Twenty Nine Million Unemployed or Underemployed, Collapse of United States Dynamism of Income Growth and Employment Creation, Stagnating Real Wages, United States International Trade, Peaking Valuations of Risk Financial Assets, World Economic Slowdown and Global Recession Risk: Part III

 

 

Twenty Nine Million Unemployed or Underemployed, Collapse of United States Dynamism of Income Growth and Employment Creation, Stagnating Real Wages, United States International Trade, Peaking Valuations of Risk Financial Assets, World Economic Slowdown and Global Recession Risk

Carlos M. Pelaez

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

Executive Summary

I Twenty Nine Million Unemployed or Underemployed

IA1 Summary of the Employment Situation

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

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

II Stagnating Real Wages

IIA United States International Trade

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

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

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has lowered its forecast of the world economy to 3.3 percent in 2013 but accelerating to 4.0 percent in 2014, 4.4 percent in 2015 and 4.5 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $33,932 billion of world output of $71,707 billion, or 47.3 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2013 to 2016 in contrast with 4.1 percent for the world as a whole. While the world would grow 17.2 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.8 percent. The difference in dollars of 2012 is rather high: growing by 17.2 percent would add $12.3 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,964 but growing by 8.8 percent would add $6.3 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,290 billion, or 38.1 percent of world output. The EMDEs would grow cumulatively 25.2 percent or at the average yearly rate of 5.8 percent, contributing $6.9 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,227 billion of China in 2012. The final four countries in Table 1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,470 billion, or 20.2 percent of world output, which is equivalent to 42.6 percent of the combined output of the major advanced economies of the G7.

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

	GDP USD 2012	Real GDP ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
World	71,707	3.3	4.0	4.4	4.5
G7	33,932	1.3	2.2	2.5	2.5
Canada	1,819	1.5	2.4	2.5	2.4
France	2,609	-0.1	0.9	1.5	1.7
DE	3,401	0.6	1.5	1.3	1.3
Italy	2,014	-1.5	0.5	1.2	1.4
Japan	5,964	1.6	1.4	1.1	1.2
UK	2,441	0.7	1.5	1.8	1.9
US	15,685	1.9	2.9	3.6	3.4
Euro Area	12,198	-0.3	1.1	1.4	1.6
DE	3,401	0.6	1.5	1.3	1.3
France	2,609	-0.1	0.9	1.5	1.7
Italy	2,014	-1.5	0.5	1.2	1.4
POT	213	-2.3	0.6	1.5	1.8
Ireland	210	1.1	2.2	2.7	2.7
Greece	249	-4.2	0.6	2.9	3.7
Spain	1,352	-1.6	0.7	1.4	1.5
EMDE	27,290	5.3	5.7	6.0	6.1
Brazil	2,396	3.0	4.0	4.1	4.2
Russia	2,022	3.4	3.8	3.7	3.6
India	1,825	5.7	6.2	6.6	6.9
China	8,227	8.0	8.2	8.5	8.5

Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries); POT: Portugal

Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx). Table I-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2012 in Table I-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high for the countries with sovereign debt difficulties in Europe: 15.7 percent for Portugal (POT), 14.7 percent for Ireland, 24.2 percent for Greece, 25.0 percent for Spain and 10.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.4 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.

Table V-2, IMF World Economic Outlook Database Projections of Unemployment Rate as Percent of Labor Force

	% Labor Force 2012	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016
World	NA	NA	NA	NA	NA
G7	7.4	7.4	7.3	7.0	6.6
Canada	7.3	7.3	7.2	7.1	7.0
France	10.2	11.2	11.6	11.4	10.9
DE	5.5	5.6	5.7	5.6	5.6
Italy	10.6	12.0	12.4	12.0	11.2
Japan	4.4	4.1	4.1	4.1	4.1
UK	8.0	7.8	7.8	7.4	6.9
US	8.1	7.7	7.5	6.9	6.3
Euro Area	11.4	12.3	12.3	11.9	11.4
DE	5.5	5.6	5.7	5.6	5.6
France	10.2	11.2	11.6	11.4	10.9
Italy	10.6	12.0	12.4	12.0	11.2
POT	15.7	18.3	18.5	18.1	17.5
Ireland	14.7	14.2	13.8	12.9	11.9
Greece	24.2	27.0	26.1	24.0	21.0
Spain	25.0	27.0	26.5	25.6	24.7
EMDE	NA	NA	NA	NA	NA
Brazil	5.5	6.0	6.5	6.5	6.5
Russia	6.0	5.5	5.5	5.5	5.5
India	NA	NA	NA	NA	NA
China	4.1	4.1	4.1	4.1	4.1

Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries)

Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IQ2013 available now for all countries. Growth is weak throughout most of the world. Japan’s GDP increased 1.2 percent in IQ2012 and 3.4 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.2 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 0.6 percent, which is much lower than 4.8 percent in IQ2012. Growth of 3.9 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.9 percent in IIIQ2012 at the SAAR of minus 3.6 percent and increased 0.2 percent relative to a year earlier. Japan’s GDP grew 0.3 percent in IVQ2012 at the SAAR of 1.2 percent and increased 0.4 percent relative to a year earlier. Japan grew 1.0 percent in IQ2013 at the SAAR of 4.1 percent and 0.4 percent relative to a year earlier. China grew at 1.9 percent in IIQ2012, which annualizes to 7.8 percent and 7.6 percent relative to a year earlier. China grew at 2.1 percent in IIIQ2012, which annualizes at 8.7 percent and 7.4 percent relative to a year earlier. In IVQ2012, China grew at 2.0 percent, which annualizes at 8.2 percent, and 7.9 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.6 percent, which annualizes at 6.6 percent and 7.7 percent relative to a year earlier. Xinhuanet informs that Premier Wen Jiabao considers the need for macroeconomic stimulus, arguing that “we should continue to implement proactive fiscal policy and a prudent monetary policy, while giving more priority to maintaining growth” (http://news.xinhuanet.com/english/china/2012-05/20/c_131599662.htm). Premier Wen elaborates that “the country should properly handle the relationship between maintaining growth, adjusting economic structures and managing inflationary expectations” (http://news.xinhuanet.com/english/china/2012-05/20/c_131599662.htm). There is decennial change in leadership in China (http://www.xinhuanet.com/english/special/18cpcnc/index.htm). China’s GDP grew 7.9 percent in IVQ2012 relative to IVQ2011. Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2012. China’s GDP grew 8.1 percent in IQ2012 relative to a year earlier but only 7.6 percent in IIQ2012 relative to a year earlier, 7.4 percent in IIIQ2012 relative to IIIQ2011, 7.9 percent in IVQ2012 relative to year earlier and 7.7 percent in IQ2013. GDP fell 0.1 percent in the euro area in IQ2012 and decreased 0.1 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.2 percent IIQ2012 and fell 0.5 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.1 percent and declined 0.7 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.6 percent relative to the prior quarter and fell 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 earlier http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/05/recovery-without-hiring-collapse-of.html). In IQ2012, UK GDP 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 (Section VB and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP Section VB and earlier http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html). In May 2013, Japan’s exports grew 10.1 percent in 12 months while imports increased 10.0 percent. The second part of Table V-4 shows that net trade deducted 1.1 percentage points from Japan’s growth of GDP in IIQ2012, deducted 2.8 percentage points from GDP growth in IIIQ2012 and deducted 0.6 percentage points from GDP growth in IVQ2012. In Apr 2013, China exports increased 14.7 percent relative to a year earlier and imports 16.8 percent. Germany’s exports increased 1.9 percent in the month of Apr 2013 and increased 8.5 percent in the 12 months ending in Apr 2013 while imports increased 2.2 percent in the month of Apr and increased 5.2 percent in the 12 months ending in Apr. Net trade contributed 0.4 percentage points to growth of GDP in IQ2012, contributed 1.3 percentage points in IIQ2012, contributed 1.4 percentage points in IIIQ2012, contributed 0.7 percentage points in IVQ2012 and contributed 1.0 percentage points in 2012. Net trade deducted 0.1 percentage points from Germany’s GDP growth. Net trade deducted 0.7 percentage points from UK value added in IQ2012, deducted 0.7 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		14.7 Apr 10.0 Mar 13 17.3 Jan-Apr 13		16.8 Apr 14.1 Mar 13 10.6 Jan-Apr 13
Euro Area	9.1 12-M Apr	3.2 Jan-Apr	1.2 12-M Apr	-3.6 Jan-Apr
Germany	1.9 Apr CSA	8.5 Apr	2.3Apr CSA	5.2 Apr
France 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 3.6 percent in 2013 to 6.1 percent in 2015 and 5.7 percent in 2018. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would more challenging with lower growth of world trade.

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

	2013	2014	2015	Average ∆% 2013-2018
World Trade Volume (Goods and Services)	3.6	5.3	6.1	5.7
Oil Price USD/Barrel	102.60	97.58	NA	NA
Commodity Price Index	181.84	174.06	NA	NA
Commodity Industrial Inputs Price 2005=100	170.04	164.66	NA	NA
Imports Goods & Services
G7	1.8	4.0	4.7	4.3
EMDE	6.2	7.3	7.9	7.5
Exports Goods & Services
G7	2.2	4.4	4.9	4.5
EMDE	4.8	6.5	7.6	7.1

Notes: Commodity Price Index includes Fuel and Non-fuel Prices; Commodity Industrial Inputs Price includes agricultural raw materials and metal prices; Oil price is average of WTI, Brent and Dubai

Source: International Monetary Fund World Economic Outlook databank

http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, 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	May 12-month NSA ∆%: 1.7; ex food and energy ∆% 1.7 May month SA ∆% = 0.5; ex food and energy ∆%: 0.1 Blog 6/23/13
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 Apr 2013 4.076 million lower by 0.886 million than 4.962 million in Apr 2007 Blog 6/16/13
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-Apr 2013/Jan-Apr 2012 NSA ∆%: Total 1.9; Durable Goods: 2.4; Nondurable Goods: 1.5 Blog 6/16/13
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	May 12-month NSA ∆%: Imports -1.9; Exports -0.9 Blog 6/16/13
Consumer Credit	Apr ∆% annual rate: 4.7 Blog 6/9/13
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 ∆% May: Receipts 15.1; Outlays 0.8; Individual Income Taxes 19.5 Deficit Fiscal Year 2011 $1,296 billion Deficit Fiscal Year 2012 $1,087 billion Blog 6/16/2013
CBO Budget and Economic Outlook	2012 Deficit $1089 B 7.0% GDP Debt 11,280 B 72.5% GDP 2013 Deficit $845 B, Debt 12,229 B 76.3% GDP Blog 8/26/12 11/18/12 2/10/13
Commercial Banks Assets and Liabilities	May 2013 SAAR ∆%: Securities -3.1 Loans 5.1 Cash Assets 73.4 Deposits 1.6 Blog 6/23/13
Flow of Funds	IQ2013 ∆ since 2007 Assets +$2612.8 MM Real estate -$2733.8 MM Financial +4799.7 MM Net Worth +$3487.4 MM Blog 6/16/13
Current Account Balance of Payments	IQ2013 -83,219 MM %GDP 2.7 Blog 6/16/13

Links to blog comments in Table USA:

6/30/13 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

Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan-Jun 2013, light vehicle sales accumulated to 7,829,141, which is higher by 7.7 percent relative to 7,272,160 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 15.96 million in Jun 2013, higher than 15.31 million in May 2013 and higher than 14.38 million in Jun 2012 (http://motorintelligence.com/m_frameset.html).

