World Inflation Waves, Regional Economic Surveys, Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates, Increasing Interest Rates Risk, Tapering Quantitative Easing, Duration Dumping, Steepening Yield Curve and Global Financial and Economic Risk, World Economic Slowdown and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013
Executive Summary
I World Inflation Waves
IA Appendix: Transmission of Unconventional Monetary Policy
IB United States Inflation
IC Long-term US Inflation
ID Current US Inflation
IE Theory and Reality of Economic History and Monetary Policy Based on Fear of Deflation
IB Collapse of United States Dynamism of Income Growth and Employment Creation
II Regional Economic Surveys of Federal Reserve Banks of New York and Philadelphia
IIB Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates
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/2013/02/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 2.9 percent in 2013 but accelerating to 3.6 percent in 2014, 4.0 percent in 2015 and 4.1 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,560 billion of world output of $72,216 billion, or 47.9 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 3.6 percent for the world as a whole. While the world would grow 15.4 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.6 percent. The difference in dollars of 2012 is rather high: growing by 15.4 percent would add $11.1 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,960 billion but growing by 8.6 percent would add $6.2 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,221 billion, or 37.7 percent of world output. The EMDEs would grow cumulatively 21.9 percent or at the average yearly rate of 5.1 percent, contributing $6.0 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,221 billion of China in 2012. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,346 billion, or 19.9 percent of world output, which is equivalent to 41.5 percent of the combined output of the major advanced economies of the G7.
Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth
| GDP USD 2012 | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| World | 72,216 | 2.9 | 3.6 | 4.0 | 4.1 |
| G7 | 34,560 | 1.2 | 2.0 | 2.5 | 2.6 |
| Canada | 1,821 | 1.6 | 2.2 | 2.4 | 2.5 |
| France | 2,614 | 0.2 | 1.0 | 1.5 | 1.7 |
| DE | 3,430 | 0.5 | 1.4 | 1.4 | 1.3 |
| Italy | 2,014 | -1.8 | 0.7 | 1.1 | 1.4 |
| Japan | 5,960 | 1.9 | 1.2 | 1.1 | 1.2 |
| UK | 2,477 | 1.4 | 1.9 | 2.0 | 2.0 |
| US | 16,245 | 1.6 | 2.6 | 3.4 | 3.5 |
| Euro Area | 12,199 | -0.4 | 1.0 | 1.4 | 1.5 |
| DE | 3,430 | 0.5 | 1.4 | 1.4 | 1.3 |
| France | 2,614 | 0.2 | 1.0 | 1.5 | 1.7 |
| Italy | 2,014 | -1.8 | 0.7 | 1.1 | 1.4 |
| POT | 212 | -1.8 | 0.8 | 1.5 | 1.8 |
| Ireland | 211 | 0.6 | 1.8 | 2.5 | 2.5 |
| Greece | 249 | -4.2 | 0.6 | 2.9 | 3.7 |
| Spain | 1,324 | -1.3 | 0.2 | 0.5 | 0.7 |
| EMDE | 27,221 | 4.5 | 5.1 | 5.3 | 5.4 |
| Brazil | 2,253 | 2.5 | 2.5 | 3.2 | 3.3 |
| Russia | 2,030 | 1.5 | 3.0 | 3.5 | 3.5 |
| India | 1,842 | 3.8 | 5.1 | 6.3 | 6.5 |
| China | 8,221 | 7.6 | 7.3 | 7.0 | 7.0 |
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/2013/02/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/2013/02/weodata/index.aspx). Table V-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 V-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. 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 | 7.3 | 7.3 | 7.0 | 6.6 |
| Canada | 7.3 | 7.2 | 7.1 | 7.0 | 6.9 |
| France | 10.3 | 11.0 | 11.1 | 10.9 | 10.5 |
| DE | 5.5 | 5.6 | 5.5 | 5.5 | 5.5 |
| Italy | 10.7 | 12.5 | 12.4 | 12.0 | 11.2 |
| Japan | 4.4 | 4.2 | 4.3 | 4.3 | 4.3 |
| UK | 8.0 | 7.7 | 7.5 | 7.3 | 7.0 |
| US | 8.1 | 7.6 | 7.4 | 6.9 | 6.4 |
| Euro Area | 11.4 | 12.3 | 12.2 | 12.0 | 11.5 |
| DE | 5.5 | 5.6 | 5.5 | 5.5 | 5.5 |
| France | 10.3 | 11.0 | 11.1 | 10.9 | 10.5 |
| Italy | 10.7 | 12.5 | 12.4 | 12.0 | 11.2 |
| POT | 15.7 | 17.4 | 17.7 | 17.3 | 16.8 |
| Ireland | 14.7 | 13.7 | 13.3 | 12.8 | 12.4 |
| Greece | 24.2 | 27.0 | 26.1 | 24.0 | 21.0 |
| Spain | 25.0 | 26.9 | 26.7 | 26.5 | 26.2 |
| EMDE | NA | NA | NA | NA | NA |
| Brazil | 5.5 | 5.8 | 6.0 | 6.5 | 6.5 |
| Russia | 6.0 | 5.7 | 5.7 | 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/2013/02/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 IIQ2013 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 0.3 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 1.2 percent, which is much lower than 5.0 percent in IQ2012. Growth of 3.8 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 3.5 percent and increased 0.3 percent relative to a year earlier. Japan’s GDP grew 0.3 percent in IVQ2012 at the SAAR of 1.1 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 0.3 percent relative to a year earlier. Japan’s GDP increased 0.9 percent in IIQ2013 at the SAAR of 3.8 percent and increased 1.2 percent relative to a year earlier. China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent and 7.6 percent relative to a year earlier. China grew at 2.0 percent in IIIQ2012, which annualizes at 8.2 percent and 7.4 percent relative to a year earlier. In IVQ2012, China grew at 1.9 percent, which annualizes at 7.8 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. In IIQ2013, China grew at 1.7 percent, which annualizes at 7.0 percent and 7.5 percent relative to a year earlier. There is decennial change in leadership in China (http://www.xinhuanet.com/english/special/18cpcnc/index.htm). Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2013. GDP fell 0.1 percent in the euro area in IQ2012 and decreased 0.2 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.3 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 0.5 percent relative to the prior quarter and fell 1.0 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.2 percent and decreased 1.2 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IIQ2013 and fell 0.6 percent relative to a year earlier. Germany’s GDP increased 0.7 percent in IQ2012 and 1.8 percent relative to a year earlier. In IIQ2012, Germany’s GDP decreased 0.1 percent and increased 0.6 percent relative to a year earlier but 1.1 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 0.5 percent in IVQ2012 and increased 0.0 percent relative to a year earlier. In IQ2013, Germany’s GDP increased 0.0 percent and fell 1.6 percent relative to a year earlier. In IIQ2013, Germany’s GDP increased 0.7 percent and 0.9 percent relative to a year earlier. Growth of US GDP in IQ2012 was 0.9 percent, at SAAR of 3.7 percent and higher by 3.3 percent relative to IQ2011. US GDP increased 0.3 percent in IIQ2012, 1.2 percent at SAAR and 2.8 percent relative to a year earlier. In IIIQ2012, GDP grew 0.7 percent, 2.8 percent at SAAR and 3.1 percent relative to IIIQ2011. In IVQ2012, GDP grew 0.0 percent, 0.1 percent at SAAR and 2.0 percent relative to IVQ2011. In IQ2013, US GDP grew at 1.1 percent SAAR, 0.3 percent relative to the prior quarter and 1.3 percent relative to the same quarter in 2013. In IIQ2013, US GDP grew at 2.5 percent in SAAR, 0.6 percent relative to the prior quarter and 1.6 percent relative to IIQ2012 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/09/increasing-interest-rate-risk.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/08/recovery-without-hiring-loss-of-full.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 0.6 percent in IIIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP fell 0.3 percent in IVQ2012 relative to IIIQ2012 and fell 0.2 percent relative to a year earlier. UK GDP increased 0.4 percent in IQ2013 and 0.2 percent relative to a year earlier. UK GDP increased 0.7 percent in IIQ2013 and 1.3 percent relative to a year earlier. Italy has experienced decline of GDP in eight consecutive quarters from IIIQ2011 to IIQ2013. 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 2.4 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 2.4 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and 2.1 percent relative to a year earlier. France’s GDP changed 0.0 percent in IQ2012 and increased 0.4 percent relative to a year earlier. France’s GDP decreased 0.3 percent in IIQ2012 and increased 0.1 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.2 percent and changed 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 0.1 percent and declined 0.5 percent relative to a year earlier. The GDP of France increased 0.5 percent in IIQ2013 and 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: 0.9 SAAR: 3.7 | 3.3 |
| Japan | QOQ: 1.2 SAAR: 5.0 | 3.4 |
| China | 1.5 | 8.1 |
| Euro Area | -0.1 | -0.2 |
| Germany | 0.7 | 1.8 |
| France | 0.0 | 0.4 |
| Italy | -1.0 | -1.7 |
| United Kingdom | 0.0 | 0.6 |
| IIQ2012/IQ2012 | IIQ2012/IIQ2011 | |
| United States | QOQ: 0.3 SAAR: 1.2 | 2.8 |
| Japan | QOQ: -0.3 | 3.8 |
| China | 2.1 | 7.6 |
| Euro Area | -0.3 | -0.5 |
| Germany | -0.1 | 0.6 1.1 CA |
| France | -0.3 | 0.1 |
| Italy | -0.6 | -2.4 |
| United Kingdom | -0.5 | 0.0 |
| IIIQ2012/ IIQ2012 | IIIQ2012/ IIIQ2011 | |
| United States | QOQ: 0.7 | 3.1 |
| Japan | QOQ: –0.9 | 0.3 |
| China | 2.0 | 7.4 |
| Euro Area | -0.1 | -0.7 |
| Germany | 0.2 | 0.4 |
| France | 0.2 | 0.0 |
| Italy | -0.3 | -2.6 |
| United Kingdom | 0.6 | 0.0 |
| IVQ2012/IIIQ2012 | IVQ2012/IVQ2011 | |
| United States | QOQ: 0.0 | 2.0 |
| Japan | QOQ: 0.3 SAAR: 1.1 | 0.4 |
| China | 1.9 | 7.9 |
| Euro Area | -0.5 | -1.0 |
| Germany | -0.5 | 0.0 |
| France | -0.2 | -0.3 |
| Italy | -0.9 | -2.8 |
| United Kingdom | -0.3 | -0.2 |
| IQ2013/IVQ2012 | IQ2013/IQ2012 | |
| United States | QOQ: 0.3 | 1.3 |
| Japan | QOQ: 1.0 SAAR: 4.1 | 0.3 |
| China | 1.6 | 7.7 |
| Euro Area | -0.2 | -1.2 |
| Germany | 0.0 | -1.6 |
| France | -0.1 | -0.5 |
| Italy | -0.6 | -2.4 |
| UK | 0.4 | 0.2 |
| IIQ2013/IQ2013 | IIQ2013/IIQ2012 | |
| United States | QOQ: 0.6 SAAR: 2.5 | 1.6 |
| Japan | QOQ: 0.9 SAAR: 3.8 | 1.2 |
| China | 1.7 | 7.5 |
| Euro Area | 0.3 | -0.6 |
| Germany | 0.7 | 0.9 |
| France | 0.5 | 0.4 |
| Italy | -0.3 | -2.1 |
| UK | 0.7 | 1.3 |
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 http://cmpassocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html and earlier http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and_4699.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In Aug 2013, Japan’s exports grew 14.7 percent in 12 months while imports increased 16.0 percent. The second part of Table V-4 shows that net trade deducted 1.0 percentage points from Japan’s growth of GDP in IIQ2012, deducted 2.7 percentage points from GDP growth in IIIQ2012 and deducted 0.2 percentage points from GDP growth in IVQ2012. Net trade added 0.3 percentage points to GDP growth in IQ2012, 1.6 percentage points in IQ2013 and 0.7 percentage points in IIQ2013. In Sep 2013, China exports decreased 0.3 percent relative to a year earlier and imports increased 7.4 percent. Germany’s exports increased 1.7 percent in the month of Aug 2013 and fell 5.4 percent in the 12 months ending in Aug 2013. Germany’s imports increased 0.4 percent in the month of Aug and decreased 2.2 percent in the 12 months ending in Aug. Net trade contributed 0.8 percentage points to growth of GDP in IQ2012, contributed 0.4 percentage points in IIQ2012, contributed 0.3 percentage points in IIIQ2012, deducted 0.5 percentage points in IVQ2012, deducted 0.2 percentage points in IQ2012 and added 0.2 percentage points in IIQ2013. Net trade deducted 0.1 percentage points from Germany’s GDP growth. Net trade deducted 0.8 percentage points from UK value added in IQ2012, deducted 0.6 percentage points in IIQ2012, added 0.4 percentage points in IIIQ2012 and subtracted 0.2 percentage points in IVQ2012. In IQ2013, net trade added 0.3 percentage points to UK’s growth of value added and contributed 0.0 percentage points in IIQ2013. France’s exports decreased 1.4 percent in Aug 2013 while imports decreased 1.6 percent and net trade added 0.10 percentage points to GDP growth in IIQ2012, 0.10 percentage points in IIIQ2012 and 0.2 percentage points in IVQ2012. Net trade deducted 0.2 percentage points from France’s GDP growth in IQ2013 and was neutral in IIQ2013. US exports increased 2.2 percent in Jun 2013 and goods exports increased 0.9 percent in Jan-Jun 2013 relative to a year earlier but net trade deducted 0.03 percentage points from GDP growth in IIIQ2012 and added 0.68 percentage points in IVQ2012. Net trade deducted 0.28 percentage points from US GDP growth in IQ2013 and deducted 0.07 percentage points in IIQ2013. US imports decreased 2.5 percent in Jun 2013 and goods imports decreased 1.7 percent in Jan-Jun 2013 relative to a year earlier. Industrial production increased 0.4 percent in Aug 2013 after changing 0.0 percent in Jul 2013 and increasing 0.1 percent in Jun 2013. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):
“Industrial production advanced 0.4 percent in August after having been unchanged in July; the gains in August were broadly based. Following a decrease in July of 0.4 percent, which was steeper than previously reported, manufacturing production rose 0.7 percent in August. The output of mines moved up 0.3 percent, its fifth consecutive monthly increase, and the production of utilities fell 1.5 percent, its fifth consecutive monthly decrease. At 99.4 percent of its 2007 average, total industrial production in August was 2.7 percent above its year-earlier level. “
In the six months ending in Aug 2013, United States national industrial production accumulated increase of 0.6 percent at the annual equivalent rate of 1.2 percent, which is much lower than growth of 2.7 percent in the 12 months ending in Aug 2013. Excluding growth of 0.4 percent in Aug 2013, growth in the remaining five months from Mar 2012 to Jul 2013 accumulated to 0.2 percent or 0.5 percent annual equivalent. Industrial production stagnated in three of the past six months and fell in one. Business equipment accumulated growth of 0.4 percent in the six months from Mar to Aug 2013 at the annual equivalent rate of 0.8 percent, which is much lower than growth of 2.5 percent in the 12 months ending in Aug 2013. Growth of business equipment accumulated minus 0.5 percent from Mar to July 2013 at the annual equivalent rate of minus 1.2 percent. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector increased 0.2 percentage point in August to 77.8 percent, a rate 0.6 percentage point above its level of a year earlier and 2.4 percentage points below its long-run (1972-2012) average.” United States industry is apparently decelerating.
