Exit Risks of Zero Interest Rates, World Trade Restricting Economic Growth, United States Commercial Banks Assets and Liabilities, United States Housing, World Economic Slowdown and Global Recession Risk: Part III

 

Exit Risks of Zero Interest Rates, World Trade Restricting Economic Growth, United States Commercial Banks Assets and Liabilities, United States Housing, World Economic Slowdown and Global Recession Risk

Carlos M. Pelaez

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

Executive Summary

I United States Commercial Banks Assets and Liabilities

IA Transmission of Monetary Policy

IB Functions of Banks

IC United States Commercial Banks Assets and Liabilities

ID Theory and Reality of Economic History and Monetary Policy Based on Fear of Deflation

II United States Housing

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

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

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has lowered its forecast of the world economy to 2.9 percent in 2013 but accelerating to 3.6 percent in 2014, 4.0 percent in 2015 and 4.1 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,560 billion of world output of $72,216 billion, or 47.9 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2013 to 2016 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.4 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.6 percent. The difference in dollars of 2012 is rather high: growing by 15.4 percent would add $11.1 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,960 billion but growing by 8.6 percent would add $6.2 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,221 billion, or 37.7 percent of world output. The EMDEs would grow cumulatively 21.9 percent or at the average yearly rate of 5.1 percent, contributing $6.0 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,221 billion of China in 2012. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,346 billion, or 19.9 percent of world output, which is equivalent to 41.5 percent of the combined output of the major advanced economies of the G7.

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

	GDP USD 2012	Real GDP ∆% 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. There are preliminary estimates for all countries for IIIQ2013. Growth is weak throughout most of the world. Japan’s GDP increased 1.2 percent in IQ2012 and 3.4 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.2 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 0.8 percent, which is much lower than 5.1 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 3.7 percent and increased 0.3 percent relative to a year earlier. Japan’s GDP grew 0.1 percent in IVQ2012 at the SAAR of 0.6 percent and increased 0.3 percent relative to a year earlier. Japan grew 1.1 percent in IQ2013 at the SAAR of 4.3 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 1.1 percent relative to a year earlier. Japan’s GDP grew 0.5 percent in IIIQ2013 at the SAAR of 1.9 percent and increased 2.7 pecent 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. In III 2013, euro area GDP increased 0.1 percent and fell 0.4 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. The GDP of Germany increased 0.3 percent in IIIQ2013 and 1.1 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. US GDP grew at 2.8 percent in SAAR in IIIQ2013, 0.7 percent relative to the prior quarter and 1.6 percent relative to the same quarter a year earlier (http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html). In IQ2012, UK GDP changed 0.0 percent, increasing 0.6 percent relative to a year earlier. UK GDP fell 0.5 percent in IIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP increased 0.6 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 nine consecutive quarters from IIIQ2011 to IIIQ2013. Italy’s GDP fell 1.1 percent in IQ2012 and declined 1.8 percent relative to IQ2011. Italy’s GDP fell 0.6 percent in IIQ2012 and declined 2.6 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.4 percent and declined 2.8 percent relative to a year earlier. The GDP of Italy contracted 0.9 percent in IVQ2012 and fell 3.0 percent relative to a year earlier. In IQ2013, Italy’s GDP contracted 0.6 percent and fell 2.5 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and 2.2 percent relative to a year earlier. The GDP of Italy fell 0.1 percent in IIIQ2013 and declined 1.9 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 0.4 percent relative to a year earlier. The GDP of France increased 0.5 percent in IIQ2013 and 0.5 percent relative to a year earlier. France’s GDP contracted 0.1 percent in IIIQ2013 and increased 0.2 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: 5.1	3.4
China	1.4	8.1
Euro Area	-0.1	-0.2
Germany	0.7	1.8
France	0.0	0.4
Italy	-1.1	-1.8
United Kingdom	0.0	0.6
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.3         SAAR: 1.2	2.8
Japan	QOQ: -0.2 SAAR: -0.8	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	-2.6
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: –3.7	0.3
China	2.0	7.4
Euro Area	-0.1	-0.7
Germany	0.2	0.4
France	0.2	0.0
Italy	-0.4	-2.8
United Kingdom	0.6	0.0
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	2.0
Japan	QOQ: 0.1 SAAR: 0.6	0.3
China	1.9	7.9
Euro Area	-0.5	-1.0
Germany	-0.5	0.0
France	-0.2	-0.3
Italy	-0.9	-3.0
United Kingdom	-0.3	-0.2
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.3 SAAR: 1.1	1.3
Japan	QOQ: 1.1 SAAR: 4.3	0.3
China	1.5	7.7
Euro Area	-0.2	-1.2
Germany	0.0	-1.6
France	-0.1	-0.4
Italy	-0.6	-2.5
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	1.1
China	1.9	7.5
Euro Area	0.3	-0.6
Germany	0.7	0.9
France	0.5	0.5
Italy	-0.3	-2.2
UK	0.7	1.3
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 0.7 SAAR: 2.8	1.6
Japan	QOQ: 0.5 SAAR: 1.9	2.7
China	2.2	7.8
Euro Area	0.1	-0.4
Germany	0.3	1.1
France	-0.1	0.2
Italy	-0.1	-1.9
UK	0.8	1.5

