Recovery without Hiring, Tapering Quantitative Easing Policy and Peaking Valuations of Risk Financial Assets, IMF View of World Economy and Finance, Collapse of United States Dynamism of Income Growth and Employment Creation, World Economic Slowdown and Global Recession Risk: Part III

 

Recovery without Hiring, Tapering Quantitative Easing Policy and Peaking Valuations of Risk Financial Assets, IMF View of World Economy and Finance, Collapse of United States Dynamism of Income Growth and Employment Creation, World Economic Slowdown and Global Recession Risk

Carlos M. Pelaez

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013

Executive Summary

I Recovery without Hiring

IA1 Hiring Collapse

IA2 Labor Underutilization

IA3 Ten Million Fewer Full-time Job

IA4 Youth and Middle-Age Unemployment

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

II IMF View of World Economy and Finance

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

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

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/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 IMF provides an update of the macroeconomic forecast of the world (http://www.imf.org/external/pubs/ft/weo/2013/update/02/). The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the global recession that affected the US economy from IVQ2007 (Dec) to IIQ2009 (Jun) (http://www.nber.org/cycles.html). A new fact is slowing growth in emerging and developing economies. The IMF has lowered its forecast of the world economy to 3.1 percent in 2013 but accelerating to 3.8 percent in 2014 with the unmodified earlier forecasts of 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, 1.2 percent in 2013 and 2.1 percent in 2014 and 2.1 on average from 2013 to 2016 in contrast with 3.9 percent for the world as a whole. While the world would grow 16.8 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.6 percent. The difference in dollars of 2012 is rather high: growing by 16.8 percent would add $12.0 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,964 but growing by 8.6 percent would add $6.2 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 24.5 percent or at the average yearly rate of 5.6 percent, contributing $6.7 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.

The IMF explains the major factors of the change in forecast (http://www.imf.org/external/pubs/ft/weo/2013/update/02/):

“Global growth is projected to remain subdued at slightly above 3 percent in 2013, the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area. Downside risks to global growth prospects still dominate: while old risks remain, new risks have emerged, including the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals. Stronger global growth will require additional policy action. Specifically, major advanced economies should maintain a supportive macroeconomic policy mix, combined with credible plans for reaching medium-term debt sustainability and reforms to restore balance sheets and credit channels. Many emerging market and developing economies face a tradeoff between macroeconomic policies to support weak activity and those to contain capital outflows. Macroprudential and structural reforms can help make this tradeoff less stark.”

Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth

	GDP USD 2012	Real GDP ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
World	71,707	3.1	3.8	4.4	4.5
G7	33,932	1.2	2.1	2.5	2.5
Canada	1,819	1.7	2.2	2.5	2.4
France	2,609	-0.2	0.8	1.5	1.7
DE	3,401	0.3	1.3	1.3	1.3
Italy	2,014	-1.8	0.7	1.2	1.4
Japan	5,964	2.0	1.2	1.1	1.2
UK	2,441	0.9	1.5	1.8	1.9
US	15,685	1.7	2.7	3.6	3.4
Euro Area	12,198	-0.3	1.1	1.4	1.6
DE	3,401	0.3	1.3	1.3	1.3
France	2,609	-0.2	0.8	1.5	1.7
Italy	2,014	-1.8	0.7	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	5.0	5.4	6.0	6.1
Brazil	2,396	2.5	3.2	4.1	4.2
Russia	2,022	2.5	3.3	3.7	3.6
India	1,825	5.6	6.3	6.6	6.9
China	8,227	7.8	7.7	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 http://www.imf.org/external/pubs/ft/weo/2013/update/02/

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 0.9 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.3 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 (http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html) with weak hiring (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html). In IQ2012, UK GDP changed 0.0 percent, increasing 0.6 percent relative to a year earlier. UK GDP fell 0.5 percent in IIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP increased 0.7 percent in IIIQ2012 and increased 0.1 percent relative to a year earlier. UK GDP fell 0.2 percent in IVQ2012 relative to IIIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP increased 0.3 percent in IQ2013 and 0.3 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	0.0	0.6
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ:0.3         SAAR: 1.3	2.1
Japan	QOQ: -0.2 SAAR: -0.6	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	-0.5	0.0
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.8  SAAR: 3.1	2.6
Japan	QOQ: –0.9 SAAR: –3.6	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	0.7	0.1
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.1 SAAR: 0.4	1.7
Japan	QOQ: 0.3 SAAR: 1.2	0.4
China	2.0	7.9
Euro Area	-0.6	-0.9
Germany	-0.7	0.0
France	-0.2	-0.3
Italy	-0.9	-2.8
United Kingdom	-0.2	0.0
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.4 SAAR: 1.8	1.6
Japan	QOQ: 1.0 SAAR: 4.1	0.4
China	1.6	7.7
Euro Area	-0.3	-1.1
Germany	0.1	-1.4
France	-0.2	-0.4
Italy	-0.6	-2.4
UK	0.3	0.3

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

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

There is evidence of deceleration of growth of world trade and even contraction in recent data. Table V-4 provides two types of data: growth of exports and imports in the latest available months and in the past 12 months; and contributions of net trade (exports less imports) to growth of real GDP. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and_4699.html 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 Jun 2013, China exports decreased 3.1 percent relative to a year earlier and imports fell 0.7 percent. Germany’s exports decreased 2.4 percent in the month of May 2013 and decreased 4.8 percent in the 12 months ending in May 2013 while imports increased 1.7 percent in the month of May and decreased 2.6 percent in the 12 months ending in May. 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 0.7 percentage points in IIQ2012, added 0.4 percentage points in IIIQ2012 and subtracted 0.3 percentage points in IVQ2012. In IQ2013, net trade added 0.6 percentage points to UK’s growth of value added. France’s exports decreased 4.3 percent in May 2013 while imports decreased 0.2 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 1.6 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 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 M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	-0.3 May	0.9 Jan-May	1.9 May	-1.7 Jan-May
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		-3.1 Jun 1.0 May 14.7 Apr 10.0 Mar 21.8 Feb		-0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb
Euro Area	9.1 12-M Apr	3.2 Jan-Apr	1.2 12-M Apr	-3.6 Jan-Apr
Germany	-2.4 May CSA	-4.8 May	1.7 May CSA	-2.6 May
France May	-4.3	-4.4	-0.2	-2.2
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 -0.7 IIQ2012 +0.4 IIIQ2012 -0.3 IVQ2012 0.6 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 Millions Yen	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 revised 3.1 percent in 2013 and 5.4 percent in 2014 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)	3.1	5.4	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 2005=100	170.04	164.66	NA	NA
Imports Goods & Services
G7	1.4	4.3	4.7	4.3
EMDE	6.0	7.3	7.9	7.5
Exports Goods & Services
G7	2.4	4.7	4.9	4.5
EMDE	4.3	6.3	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 http://www.imf.org/external/pubs/ft/weo/2013/update/02/

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, decreased to 51.4 in Jun from 52.9 in May, indicating expansion at a moderate rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/6c45a62f0c5a427c8ecdcf4ffffb6688). This index has remained above the contraction territory of 50.0 during 47 consecutive months but the reading in Jun is the slowest in a year. The employment index increased from 50.3 in May to 51.7 in Jun with input prices rising at higher rate and new orders and output increasing at slower rates (http://www.markiteconomics.com/Survey/PressRelease.mvc/6c45a62f0c5a427c8ecdcf4ffffb6688). David Hensley, Director of Global Economic Coordination at JP Morgan, finds that the index fell below trend in Jun with services slowing especially in the US (http://www.markiteconomics.com/Survey/PressRelease.mvc/6c45a62f0c5a427c8ecdcf4ffffb6688). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, was unchanged at 50.6 in Jun from 50.6 in May, which is the sixth consecutive reading above 50 (http://www.markiteconomics.com/Survey/PressRelease.mvc/3104066a480f4276bbcefe12f0387391). New export business fell sharply in Jun for the US and China while total new orders increased from 51.3 in May to 51.5 in Jun. The HSBC Brazil Composite Output Index, compiled by Markit, decreased marginally from 51.2 in May to 51.1 in Jun, indicating moderate increase in private sector activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/d6238894628a42bcb1c8ab6ce970cee0). The HSBC Brazil Services Business Activity index, compiled by Markit, was unchanged from 51.0 in May to 51.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/d6238894628a42bcb1c8ab6ce970cee0). Andre Loes, Chief Economist, Brazil, at HSBC, finds that the survey data suggest weakness in growth in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d6238894628a42bcb1c8ab6ce970cee0). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) was unchanged from 50.4 in May, which was the weakest reading in seven months, to 50.4 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/84c2905cbe394285bcc24f85a426ca6d). Andre Loes, Chief Economist, Brazil at HSBC, finds that companies are facing the fastest rate of growth of input prices since Mar 2011 with the quarterly average of the index of 50.5 at the slowest reading since IIIQ2012 (http://www.markiteconomics.com/Survey/PressRelease.mvc/84c2905cbe394285bcc24f85a426ca6d).

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^™) decreased to 51.9 in Jun from 52.3 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/61c3e275eedf42b5abc0566f4adf015e). The index of new exports orders fell from 49.8 in May to 46.3 in Jun while total new orders increased from 53.3 in May to 53.4 in Jun. Chris Williamson, Chief Economist at Markit, finds further decline in manufacturing impulse with weak internal demand and contraction of export orders at the sharpest rate since the worst point of the global recession in mid 2009 (http://www.markiteconomics.com/Survey/PressRelease.mvc/61c3e275eedf42b5abc0566f4adf015e). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 1.9 percentage points from 49.0 in May to 50.9 in Jun, which indicates growth in change of direction from contraction (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 3.1 percentage points from 48.8 in May to 51.9 in Jun. The index of exports increased 3.5 percentage points from 51.0 in May to 54.5 in Jun, advancing in expansion territory. The Non-Manufacturing ISM Report on Business^® PMI decreased 1.5 percentage points from 53.7 in May to 52.2 in Jun, indicating growth of business activity/production during 47 consecutive months, while the index of new orders decreased 5.2 percentage points from 56.0 in May to 50.8 in Jun (http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	May 12 months NSA ∆%: 1.4; ex food and energy ∆%: 1.7 May month SA ∆%: 0.1; ex food and energy ∆%: 0.2 Blog 6/23/13
Producer Price Index	Jun 12-month NSA ∆%: 2.5; ex food and energy ∆% 1.7 Jun month SA ∆% = 0.8; ex food and energy ∆%: 0.2 Blog 7/14/13
PCE Inflation	May 12-month NSA ∆%: headline 1.0; ex food and energy ∆% 1.1 Blog 6/30/13
Employment Situation	Household Survey: May Unemployment Rate SA 7.6% Blog calculation People in Job Stress Jun: 28.7 million NSA, 17.5% of Labor Force Establishment Survey: Nov Nonfarm Jobs +195,000; Private +202,000 jobs created  May 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.2 Blog 7/7/13
Nonfarm Hiring	Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million Private-Sector Hiring May 2013 4.964 million lower by 1.022 million than 5.986 million in May 2007 Blog 7/14/13
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.4 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 Blog 6/30/13
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 Real Personal Consumption Expenditures (RPCE): 0.2 12-month May NSA ∆%: RDPI: 1.1; RPCE ∆%: 1.8 Blog 6/30/13
Quarterly Services Report	IQ13/IQ12 SA ∆%: Information 4.3 Financial & Insurance 1.8 Blog 6/9/13
Employment Cost Index	Compensation Private IQ2013 SA ∆%: 0.3 Jan 13 months ∆%: 1.7 Blog 5/5/13
Industrial Production	May month SA ∆%: 0.0 May 12 months SA ∆%: 1.6 Manufacturing May SA ∆% 0.1 May 12 months SA ∆% 1.7, NSA 1.7 Capacity Utilization: 77.6 Blog 6/23/13
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 New Orders: From May -1.17 to Jun -6.69 Blog 6/23/13
Philadelphia Fed Business Outlook Index	General Index from May -5.2 to Jun 12.5 New Orders from May -7.9 to Jun 16.6 Blog 6/23/13
Manufacturing Shipments and Orders	New Orders SA May ∆% 2.1 Ex Transport 0.6 Jan-May NSA New Orders 0.9 Ex transport 0.4 Blog 7/7/13
Durable Goods	May New Orders SA ∆%: 3.6; ex transport ∆%: 0.7 Jan-May 13/Jan-May 12 New Orders NSA ∆%: 2.1; ex transport ∆% 1.2 Blog 6/30/13
Sales of New Motor Vehicles	Jan-Jun 2013 7,829,141; Jan-Jun 2012 7,272,160. Jun 13 SAAR 15.96 million, May 13 SAAR 15.31 million, Jun 2012 SAAR 14.38 million Blog 7/7/13
Sales of Merchant Wholesalers	Jan-May 2013/Jan-May 2012 NSA ∆%: Total 2.4; Durable Goods: 2.6; Nondurable Goods: 2.2 Blog 7/14/13
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Apr 13/Apr 12 NSA ∆%: Sales Total Business 3.1; Manufacturers 1.6 Retailers 4.3; Merchant Wholesalers 4.0 Blog 6/16/13
Sales for Retail and Food Services	Jan-May 2013/Jan-May 2012 ∆%: Retail and Food Services 3.7; Retail ∆% 3.7 Blog 6/16/13
Value of Construction Put in Place	May SAAR month SA ∆%: 0.5 May 12-month NSA: 5.4 Jan-May 2013 ∆% 6.2 Blog 7/7/13
Case-Shiller Home Prices	Apr 2013/Apr 2012 ∆% NSA: 10 Cities 11.6; 20 Cities: 12.1 ∆% Apr SA: 10 Cities 1.8 ; 20 Cities: 1.7 Blog 6/30/13
FHFA House Price Index Purchases Only	Apr SA ∆% 0.7; 12 month NSA ∆%: 7.4 Blog 6/30/13
New House Sales	May 2013 month SAAR ∆%: 2.1 Jan-May 2013/Jan-Apr 2012 NSA ∆%: 29.2 Blog 6/30/13
Housing Starts and Permits	May Starts month SA ∆%: 6.8 ; Permits ∆%: -3.1 Jan-May 2013/Jan-May 2012 NSA ∆% Starts 28.1; Permits  ∆% 26.6 Blog 6/23/13
Trade Balance	Balance May SA -$45,027 million versus Apr -$40,149 million Exports May SA ∆%: -0.3 Imports May SA ∆%: 1.9 Goods Exports Jan-May 2013/2012 NSA ∆%: 0.9 Goods Imports Jan-May 2013/2012 NSA ∆%: -1.7 Blog 7/7/13
Export and Import Prices	Jun 12-month NSA ∆%: Imports 0.2; Exports -0.8 Blog 7/14/13
Consumer Credit	May ∆% annual rate: 8.3 Blog 7/14/13
Net Foreign Purchases of Long-term Treasury Securities	Apr Net Foreign Purchases of Long-term US Securities: minus $37.3 billion Major Holders of Treasury Securities: China $1265 billion; Japan $1100 billion; Total Foreign US Treasury Holdings Feb $5671 billion Blog 6/16/13
Treasury Budget	Fiscal Year 2013/2012 ∆% Jun: Receipts 14.4; Outlays -4.8; Individual Income Taxes 18.0 Deficit Fiscal Year 2011 $1,296 billion Deficit Fiscal Year 2012 $1,087 billion Blog 7/14/2013
CBO Budget and Economic Outlook	2012 Deficit $1089 B 7.0% GDP Debt 11,280 B 72.5% GDP 2013 Deficit $845 B, Debt 12,229 B 76.3% GDP Blog 8/26/12 11/18/12 2/10/13
Commercial Banks Assets and Liabilities	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:

7/7/13 http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

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

Sales and inventories of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-1 for Jan-May 2013 NSA and percentage changes from the prior month SA and for Jan-May 2013 relative to Jan-May 2012. These data are volatile aggregating diverse categories of durable and nondurable goods without adjustment for price changes. Total sales for the US rose 2.4 percent in Jan-May 2013 relative to Jan-May 2012 and increased 1.6 percent in May 2013 relative to Apr 2013. The value of total sales is quite high at $2085.1 billion, approaching five trillion dollars in a year. Value in the breakdown is useful in identifying relative importance of individual categories. Sales of durable goods in Jan-May 2013 reached $949.5 billion, over two trillion dollars for a year, increasing 0.3 percent in May 2013 relative to Apr 2013 and increasing 2.6 percent in Jan-May 2013 relative to Jan-May 2012. Sales of automotive products reached $166.7 billion in Jan-May 2013, increasing 3.0 percent in the month and increasing 4.3 percent relative to a year earlier. There is strong performance of 7.7 percent in machinery but lower of 2.7 percent in electrical products. Sales of nondurable goods rose 1.5 percent over a year earlier. The influence of commodity prices returned as suggested by increase of 3.5 percent in May 2013 and increase of 7.4 percent in Jan-May 2013 relative to a year earlier in farm products with increase of 1.1 percent in petroleum products in May 2013 and decrease of 2.4 percent relative to a year earlier. The final three columns in Table VA-1 provide the value of inventories and percentage changes from the prior month and relative to the same month a year earlier. US total inventories of wholesalers decreased 0.5 percent in May 2013 and increased 3.4 percent relative to a year earlier. Inventories of durable goods of $306.6 billion are 61.9 percent of total inventories of $495.6 billion and rose 3.4 percent relative to a year earlier. Automotive inventories decreased 0.1 percent relative to a year earlier. Machinery inventories of $167.7 billion rose 9.1 percent relative to a year earlier. Inventories of nondurable goods of $189.0 billion are 38.1 percent of the total and increased 0.9 percent relative to a year earlier. Inventories of farm products decreased 6.0 percent in May relative to Apr and decreased 7.8 percent relative to a year earlier. Inventories of petroleum products increased 0.7 percent in May and decreased 5.5 percent relative to a year earlier.

