Twenty Nine Million Unemployed or Underemployed, Stagnating Real Wages and Real Disposable Income, Peaking Valuations of Risk Financial Assets, World Economic Slowdown and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2010, 2011, 2012, 2013
Executive Summary
I Twenty Nine Million Unemployed or Underemployed
IA1 Summary of the Employment Situation
IA2 Number of People in Job Stress
IA3 Long-term and Cyclical Comparison of Employment
IA4 Job Creation
II Stagnating Real Wages
IIA Stagnating Real Disposable Income and Consumption Expenditures
IIA1 Stagnating Real Disposable Income and Consumption Expenditures
IIA2 Financial Repression
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
2013 observed for many countries (http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html). The annual equivalent producer price inflation in the first wave Jan-Apr 2011 was 10.7 percent, which was driven by increases in commodity prices resulting from the carry trades from zero interest rates to risk financial assets, in particular leveraged positions in commodities. In the second wave, producer price inflation was 1.8 percent in annual equivalent rate in May-Jun 2011. In the third wave, annual equivalent inflation was 4.9 percent in Jul-Sep 2011. With the return of risk aversion in the fourth wave coinciding with the worsening sovereign debt crisis in Europe, annual equivalent inflation was 2.0 percent in Oct-Dec 2011. Inflation accelerated in the fifth wave in Jan and Feb 2012 to annual equivalent 8.1 percent. In the sixth wave, annual equivalent inflation in Mar-Apr was at 6.8 percent. In the seventh wave, risk aversion originating in world economic slowdown and financial turbulence softened carry trades with annual equivalent inflation falling to minus 0.6 percent in May-Jun 2012. In the eighth wave, more aggressive carry trades into commodity futures exposures resulted in increase of inflation at annual equivalent 9.4 percent in Jul-Aug 2012. In the ninth wave, risk aversion caused unwinding carry trades with annual equivalent inflation of minus 5.2 percent in Sep 2012-Jan 2013. Inflation returned in the tenth wave at 1.2 percent annual equivalent in Feb-Mar 2013.
Table IV-15, Italy, Industrial Prices, Internal Market
| Month ∆% | 12-Month ∆% | |
| Mar 2013 | 0.0 | 0.0 |
| Feb | 0.2 | 0.5 |
| AE ∆% Feb-Mar | 1.2 | |
| Jan | -0.6 | 0.7 |
| Dec 2012 | -0.3 | 2.4 |
| Nov | -0.3 | 2.8 |
| Oct | -0.7 | 3.5 |
| Sep | -0.3 | 4.2 |
| AE ∆% Sep-Jan | -5.2 | |
| Aug | 1.1 | 4.5 |
| Jul | 0.4 | 3.8 |
| AE ∆% Jul-Aug | 9.4 | |
| Jun | 0.0 | 4.2 |
| May | -0.1 | 4.4 |
| AE ∆% May-Jun | -0.6 | |
| Apr | 0.6 | 4.6 |
| Mar | 0.5 | 4.8 |
| AE ∆% Mar-Apr | 6.8 | |
| Feb | 0.5 | 5.2 |
| Jan | 0.8 | 5.2 |
| AE ∆% Jan-Feb | 8.1 | |
| Dec 2011 | 0.1 | 5.5 |
| Nov | 0.4 | 6.0 |
| Oct | 0.0 | 6.1 |
| AE ∆% Oct-Dec | 2.0 | |
| Sep | 0.0 | 5.3 |
| Aug | 0.4 | 5.4 |
| Jul | 0.8 | 5.2 |
| AE ∆% Jul-Sep | 4.9 | |
| Jun | 0.2 | 4.6 |
| May | 0.1 | 4.6 |
| AE ∆% May-Jun | 1.8 | |
| Apr | 0.9 | 5.1 |
| Mar | 0.9 | 5.0 |
| Feb | 0.4 | 4.5 |
| Jan | 1.2 | 5.3 |
| AE ∆% Jan-Apr | 10.7 | |
| Year | ||
| 2012 | 4.2 | |
| 2011 | 5.1 | |
| 2010 | 3.1 | |
| 2009 | -5.4 | |
| 2008 | 5.8 | |
| 2007 | 3.3 | |
| 2006 | 5.3 | |
| 2005 | 4.0 | |
| 2004 | 2.8 | |
| 2003 | 1.6 | |
| 2002 | 0.1 | |
| 2001 | 2.0 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/89301
Chart IV-16 of the Istituto Nazionale di Statistica provides 12-month percentage changes of the producer price index of Italy. Rates of change in 12 months stabilized from Jul to Nov 2011 and then fell to 3.5 percent in Jan 2012 with increases of 0.7 percent in the month of Jan 2013 and 0.5 percent in Feb 2013 followed by stability in Mar 2013.
Chart IV-16, Italy, Producer Price Index 12-Month Percentage Changes
Source: Istituto Nazionale di Statistica
Monthly and 12-month inflation of the producer price index of Italy and individual components is provided in Table IV-12. Energy prices increased 0.3 percent in Mar 2013 and fell 1.4 percent in 12 months. Producer-price inflation is nil for most components in the month of Mar 2013 with the exception of 0.3 percent for energy. There is higher inflation in 12 months of 2.1 percent for nondurable goods than 0.0 percent for durable goods.
Table IV-12, Italy, Industrial Prices, Internal Market, ∆%
| Mar 2013/ | Mar 2013/ | |
| Total | 0.0 | 0.0 |
| Consumer Goods | 0.0 | 1.7 |
| Durable Goods | 0.0 | 0.0 |
| Nondurable | 0.0 | 2.0 |
| Capital Goods | 0.0 | 0.3 |
| Intermediate | 0.0 | -0.1 |
| Energy | 0.3 | -1.4 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/89301
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-13. 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 Apr 2013 was 1.9 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 (http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html).
Table IV-13, Italy, Consumer Price Index
| Month | 12 Months | |
| Apr 2013 | 0.1 | 1.2 |
| Mar | 0.2 | 1.6 |
| Feb | 0.1 | 1.9 |
| Jan | 0.2 | 2.2 |
| Dec 2012 | 0.2 | 2.3 |
| AE ∆% Dec 2012-Apr 2013 | 1.9 | |
| 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/89137
Consumer price inflation in Italy by segments in the estimate by ISTAT for Feb 2013 is provided in Table IV-14. Total consumer price inflation in Apr 2013 was 0.1 percent and 1.2 percent in 12 months. Inflation of goods was minus 0.4 percent in Apr 2013 and 0.9 percent in 12 months. Prices of durable goods increased 0.1 percent in Apr and decreased 0.1 percent in 12 months, as typical in most countries. Prices of energy decreased 2.0 percent in Apr and decreased 0.9 percent in 12 months. Food prices increased 0.2 percent in Apr and increased 2.8 percent in 12 months. Prices of services increased 0.5 percent in Apr and rose 1.5 percent in 12 months. Transport prices, also influenced by commodity prices, increased 0.2 percent in Apr and increased 2.1 percent in 12 months. Carry trades from zero interest rates to positions in commodity futures cause increases in commodity prices. Waves of inflation originate in periods when there is no risk aversion and commodity prices decline during periods of risk aversion (http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html).
Table IV-14, Italy, Consumer Price Index and Segments, Month and 12-Month ∆%
| Apr 2013 | Weights | Month ∆% | 12-Month ∆% |
| General Index | 1,000,000 | 0.1 | 1.2 |
| I Goods | 559,402 | -0.4 | 0.9 |
| Food | 168,499 | 0.2 | 2.8 |
| Energy | 94,758 | -2.0 | -0.9 |
| Durable | 89,934 | 0.1 | -0.1 |
| Nondurable | 71,031 | 0.1 | 1.2 |
| II Services | 440,598 | 0.5 | 1.5 |
| Housing | 71,158 | 0.1 | 2.0 |
| Communications | 20,227 | 2.3 | -2.5 |
| Transport | 81,266 | 0.2 | 2.1 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/89137
Chart IV-17 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, 1.9 percent in Feb 2013 and 1.6 percent in Mar 2013. Consumer prices increased 1.2 percent in the 12 months ending in Apr 2013.
Chart, IV-17, 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/pubs/ft/weo/2013/01/weodata/index.aspx) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has lowered its forecast of the world economy to 3.3 percent in 2013 but accelerating to 4.0 percent in 2014, 4.4 percent in 2015 and 4.5 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $33,932 billion of world output of $71,707 billion, or 47.3 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2013 to 2016 in contrast with 4.1 percent for the world as a whole. While the world would grow 17.2 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.8 percent. The difference in dollars of 2012 is rather high: growing by 17.2 percent would add $12.3 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,964 but growing by 8.8 percent would add $6.3 trillion of output to the world, or about the output of Japan in 2012. 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 2012 of $27,290 billion, or 38.1 percent of world output. The EMDEs would grow cumulatively 25.2 percent or at the average yearly rate of 5.8 percent, contributing $6.9 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,227 billion of China in 2012. The final four countries in Table 1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,470 billion, or 20.2 percent of world output, which is equivalent to 42.6 percent of the combined output of the major advanced economies of the G7.
Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth
| GDP USD 2012 | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| World | 71,707 | 3.3 | 4.0 | 4.4 | 4.5 |
| G7 | 33,932 | 1.3 | 2.2 | 2.5 | 2.5 |
| Canada | 1,819 | 1.5 | 2.4 | 2.5 | 2.4 |
| France | 2,609 | -0.1 | 0.9 | 1.5 | 1.7 |
| DE | 3,401 | 0.6 | 1.5 | 1.3 | 1.3 |
| Italy | 2,014 | -1.5 | 0.5 | 1.2 | 1.4 |
| Japan | 5,964 | 1.6 | 1.4 | 1.1 | 1.2 |
| UK | 2,441 | 0.7 | 1.5 | 1.8 | 1.9 |
| US | 15,685 | 1.9 | 2.9 | 3.6 | 3.4 |
| Euro Area | 12,198 | -0.3 | 1.1 | 1.4 | 1.6 |
| DE | 3,401 | 0.6 | 1.5 | 1.3 | 1.3 |
| France | 2,609 | -0.1 | 0.9 | 1.5 | 1.7 |
| Italy | 2,014 | -1.5 | 0.5 | 1.2 | 1.4 |
| POT | 213 | -2.3 | 0.6 | 1.5 | 1.8 |
| Ireland | 210 | 1.1 | 2.2 | 2.7 | 2.7 |
| Greece | 249 | -4.2 | 0.6 | 2.9 | 3.7 |
| Spain | 1,352 | -1.6 | 0.7 | 1.4 | 1.5 |
| EMDE | 27,290 | 5.3 | 5.7 | 6.0 | 6.1 |
| Brazil | 2,396 | 3.0 | 4.0 | 4.1 | 4.2 |
| Russia | 2,022 | 3.4 | 3.8 | 3.7 | 3.6 |
| India | 1,825 | 5.7 | 6.2 | 6.6 | 6.9 |
| China | 8,227 | 8.0 | 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/pubs/ft/weo/2013/01/weodata/index.aspx
Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx). Table I-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2012 in Table I-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high for the countries with sovereign debt difficulties in Europe: 15.7 percent for Portugal (POT), 14.7 percent for Ireland, 24.2 percent for Greece, 25.0 percent for Spain and 10.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.4 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 2012 | % Labor Force 2013 | % Labor Force 2014 | % Labor Force 2015 | % Labor Force 2016 | |
| World | NA | NA | NA | NA | NA |
| G7 | 7.4 | 7.4 | 7.3 | 7.0 | 6.6 |
| Canada | 7.3 | 7.3 | 7.2 | 7.1 | 7.0 |
| France | 10.2 | 11.2 | 11.6 | 11.4 | 10.9 |
| DE | 5.5 | 5.6 | 5.7 | 5.6 | 5.6 |
| Italy | 10.6 | 12.0 | 12.4 | 12.0 | 11.2 |
| Japan | 4.4 | 4.1 | 4.1 | 4.1 | 4.1 |
| UK | 8.0 | 7.8 | 7.8 | 7.4 | 6.9 |
| US | 8.1 | 7.7 | 7.5 | 6.9 | 6.3 |
| Euro Area | 11.4 | 12.3 | 12.3 | 11.9 | 11.4 |
| DE | 5.5 | 5.6 | 5.7 | 5.6 | 5.6 |
| France | 10.2 | 11.2 | 11.6 | 11.4 | 10.9 |
| Italy | 10.6 | 12.0 | 12.4 | 12.0 | 11.2 |
| POT | 15.7 | 18.3 | 18.5 | 18.1 | 17.5 |
| Ireland | 14.7 | 14.2 | 13.8 | 12.9 | 11.9 |
| Greece | 24.2 | 27.0 | 26.1 | 24.0 | 21.0 |
| Spain | 25.0 | 27.0 | 26.5 | 25.6 | 24.7 |
| EMDE | NA | NA | NA | NA | NA |
| Brazil | 5.5 | 6.0 | 6.5 | 6.5 | 6.5 |
| Russia | 6.0 | 5.5 | 5.5 | 5.5 | 5.5 |
| 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/pubs/ft/weo/2013/01/weodata/index.aspx
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 and IQ2013 for a few 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 1.9 percent in IIQ2012, which annualizes to 7.8 percent and 7.6 percent relative to a year earlier. China grew at 2.1 percent in IIIQ2012, which annualizes at 8.7 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. In IQ2013, China grew at 1.6 percent, which annualizes at 6.6 percent and 7.7 percent relative to a year earlier. 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, 7.9 percent in IVQ2012 relative to year earlier and 7.7 percent in IQ2013. 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 2.4 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,
0.4 percent at SAAR and 1.7 percent relative to IVQ2011. In IQ2013, US GDP grew at 2.5 percent SAAR, 0.6 percent relative to the prior quarter and 1.8 percent relative to the same quarter in 2013 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/recovery-without-hiring-ten-million.html). In IQ2012, UK GDP fell 0.1 percent, increasing 0.5 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP increased 0.9 percent in IIIQ2012 and increased 0.4 percent relative to a year earlier. UK GDP fell 0.3 percent in IVQ2012 relative to IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP increased 0.3 percent in IQ2013 and 0.6 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 fell 0.1 percent in IQ2012 and increased 0.5 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 0.2 percent and increased 0.1 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 | 1.6 | 8.1 |
| Euro Area | -0.1 | 0.3 |
| Germany | 0.5 | 1.7 |
| France | -0.1 | 0.5 |
| Italy | -0.9 | -1.6 |
| United Kingdom | -0.1 | 0.5 |
| IIQ2012/IQ2012 | IIQ2012/IIQ2011 | |
| United States | QOQ: 0.3 SAAR: 1.3 | 2.1 |
| Japan | QOQ: -0.2 | 3.9 |
| China | 1.9 | 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 | 0.0 |
| IIIQ2012/ IIQ2012 | IIIQ2012/ IIIQ2011 | |
| United States | QOQ: 0.8 | 2.6 |
| Japan | QOQ: –0.9 | 0.4 |
| China | 2.1 | 7.4 |
| Euro Area | -0.1 | -0.8 |
| Germany | 0.2 | 0.4 |
| France | 0.2 | 0.1 |
| Italy | -0.2 | -2.6 |
| United Kingdom | 0.9 | 0.4 |
| IVQ2012/IIIQ2012 | IVQ2012/IVQ2011 | |
| United States | QOQ: 0.1 | 1.7 |
| 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 | 0.2 |
| IQ2013/IVQ2012 | IQ2013/IQ2012 | |
| United States | QOQ: 0.6 | 1.8 |
| China | 1.6 | 7.7 |
| UK | 0.3 | 0.6 |
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 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 and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier 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 Mar 2013, Japan’s exports grew 1.1 percent in 12 months while imports increased 5.5 percent. 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. In Mar 2013, China exports increased 10.0 percent relative to a year earlier and imports 14.1 percent. Germany’s exports decreased 1.5 percent in the month of Feb 2013 and decreased 2.8 percent in the 12 months ending in Feb 2013 while imports decreased 3.8 percent in the month of Feb and decreased 5.9 percent in the 12 months ending in Feb. 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 0.7 percentage points from UK value added in IQ2012, deducted 0.8 percentage points in IIQ2012, added 0.4 percentage points in IIIQ2012 and subtracted 0.2 percentage points in IVQ2012. France’s exports decreased 1.9 percent in Feb 2013 while imports decreased 0.8 percent and net trade deducted 0.4 percentage points from GDP growth in IIQ2012, adding 0.3 percentage points in IIIQ2012 and 0.2 percentage points in IVQ2012. US exports increased 0.8 percent in Feb 2013 and goods exports increased 2.2 percent in Jan-Feb 2013 relative to a year earlier but net trade added 0.38 percentage points to GDP growth in IIIQ2012 and added 0.33 percentage points in IVQ2012. In IQ2013, net trade deducted 0.50 percentage points from US GDP growth. US imports increased 0.0 percent in Feb 2013 and goods imports decreased 0.1 percent in Jan-Feb 2013 relative to a year earlier. In the six months ending in Mar 2013, United States national industrial production accumulated increase of 2.6 percent at the annual equivalent rate of 5.3 percent, which is higher than 3.5 percent growth in 12 months. Business equipment decreased 1.1 percent in Oct, increased 2.4 percent in Nov, increased 0.4 percent in Dec, fell 1.4 percent in Jan, increased 1.9 percent in Feb 2013 and 0.1 percent in Mar, growing 5.1 percent in the 12 months ending in Feb 2013 and at the annual equivalent rate of 4.6 percent in the six months ending in Mar 2013. Capacity utilization of total industry is analyzed by the Fed in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm) “ The rate of capacity utilization for total industry moved up in March to 78.5 percent, a rate that is 1.2 percentage points above its level of a year earlier but 1.7 percentage points below its long-run (1972--2012) average.” United States industry is apparently decelerating with some strength at the margin.