Table VA-1, US, New Motor Vehicle Sales and Car Production, Thousand Units

	New Motor Vehicle Sales	New Car Sales and Leases	New Truck Sales and Leases	Domestic Car Production
1990	14,137	9,300	4,837	6,231
1991	12,725	8,589	4,136	5,454
1992	13,093	8,215	4,878	5,979
1993	14,172	8,518	5,654	5,979
1994	15,397	8,990	6,407	6,614
1995	15,106	8,536	6,470	6,340
1996	15,449	8,527	6,922	6,081
1997	15,490	8,273	7,218	5,934
1998	15,958	8,142	7,816	5,554
1999	17,401	8,697	8,704	5,638
2000	17,806	8,852	8,954	5,542
2001	17,468	8,422	9,046	4,878
2002	17,144	8,109	9,036	5,019
2003	16,968	7,611	9,357	4,510
2004	17,298	7,545	9,753	4,230
2005	17,445	7,720	9,725	4,321
2006	17,049	7,821	9,228	4,367
2007	16,460	7,618	8,683	3,924
2008	13,494	6,814	6.680	3,777
2009	10,601	5,456	5,154	2,247
2010	11,772	5,729	6,044	2,840

Source: US Census Bureau http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html

Chart VA-1 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2013. Output has stagnated since the late 1990s.

Chart VA-1, US, Motor Vehicles and Parts Output, 1972-2013

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g17/current/

Manufacturing jobs fell 6,000 in Jun 2013 relative to May 2013, seasonally adjusted (Table I-10 and earlier http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html). Manufacturing jobs not seasonally adjusted increased 33,000 from Jun 2012 to Jun 2013 or at the average monthly rate of 2,750. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. 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 onths 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 six months and fell in one. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “The rate of capacity utilization for total industry edged down 0.1 percentage point to 77.6 percent, a rate 0.2 percentage point below its level of a year earlier and 2.6 percentage points below its long-run (1972–2012) average.” United States industry is apparently decelerating with some strength at the margin.

Manufacturing increased 0.1 percent in May 2013 after decreasing 0.4 percent in Apr 2013 seasonally adjusted, increasing 1.7 percent not seasonally adjusted in 12 months. Manufacturing grew cumulatively 0.9 percent in the six months ending in May 2013 or at the annual equivalent rate of 1.8 percent. Excluding the increase of 0.9 percent in Dec 2012 perhaps partly because of recovery from hurricane Sandy, manufacturing accumulated growth of 0.0 percent from Jan 2013 to May 2013 or at the annual equivalent rate of 0.0 percent. Manufacturing fell 7.3 percent from the peak in Jun 2007 to May 2013 and increased 18.6 from the trough in Apr 2009 to May 2013. Manufacturing output in May 2013 is 7.3 percent below the peak in Jun 2007.

Table VA-2 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.4 percent in US national income in IVQ2012 and 86.7 percent in IQ2013. Most of US national income is in the form of services. In Jun 2013, there were 136.805 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 114.998 million NSA in Jun 2013 accounted for 84.1 percent of total nonfarm jobs of 136.805 million, of which 12.049 million, or 10.5 percent of total private jobs and 8.8 percent of total nonfarm jobs, were in manufacturing. Private service-producing jobs were 96.069 million NSA in Jun 2013, or 70.2 percent of total nonfarm jobs and 83.5 percent of total private-sector jobs. Manufacturing has share of 11.0 percent in US national income in IQ2013, as shown in Table VA-2. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

Table VA-2, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total

	SAAR IVQ2012	% Total	SAAR IQ2013	% Total
National Income WCCA	14,230.5	100.0	14,317.3	100.0
Domestic Industries	13,963.9	97.9	14,070.3	98.3
Private Industries	12,300.8	86.4	12,408.8	86.7
Agriculture	139.6	1.0	156.2	1.1
Mining	221.7	1.6	210.3	1.5
Utilities	211.7	1.5	218.7	1.5
Construction	606.9	4.3	625.0	4.4
Manufacturing	1599.8	11.2	1576.9	11.0
Durable Goods	921.3	6.5	909.6	6.4
Nondurable Goods	678.4	4.8	667.3	4.7
Wholesale Trade	857.2	6.0	877.8	6.1
Retail Trade	973.3	6.8	974.8	6.8
Transportation & WH	417.9	2.9	425.4	3.0
Information	496.2	3.5	522.1	3.6
Finance, Insurance, RE	2377.2	16.7	2395.0	16.7
Professional, BS	2042.5	14.4	2053.5	14.3
Education, Health Care	1402.0	9.9	1408.9	9.8
Arts, Entertainment	548.3	3.9	553.0	3.9
Other Services	406.6	2.9	411.3	2.9
Government	1663.0	11.7	1661.5	11.6
Rest of the World	266.6	1.9	247.0	1.7

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

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

Manufacturers’ shipments increased 1.0 percent in May and decreased 0.7 percent in Apr 2013 after decreasing 1.5 percent in Mar 2013. New orders increased 2.1 percent in May 2013 and 1.3 percent in Apr 2013 following decrease by 4.7 percent in Mar 2013, as shown in Table VA-3. These data are very volatile. Volatility is illustrated by increase of 2642.2 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.2 percent in Aug. New orders excluding transportation equipment increased 0.6 percent in May 2013 and 0.2 percent in Apr 2013, after decreasing 2.8 percent in Mar 2013. Capital goods new orders, indicating investment, increased 10.0 percent in May 2013 and decreased 5.4 percent in Apr 2013 after decreasing 12.0 percent in Mar 2013. New orders of nondefense capital goods increased 9.7 percent in May 2013 and 3.5 percent in Apr 2013 after decreasing 8.9 percent in Mar 2013. Excluding more volatile aircraft, capital goods orders increased 1.5 percent in May 2013, 1.2 percent in Apr 2013 and 1.1 percent in Mar 2013.

Table VA-3, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%

	May 2013 ∆%	Apr 2013  ∆%	Mar 2013  ∆%
Total
S	1.0	-0.7	-1.5
NO	2.1	1.3	-4.7
Excluding Transport
S	0.5	-0.6	-2.2
NO	0.6	0.2	-2.8
Excluding Defense
S	0.9	-0.5	-1.7
NO	2.0	0.8	-4.0
Durable Goods
S	1.3	-0.6	0.9
NO	3.7	3.6	-5.9
Machinery
S	1.2	-2.3	0.7
NO	0.7	1.2	-1.5
Computers & Electronic Products
S	-0.3	-3.1	3.3
NO	2.4	4.6	-0.6
Computers
S	9.4	-14.9	8.9
NO	8.8	-6.4	-27.6
Transport Equipment
S	3.9	-1.0	3.0
NO	10.9	8.0	-15.0
Automobiles
S	-2.3	-3.1	0.9
Motor Vehicles
S	-2.6	4.0	0.9
NO	-2.0	4.1	-0.3
Nondefense Aircraft
S	30.1	-10.0	13.9
NO	50.8	18.4	-43.3
Capital Goods
S	5.6	-3.8	2.7
NO	10.0	5.4	-12.0
Nondefense Capital Goods
S	6.2	-3.5	2.5
NO	9.7	3.5	-8.9
Capital Goods ex Aircraft
S	1.9	-2.1	0.6
NO	1.5	1.2	1.1
Nondurable Goods
S	0.7	-0.7	-3.5
NO	0.7	-0.7	-3.5

Note: Mfg: manufacturing; S: shipments; NO: new orders; Transport: transportation

Source: US Census Bureau http://www.census.gov/manufacturing/m3/

Chart VA-2 of the US Census Bureau provides new orders of manufacturers from Mar 2012 to Apr 2013. There is significant volatility that prevents discerning clear trends.

Chart VA-2, US, Manufacturers’ New Orders 2010-2011 Seasonally Adjusted, Month ∆%

Source: US Census Bureau

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

Chart VA-3 of the US Census Bureau provides total value of manufacturers’ new orders, seasonally adjusted, from 1992 to 2013. Seasonal adjustment reduces sharp oscillations. The series dropped nearly vertically during the global recession but rose along a path even steeper than in the high-growth period before the recession. The final segment suggests deceleration but similar segments occurred in earlier periods followed with continuing growth and stability currently.

Chart VA-3, US, Value of Total Manufacturers’ New Orders, Seasonally Adjusted, 1992-2013

Source: US Census Bureau

http://www.census.gov/manufacturing/m3/

Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-4. Values are cumulative millions of dollars in Jan-Apr 2014 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-May 2013 total $2392.9 billion and new orders total $2381.2 billion, growing respectively by 1.1 percent and 0.9 percent relative to the same period in 2012. Excluding transportation equipment, shipments grew 0.2 percent and new orders increased 0.4 percent. Excluding defense, shipments grew 1.1 percent and new orders grew 1.4 percent. Durable goods shipments reached $1123.4 billion in Jan-May 2013, or 46.9 percent of the total, growing by 2.6 percent, and new orders $1111.5 billion, or 46.7 percent of the total, growing by 2.1 percent. Important information in Table VA-4 is the large share of nondurable goods with shipments of $1269.6 billion or 53.1 percent of the total, growing by minus 0.2 percent. Capital goods have relatively high value of $402.5 billion for shipments, growing 1.6 percent, and new orders $419.8 billion, increasing 0.4 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $321.5 billion, growing 1.2 percent, and new orders $339.2 billion, increasing 2.1 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.0 percent of US national income in IQ2013. These data are not adjusted for inflation.

Table VA-4, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars 

Jan-May 2013	Shipments	∆% 2013/ 2012	New Orders	∆% 2013/ 2012
Total	2,392,997	1.1	2,381,158	0.9
Excluding Transport	2,060,533	0.2	2,051,446	0.4
Excluding Defense	2,334,979	1.1	2,334,989	1.4
Durable Goods	1,123,353	2.6	1,111,514	2.1
Machinery	170,654	5.1	175,141	4.0
Computers & Electronic Products	131,340	-4.4	101,422	-8.0
Computers	2,555	-26.6	2,811	-19.4
Transport Equipment	332,464	7.2	329,712	4.3
Automobiles	53,408	24.9
Motor Vehicles	97,040	3.7	97,091	4.4
Nondefense Aircraft	50,131	5.0	60,146	4.6
Capital Goods	402,505	1.6	419,805	0.4
Nondefense Capital Goods	355,207	1.7	382,602	2.7
Capital Goods ex Aircraft	321,488	1.2	339,219	2.1
Nondurable Goods	1,269,644	-0.2	1,269,644	-0.2
Food Products	304,642	3.1
Petroleum Refineries	343,065	-1.0
Chemical Products	321,576	-2.1

Note: Transport: transportation Source: US Census Bureau

http://www.census.gov/manufacturing/m3/

Chart VA-4 of the US Census Bureau provides value of manufacturer’s new orders not seasonally adjusted from Jan 1992 to May 2013. Fluctuations are evident, which are smoothed by seasonal adjustment in the earlier Chart VA-3. The series drops nearly vertically during the global contraction and then resumes growth in a steep upward trend, flattening recently.

