CMP Associates Regulation Blog

http://www.istat.it/it/archivio/102533

Monthly and 12-month inflation of the producer price index of Italy and individual components is in Table IV-8. Energy prices decreased 0.1 percent in Sep 2013 and fell 6.7 percent in 12 months. Producer-price inflation is 0.1 percent for consumer goods and 0.3 percent for nondurable goods. There is higher inflation in 12 months of 1.1 percent for nondurable goods than 0.1 percent for durable goods.

Table IV-8, Italy, Industrial Prices, Internal Market, ∆%

	Sep 2013/ Aug 2013	Sep 2013/ Sep 2012
Total	0.0	-2.2
Consumer Goods	0.1	0.9
Durable Goods	0.3	0.1
Nondurable	0.0	1.1
Capital Goods	-0.1	0.3
Intermediate	-0.1	-1.0
Energy	-0.1	-6.7
Total Excluding Energy	-0.1	-0.2

Source: Istituto Nazionale di Statistica

The first wave of commodity price increases in the first four months of Jan-Apr 2011 also influenced the surge of consumer price inflation in Italy shown in Table IV-9. Annual equivalent inflation in the first four months of 2011 from Jan to Apr was 4.9 percent. The crisis of confidence or risk aversion resulted in reversal of carry trades on commodity positions. Consumer price inflation in Italy was subdued in the second wave in Jun and May 2011 at 0.1 percent for annual equivalent 1.2 percent. In the third wave in Jul-Sep 2011, annual equivalent inflation increased to 2.4 percent. In the fourth wave, annual equivalent inflation in Oct-Nov 2011 jumped again at 3.0 percent. Inflation returned in the fifth wave from Dec 2011 to Jan 2012 at annual equivalent 4.3 percent. In the sixth wave, annual equivalent inflation rose to 5.7 percent in Feb-Apr 2012. In the seventh wave, annual equivalent inflation was 1.2 percent in May-Jun 2012. In the eighth wave, annual equivalent inflation increased to 3.0 percent in Jul-Aug 2012. In the ninth wave, inflation collapsed to zero in Sep-Oct 2012 and was minus 0.8 percent in annual equivalent in Sep-Nov 2012. In the tenth wave, annual equivalent inflation in Dec 2012 to Aug 2013 was 2.0 percent. In the twelfth wave, annual equivalent inflation was minus 3.5 percent in Sep-Oct 2013 during reallocations of investment portfolios away from commodity futures. There are worldwide shocks to economies by intermittent waves of inflation originating in combination of zero interest rates and quantitative easing with alternation of risk appetite and risk aversion (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic_20.html).

Table IV-9, Italy, Consumer Price Index

	Month	12 Months
Oct 2013	-0.3	0.7
Sep	-0.3	0.9
AE ∆% Sep	-3.5
Aug	0.4	1.2
Jul	0.1	1.2
Jun	0.3	1.2
May	0.0	1.1
Apr	0.0	1.1
Mar	0.2	1.6
Feb	0.1	1.9
Jan	0.2	2.2
Dec 2012	0.2	2.3
AE ∆% Dec 2012-Aug 2013	2.0
Nov	-0.2	2.5
Oct	0.0	2.6
Sep	0.0	3.2
AE ∆% Sep-Nov	-0.8
Aug	0.4	3.2
Jul	0.1	3.1
AE ∆% Jul-Aug	3.0
June	0.2	3.3
May	0.0	3.2
AE ∆% May-Jun	1.2
Apr	0.5	3.3
Mar	0.5	3.3
Feb	0.4	3.3
AE ∆% Feb-Apr	5.7
Jan	0.3	3.2
Dec 2011	0.4	3.3
AE ∆% Dec-Jan	4.3
Nov	-0.1	3.3
Oct	0.6	3.4
AE ∆% Oct-Nov	3.0
Sep	0.0	3.0
Aug	0.3	2.8
Jul	0.3	2.7
AE ∆% Jul-Sep	2.4
Jun	0.1	2.7
May	0.1	2.6
AE ∆% May-Jun	1.2
Apr	0.5	2.6
Mar	0.4	2.5
Feb	0.3	2.4
Jan	0.4	2.1
AE ∆% Jan-Apr	4.9
Dec 2010	0.4	1.9
Annual
2012		3.0
2011		2.8
2010		1.5
2009		0.8
2008		3.3
2007		1.8
2006		2.1

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/102496

Consumer price inflation in Italy by segments in the estimate by ISTAT for Oct 2013 is provided in Table IV-10. Total consumer price inflation in Oct 2013 was minus 0.3 percent and 0.7 percent in 12 months. Inflation of goods was minus 0.1 percent in Oct 2013 and 0.1 percent in 12 months. Prices of durable goods changed 0.0 percent in Oct and decreased 0.7 percent in 12 months, as typical in most countries. Prices of energy decreased 1.3 percent in Oct and decreased 3.6 percent in 12 months. Food prices decreased 0.2 percent in Oct and increased 1.5 percent in 12 months. Prices of services decreased 0.3 percent in Oct and rose 1.3 percent in 12 months. Transport prices, also influenced by commodity prices, decreased 0.4 percent in Oct and increased 2.8 percent in 12 months. Carry trades from zero interest rates to positions in commodity futures cause increases in commodity prices. Waves of inflation originate in periods when there is no risk aversion and commodity prices decline during periods of risk aversion and portfolio reallocations (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic_20.html).

Table IV-10, Italy, Consumer Price Index and Segments, Month and 12-Month ∆%

Oct 2013	Weights	Month ∆%	12-Month ∆%
General Index	1,000,000	-0.3	0.7
I Goods	559,402	-0.1	0.1
Food	168,499	-0.2	1.5
Energy	94,758	-1.3	-3.6
Durable	89,934	0.0	-0.7
Nondurable	71,031	0.3	1.9
II Services	440,598	-0.3	1.3
Housing	71,158	0.2	2.2
Communications	20,227	-4.4	-8.2
Transport	81,266	-0.4	2.8

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/102496

Chart IV-4 of the Istituto Nazionale di Statistica shows moderation in 12-month percentage changes of the consumer price index of Italy with marginal increase followed by decline to 2.5 percent in Nov 2012, 2.3 percent in Dec 2012, 2.2 percent in Jan 2013, 1.9 percent in Feb 2013 and 1.6 percent in Mar 2013. Consumer prices increased 1.1 percent in the 12 months ending in Apr-May 2013 and 1.2 percent in Jun-Jul 2013. In Aug 2013, consumer prices increased 1.2 percent in 12 months. Consumer prices increased 0.9 percent in the 12 months ending in Sep 2013 and 0.7 percent in the 12 months ending in Oct 2013.

Chart, IV-4, Italy, Consumer Price Index, 12-Month Percentage Changes

Source: Istituto Nazionale di Statistica

http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

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 ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
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 2.2 percent in IIQ2012, which annualizes to 9.1 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 1.5 percent, which annualizes at 6.1 percent and 7.7 percent relative to a year earlier. In IIQ2013, China grew at 1.9 percent, which annualizes at 7.8 percent and 7.5 percent relative to a year earlier. China grew at 2.2 percent in IIIQ2013, which annualizes at 9.1 percent and 7.8 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. In IIIQ2013, UK GDP increased 0.8 percent and 1.5 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	1.4	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 SAAR: -1.2	3.8
China	2.2	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 SAAR: 2.8	3.1
Japan	QOQ: –0.9 SAAR: –3.5	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 SAAR: 0.1	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 SAAR: 1.1	1.3
Japan	QOQ: 1.0 SAAR: 4.1	0.3
China	1.5	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	1.9	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
	IIIQ2013/IIQ2013	III/Q2013/ IIIQ2012
China	2.2	7.8
UK	0.8	1.5

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/2013/09/duration-dumping-and-peaking-valuations_8763.html http://cmpass ocregulationblog.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 Sep 2013, Japan’s exports grew 11.5 percent in 12 months while imports increased 16.5 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 increased 0.6 percent in September following a gain of 0.4 percent in August. For the third quarter as a whole, industrial production rose at an annual rate of 2.3 percent. Manufacturing output edged up 0.1 percent in September following a gain of 0.5 percent in August, and increased at an annual rate of 1.2 percent for the third quarter. Production at mines moved up 0.2 percent in September and advanced at an annual rate of 12.9 percent for the third quarter. The output of utilities rose 4.4 percent in September following declines in each of the previous five months. The level of the index for total industrial production in September was equal to its 2007 average and was 3.2 percent above its year-earlier level.“

In the six months ending in Sep 2013, United States national industrial production accumulated increase of 0.9 percent at the annual equivalent rate of 1.8 percent, which is much lower than growth of 3.2 percent in the 12 months ending in Sep 2013. Excluding growth of 0.6 percent in Sep 2013, growth in the remaining five months from Apr 2012 to Aug 2013 accumulated to 0.3 percent or 0.6 percent annual equivalent. Industrial production stagnated in one of the past six months and fell in two. Business equipment accumulated growth of 1.3 percent in the six months from Apr to Sep 2013 at the annual equivalent rate of 2.6 percent, which is much lower than growth of 3.7 percent in the 12 months ending in Aug 2013. Growth of business equipment accumulated 0.1 percent from Apr to Aug 2013 at the annual equivalent rate of minus 0.2 percent. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for total industry moved up 0.4 percentage point to 78.3 percent, a rate 1.9 percentage points below its long-run (1972-2012) average.” United States industry is apparently decelerating.

Manufacturing increased 0.1 percent in Sep 2013 after increasing 0.5 percent in Aug 2013 and decreasing 0.4 percent in Jul 2013 seasonally adjusted, increasing 2.4 percent not seasonally adjusted in 12 months ending in Sep 2013, as shown in Table II-2. Manufacturing grew cumulatively 0.6 percent in the six months ending in Sep 2013 or at the annual equivalent rate of 1.2 percent. Excluding the increase of 0.5 percent in Aug 2013, manufacturing accumulated growth of 0.1 percent from Apr 2013 to Aug 2013 or at the annual equivalent rate of 0.2 percent. Table II-2 provides a longer perspective of manufacturing in the US. There has been evident deceleration of manufacturing growth in the US from 2010 and the first three months of 2011 into more recent months as shown by 12 months rates of growth. Growth rates appeared to be increasing again closer to 5 percent in Apr-Jun 2012 but deteriorated. The rates of decline of manufacturing in 2009 are quite high with a drop of 18.2 percent in the 12 months ending in Apr 2009. Manufacturing recovered from this decline and led the recovery from the recession. Rates of growth appeared to be returning to the levels at 3 percent or higher in the annual rates before the recession but the pace of manufacturing fell steadily in the past six months with some weakness at the margin. Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased 16.8 percent from the trough in Apr 2009 to Dec 2012. Manufacturing grew 21.5 percent from the trough in Apr 2009 to Sep 2013. Manufacturing output in Sep 2013 is 5.1 percent below the peak in Jun 2007.

Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	-0.6 Jul	1.6 Jan-Jul	1.6 Jul	-1.4 Jan-Jul
Japan		Sep 2013 11.5 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		Sep 2013 16.5 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 geographical breakdown of exports and imports of Japan with selected regions and countries is provided in Table V-5 for Sep 2013. The share of Asia in Japan’s trade is more than one-half for 53.3 percent of exports and 45.7 percent of imports. Within Asia, exports to China are 17.8 percent of total exports and imports from China 24.4 percent of total imports. While exports to China increased 11.4 percent in the 12 months ending in Sep 2013, imports from China increased 30.9 percent. The largest export market for Japan in Sep 2013 is the US with share of 18.6 percent of total exports, which is almost equal to that of China, and share of imports from the US of 8.3 percent in total imports. Western Europe has share of 10.9 percent in Japan’s exports and of 10.4 percent in imports. Rates of growth of exports of Japan in Sep 2013 are relatively high for several countries and regions with growth of 18.8 percent for exports to the US, 12.7 percent for exports to Mexico, 17.5 percent for exports to Brazil and 22.7 percent for exports to Australia. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Sep 2013 are positive for all trading partners. Imports from Asia increased 21.7 percent in the 12 months ending in Sep 2013 while imports from China increased 30.9 percent. Data are in millions of yen, which may have effects of recent depreciation of the yen relative to the United States dollar (USD).

Table V-5, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen

Sep 2013	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	5,972,129	11.5	6,904,278	16.5
Asia	3,183,116	8.2	3,157,135	21.7
China	1,062,421	11.4	1,682,383	30.9
USA	1,109,374	18.8	576,257	13.8
Canada	68,143	3.9	88,208	14.6
Brazil	49,002	17.5	81,227	4.9
Mexico	82,218	12.7	33,372	18.0
Western Europe	650,039	11.1	719,934	25.3
Germany	172,124	19.5	214,574	38.7
France	55,054	25.5	106,984	34.6
UK	91,845	-9.9	56,436	29.5
Middle East	219,353	21.2	1,259,004	1.3
Australia	148,527	22.7	423,281	9.4

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

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’ Index^TM (PMI^™) increased from 49.9 in Sep to 50.2 in Sep for the first reading above 50 in four months but with only marginal improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/b34553b098084f75b4bed09bebe6887c). Andre Loes, Chief Economist, Brazil at HSBC, finds acceleration of output with unchanged orders and the highest rate of output inflation in the history of the survey while input costs increased at the fastest rate since Oct 2008 (http://www.markiteconomics.com/Survey/PressRelease.mvc/b34553b098084f75b4bed09bebe6887c).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 51.1 in Oct from 52.8 in Sep, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/b09c5d2286464631a1b040b8d7370dfc). New export orders registered 50.7 in Oct up from 49.0 in Aug, indicating marginal expansion. Chris Williamson, Chief Economist at Markit, finds that manufacturing output declined for the first time since Sep 2009 (http://www.markiteconomics.com/Survey/PressRelease.mvc/b09c5d2286464631a1b040b8d7370dfc). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) decreased to 51.8 in Oct from 52.8 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/ef50b354e0ca4801b08e53072919d1c2). The index of new exports orders increased from 49.0 in Sep to 51.3 in Oct while total new orders decreased from 53.2 in Sep to 52.7 in Oct. Chris Williamson, Chief Economist at Markit, finds that the index suggests standstill of manufacturing in the US with uncertainty in the overall economy and job creation (http://www.markiteconomics.com/Survey/PressRelease.mvc/ef50b354e0ca4801b08e53072919d1c2). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 0.2 percentage points from 56.2 in Sep to 56.4 in Oct, which indicates growth at a higher rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 0.1 percentage points from 60.5 in Sep to 60.6 in Oct. The index of exports increased 5.0 percentage point from 52.0 in Sep to 57.0 in Oct, growing at a faster 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	Sep 12 months NSA ∆%: 1.2; ex food and energy ∆%: 1.7 Sep month SA ∆%: 0.2; ex food and energy ∆%: 0.1 Blog 11/3/13
Producer Price Index	Sep 12-month NSA ∆%: 0.3; ex food and energy ∆% 1.1 Sep month SA ∆% = 0.3; ex food and energy ∆%: 0.1 Blog 11/3/13
PCE Inflation	Aug 12-month NSA ∆%: headline 1.2; ex food and energy ∆% 1.2 Blog 9/29/13
Employment Situation	Household Survey: Sep Unemployment Rate SA 7.2% Blog calculation People in Job Stress Sep: 28.1 million NSA, 17.3% of Labor Force Establishment Survey: Nov Nonfarm Jobs +148,000; Private +126,000 jobs created Aug 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.7 Blog 10/27/13
Nonfarm Hiring	Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million Private-Sector Hiring Aug 2013 4.482 million lower by 0.905 million than 5387 million in Aug 2005 Blog 10/27/13
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 3.3 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 Blog 9/29/13
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 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Aug NSA ∆%: RDPI: 1.6; RPCE ∆%: 2.0 Blog 9/29/13
Quarterly Services Report	IIQ13/IIQ12 SA ∆%: Information 4.1 Financial & Insurance 4.2 Blog 9/8/13
Employment Cost Index	Compensation Private IIQ2013 SA ∆%: 0.5 Jun 13 months ∆%: 1.9 Blog 8/11/13
Industrial Production	Sep month SA ∆%: 0.6 Sep 12 months SA ∆%: 3.2 Manufacturing Sep SA ∆% 0.1 Sep 12 months SA ∆% 2.6, NSA 2.4 Capacity Utilization: 78.3 Blog 11/3/13
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 New Orders: From Sep 2.35 to Oct 7.75 Blog 10/20/13
Philadelphia Fed Business Outlook Index	General Index from Sep 22.3 to Oct 19.8 New Orders from Sep 21.2 to Oct 27.5 Blog 10/20/13
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 Blog 9/8/13
Durable Goods	Sep New Orders SA ∆%: 3.7; ex transport ∆%: -0.1 Jan-Sep 13/Jan-Sep 12 New Orders NSA ∆%: 4.6; ex transport ∆% 3.2 Blog 10/27/13
Sales of New Motor Vehicles	Jan-Oct 2013 12,994,572; Jan-Oct 2012 11,992,071. Oct 13 SAAR 15.23 million, Sep 13 SAAR 16.28 million, Oct 2012 SAAR 14.40 million Blog 11/3/13
Sales of Merchant Wholesalers	Jan-Aug 2013/Jan-Aug 2012 NSA ∆%: Total 3.2; Durable Goods: 3.1; Nondurable Goods: 3.2 Blog 10/27/13
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Aug 13/Jul 12-M NSA ∆%: Sales Total Business 2.9; Manufacturers 1.5 Retailers 4.7; Merchant Wholesalers 3.0 Blog 11/3/13
Sales for Retail and Food Services	Jan-Sep 2013/Jan-Sep 2012 ∆%: Retail and Food Services 4.2; Retail ∆% 4.3 Blog 11/3/13
Value of Construction Put in Place	Aug SAAR month SA ∆%: 0.6 Aug 12-month NSA: 6.5 Jan-Aug 2013 ∆% 5.9 Blog 10/27/13
Case-Shiller Home Prices	Aug 2013/Aug 2012 ∆% NSA: 10 Cities 12.8; 20 Cities: 12.8 ∆% Aug SA: 1.9 Cities 0.9 ; 20 Cities: 0.9 Blog 11/3/13
FHFA House Price Index Purchases Only	Aug SA ∆% 0.3; 12 month NSA ∆%: 8.5 Blog 10/27/13
New House Sales	Aug 2013 month SAAR ∆%: 7.9 Jan-Aug 2013/Jan-Aug 2012 NSA ∆%: 20.4 Blog 9/29/13
Housing Starts and Permits	Aug Starts month SA ∆%: 0.9 ; Permits ∆%: -3.8 Jan-Aug 2013/Jan-Aug 2012 NSA ∆% Starts 22.6; Permits ∆% 21.2 Blog 9/22/13
Trade Balance	Balance Aug SA -$38,803 million versus Jul -$39,642 million Exports Aug SA ∆%: -0.1 Imports Aug SA ∆%: 0.0 Goods Exports Jan-Aug 2013/2012 NSA ∆%: 1.8 Goods Imports Jan-Aug 2013/2012 NSA ∆%: -1.3 Blog 10/27/13
Export and Import Prices	Sep 12-month NSA ∆%: Imports -1.0; Exports -1.6 Blog 10/27/13
Consumer Credit	Aug ∆% annual rate: Total 4.4; Revolving minus 1.2; Nonrevolving 8.0 Blog 10/13/13
Net Foreign Purchases of Long-term Treasury Securities	Aug Net Foreign Purchases of Long-term US Securities: -$8.9 billion Major Holders of Treasury Securities: China $1268 billion; Japan $1149 billion; Total Foreign US Treasury Holdings Jul $5589 billion Blog 10/27/13
Treasury Budget	Fiscal Year 2013/2012 ∆% Sep: Receipts 13.3; Outlays minus 2.4; Individual Income Taxes 16.3 Deficit Fiscal Year 2011 $1,296 billion Deficit Fiscal Year 2012 $1,087 billion Blog 11/3/2013
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	Sep 2013 SAAR ∆%: Securities -8.7 Loans 1.2 Cash Assets 59.9 Deposits 8.0 Blog 11/3/13
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:

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

10/20/13 http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html

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

9/22/13 http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.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

Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan-Oct 2013, light vehicle sales accumulated to 12,994,572, which is higher by 8.4 percent relative to 11,992,071 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 15.23 million in Oct 2013, slightly lower than 15.28 million in Sep 2013 and higher than 14.40 million in Oct 2012 (http://motorintelligence.com/m_frameset.html).

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

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

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

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

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

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g17/Current/default.htm

Sales of manufacturers increased 0.2 percent in Aug 2013 after increasing 0.6 percent in Jul and increased 2.9 percent in the 12 months ending in Aug, as shown in Table VA-2. Retailers’ sales increased 0.2 percent in Aug after increasing 0.4 percent in Jul and increased 4.7 percent in 12 months ending in Aug 2013. Sales of merchant wholesalers increased 0.6 percent in Aug, changed 0.0 percent in Jul and increased 3.0 percent in 12 months ending in Aug. These data are not adjusted for price changes such that they reflect increases in both quantities and prices.

Table VA-2, US, Percentage Changes for Sales of Manufacturers, Retailers and Merchant Wholesalers

	Aug 13/ Jul 13 ∆% SA	Aug 2013 Millions of Dollars NSA	Jul 13/ Jun 13 ∆% SA	Aug 13/ Aug 12 ∆% NSA
Total Business	0.3	1,335,825	0.6	2.9
.Manufacturers	0.2	504,860	1.1	1.5
Retailers	0.2	394,671	0.4	4.7
Merchant Wholesalers	0.6	436,294	0.0	3.0

Source: US Census Bureau http://www.census.gov/mtis/

Chart VA-2 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers seasonally adjusted (SA) in millions of dollars. Seasonal adjustment softens adjacent changes for purposes of comparing short-term variations free of seasonal factors. There was sharp drop in the global recession followed by sharp recovery with decline and recovery in the final segment above the peak before the global recession. Data are not adjusted for price changes.

Chart VA-2, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Aug 2013

US Census Bureau

Chart VA-3 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers not seasonally adjusted (NSA) in millions of dollars. The series without adjustment shows sharp jagged behavior because of monthly fluctuations following seasonal patterns. There is sharp recovery from the global recession in a robust trend, which is mixture of price and quantity effects because data are not adjusted for price changes. There is stability in the final segment with monthly marginal strength.

