France | 0.1 | 0.0 |
| Italy | -0.2 | -2.6 |
| United Kingdom | 1.0 | 0.2 |
| IVQ2012/IIIQ2012 | IVQ2012/IVQ2011 | |
| United States | QOQ: 0.0 | 1.6 |
| Japan | QOQ: 0.0 SAAR: 0.2 | 0.5 |
| China | 2.0 | 7.9 |
| Euro Area | -0.6 | -0.9 |
| Germany | -0.6 | 0.1 |
| France | -0.3 | -0.3 |
| Italy | -0.9 | -2.8 |
| United Kingdom | -0.3 | 0.3 |
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 (Section VB at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at 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 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html). In Jan 2013, Japan’s exports increased 6.4 percent in 12 months and imports 7.3 percent. 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 1.1 percentage points from Japan’s growth of GDP in IIQ2012, deducted 2.8 percentage points from GDP growth in IIIQ2012 and deducted 0.6 percentage points from GDP growth in IVQ2012. 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 Dec 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 1.4 percent in the month of Jan 2013 and increased 3.1 percent in the 12 months ending in Jan 2013 while imports increased 3.3 percent in the month of Jan and increased 3.3 percent in the 12 months ending in Jan. Net trade contributed 0.4 percentage points to growth of GDP in IQ2012, contributed 1.4 percentage points in IIQ2012, contributed 1.6 percentage points in IIIQ2012, contributed 0.8 percentage points in IVQ2012 and contributed 1.0 percentage points in 2012. Net trade deducted 0.5 percentage points from UK value added in IQ2012, deducted 0.8 percentage points in IIQ2012, added 0.4 percentage points in IIIQ2012 and subtracted 0.1 percentage points in IVQ2012. France’s exports decreased 2.4 percent in Jan while imports decreased 1.0 percent and net trade deducted 0.3 percentage points from GDP growth in IIQ2012, adding 0.3 percentage points in IIIQ2012 and 0.1 percentage points in IVQ2012. US exports decreased 1.2 percent in Jan 2013 and goods exports increased 4.3 percent in Jan 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 increased 1.8 percent in Jan 2013 and goods imports increased 0.9 percent in Jan 2013 relative to a year earlier. In the six months ending in Jan 2013, United States national industrial production accumulated increase of 0.7 percent at the annual equivalent rate of 1.4 percent, which is lower than 2.1 percent growth in 12 months. Business equipment fell 0.7 percent in Aug 2012, decreased 0.2 percent in Sep, decreased 1.2 percent in Oct, increased 3.1 percent in Nov, increased 1.3 percent in Dec and 0.1 percent in Jan 2013, growing 6.9 percent in the 12 months ending in Jan 2013 and at the annual equivalent rate of 2.7 percent in the six months ending in Jan 2013. Capacity utilization of total industry is analyzed by the Fed in its report (http://www.federalreserve.gov/releases/g17/current/): “The capacity utilization rate for total industry decreased in January to 79.1 percent, a rate that is 1.1 percentage points below its long-run (1972--2012) average.” United States industry is apparently decelerating. Manufacturing decreased 0.4 percent in Jan 2013 seasonally adjusted, increasing 2.0 percent not seasonally adjusted in 12 months, and increased 0.9 percent in the six months ending in Jan 2013 or at the annual equivalent rate of 1.8 percent. 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 | Exports 12 M ∆% | Imports | Imports 12 M ∆% | |
| USA | -1.2 Jan | 4.3 Jan | 1.8 Jan | 0.9 Jan |
| Japan | Jan 2013 6.4 Dec -5.8 Nov -4.1 Oct -6.5 Sep -10.3 Aug -5.8 Jul -8.1 | Jan 2013 7.3 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 -25.6 Feb | 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 23.6 Jan-Feb | 2.2 Jul -0.3 Aug 4.9 Sep -9.4 Oct 11.3 Oct 4.9 Dec -12.5 Jan 13 -21.6 Feb | 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 5.1 Jan-Feb |
| Euro Area | -3.1 12-M Dec | 7.4 Jan-Dec | -5.9 12-M Dec | 1.7 Jan-Dec |
| Germany | 1.4 Jan CSA | 3.1 Jan | 3.3 Jan CSA | 3.3 Jan |
| France Jan | -2.4 | 0.0 | -1.0 | 0.7 |
| Italy Dec | -0.5 | -3.7 | 1.3 | -6.4 |
| 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 | -1.1 IIQ2012 -2.8 IIIQ2012 -0.6 IVQ2012 | |||
| Germany | 0.4 IQ2012 1.4 IIQ2012 1.6 IIIQ2012 0.8 IVQ2012 1.0 2012 | |||
| France | -0.3 IIQ2012 0.3 IIIQ2012 0.1 IVQ2012 | |||
| UK | -0.5 IQ2012 -0.8 IIQ2012 0.4 IIIQ2012 -0.1 IVQ2012 |
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.statistics.gov.uk/hub/index.html
The geographical breakdown of exports and imports of Japan with selected regions and countries is provided in Table VB-5 for Dec 2012. The share of Asia in Japan’s trade is more than one half, 53.2 percent of exports and 44.8 percent of imports. Within Asia, exports to China are 15.9 percent of total exports and imports from China 22.1 percent of total imports. The second largest export market for Japan in Oct 2012 is the US with share of 17.5 percent of total exports and share of imports from the US of 8.1 percent in total imports. Western Europe has share of 10.9 percent in Japan’s exports and of 9.6 percent in imports. Rates of growth of exports of Japan in Jan 2013 are not sharply negative for all countries and regions as in Dec 2012 with the exception of minus 5.9 percent for exports to Western Europe, minus 15.8 percent for France and minus 1.8 percent for the UK. 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 positive for all trading partners with exception of decline of 3.5 percent for Australia. Imports from Asia increased 6.1 percent in the 12 months ending in Jan 2013 while imports from China increased 6.5 percent. Data are in millions of yen, which has effects of recent depreciation of the yen relative to the United States dollar (USD).
Table V-5, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yens
| Jan 2013 | Exports | 12 months ∆% | Imports Millions Yen | 12 months ∆% |
| Total | 4,799,161 | 6.4 | 6,428,601 | 7.3 |
| Asia | 2,554,209 | 8.4 | 2,881,218 | 6.1 |
| China | 762,899 | 3.0 | 1,417,516 | 6.5 |
| USA | 839,836 | 10.9 | 521,102 | 5.8 |
| Canada | 62,477 | 0.3 | 88,641 | 2.9 |
| Brazil | 35,726 | 1.5 | 92,697 | 3.9 |
| Mexico | 63,340 | 21.0 | 32,732 | 18.8 |
| Western Europe | 523,863 | -5.9 | 616,973 | 6.3 |
| Germany | 121,942 | 0.2 | 167,753 | 2.1 |
| France | 38,170 | -15.8 | 88,718 | 11.8 |
| UK | 95,788 | -1.8 | 50,961 | 15.7 |
| Middle East | 163,562 | 3.1 | 1,259,288 | 9.8 |
| Australia | 95,765 | -10.6 | 391,186 | -3.5 |
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 53.0 in Feb from 53.2 in Jan, indicating expansion at a moderate rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10838).This index has remained above the contraction territory of 50.0 during 43 consecutive months and the average for IQ2013 in the first two months is slightly higher than 52.9 in IVQ2012. The employment index was unchanged at 52.3 in Feb relative to 52.3 in Jan with input prices rising at a faster rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10838) David Hensley, Director of Global Economic Coordination at JP Morgan, finds finds that increasing new business could signal improvement in the index (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10838). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, decreased to 50.8 in Feb from 51.4 in Dec, which is the fourth consecutive reading above 50 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10802). New export business declined for the eleventh consecutive month in Jan, but at a marginal rate of contraction. The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 54.9 in Jan to 52.9 in Feb, indicating solid expansion but at a four-month low (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10833). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 54.5 in Jan to 52.1 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10833). Andre Loes, Chief Economist, Brazil, at HSBC, finds recovering economy but within a modest forecast for 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10833). The HSBC Brazil Purchasing Managers’ IndexTM (PMI™) decreased from a 22-month high in Jan 2012 at 53.2 to 52.5 in Feb 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10766). Andre Loes, Chief Economist, Brazil at HSBC, finds continuing expansion in Brazil’s manufacturing with greater strength in IQ2013 than in IVQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10766).
VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index™ (PMI™) seasonally adjusted decreased to 55.2 in Feb from 55.8 in Jan, continuing to suggest strengthening US manufacturing activity (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10722).
New export orders registered 48.7 in Feb from 51.5 in Jan, indicating contraction at a moderate rate while output was at the highest reading in about two years. Chris Williams, Chief Economist at Markit, finds that the survey data with highest rate of output expansion in about two years are consistent with impulse to US economic growth but weakness in foreign orders that slowed new overall orders (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10722). The Markit US Manufacturing Purchasing Managers’ Index™ (PMI™) decreased to 54.3 in Feb from 55.8 in Jan (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10792). The index of new exports orders decreased from 51.5 in Jan 2013 to 48.5 in Feb 2013 while total new orders decreased from 57.4 in Jan to 55.4 in Feb. Chris Williamson, Chief Economist at Markit, finds that manufacturing in the US is moving to growth of 2 percent in IQ2013 and could support growth of the US economy (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10792). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® increased 1.1 percentage points from 53.1 in Jan to 54.2 in Feb (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 4.5 percentage points from 53.3 in Jan to 57.8 in Feb. The index of exports increased 3.0 percentage points from 50.5 in Jan to 53.5 in Feb, remaining in expansion territory. The Non-Manufacturing ISM Report on Business® PMI increased 0.8 percentage points from 55.2 in Jan to 56.0 in Feb, indicating production growth during 43 consecutive months, while the index of new orders increased 3.8 percentage points from 54.4 in Jan to 58.2 in Feb (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 | Feb 12 months NSA ∆%: 2.0; ex food and energy ∆%: 2.0 Feb month SA ∆%: 0.7; ex food and energy ∆%: 0.2 |
| Producer Price Index | Feb 12-month NSA ∆%: 1.7; ex food and energy ∆% 1.7 |
| PCE Inflation | Jan 12-month NSA ∆%: headline 1.2; ex food and energy ∆% 1.3 |
| Employment Situation | Household Survey: Feb Unemployment Rate SA 7.7% |
| Nonfarm Hiring | Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million |
| GDP Growth | BEA Revised National Income Accounts IIQ2012/IIQ2011 2.1 IIIQ2012/IIIQ2011 2.6 IVQ2012/IVQ2011 1.6 IQ2012 SAAR 2.0 IIQ2012 SAAR 1.3 IIIQ2012 SAAR 3.1 IVQ2012 SAAR 0.1 |
| Real Private Fixed Investment | SAAR IVQ2012 9.7 ∆% IVQ2007 to IIIQ2012: minus 11.2% Blog 3/3/13 |
| Personal Income and Consumption | Jan month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% -4.0 |
| Quarterly Services Report | IVQ12/IVQ11 SA ∆%: Financial & Insurance 6.2 |
| Employment Cost Index | Compensation Private IVQ2012 SA ∆%: 0.5 |
| Industrial Production | Jan month SA ∆%: -0.1 Manufacturing Dec SA ∆% -0.4 Dec 12 months SA ∆% 1.7, NSA 2.0 |
| 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 3/10/2013 |
| New York Fed Manufacturing Index | General Business Conditions From Jan -7.78 to Feb +10.04 |
| Philadelphia Fed Business Outlook Index | General Index from Jan -5.8 to Feb -12.5 |
| Manufacturing Shipments and Orders | New Orders SA Jan ∆% -2.0 Ex Transport 1.3 Jan NSA New Orders 1.2 Ex transport 3.0 |
| Durable Goods | Jan New Orders SA ∆%: -5.2; ex transport ∆%: 1.9 |
| Sales of New Motor Vehicles | Jan-Feb 2013 2,235,352; Jan-Feb 2012 2,062,722. Jan 13 SAAR 15.29 million, Feb 13 SAAR 15.38 million, Feb 2012 SAAR 14.50 million Blog 3/10/13 |
| Sales of Merchant Wholesalers | Jan 2013/Jan 2012 NSA ∆%: Total 5.9; Durable Goods: 5.4; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Jan 13/Jan 12 NSA ∆%: Sales Total Business 4.9; Manufacturers 3.1 |
| Sales for Retail and Food Services | Feb 2013/Feb 2012 ∆%: Retail and Food Services 3.6; Retail ∆% 3.6 |
| Value of Construction Put in Place | Jan SAAR month SA ∆%: -2.1 Jan 12-month NSA: 7.6 Jan-Dec 2012 ∆% 9.2 |
| Case-Shiller Home Prices | Dec 2012/Dec 2011 ∆% NSA: 10 Cities 5.9; 20 Cities: 6.8 |
| FHFA House Price Index Purchases Only | Dec SA ∆% 0.6; |
| New House Sales | Jan 2013 month SAAR ∆%: 15.6 |
| Housing Starts and Permits | Jan Starts month SA ∆%: -8.5 ; Permits ∆%: 1.8 |
| Trade Balance | Balance Jan SA -$44,448 million versus Dec -$18144 million |
| Export and Import Prices | Feb 12-month NSA ∆%: Imports -0.3; Exports 1.5 |
| Consumer Credit | Jan ∆% annual rate: 7.0 |
| Net Foreign Purchases of Long-term Treasury Securities | Jan Net Foreign Purchases of Long-term Treasury Securities: $25.7 billion |
| Treasury Budget | Fiscal Year 2013/2012 ∆% Feb: Receipts 13.1; Outlays 2.1; Individual Income Taxes 17.7 Deficit Fiscal Year 2012 $1,089,353 million Blog 3/17/2013 |
| 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 | Jan 2013 SAAR ∆%: Securities -2.5 Loans 5.9 Cash Assets 47.9 Deposits 2.8 Blog 2/24/13 |
| Flow of Funds | 2012 ∆ since 2007 Assets -$868.9 MM Real estate -$3562.7 MM Financial +$2204.3 MM Net Worth -$46.6 MM Blog 3/17/13 |
| Current Account Balance of Payments | IVQ2012 +$6793 MM %GDP 2.8 Blog 3/17/13 |
Links to blog comments in Table USA:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html
12/23-24/12 http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.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
Growth rates and levels of sales in millions of dollars of manufacturers, retailers and merchant wholesalers are provided in Table VA-1. Total business sales decreased 0.3 percent in Jan after increasing 0.1 percent in Dec and increased 4.9 percent in the 12 months ending in Jan 2013. Sales of manufacturers decreased 0.2 percent in Jan after changing 0.0 percent in Dec and increased 3.1 percent in the 12 months ending in Jan. Retailers’ sales increased 0.3 percent in Jan, increased 0.4 percent in Dec and increased 6.1 percent in 12 months ending in Jan. Sales of merchant wholesalers decreased 0.8 percent in Jan, changing 0.0 percent in Dec and increased 5.9 percent in 12 months ending in Jan. These data are not adjusted for price changes such that they reflect increases in both quantities and prices.
Table VA-1, US, Percentage Changes for Sales of Manufacturers, Retailers and Merchant Wholesalers
| Jan 13/ Dec 12 | Jan 2013 | Dec 12/ Nov 12 ∆% SA | Jan 13/ Jan 12 | |
| Total Business | -0.3 | 1,194,134 | 0.1 | 4.9 |
| Manufacturers | -0.2 | 449,650 | 0.0 | 3.1 |
| Retailers | 0.3 | 340,170 | 0.4 | 6.1 |
| Merchant Wholesalers | -0.8 | 404,314 | 0.0 | 5.9 |
Source: US Census Bureau http://www.census.gov/mtis/
Chart VA-1 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers seasonally adjusted (SA) in millions of dollars. Seasonal adjustment softens adjacent changes for purposes of comparing short-term variations free of seasonal factors. There was sharp drop in the global recession followed by sharp recovery with decline and recovery in the final segment above the peak before the global recession. Data are not adjusted for price changes.
Chart VA-1, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Jan 2013
US Census Bureau
Chart VA-2 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers not seasonally adjusted (NSA) in millions of dollars. The series without adjustment shows sharp jagged behavior because of monthly fluctuations following seasonal patterns. There is sharp recovery from the global recession in a robust trend, which is mixture of price and quantity effects because data are not adjusted for price changes. There is stability in the final segment.
Chart VA-2, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Jan 2013
US Census Bureau
Businesses added cautiously to inventories to replenish stocks. Retailers added 1.5 percent to inventories in Jan 2013 and 0.8 percent in Dec with growth of 9.2 percent in 12 months, as shown in Table VA-2. Total business increased inventories by 1.0 percent in Jan, 0.3 percent in Dec and 5.7 percent in 12 months. Inventories sales/ratios of total business continued at a level close to 1.28 under judicious management to avoid costs and risks. Inventory/sales ratios of manufacturers and retailers are higher than for merchant wholesalers. There is stability in inventory/sales ratios in individual months and relative to a year earlier.