Table VA-1, US, Sales and Inventories of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, Month ∆%

2013	Sales $ Billions Jan-May 2013 NSA	Sales May ∆% SA	Sales∆% Jan-May 2013 from Jan-May 2012  NSA	INV $ Billions May 2013 NSA	INV  May ∆% SA	INV  ∆% May 2013 from May 2012 NSA
US Total	2085.1	1.6	2.4	495.6	-0.5	3.4
Durable	949.5	0.3	2.6	306.6	-0.3	4.9
Automotive	166.7	3.0	4.3	48.4	0.0	-0.1
Prof. Equip.	189.8	-0.1	1.1	37.4	0.3	6.2
Computer Equipment	108.0	0.3	-1.2	16.8	0.2	11.5
Electrical	147.2	-0.3	2.7	37.3	0.6	5.6
Machinery	167.7	0.4	7.7	87.1	-0.7	9.1
Not Durable	1135.6	2.8	2.2	189.0	-0.8	0.9
Drugs	173.4	2.1	2.0	35.9	3.0	5.6
Apparel	58.2	5.3	1.4	21.5	-0.1	0.9
Groceries	241.8	3.8	3.5	33.0	-0.8	4.5
Farm Products	103.4	3.5	7.4	19.4	-6.0	-7.8
Petroleum	304.5	1.1	-2.4	22.2	0.7	-5.5

Note: INV: inventories

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

Chart VA-1 of the US Census Bureau provides wholesale trade NSA from Jan 1992 to May 2013. The jagged curve of wholesale trade sales without adjustment shows strong seasonal variations. There is a strong long-term trend interrupted by sharp drop during the global recession. Growth resumed along a stronger upward trend and the level in Dec 2012 surpasses the peak before the global recession with stability in the final segment.

Chart VA-1, US, Wholesale Trade Sales, Monthly, NSA, Jan 1992-May 2013, Millions of Dollars

Source: US Census Bureau

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

Chart VA-2 of the US Census Bureau provides US wholesale trade sales with seasonal adjustment from Jan 1992 to May 2013. The elimination of seasonality permits enhanced comparison of adjacent sales. The final segment identifies another drop followed by increase to a higher level with stability.

Chart VA-2, US, Wholesale Trade Sales, Monthly, SA, Jan 1992-May 2013, Millions of Dollars

Source: US Census Bureau

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

Inventory/sales ratios of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-2. The total for the US has remained almost without change at 1.18 in May 2013, 1.21 in Apr 2013 and 1.19 in May 2012. Inventory/sales ratios are higher in durable goods industries but remain relatively stable with 1.57 in May 2013, 1.58 in Apr 2013 and 1.56 in May 2012. Computer equipment operates with low inventory/sales ratios of 0.73 in May 2013, 0.73 in Apr 2013 and 0.66 in May 2012 because of the capacity to fill orders on demand. As expected because of perishable nature, nondurable inventory/sales ratios are quite low with 0.89 in May 2013 and 0.88 in Apr 2013, which are almost equal to 0.86 in May 2012. There are exceptions such as 1.96 in May 2013 in apparel that is higher than 1.86 in Apr 2013 and higher than 1.80 in May 2012.

Table VA-2, Inventory/Sales Ratios of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, % SA

	May 2013	Apr 2013	May 2012
US Total	1.18	1.21	1.19
Durable	1.57	1.58	1.56
Automotive	1.43	1.47	1.53
Prof. Equip.	0.95	0.94	0.90
Comp. Equip.	0.73	0.73	0.66
Electrical	1.23	1.22	1.21
Machinery	2.51	2.54	2.52
Not Durable	0.89	0.88	0.86
Drugs	1.02	1.02	0.99
Apparel	1.96	1.86	1.80
Groceries	0.71	0.71	0.67
Farm Products	1.29	1.29	1.36
Petroleum	0.38	0.37	0.38

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

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-3 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession.

Chart VA-3, US, Inventories of Merchant Wholesalers, Millions of Dollars, NSA, Jan 1992-May 2013

Source: US Census Bureau

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

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-4 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession.

Chart VA-4, US, Inventories of Merchant Wholesalers, Millions of Dollars, SA, Jan 1992-May 2013

Source: US Census Bureau

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

Chart VA-5 provides the chart of the US Census Bureau with inventories/sales ratios of merchant wholesalers from 2004 to 2013 seasonally adjusted. Inventory/sales ratios rise during contractions as merchants are caught with increasing inventories because of weak sales and fall during expansions as merchants attempt to fill sales with existing stocks. There is an increase in the inventory/sales ratio in 2012 but not yet significantly higher with declining trend in the final segment followed by an increase.

Chart VA-5, US, Monthly Inventories/Sales Ratios of Merchant Wholesalers, SA, 2004-2013

Source: US Census Bureau

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

IIA2 United States Import and Export Prices. Chart IIA2-1 provides prices of total US imports 2001-2013. Prices fell during the contraction of 2001. Import price inflation accelerated after unconventional monetary policy of near zero interest rates in 2003-2004 and quantitative easing by withdrawing supply with the suspension of 30-year Treasury bond auctions. Slow pace of adjusting fed funds rates from 1 percent by increments of 25 basis points in 17 consecutive meetings of the Federal Open Market Committee (FOMC) between Jun 2004 and Jun 2006 continued to give impetus to carry trades. The reduction of fed funds rates toward zero in 2008 fueled a spectacular global hunt for yields that caused commodity price inflation in the middle of a global recession. After risk aversion in 2009 because of the announcement of TARP (Troubled Asset Relief Program) creating anxiety on “toxic assets” in bank balance sheets (see Cochrane and Zingales 2009), prices collapsed because of unwinding carry trades. Renewed price increases returned with zero interest rates and quantitative easing. Monetary policy impulses in massive doses have driven inflation and valuation of risk financial assets in wide fluctuations over a decade.

Chart IIA2-1, US, Prices of Total US Imports 2001=100, 2001-2013

Source: Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-2 provides 12-month percentage changes of prices of total US imports from 2001 to 2013. The only plausible explanation for the wide oscillations is by the carry trade originating in unconventional monetary policy. Import prices jumped in 2008 during deep and protracted global recession driven by carry trades from zero interest rates to long, leveraged positions in commodity futures. Carry trades were unwound during the financial panic in the final quarter of 2008 that resulted in flight to government obligations. Import prices jumped again in 2009 with subdued risk aversion because US banks did not have unsustainable toxic assets. Import prices then fluctuated as carry trades were resumed during periods of risk appetite and unwound during risk aversion resulting from the European debt crisis.

Chart IIA2-2, US, Prices of Total US Imports, 12-Month Percentage Changes, 2001-2013

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Chart IIA2-3 provides prices of US imports from 1982 to 2013. There is no similar episode to that of the increase of commodity prices in 2008 during a protracted and deep global recession with subsequent collapse during a flight into government obligations. Trade prices have been driven by carry trades created by unconventional monetary policy in the past decade.

Chart IIA2-3, US, Prices of Total US Imports, 2001=100, 1982-2013

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Chart IIA2-4 provides 12-month percentage changes of US total imports from 1982 to 2013. There have not been wide consecutive oscillations as the ones during the global recession of IVQ2007 to IIQ2009.

Chart IIA2-4, US, Prices of Total US Imports, 12-Month Percentage Changes, 1982-2013

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Chart IIA2-5 provides the index of US export prices from 2001 to 2013. Import and export prices have been driven by impulses of unconventional monetary policy in massive doses. The most recent segment in Chart IIA2-5 shows declining trend resulting from a combination of the world economic slowdown and the decline of commodity prices as carry trade exposures are unwound because of risk aversion to the sovereign debt crisis in Europe and slowdown in the world economy.

Chart IIA2-5, US, Prices of Total US Exports, 2001=100, 2001-

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Chart IIA2-6 provides prices of US total exports from 1982 to 2013. The rise before the global recession from 2003 to 2008, driven by carry trades, is also unique in the series and is followed by another steep increase after risk aversion moderated in IQ2009.

Chart IIA2-6, US, Prices of Total US Exports, 2001=100, 1982-2013

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Chart IIA2-7 provides 12-month percentage changes of total US exports from 1982 to 2013. The uniqueness of the oscillations around the global recession of IVQ2007 to IIQ2009 is clearly revealed.

Chart IIA2-7, US, Prices of Total US Exports, 12-Month Percentage Changes, 1982-2013

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Twelve-month percentage changes of US prices of exports and imports are provided in Table IIA2-1. Import prices have been driven since 2003 by unconventional monetary policy of near zero interest rates influencing commodity prices according to moods of risk aversion. In a global recession without risk aversion until the panic of Sep 2008 with flight to government obligations, import prices increased 21.4 percent in the 12 months ending in Jul 2008, 18.1 percent in the 12 months ending in Aug 2008, 13.1 percent in the 12 months ending in Sep 2008, 4.9 percent in the twelve months ending in Oct 2008 and fell 5.9 percent in the 12 months ending in Nov 2008 when risk aversion developed in 2008 until mid 2009 (http://www.bls.gov/mxp/data.htm). Import prices rose again sharply in Nov 2010 by 4.1 percent and in Nov 2011 by 0.1 percent in the presence of zero interest rates with relaxed mood of risk aversion until carry trades were unwound in May 2011 and following months as shown by decrease of import prices by 1.4 percent in the 12 months ending in Nov 2012 and 1.8 percent in Dec 2012 and decrease of 0.3 percent in prices of exports in the 12 months ending in Dec 2012. Import prices increased 15.2 percent in the 12 months ending in Mar 2008, fell 14.9 percent in the 12 months ending in Mar 2009 and increased 11.2 percent in the 12 months ending in Mar 2010. Fluctuations are much sharper in imports because of the high content of oil that as all commodities futures contracts increases sharply with zero interest rates and risk appetite, contracting under risk aversion. There is similar behavior of prices of imports ex fuels, exports and exports ex agricultural goods but less pronounced than for commodity-rich prices dominated by carry trades from zero interest rates. A critical event resulting from unconventional monetary policy driving higher commodity prices by carry trades is the deterioration of the terms of trade, or export prices relative to import prices, that has adversely affected US real income growth relative to what it would have been in the absence of unconventional monetary policy. Europe, Japan and other advanced economies have experienced similar deterioration of their terms of trade. Because of unwinding carry trades of commodity futures as a result of risk aversion, import prices increased 0.2 percent in the 12 months ending in Jun 2013, export prices decreased 0.8 percent and prices of nonagricultural exports fell 0.3 percent. Imports excluding fuel fell 1.0 percent in the 12 months ending in Jun 2013. At the margin, price changes over the year in world exports and imports are decreasing or increasing moderately because of unwinding carry trades in a temporary mood of risk aversion that reverses exposures in commodity futures.

Table IIA2-1, US, Twelve-Month Percentage Rates of Change of Prices of Exports and Imports

	Imports	Imports Ex Fuels	Exports	Exports Non-Ag
Jun 2013	0.2	-1.0	-0.8	-0.3
Jun 2012	2.5	0.6	-2.1	-1.6
Jun 2011	13.6	5.0	10.1	8.0
Jun 2010	4.3	2.9	3.7	4.4
Jun 2009	-17.5	-4.5	-6.6	-5.9
Jun 2008	21.3	6.4	8.7	6.5
Jun 2007	2.3	2.1	4.3	3.2
Jun 2006	7.4	2.2	4.2	4.6
Jun 2005	7.4	2.1	3.2	3.8
Jun 2004	5.7	2.4	3.9	2.8
Jun 2003	2.2	0.4	1.5	0.9
Jun 2002	-3.6	NA	-1.4	-1.5
Jun 2001	-2.6	NA	-0.7	-0.7

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

Table IIA2-2 provides 12-month percentage changes of the import price index all commodities from 2001 to 2013. Interest rates moving toward zero during unconventional monetary policy in 2008 induced carry trades into highly leveraged commodity derivatives positions that caused increases in 12-month percentage changes of import prices of around 20 percent. The flight into dollars and Treasury securities by fears of toxic assets in banks in the proposal of TARP (Cochrane and Zingales 2009) caused reversion of carry trades and collapse of commodity futures explaining sharp declines in trade prices in 2009. Twelve-month percentage changes of import prices at the end of 2012 and into 2013 occurred during another bout of risk aversion.

Table IIA2-2, US, Twelve-Month Percentage Changes of Import Price Index All Commodities, 2001-2013

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Dec
2001	2.8	0.2	-1.6	-0.7	-0.8	-2.6	-4.1	-4.4	-9.1
2002	-8.9	-8.3	-5.6	-3.6	-3.7	-3.6	-1.7	-1.3	4.2
2003	5.8	7.5	6.8	1.8	1.0	2.2	2.3	2.0	2.4
2004	2.2	0.9	1.1	4.6	6.9	5.7	5.6	7.1	6.7
2005	5.7	6.1	7.6	8.4	5.9	7.4	8.2	8.2	8.0
2006	8.7	6.9	4.5	5.8	8.6	7.4	7.0	6.0	2.5
2007	0.0	1.2	2.8	2.1	1.2	2.3	2.8	1.9	10.6
2008	13.6	13.5	15.2	16.9	19.1	21.3	21.4	18.1	-10.1
2009	-12.5	-12.7	-14.9	-16.4	-17.3	-17.5	-19.1	-15.3	8.6
2010	11.4	11.3	11.2	11.2	8.5	4.3	4.9	3.8	5.3
2011	5.6	7.6	10.3	11.9	12.9	13.6	13.7	12.9	8.5
2012	6.9	5.1	3.5	0.8	-0.8	-2.5	-3.3	-1.8	-2.0
2013	-1.5	-0.6	-2.1	-2.6	-1.9	0.2

Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm

There is finer detail in one-month percentage changes of imports of the US in Table IIA2-3. Carry trades into commodity futures induced by interest rates moving to zero in unconventional monetary policy caused sharp monthly increases in import prices for cumulative increase of 13.8 percent from Mar to Jul 2008 at average rate of 2.6 percent per month or annual equivalent in five months of 36.4 percent (3.1 percent in Mar 2008, 2.8 percent in Apr 2008, 2.8 percent in May 2008, 3.0 percent in Jun 2008 and 1.4 percent in Jul 2008, data from http://www.bls.gov/mxp/data.htm). There is no other explanation for increases in import prices during sharp global recession and contracting world trade. Import prices then fell 23.4 percent from Aug 2008 to Jan 2009 or at the annual equivalent rate of minus 41.4 percent in the flight to US government securities in fear of the need to buy toxic assets from banks in the TARP program (Cochrane and Zingales 2009). Risk aversion during the first sovereign debt crisis of the euro area in May-Jun 2010 caused decline of US import prices at the annual equivalent rate of 11.4 percent. US import prices have been driven by combinations of carry trades induced by unconventional monetary policy and bouts of risk aversion (http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html). US import prices increased 0.5 percent in Jan 2013 and 0.9 percent in Feb 2013 for annual equivalent rate of 8.7 percent, similar to those in national price indexes worldwide, originating in carry trades from zero interest rates to commodity futures. Import prices fell 0.1 percent in Mar 2013, 0.6 percent in Apr 2013, 0.7 percent in May 2013 and 0.2 percent in Jun 2013.