Chart VA-3 US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Aug 2013

US Census Bureau

Businesses added cautiously to inventories to replenish stocks. Retailers added 0.3 percent to inventories in Aug and 0.8 percent in Jul 2013 with growth of 4.9 percent in 12 months, as shown in Table VA-3. Total business increased inventories by 0.3 percent in Aug, 0.4 percent in Jul and 3.3 percent in 12 months. Inventories sales/ratios of total business continued at a level close to 1.29 under careful management to avoid costs and risks. Inventory/sales ratios of manufacturers and retailers are higher than for merchant wholesalers. There is stability in inventory/sales ratios in individual months and relative to a year earlier.

Table VA-3, US, Percentage Changes for Inventories of Manufacturers, Retailers and Merchant Wholesalers and Inventory/Sales Ratios

Inventory Change	Aug 13 Millions of Dollars NSA	Aug 13/ Jul 13 ∆% SA	Jul 13/ Jun 13 ∆% SA	Aug 13/ Aug 12 ∆% NSA
Total Business	1,654,029	0.3	0.4	3.3
Manufacturers	635,404	0.2	0.3	2.0
Retailers	522,874	0.3	0.8	4.9
Merchant Wholesalers	495,751	0.5	0.2	3.1
Inventory/ Sales Ratio NSA	Aug 13 Billions of Dollars NSA	Aug 2013 SA	Jul 2013 SA	Aug 2012 SA
Total Business	1,654,029	1.29	1.29	1.30
Manufacturers	635,404	1.29	1.29	1.30
Retailers	522,874	1.40	1.40	1.40
Merchant Wholesalers	495,751	1.17	1.17	1.21

Source: US Census Bureau http://www.census.gov/mtis/

Chart VA-3 of the US Census Bureau provides total business inventories of manufacturers, retailers and merchant wholesalers seasonally adjusted (SA) in millions of dollars from Jan 1992 to Aug 2013. The impact of the two recessions of 2001 and IVQ2007 to IIQ2009 is evident in the form of sharp reductions in inventories. Inventories have surpassed the peak before the global recession. Data are not adjusted for price changes.

Chart VA-4, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Aug 2013

US Census Bureau

Chart VA-5 provides total business inventories of manufacturers, retailers and merchant wholesalers not seasonally adjusted (NSA) from Jan 1992 to Aug 2013 in millions of dollars. The recessions of 2001 and IVQ2007 to IIQ2009 are evident in the form of sharp reductions of inventories. There is sharp upward trend of inventory accumulation after both recessions. Total business inventories are higher than in the peak before the global recession.

Chart VA-5, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Aug 2013

US Census Bureau

http://www2.census.gov/retail/releases/historical/mtis/img/mtisbrf.gif

Inventories follow business cycles. When recession hits sales inventories pile up, declining with expansion of the economy. In a fascinating classic opus, Lloyd Meltzer (1941, 129) concludes:

“The dynamic sequences (I) through (6) were intended to show what types of behavior are possible for a system containing a sales output lag. The following conclusions seem to be the most important:

(i) An economy in which business men attempt to recoup inventory losses will always undergo cyclical fluctuations when equilibrium is disturbed, provided the economy is stable.

This is the pure inventory cycle.

(2) The assumption of stability imposes severe limitations upon the possible size of the marginal propensity to consume, particularly if the coefficient of expectation is positive.

(3) The inventory accelerator is a more powerful de-stabilizer than the ordinary acceleration principle. The difference in stability conditions is due to the fact that the former allows for replacement demand whereas the usual analytical formulation of the latter does not. Thus, for inventories, replacement demand acts as a de-stabilizer. Whether it does so for all types of capital goods is a moot question, but I believe cases may occur in which it does not.

(4) Investment for inventory purposes cannot alter the equilibrium of income, which depends only upon the propensity to consume and the amount of non-induced investment.

(5) The apparent instability of a system containing both an accelerator and a coefficient of expectation makes further investigation of possible stabilizers highly desirable.”

Chart VA-6 shows the increase in the inventory/sales ratios during the recession of 2007-2009. The inventory/sales ratio fell during the expansions. The inventory/sales ratio declined to a trough in 2011, climbed and then stabilized at current levels in 2012 and beginning of 2013.

Chart VA-6, Total Business Inventories/Sales Ratios 2002 to 2013

Source: US Census Bureau

Sales of retail and food services decreased 0.1 percent in Sep 2013 after increasing 0.2 percent in Aug 2013 seasonally adjusted (SA), growing 4.2 percent in Jan-Sep 2013 relative to Jan-Sep 2012 not seasonally adjusted (NSA), as shown in Table VA-4. Excluding motor vehicles and parts, retail sales increased 0.4 percent in Sep 2013, increasing 0.1 percent in Aug 2013 SA and increasing 3.2 percent NSA in Jan-Sep 2013 relative to a year earlier. Sales of motor vehicles and parts decreased 2.2 percent in Sep 2013 after increasing 0.7 percent in Aug 2013 SA and increasing 8.6 percent NSA in Jan-Sep 2013 relative to a year earlier. Gasoline station sales changed 0.0 percent SA in Sep 2013 after decreasing 0.3 percent in Aug 2013 in oscillating prices of gasoline that are moderating, decreasing 0.1 percent in Jan-Sep 2013 relative to a year earlier.

Table VA-4, US, Percentage Change in Monthly Sales for Retail and Food Services, ∆%

	Sep/ Aug ∆% SA	Aug/Jul ∆% SA	Jan-Sep 2013 Million Dollars NSA	Jan-Sep 2013 from Jan-Aug 2012 ∆% NSA
Retail and Food Services	-0.1	0.2	3,743,296	4.2
Excluding Motor Vehicles and Parts	0.4	0.1	3,018,201	3.2
Motor Vehicles & Parts Dealers	-2.2	0.7	725,095	8.6
Retail	-0.2	0.2	3,329,961	4.3
Building Materials	0.1	-0.3	236,989	6.8
Food and Beverage	0.9	-0.1	481,578	2.8
Grocery	1.0	-0.2	431,026	2.3
Health & Personal Care Stores	0.4	0.1	209,403	1.3
Clothing & Clothing Accessories Stores	-0.5	-0.2	174,686	3.5
Gasoline Stations	0.0	-0.3	415,109	-0.1
General Merchandise Stores	0.4	-0.2	469,649	0.4
Food Services & Drinking Places	0.9	0.5	413,335	3.8

Source: US Census Bureau

http://www.census.gov/retail/

Chart VA-7 of the US Bureau of the Census shows percentage change of retail and food services sales. Auto sales have been increasing monthly, and particularly relative to a year earlier, but with weakness in the total excluding auto sales and declines or mild growth in general merchandise.

Chart VA-7, US, Percentage Change of Retail and Food Services Sales

Source: US Census Bureau

http://www2.census.gov/retail/releases/historical/marts/img/martsbrf.gif

Chart VA-8 of the US Census Bureau provides total sales of retail trade and food services seasonally adjusted (SA) from Jan 1992 to Sep 2013 in millions of dollars. The impact on sales of the shallow recession of 2001 was much milder than the sharp contraction in the global recession from IVQ2007 to IIQ2009. There is flattening in the final segment of the series followed by another increase. Data are not adjusted for price changes.

Chart VA-8, US, Total Sales of Retail Trade and Food Services, SA, Jan 1992-Sep 2013, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/retail/

Chart VA-9 of the US Census Bureau provides total sales of retail trade and food services not seasonally adjusted (NSA) in millions of dollars from Jan 1992 to Sep 2013. Data are not adjusted for seasonality, which explains sharp jagged behavior, or price changes. There was contraction during the global recession from IVQ2007 to IIQ2009 with strong rebound to a higher level and stability followed by strong increase in the final segment.

Chart VA-9, US, Total Sales of Retail Trade and Food Services, NSA, Jan 1992-Sep 2013, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/retail/

Table VA-5 shows the euphoria of prices during the housing boom and the subsequent decline. House prices rose 94.5 percent in the 10-city composite of the Case-Shiller home price index and 79.5 percent in the 20-city composite between Aug 2000 and Aug 2005. Prices rose around 100 percent from Aug 2000 to Aug 2006, increasing 104.9 percent for the 10-city composite and 89.8 percent for the 20-city composite. House prices rose 39.4 percent between Aug 2003 and Aug 2005 for the 10-city composite and 34.9 percent for the 20-city composite propelled by low fed funds rates of 1.0 percent between Jun 2003 and Jun 2004. Fed funds rates increased by 0.25 basis points at every meeting of the Federal Open Market Committee (FOMC) until Jun 2006, reaching 5.25 percent. Simultaneously, the suspension of auctions of the 30-year Treasury bond caused decline of yields of mortgage-backed securities with intended decrease in mortgage rates. Similarly, between Aug 2003 and Aug 2006, the 10-city index gained 46.8 percent and the 20-city index increased 42.6 percent. House prices have fallen from Aug 2006 to Aug 2013 by 20.7 percent for the 10-city composite and 20.2 percent for the 20-city composite. Measuring house prices is quite difficult because of the lack of homogeneity that is typical of standardized commodities. In the 12 months ending in Aug 2013, house prices increased 12.8 percent in the 10-city composite and increased 12.8 percent in the 20-city composite. Table VA-5 also shows that house prices increased 62.4 percent between Aug 2000 and Aug 2013 for the 10-city composite and increased 51.4 percent for the 20-city composite. House prices are close to the lowest level since peaks during the boom before the financial crisis and global recession. The 10-city composite fell 21.0 percent from the peak in Jun 2006 to Jul 2013 and the 20-city composite fell 20.3 percent from the peak in Jul 2006 to Aug 2013. The final part of Table IIA2-5 provides average annual percentage rates of growth of the house price indexes of Standard & Poor’s Case-Shiller. The average annual growth rate between Dec 1987 and Dec 2012 for the 10-city composite was 3.3 percent. Data for the 20-city composite are available only beginning in Jan 2000. House prices accelerated in the 1990s with the average rate of the 10-city composite of 5.0 percent between Dec 1992 and Dec 2000 while the average rate for the period Dec 1987 to Dec 2000 was 3.8 percent. Although the global recession affecting the US between IVQ2007 (Dec) and IIQ2009 (Jun) caused decline of house prices of slightly above 30 percent, the average annual growth rate of the 10-city composite between Dec 2000 and Dec 2012 was 2.8 percent while the rate of the 20-city composite was 2.3 percent.