Manufacturing decreased 0.1 percent in Mar 2013 seasonally adjusted, increasing 2.1 percent not seasonally adjusted in 12 months, and increased 2.3 percent in the six months ending in Mar 2013 or at the annual equivalent rate of 4.7 percent. Manufacturing fell by 22.1 from the peak in Jun 2007 to the trough in Apr 2009 and increased 16.7 percent from the trough in Apr 2009 to Dec 2012. Manufacturing fell 7.0 percent from the peak in Jun 2007 to Mar 2013 and increased 19.4 from the trough in Apr 2008 to Mar 2013. 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 | 0.8 Feb | 2.2 Jan-Feb | 0.0 Jan | -0.1 Jan-Feb |
| Japan | Mar 2013 1.1 Feb 2013 -2.9 Jan 2013 6.4 Dec -5.8 Nov -4.1 Oct -6.5 Sep -10.3 Aug -5.8 Jul -8.1 | Mar 2013 5.5 Feb 2013 7.3 Jan 2013 7.3 Dec 1.9 Nov 0.8 Oct -1.6 Sep 4.1 Aug -5.4 Jul 2.1 | ||
| China | 10.0 Mar 13 18.4 Jan-Mar 13 | 14.1 Mar 13 8.4 Jan-Mar 13 | ||
| Euro Area | -1.1 12-M Feb | 1.9 Jan-Feb | -7.1 12-M Feb | -2.7 Jan-Feb |
| Germany | -1.5 Feb CSA | -2.8 Feb | -3.8 B CSA | -5.9 Feb |
| France Feb | -1.9 | -3.6 | -0.8 | -4.2 |
| Italy Feb | -3.0 | -2.8 | -2.6 | -9.6 |
| 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 | IQ2013 -0.50 IVQ2012 +0.33 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 | -0.4 IIQ2012 0.3 IIIQ2012 0.2 IVQ2012 | |||
| UK | -0.7 IQ2012 -0.8 IIQ2012 +0.4 IIIQ2012 -0.2 IVQ2012 |
Sources: Country Statistical Agencies http://www.census.gov/foreign-trade/ http://www.bea.gov/iTable/index_nipa.cfm
The geographical breakdown of exports and imports of Japan with selected regions and countries is provided in Table V-5 for Mar 2013. The share of Asia in Japan’s trade is more than one half, 54.2 percent of exports and 43.2 percent of imports. Within Asia, exports to China are 17.7 percent of total exports and imports from China 20.2 percent of total imports. While exports to China fell 2.5 percent in the 12 months ending in Mar 2013, imports from China increased 1.0 percent. The second largest export market for Japan in Mar 2013 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 9.8 percent in Japan’s exports and of 10.5 percent in imports. Rates of growth of exports of Japan in Mar 2013 are negative for several countries and regions with the exception of growth of 7.0 percent for exports to the US, 22.3 for exports to Mexico, 3.6 percent for exports to Brazil and 1.0 percent for exports to Australia. 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 increase of Japan’s exports by 1.1 percent in Mar 2013 while imports increased 5.5 percent but higher levels after the earthquake and declining prices may be another factor. Growth rates of imports in the 12 months ending in Mar 2013 are positive for most trading partners. Imports from Asia increased 3.8 percent in the 12 months ending in Mar 2013 while imports from China increased 1.0 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
| Mar 2013 | Exports | 12 months ∆% | Imports Millions Yen | 12 months ∆% |
| Total | 6,271,355 | 1.1 | 6,633,776 | 5.5 |
| Asia | 3,399,786 | 0.3 | 2,863,414 | 3.8 |
| China | 1,108,606 | -2.5 | 1,342,491 | 1.0 |
| USA | 1,096,769 | 7.0 | 535,136 | -0.4 |
| Canada | 78,247 | -7.9 | 91,097 | 5.0 |
| Brazil | 50,166 | 3.6 | 86,684 | 10.4 |
| Mexico | 88,090 | 22.3 | 31,335 | -6.8 |
| Western Europe | 615,009 | -4.7 | 696,019 | 10.8 |
| Germany | 153,886 | -1.4 | 185,366 | 0.4 |
| France | 49,858 | -16.6 | 103,961 | 30.1 |
| UK | 80,750 | -12.4 | 47,673 | -14.4 |
| Middle East | 224,218 | -7.1 | 1,313,653 | 2.7 |
| Australia | 150,352 | 1.0 | 399,424 | 6.1 |
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 increasing growth of the volume of world trade of goods and services from 3.6 percent in 2013 to 6.1 percent in 2015 and 5.7 percent in 2018. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would more challenging with lower growth of world trade.
Table V-6, IMF, Projections of World Trade, ∆%
| 2013 | 2014 | 2015 | Average ∆% 2013-2018 | |
| World Trade Volume (Goods and Services) | 3.6 | 5.3 | 6.1 | 5.7 |
| Oil Price USD/Barrel | 102.60 | 97.58 | NA | NA |
| Commodity Price Index | 181.84 | 174.06 | NA | NA |
| Commodity Industrial Inputs Price | 170.04 | 164.66 | NA | NA |
| Imports Goods & Services | ||||
| G7 | 1.8 | 4.0 | 4.7 | 4.3 |
| EMDE | 6.2 | 7.3 | 7.9 | 7.5 |
| Exports Goods & Services | ||||
| G7 | 2.2 | 4.4 | 4.9 | 4.5 |
| EMDE | 4.8 | 6.5 | 7.6 | 7.1 |
Notes: Commodity Price Index includes Fuel and Non-fuel Prices; Commodity Industrial Inputs Price includes agricultural raw materials and metal prices; Oil price is average of WTI, Brent and Dubai
Source: International Monetary Fund World Economic Outlook databank
http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx
The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, increased marginally to 53.1 in Mar from 52.9 in Feb, indicating expansion at a moderate rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10974).This index has remained above the contraction territory of 50.0 during 44 consecutive months and the average for IQ2013 at 53.0 is slightly higher than 52.9 in IVQ2012. The employment index decreased to 51.4 in Mar relative to 52.3 in Feb with input prices rising at slower rate (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10974) David Hensley, Director of Global Economic Coordination at JP Morgan, finds continuing growth with slowing new orders and slow employment growth raising doubts on the sustainability of growth (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10974). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased marginally to 51.2 in Mar from 50.9 in Feb, which is the third consecutive reading above 50 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10951). New export business increased marginally for the first month after eleven consecutive monthly declines. The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 52.9 in Feb to 51.0 in Mar, indicating improvement but with business activity growing at lower rates in both manufacturing and services (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10948). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 52.1 in Feb to 50.3 in Mar ((http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10948). Andre Loes, Chief Economist, Brazil, at HSBC, finds recovering economy but within a modest forecast for 2013 lowered from 3 percent to 2.6 percent ((http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10948). 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 and 51.2 in Mar 2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10871). The average of 52.5 in IQ2013 was higher than the average of 51.2 for IVQ2012. Andre Loes, Chief Economist, Brazil at HSBC, finds continuing expansion in Brazil’s manufacturing with greater strength in IQ2013 than in IVQ2012 and the highest reading in IQ2011, supporting the view that the economy of Brazil is experiencing moderate recovery (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10871).
VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index™ (PMI™) seasonally adjusted fell to 52.0 in Apr from 54.6 in Mar, which is the lowest reading in six months (http://www.markiteconomics.com/Survey/PressRelease.mvc/8b5f686e481f42199fa60c1ae997959c).New export orders registered 52.2 in Apr from 51.8 in Mar, indicating expansion at a moderate rate while output fell from 56.6 in Mar to 53.6 in Apr. Chris Williams, Chief Economist at Markit, finds that the survey data are consistent with growth at only 2.0 percent annual rythm in the beginning of IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/8b5f686e481f42199fa60c1ae997959c). The Markit US Manufacturing Purchasing Managers’ Index™ (PMI™) increased to 54.6 in Mar from 54.3 in Feb (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10933). The index of new exports orders increased from 48.5 in Feb 2013 to 51.8 in Mar 2013 while total new orders were unchanged from 54.4 in Feb to 55.4 in Mar. 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=10933). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® decreased 2.9 percentage points from 54.2 in Feb to 51.3 in Mar (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders decreased 6.4 percentage points from 57.8 in Feb to 51.4 in Mar. The index of exports increased 2.5 percentage points from 53.5 in Feb to 56.0 in Mar, remaining in expansion territory. The Non-Manufacturing ISM Report on Business® PMI decreased 1.6 percentage points from 56.0 in Feb to 54.4 in Mar, indicating production growth during 44 consecutive months, while the index of new orders decreased 3.6 percentage points from 58.2 in Feb to 54.6 in Mar (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 | Mar 12 months NSA ∆%: 1.5; ex food and energy ∆%: 1.9 Mar month SA ∆%: -0.2; ex food and energy ∆%: 0.1 |
| Producer Price Index | Mar 12-month NSA ∆%: 1.1; ex food and energy ∆% 1.7 |
| PCE Inflation | Mar 12-month NSA ∆%: headline 1.0; ex food and energy ∆% 1.1 |
| Employment Situation | Household Survey: Apr Unemployment Rate SA 7.5% |
| 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 1.7 IQ2013/IQ2012 1.8 IQ2012 SAAR 2.0 IIQ2012 SAAR 1.3 IIIQ2012 SAAR 3.1 IVQ2012 SAAR 0.4 IQ2013 SAAR 2.5 |
| Real Private Fixed Investment | SAAR IQ2013 4.1 ∆% IVQ2007 to IIIQ2012: minus 8.8% Blog 4/28/13 |
| Personal Income and Consumption | Mar month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.3 |
| Quarterly Services Report | IVQ12/IVQ11 SA ∆%: Financial & Insurance 6.2 |
| Employment Cost Index | Compensation Private IQ2013 SA ∆%: 0.3 |
| Industrial Production | Mar month SA ∆%: 0.4 Manufacturing Mar SA ∆% -0.1 Mar 12 months SA ∆% 2.5, NSA 2.1 |
| Productivity and Costs | Nonfarm Business Productivity IQ2013∆% SAAE 0.7; IQ2013/IQ2012 ∆% 0.9; Unit Labor Costs SAAE IQ2013 ∆% 0.5; IQ2013/IQ2012 ∆%: 0.6 Blog 5/5/2013 |
| New York Fed Manufacturing Index | General Business Conditions From Mar 9.24 to Apr 3.05 |
| Philadelphia Fed Business Outlook Index | General Index from Mar 2.0 to Apr 1.3 |
| Manufacturing Shipments and Orders | New Orders SA Mar ∆% -4.0 Ex Transport -2.0 Jan-Mar NSA New Orders -0.2 Ex transport -0.1 |
| Durable Goods | Mar New Orders SA ∆%: minus 5.7; ex transport ∆%: minus 1.4 |
| Sales of New Motor Vehicles | Jan-Apr 2013 4,974,000; Jan-Apr 2012 4,652,005. Apr 13 SAAR 14.92 million, Mar 13 SAAR 15.27 million, Apr 2012 SAAR 14.12 million Blog 5/5/13 |
| Sales of Merchant Wholesalers | Jan-Feb 2013/Jan-Feb 2012 NSA ∆%: Total 1.7; Durable Goods: 0.4; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Feb 13/Feb 12 NSA ∆%: Sales Total Business 0.1; Manufacturers 0.0 |
| Sales for Retail and Food Services | Jan-Mar 2013/Jan-Mar 2012 ∆%: Retail and Food Services 2.8; Retail ∆% 2.7 |
| Value of Construction Put in Place | Mar SAAR month SA ∆%: -1.7 Mar 12-month NSA: 4.9 Jan-Mar 2013 ∆% 4.7 |
| Case-Shiller Home Prices | Feb 2013/Feb 2012 ∆% NSA: 10 Cities 8.6; 20 Cities: 9.3 |
| FHFA House Price Index Purchases Only | Feb SA ∆% 0.7; |
| New House Sales | Mar 2013 month SAAR ∆%: minus 1.5 |
| Housing Starts and Permits | Mar Starts month SA ∆%: 7.0 ; Permits ∆%: -3.9 |
| Trade Balance | Balance Feb SA -$42,960 million versus Jan -$44,460 million |
| Export and Import Prices | Mar 12-month NSA ∆%: Imports -2.7; Exports 0.3 |
| Consumer Credit | Feb ∆% annual rate: 7.8 |
| Net Foreign Purchases of Long-term Treasury Securities | Feb Net Foreign Purchases of Long-term Treasury Securities: -$17.8 billion |
| Treasury Budget | Fiscal Year 2013/2012 ∆% Mar: Receipts 112.4; Outlays minus 2.5; Individual Income Taxes 14.7 Deficit Fiscal Year 2012 $1,089,353 million Blog 4/14/2013 |
| 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 | Mar 2013 SAAR ∆%: Securities -4.3 Loans 2.1 Cash Assets 85.5 Deposits 7.6 Blog 4/28/13 |
| 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:
4/28/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states_28.html
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html
4/14/13 http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html
4/7/13 http://cmpassocregulationblog.blogspot.com/2013/04/thirty-million-unemployed-or.htm
03/31/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html
3/17/13 http://cmpassocregulationblog.blogspot.com/2013/03/recovery-without-hiring-ten-million.html
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html
11/18/12 http://cmpassocregulationblog.blogspot.com/2012/11/united-states-unsustainable-fiscal.html
The Bureau of Labor Statistics (BLS) of the Department of Labor provides the quarterly report on productivity and costs. The operational definition of productivity used by the BLS is (http://www.bls.gov/news.release/pdf/prod2.pdf 1): “Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.” The BLS has revised the estimates for productivity and unit costs. Table VA-1 provides revised data for nonfarm business sector productivity and unit labor costs for IQ2013 and the final two quarters of 2012 in seasonally adjusted annual equivalent (SAAE) rate and the percentage change from the same quarter a year earlier. Reflecting increases in output of 2.5 percent and of 1.8 percent in hours worked, nonfarm business sector labor productivity increased at a SAAE rate of 0.7 percent in IQ2013, as shown in column 2 “IQ2013 SAEE.” The increase of labor productivity from IQ2012 to IQ2013 was 0.9 percent, reflecting increases in output of 2.5 percent and of hours worked of 1.5 percent, as shown in column 3 “IQ2013 YoY.” Hours worked increased from 1.6 percent in IIIQ2012 in SAAE to 2.4 percent in IVQ2012 and 1.8 percent in IQ2013 while output growth fell from 4.7 percent in IIIQ2011 to 0.7 percent in IVQ2012 and 2.5 percent in IQ2013. The BLS defines unit labor costs as (http://www.bls.gov/news.release/pdf/prod2.pdf 1): “BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.” Unit labor costs increased at the SAAE rate of 0.5 percent in IQ2013 and rose 0.6 percent in IQ2013 relative to IQ2012. Hourly compensation increased at the SAAE rate of 1.2 percent in IQ2013, which deflating by the estimated consumer price increase SAAE rate in IQ2013 results in decrease of real hourly compensation at 0.3 percent. Real hourly compensation decreased 0.1 percent in IQ2013 relative to IQ2012.
Table VA-1, US, Nonfarm Business Sector Productivity and Costs %
| IQ 2013 SAAE | IQ 2013 YoY | IVQ 2012 SAAE | IVQ 2012 YoY | IIIQ | IIIQ | |
| Productivity | 0.7 | 0.9 | -1.7 | 0.6 | 3.1 | 1.6 |
| Output | 2.5 | 2.5 | 0.7 | 2.5 | 4.7 | 3.7 |
| Hours | 1.8 | 1.5 | 2.4 | 1.9 | 1.6 | 2.1 |
| Hourly | 1.2 | 1.6 | 2.7 | 2.7 | 1.2 | 1.7 |
| Real Hourly Comp. | -0.3 | -0.1 | 0.4 | 0.7 | -0.9 | 0.0 |
| Unit Labor Costs | 0.5 | 0.6 | 4.4 | 2.0 | -1.9 | 0.1 |
| Unit Nonlabor Payments | 0.7 | 2.2 | -5.3 | 1.0 | 9.3 | 3.6 |
| Implicit Price Deflator | 0.6 | 1.3 | 0.2 | 1.6 | 2.7 | 1.6 |
Notes: SAAE: seasonally adjusted annual equivalent; Comp.: compensation; YoY: Quarter on Same Quarter Year Earlier
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
In 2012, productivity increased 0.7 percent in the annual average, as shown in Table VA-2. Increases in productivity were 0.6 percent in 2011, 3.1 percent in 2010 and 2.9 percent in 2008. Savings of labor inputs have characterized the contraction period and the recovery period. Real hourly compensation fell 0.6 percent in 2012 and 0.6 percent in 2011, interrupting increases of 0.4 percent in 2010 and 1.8 percent in 2009. Unit labor costs fell 1.5 percent in 2009 and 1.0 percent in 2010 but increased 2.0 percent in 2011 and 0.7 percent in 2012.