Manufacturing increased 0.7 percent in Aug 2013 after decreasing 0.4 percent in Jul 2013 and increasing 0.3 percent in Jul 2013 seasonally adjusted, increasing 2.5 percent not seasonally adjusted in 12 months ending in Aug 2013. Manufacturing grew cumulatively 0.2 percent in the six months ending in Jul 2013 or at the annual equivalent rate of 0.4 percent. Excluding the increase of 0.7 percent in Aug 2013, manufacturing accumulated growth of minus 0.5 percent from Mar 2013 to Jul 2013 or at the annual equivalent rate of minus 1.2 percent.
Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points
| Exports | Exports 12 M ∆% | Imports | Imports 12 M ∆% | |
| USA | -0.6 Jul | 1.6 Jan-Jul | 1.6 Jul | -1.4 Jan-Jul |
| Japan | Aug 2013 14.7 Jul 2013 12.2 Jun 2013 7.4 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 | Aug 2013 16.0 Jul 2013 19.6 Jun 2013 11.8 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 | -0.3 Sep 7.2 Aug 5.1 Jul -3.1 Jun 1.0 May 14.7 Apr 10.0 Mar 21.8 Feb | 7.4 Sep 10.9 Jul -0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb | ||
| Euro Area | -5.4 12-M Aug | 0.9 Jan-Aug | -7.2 12-M Aug | -4.0 Jan-Aug |
| Germany | 1.0 Aug CSA | -5.4 Aug | 0.4 Aug CSA | -2.2 Aug |
| France Jul | -1.4 | -5.2 | -1.6 | -6.9 |
| Italy Aug | 1.7 | -4.4 | 1.1 | -9.8 |
| UK | 0.4 Aug | 1.6 Jun-Aug 13 /Jun-Aug 12 | 0.1 Aug | 1.5 Jun-Aug 13/Jun-Aug 12 |
| Net Trade % Points GDP Growth | % Points | |||
| USA | IIQ2013 -0.07 IQ2013 -0.28 IVQ2012 +0.68 IIIQ2012 -0.03 IIQ2012 +0.10 IQ2012 +0.44 | |||
| Japan | 0.3 IQ2012 -1.0 IIQ2012 -2.7 IIIQ2012 -0.2 IVQ2012 1.6 IQ2013 0.7 IIQ2013 | |||
| Germany | IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.2 IIQ2013 0.2 | |||
| France | 0.1 IIIQ2012 0.2 IVQ2012 -0.2 IQ2013 0.0 IIQ2013 | |||
| UK | -0.8 IQ2012 -0.6 IIQ2012 +0.4 IIIQ2012 -0.2 IVQ2012 0.3 IQ2013 0.0 IIQ2013 |
Sources: Country Statistical Agencies http://www.census.gov/foreign-trade/ http://www.bea.gov/iTable/index_nipa.cfm
The structure of exports and imports of Japan is in Table V-5. Japan imports all types of raw materials and fuels at rapidly increasing prices caused by the carry trade from zero interest rates to commodities, oscillating under shocks of risk aversion. Mineral fuels account for 33.8 percent of Japan’s imports and increased 17.5 percent in the 12 months ending in Aug 2013 because of alternating carry trades into commodity futures in accordance with risk aversion. Weakness of world demand depresses prices of industrial goods. Manufactured products contribute 13.4 percent of Japan’s exports with increase of 13.5 percent in the 12 months ending in Aug 2013. Machinery contributes 19.1 percent of Japan’s exports with increase of 7.3 percent in the 12 months ending in Aug 2013. Electrical machinery contributes 18.3 percent of Japan’s exports with increase of 7.3 percent in the 12 months ending in Aug 2013. Exports of transport equipment with share of 21.2 percent in total exports increased 15.2 percent in the 12 months ending in Aug 2013 but had been increasing sharply largely because of the low level after the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. The breakdown of transport equipment in Table V-5 shows increase of the major categories of motor vehicles of 21.0 percent: cars increased 23.4 percent with increase of 6.0 percent in the minor category of buses and trucks, increase of 12.2 percent for parts of motor vehicles, increase of 25.9 percent for motorcycles and decrease of 28.5 percent for ships. The result of rising commodity prices and stable or declining prices of industrial products is pressure on Japan’s terms of trade with oscillations when risk aversion causes reversal of carry trades from zero interest rates to commodity prices. Data in Table VB-5 are in millions of yen that have been affected by recent depreciation of the yen relative to the USD with invoicing of many products in dollars.
Table V-5, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen
| Aug 2013 | Exports | 12 months ∆% | Imports Millions Yen | 12 months ∆% |
| Total | 5,783,712 | 14.7 | 6,744,041 | 16.0 |
| Asia | 3,221,175 | 13.5 | 2,919,797 | 15.3 |
| China | 1,118,989 | 15.8 | 1,423,073 | 17.6 |
| USA | 1,069,528 | 20.6 | 574,187 | 14.0 |
| Canada | 71,661 | 14.8 | 93,246 | 16.2 |
| Brazil | 53,085 | 26.3 | 82,097 | 22.8 |
| Mexico | 69,563 | 1.5 | 32,992 | 22.2 |
| Western Europe | 588,220 | 21.3 | 685,872 | 9.9 |
| Germany | 150,838 | 19.9 | 209,602 | 20.2 |
| France | 48,700 | 32.0 | 81,964 | -3.7 |
| UK | 90,388 | 25.4 | 50,242 | 4.0 |
| Middle East | 184,317 | 10.1 | 1,313,053 | 21.2 |
| Australia | 139,549 | 19.2 | 463,638 | 5.4 |
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 2.9 percent in 2013 to 5.4 percent in 2015 and 5.1 percent on average from 2013 to 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, USD Billions, USD/Barrel and ∆%
| 2013 | 2014 | 2015 | Average ∆% 2013-2018 | |
| World Trade Volume (Goods and Services) | 2.9 | 4.9 | 5.4 | 5.1 |
| Exports Goods & Services | 3.0 | 5.1 | 5.4 | 5.1 |
| Imports Goods & Services | 2.8 | 4.7 | 5.4 | 5.0 |
| Oil Price USD/Barrel | 104.49 | 101.35 | NA | NA |
| Value of World Exports Goods & Services $B | 23,164 | 24,367 | NA | NA |
| Value of World Exports Goods $B | 18,709 | 19,632 | NA | NA |
| Exports Goods & Services | ||||
| EMDE | 3.5 | 5.8 | 6.3 | 5.9 |
| G7 | 2.3 | 4.6 | 4.4 | 4.4 |
| Imports Goods & Services | ||||
| EMDE | 5.0 | 5.9 | 6.7 | 6.2 |
| G7 | 1.3 | 3.9 | 4.2 | 4.0 |
| Terms of Trade of Goods & Services | ||||
| EMDE | -0.5 | -0.4 | -0.6 | -0.5 |
| G7 | 0.1 | -0.1 | 0.1 | 0.1 |
| Terms of Trade of Goods | ||||
| EMDE | -0.6 | -0.9 | -0.9 | -0.8 |
| G7 | -0.5 | 0.2 | 0.2 | -0.007 |
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/2013/02/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 53.5 in Sep from 55.1 in Aug, indicating expansion at a slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/eca40cba6d8541abb209be984d396e61). This index has remained above the contraction territory of 50.0 during 50 consecutive months and reached in IIIQ2013 the highest reading in a year and a half. The employment index decreased from 52.2 in Aug to 51.0 in Sep with input prices rising at a faster rate and new orders and output increasing at slower rates (http://www.markiteconomics.com/Survey/PressRelease.mvc/eca40cba6d8541abb209be984d396e61). Joe Lupton, Global Economist at JP Morgan, finds strength in growth in IIIQ2013 and possible rise to trend growth in the final quarter of 2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/eca40cba6d8541abb209be984d396e61). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, was higher at 51.8 in Sep from 51.6 in Aug, which is the highest reading in 27 months and the ninth consecutive reading above 50 with three consecutive months of increase (http://www.markiteconomics.com/Survey/PressRelease.mvc/ce0dc08ba1fe4f468f9514b929f64aae). New export orders expanded at the fastest pace since May 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/ce0dc08ba1fe4f468f9514b929f64aae). The HSBC Brazil Composite Output Index, compiled by Markit, increased marginally from 49.7 in Aug to 50.7 in Sep, indicating moderate expansion in the first reading above 50 since Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/84c23fdc900f4fd89797fca3ef97c279). The HSBC Brazil Services Business Activity index, compiled by Markit increased marginally from 49.7 in Aug to 50.7 in Aug, indicating moderate improvement in business activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/84c23fdc900f4fd89797fca3ef97c279). Andre Loes, Chief Economist, Brazil, at HSBC, finds that the reading of 50.2 in IIIQ2013 is the second weakest since the 2009 global recession (http://www.markiteconomics.com/Survey/PressRelease.mvc/84c23fdc900f4fd89797fca3ef97c279). The HSBC Brazil Purchasing Managers’ IndexTM (PMI™) increased from 49.4 in Aug to 49.9 in Sep with activity in standstill (http://www.markiteconomics.com/Survey/PressRelease.mvc/e7607447816649f58eae2b0a76f3dea6). Andre Loes, Chief Economist, Brazil at HSBC, finds mild stabilization of manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/e7607447816649f58eae2b0a76f3dea6).
VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index™ (PMI™) seasonally adjusted decreased to 52.8 in Sep from 53.1 in Aug, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/77970ab4c59744eab5404ffa49d76d36). New export orders registered 49.1 in Sep down from 52.0 in Aug, indicating marginal contraction. Chris Williamson, Chief Economist at Markit, finds that the survey data are consistent with improvement in IIIQ2013 relative to IIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/77970ab4c59744eab5404ffa49d76d36). The Markit US Manufacturing Purchasing Managers’ Index™ (PMI™) decreased to 52.8 in Sep from 53.1 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/e32b050a3ef7439f9f5065117489c887). The index of new exports orders decreased from 52.0 in Aug to 49.0 in Sep while total new orders decreased from 55.7 in Aug to 53.2 in Sep. Chris Williamson, Chief Economist at Markit, finds that the index suggests standstill of manufacturing in the US (http://www.markiteconomics.com/Survey/PressRelease.mvc/e32b050a3ef7439f9f5065117489c887). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® increased 0.5 percentage points from 55.7 in Aug to 56.2 in Sep, which indicates growth at a higher rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders decreased 2.7 percentage points from 63.2 in Aug to 60.5 in Sep. The index of exports decreased 3.5 percentage point from 55.5 in Aug to 52.0 in Sep, growing at a slower rate. The Non-Manufacturing ISM Report on Business® PMI decreased 4.2 percentage points from 58.6 in Aug to 54.4 in Sep, indicating growth of business activity/production during 50 consecutive months, while the index of new orders decreased 0.9 percentage points from 60.5 in Aug to 59.6 in Sep (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 | Aug 12 months NSA ∆%: 1.5; ex food and energy ∆%: 1.8 Aug month SA ∆%: 0.1; ex food and energy ∆%: 0.1 |
| Producer Price Index | Aug 12-month NSA ∆%: 1.4; ex food and energy ∆% 1.1 |
| PCE Inflation | Aug 12-month NSA ∆%: headline 1.2; ex food and energy ∆% 1.2 |
| Employment Situation | Household Survey: Aug Unemployment Rate SA 7.3% |
| Nonfarm Hiring | Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million |
| GDP Growth | BEA Revised National Income Accounts IIQ2012/IIQ2011 2.8 IIIQ2012/IIIQ2011 3.1 IVQ2012/IVQ2011 2.0 IQ2013/IQ2012 1.3 IIQ2013/IIQ2012 1.6 IQ2012 SAAR 3.7 IIQ2012 SAAR 1.2 IIIQ2012 SAAR 2.8 IVQ2012 SAAR 0.1 IQ2013 SAAR 1.1 IIQ2013 SAAR 2.5 |
| Real Private Fixed Investment | SAAR IIQ2013 6.5 ∆% IVQ2007 to IIQ2013: minus 4.9% Blog 9/29/13 |
| Personal Income and Consumption | Aug month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.3 |
| Quarterly Services Report | IIQ13/IIQ12 SA ∆%: Financial & Insurance 4.2 |
| Employment Cost Index | Compensation Private IIQ2013 SA ∆%: 0.5 |
| Industrial Production | Aug month SA ∆%: 0.4 Manufacturing Aug SA ∆% 0.7 Aug 12 months SA ∆% 2.6, NSA 2.5 |
| Productivity and Costs | Nonfarm Business Productivity IIQ2013∆% SAAE 2.3; IIQ2013/IIQ2012 ∆% 0.3; Unit Labor Costs SAAE IIQ2013 ∆% 0.0; IIQ2013/IIQ2012 ∆%: 1.5 Blog 9/8/2013 |
| New York Fed Manufacturing Index | General Business Conditions From Sep 6.29 to Oct 1.52 |
| Philadelphia Fed Business Outlook Index | General Index from Sep 22.3 to Oct 19.8 |
| Manufacturing Shipments and Orders | New Orders SA Jul ∆% -2.4 Ex Transport 1.2 Jan-Jul NSA New Orders 1.9 Ex transport 1.4 |
| Durable Goods | Aug New Orders SA ∆%: 0.1; ex transport ∆%: -0.1 |
| Sales of New Motor Vehicles | Jan-Sep 2013 11,786,536; Jan-Sep 2012 10,899,909. Sep 13 SAAR 15.28 million, Aug 13 SAAR 16.09 million, Sep 2012 SAAR 14.78 million Blog 10/6/13 |
| Sales of Merchant Wholesalers | Jan-Jul 2013/Jan-Jul 2012 NSA ∆%: Total 3.2; Durable Goods: 3.2; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Jul 13/Jun 12 NSA ∆%: Sales Total Business 6.4; Manufacturers 3.6 |
| Sales for Retail and Food Services | Jan-Aug 2013/Jan-Aug 2012 ∆%: Retail and Food Services 4.3; Retail ∆% 4.4 |
| Value of Construction Put in Place | Jul SAAR month SA ∆%: 0.6 Jul 12-month NSA: 5.2 Jan-Jul 2013 ∆% 5.6 |
| Case-Shiller Home Prices | Jul 2013/Jul 2012 ∆% NSA: 10 Cities 12.3; 20 Cities: 12.4 |
| FHFA House Price Index Purchases Only | Jul SA ∆% 1.0; |
| New House Sales | Aug 2013 month SAAR ∆%: 7.9 |
| Housing Starts and Permits | Aug Starts month SA ∆%: 0.9 ; Permits ∆%: -3.8 |
| Trade Balance | Balance Jul SA -$39,147 million versus Jun -$34,543 million |
| Export and Import Prices | Aug 12-month NSA ∆%: Imports -0.4; Exports -1.1 |
| Consumer Credit | Aug ∆% annual rate: Total 4.4; Revolving minus 1.2; Nonrevolving 8.0 |
| Net Foreign Purchases of Long-term Treasury Securities | Jul Net Foreign Purchases of Long-term US Securities: $33.1 billion |
| Treasury Budget | Fiscal Year 2013/2012 ∆% Aug: Receipts 13.0; Outlays minus 3.7; Individual Income Taxes 15.8 Deficit Fiscal Year 2012 $1,087 billion Blog 9/15/2013 |
| CBO Budget and Economic Outlook | 2012 Deficit $1087 B 6.8% GDP Debt 11,281 B 70.1% GDP 2013 Deficit $642 B, Debt 12,036 B 72.5% GDP Blog 8/26/12 11/18/12 2/10/13 9/22/13 |
| Commercial Banks Assets and Liabilities | Aug 2013 SAAR ∆%: Securities -11.0 Loans -2.6 Cash Assets 85.8 Deposits 1.8 Blog 9/29/13 |
| Flow of Funds | IIQ2013 ∆ since 2007 Assets +6079.8 MM Real estate -$2325.1 MM Financial +7835.2 MM Net Worth +$6902.3 MM Blog 9/29/13 |
| Current Account Balance of Payments | IIQ2013 -178,171 MM %GDP 2.4 Blog 9/22/13 |
Links to blog comments in Table USA:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
9/22/13 http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html
9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html
9/8/13 http://cmpassocregulationblog.blogspot.com/2013/09/twenty-eight-million-unemployed-or.html
8/11/13 http://cmpassocregulationblog.blogspot.com/2013/08/recovery-without-hiring-loss-of-full.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
VB Japan. Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (http://www.boj.or.jp/en/announcements/release_2013/k130711a.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.5 and 3.0 percent, with the all items CPI less fresh food of 0.5 to 0.8 percent. The critical difference is forecast of the CPI excluding fresh food of 2.7 to 3.6 percent in 2014 and 1.6 to 2.9 percent in 2015. The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:
“The Bank of Japan conducts monetary policy based on the principle that the policy shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy, and is responsible for maintaining financial system stability. The Bank aims to achieve price stability on a sustainable basis, given that there are various factors that affect prices in the short run.
The Bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of Japan's economy make progress. Based on this recognition, the Bank sets the price stability target at 2 percent in terms of the year-on-year rate of change in the consumer price index.
Under the price stability target specified above, the Bank will pursue monetary easing and aim to achieve this target at the earliest possible time. Taking into consideration that it will take considerable time before the effects of monetary policy permeate the economy, the Bank will ascertain whether there is any significant risk to the sustainability of economic growth, including from the accumulation of financial imbalances.”
The Bank of Japan also provided explicit analysis of its view on price stability in a “Background note regarding the Bank’s thinking on price stability” (http://www.boj.or.jp/en/announcements/release_2013/data/rel130123a1.pdf http://www.boj.or.jp/en/announcements/release_2013/rel130123a.htm/). The Bank of Japan also amended “Principal terms and conditions for the Asset Purchase Program” (http://www.boj.or.jp/en/announcements/release_2013/rel130122a.pdf): “Asset purchases and loan provision shall be conducted up to the maximum outstanding amounts by the end of 2013. From January 2014, the Bank shall purchase financial assets and provide loans every month, the amount of which shall be determined pursuant to the relevant rules of the Bank.”
Financial markets in Japan and worldwide were shocked by new bold measures of “quantitative and qualitative monetary easing” by the Bank of Japan (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The objective of policy is to “achieve the price stability target of 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) at the earliest possible time, with a time horizon of about two years” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The main elements of the new policy are as follows:
- Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
- Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year
| Fiscal Year | Real GDP | CPI All Items Less Fresh Food | Excluding Effects of Consumption Tax Hikes |
| 2013 | |||
| Jul 2013 | +2.5 to +3.0 [+2.8] | +0.5 to +0.8 [+0.6] | |
| Apr 2013 | +2.4 to +3.0 [+2.9] | +0.4 to +0.8 [+0.7] | |
| 2014 | |||
| Jul 2013 | +0.8 to +1.5 [+1.3] | +2.7 to +3.6 [+3.3] | +0.7 to +1.6 [+1.3] |
| Apr 2013 | +1.0 to +1.5 [+1.4] | +2.7 to +3.6 [+3.4] | +0.7 to +1.6 [+1.4] |
| 2015 | |||
| Jul 2013 | +1.3 to +1.9 [+1.5] | +1.6 to +2.9 [+2.6] | +0.9 to +2.2 [+1.9] |
| Apr 2013 | +1.4 to +1.9 [+1.6] | +1.6 to +2.9 [+2.6] | +0.9 to +2.2 [+1.9] |
Figures in brackets are the median of forecasts of Policy Board members
Source: Policy Board, Bank of Japan
http://www.boj.or.jp/en/announcements/release_2013/k130711a.pdf
Private-sector activity in Japan expanded with the Markit Composite Output PMI™ Index increasing from 51.9 in Aug to 53.2 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/138be09087a9442aa1e7ceac9421a614). Claudia Tillbrooke, Economist at Markit and author of the report, finds that the survey data suggest continuing growth of the economy of Japan but concern on implementation of the sales tax (http://www.markiteconomics.com/Survey/PressRelease.mvc/138be09087a9442aa1e7ceac9421a614). The Markit Business Activity Index of Services increased from 51.2 in Aug to 53.0 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/138be09087a9442aa1e7ceac9421a614). Claudia Tillbrooke, Economist at Markit and author of the report, finds growth in services for the eleventh consecutive month but weak growth of new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/138be09087a9442aa1e7ceac9421a614). Markit/JMMA Purchasing Managers’ Index™ (PMI™), seasonally adjusted, increased from 52.2 in Aug to 52.5 in Sep, which is the highest level since Feb 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/eccbf11e68e444f6bae12df9a36ef2cb). New orders grew at the highest rate in 40 months. New export orders recovered from decline in Aug, growing at the highest rate in six months. Claudia Tillbrooke, Economist at Markit and author of the report, finds manufacturing conditions with output expanding in Sep at the fastest rate in thirty-six months (http://www.markiteconomics.com/Survey/PressRelease.mvc/eccbf11e68e444f6bae12df9a36ef2cb).Table JPY provides the country data table for Japan.
Table JPY, Japan, Economic Indicators
| Historical GDP and CPI | 1981-2010 Real GDP Growth and CPI Inflation 1981-2010 |
| Corporate Goods Prices | Aug ∆% +0.3 |
| Consumer Price Index | Aug NSA ∆% 0.3; Aug 12 months NSA ∆% 0.9 |
| Real GDP Growth | IIQ2013 ∆%: 0.9 on IQ2013; IIQ2013 SAAR 3.8; |
| Employment Report | Aug Unemployed 2.71 million Change in unemployed since last year: minus 60 thousand |
| All Industry Indices | Jul month SA ∆% 0.5 Blog 9/22/13 |
| Industrial Production | Aug SA month ∆%: -0.7 |
| Machine Orders | Total Aug ∆% 4.5 Private ∆%: 3.2 Aug ∆% Excluding Volatile Orders 5.4 |
| Tertiary Index | Aug month SA ∆% 0.7 |
| Wholesale and Retail Sales | Aug 12 months: |
| Family Income and Expenditure Survey | Aug 12-month ∆% total nominal consumption -0.5, real -1.6 Blog 10/6/13 |
| Trade Balance | Exports Aug 12 months ∆%: 14.7 Imports Aug 12 months ∆% 16.0 Blog 9/22/13 |
Links to blog comments in Table JPY:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
9/22/13 http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html
9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html
8/18/13 http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.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, rebounding to 54.1 in Jul 2013. The index eased to 53.9 in Aug 2013. The index increased to 55.4 in Sep 2013.
Table CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| Total Index | New Orders | Interm. | Subs Prices | Exp | |
| Sep 2013 | 55.4 | 53.4 | 56.7 | 50.6 | 60.1 |
| Aug | 53.9 | 50.9 | 57.1 | 51.2 | 62.9 |
| Jul | 54.1 | 50.3 | 58.2 | 52.4 | 63.9 |
| Jun | 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, rebounding to 54.1 in Jul 2013. The index stabilized at 53.9 in Aug 2013 climbing to 55.4 in Sep 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 and rebounding to 50.3 in Jul 2013. The index increased to 51.0 in Aug 2013 and 51.1 in Sep 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 and 50.6 in Jul 2013. The index of new orders increased to 52.4 in Aug 2013 and 52.8 in Sep 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, increasing to 49.1 in Jul 2013. The index of employment increased to 49.3 in Aug 2013 and fell to 49.1 in Sep 2013.
Table CIPMMFG, China, Manufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| IPM | PI | NOI | INV | EMP | SDEL | |
| Sep 2013 | 51.1 | 52.9 | 52.8 | 48.5 | 49.1 | 50.8 |
| Aug | 51.0 | 52.6 | 52.4 | 48.0 | 49.3 | 50.4 |
| Jul | 50.3 | 52.4 | 50.6 | 47.6 | 49.1 | 50.1 |
| Jun | 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, increasing to 50.3 in Jul 2013. The index increased to 51.0 in Aug 2013 and 51.1 in Sep 2013.
Chart CIPMMFG, China, Manufacturing Index of Purchasing Managers, Seasonally Adjusted
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Cumulative growth of China’s GDP in IIQ2013 relative to the same period in 2012 was 7.6 percent, as shown in Table VC-GDP. Secondary industry accounts for 47.2 percent of GDP of which industry alone for 41.0 percent in IQ2013 and construction with the remaining 6.2 percent in the first three quarters of 2012. Tertiary industry accounts for 45.3 percent of cumulative GDP in IIQ2013 and primary industry for 7.5 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 10.4 percent in IIQ2011 to 7.4 percent in IVQ2011 and 6.2 percent in IQ2012, rebounding to 8.7 percent in IIQ2012, 8.2 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 fell to 6.6 percent and to 7.0 percent in IIQ2013.
Table VC-GDP, China, Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted ∆%
| Cumulative GDP IIQ2013 | Value Current CNY 100 Million | 2013 Year-on-Year Constant Prices ∆% |
| GDP | 248009 | 7.6 |
| Primary Industry | 18622 | 3.0 |
| Farming | 18622 | 3.0 |
| Secondary Industry | 117037 | 7.6 |
| Industry | 101601 | 7.3 |
| Construction | 15436 | 9.6 |
| Tertiary Industry | 112350 | 8.3 |
| Transport, Storage, Post | 12995 | 6.8 |
| Wholesale, Retail Trades | 23291 | 10.2 |
| Hotel & Catering Services | 4824 | 4.7 |
| Financial Intermediation | 16036 | 10.8 |
| Real Estate | 16127 | 7.5 |
| Other | 39077 | 7.4 |
| Growth in Quarter Relative to Prior Quarter | ∆% on Prior Quarter | ∆% Annual Equivalent |
| 2013 | ||
| IIQ2013 | 1.7 | 7.0 |
| IQ2013 | 1.6 | 6.6 |
| 2012 | ||
| IVQ2012 | 1.9 | 7.8 |
| IIIQ2012 | 2.0 | 8.2 |
| IIQ2012 | 2.1 | 8.7 |
| IQ2012 | 1.5 | 6.2 |
| 2011 | ||
| IVQ2011 | 1.8 | 7.4 |
| IIIQ2011 | 2.2 | 9.1 |
| IIQ2011 | 2.5 | 10.4 |
| IQ2011 | 2.3 | 9.5 |
Source: National Bureau of Statistics of China
http://www.stats.gov.cn/english/
Growth of China’s GDP in IIQ2013 relative to the same period in 2012 was 7.5 percent, as shown in Table VC-GDPA. Secondary industry accounts for 47.2 percent of GDP of which industry alone for 41.0 percent in cumulative IIQ2013 and construction with the remaining 7.5 percent in the first two quarters of 2013. Tertiary industry accounts for 45.3 percent of GDP in the cumulative to IIQ2013 and primary industry for 7.5 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). GDP growth decelerated from 12.1 percent in IQ2010 and 11.2 percent in IIQ2010 to 7.7 percent in IQ2013 and 7.5 percent in IIQ2013.
Table VC-GDPA, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter
| IQ 2013 | IIQ 2013 | |||||||
| GDP | 7.7 | 7.5 | ||||||
| Primary Industry | 3.4 | 3.0 | ||||||
| Secondary Industry | 7.8 | 7.6 | ||||||
| Tertiary Industry | 8.3 | 8.3 | ||||||
| GDP ∆% Relative to a Prior Quarter | 1.6 | 1.7 | ||||||
| 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/b914291cca4d4e67a1948ec3d607812d) is moving at faster pace. The overall Flash HSBC China Manufacturing PMI™ increased from 50.1 in Aug to 51.2 in Sep, which is moderately above the contraction frontier of 50.0, while the Flash HSBC China Manufacturing Output Index increased from 50.9 in Aug to 51.1 in Sep, moving into moderate expansion territory. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the flash manufacturing index moved to the highest reading in six months with improvements in domestic and foreign demand conditions (http://www.markiteconomics.com/Survey/PressRelease.mvc/b914291cca4d4e67a1948ec3d607812d). The HSBC China Services PMI™, compiled by Markit, shows marginal improvement in business activity in China with the HSBC Composite Output, combining manufacturing and services, increasing from 49.5 in Jul to 51.8 in Aug, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/43566e4eb02640ce8511830afb369003). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds support of manufacturing combined with services (http://www.markiteconomics.com/Survey/PressRelease.mvc/43566e4eb02640ce8511830afb369003). The HSBC Business Activity index increased from 51.3 in Jul to 52.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/43566e4eb02640ce8511830afb369003). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds the highest reading of services in five months (http://www.markiteconomics.com/Survey/PressRelease.mvc/43566e4eb02640ce8511830afb369003). The HSBC Purchasing Managers’ Index™ (PMI™), compiled by Markit, increased marginally to 50.2 in Sep from 50.1 in Aug, indicating relatively unchanged manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/f7be0e1a864c49839fe62885cd4ad72f). New export orders posted the first increase in six months. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds stabilizing conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/f7be0e1a864c49839fe62885cd4ad72f). Table CNY provides the country data table for China.