Table VA-5, US, Percentage Changes of Standard & Poor’s Case-Shiller Home Price Indices, Not Seasonally Adjusted, ∆%

	10-City Composite	20-City Composite
∆% Aug 2000 to Aug 2003	39.6	33.1
∆% Aug 2000 to Aug 2005	94.5	79.5
∆% Aug 2003 to Aug 2005	39.4	34.9
∆% Aug 2000 to Aug 2006	104.9	89.8
∆% Aug 2003 to Aug 2006	46.8	42.6
∆% Aug 2005 to Aug 2013	-16.5	-15.6
∆% Aug 2006 to Aug 2013	-20.7	-20.2
∆% Aug 2009 to Aug 2013	13.1	12.6
∆% Aug 2010 to Aug 2013	10.3	10.8
∆% Aug 2011 to Aug 2013	14.2	15.1
∆% Aug 2012 to Aug 2013	12.8	12.8
∆% Aug 2000 to Aug 2013	62.4	51.4
∆% Peak Jun 2006 Aug 2013	-21.0
∆% Peak Jul 2006 Aug 2013		-20.3
Average ∆% Dec 1987-Dec 2012	3.3	NA
Average ∆% Dec 1987-Dec 2000	3.8	NA
Average ∆% Dec 1992-Dec 2000	5.0	NA
Average ∆% Dec 2000-Dec 2012	2.8	2.3

Source: http://us.spindices.com/index-family/real-estate/sp-case-shiller

Monthly house prices increased sharply from Feb to Aug 2013 for both the 10- and 20-city composites. In Aug 2013, the seasonally adjusted 10-city composite increased 0.9 percent and the 20-city 0.9 percent while the 10-city not seasonally adjusted increased 1.3 percent and the 20-city 1.3 percent. House prices increased at high monthly percentage rates from Feb to Aug 2013. With the exception of Feb through Apr 2012, house prices seasonally adjusted declined in every month for both the 10-city and 20-city Case-Shiller composites from Dec 2010 to Jan 2012, as shown in Table VA-6. The most important seasonal factor in house prices is school changes for wealthier homeowners with more expensive houses. Without seasonal adjustment, house prices fell from Dec 2010 throughout Mar 2011 and then increased in every month from Apr to Aug 2011 but fell in every month from Sep 2011 to Feb 2012. The not seasonally adjusted index registers decline in Mar 2012 of 0.1 percent for the 10-city composite and is flat for the 20-city composite. Not seasonally adjusted house prices increased 1.4 percent in Apr 2012 and at high monthly percentage rates until Sep 2012. House prices not seasonally adjusted stalled from Oct 2012 to Jan 2013 and surged from Feb to Aug 2013. Declining house prices cause multiple adverse effects of which two are quite evident. (1) There is a disincentive to buy houses in continuing price declines. (2) More mortgages could be losing fair market value relative to mortgage debt. Another possibility is a wealth effect that consumers restrain purchases because of the decline of their net worth in houses.

Table VA-6, US, Monthly Percentage Change of S&P Case-Shiller Home Price Indices, Seasonally Adjusted and Not Seasonally Adjusted, ∆%

	10-City Composite SA	10-City Composite NSA	20-City Composite SA	20-City Composite NSA
Aug 2013	0.9	1.3	0.9	1.3
Jul	0.7	1.9	0.6	1.8
Jun	1.0	2.2	0.9	2.2
May	1.0	2.5	1.0	2.5
Apr	1.8	2.6	1.7	2.6
Mar	1.9	1.3	1.9	1.3
Feb	1.3	0.3	1.3	0.2
Jan	0.8	0.0	0.9	0.0
Dec 2012	1.0	0.2	1.0	0.2
Nov	0.6	-0.3	0.7	-0.2
Oct	0.7	-0.2	0.7	-0.1
Sep	0.5	0.3	0.6	0.3
Aug	0.4	0.8	0.5	0.9
Jul	0.3	1.5	0.3	1.6
Jun	0.9	2.1	1.0	2.3
May	0.8	2.2	0.9	2.4
Apr	0.6	1.4	0.6	1.4
Mar	0.5	-0.1	0.6	0.0
Feb	0.1	-0.9	0.1	-0.8
Jan	-0.3	-1.1	-0.1	-1.0
Dec 2011	-0.5	-1.2	-0.4	-1.1
Nov	-0.6	-1.4	-0.5	-1.3
Oct	-0.5	-1.3	-0.5	-1.3
Sep	-0.4	-0.6	-0.4	-0.7
Aug	-0.4	0.1	-0.4	0.1
Jul	-0.2	0.9	-0.2	1.0
Jun	-0.2	1.0	-0.1	1.2
May	-0.3	1.0	-0.4	1.0
Apr	-0.1	0.6	-0.2	0.6
Mar	-0.3	-1.0	-0.4	-1.0
Feb	-0.3	-1.3	-0.3	-1.2
Jan	-0.3	-1.1	-0.3	-1.1
Dec 2010	-0.2	-0.9	-0.2	-1.0

Source: http://us.spindices.com/index-family/real-estate/sp-case-shiller

Table VA-7 provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2013 fiscal year ending in Sep 2013; federal fiscal data for the years from 2009 to 2012; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2012. Receipts increased 13.3 percent in the cumulative fiscal year 2013 for ending in Sep 2013 relative to the cumulative in fiscal year 2012. Individual income taxes increased 16.3 percent relative to the same period a year earlier. Outlays decreased 2.4 percent relative to a year earlier. Total revenues of the US from 2009 to 2012 accumulate to $9020 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,109 billion, or $14.1 trillion, with the deficit accumulating to $5089 billion, or $5.1 trillion. Revenues decreased 6.6 percent from $9653 billion in the four years from 2005 to 2008 to $9020 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and by growth of only 2.2 percent on average in the cyclical expansion from IIIQ2009 to IIQ2013 (http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html). In contrast with the decline of revenue, outlays or expenditures increased 30.2 percent from $10,839 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,109 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.2 percent while revenue declined by 6.6 percent caused the increase in the federal deficit from $1186 billion in 2005-2008 to $5089 billion in 2009-2012. Federal revenue was 14.9 percent of GDP on average in the years from 2009 to 2012, which is well below 17.4 percent of GDP on average from 1973 to 2012. Federal outlays were 23.3 percent of GDP on average from 2009 to 2012, which is well above 20.4 percent of GDP on average from 1973 to 2012. The lower part of Table IIB-4 shows that debt held by the public swelled from $5803 billion in 2008 to $11,281 billion in 2012, by $5478 billion or 94.4 percent. Debt held by the public as percent of GDP or economic activity jumped from 39.3 percent in 2008 to 70.1 percent in 2012, which is well above the average of 39.2 percent from 1973 to 2012 (http://www.cbo.gov/publication/44508). The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures.

Table VA-7, US, Treasury Budget in Fiscal Year to Date Million Dollars

Sep 2013	Fiscal Year 2013	Fiscal Year 2012	∆%
Receipts	2,773,978	2,449,093	13.3
Outlays	3,454,253	3,538,286	-2.4
Deficit	-680,276	-1,089,193	NA
Individual Income Taxes	1,316,405	1,132,206	16.3
Social Insurance	673,274	569,501	18.2
	Receipts	Outlays	Deficit (-), Surplus (+)
$ Billions
2012	2,450	3,537	-1,087
Fiscal Year 2011	2,302	3,598	-1,296
Fiscal Year 2010	2,163	3,456	-1,293
Fiscal Year 2009	2,105	3,518	-1,413
Total 2009-2012	9,020	14,109	-5,089
Average % GDP 2009-2012	14.9	23.3	-8.4
Fiscal Year 2008	2,524	2,983	-459
Fiscal Year 2007	2,568	2,729	-161
Fiscal Year 2006	2,407	2,655	-248
Fiscal Year 2005	2,154	2,472	-318
Total 2005-2008	9,653	10,839	-1,186
Average % GDP 2005-2008	17.3	19.5	-2.1
Debt Held by the Public	Billions of Dollars	Percent of GDP
2005	4,592	35.6
2006	4,829	35.3
2007	5,035	35.1
2008	5,803	39.3
2009	7,545	52.3
2010	9,019	61.0
2011	10,128	65.8
2012	11,281	70.1

Source: http://www.fms.treas.gov/mts/index.html CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. Congressional Budget Office, 2013CBOHBDMay14. Historical budget data—May 2013. CBO, Washington, DC, May 14. Congressional Budget Office, 2013CBOHD, Historical budget data—August 2013. CBO, Washington, DC, Aug 12.

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 2.6 and 3.0 percent, with the all items CPI less fresh food of 0.6 to 1.0 percent. The critical difference is forecast of the CPI excluding fresh food of 2.8 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 Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
Oct 2013	+2.6 to +3.0 [+2.7]	+0.6 to +1.0 [+0.7]
Jul 2013	+2.5 to +3.0 [+2.8]	+0.5 to +0.8 [+0.6]
2014
Oct 2013	+0.9 to +1.5 [+1.5]	+2.8 to +3.6 [+3.3]	+0.8 to +1.6 [+1.3]
Jul 2013	+0.8 to +1.5 [+1.3]	+2.7 to +3.6 [+3.3]	+0.7 to +1.6 [+1.3]
2015
Oct 2013	+1.3 to +1.8 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
Jul 2013	+1.3 to +1.9 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]

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

Source: Policy Board, Bank of Japan

http://www.boj.or.jp/en/mopo/outlook/gor1310b.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 52.5 in Se[ to 54.2 in Oct, which is the highest level since May 2010 (http://www.markiteconomics.com/Survey/PressRelease.mvc/53c9d4335c3340399112967379f52a18). New orders grew at the highest rate in four years in anticipation of the increase in the sales tax next year. New export orders recovered from decline in Aug, growing at high rates in Sep and Oct with respondents pointing to yen devaluation. Claudia Tillbrooke, Economist at Markit and author of the report, finds improving manufacturing conditions at the highest levels in more than three years with impulse originating in new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/53c9d4335c3340399112967379f52a18).Table JPY provides the country data table for Japan.

Table JPY, Japan, Economic Indicators

Historical GDP and CPI	1981-2010 Real GDP Growth and CPI Inflation 1981-2010 Blog 8/9/11 Table 26
Corporate Goods Prices	Aug ∆% +0.3 12 months ∆% 2.3 Blog 10/13/13
Consumer Price Index	Sep NSA ∆% 0.3; Sep 12 months NSA ∆% 1.1 Blog 10/27/13
Real GDP Growth	IIQ2013 ∆%: 0.9 on IQ2013; IIQ2013 SAAR 3.8; ∆% from quarter a year earlier: 1.2 % Blog 6/16/13 8/18/13 9/15/13
Employment Report	Sep Unemployed 2.58 million Change in unemployed since last year: minus 170 thousand Unemployment rate: 4.0 % Blog 11/3/13
All Industry Indices	Aug month SA ∆% 0.3 12-month NSA ∆% 0.9 Blog 10/27/13
Industrial Production	Sep SA month ∆%: 1.5 12-month NSA ∆% 5.4 Blog 11/3/13
Machine Orders	Total Aug ∆% 4.5 Private ∆%: 3.2 Aug ∆% Excluding Volatile Orders 5.4 Blog 10/13/13
Tertiary Index	Aug month SA ∆% 0.7 Aug 12 months NSA ∆% 0.8 Blog 10/13/13
Wholesale and Retail Sales	Sep 12 months: Total ∆%: 2.6 Wholesale ∆%: 2.4 Retail ∆%: -0.3 Blog 11/3/13
Family Income and Expenditure Survey	Sep 12-month ∆% total nominal consumption 5.2, real 3.7 Blog 11/3/13
Trade Balance	Exports Sep 12 months ∆%: 11.5 Imports Sep 12 months ∆% 16.5 Blog 11/3/13

Links to blog comments in Table JPY:

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.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

In Sep 2013, industrial production in Japan increased 1.5 percent and increased 5.4 percent in the 12 months ending in Aug 2013, as shown in Table VB-1. Decline of 3.1 percent in Jun interrupted four consecutive monthly increases from Feb through May 2013. Another interruption occurred in Jul with decrease of 0.9 percent and decline of 0.4 percent in 12 months. Japan’s industrial production is strengthening with growth of 1.4 percent in Dec 2012, 0.9 percent in Feb 2013, 0.1 percent in Mar 2013, 0.9 percent in Apr 2013, 1.9 percent in May 2013, 3.4 percent in Jul 2013 and 1.5 percent in Sep 2013. Growth in 12 months improved from minus 10.1 percent in Feb 2013 to 5.4 percent in Sep 2013. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 15.6 percent in 2010. The annual average in calendar year 2011 fell 2.8 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Industrial production increased 0.6 percent in 2012.

