Tapering Quantitative Easing Policy and Peaking Valuations of Risk Financial Assets, Mediocre United States Economic Growth, Stagnating Real Disposable Income, Financial Repression, Swelling Undistributed Corporate Profits, United States Housing Collapse, World Economic Slowdown and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013
Executive Summary
I Mediocre and Decelerating United States Economic Growth
IA Mediocre and Decelerating United States Economic Growth
IA1 Contracting Real Private Fixed Investment
IA2 Swelling Undistributed Corporate Profits
II Stagnating Real Disposable Income and Consumption Expenditures
IIA1 Stagnating Real Disposable Income and Consumption Expenditures
IIA2 Financial Repression
IIB United States Housing Collapse
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
Unconventional monetary policy of zero interest rates and quantitative easing has been used in
Japan and now in the US. Table IV-7 provides the consumer price index of Japan, with inflation of minus 0.3 percent in 12 months ending in May 2013 and increase of 0.1 percent NSA (not-seasonally-adjusted) in May 2013. Inflation of consumer prices in the first four months of 2012 annualizes at 0.0 percent SA and 3.0 percent NSA. Inflation in Mar-May 2013 not seasonally adjusted annualizes at 2.4 percent. There are negative percentage changes in most of the 12-month rates in 2011 with the exception of Jul and Aug both with 0.2 percent and stability in Sep. All 12-month rates of inflation in the first five months of 2013 are negative. There are ten years of deflation, three of zero inflation and only five of inflation in the annual rate of inflation from 1995 to 2012. This experience is entirely different from that of the US that shows long-term inflation. There is only one annual negative change of the CPI all items of the US in Table IV-7, minus 0.4 percent in 2009 but following 3.8 percent in 2008 because of carry trades from policy rates moving to zero in 2008 during a global contraction that were reversed because of risk aversion in late 2008 and early 2009, causing decreasing commodity prices. Both the US and Japan experienced high rates of inflation during the US Great Inflation of the 1970s (see http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html and Appendix I The Great Inflation; see Taylor 1993, 1997, 1998LB, 1999, 2012FP, 2012Mar27, 2012Mar28, 2012JMCB and http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html). It is difficult to justify unconventional monetary policy because of risks of deflation similar to that experienced in Japan. Fear of deflation as had occurred during the Great Depression and in Japan was used as an argument for the first round of unconventional monetary policy with 1 percent interest rates from Jun 2003 to Jun 2004 and quantitative easing in the form of withdrawal of supply of 30-year securities by suspension of the auction of 30-year Treasury bonds with the intention of reducing mortgage rates. For fear of deflation, see Pelaez and Pelaez, International Financial Architecture (2005), 18-28, and Pelaez and Pelaez, The Global Recession Risk (2007), 83-95. The financial crisis and global recession were caused by interest rate and housing subsidies and affordability policies that encouraged high leverage and risks, low liquidity and unsound credit (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 157-66, Regulation of Banks and Finance (2009b), 217-27, International Financial Architecture (2005), 15-18, The Global Recession Risk (2007), 221-5, Globalization and the State Vol. II (2008b), 197-213, Government Intervention in Globalization (2008c), 182-4). Several past comments of this blog elaborate on these arguments, among which: http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html http://cmpassocregulationblog.blogspot.com/2011/01/professor-mckinnons-bubble-economy.html http://cmpassocregulationblog.blogspot.com/2011/01/world-inflation-quantitative-easing.html http://cmpassocregulationblog.blogspot.com/2011/01/treasury-yields-valuation-of-risk.html http://cmpassocregulationblog.blogspot.com/2010/11/quantitative-easing-theory-evidence-and.html http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.html
Table IV-7, Japan, Consumer Price Index, All Items ∆%
| ∆% Month NSA | ∆% 12-Month NSA | |
| May 2013 | 0.1 | -0.3 |
| Apr | 0.3 | -0.7 |
| Mar | 0.2 | -0.9 |
| Feb | -0.2 | -0.7 |
| Jan | 0.0 | -0.3 |
| Dec 2012 | 0.0 | -0.1 |
| Nov | -0.4 | -0.2 |
| Oct | 0.0 | -0.4 |
| Sep | 0.1 | -0.3 |
| Aug | 0.1 | -0.4 |
| Jul | -0.3 | -0.4 |
| Jun | -0.5 | -0.2 |
| May | -0.3 | 0.2 |
| Apr | 0.1 | 0.4 |
| Mar | 0.5 | 0.5 |
| Feb | 0.2 | 0.3 |
| Jan | 0.2 | 0.1 |
| Dec 2011 | 0.0 | -0.2 |
| Nov | -0.6 | -0.5 |
| Oct | 0.1 | -0.2 |
| Sep | 0.0 | 0.0 |
| Aug | 0.2 | 0.2 |
| Jul | 0.0 | 0.2 |
| Jun | -0.2 | -0.4 |
| May | 0.0 | -0.4 |
| Apr | 0.1 | -0.5 |
| Mar | 0.3 | -0.5 |
| Feb | 0.0 | -0.5 |
| Jan | -0.1 | -0.6 |
| Dec 2010 | –0.3 | 0.0 |
| CPI All Items USA | CPI All Items Japan | |
| Annual | ||
| 2012 | 2.1 | 0.0 |
| 2011 | 3.2 | -0.3 |
| 2010 | 1.6 | -0.7 |
| 2009 | -0.4 | -1.4 |
| 2008 | 3.8 | 1.4 |
| 2007 | 2.8 | 0.0 |
| 2006 | 3.2 | 0.3 |
| 2005 | 3.4 | -0.3 |
| 2004 | 2.7 | 0.0 |
| 2003 | 2.3 | -0.3 |
| 2002 | 1.6 | -0.9 |
| 2001 | 2.8 | -0.7 |
| 2000 | 3.4 | -0.7 |
| 1999 | 2.2 | -0.3 |
| 1998 | 1.6 | 0.6 |
| 1997 | 2.3 | 1.8 |
| 1996 | 3.0 | 0.1 |
| 1995 | 2.8 | -0.1 |
| 1994 | 2.6 | 0.7 |
| 1993 | 3.0 | 1.3 |
| 1992 | 3.0 | 1.6 |
| 1991 | 4.2 | 3.3 |
| 1990 | 5.4 | 3.1 |
| 1989 | 4.8 | 2.3 |
| 1988 | 4.1 | 0.7 |
| 1987 | 3.6 | 0.1 |
| 1986 | 1.9 | 0.6 |
| 1985 | 3.6 | 2.0 |
| 1984 | 4.3 | 2.3 |
| 1983 | 3.2 | 1.9 |
| 1982 | 6.2 | 2.8 |
| 1981 | 10.3 | 4.9 |
| 1980 | 13.5 | 7.7 |
| 1979 | 11.3 | 3.7 |
| 1978 | 7.6 | 4.2 |
| 1977 | 6.5 | 8.1 |
| 1976 | 5.8 | 9.4 |
| 1975 | 9.1 | 11.7 |
| 1974 | 11.0 | 23.2 |
| 1973 | 6.2 | 11.7 |
| 1972 | 3.2 | 4.9 |
| 1971 | 4.4 | 6.3 |
Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications
http://www.stat.go.jp/english/data/cpi/index.htm
Japan provides the consumer price index for all items and regions of Japan monthly from 1971 to 2012 with 2010=100, shown in Chart IV-14. There was inflation in Japan during the 1970s and 1980s similar to other countries and regions. The index shows stability after the 1990s with sporadic cases of deflation. Slower growth with sporadic inflation has been characterized as a “lost decade” in Japan (see Pelaez and Pelaez, The Global Recession Risk (2007), 82-115).
Chart IV-14, Japan, Consumer Price Index All Items, All Japan, Index 2010=100, Monthly, 1970-2012
Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications http://www.stat.go.jp/english/data/cpi/index.htm
Chart IV-15 provides the US consumer price index NSA from 1914 to 2013. The dominating characteristic is the increase in slope during the Great Inflation from the middle of the 1960s through the 1970s. There is long-term inflation in the US and no evidence of deflation risks.
Chart IV-15, US, Consumer Price Index, All Items, NSA, 1914-2013
Source: US Bureau of Labor Statistics
Chart IV-16 of the Statistics Bureau of the Ministry of Internal Affairs and Communications of Japan provides 12-month percentage changes of the consumer price index for all items and regions of Japan monthly from 1971 to 2012. Japan experienced the same inflation waves of the United States during the Great Inflation of the 1970s followed by similar low inflation after the inflation-control increase of interest rates in the early 1980s. Numerous cases of negative inflation or deflation are observed after the 1990s.
Chart IV-16, Japan, CPI All Items, All Japan, 12-Month ∆%, 1971-2012
Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications
http://www.stat.go.jp/english/data/cpi/index.htm
Chart IV-17 provides 12-month percentage changes of the US consumer price index from 1914 to 2013. There are actually three waves of inflation in the second half of the 1960s, in the mid 1970s and again in the late 1970s. Table IV-5 provides similar inflation waves in the economy of Japan with 11.8 percent in 1973, 23.1 percent in 1974 and 11.8 percent in 1975. The Great Inflation of the 1970s is analyzed in various comments of this blog (http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html and in Appendix I The Great Inflation; see Taylor 1993, 1997, 1998LB, 1999, 2012FP, 2012Mar27, 2012Mar28, 2012JMCB and http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html). Inflation rates then stabilized in the US in a range with only two episodes above 5 percent. There are isolated cases of deflation concentrated over extended periods only during the 1930s. There is no case in United States economic history for unconventional monetary policy because of fear of deflation. There are cases of long-term deflation without lost decades or depressions.
Delfim Netto (1958) partly reprinted in Pelaez (1973) conducted two classical nonparametric tests (Mann 1945, Wallis and Moore 1941; see Kendall and Stuart 1968) with coffee-price data in the period of free markets from 1857 to 1906 with the following conclusions (Pelaez, 1976a, 280):
“First, the null hypothesis of no trend was accepted with high confidence; secondly, the null hypothesis of no oscillation was rejected also with high confidence. Consequently, in the nineteenth century international prices of coffee fluctuated but without long-run trend. This statistical fact refutes the extreme argument of structural weakness of the coffee trade.”
The conventional theory that the terms of trade of Brazil deteriorated over the long term is without reality (Pelaez 1976a, 280-281):
“Moreover, physical exports of coffee by Brazil increased at the high average rate of 3.5 per cent per year. Brazil's exchange receipts from coffee-exporting in sterling increased at the average rate of 3.5 per cent per year and receipts in domestic currency at 4.5 per cent per year. Great Britain supplied nearly all the imports of the coffee economy. In the period of the free coffee market, British export prices declined at the rate of 0.5 per cent per year. Thus, the income terms of trade of the coffee economy improved at the relatively satisfactory average rate of 4.0 per cent per year. This is only a lower bound of the rate of improvement of the terms of trade. While the quality of coffee remained relatively constant, the quality of manufactured products improved significantly during the fifty-year period considered. The trade data and the non-parametric tests refute conclusively the long-run hypothesis. The valid historical fact is that the tropical export economy of Brazil experienced an opportunity of absorbing rapidly increasing quantities of manufactures from the "workshop" countries. Therefore, the coffee trade constituted a golden opportunity for modernization in nineteenth-century Brazil.”
Imlah (1958) provides decline of British export prices at 0.5 percent in the nineteenth century and there were no lost decades, depressions or unconventional monetary policies in the highly dynamic economy of England that provided the world’s growth impulse. The experience of the United Kingdom with deflation and economic growth is relevant and rich. Yearly percentage changes of the composite index of prices of the United Kingdom of O’Donoghue and Goulding (2004) provide strong evidence. There are 73 declines of inflation in the 145 years from 1751 to 1896. Prices declined in 50.3 percent of 145 years. Some price declines were quite sharp and many occurred over several years. O’Donoghue and Goulding (2004) also provide inflation data for the UK from 1929 to 1934. Deflation was much sharper in continuous years in earlier periods than during the Great Depression. The United Kingdom could not have led the world in modern economic growth if there were meaningful causality from deflation to depression.
Chart IV-17, US, Consumer Price Index, All Items, NSA, 12-Month Percentage Change 1914-2013
Source: US Bureau of Labor Statistics
Chart IV-18 provides the US consumer price index excluding food and energy from 1957 (when it first becomes available) to 2013. There is long-term inflation in the US without episodes of deflation that would justify symmetric inflation targets to increase inflation from low levels.
Chart IV-18, US, Consumer Price Index Excluding Food and Energy, NSA, 1957-2013
Source: US Bureau of Labor Statistics
Chart IV-19 provides 12-month percentage changes of the consumer price index excluding food and energy from 1958 (when it first becomes available) to 2013. There are three waves of inflation in the 1970s during the Great Inflation. There is no episode of deflation.
Chart IV-19, US, Consumer Price Index Excluding Food and Energy, 12-Month Percentage Change, NSA, 1958-2013
Source: US Bureau of Labor Statistics
More detail on the consumer price index of Japan in Apr is in Table IV-8. Items rich in commodities, such as 4.6 percent in fuel, light and water charges with increase of 2.2 percent in the month of May, have driven inflation in the 12 months ending in May 2013. There is similar behavior in the preliminary estimate for Jun for the Ku Area of Tokyo with increase of 1.6 percent of fuel, light and water charges and increase of 8.6 percent in 12 months. There is 12-month increase of 0.5 percent of CPI transport and communications and 0.0 percent of CPI excluding fresh food in May 2013. There is mild deflation in the CPI excluding food, alcoholic beverages and energy with minus 0.4 percent in the 12 months ending in May 2013 and increase of 0.1 percent in May 2013. The CPI excluding imputed rent increased 0.2 percent in May 2013 and fell 0.3 percent in 12 months. The all-items CPI estimate for Jun 2013 of the Ku-Area of Tokyo shows decrease of 0.1 percent in May 2013 and 0.0 percent in 12 months.