Table VA-2, US, Revised Nonfarm Business Sector Productivity and Costs Annual Average, ∆% Annual Average
| 2012 ∆% | 2011 ∆% | 2010 ∆% | 2009 ∆% | 2008 ∆% | 2007 ∆% | |
| Productivity | 0.7 | 0.6 | 3.1 | 2.9 | 0.6 | 1.5 |
| Real Hourly Compensation | -0.6 | -0.6 | 0.4 | 1.8 | -0.4 | 1.1 |
| Unit Labor Costs | 0.7 | 2.0 | -1.0 | -1.5 | 2.8 | 2.4 |
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Productivity jumped in the recovery after the recession from Mar IQ2001 to Nov IVQ2001 (http://www.nber.org/cycles.html). Table VA-3 provides quarter on quarter and annual percentage changes in nonfarm business output per hour, or productivity, from 1999 to 2012. The annual average jumped from 3.0 percent in 2001 to 4.5 percent in 2002. Nonfarm business productivity increased at the SAAE rate of 8.9 percent in the first quarter after the recession in IQ2002. Productivity increases decline later in the expansion period. Productivity increases were mediocre during the recession from Dec IVQ2007 to Sep IIIQ2009 (http://www.nber.org/cycles.html) and increased during the first phase of expansion from IIQ2009 to IQ2010, trended lower and collapsed in 2011 and 2012 with sporadic jumps and declines in five out of eight quarters. Productivity increased at 0.7 percent in IQ2013.
Table VA-3, US, Nonfarm Business Output per Hour, Percent Change from Prior Quarter at Annual Rate, 1999-2012
| Year | Qtr1 | Qtr2 | Qtr3 | Qtr4 | Annual |
| 1999 | 4.0 | 0.3 | 3.4 | 7.0 | 3.3 |
| 2000 | -1.4 | 9.1 | 0.1 | 4.2 | 3.4 |
| 2001 | -1.1 | 7.4 | 2.2 | 5.8 | 3.0 |
| 2002 | 8.9 | 0.2 | 3.9 | -0.1 | 4.5 |
| 2003 | 3.5 | 5.6 | 9.6 | 1.4 | 3.7 |
| 2004 | 0.7 | 3.4 | 0.3 | 1.0 | 2.7 |
| 2005 | 4.3 | -0.9 | 3.0 | -0.1 | 1.7 |
| 2006 | 2.9 | 0.2 | -2.4 | 2.8 | 0.9 |
| 2007 | -0.2 | 3.3 | 4.7 | 2.0 | 1.5 |
| 2008 | -2.5 | 2.4 | -1.0 | -3.4 | 0.6 |
| 2009 | 5.8 | 6.5 | 5.2 | 4.8 | 2.9 |
| 2010 | 3.1 | -0.5 | 3.2 | 1.7 | 3.1 |
| 2011 | -1.3 | 0.6 | -0.1 | 2.3 | 0.6 |
| 2012 | -0.7 | 1.7 | 3.1 | -1.7 | 0.7 |
| 2013 | 0.7 |
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-1 of the Bureau of Labor Statistics (BLS) provides SAAE rates of nonfarm business productivity from 1999 to 2012. There is a clear pattern in both episodes of economic cycles in 2001 and 2007 of rapid expansion of productivity in the transition from contraction to expansion followed by more subdued productivity expansion. Part of the explanation is the reduction in labor utilization resulting from adjustment of business to the sudden shock of collapse of revenue. Productivity rose briefly in the expansion after 2009 but then collapsed and moved to negative change with some positive changes recently at lower rates.
Chart VA-1, US, Nonfarm Business Output per Hour, Percent Change from Prior Quarter at Annual Rate, 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Percentage changes from prior quarter at SAAE rates and annual average percentage changes of nonfarm business unit labor costs are provided in Table VA-4. Unit labor costs fell during the contractions with continuing negative percentage changes in the early phases of the recovery. Weak labor markets partly explain the decline in unit labor costs. As the economy moves toward full employment, labor markets tighten with increase in unit labor costs. The expansion beginning in IIIQ2009 has been characterized by high unemployment and underemployment. Table VA-4 shows continuing subdued increases in unit labor costs in 2011 but with increase of 6.4 percent in IQ2012 followed by decrease of 0.5 percent in IIQ2012, decline of 1.9 percent in IIIQ2012 and increase of 4.4 percent in IVQ2012. Unit labor costs increased at 0.5 percent in IQ2013.
Table VA-4, US, Nonfarm Business Unit Labor Costs, Percent Change from Prior Quarter at Annual Rate 1999-2012
| Year | Qtr1 | Qtr2 | Qtr3 | Qtr4 | Annual |
| 1999 | 3.0 | 0.5 | 0.1 | 1.6 | 0.9 |
| 2000 | 17.4 | -7.4 | 8.6 | -1.5 | 3.9 |
| 2001 | 10.9 | -5.8 | -1.1 | -1.7 | 1.5 |
| 2002 | -4.1 | 3.3 | -1.6 | 2.2 | -1.3 |
| 2003 | 2.7 | 1.4 | -3.5 | 1.8 | 1.0 |
| 2004 | -2.5 | 2.4 | 5.8 | 2.7 | 0.7 |
| 2005 | -1.0 | 3.5 | 2.6 | 2.6 | 2.3 |
| 2006 | 2.9 | 1.2 | 3.5 | 6.9 | 2.9 |
| 2007 | 4.0 | -1.9 | -1.9 | 4.3 | 2.4 |
| 2008 | 8.7 | -3.4 | 4.2 | 5.7 | 2.8 |
| 2009 | -8.1 | -0.2 | -3.1 | -3.9 | -1.5 |
| 2010 | -1.2 | 3.3 | -1.5 | -1.4 | -1.0 |
| 2011 | 11.4 | -1.4 | -0.6 | -3.4 | 2.0 |
| 2012 | 6.4 | -0.5 | -1.9 | 4.4 | 0.7 |
| 2013 | 0.5 |
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-2 provides percentage changes quarter on quarter at SAAE rates of nonfarm business unit labor costs. With the exception of 3.3 percent in IIQ2010, a jump of 11.4 percent in IQ2011, 6.4 percent in IQ2012, 4.4 percent in IVQ2012 and 0.5 percent in IQ2013, changes in nonfarm business unit labor costs have been negative.
Chart VA-2, US, Nonfarm Business Unit Labor Costs, Percent Change from Prior Quarter at Annual Rate 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Table VA-5 provides percentage change from prior quarter at annual rates for nonfarm business real hourly worker compensation. The expansion after the contraction of 2001 was followed by strong recovery of real hourly compensation. Real hourly compensation increased at the rate of 5.3 percent in IQ2011 but fell at annual rates of 5.2 percent in IIQ2011, 3.6 percent in IIIQ2011 and 2.5 percent in IVQ2011. Real hourly compensation increased at 3.2 percent in IQ2012 and at 0.2 percent in IIQ2012, declining at 0.9 percent in IIIQ2012 and increasing at 0.4 percent in IVQ2012. Real hourly compensation fell 0.6 percent in 2011 and declined 0.6 percent in 2012. Real hourly compensation fell at 0.3 percent in IQ2013.
Table VA-5, Nonfarm Business Real Hourly Compensation, Percent Change from Prior Quarter at Annual Rate 1999-2012
| Year | Qtr1 | Qtr2 | Qtr3 | Qtr4 | Annual |
| 1999 | 5.5 | -2.0 | 0.3 | 5.5 | 2.2 |
| 2000 | 11.4 | -2.0 | 4.7 | -0.2 | 3.9 |
| 2001 | 5.6 | -1.6 | 0.0 | 4.5 | 1.7 |
| 2002 | 2.9 | 0.3 | 0.1 | -0.4 | 1.5 |
| 2003 | 2.2 | 7.7 | 2.7 | 1.7 | 2.4 |
| 2004 | -5.1 | 2.7 | 3.3 | -0.6 | 0.6 |
| 2005 | 1.5 | -0.2 | -0.4 | -1.3 | 0.6 |
| 2006 | 3.6 | -2.0 | -2.8 | 11.7 | 0.5 |
| 2007 | -0.2 | -3.1 | 0.2 | 1.3 | 1.1 |
| 2008 | 1.4 | -6.1 | -3.0 | 12.0 | -0.4 |
| 2009 | -0.3 | 4.4 | -1.6 | -2.3 | 1.8 |
| 2010 | 1.0 | 3.1 | 0.3 | -2.7 | 0.4 |
| 2011 | 5.3 | -5.2 | -3.6 | -2.5 | -0.6 |
| 2012 | 3.2 | 0.2 | -0.9 | 0.4 | -0.6 |
| 2013 | -0.3 |
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-3 provides percentage change from prior quarter at annual rate of nonfarm business real hourly compensation from 1999 to 2012. There are significant fluctuations in quarterly percentage changes oscillating between positive and negative. There is no clear pattern in the two contractions in the 2000s.
Chart VA-3, US, Nonfarm Business Real Hourly Compensation, Percent Change from Prior Quarter at Annual Rate 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-4 provides percentage change of nonfarm business output per hour in a quarter relative to the same quarter a year earlier. As in most series of real output, productivity increased sharply in 2010 but the momentum was lost after 2011 as with the rest of the real economy.
Chart VA-4, US, Nonfarm Business Output per Hour, Percent Change from Same Quarter a Year Earlier 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-5 provides percentage changes of nonfarm business unit labor costs relative to the same quarter a year earlier. Softening of labor markets caused relatively high yearly percentage changes in the recession of 2001 repeated in the recession in 2009. Recovery was strong in 2010 but then weakened.
Chart VA-5, US, Nonfarm Business Unit Labor Costs, Percent Change from Same Quarter a Year Earlier 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Chart VA-6 provides percentage changes in a quarter relative to the same quarter a year earlier for nonfarm business real hourly compensation. Labor compensation eroded sharply during the recession with brief recovery in 2010 and another fall until recently.
Chart VA-6, US, Nonfarm Business Real Hourly Compensation, Percent Change Same Quarter a Year Earlier 1999-2013
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Rapid increase of US labor productivity in the 1990s is shown in Chart VA-7 with the index of nonfarm business labor productivity from 1947 to 2012. The rate of productivity increase continued in the early part of the 2000s but then softened and fell during the global recession.
Chart VA-7, US, Nonfarm Business Labor Productivity, Output per Hour, 1947-2012, Index 2005=100
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Unit labor costs increased sharply during the Great Inflation from the late 1960s to 1981 as shown by sharper slope in Chart VA-8. Unit labor costs continued to increase but at a lower rate.
Chart VA-8, US, Nonfarm Business, Unit Labor Costs, 1947-2012, Index 2005=100
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
Real hourly compensation increased at relatively high rates after 1947 to the early 1970s but reached a plateau that lasted until the early 1990s, as shown in Chart VA-9. There were rapid increases until the global recession.
Chart VA-9, US, Nonfarm Business, Real Hourly Compensation, 1947-2012, Index 2005=100
Source: US Bureau of Labor Statistics http://www.bls.gov/lpc/
The Bureau of Labor Statistics (BLS) of the US Department of Labor provides the quarterly employment cost index (ECI). The ECI is highly useful in several ways including: (1) how costs of employees may affect hiring decisions and thus the overall economy; (2) impact of employment costs on inflation and thus monetary policy; and (3) relation of employee costs to inflation on issues such as welfare of the working population and their ability to consume that could affect economic growth. The BLS estimates total compensation composed of wages and salaries, which are about 70 percent of total compensation, and benefits, accounting for the remaining 30 percent (http://www.bls.gov/news.release/pdf/eci.pdf 1). There is vast theoretical and empirical literature on how benefits interact with wage determination. The ECI is considered initially with current data in Table VA-6 and subsequently with charts of the BLS on evolution over the past decade. The BLS provides data for the entire civilian population, the private sector and state/local government. The data are available quarterly and for the 12 months of the ending month of the quarter. Total compensation 12-month percentage changes have moderated for the entire civilian population, the private sector and state and local government. In the 12 months ending in Mar 2013, total compensation increased 1.7 percent for the private sector, which is marginally higher than inflation of 1.5 percent in the 12 months ending in Mar 2013 (http://www.bls.gov/cpi/data.htm), 1.8 percent for the entire civilian population and 1.9 percent for state and local government. Wages and salaries in the 12 months ending in Mar 2013 increased at relatively subdued rates of 1.7 percent for the private sector, which is slightly above inflation of 1.5 percent in the 12 months ending in Mar 2013 (http://www.bls.gov/cpi/data.htm), 1.6 percent for the entire civilian population and only 1.1 percent for state/local workers. Wages have been losing or gaining slightly relative to headline CPI inflation of 1.5 percent in the 12 months ending in Mar 2013 (http://www.bls.gov/cpi/data.htm). Compensation benefits of the private sector increased at 1.5 percent in the 12 months ending in Mar, which is lower than 1.7 percent for wages and salaries.
Table VA-6, Employment Cost Index Quarterly and 12 Months Changes %
| IVQ12 SA | IQ 13 SA | 12 M Mar 12 | 12 M | 12 M | 12 M | 12 M | |
| Civilian | |||||||
| Comp | 0.4 | 0.3 | 1.9 | 1.7 | 2.0 | 1.9 | 1.8 |
| Wages/ | 0.3 | 0.5 | 1.7 | 1.7 | 1.7 | 1.7 | 1.6 |
| Benefits | 0.6 | 0.1 | 2.7 | 2.1 | 2.6 | 2.5 | 1.9 |
| Private | |||||||
| Comp | 0.4 | 0.3 | 2.1 | 1.8 | 2.0 | 1.9 | 1.7 |
| Wages/ | 0.3 | 0.5 | 1.9 | 1.8 | 1.8 | 1.7 | 1.7 |
| Benefits | 0.6 | -0.3 | 2.8 | 1.9 | 2.3 | 2.2 | 1.5 |
| State local | |||||||
| Comp | 0.5 | 0.5 | 1.5 | 1.6 | 1.8 | 1.9 | 1.9 |
| Wages/ | 0.3 | 0.2 | 1.0 | 1.1 | 1.1 | 1.1 | 1.1 |
| Benefits | 0.7 | 1.1 | 2.3 | 2.7 | 3.2 | 3.4 | 3.5 |
Notes: Civilian includes private industry plus state and local government; SA: seasonally adjusted; NSA: not seasonally adjusted; Comp: compensation; Govt: government
Source: US Bureau of Labor Statistics http://www.bls.gov/ncs/ect/
A series of charts of the BLS provides evolution of the ECI during the past decade. Percentage changes in 12 months of total civilian compensation in Chart VA-10 were in a range of around 3 to 4 percent before the global recession, declining to less than 2 percent with the contraction and increasing above 2 percent in the expansion. Recently, rates have fallen, stagnated, fell again, recovered and declined.
Chart VA-10, US, ECI, Total Compensation, All Civilian, 12-Month Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
Chart VA-11 provides the 12 months percentage rates of change of wages and salaries for the entire civilian population. The rates collapsed with the global recession and have flattened around 1.5 percent since 2010 while inflation has accelerated and decelerated following world inflation waves (http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html).
Chart VA-11, US, ECI, Wages and Salaries, All Civilian 12-Month Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
Twelve-month percentage changes of benefits of the total civilian population in Chart VA-12 were much higher in the first part of the 2000s, surpassing relatively subdued inflation but declined to less than 2 percent with the global recession. After 2010, there is a clear rising trend of benefit above 3 percent with decline in recent months of 2011 and then stagnation and declines in 2012-2013.
Chart VA-12, US, ECI, Total Benefits, All Civilian 12 Months Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
ECI total compensation 12-months percentage changes from 2001 to 2011 for the private sector are shown in Chart VA-13. Behavior is similar as for total civilian compensation. Private-sector compensation had stabilized somewhat above 2 percent with inflation rising to 2.7 percent in the 12 months ending in Mar 2012 but fell to 1.8 percent in Jun that is almost equal to 1.7 percent consumer price inflation. Compensation and CPI inflation converged to 1.5 percent in Mar 2013.
Chart VA-13, US, ECI, Total Compensation, Private Industry 12 Months Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
There is different behavior of 12 months percentage rates of private-sector wages and salaries in Chart VA-14. Rates fell in the first part of the decade and then rose into 2007. Rates of change in 12 months of wages and salaries in the private sector fell during the global contraction to barely above 1 percent and have not rebounded sufficiently while inflation has returned in waves.