Table VB-1, Japan, Industrial Production ∆%

	∆% Month SA	∆% 12 Months NSA
Sep 2013	1.5	5.4
Aug	-0.9	-0.4
Jul	3.4	1.8
Jun	-3.1	-4.6
May	1.9	-1.1
Apr	0.9	-3.4
Mar	0.1	-7.2
Feb	0.9	-10.1
Jan	-0.6	-6.0
Dec 2012	1.4	-7.6
Nov	-1.0	-5.5
Oct	0.3	-4.7
Sep	-2.2	-7.6
Aug	-1.4	-4.1
Jul	-0.5	0.1
Jun	-0.8	-0.6
May	-1.8	7.6
Apr	-0.5	15.1
Mar	0.2	16.6
Calendar Year
2012		0.6
2011		-2.8
2010		15.6

Source: Japan, Ministry of Economy, Trade and Industry (METI)

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

The employment report for Japan in Sep 2013 is in Table VB-2. The rate of unemployment seasonally adjusted decreased to 4.2 percent in Sep 2012 from 4.3 percent in Jul 2012 and remained at 4.2 percent in Oct 2012, declining to 4.1 percent in Nov 2012, increasing to 4.2 percent in Dec 2012, stabilizing at 4.2 percent in Jan 2013 and increasing to 4.3 percent in Feb 2013. The seasonally adjusted rate of unemployment fell to 4.1 percent in Apr and May 2013. The rate of unemployment not seasonally adjusted stood at 4.1 percent in Apr 2013 and 0.3 percentage points lower from a year earlier. The rate of unemployment fell to 3.9 percent in Jun 2013 seasonally and not seasonally adjusted. In Jul 2013, the rate of unemployment fell to 3.8 percent seasonally adjusted and remained at 3.9 percent not seasonally adjusted. The rate of unemployment rose to 4.1 percent in Aug 2013 and fell to 4.0 percent seasonally adjusted in Sep 2013. The employment rate stood at 57.3 percent in Sep 2013 and increased 0.5 percentage points from a year earlier.

Table VB-2, Japan, Employment Report Sep 2013

Sep 2013 Unemployed	2.58 million
Change since last year	-170 thousand; ∆% –6.2
Unemployment rate	4.0% SA -0.1; NSA 3.9%, -0.3 from earlier year
Population ≥ 15 years	110.91 million
Change since last year	∆% -0.1
Labor Force	66.17 million
Change since last year	∆% 0.5
Employed	63.59 million
Change since last year	∆% 0.8
Labor force participation rate	59.7
Change since last year	0.4
Employment rate	57.3%
Change since last year	0.5

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2013. The sharp decline in Sep 2011 was the best reading in 2011 but the rate increased in the final quarter of the year, declining in Feb 2012 and stabilizing in Mar 2012 but increasing to 4.6 percent in Apr 2012 and declining again to 4.4 percent in May 2012 and 4.3 percent in both Jun and Jul 2012 with further decline to 4.2 percent in Aug, Sep and Oct 2012, 4.1 percent in Nov 2012, 4.2 percent in Dec 2012, 4.2 percent in Jan 2013, 4.3 percent in Feb 2013 and 4.1 percent in Mar-May 2013. The rate of unemployment fell to 3.9 percent in Jun 2013 and 3.8 percent in Jul 2013. The rate of unemployment rose to 4.1 percent in Aug 2013, falling to 4.0 percent in Sep 2013.

Chart VB-1, Japan, Unemployment Rate, Seasonally Adjusted

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

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

During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid 1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for 1968, 1975, 1980 and 1985 and yearly from 1990 to 2012. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.4 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011 and 4.3 percent in 2012, while the participation rate fell from 60.4 percent to 59.6 percent, falling to 59.3 percent in 2011 and 59.1 in 2012. The employment rate fell from 58.1 percent to 56.6 percent in 2010 and 56.5 percent in 2011 and 2012. The global recession adversely affected labor markets in advanced economies.

Table VB-3, Japan, Rates of Unemployment, Participation in Labor Force and Employment, %

	Participation Rate	Employment Rate	Unemployment Rate
1953	70.0	68.6	1.9
1960	69.2	68.0	1.7
1965	65.7	64.9	1.2
1970	65.4	64.6	1.1
1975	63.0	61.9	1.9
1980	63.3	62.0	2.0
1985	63.0	61.4	2.6
1990	63.3	61.9	2.1
1991	63.8	62.4	2.1
1992	64.0	62.6	2.2
1993	63.8	62.2	2.5
1994	63.6	61.8	2.9
1995	63.4	61.4	3.2
1996	63.5	61.4	3.4
1997	63.7	61.5	3.4
1998	63.3	60.7	4.1
1999	62.9	59.9	4.7
2000	62.4	59.5	4.7
2001	62.0	58.9	5.0
2002	61.2	57.9	5.4
2003	60.8	57.6	5.3
2004	60.4	57.6	4.7
2005	60.4	57.7	4.4
2006	60.4	57.9	4.1
2007	60.4	58.1	3.9
2008	60.2	57.8	4.0
2009	59.9	56.9	5.1
2010	59.6	56.6	5.1
2011	59.3	56.5	4.6
2012	59.1	56.5	4.3

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

The survey of household income and consumption of Japan in Table VB-4 is showing noticeable improvement in recent months relative to earlier months, which can be appreciated in Chart VB-2 below. There was deterioration in Nov 2011, renewed strength in Dec 2011, another decline in Jan 2012 and increase in Feb and Mar 2012 with stabilization in Apr and May 2012 but sharp decline into Jun 2012. Recovery in Jul and Aug 2012 was interrupted in Sep-Oct 2012 and new increases in Nov 2012, Jan 2013, Feb 2013, Mar 2013 and Apr 2013 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption decreased 1.6 percent in real terms in May 2013 and decreased 1.9 percent in nominal terms relative to a year earlier. Real consumption fell 0.4 percent in Jun 2013 and nominal consumption declined 0.1 percent. Consumption rebounded in Jul 2013 with increase of real consumption by 0.1 percent and nominal consumption by 1.0 percent. In Aug 2013, real consumption fell 1.6 percent relative to a year earlier and 0.5 percent in nominal terms. Table VB-4 shows marked improvement in Sep 2013 with growth of nominal consumption of 5.2 percent in 12 months and 3.7 percent in real consumption. There are multiple segments of increasing real consumption: housing increasing 4.8 percent in nominal terms and 5.1 percent in real terms, transportation/communications increasing 4.1 percent in real terms and 6.7 percent in nominal terms, medical care increasing 3.5 percent in nominal terms and 4.2 percent in real terms. Education increased 37.5 percent in real terms and 38.5 percent in nominal terms. Fuel, light and water charges increased 9.4 percent in nominal terms and increased 3.8 percent in real terms. Real household income increased 0.9 percent; real disposable income decreased 0.4 percent; and real consumption expenditures increased 3.7 percent.

Table VB-4, Japan, Family Income and Expenditure Survey, 12-month ∆% Relative to a Year Earlier

Sep 2013	Nominal	Real
Households of Two or More Persons
Total Consumption	5.2	3.7
Excluding Housing, Vehicles & Remittance		-1.5
Food	2.9	1.2
Housing	4.8	5.1
Fuel, Light & Water Charges	9.4	3.8
Furniture & Household Utensils	3.5	4.9
Clothing & Footwear	8.8	8.0
Medical Care	3.5	4.2
Transport and Communications	6.7	4.1
Education	38.5	37.5
Culture & Recreation	2.9	3.5
Other Consumption Expenditures	-0.1	-1.5*
Workers’ Households
Income	2.3	0.9
Disposable Income	1.0	-0.4
Consumption Expenditures	5.2	3.7

*Real: nominal deflated by CPI excluding imputed rent

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Chart VB-2 of the Ministry of Internal Affairs and Communication provides year-on-year change of real consumption expenditures. There is improvement in the final segment with wide oscillations.

Chart VB-2, Japan, Real Percentage Change of Consumption Year-on-Year

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Percentage changes in 12 months of nominal and real consumption expenditures in Japan are provided in Table VB-5. Real consumption expenditures increased 3.7 percent in the 12 months ending in Sep 2013 and nominal consumption expenditures 5.2 percent. Real consumption expenditures fell 1.6 percent in Aug 2013 relative to a year earlier and nominal consumption expenditures fell 0.5 percent. There is recovery in Jul 2013 with real consumption expenditures increasing 0.1 percent and nominal consumption expenditures increasing 1.0 percent. Real consumption expenditures decreased 0.4 percent in the 12 months ending in Jun 2013 and 0.1 percent in nominal terms. Declines in May and Jun 2013 interrupted growth from Jan to Apr 2013. There was sharp decline in nominal consumption of 8.8 percent in Mar 2011 and 8.2 percent in real consumption because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Dec was the first month in 2011 with increases in 12 months in both nominal and real consumption expenditures followed by Feb 2012 through Aug 2012. Nominal and real consumption fell in both Sep and Oct 2012 and increased in Nov 2012. Real consumption fell 0.7 percent in the 12 months ending in Dec 2012 and nominal consumption fell 0.8 percent. Real consumption expenditures increased 2.4 percent in the 12 months ending in Jan 2013 and 2.1 percent in nominal terms. Nominal consumption increased 0.8 percent in Feb 2013 and nominal consumption increased 0.1 percent. Real consumption increased 5.2 percent in the 12 months ending in Mar 2013 and nominal consumption 4.1 percent. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 5.0 percent in IQ2012 with private consumption contributing 2.2 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million_1166.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 1.2 percent and contribution of 0.2 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 3.5 percent and personal consumption deducted 0.9 percentage points. Japan’s GDP grew at the SAAR of 1.1 percent in IVQ2012 with personal consumption contributing 1.2 percentage points. Japan’s GDP growth in IQ2013 was at 4.1 percent SAAR with highest contribution of 2.1 percentage points by personal consumption expenditures. In IIQ2013, Japan’s GDP grew at 3.8 percent SAAR with personal consumption expenditures contributing 1.8 percentage points.