Table IV-8, Japan, Consumer Price Index, ∆%
| 2013 | May 2013/May 2013 ∆% | Year ∆% |
| CPI All Items | 0.1 | -0.3 |
| CPI Excluding Fresh Food | 0.2 | 0.0 |
| CPI Excluding Food, Alcoholic Beverages and Energy | 0.1 | -0.4 |
| CPI Goods | 0.2 | -0.6 |
| CPI Services | 0.0 | 0.0 |
| CPI Excluding Imputed Rent | 0.2 | -0.3 |
| CPI Fuel, Light, Water Charges | 2.2 | 4.6 |
| CPI Transport & Communications | 0.0 | 0.5 |
| CPI Ku-Area Tokyo All Items | -0.1 | 0.0 |
| Fuel, Light, Water Charges Ku Area Tokyo | 1.6 | 8.6 |
Note: Ku-area Tokyo CPI data preliminary for Jun 2013
Sources: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications
http://www.stat.go.jp/english/data/cpi/index.htm
There are waves of inflation of producer prices in France as everywhere in the world economy (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html), as shown in Table IV-9. There was a first wave of sharply increasing inflation in the first four months of 2011 originating in the surge of commodity prices driven by carry trades from zero interest rates to commodity futures risk positions. Producer price inflation in the first four months of 2011 was at the annual equivalent rate of 10.4 percent. In the second wave, producer prices fell 0.2 percent in May and another 0.1 percent in Jun for annual equivalent inflation in May-Jun 2011 of minus 1.8 percent. In the third wave from Jul to Sep 2011, annual equivalent producer price inflation was 3.7 percent. In the fourth wave Oct-Dec 2011, annual equivalent producer price inflation was 2.8 percent. In the fifth wave Jan-Mar 2012, average annual inflation rose to 6.2 percent during carry trades from zero interest rates to commodity futures. In the sixth wave in Apr-Jun 2012, annual equivalent inflation fell at the rate of 5.1 percent during unwinding of carry trades because of increasing risk aversion. In the seventh wave, carry trades returned under more relaxed risk aversion with producer price inflation in France at 8.7 percent in annual equivalent in Jul-Oct 2012. In the eighth wave, return of risk aversion caused unwinding carry trade and annual equivalent inflation of minus 4.1 percent in Nov-Dec 2012. In the ninth wave, inflation returned with annual equivalent 3.7 percent in Jan-Mar 2013. In the tenth wave, annual equivalent inflation was minus 14.0 percent in Apr-May 2013. The bottom part of Table IV-12 shows producer price inflation at 3.2 percent in the 12 months ending in Dec 2005 and again at 4.6 percent in the 12 months ending in Dec 2007. Producer prices fell in 2009 during the global contraction and decline of commodity prices but returned at 4.3 percent in the 12 months ending in Dec 2010.
Table IV-9, France, Producer Price Index for the French Market, ∆%
| Month | 12 Months | |
| May 2013 | -1.2 | -0.2 |
| Apr | -1.3 | 0.2 |
| AE ∆% Apr-May | -14.0 | |
| Mar | 0.0 | 1.6 |
| Feb | 0.5 | 2.0 |
| Jan | 0.4 | 2.1 |
| AE ∆% Jan-Mar | 3.7 | |
| Dec 2012 | -0.5 | 2.2 |
| Nov | -0.2 | 2.4 |
| AE ∆% Nov-Dec | -4.1 | |
| Oct | 0.5 | 3.0 |
| Sep | 0.3 | 3.0 |
| Aug | 1.4 | 3.0 |
| Jul | 0.6 | 1.6 |
| AE ∆% Jul-Oct | 8.7 | |
| Jun | -0.6 | 1.6 |
| May | -0.8 | 2.1 |
| Apr | 0.1 | 2.8 |
| AE ∆% Apr-Jun | -5.1 | |
| Mar | 0.5 | 3.6 |
| Feb | 0.5 | 4.0 |
| Jan | 0.5 | 4.2 |
| AE ∆% Jan-Mar | 6.2 | |
| Dec 2011 | -0.2 | 4.5 |
| Nov | 0.4 | 5.2 |
| Oct | 0.5 | 5.3 |
| AE ∆% Oct-Dec | 2.8 | |
| Sep | 0.3 | 5.4 |
| Aug | 0.0 | 5.6 |
| Jul | 0.6 | 5.7 |
| AE ∆% Jul-Sep | 3.7 | |
| Jun | -0.1 | 5.4 |
| May | -0.2 | 5.7 |
| AE ∆% May-Jun | -1.8 | |
| Apr | 1.0 | 6.0 |
| Mar | 0.8 | 5.7 |
| Feb | 0.7 | 5.2 |
| Jan | 0.8 | 4.6 |
| AE ∆% Jan-Apr | 10.4 | |
| Dec 2010 | 4.3 | |
| Dec 2009 | -2.9 | |
| Dec 2008 | 0.8 | |
| Dec 2007 | 4.6 | |
| Dec 2006 | 2.6 | |
| Dec 2005 | 3.2 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=25&date=20130628
Chart IV-20 of the Institut National de la Statistique et des Études Économiques of France provides the producer price index for the internal market in France from Jan 1999 to Apr 2013. The index also captures the low price environment of the early 2000s that was used as an argument of fear of deflation. For fear of deflation, see Pelaez and Pelaez, International Financial Architecture (2005), 18-28, and Pelaez and Pelaez, The Global Recession Risk (2007), 83-95. During the first round of unconventional monetary policy of low interest rates and withdrawal of duration in bond markets by suspension of auctions of the 30-year Treasury bond, inflation accelerated from 2004 to 2007. When policy interest rates were moved toward zero in 2008, carry trades during a global recession caused sharp increases in commodity prices and price indexes worldwide. Inflation collapsed in the risk panic from the latter part of 2008 into the first part of 2009. Carry trades induced by zero interest rates have caused a trend of inflation with oscillations during period of risk aversion (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html).
Chart IV-20, France, Producer Prices for the Internal Market, Jan 1999-May 2013, 2010=100
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=25&date=20130628
France’s producer price index for the domestic market is shown in Table IV-10 for May 2013. The segment of prices of coke and refined petroleum decreased 1.5 percent in May 2013 and decreased 7.4 percent in 12 months. Manufacturing prices, with the highest weight in the index, decreased 0.4 percent in May and fell 0.2 percent in 12 months. Mining prices decreased 4.0 percent in May and decreased 0.1 percent in 12 months. Waves of inflation originating in carry trades from unconventional monetary policy of zero interest rates (http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html) tend to deteriorate sales prices of productive activities relative to prices of inputs and commodities with adverse impact on operational margins and thus on production, investment and hiring.
Table IV-10, France, Producer Price Index for the Domestic Market, %
| May 2013 | Weight | Month ∆% | 12 Months ∆% |
| Total | 1000 | -1.2 | -0.1 |
| Mining | 226 | -4.0 | -0.1 |
| Mfg | 774 | --0.4 | -0.2 |
| Food Products, Beverages, Tobacco | 196 | 0.1 | 3.4 |
| Coke and Refined Petroleum | 49 | -1.5 | -7.4 |
| Electrical, Electronic | 53 | -0.4 | 0.1 |
| Transport | 80 | -0.1 | -0.7 |
| Other Mfg | 396 | -0.5 | -0.9 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=25&date=20130628
Chart IV-21 of the Institut National de la Statistique et des Études Économiques of France provides the behavior of the producer price index of France for the various segments: import prices, foreign markets, domestic market and all markets. All the components rose to the peak in 2008 driven by carry trades from zero interest rates of unconventional monetary policy that was of such an impulse as to drive increases in commodity prices during the global recession. Prices collapsed with the flight out of financial risk assets such as commodity positions to government obligations. Commodity price increases returned with zero interest rates and subdued risk aversion. The shock of confidence of the current European sovereign risk moderated exposures to financial risk that influenced the flatter curve of France’s producer prices followed by another mild trend of increase and moderation in Dec 2011 and then renewed inflation in the first quarter of 2012 with a new pause in Apr 2012, decline in May-Jun 2012, the jump in Jul-Oct 2012 and the decline in Nov-Dec 2012 followed by increase in Jan-Feb 2013. Prices stabilized in Mar 2013 and collapsed in Apr-May 2013.
Chart IV-21, France, Producer Price Index (PPI)
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=25&date=20130628
Italy’s producer price inflation in Table IV-11 also has the same waves in 2011 and into 2012-2013 observed for many countries (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.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. In the eleventh wave, industrial prices fell at annual equivalent 3.5 percent in Apr-May 2013.
Table IV-11, Italy, Industrial Prices, Internal Market
| Month ∆% | 12-Month ∆% | |
| May 2013 | -0.1 | -1.1 |
| Apr | -0.5 | -1.1 |
| AE ∆% Apr-May | -3.5 | |
| Mar | 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/94809
Chart IV-21 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. Inflation turned negative in Apr-May 2013.
Chart IV-22, 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 in Table IV-12. Energy prices decreased 0.4 percent in May 2013 and fell 4.8 percent in 12 months. Producer-price inflation is nil for most components in the month of Apr 2013 with the exception of 0.1 percent for intermediate goods and 0.1 percent for the index excluding energy. There is higher inflation in 12 months of 1.7 percent for nondurable goods than 0.1 percent for durable goods.
Table IV-12, Italy, Industrial Prices, Internal Market, ∆%
| May 2013/ | May 2013/ | |
| Total | -0.1 | -1.1 |
| Consumer Goods | -0.1 | 1.5 |
| Durable Goods | -0.2 | 0.1 |
| Nondurable | 0.0 | 1.7 |
| Capital Goods | 0.0 | 0.6 |
| Intermediate | 0.1 | -0.4 |
| Energy | -0.4 | -4.8 |
| Total Excluding Energy | 0.1 | 0.4 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/94809
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 Jun 2013 was 1.7 percent. There are worldwide shocks to economies 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/2013/06/paring-quantitative-easing-policy-and.html).
Table IV-13, Italy, Consumer Price Index
| Month | 12 Months | |
| Jun 2013 | 0.3 | 1.2 |
| May | 0.0 | 1.1 |
| Apr | 0.0 | 1.1 |
| Mar | 0.2 | 1.6 |
| Feb | 0.1 | 1.9 |
| Jan | 0.2 | 2.2 |
| Dec 2012 | 0.2 | 2.3 |
| AE ∆% Dec 2012-May 2013 | 1.7 | |
| 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/94782
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 Jun 2013 was 0.3 percent and 1.2 percent in 12 months. Inflation of goods was minus 0.2 percent in Jun 2013 and 0.9 percent in 12 months. Prices of durable goods decreased 0.5 percent in Jun and decreased 0.8 percent in 12 months, as typical in most countries. Prices of energy increased 0.3 percent in Jun and decreased 0.5 percent in 12 months. Food prices increased 0.6 percent in Jun and increased 2.8 percent in 12 months. Prices of services increased 0.3 percent in Jun and rose 1.6 percent in 12 months. Transport prices, also influenced by commodity prices, increased 0.7 percent in Jun and increased 3.0 percent in 12 months. Carry trades from zero interest rates to positions in commodity futures cause increases in commodity prices. Waves of inflation originate in periods when there is no risk aversion and commodity prices decline during periods of risk aversion (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html).
Table IV-14, Italy, Consumer Price Index and Segments, Month and 12-Month ∆%
| Jun 2013 | Weights | Month ∆% | 12-Month ∆% |
| General Index | 1,000,000 | 0.3 | 1.2 |
| I Goods | 559,402 | 0.2 | 0.9 |
| Food | 168,499 | 0.6 | 2.8 |
| Energy | 94,758 | 0.3 | -0.5 |
| Durable | 89,934 | -0.5 | -0.8 |
| Nondurable | 71,031 | 0.0 | 1.4 |
| II Services | 440,598 | 0.3 | 1.6 |
| Housing | 71,158 | 0.2 | 2.1 |
| Communications | 20,227 | -0.3 | -3.4 |
| Transport | 81,266 | 0.7 | 3.0 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/94782
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 1.1 percent in the 12 months ending in Apr-May 2013 and 1.2 percent in Jun 2013.
Chart, IV-23, 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 from IQ2012 to IQ2013 available now for all countries. Growth is weak throughout most of the world. Japan’s GDP increased 1.2 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 0.6 percent, which is much lower than 4.8 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 3.6 percent and increased 0.2 percent relative to a year earlier. Japan’s GDP grew 0.3 percent in IVQ2012 at the SAAR of 1.2 percent and increased 0.4 percent relative to a year earlier. Japan grew 1.0 percent in IQ2013 at the SAAR of 4.1 percent and 0.4 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 decreased 0.1 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.2 percent IIQ2012 and fell 0.5 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.1 percent and declined 0.7 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.6 percent relative to the prior quarter and fell 1.0 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.2 percent and decreased 1.1 percent relative to a year earlier. Germany’s GDP increased 0.6 percent in IQ2012 and 1.8 percent relative to a year earlier. In IIQ2012, Germany’s GDP increased 0.2 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 0.7 percent in IVQ2012 and increased 0.0 percent relative to a year earlier. In IQ2013, Germany’s GDP increased 0.1 percent and fell 1.4 percent relative to a year earlier. Growth of US GDP in IQ2012 was 0.5 percent, at SAAR of 2.0 percent and higher by 2.4 percent relative to IQ2011. US GDP increased 0.5 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 1.8 percent SAAR, 0.4 percent relative to the prior quarter and 1.6 percent relative to the same quarter in 2013 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/05/recovery-without-hiring-collapse-of.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 seven consecutive quarters from IIIQ2011 to IQ2013. Italy’s GDP fell 1.0 percent in IQ2012 and declined 1.7 percent relative to IQ2011. Italy’s GDP fell 0.6 percent in IIQ2012 and declined 2.5 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.3 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. In IQ2013, Italy’s GDP contracted 0.6 percent and fell 2.3 percent relative to a year earlier. France’s GDP changed 0.0 percent in IQ2012 and increased 0.3 percent relative to a year earlier. France’s GDP decreased 0.2 percent in IIQ2012 and increased 0.1 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.1 percent and increased 0.0 percent relative to a year earlier. France’s GDP fell 0.2 percent in IVQ2012 and declined 0.3 percent relative to a year earlier. In IQ2013, France GDP fell 0.2 percent and declined 0.4 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: 1.2 SAAR: 4.8 | 3.4 |
| China | 1.6 | 8.1 |
| Euro Area | -0.1 | -0.1 |
| Germany | 0.6 | 1.8 |
| France | 0.0 | 0.3 |
| Italy | -1.0 | -1.7 |
| 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 | -0.5 |
| Germany | 0.2 | 0.5 1.0 CA |
| France | -0.2 | 0.1 |
| Italy | -0.6 | -2.5 |
| United Kingdom | -0.4 | 0.0 |
| IIIQ2012/ IIQ2012 | IIIQ2012/ IIIQ2011 | |
| United States | QOQ: 0.8 | 2.6 |
| Japan | QOQ: –0.9 | 0.2 |
| China | 2.1 | 7.4 |
| Euro Area | -0.1 | -0.7 |
| Germany | 0.2 | 0.4 |
| France | 0.1 | 0.0 |
| Italy | -0.3 | -2.6 |
| United Kingdom | 0.9 | 0.4 |
| IVQ2012/IIIQ2012 | IVQ2012/IVQ2011 | |
| United States | QOQ: 0.1 | 1.7 |
| Japan | QOQ: 0.3 SAAR: 1.2 | 0.4 |
| China | 2.0 | 7.9 |
| Euro Area | -0.6 | -1.0 |
| Germany | -0.7 | 0.0 |
| France | -0.2 | -0.3 |
| Italy | -0.9 | -2.8 |
| United Kingdom | -0.3 | 0.2 |
| IQ2013/IVQ2012 | IQ2013/IQ2012 | |
| United States | QOQ: 0.4 | 1.6 |
| Japan | QOQ: 1.0 SAAR: 4.1 | 0.4 |
| China | 1.6 | 7.7 |
| Euro Area | -0.2 | -1.1 |
| Germany | 0.1 | -1.4 |
| France | -0.2 | -0.4 |
| Italy | -0.6 | -2.4 |
| 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 at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html 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 and earlier 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 May 2013, Japan’s exports grew 10.1 percent in 12 months while imports increased 10.0 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 Apr 2013, China exports increased 14.7 percent relative to a year earlier and imports 16.8 percent. Germany’s exports increased 1.9 percent in the month of Apr 2013 and increased 8.5 percent in the 12 months ending in Apr 2013 while imports increased 2.2 percent in the month of Apr and increased 5.2 percent in the 12 months ending in Apr. Net trade contributed 0.4 percentage points to growth of GDP in IQ2012, contributed 1.3 percentage points in IIQ2012, contributed 1.4 percentage points in IIIQ2012, contributed 0.7 percentage points in IVQ2012 and contributed 1.0 percentage points in 2012. Net trade deducted 0.1 percentage points from Germany’s GDP growth. 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. In IQ2013, net trade deducted 0.1 percentage points from UK’s GDP growth. France’s exports increased 4.1 percent in Apr 2013 while imports increased 3.8 percent and net trade added 0.1 percentage points to GDP growth in IIQ2012, adding 0.1 percentage points in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.2 percentage points from France’s GDP growth in IQ2013. US exports decreased 1.2 percent in Apr 2013 and goods exports increased 0.8 percent in Jan-Apr 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 0.09 percentage points from US GDP growth. US imports increased 2.4 percent in Apr 2013 and goods imports decreased 1.9 percent in Jan-Apr 2013 relative to a year earlier. Industrial production changed 0.0 percent in May 2013 after falling 0.4 percent in Apr 2013 (as shown in Table II-1 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html) with all data seasonally adjusted. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):
“Industrial production was unchanged in May after having decreased 0.4 percent in April. In May, manufacturing production rose 0.1 percent after falling in each of the previous two months, and the output at mines increased 0.7 percent. The gains in manufacturing and mining were offset by a decrease of 1.8 percent in the output of utilities. At 98.7 percent of its 2007 average, total industrial production in May was 1.6 percent above its year-earlier level.”