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

Source: Country Statistical Agencies http://www.census.gov/aboutus/stat_int.html 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/2013/11/global-financial-risk-world-inflation.html 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://cmpassocreulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In Oct 2013, Japan’s exports grew 18.6 percent in 12 months while imports increased 26.1 percent. The second part of Table V-4 shows that net trade deducted 1.3 percentage points from Japan’s growth of GDP in IIQ2012, deducted 2.1 percentage points from GDP growth in IIIQ2012 and deducted 0.6 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 0.6 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.8 percentage points from GDP growth in Japan. In Oct 2013, China exports increased 5.6 percent relative to a year earlier and imports increased 7.6 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 1.7 percent in the month of Sep and increased 3.6 percent in the 12 months ending in Sep. 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 0.3 percentage points in IIQ2013. Net traded deducted 0.4 percentage points from Germany’s GDP growth in IIIQ2013. 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. In IIIQ2013, net trade deducted 0.9 percentage points from UK GDP growth. France’s exports increased 1.8 percent in Sep 2013 while imports increased 3.4. Net traded added 0.1 percentage points from France’s GDP in IIIQ2012 and 0.2 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and was neutral in IIQ2013, deducting 0.7 percentage points in IIIQ2013. US exports decreased 0.2 percent in Sep 2013 and goods exports increased 1.6 percent in Jan-Sep 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. Net traded added 0.31 percentage points to US GDP growth in IIIQ2013. US imports increased 1.2 percent in Sep 2013 and goods imports decreased 0.9 percent in Jan-Sep 2013 relative to a year earlier. Industrial production decreased 0.1 percent in Oct 2013 after increasing 0.7 percent in Sep 2013 and increasing 0.5 percent in Aug 2013, as shown in Table I-1, with all data seasonally adjusted. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production edged down 0.1 percent in October after having increased 0.7 percent in September. Manufacturing production rose 0.3 percent in October for its third consecutive monthly gain. The index for mining fell 1.6 percent after having risen for six consecutive months, and the output of utilities dropped 1.1 percent after having jumped 4.5 percent in September. The level of the index for total industrial production in October was equal to its 2007 average and was 3.2 percent above its year-earlier level. Capacity utilization for the industrial sector declined 0.2 percentage point in October to 78.1 percent, a rate 1.1 percentage points above its level of a year earlier and 2.1 percentage points below its long-run (1972-2012) average.“