Table VA-2, US, Percentage Changes for Inventories of Manufacturers, Retailers and Merchant Wholesalers and Inventory/Sales Ratios
| Inventory Change | Jan 13 | Jan 13/ Dec 12 ∆% SA | Dec 12/ Nov 12 ∆% SA | Jan 13/ Jan 12 ∆% NSA |
| Total Business | 1,632,604 | 1.0 | 0.3 | 5.7 |
| Manufacturers | 614,438 | 0.5 | 0.0 | 2.3 |
| Retailers | 509,842 | 1.5 | 0.8 | 9.2 |
| Merchant | 508,324 | 1.2 | 0.1 | 6.5 |
| Inventory/ | Jan 13 | Dec 2012 SA | Nov 2012 SA | Oct 2011 SA |
| Total Business | 1,632,604 | 1.29 | 1.28 | 1.26 |
| Manufacturers | 614,438 | 1.28 | 1.27 | 1.28 |
| Retailers | 509,842 | 1.40 | 1.38 | 1.33 |
| Merchant Wholesalers | 508,324 | 1.21 | 1.19 | 1.17 |
Source: US Census Bureau http://www.census.gov/mtis/
Chart VA-3 of the US Census Bureau provides total business inventories of manufacturers, retailers and merchant wholesalers seasonally adjusted (SA) in millions of dollars from Jan 1992 to Jan 2013. The impact of the two recessions of 2001 and IVQ2007 to IIQ2009 is evident in the form of sharp reductions in inventories. Inventories have surpassed the peak before the global recession. Data are not adjusted for price changes.
Chart VA-3, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Jan 2013
US Census Bureau
Chart VA-4 provides total business inventories of manufacturers, retailers and merchant wholesalers not seasonally adjusted (NSA) from Jan 1992 to Jan 2013 in millions of dollars. The recessions of 2001 and IVQ2007 to IIQ2009 are evident in the form of sharp reductions of inventories. There is sharp upward trend of inventory accumulation after both recessions. Total business inventories are significantly higher than in the peak before the global recession.
Chart VA-4, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Jan 2013
US Census Bureau
Inventories follow business cycles. When recession hits sales inventories pile up, declining with expansion of the economy. In a fascinating classic opus, Lloyd Meltzer (1941, 129) concludes:
“The dynamic sequences (I) through (6) were intended to show what types of behavior are possible for a system containing a sales output lag. The following conclusions seem to be the most important:
(i) An economy in which business men attempt to recoup inventory losses will always undergo cyclical fluctuations when equilibrium is disturbed, provided the economy is stable.
This is the pure inventory cycle.
(2) The assumption of stability imposes severe limitations upon the possible size of the marginal propensity to consume, particularly if the coefficient of expectation is positive.
(3) The inventory accelerator is a more powerful de-stabilizer than the ordinary acceleration principle. The difference in stability conditions is due to the fact that the former allows for replacement demand whereas the usual analytical formulation of the latter does not. Thus, for inventories, replacement demand acts as a de-stabilizer. Whether it does so for all types of capital goods is a moot question, but I believe cases may occur in which it does not.
(4) Investment for inventory purposes cannot alter the equilibrium of income, which depends only upon the propensity to consume and the amount of non-induced investment.
(5) The apparent instability of a system containing both an accelerator and a coefficient of expectation makes further investigation of possible stabilizers highly desirable.”
Chart VA-5 shows the increase in the inventory/sales ratios during the recession of 2007-2009. The inventory/sales ratio fell during the expansions. The inventory/sales ratio declined to a trough in 2011, climbed and then stabilized at current levels in 2012 and beginning of 2013.
Chart VA-5, Total Business Inventories/Sales Ratios 2002 to 2013
Source: US Census Bureau
Sales of retail and food services increased 1.1 percent in Feb 2013 after increasing 0.2 percent in Jan 2013 seasonally adjusted (SA), growing 3.6 percent in Jan-Feb 2013 relative to Jan-Feb 2012 not seasonally adjusted (NSA), as shown in Table VA-3. Excluding motor vehicles and parts, retail sales increased 1.0 percent in Feb 2013, increasing 0.4 percent in Jan 2013 SA and increasing 2.7 percent NSA in Jan-Feb 2013 relative to a year earlier. Sales of motor vehicles and parts increased 1.1 percent in Feb 2013 after decreasing 0.3 percent in Jan 2013 SA and increasing 7.3 percent NSA in Jan-Feb 2013 relative to a year earlier. Gasoline station sales increased 5.0 percent SA in Feb 2013 after increasing 0.7 percent in Jan 2013 in oscillating prices of gasoline that are moderating, increasing 0.8 percent in Jan-Feb 2013 relative to a year earlier.
Table VA-3, US, Percentage Change in Monthly Sales for Retail and Food Services, ∆%
| Feb/ Jan ∆% SA | Jan/Dec ∆% SA | Jan-Feb 2013 Million Dollars NSA | Jan-Feb 2013 from Jan-Feb 2012 ∆% NSA | |
| Retail and Food Services | 1.1 | 0.2 | 763,376 | 3.6 |
| Excluding Motor Vehicles and Parts | 1.0 | 0.4 | 619,682 | 2.7 |
| Motor Vehicles & Parts | 1.1 | -0.3 | 143,694 | 7.3 |
| Retail | 1.3 | 0.3 | 679,500 | 3.6 |
| Building Materials | 1.1 | 0.8 | 39,422 | 3.7 |
| Food and Beverage | 0.8 | 0.1 | 101,669 | 2.3 |
| Grocery | 0.7 | 0.2 | 91,940 | 2.0 |
| Health & Personal Care Stores | 0.0 | 0.2 | 45,380 | 0.0 |
| Clothing & Clothing Accessories Stores | 0.2 | 0.8 | 33,262 | 3.6 |
| Gasoline Stations | 5.0 | 0.7 | 82,961 | 0.8 |
| General Merchandise Stores | 0.5 | 0.2 | 91,687 | -4.0 |
| Food Services & Drinking Places | -0.7 | -0.6 | 83,876 | 3.4 |
Source: US Census Bureau http://www.census.gov/retail/
Chart VA-6 of the US Bureau of the Census shows percentage change of retail and food services sales. Auto sales have been increasing strongly monthly, and particularly relative to a year earlier, but with weakness in the total excluding auto sales and declines or mild growth in general merchandise.
Chart VA-6, US, Percentage Change of Retail and Food Services Sales
Source: US Census Bureau
http://www2.census.gov/retail/releases/historical/marts/img/martsbrf.gif
Chart VA-7 of the US Census Bureau provides total sales of retail trade and food services seasonally adjusted (SA) from Jan 1992 to Feb 2013 in millions of dollars. The impact on sales of the shallow recession of 2001 was much milder than the sharp contraction in the global recession from IVQ2007 to IIQ2009. There is flattening in the final segment of the series followed by another increase. Data are not adjusted for price changes.
Chart VA-7, US, Total Sales of Retail Trade and Food Services, SA, Jan 1992-Feb 2013, Millions of Dollars
Source: US Census Bureau
Chart VA-8 of the US Census Bureau provides total sales of retail trade and food services not seasonally adjusted (NSA) in millions of dollars from Jan 1992 to Feb 2013. Data are not adjusted for seasonality, which explains sharp jagged behavior, or price changes. There was contraction during the global recession from IVQ2007 to IIQ2009 with strong rebound to a higher level and stability followed by strong increase in the final segment.
Chart VA-8, US, Total Sales of Retail Trade and Food Services, NSA, Jan 1992-Feb 2013, Millions of Dollars
Source: US Census Bureau
Chart IA2-1 provides prices of total US imports 2001-2013. Prices fell during the contraction of 2001. Import price inflation accelerated after unconventional monetary policy of near zero interest rates in 2003-2004 and quantitative easing by withdrawing supply with the suspension of 30-year Treasury bond auctions. Slow pace of adjusting fed funds rates from 1 percent by increments of 25 basis points in 17 consecutive meetings of the Federal Open Market Committee (FOMC) between Jun 2004 and Jun 2006 continued to give impetus to carry trades. The reduction of fed funds rates toward zero in 2008 fueled a spectacular global hunt for yields that caused commodity price inflation in the middle of a global recession. After risk aversion in 2009 because of the announcement of TARP (Troubled Asset Relief Program) creating anxiety on “toxic assets” in bank balance sheets (see Cochrane and Zingales 2009), prices collapsed because of unwinding carry trades. Renewed price increases returned with zero interest rates and quantitative easing. Monetary policy impulses in massive doses have driven inflation and valuation of risk financial assets in wide fluctuations over a decade.
Chart IA2-1, US, Prices of Total US Imports 2001=100, 2001-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-2 provides 12-month percentage changes of prices of total US imports from 2001 to 2013. The only plausible explanation for the wide oscillations is by the carry trade originating in unconventional monetary policy. Import prices jumped in 2008 during deep and protracted global recession driven by carry trades from zero interest rates to long, leveraged positions in commodity futures. Carry trades were unwound during the financial panic in the final quarter of 2008 that resulted in flight to government obligations. Import prices jumped again in 2009 with subdued risk aversion because US banks did not have unsustainable toxic assets. Import prices then fluctuated as carry trades were resumed during periods of risk appetite and unwound during risk aversion resulting from the European debt crisis.
Chart IA2-2, US, Prices of Total US Imports, 12-Month Percentage Changes, 2001-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-3 provides prices of US imports from 1982 to 2013. There is no similar episode to that of the increase of commodity prices in 2008 during a protracted and deep global recession with subsequent collapse during a flight into government obligations. Trade prices have been driven by carry trades created by unconventional monetary policy in the past decade.
Chart IA2-3, US, Prices of Total US Imports, 2001=100, 1982-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-4 provides 12-month percentage changes of US total imports from 1982 to 2013. There have not been wide consecutive oscillations as the ones during the global recession of IVQ2007 to IIQ2009.
Chart IA2-4, US, Prices of Total US Imports, 12-Month Percentage Changes, 1982-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-5 provides the index of US export prices from 2001 to 2013. Import and export prices have been driven by impulses of unconventional monetary policy in massive doses. The most recent segment in Chart IA2-5 shows declining trend resulting from a combination of the world economic slowdown and the decline of commodity prices as carry trade exposures are unwound because of risk aversion to the sovereign debt crisis in Europe.
Chart IA2-5, US, Prices of Total US Exports, 2001=100, 2001-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-6 provides prices of US total exports from 1982 to 2013. The rise before the global recession from 2003 to 2008, driven by carry trades, is also unique in the series and is followed by another steep increase after risk aversion moderated in IQ2009.
Chart IA2-6, US, Prices of Total US Exports, 2001=100, 1982-2013
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IA2-7 provides 12-month percentage changes of total US exports from 1982 to 2013. The uniqueness of the oscillations around the global recession of IVQ2007 to IIQ2009 is clearly revealed.
Chart IA2-7, US, Prices of Total US Exports, 12-Month Percentage Changes, 1982-2013
Source:
Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Twelve-month percentage changes of US prices of exports and imports are provided in Table IA2-1. Import prices have been driven since 2003 by unconventional monetary policy of near zero interest rates influencing commodity prices according to moods of risk aversion. In a global recession without risk aversion until the panic of Sep 2008 with flight to government obligations, import prices increased 21.4 percent in the 12 months ending in Jul 2008, 18.1 percent in the 12 months ending in Aug 2008, 13.1 percent in the 12 months ending in Sep 2008, 4.9 percent in the twelve months ending in Oct 2008 and fell 5.9 percent in the 12 months ending in Nov 2008 when risk aversion developed in 2008 until mid 2009 (http://www.bls.gov/mxp/data.htm). Import prices rose again sharply in Nov 2010 by 4.1 percent and in Nov 2011 by 0.1 percent in the presence of zero interest rates with relaxed mood of risk aversion until carry trades were unwound in May 2011 and following months as shown by decrease of import prices by 1.4 percent in the 12 months ending in Nov 2012 and 1.8 percent in Dec 2012 and decrease of 0.3 percent in prices of exports in the 12 months ending in Dec 2012. Import prices increased 13.6 percent in the 12 months ending in Jan 2008, fell 12.5 percent in the 12 months ending in Jan 2009 and increased 11.4 percent in the 12 months ending in Jan 2010. Fluctuations are much sharper in imports because of the high content of oil that as all commodities futures contracts increases sharply with zero interest rates and risk appetite, contracting under risk aversion. There is similar behavior of prices of imports ex fuels, exports and exports ex agricultural goods but less pronounced than for commodity-rich prices dominated by carry trades from zero interest rates. A critical event resulting from unconventional monetary policy driving higher commodity prices by carry trades is the deterioration of the terms of trade, or export prices relative to import prices, that has adversely affected US real income growth relative to what it would have been in the absence of unconventional monetary policy. Europe, Japan and other advanced economies have experienced similar deterioration of their terms of trade. Because of unwinding carry trades of commodity futures as a result of risk aversion, import prices decreased 0.3 percent in the 12 months ending in Feb 2013, export prices increased 1.5 percent and prices of nonagricultural exports were unchanged. Imports excluding fuel were unchanged in the 12 months ending in Feb 2013. At the margin, price changes over the year in world exports and imports are decreasing or increasing moderately because of unwinding carry trades in a temporary mood of risk aversion.
Table IA2-1, US, Twelve-Month Percentage Rates of Change of Prices of Exports and Imports
| Imports | Imports Ex Fuels | Exports | Exports Non-Ag | |
| Feb 2013 | -0.3 | 0.0 | 1.5 | 0.0 |
| Feb 2012 | 5.1 | 2.4 | 1.8 | 2.8 |
| Feb 2011 | 7.6 | 3.8 | 8.7 | 6.3 |
| Feb 2010 | 11.3 | 1.9 | 3.4 | 3.6 |
| Feb 2009 | -12.7 | -1.2 | -4.5 | -3.4 |
| Feb 2008 | 13.5 | 4.3 | 6.9 | 4.8 |
| Feb 2007 | 1.2 | 2.5 | 4.9 | 3.8 |
| Feb 2006 | 6.9 | 0.8 | 2.7 | 2.7 |
| Feb 2005 | 6.1 | 2.7 | 3.4 | 4.6 |
| Feb 2004 | 0.9 | 1.8 | 2.7 | 1.6 |
| Feb 2003 | 7.5 | 0.5 | 2.3 | 1.6 |
| Feb 2002 | -8.3 | NA | -2.9 | -2.9 |
| Feb 2001 | 0.2 | NA | 0.6 | 0.5 |
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/
Table IIA2-2 provides 12-month percentage changes of the import price index all commodities from 2001 to 2013. Interest rates moving toward zero during unconventional monetary policy in 2008 induced carry trades into highly-leveraged commodity derivatives positions that caused increased in 12-month percentage changes of import prices of around 20 percent. The flight into dollars and Treasury securities by fears of toxic assets in banks in the proposal of TARP (Cochrane and Zingales 2009) caused reversion of carry trades and collapse of commodity futures. Twelve-month percentage changes of import prices at the end of 2012 and into 2013 occurred during another bout of risk aversion.
Table IA2-2, US, Twelve-Month Percentage Changes of Import Price Index All Commodities, 2001-2013
| Year | Jan | Feb | Mar | Apr | May | Jun | Oct | Nov | Dec |
| 2001 | 2.8 | 0.2 | -1.6 | -0.7 | -0.8 | -2.6 | -7.4 | -8.8 | -9.1 |
| 2002 | -8.9 | -8.3 | -5.6 | -3.6 | -3.7 | -3.6 | 1.9 | 2.5 | 4.2 |
| 2003 | 5.8 | 7.5 | 6.8 | 1.8 | 1.0 | 2.2 | 0.8 | 2.3 | 2.4 |
| 2004 | 2.2 | 0.9 | 1.1 | 4.6 | 6.9 | 5.7 | 9.9 | 9.0 | 6.7 |
| 2005 | 5.7 | 6.1 | 7.6 | 8.4 | 5.9 | 7.4 | 8.2 | 6.4 | 8.0 |
| 2006 | 8.7 | 6.9 | 4.5 | 5.8 | 8.6 | 7.4 | -1.0 | 1.3 | 2.5 |
| 2007 | 0.0 | 1.2 | 2.8 | 2.1 | 1.2 | 2.3 | 9.1 | 12.0 | 10.6 |
| 2008 | 13.6 | 13.5 | 15.2 | 16.9 | 19.1 | 21.3 | 4.9 | -5.9 | -10.1 |
| 2009 | -12.5 | -12.7 | -14.9 | -16.4 | -17.3 | -17.5 | -5.6 | 3.4 | 8.6 |
| 2010 | 11.4 | 11.3 | 11.2 | 11.2 | 8.5 | 4.3 | 3.9 | 4.1 | 5.3 |
| 2011 | 5.6 | 7.6 | 10.3 | 11.9 | 12.9 | 13.6 | 11.1 | 10.1 | 8.5 |
| 2012 | 6.9 | 5.1 | 3.5 | 0.8 | -0.8 | -2.5 | 0.0 | -1.4 | -2.0 |
| 2013 | -1.3 | -0.3 |
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
There is finer detail in one-month percentage changes of imports of the US in Table IA2-3. Carry trades into commodity futures induced by interest rates moving to zero in unconventional monetary policy caused sharp monthly increases in import prices for cumulative increase of 13.8 percent from Mar to Jul 2008 at average rate of 2.6 percent per month or annual equivalent in five months of 36.4 percent (3.1 percent in Mar 2008, 2.8 percent in Apr 2008, 2.8 percent in May 2008, 3.0 percent in Jun 2008 and 1.4 percent in Jul 2008, data from http://www.bls.gov/mxp/data.htm). There is no other explanation for increases in import prices during sharp global recession and contracting world trade. Import prices then fell 23.4 percent from Aug 2008 to Jan 2009 or at the annual equivalent rate of minus 41.4 percent in the flight to US government securities in fear of the need to buy toxic assets from banks in the TARP program (Cochrane and Zingales 2009). Risk aversion during the first sovereign debt crisis of the euro area in May-Jun 2010 caused decline of US import prices at the annual equivalent rate of 11.4 percent. US import prices have been driven by combinations of carry trades induced by unconventional monetary policy and bouts of risk aversion (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html). US import prices increased 0.6 percent in Jan 2013 and 1.1 percent in Feb 2013 for annual equivalent rate of 10.7 percent, similar to those in national price indexes worldwide, originating in carry trades from zero interest rates to commodity futures.