In the six months ending in May 2013, United States national industrial production accumulated increase of 0.5 percent at the annual equivalent rate of 1.0 percent, which is lower than growth of percent in 12 months. Excluding growth of 0.7 in Feb 2013, growth in the remaining five months from Dec 2012 to May 2013 accumulated to minus 0.2 percent or minus 0.5 percent annual equivalent. Industrial production stagnated in three of the past six months and fell in one. Business equipment accumulated growth of 0.9 percent in the six months from Dec 2012 to May 2013 at the annual equivalent rate of 1.8 percent, which is much lower than growth of 3.3 percent in 12 months. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “The rate of capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent, a rate 0.2 percentage point below its level of a year earlier and 2.6 percentage points below its long-run (1972–2012) average.” United States industry is apparently decelerating. Manufacturing increased 0.1 percent in May 2013 after decreasing 0.4 percent in Apr 2013 seasonally adjusted, increasing 1.7 percent not seasonally adjusted in 12 months. Manufacturing grew cumulatively 0.9 percent in the six months ending in May 2013 or at the annual equivalent rate of 1.8 percent. Excluding the increase of 0.9 percent in Dec 2012 perhaps partly because of recovery from hurricane Sandy, manufacturing accumulated growth of 0.0 percent from Jan 2013 to May 2013 or at the annual equivalent rate of 0.0 percent. Manufacturing fell 7.3 percent from the peak in Jun 2007 to May 2013 and increased 18.6 from the trough in Apr 2008 to May 2013. Manufacturing grew 18.6 percent from the trough in Apr 2009 to Apr 2013. Manufacturing output in May 2013 is 7.3 percent below the peak in Jun 2007. Data do suggest that world trade slowdown is accompanying world economic slowdown.
Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points
| Exports | Exports 12 M ∆% | Imports | Imports 12 M ∆% | |
| USA | 1.2 Apr | 0.8 Jan-Apr | 2.4 Apr | -1.9 Jan-Apr |
| Japan | May 2013 10.1 Apr 2013 3.8 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 | May 2013 10.0 Apr 2013 9.4 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 | 14.7 Apr 10.0 Mar 13 17.3 Jan-Apr 13 | 16.8 Apr 14.1 Mar 13 10.6 Jan-Apr 13 | ||
| Euro Area | 9.1 12-M Apr | 3.2 Jan-Apr | 1.2 12-M Apr | -3.6 Jan-Apr |
| Germany | 1.9 Apr CSA | 8.5 Apr | 2.3Apr CSA | 5.2 Apr |
| France Apr | 4.1 | 4.1 | 3.8 | -0.6 |
| Italy Apr | 0.0 | 4.4 | -0.9 | -2.6 |
| UK | -1.3 Apr | 0.3 Feb-Apr 13 /Feb-Apr 12 | -2.7 Apr | -0.9 Feb-Apr 13/Feb-Apr 12 |
| Net Trade % Points GDP Growth | % Points | |||
| USA | IQ2013 -0.09 IVQ2012 +0.33 IIIQ2012 +0.38 IIQ2012 +0.23 IQ2012 +0.06 | |||
| Japan | -1.1 IIQ2012 -2.8 IIIQ2012 -0.6 IVQ2012 | |||
| Germany | 0.4 IQ2012 1.3 IIQ2012 1.4 IIIQ2012 0.7 IVQ2012 1.0 2012 IQ2013 -0.1 | |||
| France | 0.1 IIQ2012 0.1 IIIQ2012 0.1 IVQ2012 -0.2 IQ2013 | |||
| UK | -0.7 IQ2012 -0.8 IIQ2012 +0.4 IIIQ2012 -0.2 IVQ2012 -0.1 IQ2013 |
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 in Table VB-5 for May 2013. The share of Asia in Japan’s trade is more than one-half for 55.5 percent of exports and 44.1 percent of imports. Within Asia, exports to China are 18.1 percent of total exports and imports from China 21.5 percent of total imports. While exports to China increased 8.3 percent in the 12 months ending in May 2013, imports from China increased 14.6 percent. The largest export market for Japan in May 2013 is the US with share of 18.1 percent of total exports, which is almost equal to that of China, and share of imports from the US of 9.1 percent in total imports. Western Europe has share of 9.4 percent in Japan’s exports and of 9.9 percent in imports. Rates of growth of exports of Japan in May 2013 are relatively high for several countries and regions with growth of 16.3 percent for exports to the US, 13.0 for exports to Mexico, 27.1 percent for exports to Brazil and 23.6 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. Growth rates of imports in the 12 months ending in May 2013 are positive for all trading partners. Imports from Asia increased 9.7 percent in the 12 months ending in May 2013 while imports from China increased 14.6 percent. Data are in millions of yen, which may have 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
| May 2013 | Exports | 12 months ∆% | Imports Millions Yen | 12 months ∆% |
| Total | 5,767,644 | 10.1 | 6,761,560 | 10.0 |
| Asia | 3,199,236 | 11.1 | 2,981,223 | 9.7 |
| China | 1,046,464 | 8.3 | 1,456,429 | 14.6 |
| USA | 1,041,261 | 16.3 | 614,143 | 10.2 |
| Canada | 69,274 | 11.7 | 111,621 | 18.9 |
| Brazil | 46,286 | 27.1 | 107,740 | 24.9 |
| Mexico | 79,321 | 13.0 | 38,810 | 18.3 |
| Western Europe | 540,295 | -4.4 | 668,524 | 8.2 |
| Germany | 135,169 | -6.5 | 179,691 | 6.6 |
| France | 48,414 | 16.6 | 87,713 | 11.9 |
| UK | 88,823 | -0.2 | 60,459 | 10.5 |
| Middle East | 193,783 | 8.0 | 1,230,780 | 11.5 |
| Australia | 149,932 | 23.6 | 449,571 | 7.0 |
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 to 53.1 in May from 51.9 in Apr, indicating expansion at a moderate rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/e1cd4b422e4142abb5b7cc388ed55e52).This index has remained above the contraction territory of 50.0 during 46 consecutive months. The employment index remained unchanged at 50.4 in May relative to 50.4 in Apr with input prices rising at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/e1cd4b422e4142abb5b7cc388ed55e52). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased marginally to 50.6 in May from 50.4 in Apr, which is the fifth consecutive reading above 50 (http://www.markiteconomics.com/Survey/PressRelease.mvc/29fc067a0d4342edb2b0ba45b77a9bee). New export business is near stagnation and total new orders increased from 50.8 in Apr to 51.4 in May. The HSBC Brazil Composite Output Index, compiled by Markit, decreased marginally from 51.5 in Apr to 51.2 in May, indicating moderate increase in private sector activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/de8a2ffef594427487be825fd917927c). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 51.3 in Apr to 51.0 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/de8a2ffef594427487be825fd917927c). Andre Loes, Chief Economist, Brazil, at HSBC, finds slower rate of increase in input prices but moderate growth of the private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/de8a2ffef594427487be825fd917927c). The HSBC Brazil Purchasing Managers’ IndexTM (PMI™) decreased from 50.8 in Apr to 50.4 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/08d8ebe4ce0c4273aab97f69e1210b58). Andre Loes, Chief Economist, Brazil at HSBC, finds that companies may have time to improve profit margins because of increases in prices of output relative to prices of inputs (http://www.markiteconomics.com/Survey/PressRelease.mvc/08d8ebe4ce0c4273aab97f69e1210b58).
VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index™ (PMI™) seasonally adjusted decreased marginally to 52.2 in Jun from 52.3 in May, for the lowest reading in eight months (http://www.markiteconomics.com/Survey/PressRelease.mvc/c96fce226f8442bbb3b355ca5d4f168c).New export orders registered 47.5 in Jun down from 49.8 in Apr, indicating contraction at a faster 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 2.4 percent annual rhythm in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c96fce226f8442bbb3b355ca5d4f168c). The Markit US Manufacturing Purchasing Managers’ Index™ (PMI™) increased to 52.3 in May from 52.1 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/1b6c8066bfa54224abb1ec66117c8e38). The index of new exports orders fell from 51.8 in Apr t0 49.8 in May while total new orders increased from 51.5 in Apr to 53.3 in May. Chris Williamson, Chief Economist at Markit, finds moderate growth in all segments of the index, suggesting risk of standstill (http://www.markiteconomics.com/Survey/PressRelease.mvc/1b6c8066bfa54224abb1ec66117c8e38). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® decreased 1.7 percentage points from 50.7 in Apr to 49.0 in May, which is the lowest reading since Jul 2009 that stood at 45.8 (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders decreased 3.5 percentage points from 52.3 in Apr to 48.8 in May. The index of exports decreased 3.0 percentage points from 54.0 in Apr to 51.0 in May, remaining in expansion territory. The Non-Manufacturing ISM Report on Business® PMI increased 0.6 percentage points from 53.1 in Apr to 53.7 in May, indicating growth of business activity/production during 46 consecutive months, while the index of new orders increased 1.5 percentage points from 54.5 in A[t to 56.0 in May (http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943).
Table USA, US Economic Indicators
| Consumer Price Index | May 12 months NSA ∆%: 1.4; ex food and energy ∆%: 1.7 May month SA ∆%: 0.1; ex food and energy ∆%: 0.2 |
| Producer Price Index | May 12-month NSA ∆%: 1.7; ex food and energy ∆% 1.7 |
| PCE Inflation | May 12-month NSA ∆%: headline 1.0; ex food and energy ∆% 1.1 |
| Employment Situation | Household Survey: May Unemployment Rate SA 7.6% |
| 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 1.6 IQ2012 SAAR 2.0 IIQ2012 SAAR 1.3 IIIQ2012 SAAR 3.1 IVQ2012 SAAR 0.4 IQ2013 SAAR 1.8 |
| Real Private Fixed Investment | SAAR IQ2013 3.0 ∆% IVQ2007 to IIIQ2012: minus 9.1% Blog 6/30/13 |
| Personal Income and Consumption | May month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.5 |
| Quarterly Services Report | IQ13/IQ12 SA ∆%: Financial & Insurance 1.8 |
| Employment Cost Index | Compensation Private IQ2013 SA ∆%: 0.3 |
| Industrial Production | May month SA ∆%: 0.0 Manufacturing May SA ∆% 0.1 May 12 months SA ∆% 1.7, NSA 1.7 |
| Productivity and Costs | Nonfarm Business Productivity IQ2013∆% SAAE 0.5; IQ2013/IQ2012 ∆% 0.9; Unit Labor Costs SAAE IQ2013 ∆% -4.3; IQ2013/IQ2012 ∆%: 1.1 Blog 6/9/2013 |
| New York Fed Manufacturing Index | General Business Conditions From May -1.43 to Jun 7.84 |
| Philadelphia Fed Business Outlook Index | General Index from May -5.2 to Jun 12.5 |
| Manufacturing Shipments and Orders | New Orders SA Apr ∆% 1.0 Ex Transport -0.1 Jan-Apr NSA New Orders 0.2 Ex transport 0.2 |
| Durable Goods | May New Orders SA ∆%: 3.6; ex transport ∆%: 0.7 |
| Sales of New Motor Vehicles | Jan-May 2013 6,424,707; Jan-May 2012 5,986,605. May 13 SAAR 15.31 million, Apr 13 SAAR 14.92 million, May 2012 SAAR 13.95 million Blog 6/9/13 |
| Sales of Merchant Wholesalers | Jan-Apr 2013/Jan-Apr 2012 NSA ∆%: Total 1.9; Durable Goods: 2.4; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Apr 13/Apr 12 NSA ∆%: Sales Total Business 3.1; Manufacturers 1.6 |
| Sales for Retail and Food Services | Jan-May 2013/Jan-May 2012 ∆%: Retail and Food Services 3.7; Retail ∆% 3.7 |
| Value of Construction Put in Place | Apr SAAR month SA ∆%: -0.4 Apr 12-month NSA: 4.3 Jan-Apr 2013 ∆% 4.5 |
| Case-Shiller Home Prices | Apr 2013/Apr 2012 ∆% NSA: 10 Cities 11.6; 20 Cities: 12.1 |
| FHFA House Price Index Purchases Only | Apr SA ∆% 0.7; |
| New House Sales | May 2013 month SAAR ∆%: 2.1 |
| Housing Starts and Permits | May Starts month SA ∆%: 6.8 ; Permits ∆%: -3.1 |
| Trade Balance | Balance Apr SA -$38,829 million versus Mar -$42,960 million |
| Export and Import Prices | May 12-month NSA ∆%: Imports -1.9; Exports -0.9 |
| Consumer Credit | Apr ∆% annual rate: 4.7 |
| Net Foreign Purchases of Long-term Treasury Securities | Apr Net Foreign Purchases of Long-term US Securities: minus $37.3 billion |
| Treasury Budget | Fiscal Year 2013/2012 ∆% May: Receipts 15.1; Outlays 0.8; Individual Income Taxes 19.5 Deficit Fiscal Year 2012 $1,087 billion Blog 6/16/2013 |
| 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 | May 2013 SAAR ∆%: Securities -3.1 Loans 5.1 Cash Assets 73.4 Deposits 1.6 Blog 6/23/13 |
| Flow of Funds | IQ2013 ∆ since 2007 Assets +$2612.8 MM Real estate -$2733.8 MM Financial +4799.7 MM Net Worth +$3487.4 MM Blog 6/16/13 |
| Current Account Balance of Payments | IQ2013 -83,219 MM %GDP 2.7 Blog 6/16/13 |
Links to blog comments in Table USA:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html
5/5/13 http://cmpassocregulationblog.blogspot.com/2013/05/twenty-nine-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
Manufacturers’ shipments of durable goods increased 1.2 percent in May 2013, decreased 0.6 percent in Apr 2013 and increased 0.9 percent in Mar 2013. New orders increased 3.6 percent in May 2013 and 3.6 percent in Apr 2013 after decreasing 5.9 percent in Mar 2013, as shown in Table VA-1. These data are very volatile. Volatility is illustrated by decrease of 12.9 percent in Nov 2012 after increase of orders for nondefense aircraft of 2642.2 percent in Sep 2012 after decrease of 97.2 percent in Aug and increases of 51.1 percent in Jul 2012 and 32.5 percent in Jun 2012. Nondefense aircraft new orders increased 51.0 percent in May 2013 and 18.1 percent in Apr 2013 after decreasing 43.3 percent in Mar 2013. New orders excluding transportation equipment increased 0.7 percent in May 2013 and 1.7 percent in Apr 2013, decreasing 1.6 percent in Mar 2013. Capital goods new orders, indicating investment, increased 9.6 percent in May 2013 and 5.4 percent in Apr 2013, decreasing 12.0 percent in Mar 2013. New orders of nondefense capital goods increased 9.3 percent in May 2013 and 3.5 percent in Apr 2013, decreasing 8.9 percent in Mar 2013. Capital goods orders excluding more volatile aircraft increased 1.1 percent in May 2013, 1.2 percent in Apr 2013 and 1.1 percent in Mar 2013.