In the six months ending in Oct 2013, United States national industrial production accumulated increase of 1.3 percent at the annual equivalent rate of 2.6 percent, which is lower than growth of 3.2 percent in the 12 months ending in Oct 2013. Excluding growth of 0.7 percent in Sep 2013, growth in the remaining five months from May 2012 to Oct 2013 accumulated to 0.6 percent or 1.2 percent annual equivalent. Industrial production fell in two of the past six months. Business equipment accumulated growth of 1.7 percent in the six months from May to Oct 2013 at the annual equivalent rate of 3.4 percent, which is much lower than growth of 5.1 percent in the 12 months ending in Oct 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 the industrial sector declined 0.2 percentage point in October to 78.1 percent, a rate 1.1 percentage points above its level of a year earlier and 2.1 percentage points below its long-run (1972-2012) average.” United States industry apparently decelerated to a lower growth rate. Manufacturing increased 0.3 percent in Oct 2013 after increasing 0.1 percent in Sep 2013 and increasing 0.7 percent in Aug 2013 seasonally adjusted, increasing 3.4 percent not seasonally adjusted in 12 months ending in Oct 2013, as shown in Table I-2. Manufacturing grew cumulatively 1.2 percent in the six months ending in Oct 2013 or at the annual equivalent rate of 2.4 percent. Excluding the increase of 0.7 percent in Aug 2013, manufacturing accumulated growth of 0.5 percent from May 2013 to Oct 2013 or at the annual equivalent rate of 1.0 percent. 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 21.2 percent from the trough in Apr 2009 to Oct 2013. Manufacturing output in Oct 2013 is 5.3 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	-0.2 Sep	1.6 Jan-Sep	1.2 Sep	-0.9 Jan-Sep
Japan		Oct 2013 18.6 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		Oct 2013 26.1 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		5.6 Oct -0.3 Sep 7.2 Aug 5.1 Jul -3.1 Jun 1.0 May 14.7 Apr 10.0 Mar 21.8 Feb		7.6 Oct 7.4 Sep 10.9 Jul -0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb
Euro Area	2.7 12-M Sep	0.9 Jan-Sep	-0.2 12-M Sep	-3.5 Jan-Sep
Germany	1.7 Sep CSA	3.6 Sep	-1.9 Sep CSA	-0.3 Sep
France Sep	1.8	-1.3	3.4	0.7
Italy Sep	0.6	2.0	1.9	-0.1
UK	0.1 Sep	0.1 Jul-Sep 13 /Jul-Sep 12	0.2 Sep	1.8 Jul-Sep 13/Jul-Sep 12
Net Trade % Points GDP Growth	% Points
USA	IIIQ2013 0.31 IIQ2013 -0.07 IQ2013 -0.28 IVQ2012 +0.68 IIIQ2012 -0.03 IIQ2012 +0.10 IQ2012 +0.44
Japan	0.3 IQ2012 -1.3 IIQ2012 -2.1 IIIQ2012 -0.6 IVQ2012 1.6 IQ2013 0.6 IIQ2013 -1.8 IIIQ2013
Germany	IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.2 IIQ2013 0.3 IIIQ2013 -0.4
France	0.1 IIIQ2012 0.2 IVQ2012 -0.1 IQ2013 0.0 IIQ2013 -0.7 IIIQ2013
UK	-0.8 IQ2012 -0.6 IIQ2012 +0.4 IIIQ2012 -0.2 IVQ2012 0.3 IQ2013 0.0 IIQ2013 -0.9 IIIQ2013

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 Oct 2013. The share of Asia in Japan’s trade is more than one-half for 53.4 percent of exports and 46.1 percent of imports. Within Asia, exports to China are 18.8 percent of total exports and imports from China 23.0 percent of total imports. While exports to China increased 21.3 percent in the 12 months ending in Oct 2013, imports from China increased 22.0 percent. The largest export market for Japan in Oct 2013 is the US with share of 19.1 percent of total exports, which is almost equal to that of China, and share of imports from the US of 8.2 percent in total imports. Western Europe has share of 10.7 percent in Japan’s exports and of 10.1 percent in imports. Rates of growth of exports of Japan in Oct 2013 are relatively high for several countries and regions with growth of 26.4 percent for exports to the US, 20.6 percent for exports to Mexico, 15.5 percent for exports to Brazil and 29.1 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 Oct 2013 are positive for all trading partners. Imports from Asia increased 23.5 percent in the 12 months ending in Oct 2013 while imports from China increased 22.0 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

Oct 2013	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,104,509	18.6	7,195,191	26.1
Asia	3,261,087	14.9	3,317,938	23.5
China	1,147,898	21.3	1,654,281	22.0
USA	1,164,142	26.4	586,945	16.2
Canada	76,514	11.8	107,110	12.4
Brazil	47,134	15.5	99,248	14.9
Mexico	87,516	20.6	35,278	6.6
Western Europe	654,440	24.3	724,470	15.0
Germany	166,549	25.5	216,462	26.8
France	58,880	46.3	90,945	1.6
UK	92,372	7.9	53,538	7.8
Middle East	215,339	13.8	1,322,212	51.9
Australia	140,762	29.1	409,549	10.7