Table VB-5, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier

	Nominal Consumption Expenditures ∆% Relative to a Year Earlier	Real Consumption Expenditures ∆% Relative to a Year Earlier
Sep 2013	5.2	3.7
Aug	-0.5	-1.6
Jul	1.0	0.1
Jun	-0.1	-0.4
May	-1.9	-1.6
Apr	0.8	1.5
Mar	4.1	5.2
Feb	0.1	0.8
Jan	2.1	2.4
Dec 2012	-0.8	-0.7
Nov	0.1	0.2
Oct	-0.5	-0.1
Sep	-1.2	-0.9
Aug	1.4	1.8
Jul	1.2	1.7
Jun	1.5	1.6
May	4.3	4.0
Apr	3.2	2.6
Mar	4.1	3.4
Feb	2.7	2.3
Jan	-2.1	-2.3
Dec 2011	0.3	0.5
Nov	-3.8	-3.2
Oct	-0.6	-0.4
Sep	-1.9	-1.9
Aug	-3.9	-4.1
Jul	-1.8	-2.1
Jun	-3.9	-3.5
May	-1.6	-1.2
Apr	-2.5	-2.0
Mar	-8.8	-8.2
Feb	-0.1	0.5
Jan	-0.9	-0.3
Dec 2010	-3.2	-3.3
Dec 2009	0.3	2.1

Source:

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Japan is experiencing weak internal demand as in most advanced economies, interrupted by strong growth in IQ2012 but renewed weakening at the end of IIQ2012, beginning of IIIQ2012 with recovery in IVQ2012, IQ2013 and IIQ2013. Table VB-6 provides Japan’s wholesale and retail sales. There is strong performance in May with growth of 0.8 percent for retail sales followed by 1.6 percent in Jun 2013. Retail sales fell 0.3 percent in Jul 2013, rebounding 1.1 percent in Aug 2013. Retail sales fell 0.3 percent in the 12 months ending in Sep 2013. Retail sales are recovering from deep drops in Mar and Apr 2011 following the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Retail sales have been increasing in 12-month percentage changes from Dec 2011 through May 2012 but fell again by 1.3 percent in Jul 2012, increasing 1.3 percent in Aug 2012 and 0.4 percent in Sep 2012 but declining 1.2 percent in Oct 2012, rebounding by 0.9 percent in Nov 2012 and only 0.2 percent in Dec 2012 but contracting 1.1 percent in Jan 2013 and 2.2 percent in Feb 2013. In May 2013, retail sales increased 0.8 percent relative to a year earlier and 1.6 percent in Jun 2013 followed by decline of 0.3 percent in Jul 2013. Retail sales rebounded 1.1 percent in Aug 2013 and fell 0.3 percent in Sep 2013.

Table VB-6, Japan, Wholesale and Retail Sales 12 Month ∆%

	Total	Wholesale	Retail
Sep 2013	2.6	2.4	-0.3
Aug	0.6	0.4	1.1
Jul	1.3	2.0	-0.3
Jun	0.5	0.1	1.6
May	0.6	0.5	0.8
Apr	-0.1	-0.1	-0.2
Mar	-1.3	-1.8	-0.3
Feb	-1.6	-1.3	-2.2
Jan	-0.3	0.1	-1.1
Dec 2012	-1.7	-2.5	0.2
Nov	-0.9	-1.6	0.9
Oct	-1.6	-1.8	-1.2
Sep	-3.6	-5.1	0.4
Aug	-2.7	-4.4	1.3
Jul	-3.1	-4.0	-1.3
Jun	-2.6	-3.6	-0.2
May	2.7	2.6	3.0
Apr	1.8	0.4	5.0
Mar	3.2	0.9	9.3
Feb	-0.1	-1.3	3.1
Jan	-2.1	-3.8	1.6
Dec 2011	-0.8	-2.0	2.5
Nov	-2.3	-2.4	-2.2
Oct	1.1	0.8	1.9
Sep	0.3	0.8	-1.1
Aug	3.1	5.2	-2.6
Jul	2.3	3.0	0.6
Jun	3.1	3.8	1.2
May	1.3	2.3	-1.3
Apr	-2.6	-1.7	-4.8
Mar	-1.3	1.2	-8.3
Feb	5.3	7.2	0.1
Jan	3.3	4.6	0.1
Dec 2010	3.5	5.7	-2.1
Calendar Year
2012	-0.9	-2.0	1.8
2011	1.0	1.9	-1.0
2010	2.4	2.3	2.6
2009	-20.5	-25.6	-2.3
2008	1.2	1.5	0.3

Source: Japan, Ministry of Economy, Trade and Industry (METI)

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

VC China. China estimates an index of nonmanufacturing purchasing managers on the basis of a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The index fell from 58.0 in Mar to 55.2 in May but climbed to 56.7 in Jun, which is lower than 58.0 in Mar and 57.3 in Feb but higher than in any other of the months in 2012. In Jul 2012 the index fell marginally to 55.6 and then to 56.3 in Aug and 53.7 in Sep but rebounded to 55.5 in Oct and 55.6 in Nov 2012. Improvement continued with 56.1 in Dec 2012 and 56.2 in Jan 2013, declining marginally to 54.5 in Feb 2013 and 55.6 in Mar 2013. The index fell to 54.5 in Apr 2013, 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. Input Prices	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

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

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 with marginal improvement to 51.4 in Oct 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 with marginal decline to 52.5 in Oct 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 with marginal improvement to 49.2 in Oct 2013.

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

	IPM	PI	NOI	INV	EMP	SDEL
Oct 2013	51.4	54.4	52.5	48.6	49.2	50.8
Sep	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

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, 51.1 in Sep 2013 and 51.4 in Oct 2013.

Chart CIPMMFG, China, Manufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

Cumulative growth of China’s GDP in IIIQ2013 relative to the same period in 2012 was 7.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 45.3 percent of GDP in IIIQ2013. In IIQ2013, industry alone accounts for 38.5 percent in IIQ2013 and construction with the remaining 6.8 percent in the first three quarters of 2012. Tertiary industry accounts for 45.5 percent of cumulative GDP in IIIQ2013 and primary industry for 9.2 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-GDP provides quarter-on-quarter growth rates of GDP and their annual equivalent. China’s GDP growth decelerated significantly from annual equivalent 10.8 percent in IIQ2011 to 7.4 percent in IVQ2011 and 5.7 percent in IQ2012, rebounding to 9.1 percent in IIQ2012, 8.2 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 fell to 6.1 percent and to 7.8 percent in IIQ2013, rebounding to 9.1 percent in IIIQ2013.

Table VC-GDP, China, Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted ∆%

Cumulative GDP IIIQ2013	Value Current CNY Billion	2013 Year-on-Year Constant Prices ∆%
GDP	38,676.2	7.7
Primary Industry	3,566.9	3.4
Farming	3,566.9	3.4
Secondary Industry	17,511.8	7.8
Industry	14,900.0	7.6
Construction	2,611.8	9.7
Tertiary Industry	17,597.5	8.4
Transport, Storage, Post	21,449.9	7.2
Wholesale, Retail Trades	3,056.7	10.4
Hotel & Catering Services	772.7	5.1
Financial Intermediation	2,623.8	10.4
Real Estate	2,454.6	7.3
Other	6,094.8	7.6
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2013
IIIQ2013	2.2	9.1
IIQ2013	1.9	7.8
IQ2013	1.5	6.1
2012
IVQ2012	1.9	7.8
IIIQ2012	2.0	8.2
IIQ2012	2.2	9.1
IQ2012	1.4	5.7
2011
IVQ2011	1.8	7.4
IIIQ2011	2.2	9.1
IIQ2011	2.6	10.8
IQ2011	2.3	9.5

Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/

Growth of China’s GDP in IIIQ2013 relative to the same period in 2012 was 7.8 percent, as shown in Table VC-GDPA. Secondary industry accounts for 45.3 percent of GDP of which industry alone for 38.5 percent in cumulative IIIQ2013 and construction with the remaining 6.8 percent in the first three quarters of 2013. Tertiary industry accounts for 45.5 percent of GDP in the cumulative to IIIQ2013 and primary industry for 9.2 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, 7.5 percent in IIQ2013 and 7.8 percent in IIIQ2013.

Table VC-GDPA, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter

	IQ 2013	IIQ 2013	IIIQ 2013
GDP	7.7	7.5	7.8
Primary Industry	3.4	3.0	3.4
Secondary Industry	7.8	7.6	7.8
Tertiary Industry	8.3	8.3	8.4
GDP ∆% Relative to a Prior Quarter	1.5	1.9	2.2
	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	2.6	2.2	1.8	1.4	2.2	2.0	1.9
	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/6c331e2e4a1e420e84c67a8d51b349f6) is moving at faster pace. The overall Flash HSBC China Manufacturing PMI^™ increased from 50.2 in Sep to 50.9 in Sep, which is moderately above the contraction frontier of 50.0, while the Flash HSBC China Manufacturing Output Index increased from 50.2 in Sep to 51.0 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 seven months with potential for recovery of growth in IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/6c331e2e4a1e420e84c67a8d51b349f6). 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 to 50.9 in Oct from 50.2 in Sep, indicating marginally improving manufacturing in China (http://www.markiteconomics.com/Survey/PressRelease.mvc/3308d2cd1c824ec1a9842f2fbc17645b). New export orders posted the strongest increase in about a year with demand from the US. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds China moving in the path of moderate recovery of growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/3308d2cd1c824ec1a9842f2fbc17645b). 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 Blog 10/20/13
Consumer Price Index	Sep month ∆%: 0.8 Sep 12 months ∆%: 3.1 Blog 10/20/13
Value Added of Industry	Sep month ∆%: 0.72 Jan-Sep 2013/Jan-Sep 2012 ∆%: 9.6 Sep 12-Month ∆%: 10.2 Blog 10/27/13
GDP Growth Rate	Year IIIQ2013 ∆%: 7.8 Quarter IIQ2013 AE ∆%: 9.1 Blog 10/27/13
Investment in Fixed Assets	Total Jan-Sep 2013 ∆%: 20.2 Real estate development: 19.7 Blog 10/27/13
Retail Sales	Sep month ∆%: 1.24 Sep 12 month ∆%: 13.3 Jan-Sep ∆%: 12.9 Blog 10/27/13
Trade Balance	Sep balance $15.20 billion Exports 12M ∆% -0.3 Imports 12M ∆% 7.4 Cumulative Sep: $169.41 billion Blog 10/20/13

Links to blog comments in Table CNY:

10/20/13 http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html

VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.3 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, decreased from 52.2 in Sep to 51.5 in Oct, which is a two month low after a high in 27 months in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/0a90c155c5334ae9a0285122636dcadd). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the index is consistent with growth of GDP of 0.2 percent based on the first month of IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/0a90c155c5334ae9a0285122636dcadd). 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 Sep 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	Sep 2013: 12.2 % unemployment rate Sep 2013: 19.447 million unemployed Blog 11/3/13
HICP	Sep month ∆%: 0.5 12 months Sep ∆%: 1.1 Blog 10/20/13
Producer Prices	Euro Zone industrial producer prices Aug ∆%: 0.0 Aug 12-month ∆%: -0.8 Blog 10/6/13
Industrial Production	Aug month ∆%: 1.0; Aug 12 months ∆%: -2.1 Blog 10/20/13
Retail Sales	Aug month ∆%: 0.7 Aug 12 months ∆%: minus 0.3 Blog 10/6/13
Confidence and Economic Sentiment Indicator	Sentiment 97.8 Oct 2013 Consumer minus 14.5 Oct 2013 Blog 11/3/13
Trade	Jan-Aug 2013/Jan-Aug 2012 Exports ∆%: 0.9 Imports ∆%: -4.0 Aug 2013 12-month Exports ∆% -5.4 Imports ∆% -7.2 Blog 10/20/13

Links to blog comments in Table EUR:

10/20/13 http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html

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

EUROSTAT estimates the rate of unemployment in the euro area at 12.2 percent in Sep 2013, as shown in Table VD-1. The number of unemployed in Sep 2013 was 19.447 million, which was 0.996 million higher than 18.451 million in Sep 2012. The rate of unemployment jumped from 11.6 percent in Sep 2012 to 12.2 percent in Sep 2013.