Table VA-1, US, Durable Goods Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%
| May 2013 | Apr 2013 ∆% | Mar 2013 | |
| Total | |||
| S | 1.2 | -0.6 | 0.9 |
| NO | 3.6 | 3.6 | -5.9 |
| Excluding | |||
| S | 0.2 | -0.5 | 0.1 |
| NO | 0.7 | 1.7 | -1.6 |
| Excluding | |||
| S | 1.2 | -0.3 | 0.7 |
| NO | 3.5 | 2.5 | -4.5 |
| Machinery | |||
| S | 1.1 | -2.4 | 0.7 |
| NO | 1.2 | 1.0 | -1.5 |
| Computers & Electronic Products | |||
| S | -0.2 | -3.0 | 3.3 |
| NO | 2.7 | 4.7 | -0.6 |
| Computers | |||
| S | 1.1 | -5.8 | 11.9 |
| NO | 1.0 | -3.7 | -0.4 |
| Transport | |||
| S | 3.6 | -0.9 | 3.0 |
| NO | 10.2 | 8.3 | -15.0 |
| Motor Vehicles | |||
| S | -1.6 | 2.3 | 0.6 |
| NO | -1.2 | 2.4 | 0.1 |
| Nondefense | |||
| S | 30.4 | -10.0 | 13.9 |
| NO | 51.0 | 18.3 | -43.3 |
| Capital Goods | |||
| S | 5.3 | -3.7 | 2.7 |
| NO | 9.6 | 5.4 | -12.0 |
| Nondefense Capital Goods | |||
| S | 6.0 | -3.4 | 2.5 |
| NO | 9.3 | 3.5 | -8.9 |
| Capital Goods ex Aircraft | |||
| S | 1.7 | -2.0 | 0.6 |
| NO | 1.1 | 1.2 | 1.1 |
Note: Mfg: manufacturing; S: shipments; NO: new orders; Transport: transportation
Source: US Census Bureau http://www.census.gov/manufacturing/m3/
Chart VA-1 provides monthly changes in durable goods new orders. There is significant volatility in these data, preventing identification of trends.
Chart VA-1, US, Manufacturers’ Durable Goods New Orders 2010-2011
Source: US Census Bureau
http://www.census.gov/briefrm/esbr/www/esbr021.html
Additional perspective on manufacturers’ shipments and new orders of durable goods is provided by Table VA-2. Values are cumulative millions of dollars in Jan-May 2013 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-May 2013 total $1123.2 billion and new orders total $1111.3 billion, growing respectively by 2.6 percent and 2.1 percent relative to the same period in 2012. Excluding transportation equipment, shipments grew 0.7 percent and new orders increased 1.2 percent. Excluding defense, shipments grew 2.8 percent and new orders grew 3.3 percent. Important information not in Table VA-2 is the large share of nondurable goods: with shipments of $3 trillion in 2012, growing by 2.0 percent, and new orders of $3 trillion, growing by 2.0 percent, in part driven by higher prices for food and energy. Durable goods were lower in value in 2012, with shipments of $2.7 trillion, growing by 7.0 percent, and new orders of $2.6 trillion, growing by 4.1 percent. Capital goods have relatively high value of $402.3 billion for shipments, growing 1.6 percent, and new orders $419.5 billion, growing 0.3 percent. Excluding aircraft, capital goods shipments reached $321.5 billion, growing by 1.2 percent, and new orders $338.9 billion, growing 2.0 percent. Data weakened significantly in 2013.
Table VA-2, US, Value of Manufacturers’ Shipments and New Orders of Durable Goods, NSA, Millions of Dollars
| Jan-May 2013 | Shipments | ∆% 2013/ 2012 | New Orders | ∆% 2013/ |
| Total | 1,123,247 | 2.6 | 1,111,305 | 2.1 |
| Excluding Transport | 790,707 | 0.7 | 781,715 | 1.2 |
| Excluding Defense | 1,065,383 | 2.8 | 1,065,232 | 3.3 |
| Machinery | 170,533 | 5.0 | 175,181 | 4.0 |
| Computers & Electronic Products | 131,396 | -4.4 | 101,505 | -7.9 |
| Computers & Related Products | 10,040 | -8.5 | 10,296 | -6.2 |
| Transport Equipment | 332,540 | 7.3 | 329,590 | 4.3 |
| Motor Vehicles | 224,086 | 9.7 | 224,247 | 10.1 |
| Nondefense Aircraft | 50,136 | 5.0 | 60,150 | 4.6 |
| Capital Goods | 402,348 | 1.6 | 419,473 | 0.3 |
| Nondefense Capital Goods | 355,216 | 1.7 | 382,378 | 2.6 |
| Capital Goods ex Aircraft | 321,497 | 1.2 | 338,995 | 2.0 |
Note: Transport: transportation
Source: US Census Bureau http://www.census.gov/manufacturing/m3/
Chart VA-2 of the Board of Governors of the Federal Reserve System shows that output of durable manufacturing accelerated in the 1980s and 1990s with slower growth in the 2000s perhaps because processes matured. Growth was robust after the major drop during the global recession but appears to vacillate in the final segment.
Chart VA-2, US, Output of Durable Manufacturing, 1972-2013
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g17/Current/default.htm
Manufacturing jobs fell 8,000 in May 2013 relative to Apr 2013, seasonally adjusted (http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/twenty-nine-million-unemployed-or.html). Manufacturing jobs not seasonally adjusted increased 47,000 from May 2012 to May 2013 or at the average monthly rate of 3,917. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. In the six months ending in Apr 2013, United States national industrial production accumulated increase of 2.0 percent at the annual equivalent rate of 4.1 percent, which is higher than 1.9 percent growth in 12 months. Excluding 1.3 percent growth in Nov 2012 in the rebound from hurricane Sandy, growth in the five months from Dec 2012 to Apr 2013 accumulated to 0.7 percent or 1.7 percent annual equivalent. Business equipment decreased 0.5 percent in Apr 2013, growing 3.4 percent in the 12 months ending in Apr 2013 and at the annual equivalent rate of 5.6 percent in the six months ending in Apr 2013 and 0.9 percent annual equivalent in the five months ending in Apr 2013. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “The rate of capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent, a rate 0.2 percentage point below its level of a year earlier and 2.6 percentage points below its long-run (1972–2012) average.” United States industry is apparently decelerating with some strength at the margin.
Manufacturing increased 0.1 percent in May 2013 after decreasing 0.4 percent in Apr 2013 seasonally adjusted, increasing 1.7 percent not seasonally adjusted in 12 months. Manufacturing grew cumulatively 0.9 percent in the six months ending in May 2013 or at the annual equivalent rate of 1.8 percent. Excluding the increase of 0.9 percent in Dec 2012 perhaps partly because of recovery from hurricane Sandy, manufacturing accumulated growth of 0.0 percent from Jan 2013 to May 2013 or at the annual equivalent rate of 0.0 percent. Manufacturing fell 7.3 percent from the peak in Jun 2007 to May 2013 and increased 18.6 from the trough in Apr 2008 to May 2013. Manufacturing grew 18.6 percent from the trough in Apr 2009 to Apr 2013. Manufacturing output in May 2013 is 7.3 percent below the peak in Jun 2007.
Table VA-3 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.4 percent in US national income in IVQ2012 and 86.7 percent in IQ2013. Most of US national income is in the form of services. In May 2013, there were 136.367 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 114.128 million NSA in May 2013 accounted for 83.7 percent of total nonfarm jobs of 136.367 million, of which 11.954 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 95.459 million NSA in May 2013, or 70.0 percent of total nonfarm jobs and 83.6 percent of total private-sector jobs. Manufacturing has share of 11.0 percent in US national income in IQ2013, as shown in Table VA-3. 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-3, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total
| SAAR | % Total | SAAR IQ2013 | % Total | |
| National Income WCCA | 14,230.5 | 100.0 | 14,317.3 | 100.0 |
| Domestic Industries | 13,963.9 | 97.9 | 14,070.3 | 98.3 |
| Private Industries | 12,300.8 | 86.4 | 12,408.8 | 86.7 |
| Agriculture | 139.6 | 1.0 | 156.2 | 1.1 |
| Mining | 221.7 | 1.6 | 210.3 | 1.5 |
| Utilities | 211.7 | 1.5 | 218.7 | 1.5 |
| Construction | 606.9 | 4.3 | 625.0 | 4.4 |
| Manufacturing | 1599.8 | 11.2 | 1576.9 | 11.0 |
| Durable Goods | 921.3 | 6.5 | 909.6 | 6.4 |
| Nondurable Goods | 678.4 | 4.8 | 667.3 | 4.7 |
| Wholesale Trade | 857.2 | 6.0 | 877.8 | 6.1 |
| Retail Trade | 973.3 | 6.8 | 974.8 | 6.8 |
| Transportation & WH | 417.9 | 2.9 | 425.4 | 3.0 |
| Information | 496.2 | 3.5 | 522.1 | 3.6 |
| Finance, Insurance, RE | 2377.2 | 16.7 | 2395.0 | 16.7 |
| Professional, BS | 2042.5 | 14.4 | 2053.5 | 14.3 |
| Education, Health Care | 1402.0 | 9.9 | 1408.9 | 9.8 |
| Arts, Entertainment | 548.3 | 3.9 | 553.0 | 3.9 |
| Other Services | 406.6 | 2.9 | 411.3 | 2.9 |
| Government | 1663.0 | 11.7 | 1661.5 | 11.6 |
| Rest of the World | 266.6 | 1.9 | 247.0 | 1.7 |
Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services
Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
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 with the Markit Composite Output PMI™ Index increasing from 51.8 in Apr to 54.1 in May, which is a new high of the series (http://www.markiteconomics.com/Survey/PressRelease.mvc/eddc14aea9794212a1b77033f0ffae45). Paul Smith, economist at Markit and author of the report, finds that the survey data suggest continuing growth of the economy of Japan with performance that could exceed the annual rate of 3.5 percent in IQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/eddc14aea9794212a1b77033f0ffae45). The Markit Business Activity Index of Services increased from 51.7 in Apr, to 54.8 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/eddc14aea9794212a1b77033f0ffae45). Paul Smith, Senior Economist at Markit and author of the report, finds continuing confidence in demand for services that is generating record creation of jobs (http://www.markiteconomics.com/Survey/PressRelease.mvc/eddc14aea9794212a1b77033f0ffae45). Markit/JMMA Purchasing Managers’ Index™ (PMI™), seasonally adjusted, increased from 51.1 in Apr to 51.5 in May, which is the highest reading in 21 months, indicating modest growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/be0802fd0033425db2b840bfd36d068e). Foreign and domestic business continued improvement with yen devaluation supporting foreign demand but with increases in input costs. Paul Smith, Senior Economist at Markit and author of the report, finds that output increased at the fastest rhythm in 19 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/be0802fd0033425db2b840bfd36d068e).Table JPY provides the country data table for Japan.
Table JPY, Japan, Economic Indicators
| Historical GDP and CPI | 1981-2010 Real GDP Growth and CPI Inflation 1981-2010 |
| Corporate Goods Prices | May ∆% +0.1 |
| Consumer Price Index | May NSA ∆% 0.1; May 12 months NSA ∆% -0.3 |
| Real GDP Growth | IQ2013 ∆%: 1.0 on IVQ2012; IQ2013 SAAR 4.1; |
| Employment Report | May Unemployed 2.79 million Change in unemployed since last year: minus 180 thousand |
| All Industry Indices | Apr month SA ∆% 0.4 Blog 6/30/13 |
| Industrial Production | May SA month ∆%: 2.0 |
| Machine Orders | Total Apr ∆% -14.2 Private ∆%: -12.4 Apr ∆% Excluding Volatile Orders -8.8 |
| Tertiary Index | Apr month SA ∆% 0.0 |
| Wholesale and Retail Sales | May 12 months: |
| Family Income and Expenditure Survey | May 12-month ∆% total nominal consumption -1.8, real -1.6 Blog 6/30/13 |
| Trade Balance | Exports May 12 months ∆%: 10.1 Imports May 12 months ∆% 10.0 Blog 6/23/13 |
Links to blog comments in Table JPY:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
8/9/11 http://cmpassocregulationblog.blogspot.com/2011/08/turbulence-in-world-financial-markets.html
The indices of all industry activity of Japan, which approximates GDP or economic activity, fell to levels close to the worst point of the recession, showing the brutal impact of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Table VB-1 with the latest revisions shows the quarterly index, which permits comparison with the movement of real GDP. The first row provides weights of the various components of the index: AG (agriculture) 1.4 percent (not shown), CON (construction) 5.7 percent, IND (industrial production) 18.3 percent, TERT (services) 63.2 percent, and GOVT (government) 11.4 percent. GDP increased 1.0 percent in IQ2013 (Table VB-16/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html), industry increased 0.6 percent, the tertiary sector increased 0.1 percent, government increased 0.3 percent and construction decreased 0.5 percent. The report shows that the all industry index decreased 0.1 percent in IQ2013. Industry added 0.10 percentage points to growth of the all industry index and the tertiary index added 0.07 percentage points. Japan had already experienced a very weak quarter in IVQ2010, with decline of GDP of 0.3 percent (Table VB-1 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html), when it was unexpectedly hit by the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. GDP fell 2.0 percent in IQ2012 and 0.8 percent in IIQ2011. GDP was flat in IQ2011 relative to a year earlier and fell 1.6 percent in IIQ2011 relative to a year earlier (Table VB-1 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html). The all industry activity index fell in all quarters of 2012 with exception of growth of 0.1 percent in IQ2012. Weakness in industry was the driver of decline.