Table IIA2-3, US, One-Month Percentage Changes of Import Price Index All Commodities, 2001-2013

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Dec
2001	0.0	-0.6	-1.6	-0.5	0.2	-0.4	-1.5	-0.1	-0.1	-1.0
2002	0.2	0.0	1.3	1.6	0.1	-0.3	0.4	0.3	0.7	0.6
2003	1.8	1.7	0.6	-3.1	-0.7	0.9	0.5	0.0	-0.5	0.7
2004	1.5	0.4	0.8	0.2	1.5	-0.2	0.4	1.5	0.5	-1.4
2005	0.6	0.9	2.2	0.9	-0.8	1.2	1.2	1.4	2.1	0.0
2006	1.2	-0.8	-0.1	2.1	1.8	0.1	0.8	0.5	-2.2	1.1
2007	-1.2	0.4	1.6	1.4	0.9	1.2	1.3	-0.3	0.6	-0.2
2008	1.5	0.2	3.1	2.8	2.8	3.0	1.4	-3.1	-3.6	-4.6
2009	-1.3	0.0	0.5	1.1	1.7	2.7	-0.6	1.5	0.2	0.2
2010	1.2	-0.1	0.4	1.1	-0.8	-1.2	0.0	0.4	0.0	1.4
2011	1.5	1.7	3.0	2.6	0.1	-0.6	0.1	-0.4	-0.1	0.0
2012	0.0	0.0	1.4	-0.1	-1.5	-2.3	-0.7	1.2	1.0	-0.6
2013	0.5	0.9	-0.1	-0.6	-0.7	-0.2

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-8 shows the US monthly import price index of all commodities excluding fuels from 2001 to 2013. All curves of nominal values follow the same behavior under the influence of unconventional monetary policy. Zero interest rates without risk aversion result in jumps of nominal values while under strong risk aversion even with zero interest rates there are declines of nominal values.

Chart IIA2-8, US, Import Price Index All Commodities Excluding Fuels, 2001=100, 2001-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-9 provides 12-month percentage changes of the US import price index excluding fuels between 2001 and 2013. There is the same behavior of carry trades driving up without risk aversion and down with risk aversion prices of raw materials, commodities and food in international trade during the global recession of IVQ2007 to IIQ2009 and in previous and subsequent periods.

Chart IIA2-9, US, Import Price Index All Commodities Excluding Fuels, 12-Month Percentage Changes, 2002-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-10 provides the monthly US import price index ex petroleum from 2001 to 2013. Prices including or excluding commodities follow the same fluctuations and trends originating in impulses of unconventional monetary policy of zero interest rates.

Chart IIA2-10, US, Import Price Index ex Petroleum, 2001=100, 2000-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-11 provides the US import price index ex petroleum from 1985 to 2013. There is the same unique hump in 2008 caused by carry trades from zero interest rates to prices of commodities and raw materials.

Chart IIA2-11, US, Import Price Index ex Petroleum, 2001=100, 1985-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-12 provides 12-month percentage changes of the import price index ex petroleum from 1986 to 2013. The oscillations caused by the carry trade in increasing prices of commodities and raw materials without risk aversion and subsequently decreasing them during risk aversion are unique.

Chart IIA2-12, US, Import Price Index ex Petroleum, 12-Month Percentage Changes, 1986-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-13 of the US Energy Information Administration shows the price of WTI crude oil since the 1980s. Chart IA2-13 captures commodity price shocks during the past decade. The costly mirage of deflation was caused by the decline in oil prices during the recession of 2001. The upward trend after 2003 was promoted by the carry trade from near zero interest rates. The jump above $140/barrel during the global recession in 2008 at $145.29/barrel on Jul 3, 2008, can only be explained by the carry trade promoted by monetary policy of zero fed funds rate. After moderation of risk aversion, the carry trade returned with resulting sharp upward trend of crude prices. Risk aversion resulted in another drop in recent weeks followed by some recovery and renewed deterioration.

Chart IIA2-13, US, Crude Oil Futures Contract

Source: US Energy Information Administration

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

The price index of US imports of petroleum and petroleum products in shown in Chart IIA2-14. There is similar behavior of the curves all driven by the same impulses of monetary policy.

Chart IIA2-14, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 2001-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-15 provides the price index of petroleum and petroleum products from 1982 to 2013. The rise in prices during the global recession in 2008 and the decline after the flight to government obligations is unique in the history of the series. Increases in prices of trade in petroleum and petroleum products were induced by carry trades and declines by unwinding carry trades in flight to government obligations.

Chart IIA2-15, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 1982-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-16 provides 12-month percentage changes of the price index of US imports of petroleum and petroleum products from 1982 to 2013. There were wider oscillations in this index from 1999 to 2001 (see Barsky and Killian 2004 for an explanation).

Chart IIA2-16, US, Import Price Index of Petroleum and Petroleum Products, 12-Month Percentage Changes, 1982-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

The price index of US exports of agricultural commodities is in Chart IIA2-17 from 2001 to 2013. There are similar fluctuations and trends as in all other price index originating in unconventional monetary policy repeated over a decade. The most recent segment in 2011 has declining trend in a new flight from risk resulting from the sovereign debt crisis in Europe followed by declines in Jun 2012 and Nov 2012 with stability in Dec 2012 into 2013.

Chart IIA2-17, US, Exports Price Index of Agricultural Commodities, 2001=100, 2001-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-18 provides the price index of US exports of agricultural commodities from 1982 to 2013. The increase in 2008 in the middle of deep, protracted contraction was induced by unconventional monetary policy. The decline from 2008 into 2009 was caused by unwinding carry trades in a flight to government obligations. The increase into 2011 and current pause were also induced by unconventional monetary policy in waves of increases during relaxed risk aversion and declines during unwinding of positions because of aversion to financial risk.

Chart IIA2-18, US, Exports Price Index of Agricultural Commodities, 2001=100, 1982-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-19 provides 12-month percentage changes of the index of US exports of agricultural commodities from 1986 to 2013. The wide swings in 2008, 2009 and 2011 are only explained by unconventional monetary policy inducing carry trades from zero interest rates to commodity futures and reversals during risk aversion.

Chart IIA2-19, US, Exports Price Index of Agricultural Commodities, 12-Month Percentage Changes, 1986-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-20 shows the export price index of nonagricultural commodities from 2001 to 2013. Unconventional monetary policy of zero interest rates drove price behavior during the past decade. Policy has been based on the myth of stimulating the economy by climbing the negative slope of an imaginary short-term Phillips curve.

Chart IIA2-20, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 2001-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Chart IIA2-21 provides a longer perspective of the price index of US nonagricultural commodities from 1982 to 2013. Increases and decreases around the global contraction after 2007 were caused by carry trade induced by unconventional monetary policy.

Chart IIA2-21, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 1982-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

Finally, Chart IIA2-22 provides 12-month percentage changes of the price index of US exports of nonagricultural commodities from 1986 to 2013. The wide swings before, during and after the global recession beginning in 2007 were caused by carry trades induced by unconventional monetary policy.

Chart IIA2-22, US, Exports Price Index of Nonagricultural Commodities, 12-Month Percentage Changes, 1986-2013

Source: US Bureau of Labor Statistics

http://www.bls.gov/mxp/data.htm

The report of consumer credit outstanding of the Board of Governors of the Federal Reserve System is provided in Table VA-3. The data are in seasonally adjusted annual rates both percentage changes and billions of dollars. The estimate of consumer credit “covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate (http://www.federalreserve.gov/releases/g19/current/default.htm). Consumer credit is divided into two categories. (1) Revolving consumer credit (REV in Table VA-3) consists mainly of unsecured credit cards. (2) Non-revolving consumer credit (NREV in Table VA-3) “includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers or vacations” (http://www.federalreserve.gov/releases/g19/current/default.htm). In May 2013, revolving credit was $856 billion, or 30.2 percent of total consumer credit of $2839 billion, and non-revolving credit was $1983 billion, or 69.8 percent of total consumer credit outstanding. Consumer credit grew at relatively high rates before the recession beginning in IVQ2007 (Dec) and extending to IIQ2009 (Jun) as dated by the National Bureau of Economic Research or NBER (http://www.nber.org/cycles/cyclesmain.html). Percentage changes of consumer credit outstanding fell already in 2009. Rates were still negative in 2010 with decline of 0.7 percent in annual data and sharp decline of 7.6 percent in revolving credit. In IVQ 2012, total consumer credit grew at 6.5 percent with increase of revolving credit at 0.3 percent and increase of non-revolving credit at 9.3 percent. Growth continued in May 2013 with total credit at 8.3 percent, revolving at 9.3 percent and non-revolving at 7.9 percent.

Table VA-3, US, Consumer Credit Outstanding, SA, Annual Rate and Billions of Dollars

	Total ∆%	REV ∆%	NRV ∆%	Total $B	REV $B	NREV $B
2013
May	8.3	9.3	7.9	2839	856	1983
Apr	4.6	1.1	6.2	2820	850	1970
Mar	3.6	-1.1	5.7	2809	849	1960
IQ	5.9	1.5	7.8	2809	849	1960
2012
IVQ	6.5	0.3	9.3	2768	846	1922
IIIQ	4.9	0.4	6.9	2724	845	1879
IIQ	6.4	1.0	8.9	2691	844	1847
IQ	5.4	-0.1	8.0	2651	842	1809
2012	5.9	0.4	8.5	2768	846	1922
2011	3.7	0.2	5.5	2616	842	1773
2010	-0.7	-7.6	3.4	2522	841	1681
2009	-4.4	-8.8	-1.5	2420	917	1503
2008	0.8	0.2	1.2	2526	1005	1521
2007	5.9	8.5	4.3	2529	1008	1521

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

Source: Board of Governors of the Federal Reserve System

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

Chart VA-6 of the Board of Governors of the Federal Reserve System total consumer credit outstanding in millions of dollars measured in the right axis and the finance rate on 24-month personal loans at commercial banks, not seasonally adjusted, measured on the left axis. There was sharp decline of total consumer loans outstanding during the global recession followed by strong recovery. There is long-term decline of the financing rate.

Chart VA-6 US, Total Consumer Credit Owned and Securitized NSA and Financing Rate on 24-month Personal Loans at Commercial Banks NSA, Millions of Dollars and Percent, Feb 1972-May 2013

Source: Board of Governors of the Federal Reserve System

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

Chart VA-7 of the Board of Governors of the Federal Reserve System provides percentage changes of total consumer credit outstanding in the US and the financing rate on 24-month personal consumer loans at commercial banks, since 1972. The shaded bars are the cyclical contraction dates of the National Bureau of Economic Research (http://www.nber.org/cycles/cyclesmain.html). Consumer credit is cyclical, declining during contractions as shown by negative percentage changes during economic contractions. There is clear upward trend in 2012-2013 but with significant fluctuations.

Chart VA-7, US, Percent Change of Total Consumer Credit, Seasonally Adjusted at an Annual Rate and Finance Rate on 24-month Personal Loans at Commercial Banks NSA, Feb 1972-May 2013

Source: Board of Governors of the Federal Reserve System

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

Table VA-4 provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2013 fiscal year to May 2013; federal fiscal data for the years from 2009 to 2012; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2012. Receipts increased 14.4 percent in the cumulative fiscal year 2013 for Jun 2013 relative to the cumulative in fiscal year 2012. Individual income taxes increased 16.4 percent relative to the same period a year earlier. Outlays decreased 4.8 percent relative to a year earlier. Total revenues of the US from 2009 to 2012 accumulate to $9020 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,109 billion, or $14.1 trillion, with the deficit accumulating to $5089 billion, or $5.1 trillion. Revenues decreased 6.6 percent from $9653 billion in the four years from 2005 to 2008 to $9020 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and by growth of only 2.1 percent on average in the cyclical expansion from IIIQ2009 to IVQ2012 (http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html). There is extraordinary contrast between the mediocre average annual equivalent growth rate of 2.1 percent of the US economy in the fifteen quarters of the current cyclical expansion from IIIQ2009 to IQ2013 and the average of 5.7 percent in the first thirteen quarters of expansion from IQ1983 to IQ1986 and 5.3 percent in the first fifteen quarters of expansion from IQ1983 to IIIQ1986 (http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html). The average growth rate of 7.8 percent is derived from 7.9 percent from IIIQ1954 to IIQ1955, 9.5 percent from IIIQ1958 to IIQ1959, 6.1 percent from IIIQ1975 to IIQ1976 and 7.7 percent from IQ1983 to IVQ1983. The United States missed this opportunity of high growth in the initial phase of recovery. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). The average of 7.8 percent in the first four quarters of major cyclical expansions is more than twice higher than the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 3.2 percent obtained by diving GDP of $13,103.5 billion in IIIQ2010 by GDP of $12,701.0 billion in IIQ2009 {[$13.103.5/$12,701.0 -1]100 = 3.2%], or accumulating the quarter on quarter growth rates. As a result, there are 28.7 million unemployed or underemployed in the United States for an effective unemployment rate of 17.7 percent (http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html). BEA data show the US economy in standstill with annual growth of 2.4 percent in 2010 decelerating to 1.8 percent annual growth in 2011 and 2.2 percent in 2012. The US missed the opportunity to recover employment as in past cyclical expansions from contractions. In contrast with the decline of revenue, outlays or expenditures increased 30.2 percent from $10,839 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,109 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.2 percent while revenue declined by 6.6 percent caused the increase in the federal deficit from $1186 billion in 2005-2008 to $5089 billion in 2009-2012. Federal revenue was 15.4 percent of GDP on average in the years from 2009 to 2012, which is well below 18.0 percent of GDP on average from 1970 to 2010. Federal outlays were 24.0 percent of GDP on average from 2009 to 2012, which is well above 21.9 percent of GDP on average from 1970 to 2010. The lower part of Table IIB-4 shows that debt held by the public swelled from $5803 billion in 2008 to $11,281 billion in 2012, by $5478 billion or 94.4 percent. Debt held by the public as percent of GDP or economic activity jumped from 40.5 percent in 2008 to 72.6 percent in 2012, which is well above the average of 37.0 percent from 1970 to 2010. The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures.

Table VA-4, US, Treasury Budget in Fiscal Year to Date Million Dollars

Jun 2013	Fiscal Year 2013	Fiscal Year 2012	∆%
Receipts	2,087,143	1,824,082	14.4
Outlays	2,596,968	2,728,317	-4.8
Deficit	-509,825	-904,236	NA
Individual Income Taxes	992,168	840,471	18.0
Social Insurance	505,474	434,163	16.4
	Receipts	Outlays	Deficit (-), Surplus (+)
$ Billions
2012	2,450	3,537	-1,087
Fiscal Year 2011	2,302	3,598	-1,296
Fiscal Year 2010	2,163	3,456	-1,293
Fiscal Year 2009	2,105	3,518	-1,413
Total 2009-2012	9,020	14,109	-5,089
Average % GDP 2009-2012	15.4	24.0	-8.7
Fiscal Year 2008	2,524	2,983	-459
Fiscal Year 2007	2,568	2,729	-161
Fiscal Year 2006	2,407	2,655	-248
Fiscal Year 2005	2,154	2,472	-318
Total 2005-2008	9,653	10,839	-1,186
Average % GDP 2005-2008	17.9	20.1	-2.2
Debt Held by the Public	Billions of Dollars	Percent of GDP
2005	4,592	36.9
2006	4,829	36.6
2007	5,035	36.3
2008	5,803	40.5
2009	7,545	54.0
2010	9,019	62.9
2011	10,128	67.8
2012	11,281	72.6

Source: http://www.fms.treas.gov/mts/index.html CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. Congressional Budget Office, 2013CBOHBDMay14. Historical budget data—May 2013. CBO, Washington, DC, May 14.