Table VD-1, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA

	Unemployment Rate %	Number Unemployed Millions
Sep 2013	12.2	19.447
Aug	12.2	19.387
Jul	12.1	19.314
Jun	12.1	19.261
May	12.1	19.228
Apr	12.1	19.179
Mar	12.0	19.121
Feb	12.0	19.106
Jan	12.0	19.078
Dec 2012	11.9	18.839
Nov	11.8	18.777
Oct	11.7	18.676
Sep	11.6	18.451
Aug	11.5	18.290
Jul	11.5	18.224
Jun	11.4	18.119
May	11.3	17.885
Apr	11.2	17.734
Mar	11.0	17.453
Feb	10.9	17.226
Jan	10.7	17.015
Dec 2011	10.7	16.906
Nov	10.6	16.804
Oct	10.4	16.513
Sep	10.3	16.341
Aug	10.2	16.089
Jul	10.1	15.940
Jun	10.0	15.721
May	9.9	15.663
Apr	9.9	15.516
Mar	9.9	15.581
Feb	9.9	15.605
Jan	10.0	15.687
Dec 2010	10.0	15.797

Source: EUROSTAT

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

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

Table VD-2 shows the disparity in rates of unemployment in the euro area with 12.2 percent for the region as a whole and 19.447 million unemployed but 5.2 percent in Germany and 2.239 million unemployed. At the other extreme is Spain with rate of unemployment of 26.6 percent and 6.050 million unemployed. The rate of unemployment of the European Union in Sep 2013 is 11.0 percent with 26.872 million unemployed.

Table VD-2, Unemployed and Unemployment Rate in Countries and Regions, Millions and %

Sep 2013	Unemployment Rate %	Unemployed Millions
Euro Zone	12.2	19.447
Germany	5.2	2.239
France	11.1	3.287
Netherlands	7.0	0.630
Finland	8.1	0.217
Portugal	16.3	0.864
Ireland	13.6	0.295
Italy	12.5	3.194
Greece	NA	NA
Spain	26.6	6.050
Belgium	8.9	0.444
European Union	11.0	26.872

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

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

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

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

Source: EUROSTAT

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

The Economic Sentiment Indicator of the European Economic Commission, Economic and Financial Affairs, provides correlation with the economic cycle since 1990, capturing all three recessions in the period and even the threat of recession from 1994 to 1995. The latest chart of this index accessible in the link in parenthesis shows trend of decline in 2011 and 2012 that has punctured the historical average of 100 and resumed downward trend in 2012 followed by recovery moving closer to the average (http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm). Table VD-3 provides the index increasing from 86.9 in Nov 2012 to 97.8 in Oct 2013. The index is above the minimum value of 70.0 reached in Mar 2009 but still below the average of 100.

Table VD-3, Euro Area, Indicators of Confidence and Economic Sentiment SA

	ESI	IND	SERV	CON	RET	CONS
Historical Average	100.0	-7.0	9.3	-13.3	-9.3	-18.2
Maximum	118.1 05-00	7.9 04-07	35.3 08-98	2.4 05-00	5.2 06-90	6.0 02-90
Minimum	70.0 03-09	-38.1 03-09	-26.1 03-09	-34.3 03-09	-24.9 01-93	-46.2 09-93
Oct 2013	97.8	-4.8	-3.7	-14.5	-7.8	-29.6
Sep	96.9	-6.6	-3.2	-14.9	-6.9	-28.8
Aug	95.3	-7.8	-5.2	-15.6	-10.6	-33.2
Jul	92.5	-10.6	-7.8	-17.4	-14.0	-32.6
Jun	91.3	-11.2	-9.6	-18.8	-14.6	-31.5
May	89.5	-13.0	-9.3	-21.8	-16.7	-33.0
Apr	88.6	-13.7	-11.1	-22.2	-18.4	-31.1
Mar	90.1	-12.2	-7.1	-23.5	-17.1	-29.9
Feb	90.5	-11.1	-8.5	-23.6	-16.1	-29.2
Jan	89.7	-13.3	-7.9	-23.9	-15.5	-28.1
Dec 2012	88.0	-13.8	-9.8	-26.3	-15.9	-33.0
Nov	86.9	-14.7	-11.5	-26.7	-14.8	-33.8

ESI: Economic Sentiment Index; IND: Industry; SERV: Services; CON: Consumer; RET: Retail Trade; CONS: Construction

Source: European Commission Services

http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 2012, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.0 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, decreased from 53.2 in Sep to 52.6 in Oct for the lowest reading in three months. The index of manufacturing output reached 53.3 in Oct, which is a two-month high, while the index of services decreased to 52.3 for a three-month low (http://www.markiteconomics.com/Survey/PressRelease.mvc/ea870691dbeb4b3d9169092f34426260). New work volumes increased marginally. Tim Moore, Senior Economist at Markit, finds stronger manufacturing than services with potential for continuing growth of private sector activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/ea870691dbeb4b3d9169092f34426260). 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 Aug 12-month NSA ∆%: 1.5 Blog 10/13/13
Producer Price Index	Sep month ∆%: 0.0 CSA, 0.3 12-month NSA ∆%: -0.5 Blog 10/27/13
Industrial Production	MFG Aug month CSA ∆%: 2.1 12-month NSA: -3.1 Blog 10/13/13
Machine Orders	MFG Aug month ∆%: -0.3 Aug 12-month ∆%: 0.1 Blog 10/13/13
Retail Sales	Sep Month ∆% -0.4 12-Month ∆% 0.2 Blog 11/3/13
Employment Report	Unemployment Rate SA Sep 5.2% Blog 11/3/13
Trade Balance	Exports Aug 12-month NSA ∆%: -5.4 Imports Aug 12 months NSA ∆%: -2.2 Exports Aug month CSA ∆%: 1.0; Imports Aug month SA 0.4 Blog 10/13/13

Links to blog comments in Table DE:

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-united-states.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

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-1. The number unemployed, not seasonally adjusted, increased from 2.17 million in Sep 2012 to 2.20 million in Sep 2013, or 1.4 percent, while the unemployment rate did not change from 5.1 percent in Sep 2012 to 5.1 percent in Sep 2013. The number of persons in employment, not seasonally adjusted, increased from 40.65 million in Sep 2012 to 40.96 million in Sep 2013, or 0.8 percent, while the employment rate increased from 64.5 percent in Sep 2012 to 65.0 percent in Sep 2013. The number unemployed, seasonally adjusted, fell from 2.25 million in Aug 2013 to 2.24 million in Sep 2013, while the unemployment remained fell to 5.2 percent in Sep 2013 relative to 5.3 percent in Aug 2013. The number of persons in employment, seasonally adjusted, increased from 40.55 million in Aug 2013 to 40.59 million in Sep 2013, or 0.1 percent.

Table VE-1, Germany, Unemployment Labor Force Survey

	Sep 2013	Aug 2013	Sep 2012
NSA
Number Unemployed Millions	2.20 ∆% Sep 2013 /Aug 2013: 1.4 ∆% Sep 2013/Sep 2012: 1.4	2.17	2.17
% Rate Unemployed	5.1	5.0	5.1
Persons in Employment Millions	40.96 ∆% Sep 2013/Aug 2013: -0.1 ∆% Sep 2013/Sep 2012: 0.8	41.01	40.65
Employment Rate	65.0	65.1	64.5
SA
Number Unemployed Millions	2.24 ∆% Sep 2013/Aug 2013: -0.4 ∆% Sep 2013/Sep 2012: –2.2	2.25	2.29
% Rate Unemployed	5.2	5.3	5.4
Persons in Employment Millions	40.59 ∆% Sep 2013/Aug 2013: 0.1 ∆% Sep 2013/Sep 2012: 1.3	40.55	40.08

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt https://www.destatis.de/EN/PressServices/Press/pr/2013/10/PE13_364_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-2 stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Feb 2013 and 7.1 percent in Apr 2013. The unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 2013 and rose to 6.8 percent in Jul-Aug 2013. The rate fell to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

Table VE-2, Germany, Unemployment Rate in Percent of Labor Force

	Percent of Labor Force
Oct 2013	6.5
Sep	6.6
Aug	6.8
Jul	6.8
Jun	6.6
May	6.8
Apr	7.1
Feb	7.3
Jan	7.4
Dec 2012	6.7
Nov	6.5
Oct	6.5
Sep	6.5
Aug	6.8
Jul	6.8
Jun	6.6
May	6.7
Apr	7.0
Mar	7.2
Feb	7.4
Jan	7.3
Dec 2011	6.6
Nov	6.4
Oct	6.5
Sep	6.6
Aug	7.0
Jul	7.0
Jun	6.9
May	7.0
Apr	7.3
Mar	7.6
Feb	7.9
Jan	7.9
Dec 2010	7.1
Dec 2009	7.8
Dec 2008	7.4
Dec 2007	8.1
Dec 2006	9.6
Dec 2005	11.1

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, 6.6 percent in Jun 2012, 6.8 percent in Jul and Aug 2012 and 6.5 percent from Sep to Nov 2012, increasing to 6.7 percent in Dec 2012, 6.8 percent in Apr 2013 and 6.6 percent in May 2013. The unemployment rate rose slightly to 6.8 percent in Aug 2013, falling to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013.

Chart VE-1, Germany, Unemployment Rate, Unadjusted, Percent

Source: Statistisches Bundesamt Deutschland

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

Retail sales in Germany adjusted for inflation are provided in Table VE-3. There have been sharp fluctuations in monthly and 12 months percentage changes. In Sep 2013, retail sales decreased 0.4 percent and increased 0.2 percent in 12 months. Retail sales increased 0.5 percent in Jul 2013 and increased 3.8 percent in 12 months. Retail sales rebounded in Jan 2013 with monthly increase of 3.1 percent and 2.8 percent in 12 months.

Table VE-3, Retail Sales in Germany Adjusted for Inflation

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Sep 2013	0.2	-0.4
Aug	0.4	-0.2
Jul	3.8	0.5
Jun	-2.5	-1.0
May	0.4	0.9
Apr	2.8	0.3
Mar	-2.9	-0.5
Feb	-2.8	-0.9
Jan	2.8	3.1
Dec 2012	-3.1	-1.8
Nov	0.5	1.1
Oct	1.5	-0.9
Sep	-3.0	-0.2
Aug	0.0	0.4
Jul	-0.9	-0.9
Jun	4.6	0.2
May	-0.5	0.4
Apr	-4.6	-0.6
Mar	4.3	0.9
Feb	2.4	0.8
Jan	2.0	-1.7
Dec 2011	0.8	0.8
Nov	0.9	-0.6
Oct	-0.4	0.3
Sep	1.2	0.1
Aug	3.4	-0.5
Jul	-2.4	0.6
Jun	-2.0	2.0
May	4.5	-1.6
Apr	4.8	1.0
Mar	-2.9	-2.8
Feb	3.0	1.4
Jan	3.3	0.8
Dec 2010	-0.2	0.3
Dec 2009	-2.2
Dec 2008	3.4
Dec 2007	-6.2
Dec 2006	1.3

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-2 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2009 to 2013. There appear to be fluctuations without trend.

Chart VE-2, Germany, Turnover in Retail Trade at Constant Prices 2005=100

Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany

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

Chart VE-3 of the Federal Statistical Office of Germany provides retail sales at current prices. The final segment suggests a trend of increase.