Table IA2-3, US, One-Month Percentage Changes of Import Price Index All Commodities, 2001-2013
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2001 | 0.0 | -0.6 | -1.6 | -0.5 | 0.2 | -0.4 | -1.5 | -0.1 | -0.1 | -2.3 | -1.5 | -1.0 |
| 2002 | 0.2 | 0.0 | 1.3 | 1.6 | 0.1 | -0.3 | 0.4 | 0.3 | 0.7 | 0.0 | -0.9 | 0.6 |
| 2003 | 1.8 | 1.7 | 0.6 | -3.1 | -0.7 | 0.9 | 0.5 | 0.0 | -0.5 | 0.1 | 0.5 | 0.7 |
| 2004 | 1.5 | 0.4 | 0.8 | 0.2 | 1.5 | -0.2 | 0.4 | 1.5 | 0.5 | 1.6 | -0.3 | -1.4 |
| 2005 | 0.6 | 0.9 | 2.2 | 0.9 | -0.8 | 1.2 | 1.2 | 1.4 | 2.1 | 0.1 | -1.9 | 0.0 |
| 2006 | 1.2 | -0.8 | -0.1 | 2.1 | 1.8 | 0.1 | 0.8 | 0.5 | -2.2 | -2.5 | 0.4 | 1.1 |
| 2007 | -1.2 | 0.4 | 1.6 | 1.4 | 0.9 | 1.2 | 1.3 | -0.3 | 0.6 | 1.5 | 3.2 | -0.2 |
| 2008 | 1.5 | 0.2 | 3.1 | 2.8 | 2.8 | 3.0 | 1.4 | -3.1 | -3.6 | -6.0 | -7.4 | -4.6 |
| 2009 | -1.3 | 0.0 | 0.5 | 1.1 | 1.7 | 2.7 | -0.6 | 1.5 | 0.2 | 0.8 | 1.5 | 0.2 |
| 2010 | 1.2 | -0.1 | 0.4 | 1.1 | -0.8 | -1.2 | 0.0 | 0.4 | 0.0 | 1.1 | 1.7 | 1.4 |
| 2011 | 1.5 | 1.7 | 3.0 | 2.6 | 0.1 | -0.6 | 0.1 | -0.4 | -0.1 | -0.4 | 0.7 | 0.0 |
| 2012 | 0.0 | 0.0 | 1.4 | -0.1 | -1.5 | -2.3 | -0.7 | 1.2 | 1.0 | 0.3 | -0.7 | -0.6 |
| 2013 | 0.6 | 1.1 |
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-8 shows the US monthly import price index of all commodities excluding fuels from 2001 to 2013. All curves of nominal values follow the same behavior under the influence of unconventional monetary policy. Zero interest rates without risk aversion result in jumps of nominal values while under strong risk aversion even with zero interest rates there are declines of nominal values.
Chart IA2-8, US, Import Price Index All Commodities Excluding Fuels, 2001=100, 2001-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-9 provides 12-month percentage changes of the US import price index excluding fuels between 2001 and 2013. There is the same behavior of carry trades driving up without risk aversion and down with risk aversion prices of raw materials, commodities and food in international trade during the global recession of IVQ2007 to IIQ2009 and in previous and subsequent periods.
Chart IA2-9, US, Import Price Index All Commodities Excluding Fuels, 12-Month Percentage Changes, 2002-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-10 provides the monthly US import price index ex petroleum from 2001 to 2013. Prices including or excluding commodities follow the same fluctuations and trends originating in impulses of unconventional monetary policy of zero interest rates.
Chart IA2-10, US, Import Price Index ex Petroleum, 2001=100, 2000-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-11 provides the US import price index ex petroleum from 1982 to 2013. There is the same unique hump in 2008 caused by carry trades from zero interest rates to prices of commodities and raw materials.
Chart IA2-11, US, Import Price Index ex Petroleum, 2001=100, 1985-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-12 provides 12-month percentage changes of the import price index ex petroleum from 1986 to 2013. The oscillations caused by the carry trade in increasing prices of commodities and raw materials without risk aversion and subsequently decreasing them during risk aversion are quite unique.
Chart IA2-12, US, Import Price Index ex Petroleum, 12-Month Percentage Changes, 1986-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-13 of the US Energy Information Administration shows the price of WTI crude oil since the 1980s. Chart IA2-13 captures commodity price shocks during the past decade. The costly mirage of deflation was caused by the decline in oil prices during the recession of 2001. The upward trend after 2003 was promoted by the carry trade from near zero interest rates. The jump above $140/barrel during the global recession in 2008 at $145.29/barrel on Jul 3, 2008, can only be explained by the carry trade promoted by monetary policy of zero fed funds rate. After moderation of risk aversion, the carry trade returned with resulting sharp upward trend of crude prices. Risk aversion resulted in another drop in recent weeks followed by some recovery.
Chart IA2-13, US, Crude Oil Futures Contract
Source: US Energy Information Administration
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D
The price index of US imports of petroleum and petroleum products in shown in Chart IA2-14. There is similar behavior of the curves all driven by the same impulses of monetary policy.
Chart IA2-14, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 2001-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-15 provides the price index of petroleum and petroleum products from 1982 to 2013. The rise in prices during the global recession in 2008 and the decline after the flight to government obligations is unique in the history of the series. Increases in prices of trade in petroleum and petroleum products were induced by carry trades and declines by unwinding carry trades in flight to government obligations.
Chart IA2-15, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 1982-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-16 provides 12-month percentage changes of the price index of US imports of petroleum and petroleum products from 1982 to 2013. There were wider oscillations in this index from 1999 to 2001 (see Barsky and Killian 2004 for an explanation).
Chart IA2-16, US, Import Price Index of Petroleum and Petroleum Products, 12-Month Percentage Changes, 1982-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
The price index of US exports of agricultural commodities is in Chart IA2-17 from 2001 to 2013. There are similar fluctuations and trends as in all other price index originating in unconventional monetary policy repeated over a decade. The most recent segment in 2011 has declining trend in a new flight from risk resulting from the sovereign debt crisis in Europe followed by declines in Jun 2012 and Nov 2012 with stability in Dec 2012 to Jan-Feb 2013.
Chart IA2-17, US, Exports Price Index of Agricultural Commodities, 2001=100, 2001-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-18 provides the price index of US exports of agricultural commodities from 1982 to 2013. The increase in 2008 in the middle of deep, protracted contraction was induced by unconventional monetary policy. The decline from 2008 into 2009 was caused by unwinding carry trades in a flight to government obligations. The increase into 2011 and current pause were also induced by unconventional monetary policy in waves of increases during relaxed risk aversion and declines during unwinding of positions because of aversion to financial risk.
Chart IA2-18, US, Exports Price Index of Agricultural Commodities, 2001=100, 1982-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-19 provides 12-month percentage changes of the index of US exports of agricultural commodities from 1986 to 2013. The wide swings in 2008, 2009 and 2011 are only explained by unconventional monetary policy inducing carry trades from zero interest rates to commodity futures and reversals during risk aversion.
Chart IA2-19, US, Exports Price Index of Agricultural Commodities, 12-Month Percentage Changes, 1986-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-20 shows the export price index of nonagricultural commodities from 2001 to 2013. Unconventional monetary policy of zero interest rates drove price behavior during the past decade. Policy has been based on the myth of stimulating the economy by climbing the negative slope of an imaginary short-term Phillips curve.
Chart IA2-20, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 2001-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IA2-21 provides a longer perspective of the price index of US nonagricultural commodities from 1982 to 2013. Increases and decreases around the global contraction after 2007 were caused by carry trade induced by unconventional monetary policy.
Chart IA2-21, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 1982-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Finally, Chart IA2-22 provides 12-month percentage changes of the price index of US exports of nonagricultural commodities from 1986 to 2013. The wide swings before, during and after the global recession beginning in 2007 were caused by carry trades induced by unconventional monetary policy.
Chart IA2-22, US, Exports Price Index of Nonagricultural Commodities, 12-Month Percentage Changes, 1986-2013
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Table VA-7 provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2013 fiscal year to Feb 2013; federal fiscal data for the years from 2009 to 2012; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2012. Receipts increased 13.1 percent in the cumulative fiscal year 2013 for Feb 2013 relative to the cumulative in fiscal year 2012. Individual income taxes increased 17.7 percent relative to the same period a year earlier. Outlays increased 2.1 percent relative to a year earlier. Total revenues of the US from 2009 to 2012 accumulate to $9019 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,111 billion, or $14.1 trillion, with the deficit accumulating to $5092 billion, or $5.1 trillion. Revenues decreased 6.6 percent from $9653 billion in the four years from 2005 to 2008 to $9019 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and also by growth of only 2.1 percent on average in the cyclical expansion from IIIQ2009 to IVQ2012, which is much lower than 6.2 percent on average in cyclical expansions since the 1950s (http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html). Weakness of growth and employment creation is analyzed in IB Collapse of United States Dynamism of Income Growth and Employment Creation. There are 30.8 million people without jobs or underemployed that is equivalent to 19.0 percent of the US effective labor force (http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html) and hiring is significantly below the earlier cyclical expansion before 2007 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In contrast with the decline of revenue, outlays or expenditures increased 30.2 percent from $10,839 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,111 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.2 percent while revenue declined by 6.6 percent caused the increase in the federal deficit from $1186 billion in 2005-2008 to $5092 billion in 2009-2012. Federal revenue was 15.4 percent of GDP on average in the years from 2009 to 2012, which is well below 18.0 percent of GDP on average from 1970 to 2010. Federal outlays were 24.1 percent of GDP on average from 2009 to 2012, which is well above 21.9 percent of GDP on average from 1970 to 2010. The lower part of Table IIB-4 shows that debt held by the public swelled from $5803 billion in 2008 to $11,280 billion in 2012, by $5477 billion or 94.3 percent. Debt held by the public as percent of GDP or economic activity jumped from 40.5 percent in 2008 to 72.5 percent in 2012, which is well above the average of 37.0 percent from 1970 to 2010. The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures.
Table VA-4, US, Treasury Budget in Fiscal Year to Date Million Dollars
| Feb 2013 | Fiscal Year 2013 | Fiscal Year 2012 | ∆% |
| Receipts | 1,010,593 | 893,169 | 13.1 |
| Outlays | 1,504,547 | 1,473,988 | 2.1 |
| Deficit | -493,954 | -580,819 | NA |
| Individual Income Taxes | 500,591 | 425,253 | 17.7 |
| Social Insurance | 242,201 | 220,318 | 9.9 |
| Receipts | Outlays | Deficit (-), Surplus (+) | |
| $ Billions | |||
| 2012 | 2,449 | 3,538 | -1,089 |
| Fiscal Year 2011 | 2,302 | 3,599 | -1,297 |
| Fiscal Year 2010 | 2,163 | 3,456 | -1,293 |
| Fiscal Year 2009 | 2,105 | 3,518 | -1,413 |
| Total 2009-2012 | 9,019 | 14,111 | -5,092 |
| Average % GDP 2009-2012 | 15.4 | 24.1 | -8.7 |
| Fiscal Year 2008 | 2,524 | 2,983 | -459 |
| Fiscal Year 2007 | 2,568 | 2,729 | -161 |
| Fiscal Year 2006 | 2,407 | 2,655 | -248 |
| Fiscal Year 2005 | 2,154 | 2,472 | -318 |
| Total 2005-2008 | 9,653 | 10,839 | -1,186 |
| Average % GDP 2005-2008 | 17.9 | 20.1 | -2.2 |
| Debt Held by the Public | Billions of Dollars | Percent of GDP | |
| 2005 | 4,592 | 36.9 | |
| 2006 | 4,829 | 36.6 | |
| 2007 | 5,035 | 36.3 | |
| 2008 | 5,803 | 40.5 | |
| 2009 | 7,545 | 54.1 | |
| 2010 | 9,019 | 62.8 | |
| 2011 | 10,128 | 67.7 | |
| 2012 | 11,280 | 72.5 |
Sources: http://www.fms.treas.gov/mts/index.html CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5.
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 | Real GDP | Domestic CGPI | CPI All Items Less Fresh Food |
| 2011 | |||
| Apr 2012 | -0.2 to –0.2 | +1.7 | 0.0 |
| Jan 2012 | -0.4 to –0.3 | +1.8 to +1.9 | -0.1 to 0.0 |
| 2012 | |||
| 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 | +0.4 to +0.7 | +0.1 to +0.4 |
| Jan 2012 | +1.8 to +2.1 | -0.1 to +0.2 | 0.0 to +0.2 |
| 2013 | |||
| 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 | +0.7 to +0.9 | +0.5 to +0.7 |
| Jan 2012 | +1.4 to +1.7 | +0.6 to 1.0 | +0.4 to +0.5 |
| 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 decreasing marginally from 50.4 in Jan to 50.2 in Feb, which is the second consecutive reading above the no-change 50.0 since May 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10824). 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 first quarter of 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10824). The Markit Business Activity Index of Services decreased marginally from 51.5 in Jan to 51.1 in Feb, indicating moderate growth of the private services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10824). Paul Smith, Senior Economist at Markit and author of the report, finds signs of growth in the beginning of 2013 with confidence in demand for services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10632). Markit/JMMA Purchasing Managers’ Index™ (PMI™), seasonally adjusted, increased from 47.7 in Jan to 48.5 in Feb for the ninth consecutive month of contraction below 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10739). Foreign orders fell for the eleventh consecutive. Paul Smith, economist at Markit and author of the report, finds probable decline of manufacturing of 1 percent in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10739).Table JPY provides the country data table for Japan.
Table JPY, Japan, Economic Indicators
| Historical GDP and CPI | 1981-2010 Real GDP Growth and CPI Inflation 1981-2010 |
| Corporate Goods Prices | Feb ∆% +0.4 |
| Consumer Price Index | Jan NSA ∆% 0.0; Jan 12 months NSA ∆% -0.3 |
| Real GDP Growth | IVQ2012 ∆%: 0.0 on IIIQ2012; IVQ2012 SAAR 0.2; |
| Employment Report | Jan Unemployed 2.73 million Change in unemployed since last year: minus 100 thousand |
| All Industry Indices | Dec month SA ∆% 1.8 Blog 2/24/13 |
| Industrial Production | Jan SA month ∆%: 1.0 |
| Machine Orders | Total Dec ∆% -1.6 Private ∆%: -9.8 Dec ∆% Excluding Volatile Orders 2.8 |
| Tertiary Index | Jan month SA ∆% -1.1 |
| Wholesale and Retail Sales | Jan 12 months: |
| Family Income and Expenditure Survey | Jan 12-month ∆% total nominal consumption 2.1, real 2.4 Blog 3/3/13 |
| Trade Balance | Exports Jan 12 months ∆%: 6.4 Imports Jan 12 months ∆% 7.3 Blog 2/24/13 |
Links to blog comments in Table JPY:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html
8/9/11 http://cmpassocregulationblog.blogspot.com/2011/08/turbulence-in-world-financial-markets.html
The tertiary activity index of Japan decreased 1.1 percent SA in Jan 2013 and increased 0.3 percent NSA in the 12 months ending in Jan 2013, as shown in Table VB-1. The tertiary activity index of Japan seasonally adjusted fell at the annual equivalent rate of minus 4.1 percent in Jan-Apr 2012 for cumulative decline of 1.4 percent but increased 2.6 percent not seasonally adjusted in the 12 months ending in Apr 2012, as shown in Table VB-1. The tertiary activity index fell 0.3 percent in the six months from Jun to Nov 2012 or at the annual equivalent rate of minus 0.6 percent. There was strong impact from the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 in the decline of the tertiary activity index by 5.4 percent in Mar 2011 and 3.4 percent in 12 months. The performance of the tertiary sector in the quarter Jul-Sep 2011 was weak: increase of 0.4 percent in Jul, increase of 0.1 percent in Aug and decline of 0.2 percent in Sep, after increasing 1.2 percent in Jun. The not seasonally adjusted index increased 4.2 percent in the 12 months ending in Mar 2012 but the 12-month percentage rate dropped to 0.1 percent in Sep 2012, increasing 1.4 percent in the 12 months ending in Oct 2012, 1.0 percent in the 12 months ending in Nov 2012, minus 0.2 percent in the 12 months ending in Dec 2012 and 0.3 percent in the 12 months ending in Feb 2013. Most of the growth occurred in the quarter from Apr to Jun 2011 with gain of 4.3 percent or at annual equivalent rate of 18.1 percent.