Chart VA-4, US, Value of Total Manufacturers’ New Orders, Not Seasonally Adjusted, 1992-2013

Source: US Census Bureau

http://www.census.gov/manufacturing/m3/

Construction spending at seasonally adjusted annualized rate (SAAR) reached $874.9 billion in May 2013, which was higher by 0.5 percent than in the prior month of Apr 2013, as shown in Table VA-5. Residential investment, with $328.6 billion accounting for 37.6 percent of total value of construction, increased 1.2 percent in May and nonresidential investment, with $546.3 billion accounting for 62.4 percent of the total, increased 0.1 percent. Public construction increased 1.8 percent while private construction changed 0.0 percent. Data in Table VA-5 show that nonresidential construction at $546.3 billion is much higher in value than residential construction at $328.6 billion while total private construction at $605.4 billion is much higher than public construction at $269.5 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in all quarters in 2012 with exception of deduction of 0.19 percentage points by nonresidential construction in IIIQ2012. Nonresidential investment deducted 0.19 percentage points from GDP growth in IIIQ2012 while residential construction added 0.31 percentage points and nonresidential construction added 1.28 percentage points in IVQ2012 with residential construction adding 0.41 percentage points. In IQ2013, nonresidential construction added 0.04 percentage points to GDP growth while residential construction added 0.34 percentage points. In 2012, residential construction added 0.27 percentage points to GDP growth while deducting 0.03 percentage points in 2011. Nonresidential construction added 0.78 percentage points to GDP growth in 2012 and 0.80 percentage points in 2011 (http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html http://www.bea.gov/iTable/index_nipa.cfm).

Table VA-5, Construction Put in Place in the United States Seasonally Adjusted Annual Rate Million Dollars and Month and 12-Month ∆%  

	May 2013   SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	874,911	0.5	5.4
Residential	328,623	1.2	22.7
Nonresidential	546,288	0.1	-2.9
Total Private	605,435	0.0	10.6
Private Residential	322,321	1.2	23.1
New Single Family	166,311	0.4	33.2
New Multi-Family	31,792	2.5	51.7
Private Nonresidential	283,114	-1.4	-0.9
Total Public	269,477	1.8	-4.7
Public Residential	6,302	1.6	4.1
Public Nonresidential	263,174	1.8	-4.9

SAAR: seasonally adjusted annual rate; B: billions

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

Further information on construction spending is provided in Table VA-6. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAARs and their monthly changes are provided in the final two columns. There has been improvement in construction in the US. There are only three declines in the monthly rate from Dec 2011 to May 2013. Growth in 12 months fell from 9.7 percent in Nov 2012 to 5.4 percent in May 2013.

Table VA-6, US, Value and Percentage Change in Value of Construction Put in Place, Dollars Millions and ∆%

	Value NSA Month $ Millions	12-Month ∆% NSA	Value SAAR $ Millions	Month ∆% SA*
May 2013	74,858	5.4	874,911	0.5
Apr	69,730	6.9	870,338	0.1
Mar	64,036	6.6	869,164	-0.1
Feb	58,395	5.4	869,909	0.8
Jan	59,143	7.2	863,136	-0.5
Dec 2012	67,075	7.8	867,735	0.4
Nov	76,506	9.7	864,298	0.0
Oct	81,092	9.3	863,927	1.6
Sep	78,206	3.8	850,423	0.7
Aug	80,193	4.0	836,751	0.1
Jul	76,966	6.7	836,165	0.2
Jun	77,002	5.7	845,028	1.8
May	71,039	7.9	830,364	1.1
Apr	65,251	6.2	821,266	1.2
Mar	60,084	6.3	811,165	0.2
Feb	55,425	9.7	809,624	0.2
Jan	55,191	8.3	808,272	-1.1
Dec 2011	62,242	3.4	817,569	1.0

SAAR: Seasonally Adjusted Annual Rate

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

The sharp contraction of the value of construction in the US is revealed by Table VA-7. Construction spending in Jan-May 2013, not seasonally adjusted, reached $326.2 billion, which is higher by 6.2 percent than 306.9 billion in the same period in 2012. The depth of the contraction is shown by the decline of construction spending from $460.1 billion in Jan-May 2006 to only $326.2 billion in the same period in 2013, or decline by minus 29.1 percent. The comparable decline from Jan-May 2005 to Jan-May 2013 is minus 22.5 percent. Construction spending in Jan-May 2013 decreased by 3.7 percent relative to the same period in 2003. Construction spending is lower by 8.6 percent in Jan-Apr 2013 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

Table VA-7, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%

Jan-May 2013 $ MM	326,163
Jan-May 2012	306,989
∆% to 2013	6.2
Jan-May 2011 $ MM	283,811
∆%to 2013	14.9
Jan-May 2010 $ MM	304,386
∆% to 2013	7.2
Jan-May 2009 $MM	356,865
∆% to 2013	-8.6
Jan-May 2006 $ MM	460,082
∆% to 2013	-29.1
Jan-May 2005 $ MM	421,055
∆% to 2013	-22.5
Jan-May 2003 $ MM	338,822
∆% to 2013	-3.7

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

Chart VA-18 of the US Census Bureau provides value of construction spending in the US not seasonally adjusted from 2002 to 2013. There are wide oscillations requiring seasonal adjustment to compare adjacent data. There was sharp decline during the global recession followed in recent periods by a stationary series that may be moving upward again.

Chart VA-5, Value of Construction Spending not Seasonally Adjusted, Millions of Dollars, 2002-2013

Source: US Census Bureau

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

Monthly construction spending in the US in Jan-May and Dec not seasonally adjusted is shown in Table VA-8 for the years between 2002 and 2013. The value of $74.9 billion in May 2013 is higher by 5.4 percent than $71.0 billion in May 2012. Construction fell by 26.9 percent from the peak of $102.5 billion in May 2006 to $74.9 billion in May 2013. The data are not adjusted for inflation or changes in quality.

Table VA-8, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars

Year	Jan	Feb	Mar	Apr	May	Dec
2002	59,516	58,588	63,782	69,504	73,384	63,984
2003	59,877	58,526	64,506	69,638	74,473	71,050
2004	64,934	64,138	73,238	78,354	83,736	77,733
2005	71,474	72,048	81,345	85,485	92,959	88,172
2006	81,058	81,478	92,855	95,324	102,495	86,436
2007	79,406	79,177	88,905	93,375	100,534	84,218
2008	77,349	77,227	82,779	87,743	92,781	76,645
2009	66,944	66,296	71,624	75,187	76,808	64,098
2010	55,586	54,019	60,228	66,422	68,906	60,202
2011	50,955	50,544	56,536	61,454	65,814	62,242
2012	55,191	55,425	60,084	65,251	71,039	67,075
2013	59,143	58,395	64,036	69,730	74,858	NA

Source: US Census Bureau

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

Chart VA-6 of the US Census Bureau shows SAARs of construction spending for the US since 1993. Construction spending surged in nearly vertical slope after the stimulus of 2003 combining near zero interest rates and subsequent slow adjustment in 17 doses of increases by 25 basis points between Jun 2004 and Jun 2006 together with other housing subsidies. Construction spending collapsed after subprime mortgages defaulted with the fed funds rate increasing from 1.00 percent in Jun 2004 to 5.25 percent in Jun 2006. Subprime mortgages were programmed for refinancing in two years after increases in homeowner equity in the assumption that fed funds rates would remain low forever or increase in small increments (Gorton 2009EFM see http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html). Price declines of houses or even uncertainty prevented refinancing of subprime mortgages that defaulted, causing the financial crisis that eventually triggered the global recession. Chart VA-6 shows a trend of increase in the final segment but it is difficult to assess if it will be sustained.

Chart VA-6, US, Construction Expenditures SAAR 1993-2012

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr050.html

Construction spending at SAARs in the five months Jan-May is shown in Table VA-7 for the years between 2002 and 2013. There is a peak in 2005 to 2007 with subsequent collapse of SAARs and rebound in 2012-2013.

Table VA-7, US, Value of Construction Spending SAAR Millions of Dollars

Year	Jan	Feb	Mar	Apr	May
2002	858,654	862,338	844,551	858,240	850,935
2003	863,855	859,225	851,132	859,459	866,814
2004	938,826	938,656	960,946	967,761	974,158
2005	1,036,187	1,056,492	1,065,262	1,058,365	1,078,586
2006	1,183,861	1,199,767	1,213,270	1,183,485	1,180,059
2007	1,149,899	1,156,008	1,167,402	1,159,124	1,168,195
2008	1,106,047	1,092,331	1,094,910	1,091,142	1,091,008
2009	962,704	959,907	954,984	929,593	911,241
2010	816,132	795,808	805,985	824,008	816,318
2011	757,039	754,169	763,058	772,204	773,764
2012	808,272	809,624	811,165	821,266	830,364
2013	863,136	869,909	869,164	870,338	874,911

Source: US Census Bureau

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

Chart VA-7 of the US Census Bureau provides SAARs of value of construction from 2002 to 2013. There is clear acceleration after 2003 when fed funds rates were fixed at 1.0 percent from Jun 2003 until Jun 2004. Construction peaked in 2005-2006, stabilizing in 2007 at a lower level and then collapsed in a nearly vertical drop until 2011 with increases into 2012 and marginal drop in Jan 2013 followed by increase in Feb 2013 and decline in Mar 2013 followed by continuing increase in Apr-May 2013.

Chart VA-7, US, Construction Expenditures SAAR 2002-2013

Source: US Census Bureau

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

Annual available data for the value of construction put in place in the US between 1993 and 2012 are provided in Table VA-8. Data from 1993 to 2001 are available for public and private construction with breakdown in residential and nonresidential only for private construction. Data beginning in 2002 provide aggregate residential and nonresidential values. Total construction value put in place in the US increased 73.6 percent between 1993 and 2012 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 5.0 percent between 2000 and 2012. Total value of construction decreased 0.6 percent between 2002 and 2012 with value of nonresidential construction increasing 27.9 percent while value of residential construction fell 32.2 percent. Value of total construction fell 26.1 percent between 2005 and 2012, with value of residential construction declining 55.9 percent while value of nonresidential construction rose 17.2 percent. Value of total construction fell 27.8 percent between 2006 and 2012, with value of nonresidential construction increasing 4.2 percent while value of residential construction fell 56.0 percent. In 2002, nonresidential construction had a share of 52.6 percent in total construction while the share of residential construction was 47.4 percent. In 2012, the share of nonresidential construction in total value rose to 67.7 percent while that of residential construction fell to 32.3 percent.

Table VA-8, Annual Value of Construction Put in Place 1993-2012, Millions of Dollars and ∆% 

	Total	Private Nonresidential	Private Residential
1993	485,548	150,006	208,180
1994	531,892	160,438	241,033
1995	548,666	180,534	228,121
1996	599,693	195,523	257,495
1997	631,853	213,720	264,696
1998	688,515	237,394	296,343
1999	744,551	249,167	326,302
2000	802,756	275,293	346,138
2001	840,249	273,922	364,414
	Total	Total Nonresidential	Total Residential
2002	847,874	445,914	401,960
2003	891,497	440,246	451,251
2004	991,356	452,948	538,408
2005	1,140,136	486,629	617,507
2006	1,167,222	547,408	619,814
2007	1,152,351	651,883	500,468
2008	1,067,564	709,818	357,746
2009	903,201	649,273	253,928
2010	804,561	555,449	249,112
2011	788,014	535,357	252,657
2012	843,028	570,429	272,599
∆% 1993-2012	73.6
∆% 1993-2000	65.3
∆% 2000-2012	5.0
∆% 2002-2012	-0.6	27.9	-32.2
∆% 2005-2012	-26.1	17.2	-55.9
∆% 2006-2012	-27.8	4.2	-56.0

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

Chart VA-8 shows sharp growth of residential construction spending in the US from 2002 to 2006. The value of construction spending dropped sharply during the global recession and has remained at a low plateau with an apparent increase in the final segment.