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/announcements/release_2013/k130711a.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.5 and 3.0 percent, with the all items CPI less fresh food of 0.5 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:

1. 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).
2. 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.
3. 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).
4. 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 Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
Jul 2013	+2.5 to +3.0 [+2.8]	+0.5 to +0.8 [+0.6]
Apr 2013	+2.4 to +3.0 [+2.9]	+0.4 to +0.8 [+0.7]
2014
Jul 2013	+0.8 to +1.5 [+1.3]	+2.7 to +3.6 [+3.3]	+0.7 to +1.6 [+1.3]
Apr 2013	+1.0 to +1.5 [+1.4]	+2.7 to +3.6 [+3.4]	+0.7 to +1.6 [+1.4]
2015
Jul 2013	+1.3 to +1.9 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
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/announcements/release_2013/k130711a.pdf

Private-sector activity in Japan expanded with the Markit Composite Output PMI^™ Index decreasing from the high of the series at 54.1 in May to 52.3 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5f4daed191042f198cf2cdb41e04285). Paul Smith, economist at Markit and author of the report, finds that the survey data suggest continuing growth of the economy of Japan with accelerating performance of the economy of Japan in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5f4daed191042f198cf2cdb41e04285). The Markit Business Activity Index of Services decreased from the record high of 54.8 in May to 52.1 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5f4daed191042f198cf2cdb41e04285). Paul Smith, Senior Economist at Markit and author of the report, finds continuing optimism in services and manufacturing companies in Japan with positive outlook for the economy (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5f4daed191042f198cf2cdb41e04285). Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased from 51.5 in Apr to 52.3 in Jun, which is the highest reading in 28 months, indicating solid growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/07f08c5d1667427d93cb8bfd767d581d). New orders grew at rapid pace with higher strength in domestic demand while export orders increased for a fourth consecutive month but at slower pace. Paul Smith, Senior Economist at Markit and author of the report, finds manufacturing expanding at an annual rate of 5 percent in IIQ2013 that should contribute to GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/07f08c5d1667427d93cb8bfd767d581d).Table JPY provides the country data table for Japan.

Table JPY, Japan, Economic Indicators

Historical GDP and CPI	1981-2010 Real GDP Growth and CPI Inflation 1981-2010 Blog 8/9/11 Table 26
Corporate Goods Prices	Jun ∆% +0.1 12 months ∆% 1.2 Blog 7/14/13
Consumer Price Index	May NSA ∆% 0.1; May 12 months NSA ∆% -0.3 Blog 6/30/13
Real GDP Growth	IQ2013 ∆%: 1.0 on IVQ2012;  IQ2013 SAAR 4.1; ∆% from quarter a year earlier: 0.4 % Blog 6/16/13
Employment Report	May Unemployed 2.79 million Change in unemployed since last year: minus 180 thousand Unemployment rate: 4.1% Blog 6/30/13
All Industry Indices	Apr month SA ∆% 0.4 12-month NSA ∆% 0.5 Blog 6/30/13
Industrial Production	May SA month ∆%: 2.0 12-month NSA ∆% -1.0 Blog 6/30/13
Machine Orders	Total May ∆% 12.0 Private ∆%: 12.4 May ∆% Excluding Volatile Orders 10.5 Blog 7/14/13
Tertiary Index	May month SA ∆% 1.2 May 12 months NSA ∆% 1.7 Blog 7/14/13
Wholesale and Retail Sales	May 12 months: Total ∆%: 0.5 Wholesale ∆%: 0.3 Retail ∆%: 0.8 Blog 6/30/13
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:

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

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 tertiary activity index of Japan increased 1.2 percent SA in May 2013 and increased 1.7 percent NSA in the 12 months ending in May 2013, as shown in Table VB-1. 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-1, Japan, Tertiary Activity Index, ∆%

	Month ∆% SA	12 Months ∆% NSA
May 2013	1.2	1.7
Apr	-0.5	1.3
Mar	0.2	0.7
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 May 2013 are provided in Table VB-2. Electricity, gas, heat supply and water increased 0.9 percent in May 2013 and decreased 0.6 percent in the 12 months ending in May 2013. Wholesale and retail trade increased 0.8 percent in the month of May and decreased 1.7 percent in 12 months. Information and communications increased 1.6 percent in May and increased 1.3 percent in 12 months.

Table VB-2, Japan, Tertiary Index and Components, Month and 12-Month Percentage Changes ∆%

May 2013	Weight	Month ∆% SA	12 Months ∆% NSA
Tertiary Index	10,000.0	1.2	1.7
Electricity, Gas, Heat Supply & Water	372.9	0.9	-0.6
Information & Communications	951.2	1.6	1.3
Wholesale & Retail Trade	2,641.2	0.8	-1.7
Finance & Insurance	971.1	2.7	12.6
Real Estate & Goods Rental & Leasing	903.4	0.7	0.5
Scientific Research, Professional & Technical Services	551.3	3.6	3.8
Accommodations, Eating, Drinking	496.0	1.5	2.5
Living-Related, Personal, Amusement Services	552.7	2.7	-0.5
Learning Support	116.9	0.7	-1.4
Medical, Health Care, Welfare	921.1	0.2	2.9
Miscellaneous ex Government	626.7	-1.5	-1.9

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

Japan’s total machinery orders seasonally adjusted in Table VB-3 strengthened in May 2013, increasing 12.0 percent seasonally adjusted. Private sector orders increased 12.4 and 10.5 percent excluding volatile orders. Orders from overseas increased 10.3 percent and manufacturing orders 3.8 percent.

Table VB-3, Japan, Machinery Orders, Month ∆%, SA 

2013	May 13	Apr 13	Mar 13	Feb 13
Total	12.0	-14.2	27.8	0.9
Private Sector	12.4	-12.4	22.3	-2.2
Excluding Volatile Orders	10.5	-8.8	14.2	4.2
Mfg	3.8	-7.3	13.3	4.9
Non Mfg ex Volatile	25.4	-6.0	14.3	0.3
Government	44.8	-6.3	15.2	15.2
From Overseas	10.3	-19.9	52.1	1.0
Through Agencies	22.7	-38.2	35.2	-0.3

Note: Mfg: manufacturing

Source: Japan Economic and Social Research Institute, Cabinet Office

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

Total orders for machinery and total private-sector orders excluding volatile orders for Japan are shown in Chart VB-1 of Japan’s Economic and Social Research Institute at the Cabinet Office. The trend of private-sector orders excluding volatile orders was showing recovery from the drop after Mar 2011 because of the earthquake/tsunami. There was reversal of the trend of increase in total orders with recent decreases and an upward movement in the final data point. Fluctuations still prevent detecting longer-term trends but recovery is still evident from the global recession. There was a major setback by the declines in May 2012 shown in the final segment of Chart VB-1 with partial recovery in Jun 2012, decline again in Jul and Aug 2012 and rebound in total orders in Nov reversed in Dec but decline in orders excluding volatile segments with increase in Nov-Dec 2012. The final segment shows growth in Feb-Mar 2013 interrupted by decline in Apr 2013 followed by increase in May 2013.

Chart VB-1, Japan, Machinery Orders

Source: Japan Economic and Social Research Institute, Cabinet Office

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

Table VB-4 provides values and percentage changes from a year earlier of Japan’s machinery orders without seasonal adjustment. Total orders of JPY 1,885,691 million in May 2013 are divided between JPY 801,890 million overseas orders, or 42.5 percent of the total, and domestic orders of JPY 1,000,112 million, or 53.0 percent of the total, with orders through agencies of JPY 83,689 million, or 4.4 percent of the total. Orders through agencies are not shown in the table because of the minor value. Twelve-month percentages changes in May 2013 are strong with increases of 18.1 percent for total orders, 20.8 percent for domestic orders and 16.5 percent for orders excluding volatile components. Overseas orders rose 17.1 percent in 12 months.

Table VB-4, Japan, Machinery Orders, 12 Months ∆% and Million Yen, Original Series  

	Total	Overseas	Domestic	Private ex Volatile
Value May 2013	1,885,691	801,890	1,000,112	748,164
% Total	100.0	42.5	53.0	41.6
Value May 2012	1,597,323	684,650	827,596	641,970
% Total	100.0	42.9	51.8	40.2
12-month ∆%	18.1	17.1	20.8	16.5
May 2013	18.1	17.1	20.8	16.5
Apr 2013	-4.3	6.7	-9.9	-1.1
Mar 2013	11.5	27.5	3.3	2.4
Feb 2013	-14.8	-21.0	-10.7	-11.3
Jan 2013	-24.8	-36.7	-11.8	-9.7
Dec 2012	-12.5	-24.1	-3.3	-3.4
Nov 2012	-8.6	-9.6	-8.5	0.3
Oct 2012	-6.9	-12.8	-2.6	1.2
Sep 2012	-7.8	-18.4	-1.8	-7.8
Aug 2012	-18.6	-31.1	-10.2	-6.1
Jul 2012	2.6	-1.9	3.2	1.7
Jun 2012	-10.9	-11.3	-12.4	-9.9
May 2012	-6.8	-7.0	-8.6	1.0
Apr 2012	7.5	-9.6	23.0	6.6
Mar 2012	8.1	-10.0	19.0	-1.1
Feb 2012	-9.3	-8.9	-11.2	8.9
Jan 2012	9.8	18.3	0.5	5.7
Dec 2011	0.8	12.6	-8.5	6.3
Nov 2011	11.0	8.0	13.5	12.5
Oct 2011	-6.8	-15.6	-1.0	1.5
Dec 2010	9.4	3.5	14.1	-0.6
Dec 2009	1.8	0.4	3.6	-1.9
Dec 2008	-23.3	-29.4	-17.4	-24.7
Dec 2007	1.3	9.8	-4.3	-6.4
Dec 2006	0.8	0.9	-0.1	0.1

Note: Total machinery orders = overseas + domestic demand + orders through agencies. Orders through agencies in May 2013 were JPY 83,689 million or 4.4 percent of the total and 5.3 percent of the total in May 2012, and are not shown in the table. The data are the original numbers without any adjustments and differ from the seasonally adjusted data.

Source: Japan Economic and Social Research Institute, Cabinet Office

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

VC China. China estimates an index of nonmanufacturing purchasing managers on the basis of a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. 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, 54.3 in May 2013 and 53.9 in Jun 2013.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Jun 2013	53.9	50.3	55.0	50.6	61.8
May	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, 54.3 in May 2013 and 53.9 in Jun 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, falling to 50.1 in Jun 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, falling to 50.4 in Jun 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 and 48.7 in Jun 2013.

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

	IPM	PI	NOI	INV	EMP	SDEL
Jun 2013	50.1	52.0	50.4	47.4	48.7	50.3
May	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 and fell to 50.1 in Jun 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 weakness in business activity in China with the HSBC Composite Output, combining manufacturing and services, decreasing from 50.9 in May to 49.8 in Jun with the first output reduction in ten months (http://www.markiteconomics.com/Survey/PressRelease.mvc/cae4f011435d4230b6cfb98dcde4e488). 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 from both manufacturing and services (http://www.markiteconomics.com/Survey/PressRelease.mvc/cae4f011435d4230b6cfb98dcde4e488). The HSBC Business Activity index increased from 51.2 in May to 51.3 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/cae4f011435d4230b6cfb98dcde4e488). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds slowing services (http://www.markiteconomics.com/Survey/PressRelease.mvc/cae4f011435d4230b6cfb98dcde4e488). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, decreased to 48.2 in Jun from 49.2 in May, indicating moderate contraction in manufacturing for the second consecutive month after six prior consecutive months of improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/43d33bc53a2142e8b5c3dde180f3b9d4). New export orders decreased for the third consecutive month at the fastest rate since Sep 2012. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds weakening manufacturing because of declining orders and increasing inventories with weak lending because of the credit squeeze (http://www.markiteconomics.com/Survey/PressRelease.mvc/43d33bc53a2142e8b5c3dde180f3b9d4). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Jun 12-month ∆%: minus 2.7 Jun month ∆%: -0.6 Blog 7/14/13
Consumer Price Index	Jun month ∆%: 0.0 Jun 12 months ∆%: 2.7 Blog 7/14/13
Value Added of Industry	Jun month ∆%: 0.62 Jan-May 2013/Jan-May 2012 ∆%: 9.4 Blog 6/16/13
GDP Growth Rate	Year IQ2013 ∆%: 7.9 Quarter IQ2013 ∆%: 7.7 Blog 4/21/13
Investment in Fixed Assets	May month ∆%: 1.43 Total Jan-May 2013 ∆%: 20.4 Real estate development: 20.6 Blog 6/16/13
Retail Sales	May month ∆%: 1.17 May 12 month ∆%: 12.9 Jan-May ∆%: 12.5 Blog 6/16/13
Trade Balance	Jun balance $27.13 billion Exports 12M ∆% -3.1 Imports 12M ∆% -0.7 Cumulative Jun: $108.55 billion Blog 6/14/13

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

Table VC-8 provides China’s exports, imports, trade balance and percentage changes from Dec 2010 to May 2013. Exports increased 1.0 percent in May 2013 relative to a year earlier while imports fell 0.3 percent with trade surplus of $20.43 billion. Exports increased 14.7 percent in Apr 2013 relative to a year earlier and imports 16.8 percent for trade surplus of $18.16 billion. Exports increased 10.0 percent in Mar 2013 relative to a year earlier and imports increased 14.1 percent for trade deficit of $0.88 billion. Exports increased 18.4 percent in Jan-Mar 2013 relative to a year earlier and imports 8.4 percent for surplus of $43.27 billion. Exports increased 21.8 percent in Feb 2013 relative to a year earlier and imports fell 15.0 percent for trade surplus of $15.25 billion. China’s trade growth was stronger in Jan 2013 with growth of exports of 25.0 percent in 12 months and of imports of 28.8 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.67 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the New Year holidays.