Table VB-1, Japan, Tertiary Activity Index, ∆%
| Month ∆% SA | 12 Months ∆% NSA | |
| Jan 2013 | -1.1 | 0.3 |
| Dec 2012 | 1.1 | -0.2 |
| Nov | -0.5 | 1.0 |
| Oct | 0.2 | 1.4 |
| Sep | 0.2 | 0.1 |
| Aug | 0.3 | 0.6 |
| Jul | -0.6 | 0.9 |
| Jun | 0.1 | 0.8 |
| May | 0.9 | 3.2 |
| Apr | -0.2 | 2.6 |
| Mar | -0.6 | 4.2 |
| Feb | 0.0 | 2.4 |
| Jan | -0.6 | 0.4 |
| Dec 2011 | 1.6 | 1.2 |
| Nov | -0.8 | -0.3 |
| Oct | 0.6 | 0.9 |
| Sep | -0.2 | 0.1 |
| Aug | 0.1 | 0.8 |
| Jul | 0.4 | 0.1 |
| Jun | 1.2 | 1.0 |
| May | 0.9 | -0.2 |
| Apr | 2.1 | -2.3 |
| Mar | -5.4 | -3.4 |
| Feb | 0.3 | 2.0 |
| Jan | 0.5 | 1.0 |
| Dec 2010 | -0.2 | 1.8 |
| Nov | 0.6 | 2.5 |
| Oct | 0.2 | 0.5 |
| Sep | -0.4 | 1.3 |
| Aug | 0.1 | 2.3 |
| Jul | 0.7 | 1.6 |
| Jun | 0.1 | 1.0 |
| May | -0.3 | 1.2 |
| Dec 2009 | -5.2 | |
| Dec 2008 | -3.3 | |
| Dec 2007 | -0.3 | |
| Dec 2006 | 0.6 | |
| Dec 2005 | 2.6 | |
| Dec 2004 | 1.6 | |
| Calendar Year | ||
| 2012 | 1.4 | |
| 2011 | 0.1 | |
| 2010 | 1.3 | |
| 2009 | -5.2 | |
| 2008 | -1.0 | |
| 2007 | 1.0 | |
| 2006 | 1.8 | |
| 2005 | 1.9 | |
| 2004 | 1.8 |
Source: http://www.meti.go.jp/english/statistics/index.html
Month and 12-month rates of growth of the tertiary activity index of Japan and components in Jan 2013 are provided in Table VB-2. Electricity, gas, heat supply and water decreased 2.4 percent in Jan and decreased 01.5 percent in the 12 months ending in Jan. Wholesale and retail trade decreased 3.5 percent in the month of Jan and decreased 2.6 percent in 12 months. Information and communications increased 0.2 percent Jan and increased 1.2 percent in 12 months.
Table VB-2, Japan, Tertiary Index and Components, Month and 12-Month Percentage Changes ∆%
| Jan 2013 | Weight | Month ∆% SA | 12 Months ∆% NSA |
| Tertiary Index | 10,000.0 | -1.1 | 0.3 |
| Electricity, Gas, Heat Supply & Water | 372.9 | -2.4 | -1.5 |
| Information & Communications | 951.2 | 0.2 | 1.2 |
| Wholesale & Retail Trade | 2,641.2 | -3.5 | -2.6 |
| Finance & Insurance | 971.1 | -0.8 | 6.9 |
| Real Estate & Goods Rental & Leasing | 903.4 | -0.9 | -0.3 |
| Scientific Research, Professional & Technical Services | 551.3 | -6.6 | -0.5 |
| Accommodations, Eating, Drinking | 496.0 | 0.0 | -1.2 |
| Living-Related, Personal, Amusement Services | 552.7 | 0.1 | -1.4 |
| Learning Support | 116.9 | 0.6 | 0.4 |
| Medical, Health Care, Welfare | 921.1 | -0.5 | 3.7 |
| Miscellaneous ex Government | 626.7 | -2.2 | -2.7 |
Source: http://www.meti.go.jp/english/statistics/index.html
VC China. China estimates an index of nonmanufacturing purchasing managers on the basis of a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components from Jan to 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. | 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/
Chart VC-GDP of the National Bureau of Statistics of China provides annual value and growth rates of GDP. China’s GDP growth in 2012 is still high at 7.8 percent but at the lowest rhythm in five years.
Chart VC-GDP, China, Gross Domestic Product, Million Yuan and ∆%, 2008-2012
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/
Table VC-IND provides values and growth rates of important segments of economic activity in China. Value added by industry decelerated from 12.1 percent in 2010 to 7.9 percent in 2012. Construction growth also decelerated from 18.6 percent in 2009 during high stimulus to 9.3 percent in 2012. There is also deceleration of investment in fixed assets from growth of 30.0 percent in 2009 and 23.8 percent in 2011 to 20.2 percent in 2012. Growth of retail sales of consumer goods fell from 18.3 percent in 2010 to 14.3 percent in 2012.
Table VC-IND, China, Value Added by Industry, Construction, Investment in Fixed Assets and Retail Sales of Consumer Goods, Billions of Yuan and ∆%, 2008-2012
| IND VA BY | ∆% | CON BY | ∆% | IFA BY | ∆% | RSCG BY | ∆% | |
| 2012 | 1999 | 7.9 | 355 | 9.3 | 3747 | 20.3 | 2103 | 14.3 |
| 2011 | 1885 | 10.4 | 319 | 9.7 | 3115 | 23.8 | 1839 | 17.1 |
| 2010 | 1607 | 12.1 | 267 | 13.5 | 2781 | 23.8 | 1570 | 18.3 |
| 2009 | 1352 | 8.7 | 224 | 18.6 | 2246 | 30.0 | 1327 | 15.5 |
| 2008 | 1303 | 9.9 | 187 | 9.5 | 1788 | 25.9 | 1148 | 22.7 |
Notes: IND VA: Value Added by Industry; CON: Construction; IFA: Investment in Fixed Assets; RSCG: Retail Sales of Consumer Goods; BY: Billions of Yuan
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Table VC-F provides China FX reserves, exports and imports from 2008 to 2012. Growth of exports and imports fell from high two-digit rates to 7.9 percent for exports and 4.3 percent for imports in 2012. Growth of China’s international reserves also fell from high two-digit rates to 4.1 percent in 2012 with the stock of reserves at a high level of $3.3 trillion.
Table VC-F, China, Foreign Exchange Reserves, Exports and Imports, USD Billions and ∆%
| FX Reserves USD B | ∆% | Exports USD B | ∆% | Imports USD B | ∆% | |
| 2012 | 3311.6 | 4.1 | 2048.9 | 7.9 | 1817.8 | 4.3 |
| 2011 | 3181.1 | 11.7 | 1898.4 | 20.3 | 1743.5 | 24.9 |
| 2010 | 2847.3 | 18.7 | 1577.8 | 31.3 | 1396.2 | 38.8 |
| 2009 | 2399.2 | 23.3 | 1201.6 | 19.5 | 1005.9 | -6.8 |
| 2008 | 1946.0 | 27.3 | 1005.9 | 1132.6 |
Notes: USD B: US Dollar Billions
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=10724) is improving. The overall Flash China Manufacturing PMI™ decreased marginally from a 24-month high at 52.3 in Jan to 50.4 in Feb while the Flash China Manufacturing Output Index decreased from 53.1 in Jan to 50.9 in Feb, 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 even with moderating moderating flash indices (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10724).The HSBC China Services PMI™, compiled by Markit, shows relative strength in business activity in China with the HSBC Composite Output, combining manufacturing and services, decreasing from the two-year high in Jan of 53.5 to 51.4 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10827). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that combined manufacturing and services data suggest continuing growth (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10827). The HSBC Business Activity index decreased from 54.0 in Jan to 52.1 in Feb with continuing growth in services at a slower rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10827). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds strength in services with sound labor markets and continuing recovery in manufacturing (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10685). The HSBC Purchasing Managers’ Index™ (PMI™), compiled by Markit, decreased to 50.4 in Feb from 52.3 in Jan, indicating moderate activity (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10799). New export orders increased marginally with respondents of the survey finding strengthening demand in Europe, Japan 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 and labor markets (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10799). Table CNY provides the country data table for China.
Table CNY, China, Economic Indicators
| Price Indexes for Industry | Feb 12-month ∆%: minus 1.6 Feb month ∆%: 0.2 |
| Consumer Price Index | Feb month ∆%: 1.1 Feb 12 months ∆%: 3.2 |
| Value Added of Industry | Feb month ∆%: 0.79 Jan-Feb 2013/Jan-Feb 2012 ∆%: 9.9 |
| GDP Growth Rate | Year IVQ2012 ∆%: 7.9 |
| Investment in Fixed Assets | Feb month ∆%: -0.23 Total Jan-Feb 2012 ∆%: 21.2 Real estate development: 16.9 |
| Retail Sales | Feb month ∆%: 0.99 Jan-Feb ∆%: 12.3 |
| Trade Balance | Feb balance $15.25 billion Cumulative Feb: $44.40 billion |
Links to blog comments in Table CNY:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
1/20/13 http://cmpassocregulationblog.blogspot.com/2013/01/recovery-without-hiring-world-inflation.html
Cumulative and 12-months rates of value added of industry in China are provided in Table VC-1. Value added in total industry in Jan-Feb 2013 increased 9.9 percent relative to a year earlier. Heavy industry had been the driver of growth with a cumulative rate of 11.0 percent relative to a year earlier in Jan-Mar 2012 that declined to 10.5 percent in Jan-Apr 2012 relative to the same period a year earlier and further down to 10.1 percent in Jan-Jun 2012, 9.9 percent in Jan-Jul 2012, 9.8 percent in Jan-Aug 2012, 9.7 percent in Jan-Sep 2012, 9.7 percent in Jan-Oct 2012, 9.8 percent in Jan-Nov 2012, 9.9 percent in Jan-Dec 2012 and 10.2 percent in Jan-Feb 2013. Light industry grew 9.1 percent in Jan-Feb 2013 relative to a year earlier. Growth of total industry decelerated from cumulative 14.4 percent in Jan-Mar 2011 to 9.9 percent in Jan-Feb 2013.
Table VC-1, China, Growth Rate of Value Added of Industry ∆%
| Industry | Light Industry | Heavy | State | Joint-Stock | |
| 2013 | |||||
| Jan-Feb 2013 | 9.9 | 9.1 | 10.2 | 5.8 | 11.4 |
| 2012 | |||||
| Jan-Dec 2012 | 10.0 | 10.1 | 9.9 | 6.4 | 11.8 |
| 12 M Dec | 10.3 | 9.6 | 10.6 | 8.0 | 12.1 |
| Jan-Nov | 10.0 | 10.2 | 9.8 | 6.3 | 11.8 |
| 12 M Nov | 10.1 | 9.2 | 10.5 | 7.2 | 11.8 |
| Jan-Oct | 10.0 | 10.3 | 9.7 | 6.4 | 11.8 |
| 12 M Oct | 9.6 | 9.1 | 9.7 | 7.0 | 11.7 |
| Jan-Sep | 10.0 | 10.4 | 9.7 | 6.3 | 11.8 |
| 12 M Sep | 9.2 | 9.0 | 9.3 | 6.3 | 11.0 |
| Jan-Aug | 10.1 | 10.5 | 9.8 | 6.3 | 15.4 |
| 12 M Aug | 8.9 | 8.6 | 9.0 | 5.3 | 14.3 |
| Jan-Jul | 10.3 | 10.8 | 9.9 | 6.6 | 12.1 |
| 12 M Jul | 9.2 | 10.1 | 8.8 | 4.8 | 10.9 |
| Jan-Jun | 10.5 | 11.1 | 10.1 | 7.0 | 12.4 |
| 12 M Jun | 9.5 | 9.0 | 9.6 | 6.5 | 11.5 |
| Jan-May | 10.7 | 11.5 | 10.3 | 6.7 | 12.4 |
| 12 M May | 9.6 | 9.1 | 9.8 | 6.6 | 11.0 |
| Jan-Apr | 11.0 | 12.3 | 10.5 | 6.6 | 12.9 |
| 12 M Apr | 9.3 | 10.3 | 8.9 | 4.3 | 10.7 |
| Jan-Mar | 11.6 | 13.2 | 11.0 | 7.2 | 13.8 |
| 12 M Mar | 11.9 | 13.9 | 11.2 | 8.0 | 13.7 |
| Jan-Feb | 11.4 | 12.7 | 10.9 | 7.3 | 13.9 |
| 2011 | |||||
| Jan-Dec | 13.9 | 13.0 | 14.3 | 9.9 | 15.8 |
| 12 M Dec | 12.8 | 12.6 | 13.0 | 9.2 | 14.7 |
| Jan-Nov | 14.0 | 13.0 | 14.4 | 9.9 | 16.0 |
| 12 M Nov | 12.4 | 12.4 | 12.4 | 7.8 | 14.4 |
| Jan-Oct | 14.1 | 13.0 | 14.5 | 10.1 | 9.1 |
| 12 M Oct | 13.2 | 12.1 | 13.7 | 8.9 | 15.1 |
| Jan-Sep | 14.2 | 13.1 | 14.6 | 10.4 | 16.1 |
| 12 M Sep | 13.8 | 12.8 | 14.3 | 9.9 | 16.0 |
| Jan-Aug | 14.2 | 13.1 | 14.6 | 10.4 | 16.1 |
| 12 M Aug | 13.5 | 13.4 | 13.5 | 9.4 | 15.5 |
| Jan-Jul | 14.3 | ||||
| 12 M | 14.0 | 12.8 | 14.5 | 9.5 | |
| Jan-Jun | 14.3 | 13.1 | 14.7 | 10.7 | 19.7 |
| 12 M | 15.1 | 13.9 | 15.6 | 10.7 | 20.8 |
| Jan-May | 14.0 | 12.9 | 14.4 | 10.7 | 19.3 |
| 12 M May | 13.3 | 12.9 | 13.5 | 8.9 | 18.7 |
| Jan-Apr | 14.2 | 12.9 | 14.7 | 11.2 | 19.5 |
| 12 M Apr | 13.4 | 11.9 | 14.0 | 10.4 | 18.0 |
| Jan-Mar | 14.4 | 13.1 | 14.9 | 11.4 | 19.8 |
| 12 M Mar | 14.8 | 12.8 | 15.6 | 12.9 | 19.2 |
| 12 M Feb | 14.9 | 13.1 | 15.6 | 10.5 | 21.7 |
| Jan-Feb | 14.1 | 13.3 | 14.4 | 10.6 | 20.3 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart VC-1 provides 12-month percentage changes of value added of industry in 2011 and from Jan to Dec 2012. Growth rates of value added of industry in the first five months of 2010 were higher than in 2011 as would be expected in an earlier phase of recovery from the global recession. Growth rates have converged in the second half of 2011 to lower percentages with further decline into 2012 to single digit percentage changes, 10.3 percent in Dec 2012 and 9.9 percent in Feb 2013.
Chart VC-1, China, Growth Rate of Total Value Added of Industry, 12-Month ∆%
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Yearly rates of growth for the past 12 months and cumulative relative to the earlier year of various segments of industrial production in China are provided in Table VC-2. Rates from Jan to Dec 2011 relative to the same period a year earlier fluctuated but remained mostly above 10 percent with the exception of motor vehicles and crude oil. There is deceleration in Jan-Dec 2012 of percentage change with no segment showing growth exceeding 10 percent with exception of 12-month growth of 13.5 percent for pig iron and 16.7 percent for nonferrous metals. In Jan-Feb 2013, all segments grew at rates exceeding 10 percent with exception of electricity at 3.4 percent and crude oil at 3.0 percent. Electricity fell from growth of 16.2 percent in the 12 months ending in Jun 2011 to 0.0 percent in the 12 months ending in Jun 2012, rebounding to 4.8 percent in Aug 2012 but declining to 1.5 percent in Sep 2012, increasing to 3.9 percent in Oct 2012, 7.9 percent in Nov 2012 and 7.6 percent in Dec 2012.