Chart VA-8, US, Residential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2013

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

VB Japan. Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (http://www.boj.or.jp/en/mopo/outlook/gor1304b.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.4 and 3.0 percent, with the all items CPI less fresh food of 0.4 to 0.8 percent. The critical difference is forecast of the CPI excluding fresh food of 2.7 to 3.6 percent in 2014 and 1.6 to 2.9 percent in 2015. The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

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

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

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

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

Financial markets in Japan and worldwide were shocked by new bold measures of “quantitative and qualitative monetary easing” by the Bank of Japan (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The objective of policy is to “achieve the price stability target of 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) at the earliest possible time, with a time horizon of about two years” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The main elements of the new policy are as follows:

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
2012
Apr 2013	+1.0 to +1.0 [+1.0]	-0.2
Jan 2013	+1.0 to +1.1 [+1.0]	-0.2 to –0.1 [-0.2]
2013
Apr 2013	+2.4 to +3.0 [+2.9]	+0.4 to +0.8 [+0.7]
Jan 2013	+1.9 to +2.5 [+2.3]	+0.3 to +0.6 [+0.4]
2014
Apr 2013	+1.0 to +1.5 [+1.4]	+2.7 to +3.6 [+3.4]	+0.7 to +1.6 [+1.4]
Jan 2013	+0.6 to +1.0 [+0.8]	+2.5 to +3.0 [+2.9]	+0.5 to +1.0 [+0.9]
2015
Apr 2013	+1.4 to +1.9 [+1.6]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]

Figures in brackets are the median of forecasts of Policy Board members

Source: Policy Board, Bank of Japan http://www.boj.or.jp/en/mopo/outlook/gor1304a.pdf

Private-sector activity in Japan expanded with the Markit Composite Output PMI^™ Index 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	May ∆% +0.1 12 months ∆% 0.6 Blog 6/16/13
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 Apr ∆% -14.2 Private ∆%: -12.4 Apr ∆% Excluding Volatile Orders -8.8 Blog 6/16/13
Tertiary Index	Apr month SA ∆% 0.0 Apr 12 months NSA ∆% 1.4 Blog 6/30/13
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

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	May 12-month ∆%: minus 2.9 May month ∆%: -0.6 Blog 6/16/13
Consumer Price Index	May month ∆%: minus 0.6 May 12 months ∆%: 2.1 Blog 6/16/13
Value Added of Industry	May 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	May balance $18.2 billion Exports 12M ∆% 1.0 Imports 12M ∆% -0.3 Cumulative May: $81.42 billion Blog 6/16/13

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

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	Apr month ∆%: 0.4; Apr 12 months ∆%: -0.6 Blog 6/16/13
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:

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

Table VD-1 provides percentage changes of euro area real GDP in a quarter relative to the prior quarter. Real GDP fell 0.6 percent in IVQ2011, fell 0.1 IQ2012 and fell in the final three quarters of 2012: 0.2 percent in IIQ2012, 0.1 percent in IIIQ2012 and 0.6 percent in IVQ2012. GDP fell 0.3 percent in IIIQ2013. The global recession manifested in the euro area in five consecutive quarterly declines from IIQ2008 to IIQ2009. The strongest impact was contraction of 2.8 percent in IQ2009. Recovery began in IIIQ2009 with cumulative growth of 3.8 percent to IQ2011 or at the annual equivalent rate of 2.1 percent. Growth was much more vigorous from IVQ2003 to IQ2008.

Table VD-1, Euro Area, Real GDP, Percentage Change from Prior Quarter, Calendar and Seasonally and Working Day Adjusted ∆%

	IQ	IIQ	IIIQ	IVQ
2013	-0.3
2012	-0.1	-0.2	-0.1	-0.6
2011	0.7	0.2	0.1	-0.3
2010	0.4	1.0	0.4	0.4
2009	-2.8	-0.3	0.4	0.4
2008	0.6	-0.4	-0.6	-1.7
2007	0.8	0.5	0.6	0.4
2006	0.9	1.1	0.7	1.0
2005	0.2	0.7	0.6	0.6
2004	0.5	0.5	0.4	0.3
2003	-0.1	0.1	0.5	0.7
2002	0.1	0.6	0.3	0.1
2001	0.9	0.1	0.1	0.2
2000	1.3	0.9	0.4	0.6

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

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

Table VD-2 provides percentage change in real GDP in the euro area in a quarter relative to the same quarter a year earlier. Growth rates were quite strong from 2004 to 2007. There were five consecutive quarters of sharp declines in GDP in a quarter relative to the same quarter a year earlier from IVQ2008 to IVQ2009 with sharp contractions of 5.4 percent in IQ2009, 5.3 percent in IIQ2009 and 4.4 percent in IIIQ2009. Growth rates decline in magnitude with 1.4 percent in IIIQ2011, 0.7 percent in IVQ211 and -0.1 percent in IQ2012 followed by contractions of 0.5 percent in IIQ2012, 0.7 percent in IIIQ2012 and 0.9 percent in IVQ2012. GDP contracted 1.1 percent in IQ2013 relative to a year earlier.

Table VD-2, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a Year Earlier, Seasonally and Working Day Adjusted ∆%

	IQ	IIQ	IIIQ	IV
2013	-1.1
2012	-0.1	-0.5	-0.7	-0.9
2011	2.5	1.7	1.4	0.7
2010	1.0	2.3	2.3	2.2
2009	-5.4	-5.3	-4.4	-2.3
2008	2.1	1.2	0.0	-2.1
2007	3.7	3.0	3.0	2.3
2006	3.0	3.3	3.4	3.8
2005	1.4	1.6	1.9	2.2
2004	1.8	2.2	2.2	1.8
2003	0.8	0.3	0.5	1.2
2002	0.5	1.0	1.2	1.0
2001	2.9	2.1	1.7	1.3
2000	4.3	4.4	3.8	3.3

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

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

Table VD-3 provides growth of euro area real GDP in a quarter relative to the same quarter a year earlier not seasonally adjusted. GDP in IQ2013 fell 1.7 percent relative to a year earlier without seasonal adjustment. Growth rates in 2006 and 2007 were quite strong followed by sharp declines of 5.6 percent in IQ2009, 5.8 percent in IIQ2009 and 4.2 percent in IQ2009.

Table VD-3, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a Year Earlier, Not Seasonally Adjusted ∆%

	IQ	IIQ	IIIQ	IV
2013	-1.7
2012	0.3	-0.8	-0.8	-1.0
2011	2.7	1.8	1.4	0.3
2010	1.2	2.5	2.2	2.1
2009	-5.6	-5.8	-4.2	-1.9
2008	1.6	1.6	0.5	-2.1
2007	3.5	3.1	3.1	2.4
2006	3.6	2.6	3.1	3.7
2005	1.0	2.1	1.8	1.8
2004	2.1	2.6	2.2	2.0
2003	1.0	0.1	0.5	1.2
2002	0.1	1.2	1.5	0.9
2001	2.7	2.0	1.7	1.5
2000	4.9	4.3	3.3	2.7

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

Table VD-3 provides GDP growth in IVQ2012 and relative to the same quarter a year earlier with SAWDA (seasonal and working day adjustment) and NSA (not seasonally adjuted) for the euro zone, European Union, Japan and the US. The GDP of the euro zone fell 0.3 percent in IQ2013 and declined 1.1 percent relative to a year earlier SWDA while the GDP of the European Union decreased 0.1 percent in IQ2013 and decreased 0.7 percent relative to a year earlier. Growth in IQ2013 was weak worldwide with somewhat stronger performance by the US but still insufficient to reduce unemployment and underemployment (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html) and motivate hiring (http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html).

Table VD-4, Euro Zone, European Union, Japan and USA, Real GDP Growth

	∆% IQ2013/ IVQ2012 SAWDA	∆% IQ2013/ IQ2012 SWDA	∆% IQ2013/ IQ2012 NSA
Euro Zone	-0.3	-1.1	-1.7
European Union	-0.1	-0.7	-1.4
Germany	0.1	-0.3	-1.4
France	-0.2	-0.4	-0.9
Netherlands	-0.4	-1.4	-1.8
Finland	-0.1	-2.2	-2.2
Belgium	0.0	-0.6	-0.8
Portugal	-0.4	-4.0	-4.1
Ireland	NA	NA	NA
Italy	-0.6	-2.4	-2.8
Greece	NA	NA	-5.6
Spain	-0.5	-2.0	-2.3
United Kingdom	0.3	0.6	-0.1
Japan	1.0	0.2	0.4
USA	0.4	1.6	1.6

*SAWDA: Seasonally and Working Day Adjusted except UK, Japan and USA

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

EUROSTAT estimates the rate of unemployment in the euro area at 12.1 percent in May 2013, as shown in Table VD-1. The number of unemployed in May 2013 was 19.922 million, which was 2.044 million higher than 17.878 million in May 2012. The rate of unemployment jumped from 11.3 percent in May 2012 to 12.1 percent in May 2013.

Table VD-5, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA 

	Unemployment Rate %	Number Unemployed Millions
May 2013	12.1	19.922
Apr	12.0	19.155
Mar	12.0	19.100
Feb	12.0	19.089
Jan	12.0	19.072
Dec 2012	11.8	18.849
Nov	11.8	18.804
Oct	11.7	18.698
Sep	11.6	18.467
Aug	11.5	18.282
Jul	11.4	18.196
Jun	11.4	18.100
May	11.3	17.878
Apr	11.2	17.745
Mar	11.0	17.483
Feb	10.9	17.265
Jan	10.8	17.057
Dec 2011	10.7	16.927
Nov	10.6	16.813
Oct	10.4	16.516
Sep	10.3	16.335
Aug	10.2	16.081
Jul	10.1	15.931
Jun	10.0	15.715
May	9.9	15.662
Apr	9.9	15.518
Mar	9.9	15.595
Feb	9.9	15.627
Jan	10.0	15.706
Dec 2010	10.1	15.807

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

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

Table VD-5 shows the disparity in rates of unemployment in the euro area with 12.1 percent for the region as a whole and 19.222 million unemployed but 5.3 percent in Germany and 2.269 million unemployed. At the other extreme is Spain with rate of unemployment of 26.9 percent and 6.085 million unemployed. The rate of unemployment of the European Union in May 2013 is 10.9 percent with 26.681 million unemployed.

Table VD-6, Unemployed and Unemployment Rate in Countries and Regions, Millions and %

May 2013	Unemployment Rate %	Unemployed Millions
Euro Zone	12.1	19.222
Germany	5.3	2.269
France	10.4	3.087
Netherlands	6.6	0.594
Finland	8.4	0.225
Portugal	17.6	0.932
Ireland	13.6	0.292
Italy	12.2	3.140
Greece	NA	NA
Spain	26.9	6.085
Belgium	8.6	0.425
European Union	10.9	26.681

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

Chart VD-1 of EUROSTAT illustrates the wide difference in rates of unemployment in countries and regions.

Chart VD-1, Unemployment Rate in Various Countries and Regions

Source: EUROSTAT

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

Advanced economies are experiencing weak demand. Table VD-7 provides month and 12-month percentage changes of the volume of retail sales in the euro zone from Jan 2011 to May 2013. Retail sales increased 1.0 percent in May 2013 and fell 0.1 percent in 12 months. The 12-month rates of growth have become negative since Mar 2011 with exception of 1.2 percent in Apr 2011 and stability in Aug 2011 at 0.1 percent. The lower part of Table VD-6 provides annual percentage changes of inflation-adjusted retail sales in the euro zone since 2001. Retail sales fell 0.5 percent in 2010 after falling 0.4 percent in 2009 and 1.7 percent in 2008 and fell again by 1.4 percent in 2011 and 2.8 percent in 2012.