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

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jun 2013	174.32	-3.1	147.19	-0.7	27.13
May	182.77	1.0	162.34	-0.3	20.43
Apr	187.06	14.7	168.90	16.8	18.16
Mar	182.19	10.0	183.07	14.1	-0.88
Feb	139.37	21.8	124.12	-15.2	15.25
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	199.23	14.1	167.61	6.0	31.62
Nov	179.38	2.9	159.75	0.0	19.63
Oct	175.57	11.6	143.58	2.4	31.99
Sep	186.35	9.9	158.68	2.4	27.67
Aug	177.97	2.7	151.31	-2.6	26.66
Jul	176.94	1.0	151.79	4.7	25.15
Jun	180.20	11.3	148.48	6.3	31.72
May	181.14	15.3	162.44	12.7	18.70
Apr	163.25	4.9	144.83	0.3	18.42
Mar	165.66	8.9	160.31	5.3	5.35
Feb	114.47	18.4	145.95	39.6	-31.48
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	174.72	13.4	158.20	11.8	16.52
Nov	174.46	13.8	159.94	22.1	14.53
Oct	157.49	15.9	140.46	28.7	17.03
Sep	169.67	17.1	155.16	20.9	14.51
Aug	173.32	24.5	155.56	30.2	17.76
Jul	175.13	20.4	143.64	22.9	31.48
Jun	161.98	17.9	139.71	19.3	22.27
May	157.16	19.4	144.11	28.4	13.05
Apr	155.69	29.9	144.26	21.8	11.42
Mar	152.20	35.8	152.06	27.3	0.14
Feb	96.74	2.4	104.04	19.4	-7.31
Jan	150.73	37.7	144.27	51.0	6.46
Dec 2010	154.15	17.9	141.07	25.6	13.08

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

Table VC-2 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports. Exports increased 10.3 percent cumulatively in Jun 2013 and imports 6.7 for cumulative surplus of $108.55 billion. Exports increased 13.5 percent in Jan-May 2013 relative to a year earlier while imports increased 8.2 percent for cumulative surplus of $81.42 billion. Exports increased 17.3 percent in Jan-Apr 2012 relative to a year earlier while imports increased 10.6 percent for cumulative surplus of $61.27 billion. Exports increased 18.4 percent in Jan-Mar 2013 relative to a year earlier while imports increased 8.4 percent for cumulative surplus of $43.27 billion. Cumulative exports in Jan-Feb 2013 grew 23.6 percent relative to a year earlier and imports 5.1 percent for trade surplus of $44.40 billion. There is strong beginning of 2013 with trade surplus of $29.15 in Jan 2013 and growth of exports of 17.3 percent and imports of 19.6 percent. The trade balance of $231.1 billion in 2012 is stronger than the trade balance of $155.14 billion in 2011. The trade balance in 2011 of $155.14 billion is lower than those from 2008 to 2010. China’s trade balance reached $231.1 billion in Jan-Dec 2012 with cumulative growth of exports of 7.9 percent and 4.3 percent of imports, which is much lower than 20.3 percent for exports and 24.9 percent for imports in 2011 and 31.3 percent for exports and 38.7 percent for imports in 2010. There is a rare cumulative deficit of $4.2 billion in Feb 2012 reversed to a small surplus in Mar 2012 and a higher surplus of $19.3 billion in Apr 2012, increasing to $37.9 billion in May, $68.9 billion in Jun 2012, $94.1 billion in Jul 2012, $120.8 billion in Aug 2012, $148.3 billion in Sep 2012, $180.24 billion in Oct 2012, $199.54 billion in Nov 2012 and $231.1 billion in Dec 2012. More observations are required to detect trends of Chinese trade but available data suggest deceleration that would be expected from the large share of trade with Europe.

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

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jun 2013	1052.96	10.3	944.41	6.7	108.55
May	878.64	13.5	797.22	8.2	81.42
Apr	695.87	17.4	634.88	10.6	60.98
Mar	508.87	18.4	465.80	8.4	43.07
Feb	326.73	23.6	282.58	5.0	44.15
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	2048.93	7.9	1817.83	4.3	231.11
Nov	1849.91	7.3	1650.37	4.1	199.54
Oct	1670.90	7.8	1490.67	4.6	180.24
Sep	1495.39	7.4	1347.08	4.8	148.31
Aug	1309.11	7.1	1188.51	5.1	120.61
Jul	1131.24	7.8	1037.14	6.4	94.10
Jun	954.38	9.2	885.46	6.7	68.91
May	774.40	8.7	736.49	6.7	37.92
Apr	593.24	6.9	573.94	5.1	19.3
Mar	430.02	7.6	429.36	6.6	0.66
Feb	264.40	6.9	268.64	7.7	-4.24
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	1,898.60	20.3	1,743.46	24.9	155.14
Nov	1,724.01	21.1	1585.61	26.4	138.40
Oct	1,549.71	22.0	1,425.68	26.9	124.03
Sep	1,392.27	22.7	1,285.17	26.7	107.10
Aug	1,222.63	23.6	1,129.90	27.5	92.73
Jul	1,049.38	23.4	973.17	26.9	76.21
Jun	874.3	24.0	829.37	27.6	44.93
May	712.37	25.5	689.41	29.4	22.96
Apr	555.30	27.4	545.02	29.6	10.28
Mar	399.64	26.5	400.66	32.6	-1.02
Feb	247.47	21.3	248.36	36.0	-0.89
Jan	150.7	37.7	144.27	51.0	6.46
Dec 2010	1577.93	31.3	1394.83	38.7	183.10

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

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

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

The GDP of the euro area in 2011 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $13,114.4 billion (http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx). The sum of the GDP of France is $2778.1 billion with the GDP of Germany of $3607.4 billion, Italy of $2198.7 billion and Spain $1479.6 billion is $10,063.8 billion or 76.7 percent of total euro area GDP. The four largest economies account for slightly more than three quarters of economic activity of the euro area. Table VD-EUR1 is constructed with the dataset of EUROSTAT, providing growth rates of the euro area as a whole and of the largest four economies of Germany, France, Italy and Spain annually from 1996 to 2011 with the estimate of 2012 and forecasts for 2013 and 2014 by EUROSTAT. The impact of the global recession on the overall euro area economy and on the four largest economies was quite strong. There was sharp contraction in 2009 and growth rates have not rebounded to earlier growth with exception of Germany in 2010 and 2011.

Table VD-EUR1, Euro Area, Real GDP Growth Rate, ∆%

	Euro Area	Germany	France	Italy	Spain
2014*	1.2	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 47.7 in May to 48.7 in Jun with aggregate output declining during 17 consecutive months (http://www.markiteconomics.com/Survey/PressRelease.mvc/609476644add42bcb8c486547e55cf4d). 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/609476644add42bcb8c486547e55cf4d). The Markit Eurozone Services Business Activity Index increased from 47.2 in May to 48.3 in Jun, indicating contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/609476644add42bcb8c486547e55cf4d). The Markit Eurozone Manufacturing PMI^® increased marginally to 48.8 in Jun from 48.3 in May, which indicates contraction for the twenty-third consecutive month since Aug 2011 but at the highest reading in 16 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/2bc1f71d2a9f427183cd528a3ed7832a). New orders fell at the slowest rate since Jun 2011 with marginal decline in export orders and lower rate of decline internal orders. Chris Williamson, Chief Economist at Markit, finds the survey data consistent with growth in IIIQ2013 if the trend of improvement continues (http://www.markiteconomics.com/Survey/PressRelease.mvc/2bc1f71d2a9f427183cd528a3ed7832a). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IQ2013 ∆% -0.3; IQ2013/IQ2012 ∆% -1.1 Blog 7/7/13
Unemployment	May 2013: 12.1% unemployment rate May 2013: 19.992 million unemployed Blog 7/7/13
HICP	May month ∆%: 0.1 12 months Apr ∆%: 1.4 Blog 6/16/13
Producer Prices	Euro Zone industrial producer prices May ∆%: -0.3 May 12-month ∆%: -0.1 Blog 7/7/13
Industrial Production	May month ∆%: -0.3; May 12 months ∆%: -1.3 Blog 7/14/13
Retail Sales	May month ∆%: 1.0 May 12 months ∆%: minus 0.1 Blog 7/7/13
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 Imports ∆%: -3.6 Apr 2013 12-month Exports ∆% 9.1 Imports ∆% 1.2 Blog 6/23/13

Links to blog comments in Table EUR:

7/7/13 http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

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

Table VD-1 provides monthly industrial production percentage changes for total production and major segments. Total production decreased 0.3 percent in May 2013 with declines of 1.5 percent in capital goods and 2.3 percent in durable goods. Production increased 0.5 percent in Apr with increase of capital goods of 2.5 percent and nondurable goods of 0.7 percent. Industrial production increased in all months from Dec 2012 to May 2013 with exception of declines of 0.3 percent in May 2013 and 0.5 percent in Jan 2013.

Table VD-1, Euro Zone, Industrial Production Month ∆%

	Total	INT	ENE	CG	DUR	NDUR
May     2013	-0.3	0.4	0.1	-1.5	-2.3	0.6
Apr	0.5	0.1	-1.4	2.5	-1.9	0.7
Mar	0.9	0.1	3.8	1.1	1.6	0.0
Feb	0.3	-0.2	1.7	0.9	0.9	-1.5
Jan	-0.5	0.1	0.1	-1.8	-2.0	-0.3
Dec 2012	0.6	0.3	-1.4	0.9	1.8	2.2

Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

Table VD-2 provides monthly and 12-month percentage changes of industrial production and major industrial categories in the euro zone. Most 12-month percentage changes in Table VD-2 are negative in the 12 months ending in May 2013 with exception of growth of 0.2 percent of energy and 0.1 percent of nondurable consumer goods. Industrial production decreased 0.3 percent in the month of May 2013 and fell 1.3 percent in the 12 months ending in May 2013.

Table VD-2, Euro Zone, Industrial Production, Month and 12-Month ∆%

2013	May Month ∆%	May 12-Month ∆%
Total	-0.3	-1.3
Intermediate Goods	0.4	-2.6
Energy	0.1	0.2
Capital Goods	-1.5	-0.9
Durable Consumer Goods	-2.3	-6.2
Nondurable Consumer Goods	0.6	0.1

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

There has been significant decline in percentage changes of industrial production and major categories in 12-month rates into 2012 and 2013 as shown in Table VD-3. Negative percentage changes moderated from the high rates in Oct-Nov 2012 but are still high. There is only growth of 0.2 percent for energy in the 12 months ending in May 2013 and of 0.1 percent for nondurable goods.

Table VD-3, Euro Zone, Industrial Production 12-Month ∆%

	Total	INT	ENE	CG	DUR	NDUR
May 2013	-1.3	-2.6	0.2	-0.9	-6.2	0.1
Apr	-0.6	-2.5	-0.6	1.4	-4.8	0.4
Mar	-1.5	-4.1	8.7	-3.2	-1.9	-2.5
Feb	-3.3	-2.9	-6.7	-3.9	-5.0	-0.1
Jan	-2.5	-3.9	-1.0	-3.9	-7.3	1.3
Dec 2012	-2.1	-4.8	-0.3	-1.7	-2.7	-0.4

Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods

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

Table VD-4 provides industrial production of member countries of the euro zone, the UK and the European Union. Twelve-month percentage changes in May 2013 are negative for all countries and regions in Table VD-8 with exception of the France, the Netherlands and Portugal with growth of minus 2.2 percent in the UK.

Table VD-4, Euro Zone, Industrial Production by Member Countries, ∆%

May 2013	Month ∆%	12-Month ∆%
Euro Zone	-0.3	-1.3
Germany	-0.8	-0.8
France	-0.5	0.4
Netherlands	1.2	1.9
Finland	1.9	-5.3
Belgium	NA	NA
Portugal	6.1	4.5
Ireland	-2.7	-7.7
Italy	0.1	-4.2
Greece	-2.1	-4.9
Spain	0.3	-1.3
UK	0.0	-2.2
European Union	-0.6	-1.6

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

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 2012, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced 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 50.2 in May to 50.4 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/fff41c347a20425bb0c0e63f4a8fe8f6). Tim Moore, Senior Economist at Markit and author of the report, finds risks of standstill in the economy of Germany with minor increases in output and concerned outlook (http://www.markiteconomics.com/Survey/PressRelease.mvc/fff41c347a20425bb0c0e63f4a8fe8f6). The Germany Services Business Activity Index increased from 49.7 in May to 50.4 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/fff41c347a20425bb0c0e63f4a8fe8f6). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 49.4 in May to 48.6 in Jun, in very moderate contraction territory below 50.0 (http://www.markiteconomics.com/Survey/PressRelease.mvc/1923f6df3e784218afce4dde78ee6c2f). New export orders fell at the fastest rate in 2013 with declines in Asia and Europe. Tim Moore, Senior Economist at Markit and author of the report, finds restrain from weakness in markets, especially in exports, even with reduction of sales prices at the fastest rate in more than three years (http://www.markiteconomics.com/Survey/PressRelease.mvc/1923f6df3e784218afce4dde78ee6c2f).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	Jun month NSA ∆%: 0.1 Jun 12-month NSA ∆%: 1.8 Blog 7/14/13
Producer Price Index	May month ∆%: -0.3 CSA, 0.1 12-month NSA ∆%: 0.2 Blog 6/23/13
Industrial Production	MFG Apr month CSA ∆%: minus 0.7 12-month NSA: minus 2.9 Blog 7/14/13
Machine Orders	MFG May month ∆%: -1.3 May 12-month ∆%: -4.0 Blog 7/7/13
Retail Sales	May Month ∆% 0.4 12-Month ∆% 0.8 Blog 6/30/13
Employment Report	Unemployment Rate SA May 5.4% Blog 6/30/13
Trade Balance	Exports May 12-month NSA ∆%: minus 4.8 Imports May 12 months NSA ∆%: minus 2.6 Exports May month CSA ∆%: minus 2.4; Imports Apr month SA 1.7 Blog 7/14/13

Links to blog comments in Table DE:

http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

6/23/13 http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html

5/26/13 http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html

The production industries index of Germany in Table VE-1 shows increase of 0.2 percent in Dec 2012 and decrease of 9.4 percent in the 12 months ending in Dec 2012. The index decreased 0.8 percent in Jan 2013 and 1.4 percent in 12 months and increased 0.6 percent in Feb 20, declining 5.3 percent in 12 months. In Mar 2013, the production index of Germany increased 1.1 percent and fell 8.8 percent in 12 months. The production index jumped 2.0 percent in Apr 2013 and 7.9 percent in 12 months. In May, 2013, the production index fell 1.0 percent and 3.4 percent in 12 months. Germany’s production industries suffered decline of 7.3 percent in Dec 2008 relative to Dec 2007 and decline of 2.3 percent in 2009. Recovery was vigorous with 17.1 percent in the 12 months ending in Dec 2010. The first quarter of 2011 was quite strong when the German economy outperformed the other advanced economies. The performance of Germany’s production industries from 2002 to 2006 was vigorous with average rate of 4.5 percent. Data for the production industries index of Germany fluctuate sharply from month to month and in 12-month rates.

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

	12-Month ∆% NSA	Month ∆% Calendar SA
May 2013	-3.4	-1.0
Apr	7.9	2.0
Mar	-8.8	1.1
Feb	-5.3	0.6
Jan	-1.4	-0.8
Dec 2012	-9.4	0.2
Nov	-3.0	-0.4
Oct	4.1	-1.5
Sep	-6.8	-1.3
Aug	-0.7	-0.1
Jul	2.2	0.8
Jun	4.3	-0.6
May	-6.2	1.0
Apr	-0.5	-1.9
Mar	-0.1	2.2
Feb	2.5	-0.3
Jan	4.9	0.7
Dec 2011	1.5	-1.7
Nov	3.6	0.0
Oct	-0.4	1.0
Sep	4.0	-1.9
Aug	9.8	-0.6
Jul	5.4	2.8
Jun	-1.1	-1.1
May	17.5	0.4
Apr	4.7	0.4
Mar	9.2	0.7
Feb	15.1	1.1
Jan	14.4	0.8
Dec 2010	17.1
Dec 2009	-2.3
Dec 2008	-7.3
Dec 2007	-0.1
Dec 2006	2.5
Dec 2005	4.9
Dec 2004	5.3
Dec 2003	5.1
Dec 2002	2.0
Average ∆% per Year
Dec 1994 to Dec 2012	0.7
Dec 1994 to Dec 2000	0.8
Dec 1994 to Dec 2006	1.3
Dec 2002 to Dec 2006	4.5

Source: Source: Statistisches Bundesamt Deutschland (Destatis)

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

Table VE-2 provides monthly percentage changes of the German production industries index by components from Oct 2012 to May 2013. The index decreased 1.0 percent in May 2013 with decreases of 0.7 percent in industry, 0.7 percent in manufacturing, 2.3 percent in capital goods, 4.9 percent in durable goods and 1.5 percent in energy while other segments increased with 0.9 percent in nondurable goods and 1.0 percent in intermediate goods. Performance was strong in Apr 2013 with growth of 2.0 percent for the index, 1.6 percent for manufacturing and 3.9 percent for capital goods. There was recovery in Dec 2012 with growth of 0.2 percent in production industries, 1.1 percent in manufacturing, 0.9 percent in capital goods, 0.8 percent in durable goods and 4.4 percent in nondurable goods but 0.1 percent in intermediate goods and decline of 4.6 percent of energy. There were four sharp declines in the monthly production industries index of 1.7 percent in Dec 2011, 1.9 percent in Apr 2012, 1.3 percent in Sep 2012 and 1.5 percent in Oct 2012. The declines of investment or capital goods were quite sharp with 1.4 percent in Jun 2012, 2.5 percent in Sep 2012, 3.0 percent in Oct 2012 and 1.9 percent in Jan 2013. Durable goods fell in seven of eleven months from Dec 2011 to Oct 2012 and nondurable goods also fell in multiple months.