Chart VA-14, US, ECI, Wages and Salaries, Private Industry, 12 Months Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
Chart VA-15 provides 12-month percentage rates of change of the consumer price index of the US. Inflation has risen sharply into 2011 with 3.0 percent in the 12 months ending in Dec while wage and salary increases in the private sector have risen by 1.6 percent in the 12 months ending in Dec. Wages and salaries rose 1.9 percent in the 12 months ending in Mar while inflation was 2.7 percent in the 12 months ending in Mar. Wage and salaries of the private sector increased 1.8 percent in the 12 months ending in Jun, which is almost equal to inflation of 1.7 percent. Wages and salaries increased 1.7 percent in the 12 months ending in Sep 2012 while inflation was 2.0 percent. Wages and salaries increased 1.7 percent in Dec 2012 while inflation was 1.7 percent. Wages and salaries increased 1.6 percent in the 12 months ending in Mar 2013 while inflation was 1.5 percent.
Chart VA-15, US, Consumer Price Index, 12-Month Percentage Change, NSA, 2001-2013
Source: US Bureau of Labor Statistics
Growth of benefits has been more dynamic than total compensation and wages and salaries, as shown in Chart VA-16. In 2004, the 12 month rate of change exceeded 7 percent. Rates of increase of benefits costs then fell even before the global recession, touching 1 percent in late 2010, rose sharply above 3 percent in 2011 and have fallen in recent months.
Chart VA-16, US, ECI, Total Benefits, Private Industry, 12 Months Percent Change, 2001-2013
Source: US Bureau of Labor Statistics
Behavior at the margin is provided by rates of change in a quarter relative to the prior quarter, as shown in Chart VA-17. Quarterly rates of change of total civilian compensation were high in the early 2000s, fell sharply with the global recession, recovered mildly and stagnated in recent quarters.
Chart VA-17, US, Employment Cost Index All Civilian Total Compensation Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
Chart VA-18 provides the quarterly rates of change of wages and salaries of the entire civilian population. The rates of change sank below 0.5 percent per quarter and have remained subdued since the global recession.
Chart VA-18, US, ECI, Wages and Salaries, All Civilian, Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
Quarterly rates of change of benefits of the total civilian population in Chart VA-19 had declined before the global recession. The rate collapsed in recent quarters.
Chart VA-19, US, ECI, Total Benefits, All Civilian, Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
Quarterly rates of change of total compensation of the private sector in Chart VA-20 have not returned to the levels before the contraction except with sporadic jump in 2011 followed by contraction and stagnation in recent quarters.
Chart VA-20, US, ECI, Total Compensation, Private Industry, Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
Quarterly rates of change of wages and salaries of the private sector in Chart VA-21 show significant fluctuation. Quarterly rates of change have fallen below 0.5 percent in the current expansion.
Chart VA-21, US, ECI, Wages and Salaries, Private Industry, Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
The 12-month rates of change of benefits of private industry in Chart VA-22 have fluctuated widely with the only negative change in 2007. The 12-month rate of private-sector benefits fell in past months.
VA-22, US, ECI, Total Benefits, Private Industry, Three-Month % Change, 2001-2013
Source: US Bureau of Labor Statistics
Motor vehicle sales and production in the US have been in long-term structural change. Table VA-7 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan-Apr 2013, light vehicle sales accumulated to 4,974,000, which is higher by 6.9 percent relative to 4,652,005 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 14.92 million in Apr 2013, lower than 15.27 million in Mar 2013 and higher than 14.12 million in Apr 2012 (http://motorintelligence.com/m_frameset.html).
Table VA-7, US, New Motor Vehicle Sales and Car Production, Thousand Units
| New Motor Vehicle Sales | New Car Sales and Leases | New Truck Sales and Leases | Domestic Car Production | |
| 1990 | 14,137 | 9,300 | 4,837 | 6,231 |
| 1991 | 12,725 | 8,589 | 4,136 | 5,454 |
| 1992 | 13,093 | 8,215 | 4,878 | 5,979 |
| 1993 | 14,172 | 8,518 | 5,654 | 5,979 |
| 1994 | 15,397 | 8,990 | 6,407 | 6,614 |
| 1995 | 15,106 | 8,536 | 6,470 | 6,340 |
| 1996 | 15,449 | 8,527 | 6,922 | 6,081 |
| 1997 | 15,490 | 8,273 | 7,218 | 5,934 |
| 1998 | 15,958 | 8,142 | 7,816 | 5,554 |
| 1999 | 17,401 | 8,697 | 8,704 | 5,638 |
| 2000 | 17,806 | 8,852 | 8,954 | 5,542 |
| 2001 | 17,468 | 8,422 | 9,046 | 4,878 |
| 2002 | 17,144 | 8,109 | 9,036 | 5,019 |
| 2003 | 16,968 | 7,611 | 9,357 | 4,510 |
| 2004 | 17,298 | 7,545 | 9,753 | 4,230 |
| 2005 | 17,445 | 7,720 | 9,725 | 4,321 |
| 2006 | 17,049 | 7,821 | 9,228 | 4,367 |
| 2007 | 16,460 | 7,618 | 8,683 | 3,924 |
| 2008 | 13,494 | 6,814 | 6.680 | 3,777 |
| 2009 | 10,601 | 5,456 | 5,154 | 2,247 |
| 2010 | 11,772 | 5,729 | 6,044 | 2,840 |
Source: US Census Bureau http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html
Chart VA-23 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2013. Output has stagnated since the late 1990s.
Chart VA-23, US, Motor Vehicles and Parts Output, 1972-2013
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/current/
Manufacturing jobs were unchanged in Apr 2013 relative to Mar 2013, seasonally adjusted and increased 15,000 in Apr 2013 relative to Mar 2013, not seasonally adjusted, as shown in Table I-10 (and earlier at http://cmpassocregulationblog.blogspot.com/2013/04/thirty-million-unemployed-or.html). Manufacturing jobs not seasonally adjusted increased 80,000 from Apr 2012 to Apr 2013 or at the average monthly rate of 6,667. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. In the six months ending in Mar 2013, United States national industrial production accumulated increase of 2.6 percent at the annual equivalent rate of 5.3 percent, which is higher than 3.5 percent growth in 12 months. Business equipment decreased 1.1 percent in Oct, increased 2.4 percent in Nov, increased 0.4 percent in Dec, fell 1.4 percent in Jan, increased 1.9 percent in Feb 2013 and 0.1 percent in Mar, growing 5.1 percent in the 12 months ending in Feb 2013 and at the annual equivalent rate of 4.6 percent in the six months ending in Mar 2013. Capacity utilization of total industry is analyzed by the Fed in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm) “ The rate of capacity utilization for total industry moved up in March to 78.5 percent, a rate that is 1.2 percentage points above its level of a year earlier but 1.7 percentage points below its long-run (1972--2012) average.” United States industry is apparently decelerating with some strength at the margin.
Manufacturing decreased 0.1 percent in Mar 2013 seasonally adjusted, increasing 2.1 percent not seasonally adjusted in 12 months, and increased 2.3 percent in the six months ending in Mar 2013 or at the annual equivalent rate of 4.7 percent. Manufacturing fell by 22.1 from the peak in Jun 2007 to the trough in Apr 2009 and increased 16.7 percent from the trough in Apr 2009 to Dec 2012. Manufacturing fell 7.0 percent from the peak in Jun 2007 to Mar 2013 and increased 19.4 from the trough in Apr 2008 to Mar 2013.
Table VA-8 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.3 percent in US national income in IVQ2012 and 86.4 percent in IIIQ2012. Most of US national income is in the form of services. In Mar 2013, there were 134.485 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 113.232 million NSA in Apr 2013 accounted for 83.6 percent of total nonfarm jobs of 134.494 million, of which 11.930 million, or 10.5 percent of total private jobs and 8.8 percent of total nonfarm jobs, were in manufacturing. Private service-producing jobs were 94.803 million NSA in Apr 2013, or 70.0 percent of total nonfarm jobs and 83.7 percent of total private-sector jobs. Manufacturing has share of 11.1 percent in US national income in IVQ2011 and 11.1 percent in IIIQ2012, as shown in Table I-13. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.
Table VA-8, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total
| SAAR IIIQ2012 | % Total | SAAR | % Total | |
| National Income WCCA | 13,976.7 | 100.0 | 14,122.2 | 100.0 |
| Domestic Industries | 13,733.6 | 98.3 | 13,855.6 | 98.1 |
| Private Industries | 12,075.0 | 86.4 | 12,192.5 | 86.3 |
| Agriculture | 138.6 | 1.0 | 138.9 | 1.0 |
| Mining | 205.3 | 1.5 | 214.7 | 1.5 |
| Utilities | 216.6 | 1.6 | 209.5 | 1.5 |
| Construction | 589.3 | 4.2 | 603.5 | 4.3 |
| Manufacturing | 1548.9 | 11.1 | 1563.1 | 11.1 |
| Durable Goods | 892.8 | 6.4 | 893.8 | 6.3 |
| Nondurable Goods | 656.1 | 4.7 | 669.3 | 4.7 |
| Wholesale Trade | 837.8 | 6.0 | 857.8 | 6.1 |
| Retail Trade | 957.4 | 6.9 | 972.8 | 6.9 |
| Transportation & WH | 415.5 | 3.0 | 415.8 | 2.9 |
| Information | 504.4 | 3.6 | 490.5 | 3.5 |
| Finance, Insurance, RE | 2330.6 | 16.7 | 2352.0 | 16.7 |
| Professional, BS | 2003.4 | 14.3 | 2029.0 | 14.4 |
| Education, Health Care | 1385.6 | 9.9 | 1395.5 | 9.9 |
| Arts, Entertainment | 539.4 | 3.9 | 544.4 | 3.9 |
| Other Services | 402.3 | 2.9 | 405.1 | 2.9 |
| Government | 1658.6 | 11.9 | 1663.0 | 11.8 |
| Rest of the World | 243.1 | 1.7 | 266.6 | 1.9 |
Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services
Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Manufacturers’ shipments decreased 1.0 percent in Mar 2013 after increasing 0.4 percent in Jan 2013 and 0.4 percent in Jan 2013. New orders decreased 4.0 percent in Mar 2013 following increase by 1.9 percent in Feb 2013 and decrease by 1.0 percent in Jan, as shown in Table VA-9. These data are very volatile. Volatility is illustrated by increase of 2642.2 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.2 percent in Aug. New orders excluding transportation equipment decreased 2.0 percent in Mar 2013. Capital goods new orders, indicating investment, decreased 12.2 percent in Mar 2013 after increasing 10.3 percent in Feb 2013 and decreasing 11.4 percent in Jan 2013. New orders of nondefense capital goods decreased 10.1 percent in Mar 2013, 7.1 percent in Feb 2013 and 2.0 percent in Jan 2013. Excluding more volatile aircraft, capital goods orders increased 0.9 percent in Mar 2013, decreased 4.8 percent in Feb 2013 after increasing 6.7 percent in Jan 2013.
Table VA-9, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%
| Mar 2013 | Feb 2013 ∆% | Jan 2013 | |
| Total | |||
| S | -1.0 | 0.4 | 0.4 |
| NO | -4.0 | 1.9 | -1.0 |
| Excluding | |||
| S | -1.6 | 0.1 | 0.8 |
| NO | -2.0 | 0.7 | 2.0 |
| Excluding | |||
| S | -1.2 | 0.3 | 0.7 |
| NO | -3.5 | 1.5 | 1.4 |
| Durable Goods | |||
| S | 0.5 | 0.9 | -0.7 |
| NO | -5.8 | 4.3 | -3.7 |
| Machinery | |||
| S | 0.6 | 2.7 | 0.4 |
| NO | -0.8 | -4.9 | 15.8 |
| Computers & Electronic Products | |||
| S | 2.8 | -0.4 | -3.1 |
| NO | 0.5 | -2.5 | -5.0 |
| Computers | |||
| S | 16.9 | -3.0 | -26.8 |
| NO | 2.9 | 9.3 | -25.0 |
| Transport | |||
| S | 2.3 | 1.9 | -1.8 |
| NO | -15.1 | 20.3 | -17.7 |
| Automobiles | |||
| S | 0.5 | 6.1 | 1.5 |
| Motor Vehicles | |||
| S | 0.7 | 2.1 | -2.1 |
| NO | -0.4 | 3.8 | -1.3 |
| Nondefense | |||
| S | 12.9 | -11.0 | -6.5 |
| NO | -48.3 | 86.4 | -23.8 |
| Capital Goods | |||
| S | 2.4 | 0.6 | -2.7 |
| NO | -12.2 | 10.3 | -11.4 |
| Nondefense Capital Goods | |||
| S | 2.3 | 0.1 | -1.6 |
| NO | -10.1 | 7.1 | 2.0 |
| Capital Goods ex Aircraft | |||
| S | 0.5 | 1.8 | -0.7 |
| NO | 0.9 | -4.8 | 6.7 |
| Nondurable Goods | |||
| S | -2.4 | -0.1 | 1.4 |
| NO | -2.4 | -0.1 | 1.4 |
Note: Mfg: manufacturing; S: shipments; NO: new orders; Transport: transportation
Source: US Census Bureau
http://www.census.gov/manufacturing/m3/
Chart VA-24 of the US Census Bureau provides new orders of manufacturers from Apr 2012 to Mar 2013. There is significant volatility that prevents discerning clear trends.
Chart VA-24, US, Manufacturers’ New Orders 2010-2011 Seasonally Adjusted, Month ∆%
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr022.html
Chart VA-25 of the US Census Bureau provides total value of manufacturers’ new orders, seasonally adjusted, from 1992 to 2013. Seasonal adjustment reduces sharp oscillations. The series dropped nearly vertically during the global recession but rose along a path even steeper than in the high-growth period before the recession. The final segment suggests deceleration but similar segments are found in earlier periods followed with continuing growth and stability currently.
Chart VA-25, US, Value of Total Manufacturers’ New Orders, Seasonally Adjusted, 1992-2013
Source: US Census Bureau
http://www.census.gov/manufacturing/m3/
Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-10. Values are cumulative millions of dollars in Jan-Mar 2013 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Mar 2013 total $1409.9 billion and new orders total $1408.7 billion, growing respectively by 1.1 percent and minus 0.2 percent relative to the same period in 2012. Excluding transportation equipment, shipments grew 1.1 percent and new orders increased 0.4 percent. Excluding defense, shipments grew 1.1 percent and new orders grew 0.4 percent. Durable goods shipments reached $667.7 billion in Jan-Mar 2013, or 47.4 percent of the total, growing by 2.7 percent, and new orders $666.5 billion, or 47.3 percent of the total, growing by minus 0.1 percent. Important information in Table VA-10 is the large share of nondurable goods with shipments of $742.3 billion or 52.6 percent of the total, growing by minus 0.3 percent. Capital goods have relatively high value of $230.1 billion for shipments, growing 1.1 percent, and new orders $243.2 billion, declining 5.6 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $188.5 billion, growing 1.0 percent, and new orders $199.2billion, decreasing 0.2 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.1 percent of US national income in IVQ2012. These data are not adjusted for inflation.
Table VA-10, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars
| Jan-Mar 2013 | Shipments | ∆% 2013/ | New Orders | ∆% 2013/ |
| Total | 1,409,940 | 1.1 | 1,408,748 | -0.2 |
| Excluding Transport | 1,212,874 | 0.2 | 1,210,543 | -0.1 |
| Excluding Defense | 1,378,863 | 1.1 | 1,381,670 | 0.4 |
| Durable Goods | 667,690 | 2.7 | 666,498 | -0.1 |
| Machinery | 98,676 | 6.0 | 103,384 | 3.6 |
| Computers & Electronic Products | 77,882 | -3.2 | 59,875 | -11.4 |
| Computers | 2,412 | -33.3 | 2,495 | -30.5 |
| Transport Equipment | 197,066 | 6.7 | 198,205 | -0.7 |
| Automobiles | 31,867 | 29.6 | ||
| Motor Vehicles | 57,099 | 1.2 | 57,593 | 2.0 |
| Nondefense Aircraft | 27,431 | 3.6 | 33,904 | -16.1 |
| Capital Goods | 230,134 | 1.1 | 243,247 | -5.6 |
| Nondefense Capital Goods | 205,555 | 1.2 | 222,137 | -3.2 |
| Capital Goods ex Aircraft | 188,479 | 1.0 | 199,166 | -0.2 |
| Nondurable Goods | 742,250 | -0.3 | 742,250 | -0.3 |
| Food Products | 183,517 | 3.1 | ||
| Petroleum Refineries | 200,093 | 0.6 | ||
| Chemical Products | 183,812 | -4.1 |
Note: Transport: transportation Source: US Census Bureau http://www.census.gov/manufacturing/m3/
Chart VA-26 of the US Census Bureau provides value of manufacturer’s new orders not seasonally adjusted from Jan 1992 to Feb 2013. Fluctuations are evident, which are smoothed by seasonal adjustment in the earlier Chart VA-25. The series drops nearly vertically during the global contraction and then resumes growth in a steep upward trend, flattening recently.