Chart VE-3, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2005=100

Source: Statistisches Bundesamt Deutschland (Destatis), Federal Statistical Office of Germany

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

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2012 is quite high at 3.2 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.0 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 1.9 percent in the 1990s and 1.7 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using fourth quarter data, is 1.0 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. The growth rate from 2000 to 2012 is 1.0 percent. Cobet and Wilson (2002) provide estimates of output per hour and unit labor costs in national currency and US dollars for the US, Japan and Germany from 1950 to 2000 (see Pelaez and Pelaez, The Global Recession Risk (2007), 137-44). The average yearly rate of productivity change from 1950 to 2000 was 2.9 percent in the US, 6.3 percent for Japan and 4.7 percent for Germany while unit labor costs in USD increased at 2.6 percent in the US, 4.7 percent in Japan and 4.3 percent in Germany. From 1995 to 2000, output per hour increased at the average yearly rate of 4.6 percent in the US, 3.9 percent in Japan and 2.6 percent in Germany while unit labor costs in US fell at minus 0.7 percent in the US, 4.3 percent in Japan and 7.5 percent in Germany. There was increase in productivity growth in the G7 in Japan and France in the second half of the 1990s but significantly lower than the acceleration of 1.3 percentage points per year in the US. Lucas (2011May) compares growth of the G7 economies (US, UK, Japan, Germany, France, Italy and Canada) and Spain, finding that catch-up growth with earlier rates for the US and UK stalled in the 1970s.

Table VF-FR, France, Average Growth Rates of GDP Fourth Quarter, 1949-2012

Period	Average ∆%
1949-2012	3.2
2000-2012	1.0
2000-2011	1.1
2000-2007	1.7
1990-1999	1.9
1980-1989	2.5
1970-1979	3.8
1960-1969	5.7
1950-1959	4.2

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20130814

The Markit Flash France Composite Output Index decreased from 50.5 in Sep to 50.1 in Oct for a two-month low (http://www.markiteconomics.com/Survey/PressRelease.mvc/c25fae531a1243b69ab9266c67f205f6). Jack Kennedy, Senior Economist at Markit and author of the report, finds that the data are somewhat encouraging for the beginning of the final quarter of the year (http://www.markiteconomics.com/Survey/PressRelease.mvc/c25fae531a1243b69ab9266c67f205f6). 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 12 months ∆%: 0.9 10/20/13
PPI	Sep month ∆%: 0.3 Sep 12 months ∆%: -0.8 Blog 11/3/13
GDP Growth	IIQ2013/IQ2013 ∆%: 0.5 IIQ2013/IIQ2012 ∆%: 0.4 Blog 3/31/13 5/19/12 6/30/13 9/29/13
Industrial Production	Aug ∆%: Manufacturing minus 0.3 12-Month ∆%: Manufacturing minus 3.8 Blog 10/13/13
Consumer Spending	Manufactured Goods Sep ∆%: -0.2 Sep 12-Month Manufactured Goods ∆%: -0.1 Blog 11/3/13
Employment	Unemployment Rate: IIQ2013 10.5% Blog 9/8/13
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 98 Blog 10/27/13

Links to blog comments in Table FR:

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

10/20/13 http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html

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

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

The monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption decreased 0.1 percent in Sep 2013 after decreasing 0.3 percent in Aug 2013 and increasing 0.4 percent in Jul 2013. Consumption of manufactured products decreased 0.2 percent in Sep 2013 after decreasing 0.2 percent in Aug 2013 and increasing 0.6 percent in Jun 2013. Total consumption decreased 0.1 percent in Aug 2013 relative to Aug 2012 and consumption of manufactured goods decreased 0.1 percent in Sep 2013 relative to Sep 2012. Internal demand is weak throughout most advanced economies.

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

	Total	Food	Eng. Goods	Energy	Mfg Goods
Sep 2013	-0.1	-0.2	0.2	-0.7	-0.2
Sep 2013/Sep 2012	-0.1	-1.0	0.1	1.0	-0.1
Aug	-0.3	-0.6	0.2	-0.7	-0.2
Jul	0.4	0.7	0.2	0.4	0.6
Jun	-0.8	-0.5	0.6	-4.5	-0.5
May	0.7	1.5	0.0	1.0	0.9
Apr	-0.7	-3.4	1.2	0.4	-0.5
Mar	1.3	2.7	-0.8	3.7	1.1
Feb	-0.3	-0.7	-0.8	1.7	-0.7
Jan	-0.4	0.7	-2.1	1.6	-1.1
Dec 2012	0.0	0.2	1.5	-3.9	0.6
Nov	0.1	-0.5	-0.3	2.2	-0.2
Oct	-0.1	-0.7	0.3	0.1	0.1
Sep	0.1	-0.1	0.0	0.6	0.0
Aug	-0.5	0.2	-0.5	-2.1	-0.7
Jul	0.1	-0.3	0.4	0.0	0.1
Jun	0.5	1.2	-0.4	1.3	0.5
May	0.1	-0.4	1.8	-2.8	1.0
Apr	0.2	-0.1	-2.9	9.2	-1.5
Mar	-3.0	-2.0	1.0	-13.9	-0.8
Feb	2.7	1.8	-0.2	12.4	1.1
Jan	-0.2	0.9	-1.6	1.4	-0.5
Dec 2011	-0.2	-0.8	0.4	-0.7	-0.3
Nov	-0.2	0.2	0.0	-2.1	-0.2
Oct	-0.2	-0.7	0.5	-0.7	-0.1
Sep	-0.3	0.5	-0.1	-2.9	-0.3
Aug	0.9	0.5	0.6	2.6	1.0
Jul	-0.2	-0.1	-0.5	0.5	-0.3
Jun	0.2	-0.4	0.2	1.6	0.3
May	0.3	-0.6	-0.3	4.2	-0.6
Apr	-2.1	0.5	-2.6	-6.2	-1.5
Mar	-0.7	-0.4	-0.8	-1.1	-0.9
Feb	0.8	0.8	1.8	-1.9	1.4
Jan	-1.3	-0.7	-0.2	-5.2	-0.5
Dec 2010	0.9	0.4	0.4	3.5	0.5

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20131031

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

Char VF-3, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion Euro and Converted Euro, Jan 1980 to Sep 2013

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20131031

Chart VF-2 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. Internal demand is not supporting higher rates of economic growth. There is downward trend of monthly consumption with fluctuations and stability in the final segment followed by another drop in Jan-Feb 2013 and increase in Mar 2013 but renewed decrease in Apr 2013. Consumption rose again in May 2013 and fell in Jun 2013. Consumption increased in Jul 2013 and fell in Aug-Sep 2013.

Chart VF-4, France, Total Consumption of Goods, Billions of Euros Trading and Seasonally Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20131031

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	Oct month ∆%: -0.3 Oct 12-month ∆%: 0.7 Blog 11/3/13
Producer Price Index	Sep month ∆%: 0.0 Sep 12-month ∆%: -2.2 Blog 11/3/13
GDP Growth	IIQ2013/IQ2013 SA ∆%: minus 0.3 IIQ2013/IIQ2012 NSA ∆%: minus 2.1 Blog 3/17/13 6/16/13 8/11/13 9/15/13
Labor Report	Sep 2013 Participation rate 63.6% Employment ratio 55.4% Unemployment rate 12.5% Blog 11/3/13
Industrial Production	Aug month ∆%: -0.3 12 months CA ∆%: -4.6 Blog 10/13/13
Retail Sales	Aug month ∆%: 0.0 Aug 12-month ∆%: 0.2 Blog 10/27/13
Business Confidence	Mfg Oct 97.3, Jun 90.9 Construction Oct 80.8, Jun 71.6 Blog 11/3/13
Trade Balance	Balance Aug SA €2477 million versus Jul €2260 Exports Aug month SA ∆%: 1.7; Imports Aug month ∆%: 1.1 Exports 12 months Aug NSA ∆%: -4.4 Imports 12 months NSA ∆%: -9.8 Blog 10/20/13

Links to blog comments in Table IT:

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html

10/20/13 http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html

10/13/13 http://cmpassocregulationblog.blogspot.com/2013/10/imf-view-collapse-of-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

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.2 percent in Dec 2006 to 12.5 percent in Sep 2013. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %
Sep 2013	63.6	55.4	12.5
Aug	63.8	55.6	12.4
Jul	63.5	55.7	12.1
Jun	63.5	55.7	12.1
May	63.5	55.7	12.2
Apr	63.4	55.7	12.0
Mar	63.5	55.9	11.9
Feb	63.7	56.0	11.8
Jan	63.7	56.0	11.9
Dec 2012	63.6	56.2	11.4
Nov	63.7	56.4	11.3
Oct	63.8	56.5	11.3
Sep	63.7	56.6	10.9
Aug	63.6	56.7	10.7
Jul	63.8	56.8	10.8
Jun	63.8	56.8	10.8
May	63.7	57.0	10.4
Apr	63.8	57.0	10.6
Mar	63.6	56.9	10.3
Feb	63.3	56.9	10.0
Jan	63.2	57.1	9.5
Dec 2011	63.0	56.9	9.5
Nov	62.7	56.7	9.3
Oct	62.6	57.0	8.8
Sep	62.5	56.8	8.9
Aug	62.4	57.1	8.5
Jul	62.2	56.9	8.4
Jun	62.0	57.0	8.0
May	62.1	57.0	8.1
Apr	61.7	56.9	7.8
Mar	62.1	57.1	7.9
Feb	61.8	56.8	7.9
Jan	61.9	56.9	8.0
Dec 2010	62.1	56.9	8.2
Dec 2009	62.3	57.1	8.3
Dec 2008	62.5	58.2	6.8
Dec 2007	63.1	58.9	6.5
Dec 2006	62.5	58.5	6.2
Dec 2005	62.6	57.8	7.5
Dec 2004	62.4	57.5	7.9

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/102484

Table VG-2 provides more detail on the labor report for Italy in Sep 2012. The level of employment decreased 80,000 from Aug to Sep 2013 and fell 490,000 from Sep 2012 to Sep 2013. Unemployment increased 29,000 in Sep 2013 and increased 391,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 40.4 percent in Sep 2013 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

Sep 2013	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22.349	-80	-0.4	-490	-2.1
UNE	3.194	29	0.9	391	14.0
INA 15-64	14.391	71	0.5	3	0.0
EMP %	55.4		-0.2		-1.2
UNE %	12.5		0.1		1.6
Youth UNE % 15-24	40.4		0.2		4.4
INA % 15-64	36.4		0.2		0.1

Notes: EMP: Employed; UNE: Unemployed; INA 15-64: Inactive aged 15 to 64; EMP %: Employment Rate; UNE %: Unemployment Rate; Youth UNE % 15-24: Youth Unemployment Rate aged 15 to 24; INA % 15-64: Inactive Rate aged 15 to 64.

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/102484

Chart VG-1 of the Istituto Nazionale di Statistica provides the rate of unemployment in Italy. The rate increase from 10.9 percent in Sep 2012 to 12.5 percent in Sep 2013.

Chart VG-1, Italy, Rate of Unemployment, %

Source: Istituto Nazionale di Statistica

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment dropped from slightly below 23 million in Sep 2012 to 22.349 million in Sep 2013.

Chart VG-2, Italy, Total Number of Employed Persons, Millions, SA

Source: Istituto Nazionale di Statistica