Table VC-2, China, Industrial Production Operation ∆%
| Elec- | Pig Iron | Cement | Crude | Non- | Autos | |
| 2013 | ||||||
| Jan-Feb | 3.4 | 14.2 | 10.8 | 3.0 | 13.5 | 12.4 |
| 2012 | ||||||
| Jan-Dec | 4.7 | 7.7 | 7.4 | 3.7 | 9.3 | 6.3 |
| 12 M Dec | 7.6 | 13.5 | 5.4 | 8.4 | 16.7 | 5.3 |
| Jan-Nov | 4.4 | 7.2 | 7.5 | 3.2 | 8.4 | 6.5 |
| 12 M Nov | 7.9 | 16.5 | 9.4 | 9.1 | 15.2 | 3.9 |
| Jan-Oct | 3.9 | 6.3 | 6.7 | 2.6 | 7.7 | 6.9 |
| 12 M Oct | 6.4 | 11.7 | 11.5 | 6.7 | 14.0 | 3.8 |
| Jan-Sep | 3.6 | 5.7 | 6.7 | 2.2 | 7.1 | 7.3 |
| 12 M Sep | 1.5 | 4.9 | 12.0 | 7.0 | 7.1 | 6.3 |
| Jan-Aug | 3.8 | -0.5 | 8.7 | 2.5 | 13.8 | 10.4 |
| 12 M Aug | 4.8 | 2.6 | 5.9 | -0.4 | 13.8 | 9.7 |
| Jan-Jul | 3.8 | 6.1 | 5.3 | 1.6 | 6.7 | 7.4 |
| 12M Jul | 2.1 | 6.5 | 6.1 | 1.1 | 4.1 | 12.3 |
| Jan-Jun | 3.7 | 6.1 | 5.5 | 1.7 | 6.7 | 6.7 |
| 12 M Jun | 0.0 | 6.7 | 6.5 | -0.6 | 5.8 | 13.8 |
| Jan-May | 4.7 | 6.3 | 5.0 | 2.2 | 5.1 | 6.2 |
| 12 M May | 2.7 | 6.3 | 4.3 | 0.7 | 6.6 | 18.5 |
| Jan-Apr | 5.0 | 6.2 | 5.5 | 2.9 | 4.6 | 3.1 |
| 12 M Apr | 0.7 | 7.9 | 4.9 | -0.3 | 2.3 | 10.7 |
| Jan-Mar | 7.1 | 6.5 | 7.3 | 3.1 | 5.8 | 0.0 |
| 12 M Mar | 7.2 | 10.2 | 7.9 | 2.0 | 3.3 | 5.1 |
| Jan-Feb | 7.1 | 4.6 | 4.8 | 4.0 | 8.4 | -1.8 |
| 2011 | ||||||
| Jan-Dec | 12.0 | 8.4 | 16.1 | 4.9 | 10.6 | 3.0 |
| 12 M Dec | 9.7 | 3.7 | 7.0 | 4.0 | 13.2 | -6.5 |
| Jan-Nov | 12.0 | 13.1 | 17.2 | 5.3 | 10.2 | 3.9 |
| 12 M Nov | 8.5 | 7.8 | 11.2 | 3.2 | 8.2 | -1.3 |
| Jan-Oct | 12.3 | 13.7 | 18.0 | 5.4 | 10.4 | 5.2 |
| 12 M | 9.3 | 13.4 | 16.5 | -0.9 | 3.7 | 1.3 |
| Jan-Sep | 12.7 | 13.9 | 18.1 | 6.0 | 11.2 | 5.5 |
| 12 M Sep | 11.5 | 18.8 | 15.7 | 1.5 | 13.9 | 2.5 |
| Jan-Aug | 13.0 | 13.1 | 18.4 | 6.6 | 4.7 | |
| 12 M Aug | 10.0 | 12.9 | 12.8 | 4.5 | 15.6 | 9.5 |
| Jan-Jul | 13.3 | 13.0 | 19.2 | 6.9 | 9.9 | 4.0 |
| 12 M | 13.2 | 14.9 | 16.8 | 5.9 | 9.8 | -1.3 |
| 12 M | 16.2 | 14.8 | 19.9 | -0.7 | 9.8 | 3.6 |
| 12 M | 12.1 | 10.6 | 19.2 | 6.0 | 14.2 | -1.9 |
| 12 M Apr | 11.7 | 8.3 | 22.4 | 6.8 | 6.1 | -1.6 |
| 12 M Mar | 14.8 | 13.7 | 29.8 | 8.0 | 11.6 | 9.9 |
| 12 M Feb | 11.7 | 14.5 | 9.1 | 10.9 | 14.4 | 10.3 |
| 12 M Jan | 5.1 | 3.5 | 16.4 | 12.2 | 1.4 | 23.9 |
| 12 M Dec 2010 | 5.6 | 4.6 | 17.3 | 10.3 | -1.9 | 27.6 |
M: month
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Monthly growth rates of industrial production in China are provided in Table VC-3. Monthly rates have fluctuated around 1 percent. Jan and Feb 2012 are somewhat weaker but there was improvement to 1.19 percent in Mar 2012. The rate of 0.37 percent in Apr is the lowest in the monthly series from Feb 2011 to Feb 2013. Monthly sales growth remained below 1 percent in all the thirteen months from Jan 2012 to Feb 2013 with the exception of Mar 2012.
Table VC-3, China, Industrial Production Operation, Month ∆%
| 2011 | Month ∆% |
| Feb | 0.93 |
| Mar | 0.99 |
| Apr | 1.32 |
| May | 0.79 |
| Jun | 1.30 |
| Jul | 0.82 |
| Aug | 0.85 |
| Sep | 0.95 |
| Oct | 0.71 |
| Nov | 0.68 |
| Dec | 0.94 |
| Jan 2012 | 0.50 |
| Feb | 0.61 |
| Mar | 1.19 |
| Apr | 0.37 |
| May | 0.90 |
| Jun | 0.77 |
| Jul | 0.70 |
| Aug | 0.74 |
| Sep | 0.81 |
| Oct | 0.80 |
| Nov | 0.81 |
| Dec | 0.83 |
| Jan 2013 | 0.60 |
| Feb 2013 | 0.79 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Table VC-4 provides cumulative growth of investment in fixed assets in China in 2011 relative to 2010, Jan-Dec 2012 and Jan-Feb 2013 relative to a year earlier. Total fixed investment had grown at a high rate fluctuating around 25 percent and fixed investment in real estate development has grown at rates in excess of 30 percent but rates have declined significantly to still quite high percentages. In Jan-Feb 2013 investment in fixed assets in China grew 21.2 percent relative to a year earlier and 22.8 percent in real estate development. There was slight deceleration in the final two months of 2011 that continued into Jan-Feb 2013.
Table VC-4, China, Investment in Fixed Assets ∆% Relative to a Year Earlier
| Total | State | Real Estate Development | |
| Jan-Feb 2013 | 21.2 | 16.9 | 22.8 |
| Jan-Dec 2012 | 20.6 | 14.7 | 16.2 |
| Jan-Nov | 20.7 | 14.5 | 16.7 |
| Jan-Oct | 20.7 | 14.2 | 15.4 |
| Jan-Sep | 20.5 | 13.6 | 15.4 |
| Jan-Aug | 20.2 | 12.9 | 15.6 |
| Jan-Jul | 20.4 | 12.6 | 15.4 |
| Jan-Jun | 20.4 | 13.8 | 16.6 |
| Jan-May | 20.1 | 10.0 | 18.5 |
| Jan-Apr | 20.2 | 9.5 | 18.7 |
| Jan-Mar | 20.9 | 9.0 | 23.5 |
| Jan-Feb | 21.5 | 8.8 | 27.8 |
| Jan-Dec 2011 | 23.8 | 11.1 | 27.9 |
| Jan-Nov | 24.5 | 11.7 | 29.9 |
| Jan-Oct | 24.9 | 12.4 | 31.1 |
| Jan-Sep | 24.9 | 12.7 | 32.0 |
| Jan-Aug | 25.0 | 12.1 | 33.2 |
| Jan-Jul | 25.4 | 13.6 | 33.6 |
| Jan-Jun | 25.6 | 14.6 | 32.9 |
| Jan-May | 25.8 | 14.9 | 34.6 |
| Jan-Apr | 25.4 | 16.6 | 34.3 |
| Jan-Mar | 25.0 | 17.0 | 34.1 |
| Jan-Feb | 24.9 | 15.6 | 35.2 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart VC-2 provides cumulative fixed asset investment in China relative to a year earlier in all months for 2011 and 2012. Growth rose to 25.8 percent in Jan-May 2011 and then fell back to 24.9 percent in Sep and Oct 2011, declining further to 24.5 percent in Nov and 23.8 percent in Dec 2011 with deeper drop in Jan-Feb 2012 to 21.5 percent, 20.9 percent in Jan-Mar, 20.2 percent in Jan-Apr 2012, 20.1 percent in Jan-Apr 2012, 20.4 percent in both Jan-Jun 2012 and Jan-Jul 2012, 20.2 percent in Jan-Aug 2012, 20.5 percent in Jan-Sep 2012, 20.7 percent in Jan-Oct 2012, 20.7 percent in Jan-Nov 2012, 20.6 percent in Jan-Dec 2012 and 21.2 percent in Jan-Feb 2013. Rates in 2012 and 2012 have fallen from higher gains in 2011.
Chart VC-2, China, Investment in Fixed Assets, ∆% Cumulative over Year Earlier
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Monetary policy has been used in China in the form of increases in interest rates and required reserves of banks to moderate real estate investment. These policies have been reversed because of lower inflation and weakening economic growth. Chart VC-3 shows decline of fluctuating cumulative growth rates of investment in real estate development relative to a year earlier from 35.2 percent in Jan-Feb 2011 to 31.1 percent in Jan-Oct 2011, 29.9 percent in Jan-Nov 2011, 27.9 percent in Jan-Dec 2011, 27.8 percent in Jan-Feb 2012 and sharper decline to 23.5 percent in Jan-Mar 2012, 18.7 percent in Jan-Apr 2012 and 18.5 percent in Jan-May 2012. The trend of decline continued with 16.6 percent in Jan-Jun 2012, 15.4 percent in Jan-Jul 2012, 15.6 percent in Jan-Aug 2012, 15.4 percent in Jan-Sep 2012, 16.7 percent in Jan-Oct 2012, 16.7 percent in Jan-Nov 2012, 16.2 percent in Jan-Dec 2012 and 22.8 percent in Jan-Feb 2013.
Chart VC-3, China, Investment in Real Estate Development, ∆% Cumulative over Year Earlier
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Table VC-5 provides monthly growth rates of investment in fixed assets in China from Feb 2011 to Jan 2013. Rates increased moderately after Apr 2012. The celebrations of the New Year affect sales in the first two months of the year.
Table VC-5, China, Investment in Fixed Assets, Month ∆%
| Month ∆% | |
| Feb 2011 | -0.23 |
| Mar | 2.45 |
| Apr | 2.22 |
| May | 1.68 |
| Jun | 1.48 |
| Jul | 1.58 |
| Aug | 1.62 |
| Sep | 1.88 |
| Oct | 1.42 |
| Nov | 1.43 |
| Dec | 1.52 |
| Jan 2012 | 1.70 |
| Feb | 1.84 |
| Mar | 1.07 |
| Apr | 1.03 |
| May | 1.87 |
| Jun | 1.79 |
| Jul | 1.37 |
| Aug | 1.23 |
| Sep | 1.88 |
| Oct | 1.92 |
| Nov | 0.93 |
| Dec | 1.31 |
| Jan 2013 | 1.63 |
| Feb | 0.65 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Growth rates of retail sales in 12 months and cumulative relative to a year earlier are in Table VC-6. There is decline of growth rates to cumulative 14.7 percent in Feb 2012, 14.8 percent in Mar, 14.7 percent in Apr, 14.5 percent in May, 14.4 percent in Jun, 14.2 percent in Jul, 14.1 percent in Aug to Oct 2012, 14.2 percent in Nov 2012 and 14.3 percent in Dec 2012. Percentage growth rates have declined in Jan-Dec 2012 relative to earlier months in 2011. The rate of retail sales growth was even lower at 12.3 percent in Feb 2013 with influence from the celebration of the New Year.
Table VC-6, China, Total Retail Sales of Consumer Goods ∆%
| 12-Month ∆% | Cumulative ∆%/ | |
| Feb 2013 | 12.3 | 12.3 |
| 2012 | ||
| Dec | 15.2 | 14.3 |
| Nov | 14.9 | 14.2 |
| Oct | 14.5 | 14.1 |
| Sep | 14.2 | 14.1 |
| Aug | 13.2 | 14.1 |
| Jul | 13.1 | 14.2 |
| Jun | 13.7 | 14.4 |
| May | 13.8 | 14.5 |
| Apr | 14.1 | 14.7 |
| Mar | 15.2 | 14.8 |
| Feb | 14.7 | 14.7 |
| Jan | ||
| 2011 | ||
| Dec | 18.1 | 17.1 |
| Nov | 17.3 | 17.0 |
| Oct | 17.2 | 17.0 |
| Sep | 17.7 | 17.0 |
| Aug | 17.0 | 16.9 |
| Jul | 17.2 | 16.8 |
| Jun | 17.7 | 16.8 |
| May | 16.9 | 16.6 |
| Apr | 17.1 | 16.5 |
| Mar | 17.4 | 17.4 |
| Feb | 11.6 | 15.8 |
| Jan | 19.9 | 19.9 |
Note: there are slight revisions of month relative to earlier month data but not of the month on the same month year earlier or cumulative relative to cumulative year earlier in the databank
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Chart VC-4 of the National Bureau of Statistics of China provides 12-month rates of growth of retail sales in 2011 and 2012. There is again a drop into 2012 with the lowest percentages in Chart VC-4 followed by increases.
Chart VC-4, China, Total Retail Sales of Consumer Goods 12-Month ∆%
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Table VC-7 provides monthly percentage changes of retail sales in China. Although the rate of 0.19 percent in Jan 2012 is the lowest in Table VC-9, the rate of 1.65 percent in Sep is relatively high and 1.20 percent in Dec 2012 is closer to rates in 2011. Sales are lower in Feb 2013 because of the New Year celebrations.
Table VC-7, China, Retail Sales, Month ∆%
| 2011 | Month ∆% |
| Feb | 1.35 |
| Mar | 1.26 |
| Apr | 1.30 |
| May | 1.39 |
| Jun | 1.49 |
| Jul | 1.57 |
| Aug | 1.50 |
| Sep | 1.33 |
| Oct | 1.36 |
| Nov | 1.26 |
| Dec | 1.41 |
| 2012 | |
| Jan | 0.19 |
| Feb | 0.99 |
| Mar | 1.25 |
| Apr | 0.97 |
| May | 1.09 |
| Jun | 1.17 |
| Jul | 1.06 |
| Aug | 1.06 |
| Sep | 1.34 |
| Oct | 1.09 |
| Nov | 1.18 |
| Dec | 1.20 |
| Jan 2013 | 0.17 |
| Feb | 0.99 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
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 0.6 percent in 2012 and minus 0.3 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 | -0.6 |
| 2013* | -0.3 | ||
| 2014* | 1.4 |
*EUROSTAT forecast Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
The GDP of the euro area in 2011 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $13,114.4 billion (http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx). The sum of the GDP of France is $2778.1 billion with the GDP of Germany of $3607.4 billion, Italy of $2198.7 billion and Spain $1479.6 billion is $10,063.8 billion or 76.7 percent of total euro area GDP. The four largest economies account for slightly more than three quarters of economic activity of the euro area. Table VD-EUR1 is constructed with the dataset of EUROSTAT, providing growth rates of the euro area as a whole and of the largest four economies of Germany, France, Italy and Spain annually from 1996 to 2011 with the estimate of 2012 and forecasts for 2013 and 2014 by EUROSTAT. The impact of the global recession on the overall euro area economy and on the four largest economies was quite strong. There was sharp contraction in 2009 and growth rates have not rebounded to earlier growth with exception of Germany in 2010 and 2011.