Chart VA-26, US, Value of Total Manufacturers’ New Orders, Not Seasonally Adjusted, 1992-2013
Source: US Census Bureau
http://www.census.gov/manufacturing/m3/
Construction spending at seasonally adjusted annualized rate (SAAR) reached $856.7 billion in Mar 2013, which was lower by 1.7 percent than in the prior month of Feb 2013, as shown in Table VA-11. Residential investment, with $301.6 billion accounting for 35.2 percent of total value of construction, increased 0.7 percent in Mar and nonresidential investment, with $555.4 billion accounting for 64.8 percent of the total, increased 0.7 percent. Public construction decreased 4.1 percent while private construction decreased 0.6 percent. Data in Table VA-11 show that nonresidential construction at $555.1 billion is much higher in value than residential construction at $301.6 billion while total private construction at $598.4 billion is much higher than public construction at $258.3 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in all quarters in 2012 with exception of deduction of 0.19 percentage points by nonresidential construction in IIIQ2012. Nonresidential investment deducted 0.19 percentage points from GDP growth in IIIQ2012 while residential construction added 0.31 percentage points and nonresidential construction added 1.28 percentage points in IVQ2012 with residential construction adding 0.41 percentage points. In IQ2013, nonresidential construction added 0.22 percentage points to GDP growth while residential construction added 0.31 percentage points. In 2012, residential construction added 0.27 percentage points to GDP growth while deducting 0.03 percentage points in 2011. Nonresidential construction added 0.78 percentage points to GDP growth in 2012 and 0.80 percentage points in 2011 (Section IA1 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states_28.html http://www.bea.gov/iTable/index_nipa.cfm).
Table VA-11, US, Value of Construction Put in Place in the United States Seasonally Adjusted Annual Rate Million Dollars and Month and 12-Month ∆%
| Mar 2013 SAAR $ Millions | Month ∆% | 12-Month ∆% | |
| Total | 856,719 | -1.7 | 4.8 |
| Residential | 301,638 | 0.7 | 17.8 |
| Nonresidential | 555,080 | -2.9 | -1.2 |
| Total Private | 598,418 | -0.6 | 9.8 |
| Private Residential | 294,948 | 0.4 | 18.2 |
| New Single Family | 161,968 | 1.6 | 37.6 |
| New Multi-Family | 27,536 | 0.3 | 52.7 |
| Private Nonresidential | 303,470 | -1.5 | 2.8 |
| Total Public | 258,301 | -4.1 | -5.4 |
| Public Residential | 6,691 | 13.7 | -0.2 |
| Public Nonresidential | 251,611 | -4.5 | -5.5 |
SAAR: seasonally adjusted annual rate; B: billions
Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html
Further information on construction spending is provided in Table VA-12. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAARs and their monthly changes are provided in the final two columns. There has been improvement in construction in the US in 2011 but another bump in early 2012. On a monthly basis, construction fell three consecutive months from Dec 2010 to Feb 2011, increasing in ten of the eleven months from Mar 2011 to Jan 2012, with sole decline of 3.0 percent in Jul 2011. Improvement was interrupted in 2012 with decline of 0.5 percent in Feb 2012, further decline of 0.3 percent in Mar and recovery of 0.9 percent in Apr, 1.7 percent in May and 0.8 percent in Jun with strong 1.1 percent in Aug and 1.6 percent in Oct 2012. The value of construction contracted 4.0 percent in Jan 2013, rebounding 1.5 percent in Feb 2013 and contracting 1.7 percent in Mar 2013. The 12-month rates of change improved from minus 8.6 percent in Apr 2011 to the first positive 12-month percentage change of 0.7 percent in Nov 2011 and further improvement with 10.7 percent in Dec 2012, 4.5 percent in Jan 2013, 5.3 percent in Feb 2013 and 4.2 percent in Mar 2013.
Table VA-12, US, Value and Percentage Change in Value of Construction Put in Place, Dollars Millions and ∆%
| Value NSA | 12-Month ∆% NSA | Value | Month ∆% SA* | |
| Mar 2013 | 63,500 | 4.2 | 856,719 | -1.7 |
| Feb 2013 | 59,084 | 5.3 | 871,231 | 1.5 |
| Jan | 59,090 | 4.5 | 858,145 | -4.0 |
| Dec 2012 | 69,520 | 10.7 | 893,634 | 0.1 |
| Nov | 76,737 | 12.1 | 892,448 | 1.9 |
| Oct | 81,438 | 11.1 | 876,213 | 1.6 |
| Sep | 79,357 | 7.9 | 862,220 | 0.7 |
| Aug | 81,457 | 8.5 | 855,916 | 1.1 |
| Jul | 78,070 | 11.6 | 846,645 | 0.2 |
| Jun | 76,491 | 7.3 | 845,072 | 0.8 |
| May | 71,635 | 8.8 | 838,778 | 1.7 |
| Apr | 66,201 | 9.1 | 825,133 | 0.9 |
| Mar | 60,939 | 8.6 | 817,842 | -0.3 |
| Feb | 56,108 | 11.8 | 820,677 | -0.5 |
| Jan | 56,535 | 10.9 | 824,687 | 0.5 |
| Dec 2011 | 62,825 | 4.4 | 820,614 | 2.1 |
| Nov | 68,476 | 0.7 | 804,046 | 1.0 |
| Oct | 73,282 | -0.3 | 795,733 | 0.7 |
| Sep | 73,515 | -1.7 | 790,294 | 0.5 |
| Aug | 75,101 | -1.0 | 786,308 | 3.0 |
| Jul | 69,929 | -4.3 | 763,468 | -3.0 |
| Jun | 71,297 | -3.7 | 786,784 | 1.4 |
| May | 65,845 | -4.4 | 775,837 | 2.7 |
| Apr | 60,682 | -8.6 | 755,420 | 0.3 |
| Mar | 56,130 | -6.8 | 753,433 | 1.0 |
| Feb | 50,184 | -7.1 | 746,056 | -0.9 |
| Jan | 50,971 | -8.3 | 752,638 | -3.5 |
| Dec 2010 | 60,202 | -6.1 | 779,895 | -2.3 |
SAAR: Seasonally-adjusted Annual Rate
Source: US Census Bureau
http://www.census.gov/construction/c30/c30index.html
The sharp contraction of the value of construction in the US is revealed by Table VA-13. Construction spending in Jan-Mar 2013, not seasonally adjusted, reached $181.7 billion, which is higher by 4.7 percent than $173.6 billion in the same period in 2012. The depth of the contraction is shown by the decline of construction spending from $256.5 billion in Jan-Mar 2006 to only $181.7 billion in the same period in 2013, or decline by minus 29.2 percent. The comparable decline from Jan-Mar 2005 to Jan-Mar 2013 is minus 21.7 percent. Construction spending in Jan-Mar 2013 decreased by 2.1 percent relative to the same period in 2003. Construction spending is lower by 13.1 percent in Jan 2013-Feb relative to the same period in 2009. Construction has been weaker than the economy as a whole.
Table VA-13, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%
| Jan-Mar 2013 $ MM | 181,673 |
| Jan-Mar 2012 | 173,582 |
| ∆% to 2013 | 4.7 |
| Jan-Mar 2011 $ MM | 160,422 |
| ∆% to 2013 | 13.2 |
| Jan-Mar 2010 $ MM | 174,785 |
| ∆% to 2013 | 3.9 |
| Jan-Mar 2009 $MM | 209,164 |
| ∆% to 2013 | -13.1 |
| Jan-Mar 2006 $ MM | 256,545 |
| ∆% to 2013 | -29.2 |
| Jan-Mar 2005 $ MM | 232,134 |
| ∆% to 2013 | -21.7 |
| Jan-Mar 2003 $ MM | 185,559 |
| ∆% to 2013 | -2.1 |
Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html
Chart VA-27 of the US Census Bureau provides value of construction spending in the US not seasonally adjusted from 2002 to 2013. There are wide oscillations requiring seasonal adjustment to compare adjacent data. There was sharp decline during the global recession followed in recent periods by a stationary series that may be moving upward again.
Chart VA-27, Value of Construction Spending not Seasonally Adjusted, Millions of Dollars, 2002-2013
Source: US Census Bureau
http://www.census.gov/construction/c30/c30index.html
Monthly construction spending in the US in Jan-Apr and Dec not seasonally adjusted is shown in Table VA-14 for the years between 2002 and 2013. The value of $63.5 billion in Mar 2013 is just higher by 4.3 percent than $60.9 billion in Mar 2012. Construction fell by 31.6 percent from the peak of $92.9 billion in Mar 2006 to $63.5 billion in Mar 2013. The data are not adjusted for inflation or changes in quality.
Table VA-14, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars
| Year | Jan | Feb | Mar | Apr | Dec |
| 2002 | 59,516 | 58,588 | 63,782 | 69,504 | 63,984 |
| 2003 | 59,877 | 58,526 | 64,506 | 69,638 | 71,050 |
| 2004 | 64,934 | 64,138 | 73,238 | 78,354 | 77,733 |
| 2005 | 71,474 | 72,048 | 81,345 | 85,485 | 88,172 |
| 2006 | 81,058 | 81,478 | 92,855 | 95,324 | 86,436 |
| 2007 | 79,406 | 79,177 | 88,905 | 93,375 | 84,218 |
| 2008 | 77,349 | 77,227 | 82,779 | 87,743 | 76,645 |
| 2009 | 66,944 | 66,296 | 71,624 | 75,187 | 64,098 |
| 2010 | 55,586 | 54,019 | 60,228 | 66,422 | 60,202 |
| 2011 | 50,971 | 50,184 | 56,130 | 60,682 | 62,825 |
| 2012 | 56,535 | 56,108 | 60,939 | 66,201 | 69,520 |
| 2013 | 59,090 | 59,084 | 63,500 | NA | NA |
Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html
Chart VA-28 of the US Census Bureau shows SAARs of construction spending for the US since 1993. Construction spending surged in nearly vertical slope after the stimulus of 2003 combining near zero interest rates and subsequent slow adjustment in 17 doses of increases by 25 basis points between Jun 2004 and Jun 2006 together with other housing subsidies. Construction spending collapsed after subprime mortgages defaulted with the fed funds rate increasing from 1.00 percent in Jun 2004 to 5.25 percent in Jun 2006. Subprime mortgages were programmed for refinancing in two years after increases in homeowner equity in the assumption that fed funds rates would remain low forever or increase in small increments (Gorton 2009EFM see http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html). Price declines of houses or even uncertainty prevented refinancing of subprime mortgages that defaulted, causing the financial crisis that eventually triggered the global recession. Chart VA-28 shows a trend of increase in the final segment but it is difficult to assess if it will be sustained.
Chart VA-28, US, Construction Expenditures SAAR 1993-2012
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr050.html
http://www.census.gov/briefrm/esbr/www/esbr050.html
Construction spending at SAARs in the four months Jan-Apr is shown in Table VA-15 for the years between 2002 and 2013. There is a peak in 2005 to 2007 with subsequent collapse of SAARs and rebound in 2011-2013.
Table VA-15, US, Value of Construction Spending SAAR Millions of Dollars
| Year | Jan | Feb | Mar | Apr |
| 2002 | 858,654 | 862,338 | 844,551 | 858,240 |
| 2003 | 863,855 | 859,225 | 851,132 | 859,459 |
| 2004 | 938,826 | 938,656 | 960,946 | 967,761 |
| 2005 | 1,036,187 | 1,056,492 | 1,065,262 | 1,058,365 |
| 2006 | 1,183,861 | 1,199,767 | 1,213,270 | 1,183,485 |
| 2007 | 1,149,899 | 1,156,008 | 1,167,402 | 1,159,124 |
| 2008 | 1,106,047 | 1,092,331 | 1,094,910 | 1,091,142 |
| 2009 | 962,704 | 959,907 | 954,984 | 929,593 |
| 2010 | 816,132 | 795,808 | 805,985 | 824,008 |
| 2011 | 752,638 | 746,056 | 753,433 | 755,420 |
| 2012 | 824,687 | 820,677 | 817,842 | 825,133 |
| 2013 | 858,145 | 871,231 | 856,719 | NA |
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr050.html
Chart VA-29 of the US Census Bureau provides SAARs of value of construction from 2002 to 2013. There is clear acceleration after 2003 when fed funds rates were fixed at 1.0 percent from Jun 2003 until Jun 2004. Construction peaked in 2005-2006, stabilizing in 2007 at a lower level and then collapsed in a nearly vertical drop until 2011 with increases into 2012 and marginal drop in Jan 2013 followed by increase in Feb 2013 and decline in Mar 2013.
Chart VA-29, US, Construction Expenditures SAAR 2002-2013
Source: US Census Bureau
http://www.census.gov/construction/c30/c30index.html
Annual available data for the value of construction put in place in the US between 1993 and 2012 are provided in Table VA-16. Data from 1993 to 2001 are available for public and private construction with breakdown in residential and nonresidential only for private construction. Data beginning in 2002 provide aggregate residential and nonresidential values. Total construction value put in place in the US increased 76.0 percent between 1993 and 2012 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 6.4 percent between 2000 and 2012. Total value of construction increased 0.8 percent between 2002 and 2012 with value of nonresidential construction increasing 28.4 percent while value of residential construction fell 29.8 percent. Value of total construction fell 25.0 percent between 2005 and 2012, with value of residential construction declining 54.3 percent while value of nonresidential construction rose 17.7 percent. Value of total construction fell 26.8 percent between 2006 and 2012, with value of nonresidential construction increasing 4.6 percent while value of residential construction fell 54.5 percent. In 2002, nonresidential construction had a share of 52.6 percent in total construction while the share of residential construction was 47.4 percent. In 2012, the share of nonresidential construction in total value rose to 67.0 percent while that of residential construction fell to 33.0 percent.
Table VA-16, Annual Value of Construction Put in Place 1993-2012, Millions of Dollars and ∆%
| Total | Private Nonresidential | Private Residential | |
| 1993 | 485,548 | 150,006 | 208,180 |
| 1994 | 531,892 | 160,438 | 241,033 |
| 1995 | 548,666 | 180,534 | 228,121 |
| 1996 | 599,693 | 195,523 | 257,495 |
| 1997 | 631,853 | 213,720 | 264,696 |
| 1998 | 688,515 | 237,394 | 296,343 |
| 1999 | 744,551 | 249,167 | 326,302 |
| 2000 | 802,756 | 275,293 | 346,138 |
| 2001 | 840,249 | 273,922 | 364,414 |
| Total | Total Nonresidential | Total Residential | |
| 2002 | 847,874 | 445,914 | 401,960 |
| 2003 | 891,497 | 440,246 | 451,251 |
| 2004 | 991,356 | 452,948 | 538,408 |
| 2005 | 1,140,136 | 486,629 | 617,507 |
| 2006 | 1,167,222 | 547,408 | 619,814 |
| 2007 | 1,152,351 | 651,883 | 500,468 |
| 2008 | 1,067,564 | 709,818 | 357,746 |
| 2009 | 903,201 | 649,273 | 253,928 |
| 2010 | 804,561 | 555,449 | 249,112 |
| 2011 | 778,238 | 532,552 | 245,686 |
| 2012 | 854,490 | 572,443 | 282,047 |
| ∆% 1993-2012 | 76.0 | ||
| ∆% 1993-2000 | 65.3 | ||
| ∆% 2000-2012 | 6.4 | ||
| ∆% 2002-2012 | 0.8 | 28.4 | -29.8 |
| ∆% 2005-2012 | -25.0 | 17.7 | -54.3 |
| ∆% 2006-2012 | -26.8 | 4.6 | -54.5 |
Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html
Chart VA-30 shows sharp growth of residential construction spending in the US from 2002 to 2006. The value of construction spending dropped sharply during the global recession and has remained at a low plateau with an apparent increase in the final segment.
Chart, VA-30, US, Residential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2013
Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html
Nonresidential construction has been more resilient. Chart VA-31 provides the value of nonresidential construction not seasonally adjusted. There was more moderate growth of nonresidential construction with more prudent business management and fewer subsidies. Nonresidential construction also declined during the global recession but less sharply than residential construction and has remained at a lower plateau.
Chart, VA-31, US, Nonresidential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2013
Source: US Census Bureau
http://www.census.gov/manufacturing/m3/
Table VA-17 shows the euphoria of prices during the housing boom and the subsequent decline. House prices rose 94.3 percent in the 10-city composite of the Case-Shiller home price index and 77.1 percent in the 20-city composite between Feb 2000 and Feb 2005. Prices rose around 100 percent from Feb 2000 to Feb 2006, increasing 121.6 percent for the 10-city composite and 101.6 percent for the 20-city composite. House prices rose 36.4 percent between Feb 2003 and Feb 2005 for the 10-city composite and 31.1 percent for the 20-city composite propelled by low fed funds rates of 1.0 percent between Jun 2003 and Jun 2004 and then only increasing by 0.25 basis points at every meeting of the Federal Open Market Committee (FOMC) until Jun 2006, reaching 5.25 percent. Simultaneously, the suspension of auctions of the 30-year Treasury bond caused decline of yields of mortgage-backed securities with intended decrease in mortgage rates. Similarly, between Feb 2003 and Feb 2006 the 10-city index gained 55.6 percent and the 20-city index increased 49.2 percent. House prices have fallen from Feb 2006 to Feb 2013 by 28.7 percent for the 10-city composite and 27.9 percent for the 20-city composite. Measuring house prices is quite difficult because of the lack of homogeneity that is typical of standardized commodities. In the 12 months ending in Feb 2013, house prices increased 8.6 percent in the 10-city composite and increased 9.3 percent in the 20-city composite. Table VA-17 also shows that house prices increased 58.0 percent between Feb 2000 and Feb 2013 for the 10-city composite and increased 45.4 percent for the 20-city composite. House prices are close to the lowest level since peaks during the boom before the financial crisis and global recession. The 10-city composite fell 29.6 percent from the peak in Jun 2006 to Feb 2013 and the 20-city composite fell 29.0 percent from the peak in Jul 2006 to Feb 2013. The final part of Table VA-4 provides average annual percentage rates of growth of the house price indexes of Standard & Poor’s Case-Shiller. The average annual growth rate between Dec 1987 and Dec 2012 for the 10-city composite was 3.3 percent. Data for the 20-city composite are available only beginning in Jan 2000. House prices accelerated in the 1990s with the average rate of the 10-city composite of 5.0 percent between Dec 1992 and Dec 2000 while the average rate for the period Dec 1987 to Dec 2000 was 3.8 percent. Although the global recession affecting the US between IVQ2007 (Dec) and IIQ2009 (Jun) caused decline of house prices of slightly above 30 percent, the average annual growth rate of the 10-city composite between Dec 2000 and Dec 2012 was 2.8 percent while the rate of the 20-city composite was 2.3 percent.