Table VD-7, Euro Zone, Volume of Retail Sales, Deflated ∆%

	Month ∆%	12-Month CA ∆%
May 2013	1.0	-0.1
Apr	-0.2	-1.0
Mar	-0.2	-2.0
Feb	-0.3	-1.7
Jan	1.0	-1.8
Dec 2012	-0.7	-2.8
Nov	0.1	-2.0
Oct	-0.4	-3.2
Sep	-1.6	-1.9
Aug	0.6	-0.8
Jul	-0.1	-1.5
Jun	0.3	-1.0
May	0.7	-0.7
Apr	-1.5	-3.5
Mar	0.3	0.0
Feb	-0.3	-2.2
Jan	-0.2	-1.1
Dec 2011	0.1	-1.4
Nov	-0.7	-1.1
Oct	0.2	-0.3
Sep	-0.4	-0.9
Aug	0.0	0.1
Jul	0.2	-0.1
Jun	0.8	-0.4
May	-1.7	-1.4
Apr	1.4	1.2
Mar	-1.4	-1.1
Feb	0.5	1.6
Jan	0.1	1.1
Dec ∆%
2012		-2.8
2011		-1.4
2010		-0.5
2009		-0.4
2008		-1.7
2007		-0.9
2006		2.4
2005		0.8
2004		2.3
2003		0.7
2002		-0.4
2001		1.9

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

Growth rates of retail sales of the euro zone by major segments are in Table VD-8. Total sales increased 1.0 percent in May 2013 and declined 0.1 percent in the 12 months ending in May 2013. Food and nonfood products increased 0.9 percent while automotive fuel stores fell 1.9 percent. Nonfood products excluding automotive fuel rose 0.8 percent in 12 months.

Table VD-8, Euro Zone, Volume of Retail Sales by Products, ∆%

May 2013	Month ∆%	12-Month ∆%
Total	1.0	-0.1
Food, Drinks, Tobacco	0.9	-1.5
Nonfood Products ex Automotive Fuel	0.9	0.8
Automotive Fuel in Specialized Stores	-1.9	-1.9

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

Month and 12-month percentage rates of change of retail sales by member countries of the euro zone are shown in Table VD-9 for May 2013. Retail sales are weak throughout the euro zone. The 12-month percentage changes are negative for some members in Table VD-3 with the exception of 1.2 percent for Germany. The 12-month percentage change for the UK, which is not a member of the euro zone, was 2.7 percent. The European Union’s 12-month percentage change was 0.5 percent.

Table VD-9, Euro Zone, Volume of Retail Sales by Member Countries, ∆%

May 2013	Month ∆%	12-Month ∆%
Euro Zone	1.0	-0.1
Germany	0.8	1.2
France	0.8	-0.3
Netherlands	NA	NA
Finland	3.6	1.0
Belgium	2.3	4.5
Portugal	1.8	-3.6
Ireland	2.4	0.1
Italy	NA	NA
Greece	NA	NA
Spain	1.2	-6.3
UK	2.8	2.7
European Union	1.2	0.5

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

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	May month NSA ∆%: 0.4 May 12-month NSA ∆%: 1.5 Blog 6/16/13
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 ∆%: 1.5 12-month NSA: 8.9 Blog 6/9/13
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 Apr 12-month NSA ∆%: 8.5 Imports Apr 12 months NSA ∆%: 5.2 Exports Apr month CSA ∆%: 1.9; Imports Apr month SA 2.3 Blog 6/9/13

Links to blog comments in Table DE:

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

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

Table VE-1 provides month and 12-month rates of growth of new orders of manufacturing in Germany from Jan 2010 to May 2013. There are fluctuations in both monthly rates and in the past 12 months. Table VE-1 reveals strong fluctuations in an evident deceleration of total orders for industry of Germany. Total orders for manufacturing fell 1.2 percent in May and 2.2 percent in Apr 2013 but had increased 2.3 percent in Mar and 2.1 in Feb 2013. There is the same behavior for total, foreign and domestic orders with decline in 12-month rates from two-digit levels to single digits and negative changes. An important aspect of Germany is that the bulk of orders is domestic or from other European countries while foreign orders have been growing rapidly. There is weakening world trade affecting export economies. As in other countries, data on orders for manufacturing are highly volatile. Most 12-month percentage changes from Jan 2012 to Sep 2012 in Table VE-1 are negative largely because of the unusual strength of the Germany economy in the beginning of 2011 but more recently because of slowing world economy in 2012.

Table VE-1, Germany, Volume of Orders Received in Manufacturing, Total, Domestic and Foreign, ∆%  

	Total 12 M	Total M	Foreign 12 M	Foreign M	Home 12 M	Home M
2013
May	-4.0	-1.3	-2.2	-0.7	-6.6	-2.0
Apr	5.7	-2.2	7.3	-1.4	3.5	-3.2
Mar	-5.9	2.4	-4.9	2.8	-7.3	2.0
Feb	-3.1	2.1	-2.0	2.0	-4.6	2.1
Jan	-1.0	-1.6	0.5	-2.7	-2.7	0.1
2012
Dec	-9.1	1.1	-6.7	1.6	-12.6	0.3
Nov	-0.9	-2.7	2.4	-4.7	-5.1	-0.1
Oct	4.5	4.1	7.0	6.9	1.3	0.7
Sep	-8.9	-1.9	-6.6	-2.4	-11.7	-1.2
Aug	-4.4	-0.9	-2.1	-0.5	-7.1	-1.5
Jul	-1.6	0.2	0.6	0.3	-4.2	0.2
Jun	-4.5	-1.3	-6.4	-1.0	-1.7	-1.9
May	-11.0	0.5	-3.7	1.4	-18.8	-0.7
Apr	-3.9	-2.1	-4.4	-3.1	-3.1	-0.9
Mar	-2.2	2.6	-1.2	3.5	-3.3	1.6
Feb	-4.3	0.2	-4.7	1.1	-3.8	-0.8
Jan	-2.6	-1.5	-4.6	-2.7	-0.2	0.0
2011
Dec	0.0	2.1	-0.3	4.3	0.5	-0.6
Nov	-4.8	-3.0	-8.2	-5.2	-0.3	-0.2
Oct	0.1	1.9	2.1	3.3	-2.1	0.3
Sep	2.2	-3.3	1.9	-3.6	2.6	-2.9
Aug	7.1	-0.9	5.2	0.0	9.4	-1.9
Jul	4.9	-2.5	4.6	-6.6	5.4	2.8
Jun	3.5	0.4	7.8	10.2	-2.0	-10.3
May	23.1	2.3	16.0	-4.5	31.8	10.9
Apr	6.7	1.5	9.6	2.0	3.0	0.9
Mar	9.8	-3.0	12.3	-3.0	6.9	-3.0
Feb	21.5	0.8	24.1	0.0	18.4	1.8
Jan	22.5	4.2	26.1	4.2	18.2	4.3
2010
Dec	21.8	-2.9	26.8	-4.1	15.4	-1.4
Nov	21.4	5.4	27.1	8.6	15.0	1.6
Oct	14.2	0.7	18.2	0.2	10.0	1.3
Sep	13.9	-1.2	15.6	-3.0	11.9	1.0
Aug	22.2	2.3	29.7	4.3	14.5	0.0
Jul	14.1	-1.1	21.4	-1.3	6.4	-0.9
Jun	27.6	3.3	30.6	4.4	24.2	1.9
May	24.8	-0.3	29.6	0.2	19.4	-1.1
Apr	29.9	2.8	34.0	2.9	25.7	2.9
Mar	29.4	5.0	32.9	5.1	25.8	5.0
Feb	24.0	-0.2	28.7	0.3	18.6	-0.9
Jan	17.0	4.1	23.8	4.7	9.8	3.3
Dec 2009	9.1	-1.7	10.5	-2.6	7.3	-0.5
Dec 2008	-28.3	-6.7	-31.5	-9.5	-23.7	-2.9
Dec 2007	7.1	-0.9	9.1	-2.0	4.4	0.2
Dec 2006	2.8	0.8	3.4	0.5	2.2	1.1
Dec 2005	5.0	-0.5	10.4	-1.1	-1.4	0.3
Dec 2004	12.7	6.5	13.0	8.5	12.7	4.9
Dec 2003	10.7	2.4	16.4	5.4	5.1	-0.8
Dec 2002	-0.2	-3.4	-0.8	-6.6	0.2	-0.3
Average ∆% 2003-2007	7.6		10.4		4.5
Average ∆% 2003-2012	2.3		3.9		0.3

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally adjusted; 12 M: Non-adjusted Source: Statistisches Bundesamt Deutschland

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

Orders for capital goods of Germany are shown in Table VE-6. Total capital goods orders decreased 1.8 percent in May 2013 with decrease in foreign orders of 0.5 percent and decline of domestic orders of 4.1 percent. In Apr 2013, total orders fell 3.3 percent with declines of foreign orders of 3.7 percent and of domestic orders of 2.7 percent. Total capital goods orders increased 2.2 percent in Mar 2013 with increases of 0.7 percent of domestic orders and 3.2 percent of foreign orders. The rates of change in 12 months in May 2013 are: 4.1 percent for total, 8.4 percent for domestic and 1.6 percent for foreign. There has been evident deceleration from 2010 and early 2011 with growth rates falling from two digit levels to single digits and multiple negative changes. An important aspect of Germany’s economy shown in Tables VE-5 and VE-6 is the success in increasing the competitiveness of its economic activities as shown by rapid growth of orders for industry after the recession of 2001 in the period before the global recession beginning in late 2007. Germany adopted fiscal and labor market reforms to increase productivity.

Table VE-2, Germany, Volume of Orders Received of Capital Goods Industries, Total, Foreign and Domestic, ∆%

	Total 12 M	Total M	Foreign 12 M	Foreign M	Domestic 12 M	Domestic M
2013
May	-4.1	-1.8	-1.6	-0.5	-8.4	-4.1
Apr	5.6	-3.3	6.5	-3.7	3.9	-2.7
Mar	-6.1	2.2	-4.6	3.2	-8.5	0.7
Feb	-0.7	3.1	1.6	2.6	-4.3	4.0
Jan	1.3	-2.3	3.6	-3.0	-2.3	-1.1
2012
Dec	-7.7	2.4	-4.6	2.8	-13.3	1.8
Nov	-0.7	-3.9	3.1	-5.6	-6.5	-0.8
Oct	4.6	5.4	6.3	7.2	2.1	1.9
Sep	-7.5	-1.1	-4.8	-0.8	-11.6	-1.4
Aug	-4.6	-2.0	-2.6	-1.4	-7.4	-2.9
Jul	-0.3	0.1	1.2	0.2	-2.7	-0.3
Jun	-7.1	-0.8	-9.9	-0.4	-1.9	-1.3
May	-12.0	0.3	-2.8	0.7	-23.9	-0.4
Apr	-3.3	-3.9	-4.2	-4.7	-1.7	-2.3
Mar	2.2	5.4	3.3	7.6	0.2	1.9
Feb	-5.9	1.2	-7.0	1.2	-4.2	1.2
Jan	-3.7	-3.6	-6.5	-4.2	1.0	-2.8
2011
Dec	1.2	2.7	-0.1	4.1	3.5	0.6
Nov	-6.5	-3.6	-10.5	-6.8	0.7	1.8
Oct	3.1	3.3	6.2	5.3	-2.0	0.2
Sep	2.9	-3.6	2.2	-3.9	4.0	-3.0
Aug	6.7	-0.4	4.5	0.5	10.6	-1.6
Jul	7.2	-6.8	6.4	-10.9	8.8	0.6
Jun	9.1	2.6	13.3	16.2	2.0	-15.4
May	27.5	4.0	17.7	-5.7	43.5	20.5
Apr	11.0	3.3	14.1	4.3	6.3	1.4
Mar	12.0	-5.7	14.4	-5.3	8.5	-6.2
Feb	29.3	2.4	32.5	0.7	24.8	5.3
Jan	26.8	3.9	32.8	4.4	17.7	2.9
2010
Dec	27.4	-5.1	31.2	-6.8	21.1	-2.0
Nov	30.4	9.5	37.0	13.8	20.1	2.6
Oct	20.5	0.1	24.9	-1.4	14.3	2.5
Sep	18.2	-2.3	20.3	-4.0	14.7	0.7
Aug	27.5	5.3	40.0	7.1	11.5	2.3
Jul	14.1	-2.8	28.1	-3.0	-2.5	-2.5
Jun	32.0	4.8	38.7	7.2	22.1	1.2
May	26.2	1.1	36.6	0.7	12.8	1.6
Apr	31.0	2.6	41.4	3.2	18.1	1.6
Mar	25.8	6.5	33.8	7.4	15.7	5.1
Feb	21.2	-1.1	31.3	-0.1	8.3	-2.7
Jan	17.0	4.6	29.6	3.1	2.8	7.1
Dec 2009	8.1	-1.2	13.6	-1.5	0.3	-1.0
Dec 2008	-32.2	-7.2	-36.8	-10.0	-24.5	-3.6
Dec 2007	9.4	-0.6	11.6	-2.3	6.1	2.2
Dec 2006	3.5	2.2	3.9	2.9	2.9	1.2
Dec 2005	1.8	-2.1	9.7	-2.5	-8.4	-1.6
Dec 2004	19.5	11.2	18.6	12.2	20.6	9.7
Dec 2003	11.7	2.1	17.2	5.0	5.4	-1.6
Dec 2002	-2.8	-4.3	-3.7	-8.1	-1.8	0.2
Average ∆% 2003-2007	9.0		12.1		4.9
Average ∆% 2003-2012	3.0		4.7		0.5