Table VD-EUR1, Euro Area, Real GDP Growth Rate, ∆%
| Euro Area | Germany | France | Italy | Spain | |
| 2014* | 1.4 | 2.0 | 1.2 | 0.8 | 0.8 |
| 2013* | -0.3 | 0.5 | 0.1 | -1.0 | -1.4 |
| 2012 | -0.6 | 0.7 | 0.0* | -2.2* | -1.4* |
| 2011 | 1.4 | 3.0 | 1.7 | 0.4 | 0.4 |
| 2010 | 2.0 | 4.2 | 1.7 | 1.8 | -0.3 |
| 2009 | -4.4 | -5.1 | -3.1 | -5.5 | -3.7 |
| 2008 | 0.4 | 1.1 | -0.1 | -1.2 | 0.9 |
| 2007 | 3.0 | 3.3 | 2.3 | 1.7 | 3.5 |
| 2006 | 3.2 | 3.7 | 2.5 | 2.2 | 4.1 |
| 2005 | 1.7 | 0.7 | 1.8 | 0.9 | 3.6 |
| 2004 | 2.2 | 1.2 | 2.5 | 1.7 | 3.3 |
| 2003 | 0.7 | -0.4 | 0.9 | 0.0 | 3.1 |
| 2002 | 0.9 | 0.0 | 0.9 | 0.5 | 2.7 |
| 2001 | 2.0 | 1.5 | 1.8 | 1.9 | 3.7 |
| 2000 | 3.8 | 3.1 | 3.7 | 3.7 | 5.0 |
| 1999 | 2.9 | 1.9 | 3.3 | 1.5 | 4.7 |
| 1998 | 2.8 | 1.9 | 3.4 | 1.4 | 4.5 |
| 1997 | 2.6 | 1.7 | 2.2 | 1.9 | 3.9 |
| 1996 | 1.5 | 0.8 | 1.1 | 1.1 | 2.5 |
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, decreased from 48.6 in Jan to 47.3 in Feb, for thirteen consecutive declines and sixteen drops in seventeen months but with Oct registering the lowest reading in two months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10715). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index is consistent with GDP declining in a fourth consecutive quarter but at a rate of 0.2 to 0.3 percent, which would be lower than the decline of 0.6 percent in IVQ2012 in EUROSTAT estimates (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10715). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP, decreased from 48.6 in Jan to 47.9 in Feb, which is the thirteenth consecutive contraction (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10814). Chris Williamson, Chief Economist at Markit, finds that the data are consistent with milder contraction likely of 0.2 percent decline in GDP in IQ2013 in contrast with fall of 0.6 percent in IVQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10814). The Markit Eurozone Services Business Activity Index decreased from 48.6 in Jan to 47.9 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10814). The Markit Eurozone Manufacturing PMI® was unchanged at 47.9 in Feb from 47.9 in Jan, which indicates contraction in nineteen 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=10783). Contraction of total new orders was the slowest since Jun 2011 because improving new export orders. Chris Williamson, Chief Economist at Markit, finds moderating decline of manufacturing in 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10783). Table EUR provides the regional data table for the euro area.
Table EUR, Euro Area Economic Indicators
| GDP | IVQ2012 ∆% -0.6; IVQ2012/IVQ2011 ∆% -0.9 Blog 3/10/13 |
| Unemployment | Jan 2013: 11.9% unemployment rate Jan 2013: 18.998 million unemployed Blog 3/3/13 |
| HICP | Feb month ∆%: 0.4 12 months Feb ∆%: 1.8 |
| Producer Prices | Euro Zone industrial producer prices Jan ∆%: -0.6 |
| Industrial Production | Jan month ∆%: -0.4; Jan 12 months ∆%: -1.3 |
| Retail Sales | Jan month ∆%: 1.2 |
| Confidence and Economic Sentiment Indicator | Sentiment 87.8 Jan 2013 Consumer minus 23.9 Jan 2013 Blog 2/3/13 |
| Trade | Jan-Dec 2012/Jan-Dec 2011 Exports ∆%: 7.4 Dec 2012 12-month Exports ∆% -3.1 Imports ∆% -5.9 |
Links to blog comments in Table EUR:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
2/3/13 http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html
Industrial production in the euro area decreased 0.4 percent in Jan 2013, declining in five of eight months from Jun 2012 to Jan 2013 for cumulative growth of minus 2.4 percent that is equivalent to minus 3.6 percent in a year, as shown in Table VD-1 with revised estimates by EUROSTAT. The global recession caused sharp contraction of euro area industrial production with declines of 12.7 percent in the 12 months ending in Dec 2008, 3.7 percent in the 12 months ending in Dec 2009, 8.8 percent in the 12 months ending in Dec 2010, 1.8 percent in the 12 months ending in Dec 2011 and 1.7 percent in the 12 months ending in Dec 2012.
Table VD-1, Euro Zone, Industrial Production, ∆%
| Month ∆% | 12-Month ∆% | |
| Jan 2013 | -0.4 | -1.3 |
| Dec 2012 | 0.9 | -1.7 |
| Nov | -0.8 | -4.1 |
| Oct | -0.8 | -3.0 |
| Sep | -1.9 | -2.5 |
| Aug | 0.7 | -1.3 |
| Jul | 0.4 | -2.4 |
| Jun | -0.5 | -1.8 |
| May | 0.7 | -2.5 |
| Apr | -0.9 | -2.7 |
| Mar | -0.2 | -2.1 |
| Feb | 0.7 | -1.9 |
| Jan | 0.1 | -1.9 |
| Dec 2011 | -1.8 | |
| Dec 2010 | -8.8 | |
| Dec 2009 | -3.7 | |
| Dec 2008 | -12.7 | |
| Dec 2007 | 1.8 | |
| Dec 2006 | 5.2 | |
| Dec 2005 | 2.9 | |
| Dec 2004 | 1.0 | |
| Dec 2003 | 2.3 | |
| Dec 2002 | -0.1 | |
| Dec 2001 | -4.1 | |
| Dec 2000 | 6.2 | |
| Dec 1999 | 4.8 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table VD-2 provides monthly industrial production percentage changes for total production and major segments. All segments declined in Jan 2013 with exception of growth of 0.1 percent in intermediate goods and 0.9 percent for nondurable goods. There was recovery in Dec 2012 with growth of capital goods of 0.9 percent, durables goods of 1.7 percent and nondurable goods of 1.8 percent. Total production and all segments fell in Sep-Nov 2012 with exception of 0.8 percent in nondurable goods in Oct 2012 and 0.0 percent for capital goods in Nov 2012.
Table VD-2, Euro Zone, Industrial Production Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Jan 2013 | -0.4 | 0.1 | -1.0 | -1.2 | -1.4 | 0.9 |
| Dec 2012 | 0.9 | 0.4 | 0.1 | 0.9 | 1.7 | 1.8 |
| Nov | -0.8 | -1.1 | -0.9 | 0.0 | -1.2 | -1.3 |
| Oct | -0.8 | -0.7 | -0.9 | -2.2 | -2.1 | 0.8 |
| Sep | -1.9 | -1.7 | -0.4 | -2.6 | -3.5 | -2.3 |
| Aug | 0.7 | 0.3 | 0.6 | 1.1 | 2.6 | 1.2 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods Source: Eurostat http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table VD-3 provides monthly and 12-month percentage changes of industrial production and major industrial categories in the euro zone. All 12-month percentage changes in Table VD-2 are negative with exception of increase of 0.9 percent in output of energy in the 12 months ending in Jan 2013. Industrial production decreased 0.4 percent in the month of Jan 2013 and fell 1.3 percent in the 12 months ending in Jan 2013. Industrial production deteriorated at unusually high rates in the earlier months of Oct and Sep 2012. The only positive rates in Jan 2013 were 0.1 percent for intermediate goods and 0.9 percent for nondurable consumer goods.
Table VD-3, Euro Zone, Industrial Production 12-Month ∆%
| 2013 | Jan Month ∆% | Jan 12-Month ∆% |
| Total | -0.4 | -1.3 |
| Intermediate Goods | 0.1 | -3.1 |
| Energy | -1.0 | 0.9 |
| Capital Goods | -1.2 | -2.6 |
| Durable Consumer Goods | -1.4 | -5.5 |
| Nondurable Consumer Goods | 0.9 | 3.1 |
Source: Eurostat http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
There has been significant decline in percentage changes of industrial production and major categories in 12-month rates into 2012 and 2013 as shown in Table VD-4. Negative percentage changes moderated from the high rates in Oct-Nov 2012 but are still high. There is only growth of 3.1 percent for nondurable consumer goods and 0.9 percent for energy in the 12 months ending in Jan 2013.
Table VD-4, Euro Zone, Industrial Production 12-Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Jan 2013 | -1.3 | -3.1 | 0.9 | -2.6 | -5.5 | 3.1 |
| Dec 2012 | -1.7 | -4.5 | 1.6 | -1.8 | -2.7 | -0.8 |
| Nov | -4.1 | -6.0 | -0.3 | -4.7 | -6.5 | -2.6 |
| Oct | -3.0 | -4.3 | 0.5 | -3.6 | -5.5 | -2.1 |
| Sep | -2.5 | -4.3 | -0.3 | -1.1 | -3.8 | -2.8 |
| Aug | -1.3 | -4.0 | 0.0 | 0.5 | -2.4 | -0.6 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table VD-5 provides industrial production of member countries of the euro zone, the UK and the European Union. Twelve-month percentage changes in Dec 2012 are negative for all countries in Table VD-5.
Table VD-5, Euro Zone, Industrial Production by Member Countries, ∆%
| Jan 2013 | Month ∆% | 12-Month ∆% |
| Euro Zone | -0.4 | -1.3 |
| Germany | -0.4 | -1.3 |
| France | -1.2 | -2.9 |
| Netherlands | NA | NA |
| Finland | -4.1 | -5.4 |
| Belgium | NA | NA |
| Portugal | 3.5 | -1.6 |
| Ireland | -1.1 | -3.5 |
| Italy | NA | NA |
| Greece | -0.9 | -5.0 |
| Spain | 0.6 | -5.0 |
| UK | -1.2 | -3.5 |
| European Union | -0.4 | -1.7 |
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 2012, 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, 3.0 percent in 2011 and 0.7 percent in 2012. Growth slowed in 2011 from 1.2 percent in IQ2011, 0.5 percent in IIQ2011 and 0.4 percent in IIIQ2011 to decline of 0.1 percent in IVQ2011 and growth of 0.5 percent in IQ2012, 0.3 percent in IIQ2012, 0.2 percent in IIIQ2012 and decline of 0.6 percent in IVQ2012.
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 Year ∆%
| Price Adjusted Chain-Linked | Price- and Calendar-Adjusted Chain Linked | |
| 2012 | 0.7 | 0.9 |
| 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 (Destatis) https://www.destatis.de/EN/PressServices/Press/pr/2013/02/PE13_066_811.html;jsessionid=59DE7E440F9F7393B12C16FDA63BEB66.cae1
The Flash Germany Composite Output Index of the Markit Flash Germany PMI®, combining manufacturing and services, decreased from 54.4 in Jan to 52.7 in Feb, which is above the 50.0 neutral zone and near the long-term average of the survey of 53.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10713). New export orders for manufacturing increased at the fastest rate in 22 months, with respondents finding enhanced demand in Asia. 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 in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10713). The Markit Germany Composite Output Index of the Markit Germany Services PMI®, combining manufacturing and services with close association with Germany’s GDP, decreased from 54.4 in Jan to 53.3 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10829). 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 at the fastest rate since the strong first part of 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10829). The Germany Services Business Activity Index decreased from 55.7 in Jan to 54.7 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10829). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, increased from 49.8 in Jan to 50.3 in Feb, breaking the chain of eleven consecutive month in contraction territory below 50.0 but below the long-term average of 51.9 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10780). New export orders increased briskly at the fastest rate in 12 months with broad geographical reach in Asia and outside Europe. Tim Moore, Senior Economist at Markit and author of the report, finds stronger demand from emerging Asian markets in Germany’s return to manufacturing growth propelled by the fastest growth rate of new export orders in almost two years (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10780).Table DE provides the country data table for Germany.
Table DE, Germany, Economic Indicators
| GDP | IVQ2012 -0.6 ∆%; IV/Q2012/IVQ2011 ∆% 0.1 2012/2011: 0.7% GDP ∆% 1992-2012 Blog 8/26/12 5/27/12 11/25/12 2/17/13 2/24/13 |
| Consumer Price Index | Feb month NSA ∆%: 0.6 |
| Producer Price Index | Jan month ∆%: 0.2 CSA, 0.8 NSA |
| Industrial Production | Mfg Jan month CSA ∆%: -0.2 |
| Machine Orders | MFG Jan month ∆%: -1.9 |
| Retail Sales | Jan Month ∆% 3.1 12-Month ∆% 2.4 Blog 3/3/13 |
| Employment Report | Unemployment Rate SA Jan 5.3% |
| Trade Balance | Exports Jan 12-month NSA ∆%: 3.1 Blog 3/17/13 |
Links to blog comments in Table DE:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
11/25/12 http://cmpassocregulationblog.blogspotcom/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
Twelve-month rates of growth Germany’s exports and imports are shown in Table VE-1. 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 minus 0.1 percent in Nov 2012 but sharp decline of 6.9 percent in Dec 2012 followed by rebound of 3.1 percent in Jan 2013. Imports decreased 3.6 percent in the 12 months ending in Sep 2012, rebounding to growth of 6.0 percent in Oct 2012, decreasing 1.1 percent in Nov 2012 and 7.5 percent in Dec 2012 and rebounding 3.3 percent in Jan 2013. 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-1, Germany, Exports and Imports NSA Euro Billions and 12-Month ∆%
| Exports EURO Billions | 12- Month | Imports | 12-Month | |
| Jan 2013 | 88.6 | 3.1 | 74.9 | 3.3 |
| Dec 2012 | 79.0 | -6.9 | 66.9 | -7.5 |
| 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-1 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-1, Germany, Exports Original Value and Trend 2008-2012
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-2 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-2, Germany, Imports Original Value and Trend 2008-2012
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-3 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/declining recently.
Chart VE-3, Germany, Trade Balance Original and Trend 2008-2012
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Table VE-2 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 0.1 percent in Oct 2012, decreasing 2.2 percent in Nov 2012 and increasing 0.2 percent in Dec 2012 and 1.4 percent in Jan 2013. 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 1.5 percent in Dec 2012, rebounding 3.3 percent in Jan 2013. 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-2, Germany, Exports and Imports Month ∆% Calendar and Seasonally Adjusted
| Exports | Imports | |
| Jan 2013 | 1.4 | 3.3 |
| Dec 2012 | 0.2 | -1.5 |
| Nov | -2.2 | -3.8 |
| Oct | 0.1 | 2.8 |
| Sep | -2.0 | -0.8 |
| Aug | 1.8 | 0.0 |
| Jul | 0.0 | 0.2 |
| Jun | -0.5 | -2.0 |
| May | 3.4 | 5.0 |
| Apr | -1.2 | -4.0 |
| Mar | 0.4 | 0.6 |
| Feb | 1.0 | 2.9 |
| Jan | 2.3 | 0.2 |
| Dec 2011 | -2.9 | -1.8 |
| Nov | 2.9 | -0.2 |
| Oct | -3.5 | -0.3 |
| Sep | 1.8 | 0.1 |
| Aug | 2.8 | -0.1 |
| Jul | -1.4 | 0.3 |
| Jun | -0.2 | 0.1 |
| May | 1.7 | 1.1 |
| Apr | -3.2 | -0.3 |
| Mar | 5.2 | 2.1 |
| Feb | 1.0 | 1.7 |
| Jan | 0.7 | 3.3 |
| Dec 2010 | -0.1 | -1.9 |
Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
There is extremely important information in Table VE-3 for the current sovereign risk crisis in the euro zone. Table VE-3 provides the structure of regional and country relations of Germany’s exports and imports with newly available data for Jan 2013. German exports to other European Union (EU) members are 58.7 percent of total exports in Jan 2013 and 58.7 percent in cumulative Jan 2013. Exports to the euro area are 38.7 percent in Jan and 38.7 percent cumulative in Jan. Exports to third countries are 41.3 percent of the total in Jan and 41.3 percent cumulative in Jan. There is similar distribution for imports. Exports to non-euro countries are increasing 5.5 percent in Jan 2013 and increasing 5.5 percent cumulative in Jan 2013 while exports to the euro area are increasing 0.4 percent in Jan and increasing 0.4 percent cumulative in Jan 2013. Exports to third countries, accounting for 44.3 percent of the total in Jan 2013, are increasing 4.5 percent in Jan and increasing 4.5 percent cumulative in Jan, accounting for 41.3 percent of the cumulative total in Jan 2013. 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-3, Germany, Structure of Exports and Imports by Region, € Billions and ∆%
| Jan 2013 | Jan 12-Month | Cumulative Jan 2012 € Billions | Cumulative Jan 2013/ | |
| Total | 88.6 | 3.1 | 88.6 | 3.1 |
| A. EU | 52.0 % 58.7 | 2.1 | 52.0 % 58.7 | 2.1 |
| Euro Area | 34.3 % 38.7 | 0.4 | 34.3 % 38.7 | 0.4 |
| Non-euro Area | 17.7 % 20.0 | 5.5 | 17.7 % 20.0 | 5.5 |
| B. Third Countries | 36.6 % 41.3 | 4.5 | 36.6 % 41.3 | 4.5 |
| Total Imports | 74.9 | 2.9 | 74.9 | 2.9 |
| C. EU Members | 46.9 % 62.6 | 4.6 | 46.9 % 62.6 | 4.6 |
| Euro Area | 32.3 % 43.1 | 2.8 | 32.3 % 43.1 | 2.8 |
| Non-euro Area | 14.6 % 19.5 | 8.7 | 14.6 % 19.5 | 8.7 |
| D. Third Countries | 28.0 % 37.4 | 0.2 | 28.0 % 37.4 | 0.2 |
Notes: Total Exports = A+B; Total Imports = C+D
Source:
Statistisches Bundesamt Deutschland https://www.destatis.de/EN/PressServices/Press/pr/2013/03/PE13_094_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 IVQ1949 to IVQ2012 is quite high at 3.3 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.1 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 1.9 percent in the 1990s and 1.7 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using fourth quarter data, is 1.0 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. Cobet and Wilson (2002) provide estimates of output per hour and unit labor costs in national currency and US dollars for the US, Japan and Germany from 1950 to 2000 (see Pelaez and Pelaez, The Global Recession Risk (2007), 137-44). The average yearly rate of productivity change from 1950 to 2000 was 2.9 percent in the US, 6.3 percent for Japan and 4.7 percent for Germany while unit labor costs in USD increased at 2.6 percent in the US, 4.7 percent in Japan and 4.3 percent in Germany. From 1995 to 2000, output per hour increased at the average yearly rate of 4.6 percent in the US, 3.9 percent in Japan and 2.6 percent in Germany while unit labor costs in US fell at minus 0.7 percent in the US, 4.3 percent in Japan and 7.5 percent in Germany. There was increase in productivity growth in the G7 in Japan and France in the second half of the 1990s but significantly lower than the acceleration of 1.3 percentage points per year in the US. Lucas (2011May) compares growth of the G7 economies (US, UK, Japan, Germany, France, Italy and Canada) and Spain, finding that catch-up growth with earlier rates for the US and UK stalled in the 1970s.