Table VB-1, Japan, Indices of All Industry Activity Percentage Change from Prior Quarter SA ∆%
| CON | IND | TERT | GOVT | ALL IND | REAL | |
| Weight | 5.7 | 18.3 | 63.2 | 11.4 | 100.0 | |
| 2013 | ||||||
| IQ2013 | -0.5 | 0.6 | 0.1 | 0.3 | -0.1 | 1.0 |
| Cont to IQ % Change | -0.02 | 0.10 | 0.07 | 0.04 | ||
| 2012 | ||||||
| IVQ2012 | 3.0 | -1.8 | 0.3 | 0.1 | -0.1 | 0.3 |
| IIIQ | 1.6 | -3.3 | 0.0 | 0.0 | -0.4 | -0.9 |
| IIQ | 1.3 | -2.1 | 0.0 | 0.0 | -0.2 | -0.2 |
| IQ | 2.0 | 1.6 | 0.0 | 0.2 | 0.1 | 1.2 |
AG: indices of agriculture, forestry and fisheries has weight of 1.4% and is not included in official report or in this table; CON: indices of construction industry activity; IND: indices of industrial production; TERT: indices of tertiary industry activity; GOVT: indices of government services, etc.; ALL IND: indices of all industry activity
Source:
http://www.meti.go.jp/english/statistics/index.html
There are more details in Table VB-2. In Apr 2013, the all industry activity index increased 0.4 percent with industry growing 0.9 percent and services changing 0.0 percent while construction increased 0.3 percent and government decreased 0.3 percent. Industry contributed 0.15 percentage points and services was neutral while construction added 0.01 percentage points and government deducted 0.04 percentage points. The all industry activity index is stronger in 2013 with growth of 0.5 percent in Dec 2012, 0.4 percent in Feb 2013, 0.2 percent in Mar 2013 and 0.4 percent in Apr 2013. Industry is recovering with growth of 1.4 percent in Dec 2012, 0.9 percent in Feb 2013, 0.1 percent in Mar 2013 and 0.9 percent in Apr 2013. The highest risk to Japan is if weakening world growth would affect Japanese exports.
Table VB-2, Japan, Indices of All Industry Activity Percentage Change from Prior Month SA ∆%
| CON | IND | TERT | GOVT | ALL IND | |
| Apr 2013 | 0.3 | 0.9 | 0.0 | -0.3 | 0.4 |
| Cont to Apr % Change | 0.01 | 0.15 | 0.00 | -0.04 | |
| Mar 2013 | 0.6 | 0.1 | -0.2 | -0.3 | 0.2 |
| Feb | -1.3 | 0.9 | 1.3 | -0.2 | 0.4 |
| Jan | -1.4 | -1.7 | -0.8 | 0.6 | -0.7 |
| Dec 2012 | 0.9 | 1.4 | 0.2 | -0.3 | 0.5 |
| Nov | 3.0 | -0.9 | -0.1 | 0.3 | -0.2 |
| Oct | -0.1 | 0.3 | 0.2 | 0.2 | 0.2 |
| Sep | 1.2 | -2.2 | 0.0 | -0.3 | -0.4 |
| Aug | 0.1 | -1.4 | 0.2 | 0.1 | 0.0 |
| Jul | -1.0 | -0.5 | -0.3 | -0.1 | -0.3 |
| Jun | 1.7 | -0.9 | 0.0 | 0.1 | 0.1 |
| May | 3.0 | -1.8 | 0.5 | 0.0 | -0.1 |
| Apr | -1.1 | -0.4 | -0.2 | 0.0 | -0.1 |
| Mar | -0.5 | -0.2 | -0.3 | 0.1 | -0.2 |
| Feb | 0.7 | -0.2 | 0.2 | -0.2 | 0.1 |
| Jan | 2.6 | 0.8 | -0.8 | 0.4 | -0.7 |
AG: indices of agriculture, forestry and fisheries has weight of 1.4% and is not included in official report or in this table; CON: indices of construction industry activity; IND: indices of industrial production; TERT: indices of tertiary industry activity; GOVT: indices of government services, etc.; ALL IND: indices of all industry activity
Sources:
http://www.meti.go.jp/english/statistics/index.html
Percentage changes from a year earlier in calendar years and relative to the same quarter a year earlier of the all industry activity indices are provided in Table VB-3. The first row shows that services contribute 63.2 percent of the total index and industry contributes 18.3 percent for joint contribution of 81.5 percent. The all industry activity index decreased 1.3 percent in IQ2013 relative to a year earlier and GDP increased 0.4 percent relative to a year earlier (Table VB-4 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html). Industry decreased 7.8 percent relative to a year earlier while the tertiary sector decreased 0.4 percent, deducting combined 1.69 percentage points from growth of the all industry activity index of minus 1.3 percent while construction added 0.25 percentage points and government added 0.11 percentage points. The fall of industrial production in 2009 was by a catastrophic 21.9 percent. Japan emerged from the crisis with industrial growth of 16.4 percent in 2010. Quarterly data show that industry is the most dynamic sector of the Japanese economy. The all-industry index increased 1.2 percent in 2012 and real GDP increased 1.9 percent. Industry increased 0.1 percent, adding 0.02 percentage points, while the tertiary sector increased 1.4 percent, adding 0.94 percentage points. The Tōhoku or Great East Earthquake and Tsunami of Mar 11, 201, declining world trade and revaluation of the yen in fear of world financial risks interrupted the recovery of the Japanese economy from the global recession.
Table VB-3, Japan, Indices of All Industry Activity Percentage Change from Earlier Calendar Year and Same Quarter Year Earlier NSA ∆%
| CON | IND | TERT | GOVT | ALL IND | REAL | |
| Weight | 5.7 | 18.3 | 63.2 | 11.4 | 100.0 | |
| Calendar Year | ||||||
| 2012 | 3.2 | 0.1 | 1.4 | 0.3 | 1.2 | 1.9 |
| Cont to 2012 % Change | 0.15 | 0.02 | 0.94 | 0.04 | ||
| 2011 | -2.0 | -2.3 | 0.1 | -0.2 | -0.5 | -0.6 |
| 2010 | -7.0 | 16.4 | 1.3 | -0.7 | 3.1 | 4.7 |
| 2009 | -5.6 | -21.9 | -5.2 | 0.1 | -7.7 | -5.5 |
| 2008 | -7.6 | -3.4 | -1.0 | -1.4 | -1.9 | -1.0 |
| 2013 | ||||||
| IQ | 5.4 | -7.8 | -0.4 | 0.9 | -1.3 | 0.4 |
| Cont to IQ % Change | 0.25 | -1.43 | -0.26 | 0.11 | ||
| 2012 | ||||||
| IVQ | 6.7 | -5.9 | 0.7 | -0.1 | -0.3 | 0.4 |
| IIIQ | 3.1 | -4.2 | 0.5 | 0.4 | -0.2 | 0.2 |
| IIQ | 4.9 | 5.5 | 2.1 | 0.6 | 2.6 | 3.9 |
| IQ | -1.1 | 6.2 | 2.4 | 0.3 | 2.6 | 3.4 |
AG: indices of agriculture, forestry and fisheries has weight of 1.4% and is not included in official report or in this table; CON: indices of construction industry activity; IND: indices of industrial production; TERT: indices of tertiary industry activity; GOVT: indices of government services, etc.; ALL IND: indices of all industry activity
Source: http://www.meti.go.jp/english/statistics/index.html
Percentage changes of a month relative to the same month a year earlier for the indices of all industry activity of Japan are shown in Table VB-4. The all industry activity index increased 0.5 percent in Apr 2013 relative to Apr 2012. Industry fell 3.4 percent in Apr 2013 relative to a year earlier, subtracting 0.61 percentage points to growth of the all industry activity index. The tertiary sector increased 1.4 percent, adding 0.95 percentage points. Construction added 0.28 percentage points to the index and government deducted 0.10 percentage points.
Table VB-4, Japan, Indices of All Industry Activity Percentage Change from Same Month Year Earlier NSA ∆%
| CON | IND | TERT | GOVT | ALL IND | |
| Apr 2013 | 6.8 | -3.4 | 1.4 | -0.8 | 0.5 |
| Cont to Mar % Change | 0.28 | -0.61 | 0.95 | -0.10 | |
| Mar | 5.4 | -7.1 | 0.3 | 0.7 | -0.9 |
| Feb | 4.3 | -10.1 | -1.6 | 1.9 | -2.4 |
| Jan | 6.8 | -6.1 | 0.1 | -0.1 | -0.7 |
| Dec 2012 | 8.7 | -7.5 | -0.1 | 0.6 | -0.9 |
| Nov | 7.6 | -5.7 | 1.0 | 0.3 | 0.0 |
| Oct | 3.5 | -4.7 | 1.3 | -1.1 | 0.1 |
| Sep | 2.9 | -7.7 | 0.1 | 0.7 | -1.2 |
| Aug | 2.6 | -4.4 | 0.6 | 0.9 | -0.1 |
| Jul | 3.8 | -0.2 | 0.8 | -0.3 | 0.6 |
| Jun | 6.7 | -1.5 | 0.8 | 0.9 | 0.6 |
| May | 5.3 | 6.1 | 3.1 | -0.4 | 3.3 |
| Apr | 2.6 | 13.6 | 2.4 | 1.3 | 4.1 |
| Mar | 3.0 | 16.2 | 4.2 | 0.5 | 5.8 |
| Feb | -2.5 | 2.8 | 2.4 | -0.7 | 1.8 |
| Jan | -3.4 | -1.6 | 0.4 | 0.4 | -0.1 |
AG: indices of agriculture, forestry and fisheries has weight of 1.4% and is not included in official report or in this table; CON: indices of construction industry activity; IND: indices of industrial production; TERT: indices of tertiary industry activity; GOVT: indices of government services, etc.; ALL IND: indices of all industry activity
Source:
http://www.meti.go.jp/english/statistics/index.html
The tertiary activity index of Japan changed 0.0 percent SA in Apr 2013 and increased 1.4 percent NSA in the 12 months ending in Apr 2013, as shown in Table VB-5. The index is showing significant volatility with increase of 1.3 percent in Feb 2013 but decreases in multiple months. The tertiary activity index fell 5.2 percent in 2009, growing 1.3 percent in 2010, 0.1 percent in 2011 and 1.4 percent in 2012.
Table VB-5, Japan, Tertiary Activity Index, ∆%
| Month ∆% SA | 12 Months ∆% NSA | |
| Apr 2013 | 0.0 | 1.4 |
| Mar | -0.2 | 0.3 |
| Feb | 1.3 | -1.6 |
| Jan | -0.8 | 0.1 |
| Dec 2012 | 0.2 | -0.1 |
| Nov | -0.1 | 1.0 |
| Oct | 0.2 | 1.3 |
| Sep | 0.0 | 0.1 |
| Aug | 0.2 | 0.6 |
| Jul | -0.3 | 0.8 |
| Jun | 0.0 | 0.8 |
| May | 0.5 | 3.1 |
| Apr | -0.2 | 2.4 |
| Mar | -0.3 | 4.2 |
| Feb | 0.2 | 2.4 |
| Jan | -0.8 | 0.3 |
| Calendar Year | ||
| 2012 | 1.4 | |
| 2011 | 0.1 | |
| 2010 | 1.3 | |
| 2009 | -5.2 | |
| 2008 | -1.0 | |
| 2007 | 1.0 | |
| 2006 | 1.8 | |
| 2005 | 1.9 | |
| 2004 | 1.8 |
Source:
http://www.meti.go.jp/english/statistics/index.html
Month and 12-month rates of growth of the tertiary activity index of Japan and components in Mar 2013 are provided in Table VB-6. Electricity, gas, heat supply and water increased 1.2 percent in Apr 2013 and decreased 2.4 percent in the 12 months ending in Apr 2013. Wholesale and retail trade decreased 0.9 percent in the month of Apr and decreased 1.4 percent in 12 months. Information and communications increased 0.7 percent in Apr and increased 0.5 percent in 12 months.
Table VB-6, Japan, Tertiary Index and Components, Month and 12-Month Percentage Changes ∆%
| Apr 2013 | Weight | Month ∆% SA | 12 Months ∆% NSA |
| Tertiary Index | 10,000.0 | 0.0 | 1.4 |
| Electricity, Gas, Heat Supply & Water | 372.9 | 1.2 | -2.4 |
| Information & Communications | 951.2 | 0.7 | 0.5 |
| Wholesale & Retail Trade | 2,641.2 | -0.9 | -1.4 |
| Finance & Insurance | 971.1 | 3.5 | 11.9 |
| Real Estate & Goods Rental & Leasing | 903.4 | -0.9 | -0.2 |
| Scientific Research, Professional & Technical Services | 551.3 | 2.9 | 2.7 |
| Accommodations, Eating, Drinking | 496.0 | -0.4 | -0.3 |
| Living-Related, Personal, Amusement Services | 552.7 | -2.3 | -3.9 |
| Learning Support | 116.9 | -1.0 | -2.1 |
| Medical, Health Care, Welfare | 921.1 | 0.8 | 5.1 |
| Miscellaneous ex Government | 626.7 | -0.3 | 0.0 |
Source: http://www.meti.go.jp/english/statistics/index.html
In May 2013, industrial production in Japan increased 2.0 percent and decreased 1.0 percent in the 12 months ending in May 2013, as shown in Table VB-7. Japan’s industrial production is strengthening with growth of 1.4 percent in Dec 2012, 0.9 percent in Jan 2013, 0.9 percent in apr 2013 and 2.0 percent in May 2013. Growth in 12 months has improved from minus 10.1 percent in Feb 2013 to minus 1.0 percent in May 2013. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 15.6 percent in 2010. The annual average in calendar year 2011 fell 2.8 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 and fell again 0.6 percent in 2012.
Table VB-7, Japan, Industrial Production ∆%
| ∆% Month SA | ∆% 12 Months NSA | |
| May 2013 | 2.0 | -1.0 |
| Apr | 0.9 | -3.4 |
| Mar | 0.1 | -7.2 |
| Feb | 0.9 | -10.1 |
| Jan | -0.6 | -6.0 |
| Dec 2012 | 1.4 | -7.6 |
| Nov | -1.0 | -5.5 |
| Oct | 0.3 | -4.7 |
| Sep | -2.2 | -7.6 |
| Aug | -1.4 | -4.1 |
| Jul | -0.5 | 0.1 |
| Jun | -0.8 | -0.6 |
| May | -1.8 | 7.6 |
| Apr | -0.5 | 15.1 |
| Mar | 0.2 | 16.6 |
| Calendar Year | ||
| 2012 | -0.6 | |
| 2011 | -2.8 | |
| 2010 | 15.6 |
Source: http://www.meti.go.jp/english/statistics/index.html
The employment report for Japan in May 2013 is in Table VB-8. 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 Apr and May 2013. The rate of unemployment not seasonally adjusted stood at 4.2 percent in Apr 2013 and 0.3 percentage points lower from a year earlier. The employment rate stood at 57.2 percent in Apr 2013 and increased 0.4 percentage points from a year earlier.