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

	May 2013	Apr	Mar	Feb	Jan	Dec 2012	Nov	Oct
Production Industries	-1.0	2.0	1.1	0.6	-0.8	0.2	-0.4	-1.5
Industry	-0.7	1.7	1.1	0.9	-1.1	1.1	-0.3	-1.5
Mfg	-0.7	1.6	1.1	0.9	-1.1	1.1	-0.3	-1.5
Intermediate Goods	1.0	-0.2	0.6	0.1	0.2	0.1	-0.8	-0.3
Capital Goods	-2.3	3.9	1.5	2.8	-2.0	0.9	1.1	-3.0
Durable Goods	-4.9	-1.8	2.1	1.4	1.2	0.8	-1.2	-3.4
Nondurable Goods	0.9	0.5	1.1	-3.2	-2.1	4.4	-2.5	0.5
Energy	-1.5	-2.5	7.3	0.8	-0.2	-4.6	-1.2	-2.2

Seasonally Calendar Adjusted

Source: Source: Statistisches Bundesamt Deutschland (Destatis

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

Table VE-3 provides 12-month unadjusted percentage changes of industry and components in Germany. There have been percentage declines of 12-month rates in the production index of Germany and all segments in the four months from Dec 2012 to Mar 2013 with exception of nondurables in Jan 2013 and energy in Mar 2013. There is sharp recovery in Apr 2013 with growth of manufacturing by 9.0 percent and capital goods by 13.8 percent. All segments show declines in 12 months in May 2013. Percentage declines in 12 months are quite sharp in Dec 2012 with most percentage changes negative around two-digits. Although there are sharp fluctuations in the data, there is suggestion of deceleration that would be expected from much higher earlier rates. The deceleration is quite evident in single-digit percentage changes from Sep 2011 to Dec 2012 relative to high double-digit percentage changes in Jan-Mar 2011. There are multiple negative 12-month percentage changes across many segments. Growth rates in the recovery from the global recession from IVQ2007 to IIQ2009 were initially very vigorous in comparison with the growth rates before the contraction that are shown in the bottom part of Table VE-3.

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

	IND	MFG	INTG	CG	DG	NDG	EN
2013
May	-2.8	-2.9	-3.8	-1.8	-10.5	-1.9	-4.1
Apr	9.1	9.0	4.3	13.8	9.1	7.8	-1.9
Mar	-8.5	-8.3	-8.1	-8.9	-9.4	-7.9	0.1
Feb	-5.0	-5.0	-5.5	-5.2	-6.4	-2.8	-12.1
Jan	-0.7	-0.6	-1.2	-2.0	-2.0	4.8	-4.6
2012
Dec	-9.6	-9.3	-11.8	-8.5	-12.4	-7.1	-2.3
Nov	-3.2	-3.1	-4.0	-2.7	-7.6	-1.3	0.7
Oct	3.9	3.8	2.9	4.0	0.7	6.9	3.2
Sep	-7.7	-7.6	-9.0	-7.2	-11.1	-5.4	3.9
Aug	-1.1	-1.1	-3.3	0.3	0.6	0.5	4.4
Jul	2.0	1.9	0.3	4.7	-2.3	-0.8	2.1
Jun	4.0	3.9	2.1	6.5	7.4	0.4	6.9
May	-6.8	-6.7	-7.2	-5.9	-10.6	-7.7	4.0
Apr	-0.9	-0.9	-1.8	1.9	-5.3	-5.7	4.0
Mar	-0.4	-0.3	-3.0	2.8	-6.0	-2.2	-0.8
Feb	3.3	3.3	1.1	7.4	0.0	-2.3	5.8
Jan	5.7	5.6	3.2	10.4	5.0	0.1	-3.3
2011
Dec	0.9	0.8	1.0	0.9	0.1	1.0	-9.3
Nov	4.0	3.9	2.2	7.5	2.1	-1.4	-5.8
Oct	0.1	0.2	-1.0	2.7	-2.5	-3.8	-6.1
Sep	5.2	5.2	4.1	8.8	3.2	-1.6	-6.3
Aug	11.6	11.5	8.6	20.0	4.6	0.7	-3.2
Jul	7.3	7.3	4.4	13.1	6.6	-0.7	-5.9
Jun	-0.1	-0.2	-0.6	1.9	-10.3	-2.5	-4.8
May	20.8	20.5	16.9	27.7	20.5	12.4	-7.4
Apr	6.8	6.7	5.3	10.6	4.4	1.3	-5.7
Mar	10.5	10.4	9.7	14.5	8.1	1.1	2.5
Feb	16.5	16.3	15.0	22.6	9.7	5.4	-0.6
Jan	16.3	16.0	16.1	22.9	9.7	2.7	-2.7
2010
Dec	17.6	17.6	15.0	25.8	8.3	1.5	2.5
Nov	14.0	14.0	13.0	19.3	7.7	3.7	3.5
Oct	9.9	9.9	9.8	14.1	6.3	0.6	2.4
Sep	9.8	9.5	12.1	10.1	8.3	2.8	2.1
Aug	17.0	17.0	19.3	19.9	18.3	7.1	1.3
Jul	9.0	8.7	13.1	8.7	7.4	1.0	1.9
Jun	16.3	16.2	20.7	16.1	19.6	4.9	-2.8
May	13.0	13.3	19.9	12.0	11.2	1.2	11.1
Apr	14.8	14.9	21.6	15.5	8.8	-0.1	9.4
Mar	14.3	14.5	20.4	12.1	12.0	5.9	4.2
Feb	6.8	7.4	10.6	6.5	8.0	-0.9	3.7
Jan	0.4	0.9	6.4	-3.9	0.7	-2.8	0.8
Dec 2010	17.6	17.6	15.0	25.8	8.3	1.5	2.5
Dec 2009	-3.2	-3.1	3.3	-9.9	-0.1	1.1	3.7
Dec 2008	-7.6	-7.4	-14.3	-5.4	-11.2	3.7	-9.0
Dec 2007	0.0	-0.3	-0.6	2.5	-10.0	-2.7	1.6
Dec 2006	3.2	3.1	5.2	2.3	8.6	-0.9	-5.3
Dec 2005	5.8	5.9	3.5	9.0	3.2	2.1	0.6
Dec 2004	5.3	5.5	7.7	3.4	0.8	5.7	9.6
Dec 2003	5.5	5.3	5.5	6.4	1.7	4.4	0.3
Dec 2002	3.7	3.3	5.4	3.4	-5.9	2.3	-2.6

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

Source: Statistisches Bundesamt Deutschland (Destatis

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

Broader perspective since 2005 is provided by Chart VE-1 of the Statistisches Bundesamt Deutschland, Federal Statistical Agency of Germany. The index of production industries not seasonally adjusted rises by more than one third between 2003 and 2008 with sharp fluctuations and then collapses during the global recession in 2008. Recovery has been in a steep upward trajectory that has recovered at the more recent peaks the losses during the contraction. Recovery was reversed by the drop in Dec 2011 with strong rebound into 2012 and another sharp drop in Apr 2012 with recovery in May 2012 and drops in Jun, Aug, Sep, Oct and Jan 2013 followed by recovery in Feb-Apr 2013. The index fell again in May 2013.

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

Source: Statistiche Bundesamt Deutschland

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

More detail is provided by Chart VE-2 of the Statistiche Bundesamt Deutschland, or Federal Statistical Agency of Germany, with the unadjusted production industries index and trend from 2009 to 2013. There could be some flattening in recent months probably leading into stagnation or mild downturn as depicted by trend.

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

Source: Statistiche Bundesamt Deutschland

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

Table VE-4 provides month and 12-month rates of growth of manufacturing in Germany from Dec 2010 to May 2013. There are fluctuations in both monthly rates and in the past 12 months. Recovery is strong in Jan-Mar 2012 with cumulative growth of 2.1 percent at the high annual equivalent rate of 8.7 percent but the drop in Apr 2012 of 1.8 percent results in increase of 0.3 percent in the first four months of 2012 that pulls down the 12-month rate of Apr 2012 to minus 0.9 percent. Growth of 1.5 percent in May 2012 is insufficient to prevent decline of 6.7 percent in 12 months because production was quite strong in the first part of 2011. Manufacturing decreased 0.8 percent in Jun 2011 but the 12-month change was 3.9 percent. In Jul 2012, manufacturing grew 0.9 percent in the month and 1.9 percent in 12 months. Declining of manufacturing by 0.2 percent in Aug 2012 brought down the 12-month percentage change to minus 1.1 percent. In Sep, manufacturing output fell 1.5 percent, pulling down the 12-month rate to minus 7.6 percent. Manufacturing decreased 1.5 percent in Oct but increased 3.8 percent in 12 months. In Nov 2012, manufacturing decreased 0.3 percent but fell 3.1 percent in 12 months. Manufacturing increased 1.1 percent in Dec 2012 but fell 9.3 percent in 12 months. In Jan 2013, manufacturing fell 1.1 percent and decreased 0.6 percent in 12 months. Manufacturing increased 0.8 percent in Feb 2013, declining 5.0 percent in 12 months. In Mar 2013, manufacturing increased 1.1 percent but fell 8.3 percent in 12 months. There is strong recovery in Apr 2013 with growth of 1.6 percent and 9.0 percent in 12 months. Manufacturing fell 0.7 percent in May 2013 and declined 2.9 percent in 12 months.

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

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
May 2013	-2.9	-0.7
Apr	9.0	1.6
Mar	-8.3	1.1
Feb	-5.0	0.9
Jan	-0.6	-1.1
Dec 2012	-9.3	1.1
Nov	-3.1	-0.3
Oct	3.8	-1.5
Sep	-7.6	-1.5
Aug	-1.1	-0.2
Jul	1.9	0.9
Jun	3.9	-0.8
May	-6.7	1.5
Apr	-0.9	-1.8
Mar	-0.3	1.2
Feb	3.3	0.4
Jan	5.6	0.5
Dec 2011	0.8	-1.6
Nov	3.9	-0.3
Oct	0.2	0.9
Sep	5.2	-2.0
Aug	11.5	-0.5
Jul	7.3	2.9
Jun	-0.2	-1.1
May	20.5	0.7
Apr	6.7	0.6
Mar	10.4	0.9
Feb	16.3	1.4
Jan	16.0	-0.9
Dec	17.6	1.3

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-3 of the Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, provides the manufacturing index of Germany from 2009 to 2013. Manufacturing was already flattening in 2007 and fell sharply in 2008 to the beginning of 2010. Manufacturing grew sharply in the initial phase of recovery but has flattened in recent months as revealed by the trend that may be turning downward.

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

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

Twelve-month rates of growth Germany’s exports and imports are shown in Table VE-5. There was sharp decline in the rates in Jun and Jul 2011 to single-digit levels especially for exports. In the 12 months ending in Aug 2011, exports rose 14.6 percent and imports 13.2 percent. In Sep 2011, exports grew 10.5 percent relative to a year earlier and imports grew 11.7 percent. Growth rates in 12 months ending in Oct 2011 fell significantly to 3.6 percent for exports and 9.2 percent for imports. Lower prices may explain part of the decline in nominal values. Exports fell 3.4 percent in 12 months ending in Sep 2012, rebounding to growth of 10.5 percent in Oct 2012 and minus 0.1 percent in Nov 2012 but sharp decline of 6.9 percent in Dec 2012 followed by rebound of 3.0 percent in Jan 2013. Exports fell 2.8 percent in the 12 months ending in Feb 2013 and declined 4.2 percent in the 12 months ending in Mar 2013. In Apr 2013, exports increased 8.5 percent relative to a year earlier. Exports fell 4.8 percent in the 12 months ending in May 2013. Imports decreased 3.6 percent in the 12 months ending in Sep 2012, rebounding to growth of 6.0 percent in Oct 2012, decreasing 1.1 percent in Nov 2012 and 7.5 percent in Dec 2012 and rebounding 2.9 percent in Jan 2013. Imports fell 5.9 percent in the 12 months ending in Feb 2013 and declined 7.0 percent in Mar 2013. In Apr 2013, imports increased 5.1 percent relative to a year earlier. In May 2013, imports fell 2.6 percent relative to a year earlier. Growth was much stronger in the recovery during 2010 and 2011 from the fall from 2007 to 2009. Germany’s trade grew at high rates in 2006 and 2005.

Table VE-5, Germany, Exports and Imports NSA Euro Billions and 12-Month ∆%

	Exports EURO Billions	12- Month ∆%	Imports EURO Billions	12-Month ∆%
May 2013	88.2	-4.8	75.2	-2.6
Apr	94.3	8.3	76.4	5.1
Mar	94.6	-4.2	75.7	-7.0
Feb	88.6	-2.8	71.8	-5.9
Jan	88.5	3.0	74.9	2.9
Dec 2012	79.0	-6.9	66.9	-7.5
Nov	94.0	-0.1	77.1	-1.1
Oct	98.4	10.5	82.7	6.0
Sep	91.7	-3.4	74.8	-3.6
Aug	90.2	5.7	73.9	0.5
Jul	93.5	9.2	76.6	2.1
Jun	94.7	7.5	76.8	2.1
May	92.7	0.4	77.2	-0.5
Apr	87.1	3.1	72.7	-1.3
Mar	98.8	0.1	81.4	2.0
Feb	91.2	7.9	76.3	5.4
Jan	86.0	8.4	72.8	4.9
Dec 2011	84.8	4.7	72.3	5.6
Nov	94.1	7.4	78.0	5.8
Oct	89.1	3.6	78.1	9.2
Sep	95.0	10.5	77.7	11.7
Aug	85.3	14.6	73.5	13.2
Jul	85.6	5.2	75.0	9.7
Jun	88.1	3.3	75.2	5.6
May	92.4	21.2	77.5	17.4
Apr	84.5	12.4	73.7	18.5
Mar	98.7	15.3	79.8	15.1
Feb	84.5	20.8	72.5	27.6
Jan	79.3	25.2	69.4	26.0
Dec 2010	81.0	20.0	68.4	24.3
Nov	87.6	21.2	73.7	30.9
Oct	86.0	18.7	71.5	19.2
Sep	86.0	21.2	69.5	17.0
Aug	74.4	23.8	64.9	27.1
Jul	81.4	15.3	68.4	24.4
Jun	85.3	27.5	71.2	33.9
May	76.2	25.6	66.1	31.2
Apr	75.2	16.8	62.2	14.5
Mar	85.6	22.0	69.3	18.0
Feb	70.0	9.7	56.8	3.2
Jan	63.4	-0.3	55.1	-1.9
Dec 2009	67.5	1.2	55.0	-7.3
Dec 2008	66.7	-8.6	59.4	-5.1
Dec 2007	73.0	-0.6	62.5	-0.1
Dec 2006	73.4	10.2	62.6	8.5
Dec 2005	66.6	11.5	57.7	18.1
Dec 2004	59.7	9.2	48.9	10.8
Dec 2003	54.7	7.6	44.1	3.9
Dec 2002	50.8	5.5	42.5	6.4
Dec 2001	48.2	-3.7	39.9	-17.5
Dec 2000	50.0		48.4

Source: Statistisches Bundesamt Deutschland

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

Chart VE-4 of the Statistisches Bundesamt Deutschland shows exports and trend of German exports. Growth has been with fluctuations around a strong upward trend that is milder than earlier in the recovery but could be flattening or even falling.

Chart VE-4, Germany, Exports Original Value and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Chart VE-5 of the Statistisches Bundesamt Deutschland provides German imports and trend. Imports also fell sharply and have been recovering with fluctuations around a strong upward trend that could be flattening.

Chart VE-5, Germany, Imports Original Value and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Chart VE-6 of the Statistisches Bundesamt Deutschland shows the trade balance of Germany since 2008. There was sharp decline during the global recession and fluctuations around a mild upward trend during the recovery with stabilization followed by stronger trend in recent months and flattening/declining recently.