Table VF-FR, France, Average Growth Rates of GDP Fourth Quarter, 1949-2012
| Period | Average ∆% |
| 1949-2012 | 3.3 |
| 2000-2012 | 1.0 |
| 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 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20130214
The Markit Flash France Composite Output Index fell from 42.7 in Jan to 42.3 in Feb for the lowest reading in 47 months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10714). 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 since IQ2009 with all indicators at depressed readings (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10714).
The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased marginally from the low in 46 months of 42.7 in Jan to 43.1 in Feb, indicating significant contraction of private sector activity for a twelveth consecutive month at marginally slower rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10731). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI®, finds that composite data for manufacturing and services suggest further contraction of GDP in France in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10731). The Markit France Services Activity index increased from the lowest reading in 45 months of 43.6 in Jan to 43.1 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10682). The Markit France Manufacturing Purchasing Managers’ Index® increased marginally to to 43.9 in Feb from 42.9 in Jan, remaining deeply below the neutral level of 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10728). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI®, finds continuing weakness in manufacturing with weakness in new internal orders because of weak domestic economic views (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10728). Table FR provides the country data table for France.
Table FR, France, Economic Indicators
| CPI | Feb month ∆% 0.3 |
| PPI | Jan month ∆%: 0.5 Blog 3/3/13 |
| GDP Growth | IVQ2012/IIIQ2012 ∆%: -0.3 |
| Industrial Production | Jan ∆%: |
| Consumer Spending | Manufactured Goods |
| Employment | IVQ2012 Unemployed 2.944 million |
| Trade Balance | Jan Exports ∆%: month -2.4, 12 months 0.0 Jan Imports ∆%: month -1.0, 12 months 0.7 Blog 3/17/13 |
| Confidence Indicators | Historical averages 100 Feb Mfg Business Climate 90 Blog 2/24/13 |
Links to blog comments in Table FR:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
Table VF-1 provides longer historical perspective of manufacturing in France. Manufacturing fell 1.4 percent in Jan 2013 and 4.5 percent relative to a year earlier. Growth of 1.3 percent in Dec 2012 pulled down the 12-month rate of decline from 6.2 percent in Nov 2012 to 3.1 percent in Dec 2012. Manufacturing in France fell 14.1 percent in 2008 and 4.2 percent in Dec 2009.
Table VF-1, France, Manufacturing, Month and 12-Month ∆%
| Month ∆% | 12-Month ∆% | |
| Jan 2013 | -1.4 | -4.5 |
| Dec 2012 | 1.3 | -3.1 |
| Nov | -0.8 | -6.2 |
| Oct | -1.2 | -3.4 |
| Sep | -2.7 | -2.5 |
| Aug | 1.8 | -1.0 |
| Jul | 1.7 | -2.7 |
| Jun | -0.7 | -3.8 |
| May | -1.1 | -5.6 |
| Apr | -0.6 | -3.1 |
| Mar | 1.0 | -2.8 |
| Feb | -1.8 | -5.3 |
| Jan | 0.0 | -2.7 |
| Dec 2011 | -1.8 | -0.7 |
| Nov | 2.1 | 1.7 |
| Oct | -0.3 | 2.0 |
| Sep | -1.2 | 1.3 |
| Aug | 0.0 | 3.5 |
| Jul | 0.6 | 3.1 |
| Jun | -2.6 | 3.1 |
| May | 1.5 | 4.7 |
| Apr | -0.3 | 4.0 |
| Mar | -1.6 | 5.2 |
| Feb | 1.0 | 8.9 |
| Jan | 2.0 | 8.0 |
| Dec 2010 | 0.5 | 5.7 |
| Dec 2009 | -4.2 | |
| Dec 2008 | -14.1 | |
| Dec 2007 | -1.0 | |
| Dec 2006 | 2.7 | |
| Dec 2005 | 0.7 | |
| Dec 2004 | 1.0 | |
| Dec 2003 | 0.1 | |
| Dec 2002 | -1.0 | |
| Dec 2001 | -5.4 | |
| Dec 2000 | 4.6 | |
| Annual |
Source:
Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20130311
Chart VF-1 of France’s Institut National de la Statistique et des Études Économiques shows indices of manufacturing in France from 2008 to 2012. Manufacturing, which is CZ in Chart VF-1, fell deeply in 2008 and part of 2009. All curves of industrial indices tend to flatten recently with oscillations and declines and marginal improvement followed by renewed decline in the final segment.
Chart VF-2, France, Industrial Production Indices 2007-2011
Legend : CZ : Manufacturing - (C1) : Manufacture of food products and beverages - (C3) : Electrical and electronic equipment; machine equipment - (C4) : Manufacture of transport equipment - (C5) : Other manufacturing
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20130311
France has been running a trade deficit fluctuating around €6,000 million as shown in Table VF-2. Exports decreased 2.4 percent in Jan 2013 while imports decreased 1.0 percent, resulting in increase of the trade deficit from revised €5418 million in Dec 2012 to €5862 million in Jan 2013.
Table VF-2, France, Exports, Imports and Trade Balance, € Millions
| Exports | Imports | Trade Balance | |
| Jan 2013 | 36,735 | 42,597 | -5,862 |
| Dec 2012 | 37,626 | 43,044 | -5,418 |
| Nov | 36,520 | 41,175 | -4,655 |
| Oct | 37,480 | 42,523 | -5,043 |
| Sep | 37,304 | 42,591 | -5,287 |
| Aug | 38,188 | 44,121 | -5,933 |
| Jul | 36,751 | 41,500 | -4,749 |
| Jun | 36,275 | 42,830 | -6,555 |
| May | 37,456 | 43,148 | -5,692 |
| Apr | 36,605 | 42,781 | -6,176 |
| Mar | 36,189 | 41,913 | -5,724 |
| Feb | 36,879 | 43,371 | -6,492 |
| Jan | 36,726 | 42,318 | -5,592 |
| Dec 2011 | 36,048 | 41,603 | -5,555 |
| Nov | 37,490 | 42,077 | -4,587 |
| Oct | 35,848 | 42,133 | -6,275 |
| Sep | 35,631 | 42,594 | -6,963 |
| Aug | 36,965 | 42,174 | -5,209 |
| Jul | 35,272 | 41,894 | -6,622 |
| Jun | 35,274 | 40,928 | -5,654 |
| May | 34,887 | 41,751 | -6,864 |
| Apr | 34,720 | 41,679 | -6,959 |
| Mar | 35,295 | 41,671 | -6,376 |
| Feb | 34,724 | 41,318 | -6,594 |
| Jan | 34,469 | 41,074 | -6,605 |
| Dec 2010 | 33,863 | 39,554 | -5,691 |
Source: France, Direction générale des douanes et droits indirects http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp
Table VF-3. Exports decreased 2.4 percent in Jan 2013 and increased 0.0 percent in the 12 months ending in Jan 2013. Imports decreased 1.0 percent in Jan and increased 0.7 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-3, France, Exports and Imports, Month and 12-Month ∆%
| Exports | Exports | Imports | Imports 12-Month ∆% | |
| Jan 2013 | -2.4 | 0.0 | -1.0 | 0.7 |
| Dec 2012 | 3.0 | 4.4 | 4.5 | 3.5 |
| Nov | -2.6 | -2.6 | -3.2 | -2.1 |
| Oct | 0.5 | 4.6 | -0.2 | 0.9 |
| Sep | -2.3 | 4.7 | -3.5 | 0.0 |
| Aug | 3.9 | 3.3 | 6.3 | 4.6 |
| Jul | 1.3 | 4.2 | -3.1 | -0.9 |
| Jun | -3.2 | 2.8 | -0.7 | 4.6 |
| May | 2.3 | 7.4 | 0.9 | 3.3 |
| Apr | 1.1 | 5.4 | 2.1 | 2.6 |
| Mar | -1.9 | 2.5 | -3.4 | 0.6 |
| Feb | 0.4 | 6.2 | 2.5 | 5.0 |
| Jan | 1.9 | 6.5 | 1.7 | 3.0 |
| Dec 2011 | 6.5 | 5.2 | ||
| Dec 2012 | 4.4 | 3.5 | ||
| Dec 2011 | 6.5 | 5.2 | ||
| Dec 2010 | 13.5 | 14.9 | ||
| Dec 2009 | -9.7 | -2.0 | ||
| Dec 2008 | -6.7 | -10.8 | ||
| Dec 2007 | 6.0 | 8.3 | ||
| Dec 2006 | 6.2 | 6.7 | ||
| 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-4. France’s trade balance deteriorated sharply from 2007 to 2011 with the deficit increasing from €42,494 million in 2007 to €74,040 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 decline to €67,500 million with growth of exports of 3.2 percent and of imports of 1.4 percent.
Table VF-4, France, Exports, Imports and Balance Year € Millions and ∆%
| Exports € Millions | ∆% | Imports € Millions | ∆% | Balance € Millions | |
| Jan 2013 12 Months | 441,890 | 509,865 | -67,975 | ||
| Year | |||||
| 2012 | 441,582 | 3.2 | 509,082 | 1.4 | -67,500 |
| 2011 | 428,078 | 8.4 | 502,118 | 12.3 | -74,040 |
| 2010 | 394,835 | 13.9 | 447,172 | 14.1 | -52,337 |
| 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 a year earlier of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 0.5 percent in IVQ2011 to minus 2.8 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 | |||||
| IVQ | -2.8 | -6.6 | -3.9 | -7.6 | 1.9 |
| IIIQ | -2.6 | -8.0 | -4.3 | -8.5 | 2.5 |
| IIQ | -2.6 | -7.5 | -4.1 | -8.6 | 2.5 |
| IQ | -2.6 | -9.0 | -3.4 | -7.2 | 1.9 |
| 2011 | |||||
| IVQ | -0.5 | -6.8 | -1.9 | -3.2 | 3.2 |
| IIIQ | 0.4 | 0.1 | -0.6 | -2.2 | 5.7 |
| IIQ | 0.9 | 3.1 | 0.6 | -0.3 | 7.0 |
| IQ | 1.2 | 8.8 | 1.0 | 0.3 | 10.8 |
| 2010 | |||||
| IVQ | 1.9 | 15.4 | 1.0 | 0.9 | 13.3 |
| IIIQ | 1.7 | 13.2 | 1.2 | 2.7 | 12.1 |
| IIQ | 1.9 | 13.5 | 0.9 | 0.8 | 12.0 |
| IQ | 1.2 | 7.1 | 0.9 | -2.1 | 7.1 |
| 2009 | |||||
| IVQ | -3.4 | -6.4 | 0.2 | -7.8 | -9.3 |
| IIIQ | -4.9 | -12.2 | -0.8 | -12.6 | -16.4 |
| IIQ | -6.6 | -17.9 | -1.5 | -13.6 | -21.4 |
| IQ | -7.0 | -17.2 | -1.7 | -12.6 | -22.8 |
| 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/84408
The Markit/ADACI Business Activity Index decreased from 43.9 in Jan to 43.6 in Feb, indicating significant contraction of output of Italy’s for 21 consecutive months of decline (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10825). Phil Smith, economist at Markit and author of the Italy Services PMI®, finds that the index suggests continuing contraction of the Italian economy in IQ2013 at a rate similar to the decline of 0.9 percent in IVQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10825). The Markit/ADACI Purchasing Managers’ Index® (PMI®), decreased from the ten-month high in Jan of 47.8 to 45.8 in Feb for 19 consecutive months of contraction of Italy’s manufacturing below 50.0 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10770). Phil Smith, economist at Markit and author of the Italian Manufacturing PMI®, finds a more encouraging reading with two consecutive months of growth of new export orders but total new orders restrained by weak domestic demand (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10770). Table IT provides the country data table for Italy.
Table IT, Italy, Economic Indicators
| Consumer Price Index | Feb month ∆%: 0.1 |
| Producer Price Index | Jan month ∆%: -0.4 Blog 3/10/13 |
| GDP Growth | IVQ2012/IIIQ2012 SA ∆%: minus 0.9 |
| 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 |
| Retail Sales | Dec month ∆%: 0.2 Dec 12-month ∆%: -3.8 Blog 2/24/13 |
| Business Confidence | Mfg Feb 88.5, Oct 87.8 Construction Feb 81.6, Oct 81.0 Blog 3/3/13 |
| Trade Balance | Balance Dec SA €1722 million versus Nov €2264 |
Links to blog comments in Table IT:
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html
1/13/13 http://cmpassocregulationblog.blogspot.com/2013/01/peaking-valuation-of-risk-financial.html
Table VG-1 provides revised percentage changes of GDP in Italy of quarter on prior quarter and quarter on same quarter a year earlier. Italy’s GDP fell 0.9 percent in IVQ2012 and declined 2.8 percent relative to IVQ2011. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011 and has fallen in six consecutive quarters from IIIQ2011 to IVQ2012 at increasingly higher rates of contraction from 0.1 percent in IIIQ2011 to 0.8 percent in IVQ2011, 0.9 percent in IQ2012 and 0.7 percent in IIQ2012 but at lower 0.2 percent in IIIQ2012 with the pace of decline accelerating to minus 0.9 percent in IVQ2012. GDP contracted cumulatively 3.6 percent in six consecutive quarterly contractions from IIIQ2011 to IVQ2012 at the annual equivalent rate of 2.4 percent. The yearly rate has fallen from 1.9 percent in IVQ2010 to minus 2.8 percent in IVQ2012. The fiscal adjustment of Italy is significantly more difficult with the economy not growing especially on the prospects of increasing government revenue. The strategy is for reforms to improve productivity so as to facilitate future fiscal consolidation.
Table VG-1, Italy, GDP ∆%
| Quarter ∆% Relative to Preceding Quarter | Quarter ∆% Relative to Same Quarter Year Earlier | |
| IVQ2012 | -0.9 | -2.8 |
| IIIQ2012 | -0.2 | -2.6 |
| IIQ2012 | -0.7 | -2.6 |
| IQ2012 | -0.9 | -1.6 |
| IVQ2011 | -0.8 | -0.5 |
| IIIQ2011 | -0.1 | 0.4 |
| IIQ2011 | 0.3 | 0.9 |
| IQ2011 | 0.1 | 1.2 |
| IVQ2010 | 0.2 | 1.9 |
| IIIQ2010 | 0.4 | 1.7 |
| IIQ2010 | 0.5 | 1.9 |
| IQ2010 | 0.9 | 1.2 |
| IVQ2009 | 0.0 | -3.4 |
| IIIQ2009 | 0.5 | -4.9 |
| IIQ2009 | -0.2 | -6.6 |
| IQ2009 | -3.6 | -7.0 |
| IVQ2008 | -1.6 | -3.0 |
| IIIQ2008 | -1.3 | -1.9 |
| IIQ2008 | -0.5 | -0.2 |
| IQ2008 | 0.5 | 0.5 |
| IV2007 | -0.4 | 0.1 |
| IIIQ2007 | 0.3 | 1.7 |
| IIQ2007 | 0.2 | 2.0 |
| IQ2007 | 0.0 | 2.4 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/84408
Table VG-3 provides percentage changes in a quarter relative to the same quarter a year earlier for GDP and value added components. Percentage declines of industry have been sharper from IVQ2011 to IVQ2012 than for services
Table VG-2, Italy, GDP and Valued Added of Components, Chained Volume Measures, Quarter ∆% on Same Quarter Year Earlier
| Agriculture | Industry | Services | VAT and Net Taxes | GDP Market Prices | |
| 2012 | |||||
| % Value Added | 2.1 | 24.1 | 73.8 | ||
| IVQ | -7.3 | -4.6 | -1.6 | -5.6 | -2.8 |
| IIIQ | -6.3 | -3.9 | -1.7 | -5.0 | -2.6 |
| IIQ | -1.2 | -5.0 | -1.2 | -6.3 | -2.6 |
| IQ | -3.0 | -3.4 | -0.4 | -4.7 | -1.6 |
| 2011 | |||||
| IVQ | 0.8 | -1.6 | 0.4 | -3.9 | -0.5 |
| IIIQ | 0.0 | -0.2 | 0.9 | -1.0 | 0.4 |
| IIQ | -0.5 | 1.7 | 0.8 | 0.3 | 0.9 |
| IQ | 0.5 | 2.4 | 0.7 | 1.5 | 1.2 |
| 2010 | |||||
| IVQ | -0.1 | 3.6 | 1.4 | 1.9 | 1.9 |
| IIIQ | -1.7 | 4.3 | 1.0 | 1.5 | 1.7 |
| IIQ | -0.2 | 4.4 | 1.0 | 2.4 | 1.9 |
| IQ | 0.8 | 1.8 | 1.0 | 0.7 | 1.2 |
| 2009 | |||||
| IVQ | -3.7 | -7.3 | -2.2 | -2.0 | -3.4 |
| IIIQ | -1.0 | -13.0 | -2.2 | -4.2 | -4.9 |
| IIQ | -4.0 | -16.6 | -3.1 | -5.6 | -6.6 |
| IQ | -1.3 | -16.7 | -3.5 | -6.7 | -7.0 |
| 2008 | |||||
| IVQ | 2.2 | -8.2 | -1.3 | -2.1 | -3.0 |
| IIIQ | 1.0 | -3.9 | -1.2 | -1.7 | -1.9 |
| IIQ | 2.3 | -0.6 | 0.0 | -1.4 | -0.2 |
| IQ | 0.1 | 1.0 | 0.4 | -0.1 | 0.5 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/84408
Chart VG-1 of the Italian National Institute of Statistics (ISTAT) provides growth of GDP of Italy at market prices. The year on year rate of growth pulled strongly out of the contraction. There is evident trend of deceleration with increasingly sharper contraction.