Table VB-8, Japan, Employment Report Apr 2013
| May 2013 Unemployed | 2.79 million |
| Change since last year | -180 thousand; ∆% –6.1 |
| Unemployment rate | 4.1% SA -0.0; NSA 4.2%, -0.3 from earlier year |
| Population ≥ 15 years | 110.87 million |
| Change since last year | ∆% 0.0 |
| Labor Force | 66.19 million |
| Change since last year | ∆% 0.4 |
| Employed | 63.40 million |
| Change since last year | ∆% 0.7 |
| Labor force participation rate | 59.7 |
| Change since last year | 0.2 |
| Employment rate | 57.2% |
| Change since last year | 0.4 |
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-May 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-9 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-9, 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-10 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, Mar 2013 and Apr 2013 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption decreased 1.6 percent in real terms in May 2013 and decreased 1.9 percent in nominal terms relative to a year earlier. There are several segments of decreasing real consumption: fuels, light and water charges declining 6.9 percent in real terms and 2.6 percent in nominal terms and education declining 2.5 percent in real terms and 2.0 percent in nominal terms. Real household income increased 1.5 percent; real disposable income increased 3.1 percent; and real consumption expenditures increased 1.4 percent.
Table VB-10, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| May 2013 | Nominal | Real |
| Households of Two or More Persons | ||
| Total Consumption | -1.9 | -1.6 |
| Excluding Housing, Vehicles & Remittance | -0.3* | |
| Food | 2.3 | 3.9 |
| Housing | -4.5 | -4.1 |
| Fuel, Light & Water Charges | -2.6 | -6.9 |
| Furniture & Household Utensils | -0.8 | 1.7 |
| Clothing & Footwear | 7.0 | 6.9 |
| Medical Care | 3.5 | 4.3 |
| Transport and Communications | -9.5 | -10.0 |
| Education | -2.0 | -2.5 |
| Culture & Recreation | -4.0 | -2.4 |
| Other Consumption Expenditures | -2.4 | -2.1* |
| Workers’ Households | ||
| Income | 1.2 | 1.5 |
| Disposable Income | 2.8 | 3.1 |
| Consumption Expenditures | 1.1 | 1.4 |
*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-11. Real consumption expenditures decreased 1.5 percent in the 12 months ending in May 2013 and 1.9 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.
Real consumption increased 5.2 percent in the 12 months ending in Mar 2013 and nominal consumption 4.1 percent. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 4.8 percent in IQ2012 with private consumption contributing 2.0 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 0.6 percent and contribution of 0.5 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 3.6 percent and personal consumption deducted 1.0 percentage points. Japan’s GDP grew at the SAAR of 1.2 percent in IVQ2012 with personal consumption contributing 1.1 percentage points. Japan’s GDP growth in IQ2013 was at 4.1 percent SAAR with highest contribution of 2.2 percentage points by personal consumption expenditures.
Table VB-11, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier
| Nominal Consumption Expenditures | Real Consumption Expenditures | |
| May 2013 | -1.9 | -1.6 |
| Apr | 0.8 | 1.5 |
| Mar | 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 with recovery in IVQ2012 and IQ2013. Table VB-6 provides Japan’s wholesale and retail sales. Retail sales increased 0.8 percent in the 12 months ending in Apr 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 0.3 percent in the 12 months ending in Apr 2013 and fell 0.2 in the 12 months ending in Apr 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 May 2013, retail sales increased 0.8 percent relative to a year earlier.
Table VB-12, Japan, Wholesale and Retail Sales 12 Month ∆%
| Total | Wholesale | Retail | |
| May 2013 | 0.5 | 0.3 | 0.8 |
| Apr | -0.1 | -0.1 | -0.2 |
| Mar | -1.3 | -1.8 | -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. The index fell to 54.5 in Apr 2013 and 54.3 in May 2013.
Table CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| Total Index | New Orders | Interm. | Subs Prices | Exp | |
| May 2013 | 54.3 | 50.1 | 54.4 | 50.7 | 62.9 |
| Apr | 54.5 | 50.9 | 51.1 | 47.6 | 62.5 |
| Mar | 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
http://www.stats.gov.cn/english/
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. The index fell again to 54.5 in Apr 2013 and 54.3 in May 2013.
Chart CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, Seasonally Adjusted
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Table CIPMMFG provides the index of purchasing managers of manufacturing seasonally adjusted of the National Bureau of Statistics of China. The general index (IPM) rose from 50.5 in Jan 2012 to 53.3 in Apr and declined to 50.1 in Jul and to the contraction zone at 49.2 in Aug and 49.8 in Sep, climbing above 50.0 to 50.2 in Oct, 50.6 in Nov-Dec 2012, 50.9 in Mar 2013 and 50.6 in Apr 2013. The index increased to 50.8 in May 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 new orders increased to 51.8 in May 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. The index of employment fell to 48.8 in May 2013.
Table CIPMMFG, China, Manufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| IPM | PI | NOI | INV | EMP | SDEL | |
| May 2013 | 50.8 | 53.3 | 51.8 | 47.6 | 48.8 | 50.8 |
| Apr | 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. The index increased to 50.8 in May 2013.
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/f2ffa599067442d492b2baadc42da5d5) is moving at slower pace. The overall Flash HSBC China Manufacturing PMI™ decreased from 49.2 in May to 48.3 in Jun, which is moderately below the contraction frontier of 50.0, while the Flash HSBC China Manufacturing Output Index decreased from 50.7 in May to 48.8 in Jun, moving into moderate contraction territory. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the economy of China is confronting weak internal and external demand together with reduction of stocks, suggesting weaker growth in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/f2ffa599067442d492b2baadc42da5d5). The HSBC China Services PMI™, compiled by Markit, shows marginal strength in business activity in China with the HSBC Composite Output, combining manufacturing and services, decreasing from 51.1 in Apr to 50.9 in May for the seventh consecutive month of expansion (http://www.markiteconomics.com/Survey/PressRelease.mvc/62bd462cd58e42b381bdd4ec852c8efa). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that combined manufacturing and services data suggest downward effects on growth and employment in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/62bd462cd58e42b381bdd4ec852c8efa). The HSBC Business Activity index increased from 51.1 in Apr to 51.2 in May at one of the slowest rates in the history of the index (http://www.markiteconomics.com/Survey/PressRelease.mvc/62bd462cd58e42b381bdd4ec852c8efa). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds concern with growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/62bd462cd58e42b381bdd4ec852c8efa). The HSBC Purchasing Managers’ Index™ (PMI™), compiled by Markit, decreased to 49.2 in May from 50.4 in Apr, indicating moderate contraction in manufacturing for the first time after six consecutive months of improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/374b1d5a958242508eb6aa9ec226002c). New export orders decreased for the second consecutive month. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds marginally deteriorating conditions because of weak internal demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/374b1d5a958242508eb6aa9ec226002c). Table CNY provides the country data table for China.
Table CNY, China, Economic Indicators
| Price Indexes for Industry | May 12-month ∆%: minus 2.9 May month ∆%: -0.6 |
| Consumer Price Index | May month ∆%: minus 0.6 May 12 months ∆%: 2.1 |
| Value Added of Industry | May month ∆%: 0.62 Jan-May 2013/Jan-May 2012 ∆%: 9.4 |
| GDP Growth Rate | Year IQ2013 ∆%: 7.9 |
| Investment in Fixed Assets | May month ∆%: 1.43 Total Jan-May 2013 ∆%: 20.4 Real estate development: 20.6 |
| Retail Sales | May month ∆%: 1.17 Jan-May ∆%: 12.5 |
| Trade Balance | May balance $18.2 billion Cumulative May: $81.42 billion |
Links to blog comments in Table CNY:
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
4/21/13 http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.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 0.4 percent in 2013 but 1.2 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 | 1.5 |
| 2012* | 2.5 | 11.4 | -0.6 |
| 2013* | -0.4 | ||
| 2014* | 1.2 |
*EUROSTAT forecast Source: EUROSTAT
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* | 1.2 | 1.8 | 1.1 | 0.7 | 0.9 |
| 2013* | -0.4 | 0.4 | -0.1 | -1.3 | -1.5 |
| 2012 | -0.6 | 0.7 | 0.0* | -2.4 | -1.4* |
| 2011 | 1.5 | 3.0 | 2.0 | 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/eurostat/home/ 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, increased from 47.7 in May to 48.9 in May, for seventeen consecutive contractions but with deceleration of the rate of contraction to the lowest pace since Mar 2012 (http://www.markiteconomics.com/Survey/PressRelease.mvc/899f6d7cc57342b487bd764ce5610c18). The average for IIQ2013 of 47.8 is marginally higher than 47.7 in IQ2013, suggesting recession in the euro area during seventeen consecutive months. Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index is consistent with the seventh quarterly contraction of economic conditions in the region at a likely rate of decline of 0.2 percent in IIQ2013 but at slower pace in France with moderate growth in Germany and slower decline in other members (http://www.markiteconomics.com/Survey/PressRelease.mvc/899f6d7cc57342b487bd764ce5610c18). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP, increased from 46.9 in Apr to 47.7 in May with aggregate output declining during 16 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/f22c0e3f86d7424580bdf50ec8720e90). Chris Williamson, Chief Economist at Markit, finds that the data are consistent GDP falling in IIQ2012 at 0.2 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/f22c0e3f86d7424580bdf50ec8720e90). The Markit Eurozone Services Business Activity Index increased from 47.0 in Apr to 47.2 in May, indicating contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/f22c0e3f86d7424580bdf50ec8720e90). The Markit Eurozone Manufacturing PMI® increased marginally to 48.3 in May from 46.7 in May, which indicates contraction for the twenty-second consecutive month but the slowest rate since Feb 2012 (http://www.markiteconomics.com/Survey/PressRelease.mvc/0df9b459246542d2a1b60332deb37e6a). New orders fell at the slowest rate since Jun 2011 with unchanged export orders and weak internal ordes. Chris Williamson, Chief Economist at Markit, finds the survey data consistent with contraction of GDP at 0.2 percent in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/0df9b459246542d2a1b60332deb37e6a). Table EUR provides the data table for the euro area.
Table EUR, Euro Area Economic Indicators
| GDP | IQ2013 ∆% -0.2; IQ2013/IQ2012 ∆% -1.1 Blog 6/9/13 |
| Unemployment | Apr 2013: 12.2% unemployment rate Apr 2013: 19.375 million unemployed Blog 6/2/13 |
| HICP | May month ∆%: 0.1 12 months Apr ∆%: 1.4 |
| Producer Prices | Euro Zone industrial producer prices Apr ∆%: -0.6 |
| Industrial Production | Apr month ∆%: 0.4; Apr 12 months ∆%: -0.6 |
| Retail Sales | Apr month ∆%: -0.5 |
| Confidence and Economic Sentiment Indicator | Sentiment 91.3 Jun 2013 Consumer minus 18.8 Jun 2013 Blog 6/30/13 |
| Trade | Jan-Apr 2013/Jan-Apr 2012 Exports ∆%: 3.2 Apr 2013 12-month Exports ∆% 9.1 Imports ∆% 1.2 |
Links to blog comments in Table EUR:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html
6/2/13 http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html
5/19/13 http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html
Table VD-1, Euro Area, Indicators 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 increasing from 88.9 in Jul 2012 to 91.3 in Jun 2013. There is stagnating 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-1, Euro Area, Indicators of Confidence and Economic Sentiment SA
| ESI | IND | SERV | CON | RET | CONS | |
| Historical Average | 100.0 | -7.0 | 9.5 | -13.3 | -9.3 | -18.0 |
| 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 |
| Jun 2013 | 91.3 | -11.2 | -9.5 | -18.8 | -14.4 | -32.2 |
| May | 89.5 | -13.0 | -9.2 | -21.9 | -16.7 | -33.6 |
| Apr | 88.6 | -13.8 | -11.1 | -22.3 | -18.4 | -31.7 |
| 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 | 86.0 | -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 |
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 economies. The German economy grew at 4.2 percent in 2010, 3.0 percent in 2011 and 0.7 percent in 2012.
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, increased from 50.2 in May to 50.9 in Jun, with stronger improvement in services at 51.3 with unchanged manufacturing at 50.1 (http://www.markiteconomics.com/Survey/PressRelease.mvc/19df23bd5faf42a884b89501e2e69a15). New export orders for manufacturing decreased at the highest rate in 2013. Andrew Hacker, Senior Economist at Markit, finds limited growth impulse in Germany’s manufacturing and services in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/19df23bd5faf42a884b89501e2e69a15). The Markit Germany Composite Output Index of the Markit Germany Services PMI®, combining manufacturing and services with close association with Germany’s GDP, increased from 49.2 in Apr to 50.2 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/534dd918be41426f9cbc8ab706af3607). Tim Moore, Senior Economist at Markit and author of the report, finds risks of standstill in the economy of Germany (http://www.markiteconomics.com/Survey/PressRelease.mvc/534dd918be41426f9cbc8ab706af3607). The Germany Services Business Activity Index increased from 49.6 in Apr to 49.7 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/534dd918be41426f9cbc8ab706af3607). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, increased from 48.1 in Apr to 49.4 in May, in very moderate contraction territory below 50.0 (http://www.markiteconomics.com/Survey/PressRelease.mvc/f33b9dcfa04642c781b5b3e9810e06fc). New export orders were unchanged in May with strength in orders from China and the US compensating for weakness in new orders inside the euro area. Tim Moore, Senior Economist at Markit and author of the report, finds improving conditions in German manufacturing with stronger output and new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/f33b9dcfa04642c781b5b3e9810e06fc).Table DE provides the country data table for Germany.
Table DE, Germany, Economic Indicators
| GDP | IQ2013 0.1 ∆%; I/Q2013/IQ2012 ∆% -1.4 2012/2011: 0.7% GDP ∆% 1992-2012 Blog 8/26/12 5/27/12 11/25/12 2/24/13 5/19/13 5/26/13 |
| Consumer Price Index | May month NSA ∆%: 0.4 |
| Producer Price Index | May month ∆%: -0.3 CSA, 0.1 |
| Industrial Production | MFG Apr month CSA ∆%: 1.5 |
| Machine Orders | MFG Apr month ∆%: -2.3 |
| Retail Sales | May Month ∆% 0.4 12-Month ∆% 0.8 Blog 6/30/13 |
| Employment Report | Unemployment Rate SA May 5.4% |
| Trade Balance | Exports Apr 12-month NSA ∆%: 8.5 Blog 6/9/13 |
Links to blog comments in Table DE:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html
6/2/13 http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html
5/26/13 http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.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, decreased from 2.36 million in May 2012 to 2.25 million in May 2013, or 4.7 percent, while the unemployment rate decreased from 5.6 percent in May 2012 to 5.3 percent in May 2013. The number of persons in employment, not seasonally adjusted, increased from 40.07 million in May 2012 to 40.25 million in May 2013, or 0.4 percent, while the employment rate increased from 63.6 percent in May 2012 to 64.0 percent in May 2013. The number unemployed, seasonally adjusted, fell from 2.28 million in Apr 2013 to 2.27 million in May 2013, while the unemployment rate fell from 5.4 percent in Apr 2013 to 5.3 percent in May 2013. The number of persons in employment, seasonally adjusted, increased from 40.18 million in Apr 2013 to 40.21 million in May 2013, or 0.1 percent.