Table VA-17, US, Percentage Changes of Standard & Poor’s Case-Shiller Home Price Indices, Not Seasonally Adjusted, ∆%
| 10-City Composite | 20-City Composite | |
| ∆% Feb 2000 to Feb 2003 | 42.4 | 35.1 |
| ∆% Feb 2000 to Feb 2005 | 94.3 | 77.1 |
| ∆% Feb 2003 to Feb 2005 | 36.4 | 31.1 |
| ∆% Feb 2000 to Feb 2006 | 121.6 | 101.6 |
| ∆% Feb 2003 to Feb 2006 | 55.6 | 49.2 |
| ∆% Feb 2005 to Feb 2013 | -18.7 | -17.9 |
| ∆% Feb 2006 to Feb 2013 | -28.7 | -27.9 |
| ∆% Feb 2009 to Feb 2013 | 3.0 | 2.4 |
| ∆% Feb 2010 to Feb 2013 | 1.5 | 1.7 |
| ∆% Feb 2011 to Feb 2013 | 4.5 | 5.4 |
| ∆% Feb 2012 to Feb 2013 | 8.6 | 9.3 |
| ∆% Feb 2000 to Feb 2013 | 58.0 | 45.4 |
| ∆% Peak Jun 2006 Feb 2013 | -29.6 | |
| ∆% Peak Jul 2006 Feb 2013 | -29.0 | |
| Average ∆% Dec 1987-Dec 2012 | 3.3 | NA |
| Average ∆% Dec 1987-Dec 2000 | 3.8 | NA |
| Average ∆% Dec 1992-Dec 2000 | 5.0 | NA |
| Average ∆% Dec 2000-Dec 2012 | 2.8 | 2.3 |
With the exception of Apr 2011, house prices seasonally adjusted declined in every month for both the 10-city and 20-city Case-Shiller composites from Dec 2010 to Jan 2012, as shown in Table IIB1-6. The most important seasonal factor in house prices is school changes for wealthier homeowners with more expensive houses. Without seasonal adjustment, house prices fell from Dec 2010 throughout Mar 2011 and then increased in every month from Apr to Aug 2011 but fell in every month from Sep 2011 to Feb 2012. The not seasonally adjusted index increases from Apr 2012 to Sep 2012 for both the 10- and 20-city composites while the seasonally adjusted index also increases in every month from Apr 2012 to Sep 2012. The index without seasonal adjustment fell 0.2 percent in Nov 2012 for the 10-city composite and fell 0.1 percent for the 20-city composite while the seasonally adjusted index increased 0.6 percent for the 10-city composite and 0.7 percent for the 20-city composite. The seasonally adjusted index increased 0.9 percent for both composites in Dec 2012 while the not seasonally adjusted index increased 0.2 percent for the 10-city composite and 0.1 percent for the 20-city composite. In Jan 2013, the index seasonally adjusted increased 0.9 percent for the 10-city composite and 1.0 percent for the 20-city composite while the not seasonally adjusted index increased 0.0 percent for the 10-city composite and 0.1 percent for the 20-city composite. In Feb 2013, the seasonally adjusted composites increased 1.2 percent while the 10-city not seasonally adjusted composite gain 0.4 percent and the 20-city composite increased 0.3 percent. Declining house prices cause multiple adverse effects of which two are quite evident. (1) There is a disincentive to buy houses in continuing price declines. (2) More mortgages could be losing fair market value relative to mortgage debt. Another possibility is a wealth effect that consumers restrain purchases because of the decline of their net worth in houses.
Table VA-18, US, Monthly Percentage Change of S&P Case-Shiller Home Price Indices, Seasonally Adjusted and Not Seasonally Adjusted, ∆%
| 10-City Composite SA | 10-City Composite NSA | 20-City Composite SA | 20-City Composite NSA | |
| Feb 2013 | 1.2 | 0.4 | 1.2 | 0.3 |
| Jan | 0.9 | 0.0 | 1.0 | 0.1 |
| Dec 2012 | 0.9 | 0.2 | 0.9 | 0.1 |
| Nov | 0.6 | -0.2 | 0.7 | -0.1 |
| Oct | 0.6 | -0.2 | 0.7 | -0.1 |
| Sep | 0.4 | 0.3 | 0.5 | 0.3 |
| Aug | 0.4 | 0.8 | 0.5 | 0.8 |
| Jul | 0.2 | 1.5 | 0.3 | 1.6 |
| Jun | 0.9 | 2.1 | 1.0 | 2.3 |
| May | 0.8 | 2.2 | 0.9 | 2.4 |
| Apr | 0.7 | 1.4 | 1.1 | 1.4 |
| Mar | 0.6 | -0.1 | 0.3 | 0.0 |
| Feb | -0.1 | -0.9 | 0.1 | -0.8 |
| Jan | -0.2 | -1.1 | -0.1 | -1.0 |
| Dec 2011 | -0.5 | -1.2 | -0.4 | -1.2 |
| Nov | -0.6 | -1.4 | -0.6 | -1.3 |
| Oct | -0.6 | -1.3 | -0.6 | -1.3 |
| Sep | -0.5 | -0.6 | -0.5 | -0.7 |
| Aug | -0.3 | 0.1 | -0.3 | 0.1 |
| Jul | -0.3 | 0.9 | -0.3 | 1.0 |
| Jun | -0.1 | 1.0 | -0.1 | 1.2 |
| May | -0.3 | 1.0 | -0.3 | 1.0 |
| Apr | 0.0 | 0.6 | 0.2 | 0.6 |
| Mar | -0.3 | -1.0 | -0.7 | -1.0 |
| Feb | -0.4 | -1.3 | -0.3 | -1.2 |
| Jan | -0.2 | -1.1 | -0.2 | -1.1 |
| Dec 2010 | -0.2 | -0.9 | -0.2 | -1.0 |
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/gor1304b.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.4 and 3.0 percent, with the all items CPI less fresh food of 0.4 to 0.8 percent. The critical difference is forecast of the CPI excluding fresh food of 2.7 to 3.6 percent in 2014 and 1.6 to 2.9 percent in 2015. The new monetary policy of the Bank of Japan aims to increase inflation to 2 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.”
Financial markets in Japan and worldwide were shocked by new bold measures of “quantitative and qualitative monetary easing” by the Bank of Japan (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The objective of policy is to “achieve the price stability target of 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) at the earliest possible time, with a time horizon of about two years” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The main elements of the new policy are as follows:
- Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
- Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year
| Fiscal Year | Real GDP | CPI All Items Less Fresh Food | Excluding Effects of Consumption Tax Hikes |
| 2012 | |||
| Apr 2013 | +1.0 to +1.0 | -0.2 | |
| Jan 2013 | +1.0 to +1.1 [+1.0] | -0.2 to –0.1 [-0.2] | |
| 2013 | |||
| Apr 2013 | +2.4 to +3.0 [+2.9] | +0.4 to +0.8 [+0.7] | |
| Jan 2013 | +1.9 to +2.5 [+2.3] | +0.3 to +0.6 [+0.4] | |
| 2014 | |||
| Apr 2013 | +1.0 to +1.5 [+1.4] | +2.7 to +3.6 [+3.4] | +0.7 to +1.6 [+1.4] |
| Jan 2013 | +0.6 to +1.0 [+0.8] | +2.5 to +3.0 [+2.9] | +0.5 to +1.0 [+0.9] |
| 2015 | |||
| Apr 2013 | +1.4 to +1.9 [+1.6] | +1.6 to +2.9 [+2.6] | +0.9 to +2.2 [+1.9] |
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/gor1304a.pdf
Private-sector activity in Japan expanded strongly with the Markit Composite Output PMI™ Index increasing from 50.2 in Feb to 53.2 in Mar, which is the highest reading in a year (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10950). Paul Smith, economist at Markit and author of the report, finds that the survey data suggest growth of the economy of Japan possibly even higher than 0,5 percent in IQ2013 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10824). The Markit Business Activity Index of Services increased from 51.1 in Feb to 54.0 in Mar, which is the highest level since Sep 2007 when the survey began (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10950). 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=10950). Markit/JMMA Purchasing Managers’ Index™ (PMI™), seasonally adjusted, increased from 48.5 in Feb to 50.4 in Mar for the first reading above 50.0 since May 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10885). Foreign business grew at the fastest rate in more than two years with respondents attributing growth to devaluation of the yen and strength in Asia. Andrew Harker, Senior Economist at Markit and author of the report, finds resumption of growth in manufacturing in Japan in Mar 2013 both in new orders and output (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10885).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 ∆% +0.1 |
| Consumer Price Index | Mar NSA ∆% 0.2; Mar 12 months NSA ∆% -0.9 |
| Real GDP Growth | IVQ2012 ∆%: 0.0 on IIIQ2012; IVQ2012 SAAR 0.2; |
| Employment Report | Mar Unemployed 2.8 million Change in unemployed since last year: minus 270 thousand |
| All Industry Indices | Feb month SA ∆% 0.6 Blog 4/28/13 |
| Industrial Production | Mar SA month ∆%: 0.2 |
| Machine Orders | Total Feb ∆% 4.6 Private ∆%: 0.1 Feb ∆% Excluding Volatile Orders 7.5 |
| Tertiary Index | Feb month SA ∆% 1.1 |
| Wholesale and Retail Sales | Mar 12 months: |
| Family Income and Expenditure Survey | Mar 12-month ∆% total nominal consumption 4.1, real 5.2 Blog 5/5/13 |
| Trade Balance | Exports Mar 12 months ∆%: 1.1 Imports Mar 12 months ∆% 5.5 Blog 4/21/13 |
Links to blog comments in Table JPY:
4/28/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states_28.html
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html
4/14/13 http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html
3/10/13 http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or.html
8/9/11 http://cmpassocregulationblog.blogspot.com/2011/08/turbulence-in-world-financial-markets.html
In Mar 2013, industrial production in Japan increased 0.2 percent and decreased 7.3 percent in the 12 months ending in Mar 2013, as shown in Table VB-1. In the nine months Apr-Dec 2012, industrial production fell cumulative 7.2 or at the annual equivalent rate of 9.5 percent. As a result, growth of industrial production in 12 months fell from 14.2 percent in Mar 2012 to minus 7.9 percent in Dec 2012. Japan’s industrial production increased during four consecutive months by revised 2.4 percent in Dec 2012, revised 0.3 percent in Jan 2013, 0.6 percent in Feb 2013 and 0.2 percent in Mar 2013, reducing the percentage decline in 12 months from minus 7.9 percent in Dec 2012 to minus 7.3 percent in Mar 2013. Monthly industrial production had climbed in every month since the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011, with exception of Sep 2011 but fell again in Nov by 1.7 percent. Industrial production was higher in 12 months for the first month in Aug 2011 by 1.6 percent and again in Oct by 0.9 percent but fell 2.9 percent in Nov and 3.0 percent in Dec 2011 relative to a year earlier. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 16.4 percent in 2010. The annual average in calendar year 2011 fell 2.3 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 and fell again 0.3 percent in 2012.
Table VB-1, Japan, Industrial Production ∆%
| ∆% Month SA | ∆% 12 Months NSA | |
| Mar 2013 | 0.2 | -7.3 |
| Feb | 0.6 | -10.5 |
| Jan | 0.3 | -5.8 |
| Dec 2012 | 2.4 | -7.9 |
| Nov | -1.4 | -5.5 |
| Oct | 1.6 | -4.5 |
| Sep | -4.1 | -8.1 |
| Aug | -1.6 | -4.6 |
| Jul | -1.0 | -0.8 |
| Jun | 0.4 | -1.5 |
| May | -3.4 | 6.0 |
| Apr | -0.2 | 12.9 |
| Mar | 1.3 | 14.2 |
| Feb | -1.6 | 1.5 |
| Jan | 0.9 | -1.6 |
| Dec 2011 | 2.3 | -3.0 |
| Nov | -1.7 | -2.9 |
| Oct | 1.8 | 0.9 |
| Sep | -1.9 | -2.4 |
| Aug | 0.9 | 1.6 |
| Jul | 1.1 | -1.7 |
| Jun | 3.8 | -0.6 |
| May | 5.8 | -4.6 |
| Apr | 2.4 | -12.7 |
| Mar | -16.2 | -12.4 |
| Feb | 1.1 | 4.5 |
| Jan | 1.2 | 6.1 |
| Dec 2010 | 2.4 | 5.9 |
| Calendar Year | ||
| 2012 | -0.3 | |
| 2011 | -2.3 | |
| 2010 | 16.4 | |
| 2009 | -21.9 | |
| 2008 | -3.4 |
Source: http://www.meti.go.jp/english/statistics/index.html
The employment report for Japan in Mar 2013 is in Table VB-2. The rate of unemployment seasonally adjusted decreased to 4.2 percent in Sep 2012 from 4.3 percent in Jul 2012 and remained at 4.2 percent in Oct 2012, declining to 4.1 percent in Nov 2012, increasing to 4.2 percent in Dec 2012, stabilizing at 4.2 percent in Jan 2013 and increasing to 4.3 percent in Feb 2013. The seasonally adjusted rate of unemployment fell to 4.1 percent in Mar 2012. The rate of unemployment not seasonally adjusted stood at 4.3 percent in Mar 2013 and 0.4 percentage points lower from a year earlier. The employment rate stood at 56.3 percent in Mar 2013 and increased 0.3 percentage points from a year earlier.
Table VB-2, Japan, Employment Report Mar 2013
| Mar 2013 Unemployed | 2.8 million |
| Change since last year | -270 thousand; ∆% –8.8 |
| Unemployment rate | 4.1% SA -0.2; NSA 4.3%, -0.4 from earlier year |
| Population ≥ 15 years | 110.86 million |
| Change since last year | ∆% -0.1 |
| Labor Force | 65.26 million |
| Change since last year | ∆% 0.1 |
| Employed | 62.46 million |
| Change since last year | ∆% 0.5 |
| Labor force participation rate | 58.9 |
| Change since last year | 0.2 |
| Employment rate | 56.3% |
| Change since last year | 0.3 |
Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications http://www.stat.go.jp/english/data/roudou/results/month/index.htm
Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2013. The sharp decline in Sep 2011 was the best reading in 2011 but the rate increased in the final quarter of the year, declining in Feb 2012 and stabilizing in Mar 2012 but increasing to 4.6 percent in Apr 2012 and declining again to 4.4 percent in May 2012 and 4.3 percent in both Jun and Jul 2012 with further decline to 4.2 percent in Aug, Sep and Oct 2012, 4.1 percent in Nov 2012, 4.2 percent in Dec 2012, 4.2 percent in Jan 2013, 4.3 percent in Feb 2013 and 4.1 percent in Mar 2013.
Chart VB-1, Japan, Unemployment Rate
Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications
http://www.stat.go.jp/english/data/roudou/results/month/index.htm
During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid 1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for 1968, 1975, 1980 and 1985 and yearly from 1990 to 2012. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.4 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011 and 4.3 percent in 2012, while the participation rate fell from 60.4 percent to 59.6 percent, falling to 59.3 percent in 2011 and 59.1 in 2012, and the employment rate fell from 58.1 percent to 56.6 percent in 2010 and 56.5 percent in 2011 and 2012. The global recession adversely affected labor markets in advanced economies.