Chart VG-1, Italy, GDP at Market Prices, ∆% on Same Quarter Year Earlier
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 | 0.2 |
| 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 | 1.6 |
| 2000-2007 | 3.0 |
| 2009-2012 | 1.0 |
Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2012/index.html
The Business Activity Index of the Markit/CIPS UK Services PMI® increased from 51.5 in Jan to 51.8 in Feb, indicating moderate increase in activity in a second consecutive month (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10830). Chris Williamson, Chief Economist at Markit, finds that improvement in the PMIs suggests growth of around 0.1 percent in the GDP of the United Kingdom (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10830). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) decreased from 50.5 in Jan to 47.9 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10790). Chris Williamson, Chief Economist at Markit that compiles the Markit/CIPS Manufacturing PMI®, finds that output could decline by 0.5 percent in IQ2013 if there is not offset in Mar (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10790). Table UK provides the economic indicators for the United Kingdom.
Table UK, UK Economic Indicators
| CPI | Jan month ∆%: -0.5 |
| Output/Input Prices | Output Prices: Jan 12-month NSA ∆%: 2.0; excluding food, petroleum ∆%: 1.4 |
| GDP Growth | IVQ2012 prior quarter ∆% -0.3; year earlier same quarter ∆%: 0.3 |
| Industrial Production | Jan 2012/Jan 2012 ∆%: Production Industries minus 2.9; Manufacturing minus 3.0 |
| Retail Sales | Jan month ∆%: -0.6 |
| Labor Market | Oct-Dec Unemployment Rate: 7.8%; Claimant Count 4.7%; Earnings Growth 1.4% |
| Trade Balance | Balance Dec minus ₤3201 million |
Links to blog comments in Table UK:
3/3/13 http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
2/17/13 http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.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 Jan 2013. Manufacturing accounts for 67.0 percent of the production industries of the UK and decreased 3.0 percent in the 12 months ending in Jan 2013. Capital goods industries grew 2.0 percent in the 12 months ending in Jan 2013 and had been growing at very high rates during the current cyclical recovery but falling from the unsustainable high of 12.0 percent in the 12 months ending in Feb 2011. Mining and quarrying fell 9.3 percent in the 12 months ending in Jan 2013. The 12-month rates of growth of the entire index of production industries registered declines for all 12 months from Apr 2011 to Jan 2013. 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 upper 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 2.2 percent in 2011 but fell 1.5 percent in 2012
Table VH-1, UK, Output of the Production Industries, Chained Volume Indices of Gross Value Added, 12-Month ∆%
| PROD IND | MNG | MFG | CON DUR | CON NDUR | CAP | ENGY | |
| 2008 | -2.8 | -6.2 | -2.5 | -5.6 | -1.6 | -3.0 | -3.1 |
| 2009 | -9.1 | -9.0 | -9.7 | -6.7 | -0.8 | -10.2 | -6.6 |
| 2010 | 2.1 | -4.3 | 3.8 | -4.1 | -0.5 | 10.2 | -3.0 |
| 2011 | -0.6 | -14.3 | 2.2 | 1.4 | 0.6 | 6.8 | -10.2 |
| 2012 | -2.4 | -10.7 | -1.5 | -2.9 | -3.7 | 2.3 | -6.2 |
| PROD IND | MNG | MFG | CON DUR | CON NDUR | CAP | ENGY | ||
| 2010 | Nov | 2.9 | -5.2 | 4.9 | -9.4 | 0.5 | 9.9 | -2.5 |
| Dec | 3.6 | -4.0 | 4.3 | -4.3 | 2.6 | 8.8 | 1.3 | |
| 2011 | Jan | 3.7 | -3.4 | 5.8 | 3.6 | -0.4 | 9.9 | -3.1 |
| Feb | 2.1 | -11.3 | 5.2 | 1.3 | 0.8 | 12.0 | -7.1 | |
| Mar | 0.3 | -15.8 | 3.7 | 2.7 | 0.3 | 10.3 | -10.3 | |
| Apr | -0.8 | -14.4 | 2.7 | 1.3 | 3.9 | 5.5 | -11.1 | |
| May | -1.0 | -20.4 | 3.4 | 2.2 | 3.1 | 6.0 | -13.0 | |
| Jun | -0.1 | -15.4 | 3.0 | 8.0 | 1.2 | 7.6 | -9.6 | |
| Jul | -0.8 | -15.8 | 2.0 | 3.0 | 3.0 | 4.3 | -10.3 | |
| Aug | -1.4 | -16.0 | 0.7 | -0.2 | 0.2 | 4.5 | -10.0 | |
| Sep | -1.6 | -17.1 | 0.7 | -1.2 | -1.6 | 6.9 | -11.5 | |
| Oct | -2.3 | -12.9 | -0.6 | -1.5 | -2.0 | 4.6 | -11.0 | |
| Nov | -2.8 | -13.2 | -1.0 | 0.9 | -1.3 | 4.8 | -11.3 | |
| Dec | -2.5 | -14.7 | 0.9 | -3.5 | -0.3 | 6.4 | -14.5 | |
| 2012 | Jan | -3.5 | -20.0 | -0.2 | -5.7 | 0.8 | 3.4 | -14.2 |
| Feb | -2.1 | -8.7 | -1.7 | -6.6 | -0.4 | -0.8 | -4.0 | |
| Mar | -2.6 | -9.0 | -1.2 | -6.7 | -1.5 | 0.9 | -8.4 | |
| Apr | -2.0 | -13.7 | -1.4 | -2.6 | -5.2 | 3.1 | -5.6 | |
| May | -1.3 | -8.1 | -1.0 | -4.3 | -5.0 | 3.3 | -3.4 | |
| Jun | -3.9 | -6.0 | -3.9 | -9.1 | -5.8 | 1.0 | -4.9 | |
| Jul | -0.8 | -1.7 | -0.8 | -2.8 | -4.5 | 5.1 | -2.3 | |
| Aug | -1.0 | 0.8 | -1.5 | -3.0 | -4.4 | 2.6 | -0.8 | |
| Sep | -3.2 | -17.2 | -1.5 | 1.8 | -2.1 | 1.2 | -10.3 | |
| Oct | -3.1 | -21.0 | -1.7 | 4.7 | -4.7 | 2.1 | -9.3 | |
| Nov | -2.8 | -13.6 | -2.1 | -0.3 | -5.6 | 1.7 | -6.7 | |
| Dec | -2.1 | -8.7 | -1.6 | 0.7 | -6.2 | 3.9 | -4.3 | |
| 2013 | Jan | -2.9 | -9.3 | -3.0 | -1.4 | -4.8 | 2.0 | -4.4 |
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/january-2013/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. All segments fell in Jan 2013 with exception of consumer nondurables. Capital goods industries fell 3.2 percent and manufacturing 1.5 percent. Performance was stronger with growth of manufacturing of 1.5 percent and capital goods of 2.5 percent in Dec 2012. Fluctuations of monthly production are quite wide.
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 NDR | CAP | ENGY | ||
| 2010 | Nov | 0.3 | -1.0 | 0.3 | -0.6 | -1.0 | 1.1 | -0.1 |
| Dec | 0.1 | -1.9 | -0.8 | 3.6 | 0.4 | -1.2 | 1.9 | |
| 2011 | Jan | 0.7 | 4.7 | 1.0 | 3.1 | -1.1 | 1.5 | -1.4 |
| Feb | -1.2 | -9.3 | 0.3 | -0.6 | 0.3 | 2.5 | -6.3 | |
| Mar | 0.1 | -1.4 | 0.4 | 1.0 | 0.9 | 1.1 | -0.6 | |
| Apr | -1.2 | 0.5 | -0.9 | -2.2 | 0.9 | -3.1 | -1.9 | |
| May | 0.4 | -5.2 | 1.0 | 1.0 | 0.1 | 2.1 | -1.2 | |
| Jun | 0.2 | -0.1 | - | 1.8 | -0.3 | 0.8 | 0.5 | |
| Jul | -0.3 | 0.6 | -0.3 | -2.2 | 0.3 | -0.8 | -0.2 | |
| Aug | -0.3 | -0.2 | -0.5 | -1.9 | -0.4 | -0.1 | -0.2 | |
| Sep | - | -0.8 | 0.1 | -3.6 | -2.0 | 2.0 | -0.9 | |
| Oct | -1.0 | 0.9 | -1.1 | -0.8 | - | -1.3 | -1.1 | |
| Nov | -0.2 | -1.3 | - | 1.8 | -0.3 | 1.3 | -0.4 | |
| Dec | 0.4 | -3.6 | 1.1 | -0.9 | 1.4 | 0.4 | -1.8 | |
| 2012 | Jan | -0.3 | -1.7 | -0.2 | 0.8 | - | -1.4 | -1.0 |
| Feb | 0.2 | 3.4 | -1.2 | -1.5 | -1.0 | -1.7 | 4.9 | |
| Mar | -0.4 | -1.7 | 0.9 | 0.8 | -0.2 | 2.9 | -5.3 | |
| Apr | -0.7 | -4.6 | -1.1 | 2.1 | -3.0 | -1.0 | 1.1 | |
| May | 1.2 | 0.9 | 1.4 | -0.7 | 0.4 | 2.3 | 1.2 | |
| Jun | -2.4 | 2.2 | -3.0 | -3.3 | -1.1 | -1.5 | -1.0 | |
| Jul | 2.9 | 5.2 | 3.0 | 4.6 | 1.7 | 3.2 | 2.5 | |
| Aug | -0.5 | 2.4 | -1.2 | -2.1 | -0.3 | -2.4 | 1.4 | |
| Sep | -2.3 | -18.5 | 0.1 | 1.2 | 0.4 | 0.5 | -10.3 | |
| Oct | -0.8 | -3.8 | -1.2 | 2.0 | -2.8 | -0.4 | - | |
| Nov | 0.1 | 7.9 | -0.4 | -3.1 | -1.2 | 0.9 | 2.4 | |
| Dec | 1.1 | 1.9 | 1.5 | 0.2 | 0.7 | 2.5 | 0.7 | |
| 2013 | Jan | -1.2 | -2.4 | -1.5 | -1.4 | 1.5 | -3.2 | -1.1 |
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/january-2013/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 2.8 percent was driven by negative contribution of 2.10 percentage points by manufacturing. The second highest source of decline is 1.08 percentage points of mining with the subcomponent of oil and gas deducting 1.30 percentage points. The contribution of manufacturing is strong because of its share of 67.0 percent in the production index with growth of minus 3.0 percent in 12 months. The contributions do not add exactly because of rounding. Manufacturing decreased 1.6 percent in Jan 2013, subtracting 1.07 percentage points. Increase of electricity by 1.2 percent in Jan added 0.11 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 Jan 2013 | % Point | Volume | % Point | |
| PROD | 100.0 | -2.9 | -2.9 | -1.2 | -1.2 |
| MNG | 15.4 | -9.3 | -1.08 | -2.4 | -0.26 |
| MNG 06 | 12.6 | -15.0 | -1.30 | -4.3 | -0.34 |
| MFG | 67.0 | -3.0 | -2.10 | -1.5 | -1.07 |
| ELEC | 9.6 | 4.5 | 0.42 | 1.2 | 0.11 |
| WATER | 8.0 | -2.2 | -0.19 | -0.2 | -0.02 |
Notes: Cont: 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/january-2013/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 0.25 percentage points with growth in 12 months of minus 5.0 percent; chemical and chemicals products (CE) deducted 0.16 percentage points with growth in 12 months of minus 2.7 percent; rubber and plastic products (CG) deducted 0.48 percentage points with growth in 12 months of minus 10.3 percent; basic pharmaceutical products and preparations (CF), deducting 0.66 percentage points with 12-month growth of minus 13.2 percent; manufacture of food products, beverages and tobacco (CA) deducted 0.16 percentage points with 12-month growth of minus 1.3 percent. The highest positive contribution was 0.35 percentage points by transport equipment (CL) with growth of 4.4 percent. Computer, electronic and optimal product (CI) with growth of 4.3 percent added 0.17 percentage points. Electrical products (CJ) deducted 0.12 percentage points with growth of minus 5.0 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 (%) | Cont to production (% points) | Month on previous month growth (%) | Cont to production (% points) |
| CA | 11.9 | -1.2 | -0.16 | 1.2 | 0.16 |
| CB | 2.0 | -7.5 | -0.16 | -0.6 | -0.01 |
| CC | 5.5 | -5.0 | -0.25 | 5.2 | 0.24 |
| CD | 0.8 | -8.5 | -0.06 | 6.6 | 0.04 |
| CE | 6.1 | -2.7 | -0.16 | -4.5 | -0.28 |
| CF | 6.1 | -13.2 | -0.66 | -1.3 | -0.06 |
| CG | 4.7 | -10.3 | -0.48 | -5.3 | -0.24 |
| CH | 8.6 | -1.0 | -0.09 | 0.3 | 0.03 |
| CI | 4.3 | 4.3 | 0.17 | -1.1 | -0.05 |
| CJ | 2.1 | -5.0 | -0.12 | -4.4 | -0.11 |
| CK | 4.8 | -5.6 | -0.35 | -13.4 | -0.93 |
| CL | 5.7 | 4.4 | 0.35 | -0.6 | -0.05 |
| CM | 4.5 | -2.6 | -0.12 | 4.0 | 0.18 |
Notes: Cont: Contribution; 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/january-2013/index.html
The UK’s trade account is shown in Table VH-5. In Jan 2013, the UK ran a deficit in trade of goods and services (total trade) of ₤2362 million. The deficit in trade of goods was ₤8195 million and ₤7761 million in goods excluding oil. A surplus in services of ₤5833 million contributed to the smaller overall deficit in goods and services (-₤8195 million plus ₤5883 million equal to -₤2362 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 decreased 2.3 percent in Jan 2013 and fell 3.1 percent in the quarter Nov 2012-Jan 2013 relative to the same quarter a year earlier with imports decreasing 3.2 percent in Jan and decreasing 1.7 percent in Nov 2012-Jan 2013 relative to the same quarter a year earlier. Excluding oil, UK exports of goods decreased 5.4 percent in Jan 2013 and decreased 2.1 percent in Nov-Jan 2013 relative to a year earlier while imports decreased 1.0 percent in Jan and decreased 1.1 percent in Nov 2012-Jan 2013 relative to a year earlier. The great advantage of the UK similar to the US is the substantial surplus in services. Services exports decreased 0.4 percent in Jan and fell 3.5 percent in Nov 2012-Jan 2013 relative to a year earlier and imports increased 0.3 percent in Jan and decreased 3.6 percent in Nov 2012-Jan 2013 relative to a year earlier.
Table VH-5, Value of UK Trade in Goods and Services, Balance of Payments Basis, ₤ Million and ∆%
| ₤ Million SA Jan 2013 | Month ∆% | Nov 2012-Jan 2013 ∆% Nov 2012-Jan 2012 | |
| Total Trade | |||
| Exports | 39,817 | -2.3 | -3.1 |
| Imports | 42,179 | -3.2 | -1.7 |
| Balance | -2,362 | ||
| Trade in Goods | |||
| Exports | 24,433 | -3.5 | -2.9 |
| Imports | 32,628 | -4.2 | -1.1 |
| Balance | -8,195 | ||
| Trade in Goods Excluding Oil | |||
| Exports | 21,050 | -5.4 | -2.1 |
| Imports | 28,811 | -1.0 | -1.1 |
| Balance | -7,761 | ||
| Trade in Services | |||
| Exports | 15,384 | -0.4 | -3.5 |
| Imports | 9,551 | 0.3 | -3.6 |
| Balance | 5,833 |
Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/january-2013/index.html
© Carlos M. Pelaez, 2010, 2011, 2012, 2013
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