Table CNY, China, Economic Indicators
| Price Indexes for Industry | Sep 12-month ∆%: minus 1.3 Sep month ∆%: 0.2 |
| Consumer Price Index | Sep month ∆%: 0.8 Sep 12 months ∆%: 3.1 |
| Value Added of Industry | Aug month ∆%: 0.93 Jan-Aug 2013/Jan-Aug 2012 ∆%: 9.5 Aug 12-Month ∆%: 10.4 |
| GDP Growth Rate | Year IIQ2013 ∆%: 7.5 |
| Investment in Fixed Assets | Total Jan-Aug 2013 ∆%: 20.3 Real estate development: 19.3 |
| Retail Sales | Aug month ∆%: 1.17 Jan-Aug ∆%: 12.8 |
| Trade Balance | Sep balance $15.20 billion Cumulative Sep: $169.41 billion |
Links to blog comments in Table CNY:
9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html
7/21/2013 http://cmpassocregulationblog.blogspot.com/2013/07/tapering-quantitative-easing-policy-and.html
Table VC-1 provides China’s exports, imports, trade balance and 12-month percentage changes from Dec 2010 to Sep 2013. Exports fell 0.3 percent in the 12 months ending in Sep 2013 while imports increased 7.4 for reduction of the trade surplus to $15.20 billion. Markets reacted positively to China’s trade data in Aug 2013 with exports growing 7.2 percent relative to a year earlier and imports 7.1 percent for increasing trade surplus of $28.52. Exports fell 3.1 percent in Jun 2013 and imports declined 0.7 percent with growth of 5.1 percent of exports in Jul 2013 and 10.9 percent of imports. The trade surplus reached $17.82 billion. Exports increased 1.0 percent in May 2013 relative to a year earlier while imports fell 0.3 percent with trade surplus of $20.43 billion. Exports increased 14.7 percent in Apr 2013 relative to a year earlier and imports 16.8 percent for trade surplus of $18.16 billion. Exports increased 10.0 percent in Mar 2013 relative to a year earlier and imports increased 14.1 percent for trade deficit of $0.88 billion. Exports increased 21.8 percent in Feb 2013 relative to a year earlier and imports fell 15.2 percent for trade surplus of $15.25 billion. China’s trade growth was stronger in Jan 2013 with growth of exports of 25.0 percent in 12 months and of imports of 28.8 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.62 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan 2012 while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the New Year holidays.
Table VC-1, China, Exports, Imports and Trade Balance USD Billion and ∆%
| Exports | ∆% Relative | Imports USD | ∆% Relative | Balance | |
| Sep 2013 | 185.64 | -0.3 | 170.44 | 7.4 | 15.20 |
| Aug | 190.61 | 7.2 | 162.09 | 7.1 | 28.52 |
| Jul | 185.99 | 5.1 | 168.17 | 10.9 | 17.82 |
| Jun | 174.32 | -3.1 | 147.19 | -0.7 | 27.12 |
| May | 182.77 | 1.0 | 162.34 | -0.3 | 20.43 |
| Apr | 187.06 | 14.7 | 168.90 | 16.8 | 18.16 |
| Mar | 182.19 | 10.0 | 183.07 | 14.1 | -0.88 |
| Feb | 139.37 | 21.8 | 124.12 | -15.2 | 15.25 |
| Jan | 187.37 | 25.0 | 158.22 | 28.8 | 29.15 |
| Dec 2012 | 199.23 | 14.1 | 167.61 | 6.0 | 31.62 |
| Nov | 179.38 | 2.9 | 159.75 | 0.0 | 19.63 |
| Oct | 175.57 | 11.6 | 143.58 | 2.4 | 31.99 |
| Sep | 186.35 | 9.9 | 158.68 | 2.4 | 27.67 |
| Aug | 177.97 | 2.7 | 151.31 | -2.6 | 26.66 |
| Jul | 176.94 | 1.0 | 151.79 | 4.7 | 25.15 |
| Jun | 180.20 | 11.3 | 148.48 | 6.3 | 31.72 |
| May | 181.14 | 15.3 | 162.44 | 12.7 | 18.70 |
| Apr | 163.25 | 4.9 | 144.83 | 0.3 | 18.42 |
| Mar | 165.66 | 8.9 | 160.31 | 5.3 | 5.35 |
| Feb | 114.47 | 18.4 | 145.95 | 39.6 | -31.48 |
| Jan | 149.94 | -0.5 | 122.66 | -15.3 | 27.28 |
| Dec 2011 | 174.72 | 13.4 | 158.20 | 11.8 | 16.52 |
| Nov | 174.46 | 13.8 | 159.94 | 22.1 | 14.53 |
| Oct | 157.49 | 15.9 | 140.46 | 28.7 | 17.03 |
| Sep | 169.67 | 17.1 | 155.16 | 20.9 | 14.51 |
| Aug | 173.32 | 24.5 | 155.56 | 30.2 | 17.76 |
| Jul | 175.13 | 20.4 | 143.64 | 22.9 | 31.48 |
| Jun | 161.98 | 17.9 | 139.71 | 19.3 | 22.27 |
| May | 157.16 | 19.4 | 144.11 | 28.4 | 13.05 |
| Apr | 155.69 | 29.9 | 144.26 | 21.8 | 11.42 |
| Mar | 152.20 | 35.8 | 152.06 | 27.3 | 0.14 |
| Feb | 96.74 | 2.4 | 104.04 | 19.4 | -7.31 |
| Jan | 150.73 | 37.7 | 144.27 | 51.0 | 6.46 |
| Dec 2010 | 154.15 | 17.9 | 141.07 | 25.6 | 13.08 |
Source: http://english.mofcom.gov.cn/article/statistic/BriefStatistics/
Table VC-2 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports relative to a year earlier. Exports increased 8.0 percent in Jan-Sep 2013 relative to a year earlier while imports increased 7.3 percent for cumulative surplus of $169.41 billion. Exports increased 9.2 in in Jan-Aug 2013 relative to a year earlier and imports 7.3 percent for trade surplus of $154.21 billion. Exports grew 9.5 percent in Jul 2013 relative to a year earlier and imports 7.3 percent with cumulative surplus of $125.71 billion. Exports increased 10.4 percent cumulatively in Jun 2013 and imports 6.7 for cumulative surplus of $107.95 billion. Exports increased 13.5 percent in Jan-May 2013 relative to a year earlier while imports increased 8.2 percent for cumulative surplus of $80.87 billion. Exports increased 17.4 percent in Jan-Apr 2012 relative to a year earlier while imports increased 10.6 percent for cumulative surplus of $60.98 billion. Exports increased 18.4 percent in Jan-Mar 2013 relative to a year earlier while imports increased 8.4 percent for cumulative surplus of $43.07 billion. Cumulative exports in Jan-Feb 2013 grew 23.6 percent relative to a year earlier and imports 5.0 percent for trade surplus of $44.15 billion. There is strong beginning of 2013 with trade surplus of $29.15 in Jan 2013 and growth of exports of 25.0 percent and imports of 28.8 percent. The trade balance of $231.1 billion in 2012 is stronger than the trade balance of $155.14 billion in 2011. The trade balance in 2011 of $155.14 billion is lower than those from 2008 to 2010. China’s trade balance reached $231.1 billion in Jan-Dec 2012 with cumulative growth of exports of 7.9 percent and 4.3 percent of imports, which is much lower than 20.3 percent for exports and 24.9 percent for imports in 2011 and 31.3 percent for exports and 38.7 percent for imports in 2010. There is a rare cumulative deficit of $4.2 billion in Feb 2012 reversed to a small surplus in Mar 2012 and a higher surplus of $19.3 billion in Apr 2012, increasing to $37.9 billion in May, $68.9 billion in Jun 2012, $94.1 billion in Jul 2012, $120.6 billion in Aug 2012, $148.3 billion in Sep 2012, $180.24 billion in Oct 2012, $199.54 billion in Nov 2012 and $231.1 billion in Dec 2012. More observations are required to detect trends of Chinese trade but available data suggest deceleration that would be expected from the large share of trade with Europe.
Table VC-2, China, Year to Date Exports, Imports and Trade Balance USD Billion and ∆%
| Exports | ∆% Relative | Imports USD | ∆% Relative | Balance | |
| Sep 2013 | 1614.90 | 8.0 | 1445.49 | 7.3 | 169.41 |
| Aug | 1429.26 | 9.2 | 1275.05 | 7.3 | 154.21 |
| Jul | 1238.73 | 9.5 | 1113.02 | 7.3 | 125.71 |
| Jun | 1052.82 | 10.4 | 944.87 | 6.7 | 107.95 |
| May | 878.56 | 13.5 | 797.69 | 8.2 | 80.87 |
| Apr | 695.87 | 17.4 | 634.88 | 10.6 | 60.98 |
| Mar | 508.87 | 18.4 | 465.80 | 8.4 | 43.07 |
| Feb | 326.73 | 23.6 | 282.58 | 5.0 | 44.15 |
| Jan | 187.37 | 25.0 | 158.22 | 28.8 | 29.15 |
| Dec 2012 | 2048.93 | 7.9 | 1817.83 | 4.3 | 231.11 |
| Nov | 1849.91 | 7.3 | 1650.37 | 4.1 | 199.54 |
| Oct | 1670.90 | 7.8 | 1490.67 | 4.6 | 180.24 |
| Sep | 1495.39 | 7.4 | 1347.08 | 4.8 | 148.31 |
| Aug | 1309.11 | 7.1 | 1188.51 | 5.1 | 120.61 |
| Jul | 1131.24 | 7.8 | 1037.14 | 6.4 | 94.10 |
| Jun | 954.38 | 9.2 | 885.46 | 6.7 | 68.91 |
| May | 774.40 | 8.7 | 736.49 | 6.7 | 37.92 |
| Apr | 593.24 | 6.9 | 573.94 | 5.1 | 19.3 |
| Mar | 430.02 | 7.6 | 429.36 | 6.6 | 0.66 |
| Feb | 264.40 | 6.9 | 268.64 | 7.7 | -4.24 |
| Jan | 149.94 | -0.5 | 122.66 | -15.3 | 27.28 |
| Dec 2011 | 1,898.60 | 20.3 | 1,743.46 | 24.9 | 155.14 |
| Nov | 1,724.01 | 21.1 | 1585.61 | 26.4 | 138.40 |
| Oct | 1,549.71 | 22.0 | 1,425.68 | 26.9 | 124.03 |
| Sep | 1,392.27 | 22.7 | 1,285.17 | 26.7 | 107.10 |
| Aug | 1,222.63 | 23.6 | 1,129.90 | 27.5 | 92.73 |
| Jul | 1,049.38 | 23.4 | 973.17 | 26.9 | 76.21 |
| Jun | 874.3 | 24.0 | 829.37 | 27.6 | 44.93 |
| May | 712.37 | 25.5 | 689.41 | 29.4 | 22.96 |
| Apr | 555.30 | 27.4 | 545.02 | 29.6 | 10.28 |
| Mar | 399.64 | 26.5 | 400.66 | 32.6 | -1.02 |
| Feb | 247.47 | 21.3 | 248.36 | 36.0 | -0.89 |
| Jan | 150.7 | 37.7 | 144.27 | 51.0 | 6.46 |
| Dec 2010 | 1577.93 | 31.3 | 1394.83 | 38.7 | 183.10 |
Source: http://english.mofcom.gov.cn/article/statistic/BriefStatistics/
VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.3 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 1.6 percent in 2011. EUROSTAT estimates growth of GDP of the euro area of minus 0.7 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 | NA | 2.9 |
| 2000 | 2.2 | 9.4 | 3.8 |
| 2001 | 2.4 | 8.3 | 2.0 |
| 2002 | 2.3 | 8.6 | 0.9 |
| 2003 | 2.1 | 9.0 | 0.7 |
| 2004 | 2.2 | 9.3 | 2.2 |
| 2005 | 2.2 | 9.1 | 1.7 |
| 2006 | 2.2 | 8.4 | 3.3 |
| 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 | 1.6 |
| 2012* | 2.5 | 11.4 | -0.7 |
| 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 2012 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $12,199.1 billion or 16.9 percent of world GDP of $72,216.4 billion (http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx). The sum of the GDP of France $2613.9 billion with the GDP of Germany of $3429.5 billion, Italy of $2014.1 billion and Spain $1323.5 billion is $9381.0 billion or 76.9 percent of total euro area GDP and 13.0 percent of World 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 | -0.7 | 0.7 | 0.0* | -2.5 | -1.6 |
| 2011 | 1.6 | 3.3 | 2.0 | 0.5 | 0.1 |
| 2010 | 2.0 | 4.0 | 1.7 | 1.7 | -0.2 |
| 2009 | -4.4 | -5.1 | -3.1 | -5.5 | -3.8 |
| 2008 | 0.4 | 1.1 | -0.1 | -1.2 | 0.9 |
| 2007 | 3.0 | 3.3 | 2.3 | 1.7 | 3.5 |
| 2006 | 3.3 | 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 51.5 in Aug to 52.1 in Sep, which is a high in 27 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/7df638bee72d478ca163b5c1c1191887). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the euro area is experiencing the fastest growth of business in about two years, suggesting recovery of the euro area from protracted recession (http://www.markiteconomics.com/Survey/PressRelease.mvc/7df638bee72d478ca163b5c1c1191887). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP, increased from 51.5 in Aug to 52.2 in Aug in the third consecutive monthly expansion (http://www.markiteconomics.com/Survey/PressRelease.mvc/3b716a4e0c704f48bb0f305a9f4720a3). Chris Williamson, Chief Economist at Markit, finds growth in IIIQ2013 at the rate of about 0.2 percent with strong increase in Spain’s exports (http://www.markiteconomics.com/Survey/PressRelease.mvc/3b716a4e0c704f48bb0f305a9f4720a3). The Markit Eurozone Services Business Activity Index increased from 50.7 in Aug to 52.2 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/3b716a4e0c704f48bb0f305a9f4720a3). The Markit Eurozone Manufacturing PMI® decreased to 51.1 in Sep from 51.4 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/07bfd9a03db44521b2f336a8ee269f97). New orders increased with strength in new export business in all members except Greece. Chris Williamson, Chief Economist at Markit, finds recovery indications with strength in export business but with the PMI index lower than in Aug and only slightly above 50 (http://www.markiteconomics.com/Survey/PressRelease.mvc/07bfd9a03db44521b2f336a8ee269f97). Table EUR provides the data table for the euro area.