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

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of the German Statistisches Bundesamt Deutschland shows the sharp upward trend of total orders in manufacturing before the global recession. There is also an obvious upward trend in the recovery from the recession with Germany’s economy being among the most dynamic in the advanced economies until the slowdown beginning in the final months of 2011 and what could be stationary series from late 2011 into 2012 but risk of decline in the final segment.

Chart VE-1, Germany, Volume of Total Orders in Manufacturing, Non-Adjusted, 2005=100

Source:  Statistisches Bundesamt Deutschland

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

Chart VE-2 of the German Statistisches Bundesamt Deutschland provides unadjusted volume of total orders in manufacturing and a trend curve. The final segment on the right could be the beginning of declining trend but it may be early to reach conclusions.

Chart VE-2, Germany, Volume of Total Orders in Manufacturing and Trend, Non-Adjusted, 2005=100

Source: Statistisches Bundesamt Deutschland

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

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	Apr month ∆% -0.1 12 months ∆%: 0.8 6/16/13
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	Apr ∆%: Manufacturing 2.6 12-Month ∆%: Manufacturing minus 0.2 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:

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

The monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption increased 0.5 percent in May 2013 after decreasing 0.5 percent in Apr 2013 and increasing 1.2 percent in Mar 2013. Consumption of manufactured products increased 1.0 percent in May 2013 after decreasing 0.6 percent in Apr 2013 and increasing 1.0 percent in Mar 2013. Total consumption increased 0.6 percent in May 2013 relative to May 2012 and consumption of manufactured goods changed 0.0 percent in May 2013 relative to May 2012. Internal demand is weak throughout most advanced economies.

Table VF-1, France, Household Expenditures in Consumption Goods, Month ∆% Chained Billion Euros Trading-Days SA

	Total	Food	Eng. Goods	Energy	Mfg Goods
May 2013	0.5	1.4	0.1	-0.3	1.0
May 2013/May 2012	0.6	0.6	-1.7	6.4	0.0
Apr	-0.5	-3.4	1.0	1.8	-0.6
Mar	1.2	2.6	-1.1	3.5	1.0
Feb	-0.3	-0.8	-0.7	1.7	-0.7
Jan	-0.5	0.7	-2.2	1.5	-1.1
Dec 2012	0.0	0.2	1.5	-3.8	0.6
Nov	0.1	-0.5	-0.3	2.2	-0.2
Oct	0.0	-0.6	0.3	0.3	0.1
Sep	0.0	-0.3	0.1	0.3	-0.1
Aug	-0.7	0.1	-0.8	-2.2	-0.9
Jul	0.3	-0.1	0.5	0.3	0.4
Jun	0.6	1.2	-0.2	1.3	0.5
May	0.0	-0.4	1.9	-3.9	1.0
Apr	0.5	-0.1	-2.9	10.4	-1.5
Mar	-3.1	-2.0	0.7	-14.0	-1.0
Feb	2.8	1.8	-0.2	12.3	1.2
Jan	-0.2	0.9	-1.6	1.5	-0.5
Dec 2011	-0.2	-0.8	0.4	-0.7	-0.3
Nov	-0.2	0.3	0.0	-2.0	-0.1
Oct	-0.1	-0.6	0.5	-0.6	-0.1
Sep	-0.4	0.4	0.0	-3.2	-0.3
Aug	0.8	0.5	0.5	2.7	0.9
Jul	0.0	0.0	-0.3	0.7	-0.1
Jun	0.2	-0.4	0.3	1.6	0.3
May	0.3	-0.6	-0.2	3.5	-0.5
Apr	-2.0	0.5	-2.6	-5.6	-1.5
Mar	-0.8	-0.4	-1.0	-1.2	-1.0
Feb	0.8	0.8	1.8	-2.0	1.4
Jan	-1.3	-0.8	-0.2	-5.0	-0.6
Dec 2010	0.9	0.5	0.4	3.6	0.5

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20130628

Chart VF-1 of the Institut National de la Statistique et des Études Économiques of France provides consumption of manufactured goods in France in volumes of chained 2005 billion euro from Jan 1980 to May 2013. Consumption of manufactured goods increased above the level before the global recession but shows declining trend in recent months.

Char VF-1, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion Euro and Converted Euro, Jan 1980 to May 2013

Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20130628

Chart VF-1 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. Internal demand is not supporting overall economic growth. There is downward trend of monthly consumption with fluctuations and stability in the final segment followed by another drop in Jan-Feb 2013 and increase in Mar 2013 but renewed decrease in Apr 2013. Consumption rose again in May 2013.

Chart VF-2, France, Total Consumption of Goods, Billions of Euros Trading and Seasonally Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20130628

France has been running a trade deficit fluctuating around €6,000 million as shown in Table VF-2. Exports decreased 4.3 percent in May 2013 while imports decreased 0.2 percent. The trade deficit increased from revised €4482 million in Apr 2013 to €6014 million in May 2013 partly because of the higher value of imports than exports in Mar 2013.

Table VF-2, France, Exports, Imports and Trade Balance, € Millions 

	Exports	Imports	Trade Balance
May 2013	36,092	42,106	-6,014
Apr	37,715	42,197	-4,482
Mar	36,214	40,740	-4,526
Feb	35,690	41,509	-5,819
Jan	36,494	42,010	-5,516
Dec 2012	37,386	43,060	-5,674
Nov	36,238	41,056	-4,818
Oct	37,294	42,378	-5,084
Sep	37,225	42,408	-5,183
Aug	38,936	43,875	-4,939
Jul	36,505	41,394	-4,889
Jun	36,226	42,858	-6,632
May	37,762	43,070	-5,308
Apr	36,356	42,698	-6,342
Mar	36,445	42,380	-5,925
Feb	37,206	43,581	-6,375
Jan	36,661	42,307	-5,646
Dec 2011	36,013	41,528	-5,515
Dec 2010	33,828	39,548	-5,720

Source: France, Direction générale des douanes et droits indirects

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

Table VF-3 provides month and 12-month percentage changes of France’s exports and imports. Exports decreased 4.3 percent in May 2013 and decreased 4.4 percent in the 12 months ending in May 2013. Imports decreased 0.2 percent in May 2013 and decreased 2.2 percent in 12 months. Growth of exports and imports has fluctuated in 2011 and 2012 because of price surges of commodities and raw materials. Weak economic conditions worldwide also influence trade performance.

Table VF-3, France, Exports and Imports, Month and 12-Month ∆%

	Exports Month ∆%	Exports 12-Month ∆%	Imports Month ∆%	Imports 12-Month ∆%
May 2013	-4.3	-4.4	-0.2	-2.2
Apr	4.1	3.7	3.6	-1.2
Mar	1.5	-0.7	-1.9	-3.9
Feb	-2.2	-4.1	-1.2	-4.8
Jan	-2.4	-0.5	-2.4	-0.7
Dec 2012	3.2	3.8	4.9	3.7
Dec 2011		6.5		5.0
Dec 2010		13.5		15.0
Dec 2009		-9.6		-2.2
Dec 2008		-6.8		-10.8
Dec 2007		5.9		8.2
Dec 2006		6.4		6.7
Dec 2005		11.6		15.1
Dec 2004		-3.7		5.8
Dec 2003		7.1		1.6

Source: France, Direction générale des douanes et droits indirects

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

Annual data for France’s exports, imports and trade balance are provided in Table VF-4. France’s trade balance deteriorated sharply from 2007 to 2011 with the deficit increasing from €42,494 million in 2007 to €73,713 million in 2011. Annual growth rates of exports have not been sufficiently high to compensate for growth of imports driven in part by commodity price increases. In 2012, the trade deficit declined to €67,134 million with growth of exports of 3.0 percent and of imports of 1.4 percent.

Table VF-4, France, Exports, Imports and Balance Year € Millions and ∆%

	Exports € Millions	∆%	Imports € Millions	∆%	Balance € Millions
May 2013 12 Months	440,350		503,670		-63,320
Year
2012	441,467	3.0	508,901	1.4	-67,134
2011	428,405	8.4	502,118	12.2	-73,713
2010	395,030	14.0	447,429	14.2	-52,399
2009	346,481	-17.0	391,872	-17.3	-45,391
2008	417,636	2.7	473,853	5.5	-56,217
2007	406,487	3.0	448,981	5.8	-42,494
2006	394,621	9.5	424,549	10.4	-29,928
2005	360,376	4.4	384,588	9.6	-24,212
2004	345,256	5.4	350,996	7.0	-5,740
2003	327,653		327,884		-231

Source: France, Direction générale des douanes et droits indirects

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

VG Italy. Table VG-IT provides percentage changes in a quarter relative to the same quarter a year earlier of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 0.5 percent in IVQ2011 to minus 2.8 percent in 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 6/30/13
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	Apr month ∆%: -0.3 12 months CA ∆%: -4.6 Blog 6/16/13
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

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, 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	Apr 2013/Apr 2012 ∆%: Production Industries minus 0.6; Manufacturing minus 0.5 Blog 6/16/13
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 Apr ∆%: -1.3; Feb-Apr ∆%: 0.3 Imports Apr ∆%: -2.7 Feb-Apr ∆%: -0.9 Blog 6/9/13

Links to blog comments in Table UK:

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

6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html

6/9/13 http://cmpassocregulationblog.blogspot.com/2013/06/twenty-eight-million-unemployed-or.html

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

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 an important revision of the national accounts of the UK (http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html http://www.ons.gov.uk/ons/dcp171778_314093.pdf pages 5-6 and reference to Hardie and Lee (2013) ‘Impact of changes in the national accounts and

economic commentary for Q1 2013 (193.4 Kb Pdf)’.):

“Revisions resulting from the incorporation of new data, new methodology, replacement of forecasts, improvements to seasonal adjustment and rebalancing of annual supply and use tables have been taken back to the first quarter of 1997. Methodological revisions have been modelled back to 1991 in such a way as to avoid any discontinuities. Data has also been rebased back to the beginning of the time series.”