Source: Japan, Ministry of Finance http://www.customs.go.jp/toukei/info/index_e.htm

World trade projections of the IMF are in Table V-6. There is increasing growth of the volume of world trade of goods and services from 2.9 percent in 2013 to 5.4 percent in 2015 and 5.1 percent on average from 2013 to 2018. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would more challenging with lower growth of world trade.

Table V-6, IMF, Projections of World Trade, USD Billions, USD/Barrel and ∆%

	2013	2014	2015	Average ∆% 2013-2018
World Trade Volume (Goods and Services)	2.9	4.9	5.4	5.1
Exports Goods & Services	3.0	5.1	5.4	5.1
Imports Goods & Services	2.8	4.7	5.4	5.0
Oil Price USD/Barrel	104.49	101.35	NA	NA
Value of World Exports Goods & Services $B	23,164	24,367	NA	NA
Value of World Exports Goods $B	18,709	19,632	NA	NA
Exports Goods & Services
EMDE	3.5	5.8	6.3	5.9
G7	2.3	4.6	4.4	4.4
Imports Goods & Services
EMDE	5.0	5.9	6.7	6.2
G7	1.3	3.9	4.2	4.0
Terms of Trade of Goods & Services
EMDE	-0.5	-0.4	-0.6	-0.5
G7	0.1	-0.1	0.1	0.1
Terms of Trade of Goods
EMDE	-0.6	-0.9	-0.9	-0.8
G7	-0.5	0.2	0.2	-0.007