Table EUR, Euro Area Economic Indicators
| GDP | IIQ2013 ∆% 0.3; IIQ2013/IIQ2012 ∆% -0.6 Blog 10/13/13 |
| Unemployment | Aug 2013: 12.0 % unemployment rate Aug 2013: 19.178 million unemployed Blog 10/6/13 |
| HICP | Sep month ∆%: 0.5 12 months Sep ∆%: 1.1 |
| Producer Prices | Euro Zone industrial producer prices Aug ∆%: 0.0 |
| Industrial Production | Aug month ∆%: 1.0; Aug 12 months ∆%: -2.1 |
| Retail Sales | Aug month ∆%: 0.7 |
| Confidence and Economic Sentiment Indicator | Sentiment 96.9 Sep 2013 Consumer minus 14.9 Sep 2013 Blog 9/29/13 |
| Trade | Jan-Aug 2013/Jan-Aug 2012 Exports ∆%: 0.9 Aug 2013 12-month Exports ∆% -5.4 Imports ∆% -7.2 |
Links to blog comments in Table EUR:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.htm
Table VD-1 provides monthly industrial production percentage changes for total production and major segments. Total production increased 1.0 percent in Aug 2013 with increases of 0.4 percent in energy and 0.5 percent in nondurable goods. Capital goods increased 2.4 percent and durable goods 0.8 percent. Industrial production increased in all months from Dec 2012 to Jun 2013 with exception of declines of 0.3 percent in May 2013 and 0.4 percent in Jan 2013.
Table VD-1, Euro Zone, Industrial Production Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Aug 2013 | 1.0 | 0.9 | 0.4 | 2.4 | 0.8 | 0.5 |
| Jul | -1.0 | -0.5 | -1.0 | -1.8 | -1.8 | 1.0 |
| Jun | 0.7 | 0.4 | -1.5 | 2.0 | 4.3 | -0.5 |
| May | -0.3 | 0.5 | 0.1 | -1.8 | -2.1 | 0.6 |
| Apr | 0.1 | 0.1 | -1.9 | 1.6 | -1.6 | 0.8 |
| Mar | 0.7 | 0.1 | 3.9 | 0.4 | 1.7 | -0.1 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table VD-2 provides monthly and 12-month percentage changes of industrial production and major industrial categories in the euro zone. All 12-month percentage changes in Table VD-2 are negative in the 12 months ending in Aug 2013. Industrial production increased 1.0 percent in the month of Aug 2013 and decreased 2.1 percent in the 12 months ending in Aug 2013.
Table VD-2, Euro Zone, Industrial Production, Month and 12-Month ∆%
| 2013 | Aug Month ∆% | Aug 12-Month ∆% |
| Total | 1.0 | -2.1 |
| Intermediate Goods | 0.9 | -2.8 |
| Energy | 0.4 | -3.0 |
| Capital Goods | 2.4 | -1.4 |
| Durable Consumer Goods | 0.8 | -6.1 |
| Nondurable Consumer Goods | 0.5 | -1.8 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
There has been significant decline in percentage changes of industrial production and major categories in 12-month rates into 2012 and 2013 as shown in Table VD-3. Negative percentage changes moderated from the high rates in Oct-Nov 2012 but are still high. All 12-month percentage changes are negative for the various segments of euro area industrial production.
Table VD-3, Euro Zone, Industrial Production 12-Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Aug 2013 | -2.1 | -2.8 | -3.0 | -1.4 | -6.1 | -1.8 |
| Jul | -1.9 | -1.7 | -2.2 | -3.2 | -4.3 | 0.5 |
| Jun | -0.3 | -1.3 | -1.8 | 1.3 | -1.7 | -0.6 |
| May | -2.0 | -2.7 | -0.3 | -2.4 | -6.2 | -0.2 |
| Apr | -0.9 | -2.5 | -0.7 | 0.5 | -4.6 | 0.5 |
| Mar | -1.6 | -4.1 | 8.9 | -3.5 | -1.8 | -2.7 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Table VD-4 provides industrial production of member countries of the euro zone, the UK and the European Union. All twelve-month percentage changes in Aug 2013 are negative for countries and regions in Table VD-4 with exception of 0.4 percent for Germany, 0.1 percent for the Netherlands and 0.4 percent for Portugal.
Table VD-4, Euro Zone, Industrial Production by Member Countries, ∆%
| Aug 2013 | Month ∆% | 12-Month ∆% |
| Euro Zone | 1.0 | -2.1 |
| Germany | 1.8 | 0.4 |
| France | 0.2 | -3.5 |
| Netherlands | 2.4 | 0.1 |
| Finland | -0.1 | -1.5 |
| Belgium | NA | NA |
| Portugal | 8.2 | 0.4 |
| Ireland | -0.8 | -5.9 |
| Italy | -0.3 | -4.6 |
| Greece | 1.0 | -7.5 |
| Spain | 0.1 | -2.0 |
| UK | -1.1 | -1.1 |
| European Union | 0.5 | -1.6 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Euro zone trade growth continues to be relatively strong as shown in Table VD-5 but with deceleration at the margin. Exports grew at 0.9 percent and imports fell 4.0 percent in Jan-Aug 2013 relative to Jan-Aug 2012. The 12-month rate of growth of exports was minus 5.4 percent in Aug 2013 while imports fell 7.2 percent. In Jul 2013, exports increased 2.8 percent in 12 months and imports increased 0.2 percent. At the margin, rates of growth of trade are declining in part because of moderation of commodity prices.
Table VD-5, Euro Zone, Exports, Imports and Trade Balance, Billions of Euros and Percent, NSA
| Exports | Imports | |
| Jan-Aug 2013 | 1,249.5 | 1,151.5 |
| Jan-Aug 2012 | 1,238.7 | 1,199.9 |
| ∆% | 0.9 | -4.0 |
| Aug 2013 | 144.1 | 137.0 |
| Aug 2012 | 152.3 | 147.7 |
| ∆% | -5.4 | -7.2 |
| Jul 2013 | 167.0 | 149.0 |
| Jul 2012 | 162.5 | 148.7 |
| ∆% | 2.8 | 0.2 |
| Trade Balance | Jan-Aug 2013 | Jan-Aug 2012 |
| € Billions | 98.0 | 38.9 |
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
The structure of trade of the euro zone in Jan-Jul 2013 is provided in Table VD-6. Data are still not available for trade structure for Aug 2013. Manufactured exports increased 1.1 percent in Jan-Jul 2013 relative to Jan-Jul 2012 while imports decreased 2.7 percent. The trade surplus in manufactured products was higher than the trade deficit in primary products in Jan-Jul 2013 but only marginally higher in Jan-Jul 2012 partly because of the commodity shock caused by carry trades.
Table VD-6, Euro Zone, Structure of Exports, Imports and Trade Balance, € Billions, NSA, ∆%
| Primary | Manufactured | Other | Total | |
| Exports | ||||
| Jan-Jul 2013 € B | 174.8 | 897.7 | 32.9 | 1,105.4 |
| Jan-Jul 2012 € B | 168.0 | 887.5 | 30.9 | 1,086.4 |
| ∆% | 4.0 | 1.1 | 6.5 | 1.7 |
| Imports | ||||
| Jan-Jul 2013 € B | 368.0 | 626.8 | 19.8 | 1,014.5 |
| Jan-Jul 2012 € B | 388.2 | 644.2 | 19.7 | 1,052.2 |
| ∆% | -5.2 | -2.7 | 0.5 | -3.6 |
| Trade Balance € B | ||||
| Jan-Jul 2013 | -193.1 | 270.9 | 13.1 | 90.9 |
| Jan-Jul 2012 | -220.2 | 243.3 | 11.2 | 34.3 |
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
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 4.0 percent in 2010, 3.3 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 | 3.3 | 3.4 |
| 2010 | 4.0 | 3.8 |
| 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/2013/08/PE13_278_811.html
The Flash Germany Composite Output Index of the Markit Flash Germany PMI®, combining manufacturing and services, increased from 53.5 in Aug to 53.8 in Sep, for the highest reading in eight months. The index of manufacturing output reached 52.7 in Sep, which is a three-month low, while services increased to 54.4 for a seven-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/1083375a48d14308ac0a5540380ae7cf). New work volumes increased at the fastest rate since Jun 2011 driven by services. Tim Moore, Senior Economist at Markit, finds that the data is consistent with strengthening economic conditions (http://www.markiteconomics.com/Survey/PressRelease.mvc/1083375a48d14308ac0a5540380ae7cf). The Markit Germany Composite Output Index of the Markit Germany Services PMI®, combining manufacturing and services with close association with Germany’s GDP, decreased from 53.5 in Aug to 53.2 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/698fb1e693064b62b64668bd5ee9f605). Tim Moore, Senior Economist at Markit and author of the report, finds strengthening services in Germany (http://www.markiteconomics.com/Survey/PressRelease.mvc/698fb1e693064b62b64668bd5ee9f605). The Germany Services Business Activity Index increased from 51.3 in Jul to 52.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/698fb1e693064b62b64668bd5ee9f605). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, decreased from 51.8 in Aug to 51.1 in Sep, in movement away from contraction territory below 50.0 during three consecutive months (http://www.markiteconomics.com/Survey/PressRelease.mvc/ed3b0e0776c54cc0b5a86ea9e3897bd8). New export orders increased for the second consecutive month. Tim Moore, Senior Economist at Markit and author of the report, finds growth in the third quarter even with slowing in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/ed3b0e0776c54cc0b5a86ea9e3897bd8).Table DE provides the country data table for Germany.
Table DE, Germany, Economic Indicators
| GDP | IIQ2013 0.7 ∆%; II/Q2013/IIQ2012 ∆% 0.9 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 8/18/13 8/25/13 |
| Consumer Price Index | Aug month NSA ∆%: 0.0 |
| Producer Price Index | Aug month ∆%: -0.1 CSA, 0.3 |
| Industrial Production | MFG Aug month CSA ∆%: 2.1 |
| Machine Orders | MFG Aug month ∆%: -0.3 |
| Retail Sales | Aug Month ∆% 0.5 12-Month ∆% 0.3 Blog 10/6/13 |
| Employment Report | Unemployment Rate SA Jul 5.0% |
| Trade Balance | Exports Aug 12-month NSA ∆%: -5.4 Blog 10/13/13 |
Links to blog comments in Table DE:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
8/25/13 http://cmpassocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html
8/18/13 http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html
http://cmpassocregulationblog.blogspot.com/2013/07/twenty-nine-million-unemployed-or.html
5/26/13 http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.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=26&date=20130814
The Markit Flash France Composite Output Index increased from 48.8 in Aug to 50.2 in Sep for a nineteen-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/9dfafe81d70346a4bfc1751da0912d28). Jack Kennedy, Senior Economist at Markit and author of the report, finds that the data indicate stabilizing business in France (http://www.markiteconomics.com/Survey/PressRelease.mvc/9dfafe81d70346a4bfc1751da0912d28). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased marginally from 48.8 in Aug to 50.5 in Sep, indicating moderate expansion and the highest reading in 20 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/288f64300c114a9eb900c9b69575bb3f). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI®, finds stabilization of the economy of France (http://www.markiteconomics.com/Survey/PressRelease.mvc/288f64300c114a9eb900c9b69575bb3f). The Markit France Services Activity index increased from 48.9 in Aug to 51.0 in Sep for the highest reading in 20 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/288f64300c114a9eb900c9b69575bb3f). The Markit France Manufacturing Purchasing Managers’ Index® increased marginally to 49.8 in Sep from 49.7 in Aug, with output decreasing but new orders increasing for the first time since Jun 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/bcabcc955bfa461a83ed327ac0259fad). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI®, finds stabilization in French manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/bcabcc955bfa461a83ed327ac0259fad). Table FR provides the country data table for France.
Table FR, France, Economic Indicators
| CPI | Sep month ∆% -0.2 |
| PPI | Aug month ∆%: 0.3 Blog 10/6/13 |
| GDP Growth | IIQ2013/IQ2013 ∆%: 0.5 |
| Industrial Production | Aug ∆%: |
| Consumer Spending | Manufactured Goods |
| Employment | Unemployment Rate: IIQ2013 10.5% |
| Trade Balance | Jul Exports ∆%: month 1.3, 12 months -0.6 Jul Imports ∆%: month 2.7, 12 months 1.1 Blog 9/8/13 |
| Confidence Indicators | Historical averages 100 Sep Mfg Business Climate 97 Blog 9/29/13 |
Links to blog comments in Table FR:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html
9/8/13 http://cmpassocregulationblog.blogspot.com/2013/09/twenty-eight-million-unemployed-or.html
6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html
5/19/13 http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html
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, minus 2.4 percent in IQ2013 and minus 2.0 percent in IIQ2013. The aggregate demand components of consumption and gross fixed capital formation (GFCF) have been declining at faster rates. The rates of decline of GDP, consumption and GFCF were somewhat milder in IIQ2013 than in IQ2013 and the final three quarters of 2012.
Table VG-IT, Italy, GDP and Expenditure Components, Chained Volume Measures, Quarter ∆% on Same Quarter Year Earlier
| GDP | Imports | Consumption | GFCF | Exports | |
| 2013 | |||||
| IIQ2013 | -2.1 | -4.6 | -2.4 | -5.9 | 0.2 |
| IQ | -2.4 | -5.0 | -2.7 | -7.1 | -0.4 |
| 2012 | |||||
| IVQ | -2.8 | -6.8 | -4.3 | -7.9 | 1.7 |
| IIIQ | -2.6 | -8.1 | -4.3 | -8.1 | 2.5 |
| IIQ | -2.4 | -7.5 | -3.8 | -8.3 | 2.5 |
| IQ | -1.7 | -8.9 | -3.3 | -7.6 | 2.1 |
| 2011 | |||||
| IVQ | -0.5 | -6.9 | -1.8 | -3.2 | 3.1 |
| IIIQ | 0.3 | 0.1 | -0.7 | -2.1 | 5.6 |
| IIQ | 0.9 | 3.1 | 0.6 | -0.7 | 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/98480
The Markit/ADACI Business Activity Index increased from 48.8 in Aug to 52.7 in Sep, which is the highest level since May 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/a4f969bd13b6414a86982c1b01aad043). Phil Smith, Economist at Markit and author of the Italy Services PMI®, finds the index suggesting stabilizing economy with some potential for the first increase in GDP in over two years (http://www.markiteconomics.com/Survey/PressRelease.mvc/a4f969bd13b6414a86982c1b01aad043). The Markit/ADACI Purchasing Managers’ Index® (PMI®), decreased from 51.3 in Aug to 50.8 in Sep for the third consecutive reading above 50.0 with strong increase in foreign orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/bacb95f5e70f409d90a9a8413e08515a). Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI®, finds that manufacturing above 50 for three consecutive months implies positive contribution to IIIQ2013 growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/bacb95f5e70f409d90a9a8413e08515a). Table IT provides the country data table for Italy.