The new data, additions and revisions are analyzed here. Table VH-1 provides quarter on quarter chained value measures of GDP since 1998 in the third estimate for IQ2013 (http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html). GDP grew 0.3 percent in IQ2013 relative to IVQ2012. Growth of 0.7 percent in IIIQ2012 interrupted three consecutive quarters of contraction of GDP. Most advanced economies are underperforming relative to the period before the global recession. The UK Office for National Statistics analyzes the decline in the impulse of growth in the UK because of weakness in markets in the UK and worldwide. The UK Office for National Statistics estimates that GDP in IQ2013 is lower by 3.9 percent relative to the peak in IQ2008.

Table VH-1, UK, Percentage Change of GDP from Prior Quarter, Chained Value Measures ∆%

	IQ	IIQ	IIIQ	IV
2013	0.3
2012	0.0	-0.5	0.7	-0.2
2011	0.5	0.1	0.6	-0.1
2010	0.5	1.0	0.4	-0.2
2009	-2.5	-0.4	0.0	0.4
2008	0.1	-0.9	-1.4	-2.1
2007	1.0	1.3	1.2	0.1
2006	0.4	0.3	0.2	0.8
2005	0.8	1.3	1.0	1.3
2004	0.7	0.4	0.1	0.7
2003	0.5	1.3	1.3	1.3
2002	0.5	0.7	0.8	1.0
2001	0.8	0.7	0.5	0.1
2000	1.4	1.0	0.3	0.3
1999	0.3	0.0	1.9	1.3
1998	0.8	0.8	0.7	1.0

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

There are four periods in growth of GDP in a quarter relative to the same quarter a year earlier in the UK in the years from 2000 to the present as shown in Table VH-2. (1) Growth rates were quite high from 2000 to 2007. (2) There were six consecutive quarters of contraction of GDP from IIIQ2008 to IVQ2009. Contractions relative to the quarter a year earlier were quite sharp with the highest of 4.3 percent in IVQ2008, 6.8 percent in IQ2009, 6.3 percent in IIQ2009 and 5.0 percent in IIIQ2009. (3) The economy bounced strongly with 2.0 percent in IIQ2010, 2.4 percent in IIIQ2010 and 1.8 percent in IVQ2010. (4) Recovery in 2011 did not continue at rates comparable to those in 2000 to 2007 and even relative to those in the final three quarters of 2010. Growth relative to the same quarter a year earlier fell from 1.8 percent in IVQ2010 to 1.7 percent in IQ2011, 0.8 percent in IIQ2011, 1.0 percent in IIIQ2011 and 1.1 percent in IVQ2011 but only 0.6 percent in IQ2012, change of 0.0 percent in IIQ2012 relative to IQ2011, growth of 0.1 percent in IIIQ2012 and 0.0 percent in IVQ2012. Growth increased to 0.3 percent in IQ2013 relative to a year earlier and 0.3 percent in IQ2013 relative to IVQ2012. In IQ2012, GDP changed 0.0 percent and increased 0.6 percent relative to a year earlier. In IIQ2012, GDP fell 0.5 percent relative to IQ2012 and changed 0.0 percent relative to a year earlier. In IIIQ2012, GDP increased 0.7 percent and grew 0.1 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.2 percent and grew 0.0 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. In IQ2013, GDP increased 0.3 percent and 0.3 percent relative to a year earlier.

Table VH-2, UK, Percentage Change of GDP from Same Quarter a Year Earlier, Chained Value Measures ∆%

	IQ	IIQ	IIIQ	IV
2013	0.3
2012	0.6	0.0	0.1	0.0
2011	1.7	0.8	1.0	1.1
2010	0.5	2.0	2.4	1.8
2009	-6.8	-6.3	-5.0	-2.5
2008	2.8	0.6	-2.1	-4.3
2007	2.4	3.3	4.3	3.7
2006	4.0	3.0	2.3	1.8
2005	2.0	2.8	3.7	4.4
2004	4.7	3.7	2.5	1.9
2003	3.2	3.8	4.3	4.5
2002	1.8	1.9	2.3	3.2
2001	2.4	2.1	2.2	2.0
2000	4.7	5.7	4.1	3.0
1999	2.8	2.1	3.2	3.6
1998	4.0	3.5	3.4	3.4

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

Table VH-3 provides annual percentage changes of gross value added and key components. Production fell 9.5 percent in 2009 and its most important component manufacturing fell 10.2 percent. Services fell 3.9 percent in 2009. Services grew in all years from 2010 to 2012 while manufacturing fell 1.7 percent in 2012.

Table VH-3, UK, Gross Value Added by Components, ∆% on Prior Year

	Total Production	MFG	CONST	SERVICES	Gross Value Added
2010 Weights	152	104	63	778	1000
1998	1.2	0.5	1.4	5.0	3.8
1999	1.2	0.5	1.3	3.8	3.1
2000	1.8	2.1	0.8	5.6	4.5
2001	-1.6	-1.7	1.8	3.0	1.8
2002	-1.4	-2.4	5.7	2.3	2.0
2003	-0.6	-0.5	4.9	5.2	4.1
2004	0.7	1.9	5.2	3.4	3.0
2005	-0.8	-0.2	-2.4	5.2	3.6
2006	0.2	1.8	0.7	3.4	2.7
2007	0.4	0.8	2.1	4.4	3.5
2008	-2.9	-2.8	-2.5	0.0	-0.6
2009	-9.5	-10.2	-13.3	-3.9	-5.4
2010	2.8	4.2	8.3	0.8	1.6
2011	-1.2	1.8	2.3	1.5	1.2
2012	-2.4	-1.7	-8.3	1.3	0.3

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Percentage changes of gross value added and components are in Table VH-4. Gross value added increased 0.2 percent in IQ2013 with growth of services of 0.5 percent and production of 0.3 while manufacturing contracted 0.2 percent.

Table VH-4, UK, Gross Value Added by Components, ∆% on Previous Quarter

	Total PROD	MFG	CONST	SERV	GVA
2010 Weights	152	104	63	778	1000
2000 Q1	0.2	0.4	1.4	1.6	1.3
2000 Q2	0.2	0.2	-0.7	2.0	1.5
2000 Q3	-0.3	-0.2	-1.7	0.6	0.3
2000 Q4	0.3	1.0	1.0	0.1	0.2
2001 Q1	-0.5	-0.7	-0.4	1.5	0.8
2001 Q2	-1.1	-1.7	2.8	0.5	0.2
2001 Q3	-0.1	0.0	0.2	0.4	0.3
2001 Q4	-1.3	-1.6	1.1	0.3	0.0
2002 Q1	0.3	0.1	1.1	0.4	0.6
2002 Q2	-0.5	-1.3	1.1	0.8	0.6
2002 Q3	0.0	1.0	3.6	0.9	0.9
2002 Q4	-0.2	-1.5	1.1	1.3	1.0
2003 Q1	-0.7	-0.4	-2.3	1.4	0.8
2003 Q2	-0.2	0.4	3.0	1.5	1.3
2003 Q3	0.8	0.7	2.7	1.3	1.3
2003 Q4	0.5	0.8	2.5	1.4	1.3
2004 Q1	0.2	0.9	2.9	0.4	0.5
2004 Q2	0.6	0.5	-1.3	0.5	0.4
2004 Q3	-1.8	-1.4	-0.7	0.6	0.1
2004 Q4	0.7	1.3	-1.0	0.9	0.7
2005 Q1	-0.6	-0.9	0.3	1.5	1.0
2005 Q2	0.9	0.8	-0.4	1.7	1.4
2005 Q3	-1.3	-0.6	-1.8	1.7	0.9
2005 Q4	0.4	0.1	-0.4	1.7	1.4
2006 Q1	0.8	0.7	0.7	0.3	0.4
2006 Q2	-0.6	0.9	0.8	0.3	0.2
2006 Q3	0.0	0.4	0.5	0.3	0.3
2006 Q4	0.2	0.8	1.8	0.8	0.7
2007 Q1	0.2	-0.5	1.0	1.3	1.1
2007 Q2	0.2	0.2	-0.4	1.8	1.3
2007 Q3	-0.2	0.0	-1.4	1.8	1.2
2007 Q4	0.4	0.2	1.3	0.0	0.1
2008 Q1	-0.6	0.1	0.9	0.1	0.2
2008 Q2	-1.0	-1.5	-1.4	-0.5	-0.6
2008 Q3	-1.5	-1.6	-2.7	-1.3	-1.5
2008 Q4	-4.6	-4.9	-5.3	-1.5	-2.3
2009 Q1	-4.9	-5.8	-7.1	-1.6	-2.5
2009 Q2	-0.1	0.1	-1.9	-0.6	-0.6
2009 Q3	-0.9	-0.2	0.3	0.1	0.0
2009 Q4	0.7	1.3	1.0	0.2	0.3
2010 Q1	1.3	0.9	3.1	0.3	0.6
2010 Q2	1.7	2.0	5.9	0.4	1.0
2010 Q3	0.1	1.2	1.7	0.5	0.5
2010 Q4	0.7	0.8	-2.2	-0.3	-0.3
2011 Q1	-1.0	0.2	1.6	0.5	0.4
2011 Q2	-1.1	0.2	1.0	0.4	0.2
2011 Q3	-0.3	-0.4	-1.1	1.0	0.6
2011 Q4	-0.6	-0.4	-0.6	0.0	-0.1
2012 Q1	-0.5	-0.1	-4.0	0.3	0.0
2012 Q2	-1.1	-1.3	-4.5	-0.1	-0.5
2012 Q3	0.4	0.6	-1.8	1.0	0.8
2012 Q4	-2.2	-1.7	1.7	0.0	-0.2
2013 Q1	0.3	-0.2	-1.8	0.5	0.2

Notes: PROD: Production; MFG: Manufacturing; SERV: Services; GVA: Gross Value Added

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Percentage changes of gross value added and components in a quarter relative to the same quarter a year earlier are in Table VH-5. Growth of services of 1.3 percent supported growth of gross value added of 0.3 percent with negative changes in production, manufacturing and construction.