Table VB-3, Japan, Rates of Unemployment, Participation in Labor Force and Employment, %
| Unemployment Rate | Participation | Employment Rate | |
| 1968 | 1.2 | 65.9 | 65.1 |
| 1975 | 1.9 | 63.0 | 61.9 |
| 1980 | 2.0 | 63.3 | 62.0 |
| 1985 | 2.6 | 63.0 | 61.4 |
| 1990 | 2.1 | 63.3 | 61.9 |
| 1991 | 2.1 | 63.8 | 62.4 |
| 1992 | 2.2 | 64.0 | 62.6 |
| 1993 | 2.5 | 63.8 | 62.2 |
| 1994 | 2.9 | 63.6 | 61.8 |
| 1995 | 3.2 | 63.4 | 61.4 |
| 1996 | 3.4 | 63.5 | 61.4 |
| 1997 | 3.4 | 63.7 | 61.5 |
| 1998 | 4.1 | 63.3 | 60.7 |
| 1999 | 4.7 | 62.9 | 59.9 |
| 2000 | 4.7 | 62.4 | 59.5 |
| 2001 | 5.0 | 62.0 | 58.9 |
| 2002 | 5.4 | 61.2 | 57.9 |
| 2003 | 5.3 | 60.8 | 57.6 |
| 2004 | 4.7 | 60.4 | 57.6 |
| 2005 | 4.4 | 60.4 | 57.7 |
| 2006 | 4.1 | 60.4 | 57.9 |
| 2007 | 3.9 | 60.4 | 58.1 |
| 2008 | 4.0 | 60.2 | 57.8 |
| 2009 | 5.1 | 59.9 | 56.9 |
| 2010 | 5.1 | 59.6 | 56.6 |
| 2011 | 4.6 | 59.3 | 56.5 |
| 2012 | 4.3 | 59.1 | 56.5 |
Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications http://www.stat.go.jp/english/data/roudou/results/month/index.htm
The survey of household income and consumption of Japan in Table VB-4 is showing noticeable improvement in recent months relative to earlier months, which can be appreciated in the chart in the link in parentheses but followed by decline in Nov 2011, renewed strength in Dec 2011, another decline in Jan 2012 and increase in Feb and Mar 2012 with stabilization in Apr and May 2012 but sharp decline into Jun 2012 with recovery in Jul and Aug 2012, interrupted in Sep-Oct 2012 and new increases in Nov 2012, Jan 2013, Feb 2013 and Mar 2013 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption increased 5.2 percent in real terms in Mar 2013 and increased 4.1 percent in nominal terms relative to a year earlier. There are several segments of decreasing real consumption: furniture and household utensils falling 3.6 percent in real terms and 6.9 percent in nominal terms, fuels, light and water charges declining 3.7 percent in real terms and 6.9 percent in nominal terms and education declining 7.6 percent in real terms and 7.2 percent in nominal terms. Real household income increased 1.8 percent; real disposable income increased 0.6 percent; and real consumption expenditures increased 7.6 percent.
Table VB-4, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| Mar 2013 | Nominal | Real |
| Households of Two or More Persons | ||
| Total Consumption | 4.1 | 5.2 |
| Excluding Housing, Vehicles & Remittance | 2.4* | |
| Food | 1.9 | 4.4 |
| Housing | 23.3 | 23.7 |
| Fuel, Light & Water Charges | -2.1 | -4.3 |
| Furniture & Household Utensils | -6.9 | -3.7 |
| Clothing & Footwear | 9.1 | 9.3 |
| Medical Care | 1.6 | 2.0 |
| Transport and Communications | 11.6 | 11.8 |
| Education | -7.2 | -7.6 |
| Culture & Recreation | 0.2 | 3.0 |
| Other Consumption Expenditures | 4.8 | -5.9* |
| Workers’ Households | ||
| Income | 0.8 | 1.8 |
| Disposable Income | -0.4 | 0.6 |
| Consumption Expenditures | 6.5 | 7.6 |
*Real: nominal deflated by CPI excluding imputed rent
Source: http://www.stat.go.jp/english/data/kakei/156.htm
Percentage changes in 12 months of nominal and real consumption expenditures in Japan are provided in Table VB-5. Real consumption expenditures increased 5.2 percent in the 12 months ending in Mar 2013 and 4.1 percent in nominal terms. There was sharp decline in nominal consumption of 8.8 percent in Mar 2011 and 8.2 percent in real consumption because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Dec was the first month in 2011 with increases in 12 months in both nominal and real consumption expenditures followed by Feb 2012 through Aug 2012. Nominal and real consumption fell in both Sep and Oct 2012 and increased in Nov 2012. Real consumption fell 0.7 percent in the 12 months ending in Dec 2012 and nominal consumption fell 0.8 percent. Real consumption expenditures increased 2.4 percent in the 12 months ending in Jan 2013 and 2.1 percent in nominal terms. Nominal consumption increased 0.8 percent in Feb 2013 and nominal consumption increased 0.1 percent. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 6.1 percent in IQ2012 with private consumption contributing 3.0 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2013/03/thirty-one-million-unemployed-or_11.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 0.9 percent and contribution of 0.0 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 3.7 percent and personal consumption deducted 1.1 percentage points. Japan’s GDP grew at the SAAR of 0.2 percent in IVQ2012 with personal consumption contributing 1.2 percentage points. Nominal consumption increased 4.3 percent in May 2012 but at a lower 1.5 percent in Jun 2012, 1.2 percent in Jul 2012 and 1.4 percent in Aug 2012, decreasing 1.2 percent in Sep 2012 and 0.5 percent in Oct 2012, increasing 0.1 percent in Nov 2012 and decreasing 0.8 percent in Dec 2012. Real consumption expenditures increased 4.0 percent in May 2012 but at a lower 1.6 percent in Jun 2012, 1.7 percent in Jul 2012 and 1.8 percent in Aug 2012, declining 0.9 percent in Sep 2012 and 0.1 percent in Oct 2012, increasing 0.2 percent in Nov 2012 but declining 0.7 percent in Dec 2012. Consumption rebounded in Jan 2013 with growth of real consumption of 2.4 percent and nominal consumption of 2.1 percent. Growth was much lower in Feb 2013, 0.8 percent in real consumption and 0.1 percent in nominal consumption. Real consumption increased 5.2 percent in Mar 2013 and nominal consumption 4.1 percent. Both nominal and real consumption expenditures increased in 2009, 0.3 percent and 2.1 percent, respectively.
Table VB-5, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| Nominal Consumption Expenditures | Real Consumption Expenditures | |
| Mar 2013 | 4.1 | 5.2 |
| Feb | 0.1 | 0.8 |
| Jan | 2.1 | 2.4 |
| Dec 2012 | -0.8 | -0.7 |
| Nov | 0.1 | 0.2 |
| Oct | -0.5 | -0.1 |
| Sep | -1.2 | -0.9 |
| Aug | 1.4 | 1.8 |
| Jul | 1.2 | 1.7 |
| Jun | 1.5 | 1.6 |
| May | 4.3 | 4.0 |
| Apr | 3.2 | 2.6 |
| Mar | 4.1 | 3.4 |
| Feb | 2.7 | 2.3 |
| Jan | -2.1 | -2.3 |
| Dec 2011 | 0.3 | 0.5 |
| Nov | -3.8 | -3.2 |
| Oct | -0.6 | -0.4 |
| Sep | -1.9 | -1.9 |
| Aug | -3.9 | -4.1 |
| Jul | -1.8 | -2.1 |
| Jun | -3.9 | -3.5 |
| May | -1.6 | -1.2 |
| Apr | -2.5 | -2.0 |
| Mar | -8.8 | -8.2 |
| Feb | -0.1 | 0.5 |
| Jan | -0.9 | -0.3 |
| Dec 2010 | -3.2 | -3.3 |
| Dec 2009 | 0.3 | 2.1 |
Source: http://www.stat.go.jp/english/data/kakei/156.htm
Japan is experiencing weak internal demand as in most advanced economies, interrupted by strong growth in IQ2012 but renewed weakening at the end of IIQ2012, beginning of IIIQ2012 and in IVQ2012. Table VB-6 provides Japan’s wholesale and retail sales. Retail sales fell 0.3 percent in the 12 months ending in Feb 2013 and had increased 0.9 percent in the 12 months ending in Nov 2012 but only 0.2 percent in the 12 months ending in Dec 2012, falling 1.1 percent in the 12 months ending in Jan 2013 and declining 2.2 percent in Feb 2013. Total sales decreased 1.2 percent in the 12 months ending in Mar 2013. Retail sales are recovering from deep drops in Mar and Apr 2011 following the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Retail sales have been increasing in 12-month percentage changes from Dec 2011 through May 2012 but fell again by 1.3 percent in Jul 2012, increasing 1.3 percent in Aug 2012 and 0.4 percent in Sep 2012 but declining 1.2 percent in Oct 2012, rebounding by 0.9 percent in Nov 2012 and only 0.2 percent in Dec 2012 but contracting 1.1 percent in Jan 2013 and 2.2 percent in Feb 2013. In Mar 2013, retail sales contracted 0.3 percent relative to a year earlier.
Table VB-6, Japan, Wholesale and Retail Sales 12 Month ∆%
| Total | Wholesale | Retail | |
| Mar 2013 | -1.2 | -1.5 | -0.3 |
| Feb | -1.6 | -1.3 | -2.2 |
| Jan | -0.3 | 0.1 | -1.1 |
| Dec 2012 | -1.7 | -2.5 | 0.2 |
| Nov | -0.9 | -1.6 | 0.9 |
| Oct | -1.6 | -1.8 | -1.2 |
| Sep | -3.6 | -5.1 | 0.4 |
| Aug | -2.7 | -4.4 | 1.3 |
| Jul | -3.1 | -4.0 | -1.3 |
| Jun | -2.6 | -3.6 | -0.2 |
| May | 2.7 | 2.6 | 3.0 |
| Apr | 1.8 | 0.4 | 5.0 |
| Mar | 3.2 | 0.9 | 9.3 |
| Feb | -0.1 | -1.3 | 3.1 |
| Jan | -2.1 | -3.8 | 1.6 |
| Dec 2011 | -0.8 | -2.0 | 2.5 |
| Nov | -2.3 | -2.4 | -2.2 |
| Oct | 1.1 | 0.8 | 1.9 |
| Sep | 0.3 | 0.8 | -1.1 |
| Aug | 3.1 | 5.2 | -2.6 |
| Jul | 2.3 | 3.0 | 0.6 |
| Jun | 3.1 | 3.8 | 1.2 |
| May | 1.3 | 2.3 | -1.3 |
| Apr | -2.6 | -1.7 | -4.8 |
| Mar | -1.3 | 1.2 | -8.3 |
| Feb | 5.3 | 7.2 | 0.1 |
| Jan | 3.3 | 4.6 | 0.1 |
| Dec 2010 | 3.5 | 5.7 | -2.1 |
| Calendar Year | |||
| 2012 | -0.9 | -2.0 | 1.8 |
| 2011 | 1.0 | 1.9 | -1.0 |
| 2010 | 2.4 | 2.3 | 2.6 |
| 2009 | -20.5 | -25.6 | -2.3 |
| 2008 | 1.2 | 1.5 | 0.3 |
Source: http://www.meti.go.jp/english/statistics/index.html
VC China. China estimates an index of nonmanufacturing purchasing managers on the basis of a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. 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, declining marginally to 54.5 in Feb 2013 and 55.6 in Mar 2013.
Table CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| Total Index | New Orders | Interm. | Subs Prices | Exp | |
| Mar 2013 | 55.6 | 52.0 | 55.3 | 50.0 | 62.4 |
| Feb | 54.5 | 51.8 | 56.2 | 51.1 | 62.7 |
| Jan | 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
Chart CIPMNM provides China’s nonmanufacturing purchasing managers’ index. 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 55.6 in Mar 2013.
http://www.stats.gov.cn/english/
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, 50.9 in Mar 2013 and 50.6 in Apr 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, 52.3 in Mar 2013 and 51.7 in Apr 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, 49.8 in Mar 2013 and 49.0 in Apr 2013.
Table CIPMMFG, China, Manufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| IPM | PI | NOI | INV | EMP | SDEL | |
| Apr 2013 | 50.6 | 52.6 | 51.7 | 47.5 | 49.0 | 50.8 |
| Mar | 50.9 | 52.7 | 52.3 | 47.5 | 49.8 | 51.1 |
| Feb | 50.1 | 51.2 | 50.1 | 49.5 | 47.6 | 48.3 |
| Jan | 50.4 | 51.3 | 51.6 | 50.1 | 47.8 | 50.0 |
| Dec 2012 | 50.6 | 52.0 | 51.2 | 47.3 | 49.0 | 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. 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, 50.9 in Mar 2013 and 50.6 in Apr 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/
Growth of China’s GDP in IQ2013 relative to the same period in 2012 was 7.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 45.9 percent of GDP of which industry alone for 41.1 percent in IQ2013 and construction with the remaining 4.8 percent in the first three quarters of 2012. Tertiary industry accounts for 47.8 percent of GDP in the IQ2013 and primary industry for 6.3 percent. 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-1 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 IIQ2011 to 7.4 percent in IVQ2011 and 6.6 percent in IQ2012, rebounding to 7.8 percent in IIQ2012, 8.7 percent in IIIQ2012 and 8.2 percent in IVQ2012. Annual equivalent growth in IQ2013 fell to 6.6 percent.
Table VC-GDP, China, Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted ∆%
| Cumulative GDP IQ2013 | Value Current CNY 100 Million | 2013 Year-on-Year ∆% |
| GDP | 118855 | 7.7 |
| Primary Industry | 7427 | 3.4 |
| Farming | 7427 | 3.4 |
| Secondary Industry | 54569 | 7.8 |
| Industry | 48832 | 7.5 |
| Construction | 5737 | 9.8 |
| Tertiary Industry | 56859 | 8.3 |
| Transport, Storage, Post | 6563 | 7.0 |
| Wholesale, Retail Trades | 11914 | 10.5 |
| Hotel & Catering Services | 2419 | 4.5 |
| Financial Intermediation | 8099 | 11.5 |
| Real Estate | 8383 | 7.8 |
| Other | 19481 | 6.8 |
| Growth in Quarter Relative to Prior Quarter | ∆% on Prior Quarter | ∆% Annual Equivalent |
| 2012 | ||
| IQ2013 | 1.6 | 6.6 |
| IVQ2012 | 2.0 | 8.2 |
| IIIQ2012 | 2.1 | 8.7 |
| IIQ2012 | 1.9 | 7.8 |
| IQ2012 | 1.6 | 6.6 |
| 2011 | ||
| IVQ2011 | 1.8 | 7.4 |
| IIIQ2011 | 2.3 | 9.6 |
| IIQ2011 | 2.4 | 9.9 |
| IQ2011 | 2.3 | 9.5 |
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Growth of China’s GDP in IQ2013 relative to the same period in 2012 was 7.7 percent, as shown in Table VC-GDPA. Secondary industry accounts for 45.9 percent of GDP of which industry alone for 41.1 percent in IQ2013 and construction with the remaining 4.8 percent in the first three quarters of 2012. Tertiary industry accounts for 47.8 percent of GDP in the IQ2013 and primary industry for 6.3 percent. 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-1 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 IIQ2011 to 7.4 percent in IVQ2011 and 6.6 percent in IQ2012, rebounding to 7.8 percent in IIQ2012, 8.7 percent in IIIQ2012 and 8.2 percent in IVQ2012. Annual equivalent growth in IQ2013 fell to 6.6 percent.
Table VC-GDPA, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter
| IQ 2013 | ||||||||
| GDP | 7.7 | |||||||
| Primary Industry | 3.4 | |||||||
| Secondary Industry | 7.8 | |||||||
| Tertiary Industry | 8.3 | |||||||
| GDP ∆% Relative to a Prior Quarter | 1.6 | |||||||
| 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 | 2.3 | 2.4 | 2.3 | 1.8 | 1.6 | 1.9 | 2.1 | 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/
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/
The HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™) compiled by Markit (http://www.markiteconomics.com/Survey/PressRelease.mvc/6a7e23c1fd0a42c9baa11cf90ebcb9bb) is moving at slower pace. The overall Flash China Manufacturing PMI™ decreased marginally from 51.6 in Mar to 50.5 in Apr while the Flash China Manufacturing Output Index decreased from 53.0 in Mar to 51.1 in Apr, 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 toward moderate growth with weak overseas demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/6a7e23c1fd0a42c9baa11cf90ebcb9bb). 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, increasing from 51.4 in Feb to 53.5 in Mar for the seventh consecutive month of expansion (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10939). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that combined manufacturing and services data suggest continuing growth supported by improving labor markets (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10939). The HSBC Business Activity index increased from 52.1 in Feb to 54.3 in Mar with continuing growth in services at the fastest rate in six months (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10939). 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=10939). The HSBC Purchasing Managers’ Index™ (PMI™), compiled by Markit, increased to 51.6 in Mar from 50.4 in Mar, indicating moderate activity in five consecutive months of improvement (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10883). New export orders increased marginally. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds manufacturing is gaining traction from internal demand (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10883). Table CNY provides the country data table for China.