Table IT, Italy, Economic Indicators
| Consumer Price Index | Sep month ∆%: -0.3 |
| Producer Price Index | Aug month ∆%: 0.2 Blog 10/6/13 |
| GDP Growth | IIQ2013/IQ2013 SA ∆%: minus 0.3 |
| Labor Report | Aug 2013 Participation rate 63.7% Employment ratio 55.8% Unemployment rate 12.2% Blog 10/6/13 |
| Industrial Production | Aug month ∆%: -0.3 |
| Retail Sales | Jul month ∆%: -0.3 Jul 12-month ∆%: -0.9 Blog 9/29/13 |
| Business Confidence | Mfg Sep 96.6, May 89.1 Construction Sep 78.6, May 81.2 Blog 9/29/13 |
| Trade Balance | Balance Aug SA €2477 million versus Jul €2260 |
Links to blog comments in Table IT:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
10/6/13 http://cmpassocregulationblog.blogspot.com/2013/10/collapse-of-united-states-dynamism-of.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html
8/11/13 http://cmpassocregulationblog.blogspot.com/2013/08/recovery-without-hiring-loss-of-full.html
6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html
3/17/13 http://cmpassocregulationblog.blogspot.com/2013/03/recovery-without-hiring-ten-million.html
Exports and imports of Italy and monthly growth rates SA are in Table VG-1. There have been significant fluctuations. Seasonally adjusted exports increased 1.7 percent in Aug 2013 while imports increased 1.1 percent. The SA trade balance decreased from surplus of €3056 million in May 2013 to surplus of €2477 million in Aug 2013.
Table VG-1, Italy, Exports, Imports and Trade Balance SA Million Euros and Month SA ∆%
| Period | Exports | ∆% | Imports | ∆% | Balance |
| 2011 | |||||
| IQ2011 | 92,744 | 4.8 | 102,090 | 3.3 | -9,346 |
| IIQ2011 | 95,149 | 2.6 | 102,626 | 0.5 | -7,477 |
| IIIQ2011 | 95,154 | 0.0 | 101,356 | -1.2 | -6,202 |
| IVQ2011 | 95,180 | 0.0 | 97,470 | -3.8 | -2,290 |
| 2012 | |||||
| IQ2012 | 96,201 | 1.1 | 96,599 | -0.9 | -398 |
| IIQ2012 | 97,651 | 1.5 | 95,811 | -0.8 | 1,840 |
| IIIQ2012 | 98,893 | 1.3 | 95,410 | -0.4 | 3,483 |
| IVQ2012 | 98,048 | -0.9 | 92,642 | -2.9 | 5,406 |
| 2013 | |||||
| IQ2013 | 97,713 | -0.3 | 91,120 | -1.6 | 6,593 |
| IIQ2013 | 98,148 | 0.4 | 89,400 | -1.9 | 8,748 |
| 2011 | |||||
| Aug | 31,576 | -0.4 | 34,162 | 0.6 | -2,586 |
| Sep | 31,865 | 0.9 | 33,241 | -2.7 | -1,376 |
| Oct | 31,028 | -2.6 | 32,590 | -2.0 | -1,562 |
| Nov | 31,502 | 1.5 | 32,933 | 1.1 | -1,431 |
| Dec | 32,650 | 3.6 | 31,947 | -3.0 | 703 |
| 2012 | |||||
| Jan | 31,774 | -2.7 | 32,213 | 0.8 | -439 |
| Feb | 32,048 | 0.9 | 32,538 | 1.0 | -490 |
| Mar | 32,379 | 1.0 | 31,848 | -2.1 | 531 |
| Apr | 32,415 | 0.1 | 32,451 | 1.9 | -36 |
| May | 32,976 | 1.7 | 32,689 | 0.7 | 287 |
| Jun | 32,260 | -2.2 | 30,671 | -6.2 | 1,589 |
| Jul | 32,833 | 1.8 | 31,746 | 3.5 | 1,087 |
| Aug | 33,365 | 1.6 | 32,499 | 2.4 | 866 |
| Sep | 32,695 | -2.0 | 31,165 | -4.1 | 1,530 |
| Oct | 32,678 | -0.1 | 31,230 | 0.2 | 1,448 |
| Nov | 32,757 | 0.2 | 30,455 | -2.5 | 2,302 |
| Dec | 32,613 | -0.4 | 30,957 | 1.6 | 1,656 |
| 2013 | |||||
| Jan | 33,083 | 1.4 | 30,961 | 0.0 | 2,122 |
| Feb | 32,131 | -2.9 | 30,079 | -2.8 | 2,052 |
| Mar | 32,499 | 1.1 | 30,080 | 0.0 | 2,419 |
| Apr | 32,435 | -0.2 | 29,740 | -1.1 | 2,695 |
| May | 32,651 | 0.7 | 29,595 | -0.5 | 3,056 |
| Jun | 33,062 | 1.3 | 30,065 | 1.6 | 2,997 |
| Jul | 32,350 | -2.2 | 30,090 | 0.1 | 2,260 |
| Aug | 32,895 | 1.7 | 30,418 | 1.1 | 2,477 |
Source: Istituto Nazionale di Statistica
http://www.istat.it/it/archivio/101000
Italy’s trade account not seasonally adjusted is in Table VG-2. Values are different because the data are original and not adjusted. Exports decreased 4.4 percent in the 12 months ending in Aug 2013 while imports decreased 9.8 percent with actual trade surplus of €958 million. Twelve-month rates of growth picked up again in Aug 2011 with 15.2 percent for exports and 12.6 percent for imports. In Sep 2011, exports grew 10.2 percent relative to a year earlier while imports grew only 3.6 percent. In Oct 2011, exports grew 4.5 percent while imports fell 0.2 percent. In Nov 2011, exports grew 6.5 percent in 12 months while imports grew 0.5 percent. Exports continued to growth of 7.2 percent in the 12 months ending in Aug 2012 while imports fell 2.7 percent. The actual or not seasonally adjusted trade balance deficit fell from €2948 million in Aug 2011 to surplus of €1407 million in Dec 2011 but turned into deficit of €4574 million in Jan 2012. The deficit improved to lower deficit of €1195 million in Feb 2012 and surplus of €1792 million in Mar 2012, returning to deficit of €250 million in Apr and surplus of €867 million in May. In Jun 2012, the actual surplus was €2780 million and then €4733 million in Jul 2012, which was the highest in 2012 but deteriorated to actual deficit of €483 million in Aug 2012. Exports fell 20.9 percent and imports 22.1 percent during the global recession in 2009. Growth of exports of 12.0 percent in the 12 months ending in Oct 2012 while imports increased 1.0 percent increased the trade surplus to €2420 million. The trade surplus was €2105 million in Dec 2012 with growth of exports of minus 3.6 percent in 12 months while imports fell 6.0 percent. The trade balance deteriorated to deficit of €1614 million in Jan 2013 even with growth of exports of 8.7 percent in 12 months while imports fell 1.8 percent. The trade balance returned to surplus of €1092 million in Feb 2013 with decline of exports by 2.8 percent and decrease of exports by 9.7 percent. The surplus widened to €3240 million in Mar 2013 with exports declining 6.0 percent and imports falling 10.6 percent. The surplus shrank to €2025 million in Apr 2013 with growth of exports of 4.5 and decline of imports of 3.0 percent. The surplus increased to €3926 million in May 2013 with declines of exports of 1.5 percent and of imports of 10.4 percent. The surplus declined to €3619 million in Jun 2013 with decline of exports of 2.7 percent in 12 months and of imports of 5.6 percent.
Table VG-2, Italy, Exports, Imports and Trade Balance NSA Million Euros and Year-on-Year
| Period | Exports | ∆% | Imports | ∆% | Balance |
| 2010 | 337,346 | 15.6 | 367,390 | 23.4 | -30,044 |
| 2011 | 375,904 | 11.4 | 401,428 | 9.3 | -25,524 |
| 2012 | 389,725 | 3.7 | 378,759 | -5.6 | 10,966 |
| 2010 | |||||
| IQ2010 | 76,310 | 7.5 | 85,238 | 12.1 | -8,928 |
| IIQ2010 | 85,783 | 17.6 | 92,633 | 27.1 | -6,850 |
| IIIQ2010 | 84,334 | 18.1 | 89,622 | 27.0 | -5,288 |
| IVQ2010 | 90,918 | 19.1 | 99,897 | 28.0 | -8,979 |
| 2011 | |||||
| IQ2011 | 90,128 | 18.1 | 103,760 | 21.7 | -13,632 |
| II2011 | 97,274 | 13.4 | 104,303 | 12.6 | -7,029 |
| IIIQ2011 | 92,567 | 9.8 | 96,138 | 7.3 | -3,571 |
| IVQ2011 | 95,935 | 5.5 | 97,227 | -2.7 | -1,292 |
| 2012 | |||||
| IQ2012 | 95,285 | 5.7 | 99,264 | -4.3 | -3,979 |
| IIQ2012 | 99,999 | 2.8 | 96,604 | -7.4 | 3,395 |
| IIIQ2012 | 94,601 | 2.2 | 89,941 | -6.4 | 4,660 |
| IVQ2012 | 99,841 | 4.1 | 92,951 | -4.4 | 6,890 |
| 2013 | |||||
| IQ2013 | 94,609 | -0.7 | 91,890 | -7.4 | 2,719 |
| IIQ2013 | 99,914 | -0.1 | 90,344 | -6.5 | 9,570 |
| 2011 | |||||
| Aug | 24,245 | 15.2 | 27,193 | 12.6 | -2,948 |
| Sep | 32,996 | 10.2 | 34,886 | 3.6 | -1,890 |
| Oct | 32,131 | 4.5 | 33,245 | -0.2 | -1,114 |
| Nov | 32,440 | 6.5 | 34,025 | 0.5 | -1,585 |
| Dec | 31,364 | 5.6 | 29,957 | -8.5 | 1,407 |
| 2012 | |||||
| Jan | 27,429 | 4.8 | 32,003 | -1.7 | -4,574 |
| Feb | 31,787 | 7.3 | 32,982 | 0.9 | -1,195 |
| Mar | 36,070 | 5.0 | 34,278 | -11.0 | 1,792 |
| Apr | 30,510 | -1.8 | 30,760 | -9.4 | -250 |
| May | 35,132 | 4.7 | 34,265 | -4.4 | 867 |
| Jun | 34,358 | 5.2 | 31,578 | -8.4 | 2,780 |
| Jul | 37,019 | 4.8 | 32,286 | -5.2 | 4,733 |
| Aug | 25,979 | 7.2 | 26,462 | -2.7 | -483 |
| Sep | 31,602 | -4.2 | 31,193 | -10.6 | 409 |
| Oct | 35,997 | 12.0 | 33,577 | 1.0 | 2,420 |
| Nov | 33,593 | 3.6 | 31,230 | -8.2 | 2,363 |
| Dec | 30,250 | -3.6 | 28,145 | -6.0 | 2,105 |
| 2013 | |||||
| Jan | 29,824 | 8.7 | 31,438 | -1.8 | -1,614 |
| Feb | 30,890 | -2.8 | 29,798 | -9.7 | 1,092 |
| Mar | 33,894 | -6.0 | 30,654 | -10.6 | 3,240 |
| Apr | 31,868 | 4.5 | 29,843 | -3.0 | 2,025 |
| May | 34,621 | -1.5 | 30,695 | -10.4 | 3,926 |
| Jun | 33,425 | -2.7 | 29,806 | -5.6 | 3,619 |
| Jul | 38,136 | 3.0 | 32,156 | -0.4 | 5,980 |
| Aug | 24,833 | -4.4 | 23,874 | -9.8 | 958 |
Source: Istituto Nazionale di Statistica
http://www.istat.it/it/archivio/101000
Growth rates of Italy’s trade and major products are in Table VG-3 for the period Jan-Aug 2013 relative to Jan-Aug 2012. Growth rates of cumulative imports relative to a year earlier are negative for energy with minus 16.7 percent and minus 10.7 percent for durable goods. The higher rate of growth of exports of minus 0.3 percent in Jan-Aug 2013/Jan-Aug 2012 relative to imports of minus 6.4 percent may reflect weak demand in Italy with GDP declining during eight consecutive quarters from IIIQ2011 through IIQ2013 together with softening commodity prices.
Table VG-3, Italy, Exports and Imports % Share of Products in Total and ∆%
| Exports | Exports | Imports | Imports | |
| Consumer | 29.3 | 6.1 | 25.6 | 0.4 |
| Durable | 5.8 | 1.8 | 2.9 | -10.7 |
| Non-Durable | 23.5 | 7.1 | 22.7 | 1.8 |
| Capital Goods | 31.6 | 1.1 | 19.5 | -5.4 |
| Inter- | 33.6 | -3.8 | 32.6 | -5.2 |
| Energy | 5.5 | -20.2 | 22.3 | -16.7 |
| Total ex Energy | 94.5 | 0.8 | 77.7 | -3.4 |
| Total | 100.0 | -0.3 | 100.0 | -6.4 |
Note: % Share for 2012 total trade.
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/101000
Table VG-4 provides Italy’s trade balance by product categories in Aug 2013 and cumulative Jan-Aug 2013. Italy’s trade balance excluding energy generated surplus of €5355 million in Aug 2013 and €55,973 million cumulative in Jan-Aug 2013 but the energy trade balance created deficit of €4397 million in Aug 2013 and cumulative €36,746 million in Jan-Aug 2013. The overall surplus in Aug 2013 was €958 million with cumulative surplus of €19,227 million in Jan-Aug 2013. Italy has significant competitiveness in various economic activities in contrast with some other countries with debt difficulties.