Chart VE-6, Germany, Trade Balance Original and Trend 2008-2012

Source: Statistisches Bundesamt Deutschland

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

Table VE-6 provides monthly rates of growth of exports and imports of Germany. Exports fell 2.4 percent in May 2013 while imports increased 1.7 percent. There is strong recovery in Apr 2013 with growth of exports of 1.5 percent and of imports of 1.2 percent. Export growth had been relatively strong from Dec 2012 to Apr 2013 with only one monthly decline of 1.2 percent in Feb 2013. Export growth and import growth were vigorous in Jan-Mar 2011 when Germany’s economy outperformed most advanced economies but less dynamic and consistent in following months as world trade weakens.

Table VE-6, Germany, Exports and Imports Month ∆% Calendar and Seasonally Adjusted 

	Exports	Imports
May 2013	-2.4	1.7
Apr	1.4	1.2
Mar	0.5	1.0
Feb	-1.2	-3.4
Jan	1.6	3.3
Dec 2012	0.4	-1.4
Nov	-2.2	-3.8
Oct	0.8	2.7
Sep	-1.9	-0.8
Aug	1.6	-0.1
Jul	0.0	0.2
Jun	-0.9	-2.0
May	4.1	5.3
Apr	-1.2	-4.7
Mar	-0.3	0.8
Feb	1.2	3.3
Jan	2.8	0.3
Dec 2011	-2.8	-1.8
Nov	2.8	-0.2
Oct	-3.4	-0.3
Sep	1.8	0.1
Aug	2.8	-0.1
Jul	-1.4	0.3
Jun	-0.1	0.1
May	1.5	1.1
Apr	-3.0	-0.3
Mar	4.7	2.1
Feb	1.2	1.7
Jan	1.0	3.3
Dec 2010	-0.1	-1.9

Source: Statistisches Bundesamt Deutschland

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

There is extremely important information in Table VE-7 for the current sovereign risk crisis in the euro zone. Table VE-7 provides the structure of regional and country relations of Germany’s exports and imports with newly available data for May 2013. German exports to other European Union (EU) members are 56.7 percent of total exports in May 2013 and 57.2 percent in cumulative Jan-May 2013. Exports to the euro area are 36.6 percent in May and 37.4 percent cumulative in Jan-May. Exports to third countries are 43.3 percent of the total in May and 42.8 percent cumulative in Jan-May. There is similar distribution for imports. Exports to non-euro countries are decreasing 2.4 percent in the 12 months ending in May 2013, increasing 0.9 percent cumulative in Jan-May 2013 while exports to the euro area are decreasing 9.6 percent in the 12 months ending in May 2013, and decreasing 3.6 percent cumulative in Jan-May 2013. Exports to third countries, accounting for 43.3 percent of the total in May 2013, are decreasing 1.6 percent in the 12 months ending in May 2013 and increasing 2.2 percent cumulative in Jan-May 2013, accounting for 42.8 percent of the cumulative total in Jan-May 2013. Price competitiveness through devaluation could improve export performance and growth. Economic performance in Germany is closely related to its high competitiveness in world markets. Weakness in the euro zone and the European Union in general could affect the German economy. This may be the major reason for choosing the “fiscal abuse” of the European Central Bank considered by Buiter (2011Oct31) over the breakdown of the euro zone. There is a tough analytical, empirical and forecasting doubt of growth and trade in the euro zone and the world with or without maintenance of the European Monetary Union (EMU) or euro zone. Germany could benefit from depreciation of the euro because of high share in its exports to countries not in the euro zone but breakdown of the euro zone raises doubts on the region’s economic growth that could affect German exports to other member states.

Table VE-7, Germany, Structure of Exports and Imports by Region, € Billions and ∆%

	May 2013  € Billions	May 12-Month ∆%	Cumulative Jan-May 2012 € Billions	Cumulative Jan-May 2013/ Jan-May 2012 ∆%
Total Exports	88.2	-4.8	454.3	-0.3
A. EU Members	50.0 % 56.7	-7.1	259.9 % 57.2	-2.1
Euro Area	32.3 % 36.6	-9.6	169.8 % 37.4	-3.6
Non-euro Area	17.7 % 20.1	-2.4	90.1 % 19.8	0.9
B. Third Countries	38.2 % 43.3	-1.6	194.4 % 42.8	2.2
Total Imports	75.2	-2.6	374.0	-1.7
C. EU Members	49.1 % 65.3	-0.7	242.0 % 64.7	0.3
Euro Area	34.6 % 46.0	-0.5	169.0 % 45.2	-0.7
Non-euro Area	14.4 % 19.1	-1.3	73.1 % 19.5	2.5
D. Third Countries	26.1 % 34.7	-5.9	132.0 % 35.3	-5.0

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

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2013/07/PE13_224_51.html

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2012 is quite high at 3.2 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 44.6 in May to 47.2 in Jun, indicating contraction of private sector activity at the slowest rate of deterioration in 2013 and the highest reading in ten months (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1f570072f9a426a9ec90e289936095c). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds that composite data for manufacturing and services indicate movement toward stability away from sharper contraction in IQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1f570072f9a426a9ec90e289936095c). The Markit France Services Activity index increased from 44.3 in May to 47.2 in Jun for the highest reading in ten months (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1f570072f9a426a9ec90e289936095c). The Markit France Manufacturing Purchasing Managers’ Index^® increased to 48.4 in Jun from 46.4 in May, for the highest reading in sixteen consecutive months below the neutral level of 50.0 (http://www.markiteconomics.com/Survey/PressRelease.mvc/4951772002d4429881c48fda4cafcae5). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds slower decline in manufacturing but that the current period of 16 consecutive months of deterioration is the longest since beginning of the survey in 1998 (http://www.markiteconomics.com/Survey/PressRelease.mvc/4951772002d4429881c48fda4cafcae5). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Jun month ∆% 0.2 12 months ∆%: 0.9 7/14/13
PPI	May month ∆%: -1.2 May 12 months ∆%: -0.2 Blog 6/30/13
GDP Growth	IQ2013/IQ2012 ∆%: -0.4 IVQ2012/IVQ2011 ∆%: -0.3 Blog 3/31/13 5/19/12 6/30/13
Industrial Production	May ∆%: Manufacturing minus 1.1 12-Month ∆%: Manufacturing minus 0.8 Blog 6/16/13
Consumer Spending	Manufactured Goods May ∆%: 1.0 May 12-Month Manufactured Goods ∆%: 0.0 Blog 7/7/13
Employment	Unemployment Rate: 10.4% Blog 6/9/13
Trade Balance	May Exports ∆%: month -4.3, 12 months -4.4 May Imports ∆%: month -0.2, 12 months -2.2 Blog 7/7/13
Confidence Indicators	Historical averages 100 Jun Mfg Business Climate 93 Blog 6/30/13

Links to blog comments in Table FR:

7/7/13 http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-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

5/19/13 http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html

Table VF-1 provides longer historical perspective of manufacturing in France. Output of manufacturing decreased 1.1 percent in May 2013 and fell 0.8 percent in the 12 months ending in May 2013. Manufacturing increased 2.6 percent in Mar 2013 and fell 0.3 percent in 12 months. Manufacturing fell 0.8 percent in Mar 2013 and 4.4 percent relative to a year earlier. Growth of 1.2 percent in Dec 2012 pulled down the 12-month rate of decline from 6.0 percent in Nov 2012 to 3.3 percent in Dec 2012. Manufacturing in France fell 14.1 percent in the 12 months ending in Dec 2008 and 4.2 percent in Dec 2009.

Table VF-1, France, Manufacturing, Month and 12-Month ∆%

	Month ∆%	12-Month ∆%
May 2013	-1.1	-0.8
Apr	2.6	-0.3
Mar	-0.8	-4.4
Feb	0.9	-2.1
Jan	-1.5	-4.9
Dec 2012	1.2	-3.3
Nov	-0.9	-6.0
Oct	-1.2	-3.1
Sep	-2.7	-2.2
Aug	1.9	-0.5
Jul	1.6	-2.3
Jun	-0.6	-3.3
May	-0.6	-5.0
Apr	-1.7	-2.9
Mar	1.6	-2.1
Feb	-2.0	-5.1
Jan	0.1	-2.5
Dec 2011	-1.5	-0.5
Nov	2.1	1.7
Oct	-0.2	1.9
Sep	-1.1	1.2
Aug	0.0	3.6
Jul	0.6	3.2
Jun	-2.3	3.1
May	1.5	4.5
Apr	-0.9	3.8
Mar	-1.5	5.3
Feb	0.8	9.0
Jan	2.1	8.1
Dec 2010	0.6	5.8
Dec 2009		-4.2
Dec 2008		-14.1
Dec 2007		-1.0
Dec 2006		2.7
Dec 2005		0.7
Dec 2004		1.0
Dec 2003		0.1
Dec 2002		-1.0
Dec 2001		-5.5
Dec 2000		4.7

Source:

Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20130710

Chart VF-1 of the Institut National de la Statistique et des Études Économiques provides France’s index of manufacturing, adjusted for working days and seasonal effects, from Jan 1990 to May 2013. Growth was robust in the 1990s and in recovery from the 2001 recession. Manufacturing output fell sharply during the global recession followed by recovery and another trend of decline.

Chart VF-1, France, Index of Manufacturing 2010=100, Jan 1990-May 2013, Seasonal and Working-Day Adjusted

Source:

Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20130710

Chart VF-2 of France’s Institut National de la Statistique et des Études Économiques shows indices of manufacturing in France from 2009 to 2013. Manufacturing, which is CZ in Chart VF-2, fell deeply in 2008 and part of 2009. All curves of industrial indices tend to flatten recently with oscillations and declines and marginal improvement followed by renewed decline/stability in the final segment with jump in Mar-Apr 2013. Manufacturing fell in May 2013.

Chart VF-2, France, Industrial Production Indices 2007-2011

Legend : CZ : Manufacturing - (C1) : Manufacture of food products and beverages - (C3) : Electrical and electronic equipment; machine equipment - (C4) : Manufacture of transport equipment - (C5) : Other manufacturing

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20130710

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 46.5 in May to 45.8 in Jun, indicating contraction of output of Italy’s services sector for 25 consecutive months of decline since Jun 2011 with contraction sharp relative to the history of the index (http://www.markiteconomics.com/Survey/PressRelease.mvc/5bd5c06b053d42a3a8c527b6d68f4a9b). Phil Smith, economist at Markit and author of the Italy Services PMI^®, finds acceleration of contraction in May and Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/5bd5c06b053d42a3a8c527b6d68f4a9b). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 47.3 in May to 49.1 in Jun for 23 consecutive months of contraction of Italy’s manufacturing below 50.0 with the Jun at the highest in five months, indicating only marginal deterioration of overall business while output increased for the first time in 23 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/675369f0f11f4232a9cd0a1dc5c63c8f). 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/675369f0f11f4232a9cd0a1dc5c63c8f). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Jun month ∆%: 0.3 Jun 12-month ∆%: 1.2 Blog 7/14/13
Producer Price Index	May month ∆%: -0.1 May 12-month ∆%: -1.1 Blog 6/30/13
GDP Growth	IQ2013/IVQ2012 SA ∆%: minus 0.6 IQ2013/IQ2012 NSA ∆%: minus 2.4 Blog 3/17/13 6/16/13
Labor Report	Apr 2013 Participation rate 63.8% Employment ratio 56.0% Unemployment rate 12.0% Blog 6/2/13
Industrial Production	May month ∆%: 0.1 12 months CA ∆%: -4.2 Blog 7/14/13
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 Exports Apr month SA ∆%: 0.0; Imports Apr month ∆%: -0.9 Exports 12 months Apr NSA ∆%: 4.4 Imports 12 months NSA ∆%: -2.6 Blog 6/23/13

Links to blog comments in Table IT:

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

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

Italy’s industrial production increased 0.1 percent in May 2013 and fell 4.2 percent in 12 months. Industrial production decreased 0.3 percent in Apr 2013, increasing the decline of the 12-month rate of growth to minus 4.7 percent with calendar adjustment (CA) from 7.5 percent in Dec 2012 with monthly decline of 0.2 percent, as shown in Table VG-1. In the quarter Sep-Nov 2012, industrial production fell cumulative 3.2 percent, at the annual equivalent rate of 12.1 percent. Industrial production recovered with growth of 0.3 percent in May 2012 but growth in the 12 months ending in May 2012 was minus 5.8 percent. Industrial production fell 7.8 percent in the 12 months ending in Nov 2012. There have been negative changes with oscillations in monthly industrial production. Industrial production fell 18.8 percent in 2009 after falling 3.2 percent in 2008.

Table VG-1, Italy, Industrial Production ∆%

Annual			Index CA	∆% CA	Index	∆%
2011	-	-	101.1	1.1	100.3	0.3
2012	-	-	94.6	-6.4	94.2	-6.1
2012
Quarter	Index SA	Quarter ∆%	Index CA	4Q ∆%	Index	12 M ∆%
IIQ2012	94.9	-1.4	98.7	-7.3	98.0	-8.2
IIIQ2012	94.5	-0.4	90.4	-5.1	88.7	-6.1
IVQ2012	92.4	-2.2	92.5	-6.9	92.4	-5.7
2013
IQ2013	92.0	-0.4	92.5	-4.3	91.8	-6.1
2011	Index SA	Month ∆%	Index CA	12 M ∆%	Index	12 M ∆%
May	101.5	-1.8	110.3	3.3	111.7	6.6
Jun	101.0	-0.5	106.5	-0.1	106.9	-0.1
Jul	100.4	-0.6	115.0	0.0	110.4	-3.1
Aug	102.4	2.0	64.5	7.1	65.3	7.0
Sep	99.0	-3.3	106.3	-1.8	107.7	-1.8
Oct	98.5	-0.5	107.2	-3.8	102.9	-3.7
Nov	99.0	0.5	103.5	-3.5	103.9	-3.4
Dec	99.1	0.1	87.6	-2.3	87.1	-8.3
2012
Jan	96.5	-2.6	88.9	-4.9	89.2	-2.0
Feb	96.0	-0.5	96.3	-7.2	98.8	-3.6
Mar	96.2	0.2	104.8	-6.9	105.3	-6.9
Apr	95.0	-1.2	93.3	-9.2	89.5	-11.9
May	95.3	0.3	103.9	-5.8	105.2	-5.8
Jun	94.5	-0.8	99.0	-7.0	99.4	-7.0
Jul	94.5	0.0	108.4	-5.7	107.4	-2.7
Aug	95.0	0.5	61.3	-5.0	62.1	-4.9
Sep	94.0	-1.1	101.4	-4.6	96.5	-10.4
Oct	93.1	-1.0	101.0	-5.8	103.2	0.3
Nov	92.1	-1.1	95.4	-7.8	95.8	-7.8
Dec	91.9	-0.2	81.0	-7.5	78.1	-10.3
2013
Jan	92.8	1.0	85.9	-3.4	89.0	-0.2
Feb	92.0	-0.9	92.4	-4.0	91.2	-7.7
Mar	91.2	-0.9	99.2	-5.3	95.1	-9.7
Apr	90.9	-0.3	88.9	-4.7	89.3	-0.2
May	91.0	0.1	99.5	-4.2	100.8	-4.2

SA: Seasonally Adjusted; CA: Calendar Adjusted; M: Month; Q: Quarter; 4Q: Four Quarter

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/95341

There is worsening trend of Italy’s industrial production in Chart VG-1 after Aug 2011, sharply deteriorating after Dec 2011 into 2012 with marginal recovery in May 2012 and further drops in Jun-Jul 2012 followed by marginal improvement in Aug and decline in Sep-Nov 2012 deeper in negative territory with marginal improvement in Jan 2013 followed by declining trend. There is marginal improvement in Apr-May 2013.

Chart VG-2, Italy, Industrial Production, 12-Month Percentage Changes

Source: Istituto Nazionale di Statistica

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

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 5.2 percent in 2009 after dropping 0.8 percent in 2008. Recovery of 1.7 percent in 2010 is relatively low compared to annual growth rates in 2007 and earlier years. Growth was only 1.1 percent in 2011 and 0.2 percent in 2012.