Table VE-1, Germany, Unemployment Labor Force Survey
| May 2013 | Apr 2013 | May 2012 | |
| NSA | |||
| Number | 2.25 ∆% May 2013 /Apr 2013: -0.9 ∆% May 2013/May 2012: -4.7 | 2.27 | 2.36 |
| % Rate Unemployed | 5.3 | 5.4 | 5.6 |
| Persons in Employment Millions | 40.25 ∆% May 2013/Apr 2013: 1.1 ∆% May 2013/May 2012: 0.4 | 39.82 | 40.07 |
| Employment Rate | 64.0 | 63.3 | 63.6 |
| SA | |||
| Number | 2.27 ∆% May 2013/Apr 2013: -0.4 ∆% May 2013/May 2012: –2.2 | 2.28 | 2.32 |
| % Rate Unemployed | 5.3 | 5.4 | 5.5 |
| Persons in Employment Millions | 40.21 ∆% May 2013/Apr 2013: 0.1 ∆%May 2013/May 2012: 0.8 | 40.18 | 39.91 |
NSA: not seasonally adjusted; SA: seasonally adjusted
Source: Statistisches Bundesamt https://www.destatis.de/EN/PressServices/Press/pr/2013/06/PE13_215_132.html
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 unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 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 | |
| Jun 2013 | 6.6 |
| May | 6.8 |
| Apr | 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, 6.8 percent in Apr 2013 and 6.6 percent in May 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 increased 0.4 percent in <au 2013 and increased 0.8 percent in 12 months. Retail sales rebounded in Jan 2013 with monthly increase of 2.9 percent and 3.3 percent in 12 months.
Table VE-3, Retail Sales in Germany Adjusted for Inflation
| 12-Month ∆% NSA | Month ∆% SA and Calendar Adjusted | |
| May 2013 | 0.4 | 0.8 |
| Apr | 2.7 | -0.1 |
| Mar | -2.3 | -0.1 |
| Feb | -2.6 | -0.7 |
| Jan | 2.9 | 3.3 |
| Dec 2012 | -3.3 | -2.0 |
| Nov | 0.4 | 1.0 |
| Oct | 1.6 | -0.7 |
| Sep | -3.2 | 0.0 |
| Aug | -0.2 | 0.2 |
| Jul | -0.9 | -1.2 |
| Jun | 4.8 | 0.3 |
| May | -0.5 | 0.4 |
| Apr | -4.6 | -0.4 |
| Mar | 4.3 | 1.3 |
| Feb | 2.6 | 0.3 |
| Jan | 2.0 | -1.8 |
| Dec 2011 | 0.8 | 0.9 |
| Nov | 0.9 | -0.6 |
| Oct | -0.4 | 0.3 |
| Sep | 1.2 | 0.1 |
| Aug | 3.4 | -0.5 |
| Jul | -2.4 | 0.5 |
| Jun | -2.0 | 2.1 |
| May | 4.5 | -1.7 |
| Apr | 4.8 | 1.0 |
| Mar | -2.9 | -2.1 |
| Feb | 3.0 | 0.6 |
| Jan | 3.3 | 0.8 |
| 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
VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2012 is quite high at 3.2 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.0 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 1.9 percent in the 1990s and 1.7 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using fourth quarter data, is 1.0 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. The growth rate from 2000 to 2012 is 1.0 percent. Cobet and Wilson (2002) provide estimates of output per hour and unit labor costs in national currency and US dollars for the US, Japan and Germany from 1950 to 2000 (see Pelaez and Pelaez, The Global Recession Risk (2007), 137-44). The average yearly rate of productivity change from 1950 to 2000 was 2.9 percent in the US, 6.3 percent for Japan and 4.7 percent for Germany while unit labor costs in USD increased at 2.6 percent in the US, 4.7 percent in Japan and 4.3 percent in Germany. From 1995 to 2000, output per hour increased at the average yearly rate of 4.6 percent in the US, 3.9 percent in Japan and 2.6 percent in Germany while unit labor costs in US fell at minus 0.7 percent in the US, 4.3 percent in Japan and 7.5 percent in Germany. There was increase in productivity growth in the G7 in Japan and France in the second half of the 1990s but significantly lower than the acceleration of 1.3 percentage points per year in the US. Lucas (2011May) compares growth of the G7 economies (US, UK, Japan, Germany, France, Italy and Canada) and Spain, finding that catch-up growth with earlier rates for the US and UK stalled in the 1970s.
Table VF-FR, France, Average Growth Rates of GDP Fourth Quarter, 1949-2012
| Period | Average ∆% |
| 1949-2012 | 3.2 |
| 2000-2012 | 1.0 |
| 2000-2011 | 1.1 |
| 2000-2007 | 1.7 |
| 1990-1999 | 1.9 |
| 1980-1989 | 2.5 |
| 1970-1979 | 3.8 |
| 1960-1969 | 5.7 |
| 1950-1959 | 4.2 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
The Markit Flash France Composite Output Index increased from 44.6 in May to 46.8 in Jun for the highest reading in ten months (http://www.markiteconomics.com/Survey/PressRelease.mvc/474f97906cf6429aafb0aff2e364c243). Jack Kennedy, Senior Economist at Markit and author of the report, finds that the data suggest slower rate of output contraction in IIQ2013 in both manufacturing and services (http://www.markiteconomics.com/Survey/PressRelease.mvc/474f97906cf6429aafb0aff2e364c243).
The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 44.3 in Apr to 44.6 in May, indicating of private sector activity at the slowest rate of deterioration in 2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/ee6a106df24542c89bb47f88945390d5). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI®, finds that composite data for manufacturing and services indicate another quarter of contraction of GDP (http://www.markiteconomics.com/Survey/PressRelease.mvc/ee6a106df24542c89bb47f88945390d5). The Markit France Services Activity index was unchanged from 43.3 in Apr to 44.3 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/ee6a106df24542c89bb47f88945390d5). The Markit France Manufacturing Purchasing Managers’ Index® increased to 46.4 in May from 44.4 in Apr, for the highest reading in about a year but remaining deeply below the neutral level of 50.0 (http://www.markiteconomics.com/Survey/PressRelease.mvc/5e6a4fec63424237bab6e6d0f3e8083c). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI®, finds slower decline in manufacturing but that the current period of 15 consecutive months of deterioration is the longest since beginning of the survey in 1998 (http://www.markiteconomics.com/Survey/PressRelease.mvc/5e6a4fec63424237bab6e6d0f3e8083c). Table FR provides the country data table for France.
Table FR, France, Economic Indicators
| CPI | Apr month ∆% -0.1 |
| PPI | May month ∆%: -1.2 Blog 6/30/13 |
| GDP Growth | IQ2013/IQ2012 ∆%: -0.4 |
| Industrial Production | Apr ∆%: |
| Consumer Spending | Manufactured Goods |
| Employment | Unemployment Rate: 10.4% |
| Trade Balance | Apr Exports ∆%: month 4.1, 12 months 4.1 Apr Imports ∆%: month 3.8, 12 months -0.6 Blog 6/9/13 |
| Confidence Indicators | Historical averages 100 Jun Mfg Business Climate 93 Blog 6/30/13 |
Links to blog comments in Table FR:
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html
6/2/13 http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html
5/19/13 http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html
Growth of GDP in a quarter relative to the prior quarter is provided for France in Table VF-1. GDP fell 0.2 percent in IVQ201 and fell 0.2 percent in IQ2013. The French economy grew 0.1 percent in IVQ2011, stagnating in IQ2012, contracting 0.2 percent in IIQ2011 and growing 0.1 percent in IIIQ2012. In the four quarters of 2012 and the first quarter of 2013, France’s GDP contracted 0.5 percent. Growth in the ten quarters of expansion from IIIQ2009 to IVQ2011 accumulated 4.1 percent at the annual equivalent rate of 1.6 percent. Recovery has been much weaker than the cumulative 2.6 percent in the four quarters of 2006. Weak recoveries in advanced economies have prevented full utilization of labor, capital and productive resources.
Table VF-1, France, Quarterly Real GDP Growth, Quarter on Prior Quarter ∆%
| IQ | IIQ | IIIQ | IVQ | |
| 2013 | -0.2 | |||
| 2012 | 0.0 | -0.2 | 0.1 | -0.2 |
| 2011 | 1.1 | 0.0 | 0.2 | 0.1 |
| 2010 | 0.2 | 0.6 | 0.5 | 0.5 |
| 2009 | -1.7 | 0.0 | 0.1 | 0.7 |
| 2008 | 0.4 | -0.7 | -0.4 | -1.6 |
| 2007 | 0.7 | 0.5 | 0.4 | 0.3 |
| 2006 | 0.7 | 1.1 | 0.0 | 0.8 |
| 2005 | 0.2 | 0.3 | 0.6 | 0.8 |
| 2004 | 0.5 | 0.7 | 0.4 | 0.8 |
| 2003 | 0.2 | 0.0 | 0.6 | 0.7 |
| 2002 | 0.6 | 0.5 | 0.1 | 0.0 |
| 2001 | 0.6 | 0.1 | 0.3 | -0.3 |
| 2000 | 1.1 | 0.7 | 0.5 | 0.9 |
| 1999 | 0.5 | 0.9 | 1.0 | 1.3 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
Growth rates of France’s real GDP in a quarter relative to the same quarter a year earlier are shown in Table VF-2. France has not recovered the rates of growth in excess of 2 percent prior to the global recession. GDP fell 4.3 percent in IQ2009, 3.7 percent in IIQ2009, 3.2 percent in IIIQ2009 and 1.0 percent in IVQ2009. Growth in IVQ2011 relative to IVQ2010 was 1.4 percent and GDP growth declined to 0.3 percent in IQ2012, 0.1 percent in IIQ2012 relative to the same quarter a year earlier, 0.0 percent in IIIQ2012 relative to a year earlier and minus 0.3 percent in IVQ2012 relative to a year earlier. Growth in 2013 relative to a year earlier was minus 0.4 percent.
Table VF-2, France, Real GDP Growth Current Quarter Relative to Same Quarter Year Earlier ∆%
| IQ | IIQ | IIIQ | IVQ | |
| 2013 | -0.4 | |||
| 2012 | 0.3 | 0.1 | 0.0 | -0.3 |
| 2011 | 2.7 | 2.1 | 1.8 | 1.4 |
| 2010 | 1.0 | 1.7 | 2.1 | 1.9 |
| 2009 | -4.3 | -3.7 | -3.2 | -1.0 |
| 2008 | 1.6 | 0.5 | -0.4 | -2.3 |
| 2007 | 2.6 | 2.1 | 2.4 | 1.8 |
| 2006 | 2.3 | 3.2 | 2.6 | 2.7 |
| 2005 | 2.1 | 1.6 | 1.9 | 1.8 |
| 2004 | 1.9 | 2.6 | 2.4 | 2.4 |
| 2003 | 0.8 | 0.3 | 0.8 | 1.6 |
| 2002 | 0.6 | 1.0 | 0.9 | 1.2 |
| 2001 | 2.7 | 2.1 | 1.9 | 0.6 |
| 2000 | 4.4 | 4.2 | 3.6 | 3.2 |
| 1999 | 2.9 | 2.8 | 3.2 | 3.7 |
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
Chart VF-1 of the Institut National de la Statistique et des Études Économiques provides France’s quarterly real GDP from IQ1949 to IQ2013. France’s economy has grown dynamically over decades. Recovery from the global recession in 2008-2009 has flattened.
Chart VF-1, France, Quarterly Real GDP, IQ1949-IQ2013
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
Percentage changes and contributions of segments of GDP in France are provided in Table VF-3. Internal demand deducted 0.2 percentage points from GDP growth in IQ2013, 0.1 percentage points in IVQ2012 and 0.2 percentage points in IIQ2012. Net foreign trade deducted 0.2 percentage from growth in IQ2013, added 0.1 percentage points in IVQ2012, 0.1 percentage points in IIIQ2012 and 0.1 percentage points in IIQ2012.
Table VF-3, France, Contributions to GDP Growth, Calendar and Seasonally Adjusted, %
| ∆% from Prior Period | IIQ | IIIQ | IVQ 2012 | IQ 2013 | 2012 | 2013 |
| GDP | -0.2 | 0.1 | -0.2 | -0.2 | 0.0 | -0.3 |
| Imports | 0.1 | 0.0 | -1.0 | 0.2 | -0.9 | -0.6 |
| Household Consump. | -0.5 | 0.1 | 0.1 | -0.1 | -0.4 | -0.1 |
| Govt. | 0.5 | 0.3 | 0.3 | 0.4 | 1.4 | 0.9 |
| GFCF | -0.2 | -0.7 | -0.8 | -1.0 | -1.2 | -2.0 |
| Exports | 0.5 | 0.3 | -0.7 | -0.4 | 2.5 | -0.7 |
| % Point | ||||||
| Internal Demand ex Inventory Changes | -0.2 | 0.0 | 0.0 | -0.2 | -0.1 | -0.2 |
| Inventory Changes | -0.1 | 0.0 | -0.2 | 0.2 | -0.8 | -0.1 |
| Net Foreign Trade | 0.1 | 0.1 | 0.1 | -0.2 | 1.0 | 0.0 |
Notes: Consump.: Consumption; Gvt.: Government; GFCF: Gross Fixed Capital Formation; Contribus.: Contributions
Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
Chart VF-1 of France’s Institut National de la Statistique et des Études Économiques provides percentage point contributions to GDP growth. The economy was driven in IQ2013 by changes in inventories with net trade and gross fixed capital formation (GFCF) deducting from growth.
Chart VF-2, France, Percentage Point Contributions to GDP Growth
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20130626
Table VF-4 shows the INSEE business climate manufacturing indicator. The headline synthetic index decreased from 92 in Jan 2013 to 88 in Apr 2013 but rebounded to 92 in May 2013 and 93 in Jun 2013. The final row shows general production expectations deteriorating from minus 34 in Feb 2013 to minus 49 in Apr 2013 and improving to minus 46 in May 2013 and 42 in Jun 2013. The indicator of demand and export order levels improved from minus 30 in Feb 2013 to minus 29 in May 2013 and minus 28 in Jun 2013.
Table VF-4, France, Business Climate Indicators of INSEE
| Mfg 2012-2013 | Average since 1976 | Mar 13 | Apr 13 | May 13 | Jun 13 |
| Synthetic Index | 100 | 91 | 88 | 92 | 93 |
| Recent Changes in Output | 4 | -13 | -17 | -3 | -5 |
| Finished- Goods Inventory Level | 13 | 6 | 10 | 11 | 9 |
| Demand and Total Order Levels | -18 | -34 | -40 | -31 | -30 |
| Demand and Export Order Levels | -13 | -25 | -26 | -29 | -28 |
| Personal Production Expectations | 5 | 1 | -2 | -2 | 0 |
| General Production Expectations | -9 | -45 | -49 | -46 | -42 |
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20130625
Chart VF-3 of the Institut National de la Statistique et des Études Économiques (INSEE) provides the history of the business climate synthetic index of INSEE since 1992. The index fell during the contractions of 1991, 2001 and 2008. After rapid recovery beginning in 2009 the synthetic index shows declining trend in 2011 with upward reversal in 2012 interrupted in Apr through Jul 2012 and a marginal upward move in Aug-Sep 2012 but new decline in Oct 2012, marginally reversed in Nov 2012 with stability in Dec 2012 and decline in Jan 2013 but improvement in Feb 2013 and stability in Mar 2013, deteriorating in Apr 2013 and recovering in May-Jun 2013.