Table VG-4, Italy, Trade Balance by Product Categories, € Millions
| Aug 2013 | Cumulative Jan-Aug 2013 | |
| Consumer Goods | 1,383 | 14,544 |
| Durable | 769 | 8,467 |
| Nondurable | 614 | 6,077 |
| Capital Goods | 3,141 | 35,569 |
| Intermediate Goods | 831 | 5,860 |
| Energy | -4,397 | -36,746 |
| Total ex Energy | 5,355 | 55,973 |
| Total | 958 | 19,227 |
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/101000
Professors Ricardo Caballero and Francesco Giavazzi (2012Jan15) find that the resolution of the European sovereign crisis with survival of the euro area would require success in the restructuring of Italy. Growth of the Italian economy would ensure that success. A critical problem is that the common euro currency prevents Italy from devaluing the exchange rate to parity or the exchange rate that would permit export growth to promote internal economic activity, which could generate fiscal revenues for primary fiscal surpluses that ensure creditworthiness. Fiscal consolidation and restructuring are important but of long-term gestation. Immediate growth of the Italian economy would consolidate the resolution of the sovereign debt crisis. Caballero and Giavazzi (2012Jan15) argue that 55 percent of the exports of Italy are to countries outside the euro area such that devaluation of 15 percent would be effective in increasing export revenue. Newly available data in Table VG-5 providing Italy’s trade with regions and countries supports the argument of Caballero and Giavazzi (2012Jan15). Italy’s exports to the European Monetary Union (EMU), or euro area, are only 40.5 percent of the total in Jan-Aug 2013. Exports to the non-European Union area with share of 45.8 percent in Italy’s total exports are growing at 2.3 percent in Jan-Aug 2013 relative to Jan-Aug 2012 while those to EMU are growing at minus 3.2 percent.
Table VG-5, Italy, Exports and Imports by Regions and Countries, % Share and 12-Month ∆%
| Aug 2013 | Exports | ∆% Jan-Aug 2013/ Jan-Aug 2012 | Imports | ∆% Jan-Aug 2013/ Jan-Aug 2012 |
| EU | 54.2 | -2.4 | 53.2 | -2.5 |
| EMU 17 | 40.5 | -3.2 | 42.7 | -2.7 |
| France | 11.1 | -2.9 | 8.3 | -5.9 |
| Germany | 12.5 | -3.2 | 14.6 | -6.5 |
| Spain | 4.7 | -7.5 | 4.4 | -3.4 |
| UK | 4.9 | 1.9 | 2.5 | -0.9 |
| Non EU | 45.8 | 2.3 | 46.8 | -10.7 |
| Europe non EU | 13.4 | -1.2 | 11.0 | 5.5 |
| USA | 6.8 | -1.6 | 3.3 | -14.6 |
| China | 2.3 | 9.8 | 6.5 | -10.0 |
| OPEC | 5.7 | 8.1 | 10.8 | -26.3 |
| Total | 100.0 | -0.3 | 100.0 | -6.4 |
Notes: EU: European Union; EMU: European Monetary Union (euro zone)
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/101000
Table VG-6 provides Italy’s trade balance by regions and countries. Italy had trade deficit of €589 million with the 17 countries of the euro zone (EMU 17) in Aug 2013 and cumulative deficit of €1609 million in Jan-Aug 2013. Depreciation to parity could permit greater competitiveness in improving the trade surplus of €5057 million in Jan-Aug 2013 with Europe non European Union, the trade surplus of €10,003 million with the US and trade surplus with non-European Union of €11,063 million in Jan-Aug 2013. There is significant rigidity in the trade deficits in Jan-Aug 2013 of €9127 million with China and €5475 million with members of the Organization of Petroleum Exporting Countries (OPEC). Higher exports could drive economic growth in the economy of Italy that would permit less onerous adjustment of the country’s fiscal imbalances, raising the country’s credit rating.
Table VG-6, Italy, Trade Balance by Regions and Countries, Millions of Euro
| Regions and Countries | Trade Balance Aug 2013 Millions of Euro | Trade Balance Cumulative Jan-Aug 2013 Millions of Euro |
| EU | 392 | 8,164 |
| EMU 17 | -589 | -1,609 |
| France | 493 | 8,330 |
| Germany | -245 | -2,520 |
| Spain | 13 | 594 |
| UK | 773 | 6,530 |
| Non EU | 566 | 11,063 |
| Europe non EU | 399 | 5,057 |
| USA | 1,074 | 10,003 |
| China | -1,062 | -9,127 |
| OPEC | -1,109 | -5,475 |
| Total | 958 | 19,227 |
Notes: EU: European Union; EMU: European Monetary Union (euro zone)
Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/101000
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 in comparison with annual growth rates in 2007 and earlier years. Growth was only 1.1 percent in 2011 and 0.1 percent in 2012. The bottom part of Table VH-UK provides average growth rates of UK GDP since 1948. The UK economy grew at 2.6 percent per year on average between 1948 and 2012, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.1 percent. Growth in the current cyclical expansion has been only at 1.0 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2012 was lower by 3.1 percent relative to 2007.
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 | 0.1 |
| Average Growth Rates ∆% per Year | |
| 1948-2012 | 2.6 |
| 1950-1959 | 2.7 |
| 1960-1969 | 3.3 |
| 1970-1979 | 2.5 |
| 1980-1989 | 3.2 |
| 1990-1999 | 2.9 |
| 2000-2007 | 3.0 |
| 2007-2012 | -3.1 |
| 2000-2012 | 1.5 |
*Absolute change from 2007 to 2012
Source: UK Office for National Statistics http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q2-2013/index.html
The Business Activity Index of the Markit/CIPS UK Services PMI® decreased marginally from 60.5 in Aug to 60.3 in Sep, indicating increase in activity in every month since the beginning of 2013 with the highest quarterly average since IIQ1997 http://www.markiteconomics.com/Survey/PressRelease.mvc/b668420fbbc0481898a1c701a1b55cfc). Chris Williamson, Chief Economist at Markit, finds continuing improvement in the UK’s economy with possible higher growth of GDP in IIIQ2013 at the quarterly rate of 1.2 percent, which would be the highest since the period before the 2007 financial crisis (http://www.markiteconomics.com/Survey/PressRelease.mvc/b668420fbbc0481898a1c701a1b55cfc). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) decreased marginally to 56.7 in Sep from 57.1 in Aug, which was the highest reading in 36 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/010b50c61df54276b9d87c8bf7c7dcd3). Respondents indicated moderate increase in foreign demand. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI®, finds that manufacturing could grow at around 1.0 to 1.5 percent in IIIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/010b50c61df54276b9d87c8bf7c7dcd3). Table UK provides the economic indicators for the United Kingdom.
Table UK, UK Economic Indicators
| CPI | Sep month ∆%: 0.4 |
| Output/Input Prices | Output Prices: Sep 12-month NSA ∆%: 1.2; excluding food, petroleum ∆%: 0.7 |
| GDP Growth | IIQ2013 prior quarter ∆% 0.7; year earlier same quarter ∆%: 1.3 |
| Industrial Production | Aug 2013/Aug 2012 ∆%: Production Industries minus 1.5; Manufacturing minus 0.2 |
| Retail Sales | Sep month ∆%: 0.6 |
| Labor Market | Jun-Aug Unemployment Rate: 7.7%; Claimant Count 4.0%; Earnings Growth 0.7% |
| Trade Balance | Balance SA Aug minus ₤3320 million |
Links to blog comments in Table UK:
10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.html
9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
8/25/13 http://cmpassocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html
7/28/13 http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.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
Labor market statistics of the UK for the quarter Jun-Aug 2013 are provided in Table VH-1. The unemployment rate decreased to 7.7 percent and the number unemployed decreased 40,000 in the year, reaching 2.487 million. The employment rate is 71.7 percent. Earnings growth including bonuses was 0.7 percent over the earlier year. The claimant count or those receiving unemployment benefits stands at 4.0 percent, down 0.1 percentage points on the month and down 0.6 percentage points on the year.
Table VH-1, UK, Labor Market Statistics
| Quarter Jun-Aug 2013 | |
| Unemployment Rate | 7.7% down 0.1 on quarter and down 0.2 from year earlier |
| Number Unemployed | (1) Down 18,000 on quarter and down 40,000 from year earlier to reach 2.487 million (2) Unemployment rate 16 to 24 years of age 20.7% of that age group (3) Unemployed 16 to 24 years excluding those in full-time education 660,000 (298,000 in full-time education) down 7,000 on quarter; unemployment rate 19.1% down 0.2 % Points |
| Number Unemployed > one and two years | (1) Number unemployed over one year: 900,000, down 15,000 on quarter, up 3,000 on year (2) Number unemployed over two years: 467,000, down 7,000 on quarter, up 23,000 on year |
| Inactivity Rate 16-64 Years of Age (Definition: Not in employment but have not been seeking employment in the past four weeks or are unable to start work in two weeks) | (1) 22.2%, down 0.2 % points on quarter, down 0.3 on year (2) Economically inactive 16-64 years down 83,000 on quarter and down 88,000 on year to 8.954 million |
| Employment Rate | 71.7%, up 0.3 on quarter, up 0.4 % points on year |
| Number Employed | (1) Up 155,000 on quarter, +279,000 on year to 29.869 million (2) Number of employees up 102,000 on quarter to 25.38 million (3) Self-employed rose 34,000 on quarter to 4.209 million (4) Full-time 21.824 million, up 148,000 on quarter, up 363,000 on year (5) 1.45 million working part-time and self-employed who could not find full-time jobs |
| Earnings Growth Rates Year on Year | (1) Total +0.7% (including bonuses) over year earlier; regular 0.8%; private sector 1.1% on year earlier, public sector fell 0.5% on year earlier (2) Regular private 1.1 % (excluding bonuses); regular public fell 0.1% on year earlier |
| Full-time and Part-time | (1) Number full-time 21.824 million, up 148,000 on quarter (2) Number part-time 8.045 million, up 38,000 on quarter |
| Claimant Count (Jobseeker’s Allowance, JSA) | (1) Latest estimate: 1.351 million; down 41,700 in month, down 214,500 on year earlier (2) Claimant count 4.0%, down 0.1 on month and down 0.6 % points on year |
| Labor Productivity | (1) Output per worker changed 0.5% from IQ2013 to IIQ2013 |
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/october-2013/statistical-bulletin.html
Table VH-2 provides indicators of the labor force survey of the UK for Jun-Aug 2013 and earlier quarters. There has been improvement in UK labor markets with the rate of unemployment decreasing from 7.9 percent in Jun-Aug 2012 to 7.7 percent in Jun-Aug 2013.
Table VH-2, UK, Labor Force Survey Indicators
| LFHP | EMP | PART | UNE | RATE | |
| Jun-Aug 2011 | 40,168 | 29,080 | 70.3 | 2,577 | 8.1 |
| Jun-Aug 2012 | 40,193 | 29,590 | 71.3 | 2,528 | 7.9 |
| Sep-Nov 2012 | 40,209 | 29,700 | 71.5 | 2,493 | 7.7 |
| Dec-Feb 2013 | 40,226 | 29,698 | 71.4 | 2,563 | 7.9 |
| Mar-May 2013 | 40,242 | 29,714 | 71.4 | 2,505 | 7.8 |
| Jun-Aug 2013 | 40,269 | 29,869 | 71.7 | 2,487 | 7.7 |
Notes: LFHP: Labor Force Household Population Ages 16 to 64 in thousands; EMP: Employed Ages 16 and over in thousands; PART: Employment as % of Population Ages 16 to 64; UNE: Unemployed Ages 16 and over in thousands; Rate: Number Unemployed Ages 16 and over as % of Employed plus Unemployed
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/october-2013/statistical-bulletin.html
The volume of retail sales in the UK increased 0.6 percent in Sep 2013 and increased 2.2 percent in the 12 months ending in Sep 2013, as shown in Table VH-3. Percentage changes of retail sales in 12 months had been positive in several months since Sep 2011 with exceptions such as decline of 1.9 percent in Apr 2012, 1.1 percent in Jan 2013 and 0.8 percent in Mar 2013. The quarter ending in Jul 2013 is quite strong with growth of 1.9 percent in May, 0.2 percent in Jun and 1.1 percent in Jul, interrupted by decline of 0.8 percent in Aug 2013 followed by increase of 0.6 percent in Sep 2013.
Table VH-3, UK, Volume of Retail Sales ∆%
| Month ∆% | 12-Month ∆% | |
| Sep 2013 | 0.6 | 2.2 |
| Aug | -0.8 | 2.1 |
| Jul | 1.1 | 2.8 |
| Jun | 0.2 | 1.9 |
| May | 1.9 | 1.9 |
| Apr | -0.6 | 1.0 |
| Mar | -0.6 | -0.8 |
| Feb | 2.2 | 2.1 |
| Jan | -0.8 | -1.1 |
| Dec 2012 | -0.2 | 0.1 |
| Nov | 0.1 | 0.3 |
| Oct | -0.8 | 0.2 |
| Sep | 0.4 | 2.0 |
| Aug | -0.1 | 2.1 |
| Jul | 0.2 | 1.7 |
| Jun | 0.2 | 1.8 |
| May | 1.0 | 1.5 |
| Apr | -2.4 | -1.9 |
| Mar | 2.4 | 2.8 |
| Feb | -1.1 | 0.3 |
| Jan | 0.4 | 0.6 |
| Dec 2011 | 0.0 | 2.4 |
| Nov | 0.0 | 0.2 |
| Oct | 0.9 | 0.5 |
| Sep | -0.4 | 0.1 |
| Aug | 0.2 | -1.3 |
| Jul | 0.2 | -1.0 |
| Jun | 0.0 | -0.9 |
| May | -2.4 | -0.9 |
| Apr | 2.3 | 2.1 |
| Mar | -0.1 | -0.2 |
| Feb | -0.8 | -0.1 |
| Jan | 2.3 | 3.4 |
| Dec 2010 | -2.2 | -2.3 |
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/rsi/retail-sales/september-2013/index.html
Retail sales in the UK struggle with oscillating and relatively high inflation. Table VH-4 provides 12-month percentage changes of the implied deflator of UK retail sales. The implied deflator of all retail sales increased 0.9 percent in the 12 months ending in Sep 2013 while that of sales excluding auto fuel decreased 1.2 percent. The 12-month increase of the implied deflator of auto fuel in Aug 2012 was 1.5 percent. The 12-month increase of the implied deflator of auto fuel sales rose to 17.0 percent in Sep 2011, which is the highest 12-month increase in 2011, but then declined to 0.3 percent in Dec 2012 and minus 0.2 percent in Jan 2013 but decreased 2.2 percent in May 2013, increasing 1.3 percent in Jun 2013 and 2.6 percent in Jul 2013. The percentage change of the implied deflator of sales of food stores at 2.6 percent in Jul 2013 is higher than for total retail sales. Increases in fuel prices at the retail level have occurred throughout most years since 2005 with exception of the decline of 9.5 percent in 2008 when commodity carry trades were reversed in the panic of the financial crisis. UK inflation is particularly sensitive to changes in commodity prices.