Table CNY, China, Economic Indicators
| Price Indexes for Industry | Mar 12-month ∆%: minus 1.9 Mar month ∆%: 0.0 |
| Consumer Price Index | Mar month ∆%: -0.9 Mar 12 months ∆%: 2.1 |
| Value Added of Industry | Mar month ∆%: 0.66 Jan-Mar 2013/Jan-Mar 2012 ∆%: 9.5 |
| GDP Growth Rate | Year IQ2013 ∆%: 7.9 |
| Investment in Fixed Assets | Mar month ∆%: 1.59 Total Jan-Mar 2012 ∆%: 20.9 Real estate development: 20.2 |
| Retail Sales | Mar month ∆%: 1.23 Jan-Mar ∆%: 12.4 |
| Trade Balance | Mar balance -$0.88 billion Cumulative Mar: $43.27 billion |
Links to blog comments in Table CNY:
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html
4/14/13 http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html
VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.2 percent in 2006 and 3.0 percent in 2007. The global recession had strong impact with growth of only 0.4 percent in 2008 and decline of 4.4 percent in 2009. Recovery was at lower growth rates of 2.0 percent in 2010 and 1.4 percent in 2011. EUROSTAT forecasts growth of GDP of the euro area of minus 0.6 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 | 10.2 | 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/statistics/search_database
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* | -2.4 | -1.4* |
| 2011 | 1.4 | 3.0 | 1.7 | 0.4 | 0.4 |
| 2010 | 2.0 | 4.2 | 1.7 | 1.7 | -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/statistics/search_database
The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI®, combining activity in manufacturing and services, was unchanged from 46.5 in Mar to 46.5 in Apr, for fifteen consecutive declines and seventeen drops in nineteen months with acceleration of the rate of contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/8fdf9fdbced5421badae119e01f41b55). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index is consistent with GDP declining at a rate around 0.4 percent in IIQ2013 and the PMI is consistent with decline of 0.2 to 0.3 percent in IQ2013, which would be lower than the decline of 0.6 percent in IVQ2012 in EUROSTAT estimates (http://www.markiteconomics.com/Survey/PressRelease.mvc/8fdf9fdbced5421badae119e01f41b55). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP, decreased from 47.9 in Feb to 46.5 in Mar, which is the nineteenth contraction in 19 months with only one marginal increase in the beginning of 2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10945). Chris Williamson, Chief Economist at Markit, finds that the data are consistent with milder contraction of GDP in IQ2013 in contrast with fall of 0.6 percent in IVQ2012 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10945). 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® decreased to 46.8 in Mar from 47.9 in Feb, which indicates contraction in twenty consecutive months of deterioration of manufacturing business in the euro zone since Aug 2011 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10921). Total orders contracted for the twenty-second consecutive month with weakness at home and abroad. Chris Williamson, Chief Economist at Markit, finds weakness with accelerating pace of decline in Mar.
Table EUR, Euro Area Economic Indicators
| GDP | IVQ2012 ∆% -0.6; IVQ2012/IVQ2011 ∆% -0.9 Blog 4/7/13 |
| Unemployment | Mar 2013: 12.1% unemployment rate Mar 2013: 19.211 million unemployed Blog 5/5/13 |
| HICP | Mar month ∆%: 1.2 12 months Feb ∆%: 1.7 |
| Producer Prices | Euro Zone industrial producer prices Mar ∆%: -0.2 |
| Industrial Production | Feb month ∆%: 0.4; Feb 12 months ∆%: -3.1 |
| Retail Sales | Feb month ∆%: -0.3 |
| Confidence and Economic Sentiment Indicator | Sentiment 88.6 Apr 2013 Consumer minus 22.2 Apr 2013 Blog 5/5/13 |
| Trade | Jan-Feb 2013/Jan-Feb 2012 Exports ∆%: 1.8 Feb 2013 12-month Exports ∆% -1.1 Imports ∆% -7.1 |
Links to blog comments in Table EUR:
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html
4/14/13 http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html
4/7/13 http://cmpassocregulationblog.blogspot.com/2013/04/thirty-million-unemployed-or.html
EUROSTAT estimates the rate of unemployment in the euro area at 12.0 percent in Feb 2013, as shown in Table VD-1. The number of unemployed in Mar 2013 was 19.211 million, which was 1.723 million higher than 17.488 million in Mar 2012. The rate of unemployment jumped from 11.0 percent in Mar 2012 to 12.1 percent in Mar 2013.
Table VD-1, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA
| Unemployment Rate % | Number Unemployed | |
| Mar 2013 | 12.1 | 19.211 |
| Feb | 12.0 | 19.149 |
| Jan | 12.0 | 19.099 |
| Dec 2012 | 11.8 | 18.768 |
| Nov | 11.8 | 18.771 |
| Oct | 11.7 | 18.654 |
| Sep | 11.6 | 18.445 |
| Aug | 11.5 | 18.275 |
| Jul | 11.4 | 18.193 |
| Jun | 11.4 | 18.092 |
| May | 11.3 | 17.886 |
| Apr | 11.2 | 17.746 |
| Mar | 11.0 | 17.488 |
| Feb | 10.9 | 17.275 |
| Jan | 10.8 | 17.069 |
| Dec 2011 | 10.7 | 16.943 |
| Nov | 10.6 | 16.820 |
| Oct | 10.5 | 16.532 |
| Sep | 10.3 | 16.340 |
| Aug | 10.2 | 16.073 |
| Jul | 10.1 | 15.929 |
| Jun | 10.0 | 15.713 |
| May | 9.9 | 15.662 |
| Apr | 9.9 | 15.525 |
| Mar | 9.9 | 15.605 |
| Feb | 9.9 | 15.634 |
| Jan | 10.0 | 15.716 |
| Dec 2010 | 10.1 | 15.824 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Table VD-5 shows the disparity in rates of unemployment in the euro area with 12.1 percent for the region as a whole and 19.211 million unemployed but 5.4 percent in Germany and 2.291 million unemployed. At the other extreme is Spain with rate of unemployment of 26.7 percent and 6.080 million unemployed. The rate of unemployment of the European Union in Mar 2013 is 10.9 percent with 26.521 million unemployed.
Table VD-2, Unemployed and Unemployment Rate in Countries and Regions, Millions and %
| Mar 2013 | Unemployment Rate % | Unemployed Millions |
| Euro Zone | 12.1 | 19.211 |
| Germany | 5.4 | 2.291 |
| France | 11.0 | 3.254 |
| Netherlands | 6.4 | 0.573 |
| Finland | 8.2 | 0.219 |
| Portugal | 17.5 | 0.939 |
| Ireland | 14.1 | 0.301 |
| Italy | 11.5 | 2.950 |
| Greece | NA | NA |
| Spain | 26.7 | 6.080 |
| Belgium | 8.2 | 0.403 |
| European Union | 10.9 | 26.521 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Chart VD-1 provides Eurosat estimates of unemployment rates in the European Union. There is significant diversity in the rates of unemployment in members of the euro zone and the European Union.
Chart VD-1, Unemployment Rate in Various Countries and Regions
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
The Economic Sentiment Indicator of the European Economic Commission, Economic and Financial Affairs, provides correlation with the economic cycle since 1990, capturing all three recessions in the period and even the threat of recession from 1994 to 1995. The latest chart of this index accessible in the link in parenthesis shows trend of decline in 2011 and 2012 that has punctured the historical average of 100 and resumed downward trend in 2012 followed by recovery but at a relatively low level (http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm). This deterioration is shown in Table VD-1 with the index falling from 91.8 in May 2012 to 88.6 in Apr 2013. There is downward trend with the index still above the minimum value of 70.0 reached in Mar 2009 but still below the average of 100.
Table VD-3, Euro Area, Indicators of Confidence and Economic Sentiment SA
| ESI | IND | SERV | CON | RET | CONS | |
| Historical Average | 100.0 | -7.0 | 9.7 | -13.2 | -9.3 | -17.9 |
| Maximum | 118.2 | 7.8 | 35.3 | 2.4 | 5.3 | 6.1 |
| Minimum | 70.0 | -38.2 | -26.1 | -34.3 | -24.9 | -46.1 |
| Apr 2013 | 88.6 | -13.8 | -11.1 | -22.3 | -18.1 | -31.8 |
| Mar | 90.1 | -12.3 | -7.0 | -23.5 | -17.1 | -30.4 |
| Feb | 90.4 | -11.1 | -8.5 | -23.6 | -16.1 | -29.7 |
| Jan | 89.7 | -13.4 | -7.9 | -23.9 | -15.5 | -28.5 |
| Dec 2012 | 88.0 | -13.8 | -9.8 | -26.3 | -15.9 | -33.3 |
| Nov | 86.9 | -14.7 | -11.4 | -26.7 | -14.8 | -34.1 |
| Oct | 85.4 | -17.8 | -12.0 | -25.5 | -17.3 | -31.6 |
| Sep | 86.1 | -15.5 | -12.5 | -25.7 | -18.4 | -30.3 |
| Aug | 87.3 | -14.9 | -10.5 | -24.4 | -17.1 | -31.5 |
| Jul | 88.9 | -14.4 | -8.7 | -21.3 | -14.9 | -27.3 |
| Jun | 91.2 | -12.2 | -6.7 | -19.6 | -14.3 | -26.7 |
| May | 91.8 | -10.8 | -4.7 | -19.1 | -18.0 | -28.7 |
ESI: Economic Sentiment Index; IND: Industry; SERV: Services; CON: Consumer; RET: Retail Trade; CONS: Construction
Source: European Commission Services
http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm
VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 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 50.6 in Mar to 48.8 in Apr, which indicates moderate contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/403f548dda24421facaee99f64821d5b). New export orders for manufacturing decreased at the fastest rate in 2013. Tim Moore, Senior Economist at Markit and author of the report, finds weakening in Germany’s private sector with accelerated decline in new orders for both manufacturing and services (http://www.markiteconomics.com/Survey/PressRelease.mvc/403f548dda24421facaee99f64821d5b). 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 53.3 in Feb to 50.6 in Mar (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10968). Tim Moore, Senior Economist at Markit and author of the report, finds that the economy of Germany will grow modestly in IQ2013 while the strength of the recovery is declining (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10968). The Germany Services Business Activity Index decreased from 54.7 in Feb to 50.9 in Mar (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10968). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, decreased from 50.3 in Feb to 49.0 in Mar, returned to contraction territory below 50.0 and below the long-term average of 51.9 (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10931). New export orders decreased in Mar after the fastest rate in 12 months in Feb with broad geographical reach in Asia and outside Europe. Tim Moore, Senior Economist at Markit and author of the report, finds moderate deteriorating conditions in German manufacturing with weakness in export markets in the euro area after stronger demand from emerging Asian markets in Germany’s return to manufacturing growth in the prior month of Feb propelled by the fastest growth rate of new export orders in almost two years (http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10931).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 2/24/13 |
| Consumer Price Index | Mar month NSA ∆%: 0.5 |
| Producer Price Index | Mar month ∆%: -0.3 CSA, -0.2 NSA |
| Industrial Production | Mfg Feb month CSA ∆%: 0.4 |
| Machine Orders | MFG Feb month ∆%: 2.3 |
| Retail Sales | Mar Month ∆% -0.3 12-Month ∆% -2.7 Blog 5/5/13 |
| Employment Report | Unemployment Rate SA Mar 5.4% |
| Trade Balance | Exports Feb 12-month NSA ∆%: -2.8 Blog 4/14/13 |
Links to blog comments in Table DE:
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html
4/14/13 http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html
4/7/13 http://cmpassocregulationblog.blogspot.com/2013/04/thirty-million-unemployed-or.htm
2/24/13 http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html
11/25/12 http://cmpassocregulationblog.blogspotcom/2012/11/contraction-of-united-states-real.html
Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-1. The number unemployed, not seasonally adjusted, increased from 2.31 million in Mar 2012 to 2.37 million in Mar 2013, or 2.6 percent, while the unemployment rate increased from 5.5 percent in Mar 2012 to 5.6 percent in Mar 2013. The number of persons in employment, not seasonally adjusted, increased from 39.63 million in Mar 2012 to 39.99 million in Mar 2013, or 0.9 percent, while the employment rate increased from 62.9 percent in Mar 2012 to 63.5 percent in Mar 2013. The number unemployed, seasonally adjusted, was unchanged from 2.29 million in Feb 2013 to 2.29 million in Mar 2013, while the unemployment rate was unchanged from 5.4 percent in Feb 2013 to 5.4 percent in Mar 2013. The number of persons in employment, seasonally adjusted, increased from 40.19 million in Feb 2013 to 40.23 million in Mar 2013, or 0.1 percent.
Table VE-1, Germany, Unemployment Labor Force Survey
| Mar 2013 | Feb 2013 | Mar 2012 | |
| NSA | |||
| Number | 2.37 ∆% Mar 2013 /Feb 2013: -6.7 ∆% Mar 2013/Mar 2012: 2.6 | 2.54 | 2.31 |
| % Rate Unemployed | 5.6 | 6.0 | 5.5 |
| Persons in Employment Millions | 39.99 ∆% Mar 2013/Feb 2013: 0.4 ∆% Mar 2013/Mar 2012:0.9 | 39.84 | 39.63 |
| Employment Rate | 63.5 | 63.3 | 62.9 |
| SA | |||
| Number | 2.29 ∆% Mar 2013/Feb 2013: 0.0 ∆% Mar 2013/Mar 2012: –1.7 | 2.29 | 2.33 |
| % Rate Unemployed | 5.4 | 5.4 | 5.5 |
| Persons in Employment Millions | 40.23 ∆% Mar 2013/Feb 2013: 0.1 ∆% Mar 2013/Mar 2012: 1.0 | 40.19 | 39.82 |
NSA: not seasonally adjusted; SA: seasonally adjusted
Source: Statistisches Bundesamt https://www.destatis.de/EN/PressServices/Press/pr/2013/04/PE13_151_132.html;jsessionid=C2E0D0B673125D2CF8D61632C11F0CFD.cae2
The unemployment rate in Germany as percent of the labor force in Table VE-2 stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Feb 2013 and 7.1 percent in Apr 2013. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.
Table VE-2, Germany, Unemployment Rate in Percent of Labor Force
| Percent of Labor Force | |
| Apr 2013 | 7.1 |
| Feb | 7.3 |
| Jan | 7.4 |
| Dec 2012 | 6.7 |
| Nov | 6.5 |
| Oct | 6.5 |
| Sep | 6.5 |
| Aug | 6.8 |
| Jul | 6.8 |
| Jun | 6.6 |
| May | 6.7 |
| Apr | 7.0 |
| Mar | 7.2 |
| Feb | 7.4 |
| Jan | 7.3 |
| Dec 2011 | 6.6 |
| Nov | 6.4 |
| Oct | 6.5 |
| Sep | 6.6 |
| Aug | 7.0 |
| Jul | 7.0 |
| Jun | 6.9 |
| May | 7.0 |
| Apr | 7.3 |
| Mar | 7.6 |
| Feb | 7.9 |
| Jan | 7.9 |
| Dec 2010 | 7.1 |
| Dec 2009 | 7.8 |
| Dec 2008 | 7.4 |
| Dec 2007 | 8.1 |
| Dec 2006 | 9.6 |
| Dec 2005 | 11.1 |
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-1 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, 6.6 percent in Jun 2012, 6.8 percent in Jul and Aug 2012 and 6.5 percent from Sep to Nov 2012, increasing to 6.7 percent in Dec 2012 and 7.1 percent in Mar 2013.
Chart VE-1, Germany, Unemployment Rate, Unadjusted, Percent
Source: Statistisches Bundesamt Deutschland
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Retail sales in Germany adjusted for inflation are provided in Table VE-3. There have been sharp fluctuations in monthly and 12 months percentage changes. Retail sales decreased 0.3 percent in Mar 2013 and fell 2.7 percent in 12 months. Retail sales rebounded in Jan 2013 with monthly increase of 3.1 percent and 2.6 percent in 12 months.
Table VE-3, Retail Sales in Germany Adjusted for Inflation
| 12-Month ∆% NSA | Month ∆% SA and Calendar Adjusted | |
| Mar 2013 | -2.7 | -0.3 |
| Feb | -2.6 | -0.6 |
| Jan | 2.6 | 3.1 |
| Dec 2012 | -3.4 | -2.0 |
| Nov | 0.4 | 0.9 |
| Oct | 1.6 | -0.6 |
| Sep | -3.5 | 0.0 |
| Aug | -0.4 | 0.1 |
| Jul | -1.1 | -1.1 |
| Jun | 4.6 | 0.0 |
| May | -0.7 | 0.6 |
| Apr | -4.7 | -0.4 |
| Mar | 4.2 | 1.4 |
| Feb | 2.4 | 0.1 |
| Jan | 1.9 | -1.7 |
| Dec 2011 | 0.8 | 0.9 |
| Nov | 0.9 | -0.6 |
| Oct | -0.4 | 0.2 |
| Sep | 1.2 | 0.1 |
| Aug | 3.4 | -0.5 |
| Jul | -2.4 | 0.4 |
| Jun | -2.0 | 2.0 |
| May | 4.5 | -1.4 |
| Apr | 4.8 | 1.0 |
| Mar | -2.9 | -2.2 |
| Feb | 3.0 | 0.6 |
| Jan | 3.3 | 0.9 |
| Dec 2010 | -0.2 | 0.3 |
| Dec 2009 | -2.2 | |
| Dec 2008 | 3.4 | |
| Dec 2007 | -6.2 | |
| Dec 2006 | 1.3 |
Source: Statistisches Bundesamt Deutschland (Destatis
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-2 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2009 to 2013. There appear to be fluctuations without trend.
Chart VE-2, Germany, Turnover in Retail Trade at Constant Prices 2005=100
Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-3 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at current prices from 2005 to 2013. There are also sharp fluctuations but without trend.
Chart VE-3, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2005=100
Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
© Carlos M. Pelaez, 2010, 2011, 2012, 2013
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