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

	∆% on Prior Year
1998	3.6
1999	2.9
2000	4.4
2001	2.2
2002	2.3
2003	3.9
2004	3.2
2005	3.2
2006	2.8
2007	3.4
2008	-0.8
2009	-5.2
2010	1.7
2011	1.1
2012	0.2

Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 54.9 in May to 56.9 in Jun, indicating increase in activity in every month since the beginning of 2013 and at the fastest rate since 27 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/d8b5be871614424e84c8dcd2e5573427). 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/d8b5be871614424e84c8dcd2e5573427). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased from 51.5 in May to 52.5 in Jun, which is the highest rate of improvement in 25 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/c853fab910d9425083c5eee0326d3fe3). Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds manufacturing improving at the highest rates since the beginning of 2011 with improving domestic demand and supporting foreign orders, suggesting growth of output of manufacturing by 0.5 percent in IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c853fab910d9425083c5eee0326d3fe3). Table UK provides the economic indicators for the United Kingdom.

Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	May month ∆%: 0.2 May 12-month ∆%: 2.7 Blog 6/23/13
Output/Input Prices	Output Prices: May 12-month NSA ∆%: 1.2; excluding food, petroleum ∆%: 0.8 Input Prices: May 12-month NSA ∆%: 2.2 Excluding ∆%: 1.9 Blog 6/23/13
GDP Growth	IQ2013 prior quarter ∆% 0.3; year earlier same quarter ∆%: 0.3 Blog 3/31/13 4/28/13 5/26/13 7/7/13
Industrial Production	May 2013/May 2012 ∆%: Production Industries minus 2.3; Manufacturing minus 2.9 Blog 7/14/13
Retail Sales	May month ∆%: 2.1 May 12-month ∆%: 1.9 Blog 6/23/13
Labor Market	Feb-Apr Unemployment Rate: 7.8%; Claimant Count 4.5%; Earnings Growth 1.3% Blog 6/16/13
Trade Balance	Balance Apr minus ₤2579 million Exports May ∆%: 0.6; Mar-May ∆%: 1.6 Imports May ∆%: 1.4 Mar-May ∆%: -0.6 Blog 7/14/13

Links to blog comments in Table UK:

7/7/13 http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html

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

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

The UK Office for National Statistics provides the output of production industries with revisions. Table VH-1 incorporates the revisions released in Dec, 2011(http://www.ons.gov.uk/ons/rel/iop/index-of-production/november-2012/index.html) and the latest available data for May 2013. Manufacturing accounts for 68.4 percent of the production industries of the UK and decreased 2.9 percent in the 12 months ending in May 2013. Capital goods industries fell 1.0 percent in the 12 months ending in May 2013, grew 3.7 percent in the 12 months ending in Apr 2013 and had been growing at very high rates during the current cyclical recovery but falling from the unsustainable high of 12.0 percent in the 12 months ending in Feb 2011. Mining and quarrying fell 3.5 percent in the 12 months ending in May 2013. The 12-month rates of growth of the entire index of production industries registered declines for all 12 months from Mar 2011 to May 2013. With exception of most months for capital goods and Sep to Dec 2012 for consumer durables, 12-month percentage changes of all segments are mostly negative from Jan to Dec 2012. Energy and mining have been drivers of decline. The upper part of Table VH-1 provides rates of change of yearly values. Manufacturing output fell 10.2 percent in 2009 after falling 2.8 percent in 2008 but grew at 4.2 percent in the initial phase of the recovery in 2010 and 1.8 percent in 2011 but fell 1.7 percent in 2012.

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

	PROD IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENGY
2008	-2.9	-6.1	-2.8	-5.5	-1.7	-3.3	-2.9
2009	-9.5	-9.7	-10.2	-6.8	-0.8	-12.1	-6.5
2010	2.8	-2.4	4.2	-4.1	-0.3	10.4	-2.5
2011	-1.2	-14.8	1.8	0.6	-0.7	6.7	-10.7
2012	-2.4	-9.6	-1.7	-2.9	-3.8	1.6	-7.4

		PROD IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENGY
2011	Mar	-0.8	-16.9	2.9	1.9	-0.7	8.9	-10.9
	Apr	-2.2	-16.2	2.0	0.3	1.8	4.9	-11.2
	May	-1.4	-21.6	3.2	1.1	2.2	6.0	-13.5
	Jun	-0.5	-15.4	2.3	7.4	0.3	6.8	-10.1
	Jul	-0.9	-15.2	1.8	2.2	1.8	5.2	-9.9
	Aug	-2.1	-16.5	0.2	-1.5	-1.0	4.3	-10.5
	Sep	-2.3	-18.6	0.7	-2.0	-2.7	7.4	-12.1
	Oct	-3.0	-14.2	-1.0	-1.1	-3.9	4.5	-11.9
	Nov	-3.4	-14.0	-1.0	-0.3	-2.7	5.6	-12.6
	Dec	-2.5	-14.1	0.9	-3.7	-1.7	7.1	-15.4
2012	Jan	-3.5	-19.5	0.4	-5.2	0.5	4.7	-15.3
	Feb	-1.6	-6.8	-1.6	-7.0	-0.6	-1.2	-4.3
	Mar	-2.1	-6.2	-0.9	-6.6	-1.9	1.3	-8.1
	Apr	-1.5	-12.1	-1.2	-2.5	-5.0	2.5	-6.8
	May	-1.5	-6.7	-1.2	-3.9	-5.7	2.6	-4.7
	Jun	-4.2	-4.2	-4.2	-10.8	-6.3	0.0	-5.5
	Jul	-0.7	-0.4	-0.8	-2.8	-4.9	4.7	-3.5
	Aug	-0.8	2.2	-1.4	-2.3	-4.2	2.2	-2.0
	Sep	-3.7	-16.5	-1.6	2.1	-1.8	0.3	-12.0
	Oct	-3.9	-20.9	-2.4	4.7	-4.6	0.5	-11.9
	Nov	-3.0	-13.2	-2.6	0.9	-5.5	0.2	-7.9
	Dec	-3.0	-8.6	-2.5	0.7	-6.1	1.3	-5.7
2013	Jan	-3.3	-7.2	-3.9	-1.2	-6.1	0.6	-4.5
	Feb	-2.4	-8.3	-2.1	-3.9	-5.4	3.8	-8.2
	Mar	-2.0	-12.3	-1.7	0.4	-4.7	2.5	-4.3
	Apr	-1.4	-6.2	-0.9	-2.0	0.1	3.7	-5.0
	May	-2.3	-3.5	-2.9	-4.1	-0.6	-1.0	-4.8

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/may-2013/index.html

Percentage changes in the production industries and major components in a month relative to the prior month are shown in Table VH-2. Many segments decreased in May 2013 with exception of mining and quarrying and energy. There is significant fluctuation in monthly percentage changes. Most segments fell in Apr 2013 with exception of mining and consumer nondurables and most segments increased in Mar 2013 with exception of mining and quarrying and energy. Capital goods industries fell 1.8 percent in Jan 2013 and increased 1.0 percent in Mar while manufacturing fell 1.4 percent in Jan but increased 0.9 percent in Mar. Performance was stronger with growth of manufacturing of 1.0 percent and capital goods of 1.8 percent in Dec 2012. Fluctuations of monthly production are quite wide.

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

		PROD IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENGY
2011	Mar	0.0	-1.4	-0.1	-0.2	1.0	-0.2	-0.9
	Apr	-1.3	0.9	-0.7	-2.5	0.3	-2.4	-1.0
	May	1.0	-5.2	1.3	0.7	0.9	2.2	-1.5
	Jun	0.4	-0.2	0.1	4.8	-0.7	1.2	0.4
	Jul	-0.6	1.1	-0.5	-4.5	0.1	-1.1	0.0
	Aug	-0.5	-0.1	-0.7	-2.5	-0.8	-0.3	-0.4
	Sep	0.1	-1.1	0.4	-3.0	-1.8	2.5	-1.0
	Oct	-0.6	1.9	-0.8	-0.5	-0.2	-1.0	-0.7
	Nov	-0.2	-0.9	0.1	0.9	-0.1	1.3	-0.8
	Dec	0.7	-2.9	0.9	0.3	1.1	0.7	-1.6
2012	Jan	-0.7	-2.0	0.0	0.9	0.5	-1.2	-1.4
	Feb	-0.1	3.1	-1.5	-1.2	-1.0	-2.9	4.6
	Mar	-0.4	-0.8	0.6	0.1	-0.3	2.4	-4.7
	Apr	-0.7	-5.5	-1.0	1.8	-2.8	-1.3	0.4
	May	1.0	0.7	1.3	-0.8	0.1	2.3	0.6
	Jun	-2.4	2.4	-2.9	-2.7	-1.3	-1.4	-0.4
	Jul	3.1	5.1	3.1	4.2	1.6	3.6	2.1
	Aug	-0.6	2.6	-1.3	-2.0	-0.1	-2.6	1.2
	Sep	-2.8	-19.2	0.2	1.3	0.6	0.6	-11.1
	Oct	-0.8	-3.4	-1.6	2.0	-3.0	-0.7	-0.7
	Nov	0.7	8.7	-0.1	-2.8	-1.0	0.9	3.8
	Dec	0.7	2.2	1.0	0.2	0.4	1.8	0.8
2013	Jan	-1.0	-0.5	-1.4	-1.0	0.5	-1.8	-0.2
	Feb	0.9	1.9	0.4	-4.0	-0.3	0.2	0.6
	Mar	0.0	-5.0	0.9	4.6	0.5	1.0	-0.7
	Apr	-0.1	1.1	-0.2	-0.6	2.1	0.0	-0.4
	May	0.0	3.5	-0.8	-2.9	-0.5	-2.3	0.9

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/may-2013/index.html

Weights of components of the production index and contributions by components to the monthly and 12-month percentage changes of volume are provided by the UK Office for National Statistics and shown in Table VH-7. The 12-month rate of output of the production industries of minus 2.3 percent was driven by negative contribution of 0.42 percentage points by mining and quarrying with the subcomponent of oil and gas deducting 0.84 percentage points. The second highest source of decline is 2.08 percentage points of manufacturing. The contribution of manufacturing is strong because of its share of 68.4 percent in the production index with growth of minus 2.9 percent in 12 months. The contributions do not add exactly because of rounding. Manufacturing fell 0.8 percent in May 2013, deducting 0.55 percentage points. Mining increased 3.5 percent in May 2013, adding 0.40 percentage points. Decrease of electricity by 1.7 percent in May deducted 0.15 percentage points.

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

	Weight %	Volume 12-Month ∆% Ending in May 2013	% Point Contrib.	Volume Month ∆% May 2013	% Point Contrib.
PROD IND	100.0	-2.3	-2.3	0.0	0.0
MNG	15.1	-3.5	-0.42	3.5	0.40
MNG 06	12.4	-9.4	-0.84	4.9	0.39
MFG	68.4	-2.9	-2.08	-0.8	-0.55
ELEC	8.6	-0.8	-0.07	-1.7	-0.15
WATER & SEW	7.9	2.6	0.22	3.6	0.31

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/may-2013/index.html

Table VH-8 provides the breakdown of manufacturing 12-month and monthly growth and percentage contributions. Several negative contributions to 12-month growth were by: chemical and chemicals products (CE) deducted 0.14 percentage points with growth in 12 months of minus 3.3 percent; rubber and plastic products (CG) deducted 0.54 percentage points with growth in 12 months of minus 9.2 percent; and manufacture of food products, beverages and tobacco (CA) deducted 0.43 percentage points with 12-month growth of minus 3.7 percent. The highest positive contribution was 0.26 percentage points by transport equipment (CL) with growth of 2.8 percent. Electrical equipment (CJ) deducted 0.12 percentage points with growth of minus 5.0 percent in 12 months.

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

Sector	Summary Description	% of production	Month on same month a year ago growth (%)	Contribution to production (% points)
IoP	Index of Production	100.0	-2.3	-2.3
B	Total Mining & Quarrying	15.1	-3.5	-0.42
C	Total Manufacturing	68.4	-2.9	-2.08
CA	Food, beverages and tobacco	10.9	-3.7	-0.43
CB	Textiles and leather products	2.1	-8.0	-0.18
CC	Wood, paper and printing	5.5	1.0	0.05
CD	Coke and petroleum	1.7	-9.1	-0.15
CE	Chemical Products	4.2	-3.3	-0.14
CF	Pharmaceutical Products	6.4	7.3	0.36
CG	Rubber and plastic products	5.7	-9.2	-0.54
CH	Metal products	7.7	-6.1	-0.51
CI	Computer, electronic & optical	4.3	-3.4	-0.15
CJ	Electrical equipment	2.1	-5.0	-0.12
CK	Machinery and equipment	5.0	-13.5	-0.77
CL	Transport equipment	7.7	2.8	0.26
CM	Other manufacturing & repair	5.4	4.7	0.25
D	Total Electricity & Gas	8.6	-0.8	-0.07
E	Total Water	7.9	2.6	0.22

Sector	Summary Description	% of production	Month on previous month growth (%)	Contribution to production (% points)
IoP	Index of Production	100.0	0.0	0.0
B	Total Mining & Quarrying	15.1	3.5	0.40
C	Total Manufacturing	68.4	-0.8	-0.55
CA	Food, beverages and tobacco	10.9	2.3	0.25
CB	Textiles and leather products	2.1	1.0	0.02
CC	Wood, paper and printing	5.5	0.5	0.03
CD	Coke and petroleum	1.7	-4.9	-0.08
CE	Chemical Products	4.2	2.4	0.10
CF	Pharmaceutical Products	6.4	-5.9	-0.34
CG	Rubber and plastic products	5.7	1.8	0.10
CH	Metal products	7.7	-4.1	-0.34
CI	Computer, electronic & optical	4.3	-3.6	-0.16
CJ	Electrical equipment	2.1	3.0	0.07
CK	Machinery and equipment	5.0	-2.3	-0.12
CL	Transport equipment	7.7	0.3	0.03
CM	Other manufacturing & repair	5.4	-1.7	-0.10
D	Total Electricity & Gas	8.6	-1.7	-0.15
E	Total Water	7.9	3.6	0.31

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/may-2013/index.html

The UK’s trade account is shown in Table VH-5. In May 2013, the UK ran a deficit in trade of goods and services (total trade) of ₤2435 million. The deficit in trade of goods was ₤8491 million and ₤7675 million in goods excluding oil. A surplus in services of ₤6056 million contributed to the smaller overall deficit in goods and services (-₤8491 million plus ₤6056 million equal to -₤2435 million). Services have contributed to lower trade account deficits and softened the impact of the global recession on the UK economy. Exports of goods and services increased 0.6 percent in May 2013 and increased 1.6 percent in the quarter Mar-Mar 2013 relative to the same quarter a year earlier with imports increasing 1.4 percent in May and decreasing 0.6 percent in Mar-May 2013 relative to the same quarter a year earlier. Excluding oil, UK exports of goods decreased 1.8 percent in May 2013 and increased 2.5 percent in Mar-Apr 2013 relative to a year earlier while imports increased 0.8 percent in May and increased 0.5 percent in Mar-May 2013 relative to a year earlier. The great advantage of the UK similar to the US is the substantial surplus in services. Services exports decreased 0.8 percent in May and increased 3.0 percent in Mar-May 2013 relative to a year earlier and imports increased 1.6 percent in May and decreased 0.9 percent in Mar-May 2013 relative to a year earlier.

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

	₤ Million SA May 2013	Month ∆%    May 2013	Mar-May 2013 ∆% Mar-May 2012
Total Trade
Exports	41,845	0.6	1.6
Imports	44,280	1.4	-0.6
Balance	-2,435
Trade in Goods
Exports	25,633	1.5	0.7
Imports	34,124	1.3	-0.6
Balance	-8,491
Trade in Goods Excluding Oil
Exports	21,979	-1.8	2.5
Imports	29,654	0.8	0.5
Balance	-7,675
Trade in Services
Exports	16,212	-0.8	3.0
Imports	10,156	1.6	-0.9
Balance	6,056

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/may-2013/index.html

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