Table VH-4, UK, Implied Deflator of Retail Sales, 12-Month Percentage Changes, ∆%
| All Retail | All Retail Ex Auto Fuel | Mostly Food Stores | Mostly Nonfood Stores | Mostly Automotive Fuel Stores | ||
| 2009 | Dec | 3.7 | 2.4 | 2.2 | 1.8 | 17.0 |
| 2010 | Jan | 4.1 | 2.0 | 2.7 | 1.2 | 23.3 |
| Feb | 3.0 | 1.0 | 1.5 | 0.8 | 20.5 | |
| Mar | 3.6 | 1.4 | 2.2 | 0.9 | 22.7 | |
| Apr | 4.0 | 2.0 | 2.9 | 1.3 | 23.3 | |
| May | 3.4 | 1.5 | 2.0 | 1.1 | 20.9 | |
| Jun | 2.6 | 1.3 | 2.1 | 0.8 | 14.7 | |
| Jul | 2.7 | 1.6 | 3.0 | 0.5 | 13.5 | |
| Aug | 2.6 | 1.7 | 3.4 | 0.4 | 11.4 | |
| Sep | 3.1 | 2.6 | 4.3 | 1.2 | 8.3 | |
| Oct | 3.3 | 2.5 | 4.1 | 1.1 | 10.8 | |
| Nov | 3.6 | 3.0 | 4.9 | 1.4 | 9.8 | |
| Dec | 3.7 | 3.2 | 5.2 | 1.4 | 12.4 | |
| 2011 | Jan | 4.4 | 3.3 | 5.4 | 1.4 | 14.5 |
| Feb | 4.9 | 3.8 | 5.6 | 2.2 | 15.1 | |
| Mar | 4.3 | 3.0 | 4.3 | 1.9 | 14.9 | |
| Apr | 4.2 | 3.3 | 4.8 | 1.9 | 12.3 | |
| May | 4.6 | 3.5 | 5.6 | 1.8 | 13.2 | |
| Jun | 4.7 | 3.4 | 6.2 | 1.2 | 14.5 | |
| Jul | 5.1 | 3.9 | 6.0 | 2.2 | 14.5 | |
| Aug | 5.4 | 4.0 | 6.0 | 2.4 | 16.2 | |
| Sep | 5.1 | 3.7 | 6.2 | 1.7 | 17.0 | |
| Oct | 4.7 | 3.5 | 5.1 | 2.3 | 14.8 | |
| Nov | 4.0 | 3.0 | 4.7 | 1.7 | 12.6 | |
| Dec | 3.3 | 2.4 | 4.3 | 1.0 | 9.1 | |
| 2012 | Jan | 2.6 | 2.2 | 3.6 | 1.1 | 5.3 |
| Feb | 2.8 | 2.4 | 4.0 | 0.9 | 5.4 | |
| Mar | 3.0 | 2.7 | 4.5 | 1.1 | 4.9 | |
| Apr | 2.3 | 2.0 | 3.8 | 0.4 | 5.2 | |
| May | 1.4 | 1.5 | 3.1 | 0.2 | 1.2 | |
| Jun | 0.6 | 0.9 | 2.3 | -0.2 | -1.2 | |
| Jul | 0.4 | 0.7 | 2.0 | -0.2 | -1.4 | |
| Aug | 0.5 | 0.6 | 2.1 | -0.8 | 0.4 | |
| Sep | 0.9 | 0.7 | 2.1 | -0.4 | 2.9 | |
| Oct | 1.1 | 1.0 | 2.8 | -0.4 | 2.6 | |
| Nov | 0.7 | 0.7 | 3.1 | -1.0 | 1.3 | |
| Dec | 0.9 | 1.0 | 3.0 | -0.3 | 0.3 | |
| 2013 | Jan | 1.1 | 1.4 | 3.8 | -0.7 | -0.2 |
| Feb | 0.9 | 1.0 | 3.2 | -0.7 | 1.1 | |
| Mar | 0.9 | 1.1 | 3.1 | -0.7 | 0.5 | |
| Apr | 0.6 | 1.1 | 3.4 | -0.7 | -3.0 | |
| May | 1.0 | 1.5 | 3.5 | -0.1 | -2.2 | |
| Jun | 1.7 | 1.7 | 3.4 | 0.5 | 1.3 | |
| Jul | 1.8 | 1.7 | 3.4 | 0.3 | 2.6 | |
| Aug | 1.6 | 1.6 | 3.4 | 0.3 | 1.5 | |
| Sep | 0.9 | 1.3 | 3.4 | -0.2 | -1.2 |
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/rsi/retail-sales/september-2013/index.html
UK monthly retail volume of sales is quite volatile, as shown in Table VH-5. Total volume of sales decreased 0.6 percent in Apr 2013 and increased 1.9 percent in May 2013, 0.2 percent in Jun 2013, 1.1 percent in Jul 2013 but declined 0.9 percent in Aug 2013. Retail sales increased 0.6 percent in Sep 2013. There was decrease of 0.7 percent in retail sales excluding auto fuels in Sep 2013 and decrease of 0.2 percent in food stores, increase of 1.8 percent in nonfood stores and decrease of 0.7 percent in auto fuel stores. Multiple positive and negative variations and changes in magnitudes confirm high volatility.
VH-5, UK, Growth of Retail Sales Volume by Component Groups Month SA ∆%
| All Retail | All Retail Ex Auto Fuel | Mostly Food Stores | Mostly Nonfood Stores | Mostly Automotive Fuel Stores | ||
| 2011 | Jan | 2.3 | 1.4 | 0.7 | 2.1 | 10.4 |
| Feb | -0.8 | -0.9 | -0.4 | -1.5 | -0.3 | |
| Mar | -0.1 | - | 0.5 | -0.1 | -0.8 | |
| Apr | 2.3 | 2.3 | 4.1 | 0.5 | 1.7 | |
| May | -2.4 | -2.6 | -4.6 | -1.0 | -0.3 | |
| Jun | - | -0.1 | -0.2 | -0.5 | 0.3 | |
| Jul | 0.2 | 0.3 | 0.8 | 0.2 | -0.6 | |
| Aug | -0.4 | -0.4 | 0.1 | -1.1 | -0.5 | |
| Sep | 0.5 | 0.4 | 0.1 | 0.6 | 0.9 | |
| Oct | 0.9 | 1.0 | 0.8 | 1.4 | 0.6 | |
| Nov | - | -0.3 | -0.5 | -0.9 | 3.0 | |
| Dec | - | 0.2 | 0.1 | 0.8 | -0.9 | |
| 2012 | Jan | 0.4 | 0.5 | 0.4 | 0.5 | -0.1 |
| Feb | -1.1 | -0.9 | -0.3 | -1.6 | -2.5 | |
| Mar | 2.4 | 1.9 | -0.5 | 4.4 | 5.8 | |
| Apr | -2.4 | -1.1 | 0.3 | -3.0 | -12.6 | |
| May | 1.0 | 0.6 | - | 1.1 | 5.3 | |
| Jun | 0.2 | 0.5 | 0.1 | 1.0 | -2.5 | |
| Jul | 0.2 | - | - | -0.6 | 2.1 | |
| Aug | -0.1 | -0.2 | 0.3 | 0.5 | 0.6 | |
| Sep | 0.4 | 0.3 | -0.1 | -0.4 | 1.6 | |
| Oct | -0.8 | -0.5 | -1.0 | -0.3 | -3.8 | |
| Nov | 0.1 | 0.3 | -0.3 | 0.7 | -1.8 | |
| Dec | -0.2 | -0.5 | - | -1.3 | 3.0 | |
| 2013 | Jan | -0.8 | -0.5 | -0.9 | -0.6 | -3.5 |
| Feb | 2.2 | 2.1 | 0.6 | 3.2 | 2.8 | |
| Mar | -0.6 | -0.6 | 1.9 | -3.4 | - | |
| Apr | -0.6 | -0.7 | -3.6 | 2.3 | -0.2 | |
| May | 1.9 | 2.0 | 2.6 | 1.0 | 1.6 | |
| Jun | 0.2 | 0.2 | 0.2 | 0.3 | 0.2 | |
| Jul | 1.1 | 1.1 | 2.7 | -0.5 | 0.8 | |
| Aug | -0.8 | -0.8 | -2.5 | 0.4 | -0.5 | |
| Sep | 0.6 | 0.7 | -0.2 | 1.8 | -0.7 |
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/rsi/retail-sales/september-2013/index.html
Percentage growth in 12 months of retail sales volume by component groups in the UK is provided in Table VH-6. Total retail sales increased 2.2 percent in the 12 months ending in Sep 2013 with increase of 2.8 percent in sales excluding auto fuel. Sales of food stores decreased 0.6 percent in the 12 months ending in Sep 2013 while sales of nonfood stores increased 3.6 percent and sales of auto fuel stores decreased 2.5 percent.
Table VH-6, UK, Growth of Retail Sales Volume by Component Groups 12-Month ∆%
| All Retail | All Retail Ex Fuel | Mostly Food Stores | Mostly Nonfood Stores | Mostly Automotive Food Stores | ||
| 2010 | Dec | -2.3 | -1.7 | -4.3 | -0.5 | -8.5 |
| 2011 | Jan | 3.4 | 2.9 | -2.5 | 7.0 | 7.6 |
| Feb | -0.1 | -0.6 | -2.5 | -0.4 | 4.7 | |
| Mar | -0.2 | -0.6 | -1.6 | -0.6 | 3.6 | |
| Apr | 2.1 | 1.9 | 2.2 | 0.4 | 3.9 | |
| May | -0.9 | -1.3 | -3.4 | -1.0 | 2.1 | |
| Jun | -0.9 | -1.4 | -4.0 | -1.1 | 3.2 | |
| Jul | -1.0 | -1.4 | -1.2 | -2.8 | 1.9 | |
| Aug | -1.3 | -1.7 | -0.7 | -3.9 | 1.9 | |
| Sep | 0.1 | -0.3 | -0.3 | -1.8 | 3.5 | |
| Oct | 0.5 | 0.3 | 0.4 | -1.1 | 2.5 | |
| Nov | 0.2 | -0.5 | -1.1 | -1.9 | 5.2 | |
| Dec | 2.4 | 1.2 | 1.1 | 0.4 | 13.9 | |
| 2012 | Jan | 0.6 | 0.3 | 0.8 | -1.2 | 3.1 |
| Feb | 0.3 | 0.2 | 0.9 | -1.3 | 0.9 | |
| Mar | 2.8 | 2.2 | -0.1 | 3.2 | 7.6 | |
| Apr | -1.9 | -1.2 | -3.7 | -0.4 | -7.5 | |
| May | 1.5 | 2.0 | 1.0 | 1.7 | -2.3 | |
| Jun | 1.8 | 2.6 | 1.3 | 3.3 | -5.1 | |
| Jul | 1.7 | 2.3 | 0.6 | 2.4 | -2.5 | |
| Aug | 2.1 | 2.5 | 0.8 | 4.1 | -1.4 | |
| Sep | 2.0 | 2.3 | 0.6 | 3.1 | -0.7 | |
| Oct | 0.2 | 0.9 | -1.1 | 1.4 | -5.1 | |
| Nov | 0.3 | 1.5 | -0.9 | 3.0 | -9.5 | |
| Dec | 0.1 | 0.9 | -0.9 | 0.9 | -6.0 | |
| 2013 | Jan | -1.1 | -0.1 | -2.2 | -0.2 | -9.3 |
| Feb | 2.1 | 2.9 | -1.3 | 4.6 | -4.4 | |
| Mar | -0.8 | 0.3 | 1.1 | -3.2 | -9.7 | |
| Apr | 1.0 | 0.7 | -2.9 | 2.2 | 3.1 | |
| May | 1.9 | 2.2 | -0.3 | 2.1 | -0.5 | |
| Jun | 1.9 | 1.8 | -0.3 | 1.4 | 2.3 | |
| Jul | 2.8 | 3.0 | 2.4 | 1.5 | 0.9 | |
| Aug | 2.1 | 2.3 | -0.5 | 1.4 | -0.2 | |
| Sep | 2.2 | 2.8 | -0.6 | 3.6 | -2.5 |
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/rsi/retail-sales/september-2013/index.html
Table VH-7 provides the analysis of the UK Office for National Statistics of contributions to 12-month percentage changes of value and volume of retail sales in the UK. The volume of retail sales seasonally adjusted increased 2.2 percent in the 12 months ending in Sep 2013. Sales of predominantly food stores with weight of 41.5 percent decreased 0.6 percent in the 12 months ending in Sep 2013, deducting 0.2 percentage points. Mostly nonfood stores with weight of 41.3 percent increased 1.5 percent with contribution of 1.5 percentage points. Positive contribution to 12-month percentage changes of volume was made by non-store retailing with weight of 5.7 percent, growth of 19.9 percent and positive contribution of 1.1 percentage points. Automotive fuel with weight of 11.5 percent and growth of minus 2.5 percent deducted 0.2 percentage points. The value of retail sales increased 3.2 percent in the 12 months ending in Sep 2013. There were positive contributions: 1.4 percentage points for predominantly nonfood stores and 1.1 percentage points for non-store retailing. Automotive fuel stores deducted 0.4 percentage points while food stores added 1.1 percentage points.
Table VH-7, UK, Volume and Value of Retail Sales 12-month ∆% and Percentage Points Contributions by Sectors
| Sep 2013 | Weight | Volume SA | PP Cont. | Value SA | PP Cont. |
| All Retailing | 100.0 | 2.2 | 3.2 | ||
| Mostly | 41.5 | -0.6 | -0.2 | 2.7 | 1.1 |
| Mostly Nonfood Stores | 41.3 | 3.6 | 1.5 | 3.4 | 1.4 |
| Non-store Retailing | 5.7 | 19.9 | 1.1 | 19.1 | 1.1 |
| Automotive Fuel | 11.5 | -2.5 | -0.2 | -3.7 | -0.4 |
Cont.: Contribution
Source: UK Office for National Statistics
http://www.ons.gov.uk/ons/rel/rsi/retail-sales/september-2013/index.html
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013
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