Chart VF-3, France, INSEE Industrial Business Climate Synthetic Index
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20130625
Chart VF-4 of the Institut National de la Statistique et des Études Économiques (INSEE) shows strong drops of the turning point indicator in the recessions of 1991, 2001 and 2008. There have been other drops of this index. The turning point indicator has fallen to levels in the direction of past contractions and after rebounding in Oct and Nov 2011 is showing declining trend in Jan 2012 with slight reversal in Feb followed by significant improvement in Mar and deterioration in Apr through Jul 2012 with new improvement in Aug 2012 followed by decline in Sep-Oct 2012 followed by rebound in Nov 2012 and stability in Dec 2012 to Jan-Mar 2013, deteriorating in Apr-May 2013. The index improved in Jun 2013.
Chart VF-4, INSEE Business Climate Manufacturing Turning Point Indicator
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20130625
Chart VF-5 of the Institut National de la Statistique et des Études Économiques (INSEE) of France shows the indexes of general production expectations, personal production expectations and recent changes in output. All three indexes fell during the past three contractions after 1991, 2001 and 2008. The indexes are showing downward trend in 2011 that continued in Nov, Dec and Jan 2012 with slight reversal in Feb and significant improvement in Mar followed by weakens in Apr through Jul 2012 and stability in Aug-Sep 2012 and new decline in Oct 2012 followed by improvement in Nov 2012 and stability in Dec 2012 with some improvement in Jan-Feb 2013 and deterioration in Mar-Apr 2013 with stability in May 2013.
Chart VF-5, Climate Manufacturing General Production, Personal Production and Recent Changes in Output of INSEE, SA %
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20130625
Chart VF-6 provides business climate indicators for services in France. All three indicators are showing improvement in the final segment for Jun 2013.
Chart VF-6, Climate Services General Production, Personal Production and Recent Changes in Output of INSEE, SA %
http://www.insee.fr/en/themes/info-rapide.asp?id=62&date=20130625
VG Italy. Table VG-IT provides percentage changes in a quarter relative to the same quarter a year earlier of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 0.5 percent in IVQ2011 to minus 2.8 percent in IVQ2012 and minus 2.4 percent in IQ2013. The aggregate demand components of consumption and gross fixed capital formation (GFCF) have been declining at faster rates.
Table VG-IT, Italy, GDP and Expenditure Components, Chained Volume Measures, Quarter ∆% on Same Quarter Year Earlier
| GDP | Imports | Consumption | GFCF | Exports | |
| 2013 | |||||
| IQ | -2.4 | -5.2 | -2.7 | -7.5 | -0.2 |
| 2012 | |||||
| IVQ | -2.8 | -6.7 | -4.2 | -7.8 | 1.8 |
| IIIQ | -2.6 | -8.1 | -4.3 | -8.2 | 2.5 |
| IIQ | -2.5 | -7.5 | -3.9 | -8.3 | 2.5 |
| IQ | -1.7 | -8.9 | -3.3 | -7.6 | 2.1 |
| 2011 | |||||
| IVQ | -0.5 | -6.9 | -1.8 | -3.3 | 3.1 |
| IIIQ | 0.3 | 0.1 | -0.7 | -2.1 | 5.6 |
| IIQ | 0.9 | 3.1 | 0.6 | -0.6 | 7.0 |
| IQ | 1.3 | 8.8 | 0.9 | 0.6 | 10.9 |
| 2010 | |||||
| IVQ | 2.0 | 15.3 | 1.1 | 0.8 | 13.2 |
| IIIQ | 1.8 | 13.2 | 1.3 | 2.4 | 12.0 |
| IIQ | 1.9 | 13.5 | 0.8 | 1.1 | 12.0 |
| IQ | 1.1 | 7.2 | 0.8 | -2.0 | 7.3 |
| 2009 | |||||
| IVQ | -3.4 | -6.4 | 0.2 | -7.8 | -9.3 |
| IIIQ | -4.9 | -12.2 | -0.8 | -12.6 | -16.4 |
| IIQ | -6.6 | -17.9 | -1.5 | -13.6 | -21.4 |
| IQ | -7.0 | -17.2 | -1.7 | -12.6 | -22.8 |
| 2008 | |||||
| IVQ | -3.0 | -8.2 | -0.9 | -8.3 | -10.3 |
| IIIQ | -1.9 | -5.0 | -0.8 | -4.5 | -3.9 |
| IIQ | -0.2 | -0.1 | -0.3 | -1.5 | 0.4 |
| IQ | 0.5 | 1.7 | 0.1 | -1.0 | 2.9 |
GFCF: Gross Fixed Capital Formation
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/92338
The Markit/ADACI Business Activity Index decreased from 47.0 in Apr to 46.5 in May, indicating contraction of output of Italy’s services sector for 24 consecutive months of decline since Jun 2011 with some respondents experiencing moderately faster rate of contraction than in the first quarter (http://www.markiteconomics.com/Survey/PressRelease.mvc/812d0745b08d42d682b788f614dd7d5b). Phil Smith, economist at Markit and author of the Italy Services PMI®, finds that the index suggests slower rate of decline of GDP in the second quarter (http://www.markiteconomics.com/Survey/PressRelease.mvc/812d0745b08d42d682b788f614dd7d5b). The Markit/ADACI Purchasing Managers’ Index® (PMI®), increased from 45.5 in Apr to 47.3 in May for 22 consecutive months of contraction of Italy’s manufacturing below 50.0 with the May at the highest in four months (http://www.markiteconomics.com/Survey/PressRelease.mvc/c45abc76abab42639cb3813e1c38539e). Phil Smith, economist at Markit and author of the Italian Manufacturing PMI®, finds that manufacturing has been improving by obtaining foreign orders with internal demand still weak (http://www.markiteconomics.com/Survey/PressRelease.mvc/c45abc76abab42639cb3813e1c38539e). Table IT provides the country data table for Italy.
Table IT, Italy, Economic Indicators
| Consumer Price Index | Jun month ∆%: 0.3 |
| Producer Price Index | May month ∆%: -0.1 Blog 6/30/13 |
| GDP Growth | IQ2013/IVQ2012 SA ∆%: minus 0.6 |
| Labor Report | Apr 2013 Participation rate 63.8% Employment ratio 56.0% Unemployment rate 12.0% Blog 6/2/13 |
| Industrial Production | Apr month ∆%: -0.3 |
| Retail Sales | Apr month ∆%: -0.1 Apr 12-month ∆%: -2.9 Blog 6/30/13 |
| Business Confidence | Mfg Jun 90.2, Feb 88.6 Construction Jun 71.0, Feb 81.1 Blog 6/30/13 |
| Trade Balance | Balance Apr SA €2666 million versus Mar €402 |
Links to blog comments in Table IT:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/2/13 http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html
3/17/13 http://cmpassocregulationblog.blogspot.com/2013/03/recovery-without-hiring-ten-million.html
An important part of the analysis of Blanchard (2011WEOSep, 2012WEOApr) is the much more difficult adjustment of economies with need of fiscal consolidation in the presence of weak economic growth. Demand has significantly weakened throughout the advanced economies. There are many sound fundamentals in Italy such as high income and competitive companies. The restraints consist of low economic growth with high debt/GDP ratio. Table VG-1 provides growth of retail sales for Italy. Retail sales decreased 0.1 percent in Apr 2013 relative to Mar 2013, decreased 0.8 percent in Feb-Apr 2013 relative to Nov 2012-Jan 2013, decreased 2.9 percent in Apr 2013 relative to Apr 2012 and decreased 3.4 percent cumulatively in Jan-Apr 2013 relative to Jan-Apr 2012. Food retail sales outperform non-food retail sales.
Table VG-1, Italy, Retail Sales ∆%
| Apr 2013/ Mar 2013 SA | Feb-Apr 13/ | Apr 2013/ Apr 2012 NSA | Jan-Apr 2013/ | |
| Food | 0.7 | -0.2 | -4.5 | -2.1 |
| Non-food | 0.2 | -1.2 | -1.9 | -4.2 |
| Total | -0.1 | -0.8 | -2.9 | -3.4 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/94517
Chart VG-1 provides 12-month percentage changes of retail sales at current prices. There is improvement in the final segment from Feb to Apr 2013.
Chart VG-1, Italy, Percentage Changes of Retail Sales in 12 Months
Source: Istituto Nazionale di Statistica
A longer perspective of retail sales in Italy is provided by monthly and 12-month percentage changes in 2011, Jan-Dec 2012, Jan-Apr 2013 and annual rates for 2011 and 2012 in Table VG-2. Retail sales did not decline very sharply during the global recession but fell 0.8 percent in 2011 and 1.7 percent in 2012. There is an evident declining trend in 2011 with few monthly increases and similar weakness in 2012 with multiple monthly declines. Percentage changes in 12 months have increased to more than 3 percent with decrease of 3.2 percent in the 12 months ending in Mar 2013 but decrease of 2.9 percent in the 12 months ending in Apr 2013.
Table VG-2, Italy, Retail Sales Month and 12-Month ∆%
| Month ∆% SA | 12-Month ∆% NSA | |
| Apr 2013 | -0.1 | -2.9 |
| Mar | -0.3 | -3.2 |
| Feb | -0.2 | -4.8 |
| Jan | -0.5 | -2.8 |
| Dec 2012 | -0.1 | -3.4 |
| Nov | -0.2 | -2.4 |
| Oct | -0.7 | -3.4 |
| Sep | -0.2 | -1.0 |
| Aug | 0.0 | -0.4 |
| Jul | -0.3 | -3.1 |
| Jun | -0.1 | 0.2 |
| May | 0.1 | -1.1 |
| Apr | -1.1 | -6.3 |
| Mar | 0.2 | 2.3 |
| Feb | -0.3 | 0.7 |
| Jan | 0.9 | -0.9 |
| Dec 2011 | -0.9 | -3.2 |
| Nov | -0.4 | -1.5 |
| Oct | 0.6 | -0.9 |
| Sep | -0.3 | -1.1 |
| Aug | -0.4 | 0.1 |
| July | 0.0 | -1.7 |
| Jun | -0.4 | -0.6 |
| May | -0.5 | -0.3 |
| Apr | 1.0 | 3.3 |
| Mar | -0.3 | -1.9 |
| Feb | -0.3 | 0.1 |
| Jan | -0.2 | -0.5 |
| Dec 2010 | 0.5 | 0.6 |
| 2012 | -1.7 | |
| 2011 | -0.8 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/94517
Italy’s index of business confidence in manufacturing and construction is provided in Table VG-3. There has been stabilization of manufacturing confidence below the historical average of 100 from 88.6 in Feb 2013 to 90.2 in May 2013. Order books deteriorated to minus 43 in May 2013 but improved to minus 39 in Jun 2013. There is oscillation in construction with the index moving from 81.1 in Feb 2013 to 81.0 in May 2013, falling to 71.0 in Jun 2013.
Table VG-3, Italy, Index of Business Confidence in Manufacturing and Construction 2005=100
| Jun 2013 | May 2013 | Apr 2013 | Mar 2013 | Feb 2013 | |
| Mfg Confidence | 90.2 | 88.7 | 88.1 | 89.0 | 88.6 |
| Order Books | -39 | -43 | -45 | -43 | -42 |
| Stocks Finished Products | 1 | 1 | -1 | 0 | 1 |
| Production | -2 | -2 | -4 | -3 | -4 |
| Construction Confidence | 71.0 | 81.0 | 77.7 | 79.4 | 81.1 |
| Order Books | -56 | -49 | -52 | -53 | -51 |
| Employment | -27 | -13 | -17 | -13 | -13 |
Mfg: manufacturing
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/94763
VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 4.0 percent in 2009 after dropping 1.0 percent in 2008. Recovery of 1.8 percent in 2010 is relatively low compared to annual growth rates in 2007 and earlier years. Growth was only 1.0 percent in 2011 and 0.3 percent in 2012. The bottom part of Table VH-UK provides average growth rates of UK GDP since 1948. The UK economy grew at 2.6 percent on average between 1948 and 2012, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.0 percent. Growth in the current cyclical expansion has been only at 1.0 percent as advanced economies struggle with weak internal demand and world trade.
Table VH-UK, UK, Gross Domestic Product, ∆%
| ∆% on Prior Year | |
| 1998 | 3.5 |
| 1999 | 3.2 |
| 2000 | 4.2 |
| 2001 | 2.9 |
| 2002 | 2.4 |
| 2003 | 3.8 |
| 2004 | 2.9 |
| 2005 | 2.8 |
| 2006 | 2.6 |
| 2007 | 3.6 |
| 2008 | -1.0 |
| 2009 | -4.0 |
| 2010 | 1.8 |
| 2011 | 1.0 |
| 2012 | 0.3 |
| Average ∆% per Year | |
| 1948-2012 | 2.6 |
| 1948-1959 | 2.9 |
| 1960-1969 | 3.3 |
| 1970-1979 | 2.5 |
| 1980-1989 | 3.2 |
| 1990-1999 | 2.6 |
| 2000-2012 | 1.6 |
| 2000-2007 | 3.0 |
| 2009-2012 | 1.0 |
Source: UK Office for National Statistics Statistics http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q1-2013/index.html
The Business Activity Index of the Markit/CIPS UK Services PMI® increased from 52.9 in Apr to 54.9 in May, indicating increase in activity in every month since the beginning of 2013 and at the fastest rate since Mar 2012 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9fbd7a9c2e7042f4b2b9eb9c479673c8). Chris Williamson, Chief Economist at Markit, finds continuing improvement in the UK’s economy that depending on Jun could result in growth of GDP of 0.5 percent in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9fbd7a9c2e7042f4b2b9eb9c479673c8). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) increased from 50.2 in Apr to 51.3 in May, which is the highest reading since Mar 2012 (http://www.markiteconomics.com/Survey/PressRelease.mvc/ff4aa4ed5e41429c86b62108fe19555d). Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI®, finds manufacturing improving throughout all segments with the impulse originating in the internal market but increases in demand from Asia, North America and some countries in the euro area such as Germany (http://www.markiteconomics.com/Survey/PressRelease.mvc/ff4aa4ed5e41429c86b62108fe19555d). Table UK provides the economic indicators for the United Kingdom.
Table UK, UK Economic Indicators
| CPI | May month ∆%: 0.2 |
| Output/Input Prices | Output Prices: May 12-month NSA ∆%: 1.2; excluding food, petroleum ∆%: 0.8 |
| GDP Growth | IQ2013 prior quarter ∆% 0.3; year earlier same quarter ∆%: 0.6 |
| Industrial Production | Apr 2013/Apr 2012 ∆%: Production Industries minus 0.6; Manufacturing minus 0.5 |
| Retail Sales | May month ∆%: 2.1 |
| Labor Market | Feb-Apr Unemployment Rate: 7.8%; Claimant Count 4.5%; Earnings Growth 1.3% |
| Trade Balance | Balance Apr minus ₤2579 million |
Links to blog comments in Table UK:
6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html
5/26/13 http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html
5/12/13 http://cmpassocregulationblog.blogspot.com/2013/05/recovery-without-hiring-collapse-of.html
4/28/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states_28.html
03/31/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013
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