Table VH-5, UK, Gross Value Added by Components, ∆% on Same Quarter Prior year

	Total PROD	MFG	CONST	SERV	GVA
2010 Weights	152	104	63	778	1000
2000 Q1	3.1	3.3	3.4	5.1	4.6
2000 Q2	3.1	3.2	2.0	7.0	5.8
2000 Q3	0.5	0.8	-2.0	6.0	4.3
2000 Q4	0.4	1.4	0.0	4.4	3.3
2001 Q1	-0.4	0.3	-1.8	4.3	2.8
2001 Q2	-1.7	-1.6	1.6	2.7	1.5
2001 Q3	-1.4	-1.4	3.7	2.5	1.6
2001 Q4	-2.9	-3.9	3.8	2.7	1.4
2002 Q1	-2.2	-3.2	5.3	1.6	1.2
2002 Q2	-1.5	-2.8	3.5	1.9	1.6
2002 Q3	-1.5	-1.8	7.0	2.4	2.1
2002 Q4	-0.4	-1.7	7.1	3.4	3.0
2003 Q1	-1.4	-2.2	3.6	4.4	3.2
2003 Q2	-1.1	-0.5	5.5	5.1	3.9
2003 Q3	-0.3	-0.8	4.6	5.6	4.4
2003 Q4	0.4	1.5	6.0	5.8	4.8
2004 Q1	1.3	2.8	11.5	4.7	4.5
2004 Q2	2.1	2.9	6.9	3.7	3.6
2004 Q3	-0.5	0.7	3.3	2.9	2.3
2004 Q4	-0.2	1.2	-0.2	2.4	1.7
2005 Q1	-1.1	-0.6	-2.7	3.5	2.2
2005 Q2	-0.9	-0.2	-1.8	4.7	3.2
2005 Q3	-0.4	0.6	-2.9	5.9	4.1
2005 Q4	-0.7	-0.6	-2.2	6.8	4.8
2006 Q1	0.7	1.0	-1.9	5.5	4.2
2006 Q2	-0.7	1.1	-0.7	4.0	2.9
2006 Q3	0.6	2.1	1.7	2.7	2.2
2006 Q4	0.4	2.9	3.9	1.7	1.6
2007 Q1	-0.1	1.7	4.2	2.7	2.3
2007 Q2	0.7	1.0	2.9	4.2	3.5
2007 Q3	0.5	0.5	1.0	5.7	4.4
2007 Q4	0.6	-0.1	0.5	4.9	3.8
2008 Q1	-0.2	0.5	0.4	3.7	2.9
2008 Q2	-1.4	-1.1	-0.5	1.4	0.9
2008 Q3	-2.7	-2.7	-1.8	-1.7	-1.8
2008 Q4	-7.5	-7.7	-8.2	-3.2	-4.2
2009 Q1	-11.5	-13.2	-15.5	-4.9	-6.7
2009 Q2	-10.8	-11.8	-16.0	-5.0	-6.7
2009 Q3	-10.2	-10.5	-13.4	-3.6	-5.4
2009 Q4	-5.3	-4.7	-7.7	-1.9	-2.8
2010 Q1	0.9	2.1	2.4	0.0	0.2
2010 Q2	2.8	4.0	10.5	1.0	1.9
2010 Q3	3.8	5.5	12.0	1.4	2.5
2010 Q4	3.8	5.1	8.6	0.9	1.9
2011 Q1	1.4	4.4	7.0	1.2	1.6
2011 Q2	-1.4	2.5	2.2	1.2	0.9
2011 Q3	-1.8	0.9	-0.6	1.6	1.0
2011 Q4	-3.0	-0.4	1.0	2.0	1.2
2012 Q1	-2.4	-0.7	-4.6	1.8	0.8
2012 Q2	-2.4	-2.2	-9.8	1.2	0.1
2012 Q3	-1.7	-1.3	-10.5	1.2	0.2
2012 Q4	-3.3	-2.5	-8.4	1.1	0.0
2013 Q1	-2.6	-2.6	-6.3	1.3	0.3

Notes: PROD: Production; MFG: Manufacturing; SERV: Services; GVA: Gross Value Added

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Quarter-on-quarter growth of value added by expenditure components is in Table VH-6. Household final consumption expenditure grew 0.3 percent in IQ2013 relative to IVQ2012 and general government consumption changed 0.1 percent. Gross capital formation decreased 4.9 percent in IQ2013 and gross fixed capital formation (GFCF) increased 0.2 percent. Business investment fell 1.9 percent in IQ2013 and had been growing at high rates before IIQ2012. Exports fell 0.1 percent in IQ2013 but grew 1.9 percent in IIIQ2012 while imports fell 2.0 percent in IQ2013 after increasing 0.6 percent in IIIQ2012. Exports fell 1.9 percent in IVQ2012 and imports fell 1.0 percent.

VH-6, UK, Quarter on Quarter Growth of Value Added by Expenditure Components, ∆% on Prior Quarter

Component	2011 Q4	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1
Household final consumption expenditure	0.6	0.3	0.3	0.3	0.5	0.3
NPISH final consumption expenditure	0.1	-4.8	7.2	-2.9	-3.3	6.0
General government final consumption expenditure	0.4	2.7	-0.9	0.9	0.8	0.1
Gross capital formation	-10.1	1.4	0.9	0.5	-2.5	-4.9
- of which GFCF	-1.2	4.1	-2.1	-1.6	-4.9	0.2
- of which Business investment	-1.5	7.2	-4.8	-0.4	-10.3	-1.9
Exports	4.7	-1.7	-0.6	1.9	-1.9	-0.1
less Imports	1.1	0.4	1.6	0.6	-1.0	-2.0

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Table VH-7 provides contributions to value added by expenditure components in a quarter relative to the prior quarter. In IQ2013, household final consumption expenditure contributed 0.2 percentage points to growth, business investment deducted 0.1 percentage points, exports contributed 0.0 and net trade added 0.6 percentage points. Net trade deducted 0.7 percentage points in IIQ2012 and deducted 0.7 percentage points in IQ2012, adding 0.4 percentage points in IIIQ2012 and deducting 0.3 percentage points in IVQ2012. Gross fixed capital formation (GFCF) deducted 0.2 percentage points in IIIQ2012, 0.7 percentage points IVQ2012 and deducted 0.0 percentage points in IQ2013.

Table VH-7, UK, Contribution to Quarter on Prior Quarter of Growth of Value Added by Expenditure Components, %

Component	2011 Q4	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1
Household final consumption expenditure	0.4	0.2	0.2	0.2	0.3	0.2
NPISH final consumption expenditure	0.0	-0.1	0.2	-0.1	-0.1	0.1
General government final consumption expenditure	0.1	0.6	-0.2	0.2	0.2	0.0
Gross capital formation	-1.6	0.2	0.1	0.1	-0.4	-0.7
- of which GFCF	-0.2	0.6	-0.3	-0.2	-0.7	0.0
- of which Business investment	-0.1	0.6	-0.4	0.0	-0.8	-0.1
Exports	1.4	-0.6	-0.2	0.6	-0.6	0.0
less Imports	0.4	0.1	0.5	0.2	-0.3	-0.6
Net trade	1.1	-0.7	-0.7	0.4	-0.3	0.6

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Table VH-8 provides UK growth of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure grew 1.5 percent in IQ2013 relative to a year earlier. Household final consumption grew 1.5 percent in IVQ2012 after growing 1.5 percent in IIIQ2012, 1.1 percent in IIQ2012 and 0.7 percent in IQ2012. General government final consumption expenditure rose 0.8 percent in IQ2013 and grew 3.4 percent in IVQ2012, 3.1 percent in IIIQ2012 and increased strongly in prior quarters. Gross fixed capital formation (GFCF) decreased 8.3 percent in IQ2013, 4.7 percent in IVQ2012 and 0.9 percent in IIIQ2012. Business investment grew 18.5 percent in IQ2012 and at high rates in prior quarters but fell 16.5 percent in IQ2013. Exports fell 0.8 percent in IQ2013 and imports fell 0.9 percent.

Table VH-8, UK, Growth of Value Added by Expenditure Components, ∆% on Same Quarter of Prior Year

Component	2011 Q4	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1
Household final consumption expenditure	-0.8	0.7	1.1	1.5	1.5	1.5
NPISH final consumption expenditure	1.3	-3.2	-0.6	-0.8	-4.2	6.7
General government final consumption expenditure	0.1	2.9	1.8	3.1	3.4	0.8
Gross capital formation	-1.0	6.0	-3.4	-7.6	0.2	-6.0
- of which GFCF	-0.9	8.3	-0.4	-0.9	-4.7	-8.3
- of which Business investment	3.9	18.5	-0.7	0.1	-8.8	-16.5
Exports	4.1	-1.4	3.4	4.2	-2.4	-0.8
less Imports	-1.2	1.8	4.1	3.7	1.5	-0.9

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Table VH-9 provides contribution of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure contributed 0.9 percentage points in IVQ2012 and 0.9 percentage points in IQ2013 while government final consumption expenditure contributed 0.8 percentage points in IVQ2013 and 0.2 percentage points in IQ2013. The contribution of gross fixed capital formation (GFCF) was minus 1.2 percentage points IQ2013. Business investment deducted 0.7 percentage points in IVQ2012 and 1.4 percentage points in IQ2013. Net trade deducted 1.3 percentage points in IVQ2012 and 0.0 percentage points in IQ2013.

VH-9, UK, Contribution to Growth on Same Quarter of Prior Year of Value Added by Expenditure Components, %

Component	2011 Q4	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1
Household final consumption expenditure	-0.5	0.4	0.7	0.9	0.9	0.9
NPISH final consumption expenditure	0.0	-0.1	0.0	0.0	-0.1	0.2
General government final consumption expenditure	0.0	0.6	0.4	0.7	0.8	0.2
Gross capital formation	-0.1	0.8	-0.7	-1.5	-0.2	-0.9
- of which GFCF	-0.1	1.2	-0.1	-0.1	-0.7	-1.2
- of which Business investment	0.3	1.4	-0.1	0.0	-0.7	-1.4
Exports	1.3	-0.5	1.0	1.3	-0.8	-0.3
less Imports	-0.4	0.6	1.3	1.2	0.5	-0.3
Net trade	1.7	-1.0	-0.3	0.1	-1.3	0.0

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Table VH-10 provides growth of value added by expenditure components in a year relative to the prior year. Household final consumption expenditure grew 1.2 percent in 2012 compared with decline of 0.5 percent in 2011. General government final consumption expenditure grew 2.8 percent in 2012 but changed 0.0 percent in 2011. Gross capital formation fell 1.5 percent in 2012 and increased 0.9 percent in 2011. GFCF fell 2.4 percent in 2011 but increased 0.5 percent in 2012. Exports grew 4.5 percent in 2011 and 0.9 percent in 2012.

Table VH-10, UK, Growth of Value Added by Expenditure Components, ∆% on Prior Year

Component	2005	2006	2007	2008	2009	2010	2011	2012
Household final consumption expenditure	2.9	1.8	2.8	-0.9	-3.6	1.0	-0.5	1.2
NPISH final consumption expenditure	-0.2	1.3	0.9	-2.7	-4.2	2.7	2.0	-2.2
General government final consumption expenditure	2.2	2.2	0.7	2.1	0.7	0.5	0.0	2.8
Gross capital formation	3.7	5.2	9.4	-7.5	-22.7	9.6	0.9	-1.5
- of which GFCF	3.7	5.6	7.5	-6.9	-16.7	2.8	-2.4	0.5
- of which Business investment	15.2	-14.4	12.6	4.2	-16.6	-0.7	-1.3	1.8
Exports	9.1	12.0	-2.1	1.1	-8.7	6.7	4.5	0.9
less Imports	6.9	10.0	-1.5	-1.7	-10.7	7.9	0.3	2.8

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

Contributions of value added by expenditure components in a year relative to the prior year are in Table VH-11. Household final consumption deducted 0.3 percentage points in 2011 but added 0.7 percentage points in 2012. Gross capital formation added 0.1 percentage points in 2011 and deducted 0.2 percentage points in 2012 but GFCF deducted 0.4 percentage points in 2011, adding 0.1 percentage points in 2012. Net trade added 1.2 percentage points in 2011 but deducted 0.6 percentage points in 2012.

VH-11, UK, Contribution to Growth on Prior Year of Value Added by Expenditure Components, %

Component	2005	2006	2007	2008	2009	2010	2011	2012
Household final consumption expenditure	1.8	1.1	1.7	-0.6	-2.2	0.6	-0.3	0.7
NPISH final consumption expenditure	0.0	0.0	0.0	-0.1	-0.1	0.1	0.1	-0.1
General government final consumption expenditure	0.5	0.5	0.2	0.4	0.2	0.1	0.0	0.6
Gross capital formation	0.6	0.9	1.6	-1.4	-3.9	1.3	0.1	-0.2
- of which GFCF	0.6	0.9	1.3	-1.2	-2.8	0.4	-0.4	0.1
- of which Business investment	1.4	-1.4	1.1	0.4	-1.6	-0.1	-0.1	0.1
Exports	2.4	3.4	-0.6	0.3	-2.6	1.9	1.3	0.3
less Imports	2.1	3.2	-0.5	-0.6	-3.5	2.4	0.1	0.9
Net trade	0.3	0.2	-0.1	0.9	0.9	-0.5	1.2	-0.6

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2013/index.html

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