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

Source: International Monetary Fund World Economic Outlook databank

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

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, increased to 55.5 in Oct from 53.6 in Sep, indicating expansion at a faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/c79ee00ee91f455481b9003790967656). This index has remained above the contraction territory of 50.0 during 51 consecutive months. The employment index increased from 51.1 in Sep to 52.7 in Oct with input prices rising at a slower rate and new orders increasing at slower rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/c79ee00ee91f455481b9003790967656). David Hensley, Director of Global Economic Coordination at JP Morgan, finds acceleration in the first month of IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c79ee00ee91f455481b9003790967656). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, was higher at 52.1 in Oct from 51.8 in Sep, which is the highest reading in about two-and-a-half years (http://www.markiteconomics.com/Survey/PressRelease.mvc/2711528c99224748b8842d9cb3e54a6b). New export orders expanded at the fastest pace since Mar 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2711528c99224748b8842d9cb3e54a6b). David Hensley, Director of Global Economic Coordination at JP Morgan finds acceleration of global manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/2711528c99224748b8842d9cb3e54a6b). The HSBC Brazil Composite Output Index, compiled by Markit, increased from 50.7 in Sep to 52.0 in Oct, indicating moderate expansion (http://www.markiteconomics.com/Survey/PressRelease.mvc/48044fa43da14afdb6f777309c47ccfe). The HSBC Brazil Services Business Activity index, compiled by Markit increased marginally from 50.7 in Sep to 52.1 in Oct, indicating moderate improvement in business activity in an eight-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/48044fa43da14afdb6f777309c47ccfe). Andre Loes, Chief Economist, Brazil, at HSBC, finds that the reading of services of 52.1 is the highest since Feb, indicating stronger growth in IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/48044fa43da14afdb6f777309c47ccfe). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased from 49.9 in Sep to 50.2 in Oct 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 increased to 54.3 in Nov from 51.8 in Oct with the three-month average at 52.9 indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/18a5af682bef4cdeafb0caa1e50d9785). New export orders registered 52.6 in Nov up from 51.3 in Oct, indicating marginal expansion. Chris Williamson, Chief Economist at Markit, finds that manufacturing output is growing at 0.6 percent in IVQ2013, which is equivalent to annual rate of 2.3 percent per year (http://www.markiteconomics.com/Survey/PressRelease.mvc/18a5af682bef4cdeafb0caa1e50d9785). 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 increased 1.0 percentage points from 54.4 in Sep to 55.4 in Oct, indicating growth of business activity/production during 51 consecutive months, while the index of new orders decreased 2.8 percentage points from 59.6 in Sep to 56.8 in Oct (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	Oct 12 months NSA ∆%: 1.0; ex food and energy ∆%: 1.7 Oct month SA ∆%: -0.1; ex food and energy ∆%: 0.1 Blog 11/24/13
Producer Price Index	Oct 12-month NSA ∆%: 0.3; ex food and energy ∆% 1.4 Oct month SA ∆% = -0.2; ex food and energy ∆%: 0.2 Blog 11/24/13
PCE Inflation	Sep 12-month NSA ∆%: headline 0.9; ex food and energy ∆% 1.2 Blog 11/10/13
Employment Situation	Household Survey: Oct Unemployment Rate SA 7.3% Blog calculation People in Job Stress Sep: 28.9 million NSA, 17.7% of Labor Force Establishment Survey: Nov Nonfarm Jobs +204,000; Private +212,000 jobs created  Sep 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.9 Blog 11/10/13
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 Sep 2013 4.381 million lower by 0.834 million than 5.215 million in Sep 2005 Blog 11/24/13
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 IIIQ2013/IIIQ2012 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 IIIQ2013 SAAR 2.8 Blog 11/10/13
Real Private Fixed Investment	SAAR IIIQ2013 4.1 ∆% IVQ2007 to IIIQ2013: minus 4.0% Blog 11/10/13
Personal Income and Consumption	Sep month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.4 Real Personal Consumption Expenditures (RPCE): 0.1 12-month Sep NSA ∆%: RDPI: 2.0; RPCE ∆%: 1.7 Blog 11/3/13
Quarterly Services Report	IIQ13/IIQ12 SA ∆%: Information 4.1 Financial & Insurance 4.2 Blog 9/8/13
Employment Cost Index	Compensation Private IIIQ2013 SA ∆%: 0.4 Sep 12 months ∆%: 1.9 Blog 11/24/13
Industrial Production	Oct month SA ∆%: -0.1 Oct 12 months SA ∆%: 3.2 Manufacturing Oct SA ∆% 0.3 Oct 12 months SA ∆% 3.3, NSA 3.4 Capacity Utilization: 78.1 Blog 11/17/13
Productivity and Costs	Nonfarm Business Productivity IIIQ2013∆% SAAE 1.9; IIIQ2013/IIIQ2012 ∆% 0.0; Unit Labor Costs SAAE IIIQ2013 ∆% -0.6; IIIQ2013/IIIQ2012 ∆%: 1.9 Blog 11/17/2013
New York Fed Manufacturing Index	General Business Conditions From Oct 1.52 to Nov -2.21 New Orders: From Oct 7.75 to Nov -5.53 Blog 11/24/13
Philadelphia Fed Business Outlook Index	General Index from Oct 19.8 to Nov 6.5 New Orders from Oct 27.5 to Nov 11.8 Blog 11/24/13
Manufacturing Shipments and Orders	New Orders SA Sep ∆% 1.7 Ex Transport -0.2 Jan-Sep NSA New Orders 2.4 Ex transport 1.5 Blog 11/10/13
Durable Goods	Oct New Orders SA ∆%: -2.0; ex transport ∆%: -0.1 Jan-Oct 13/Jan-Oct 12 New Orders NSA ∆%: 3.3; ex transport ∆% 1.4 Blog 12/1/13
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-Sep 2013/Jan-Sep 2012 NSA ∆%: Total 3.6; Durable Goods: 3.9; Nondurable Goods: 3.3 Blog 11/24/13
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Sep 13/Sep 12-M NSA ∆%: Sales Total Business 4.2; Manufacturers 2.5 Retailers 3.5; Merchant Wholesalers 6.8 Blog 11/24/13
Sales for Retail and Food Services	Jan-Oct 2013/Jan-Oct 2012 ∆%: Retail and Food Services 4.2; Retail ∆% 4.3 Blog 11/24/13
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	Sep 2013/Sep 2012 ∆% NSA: 10 Cities 13.3; 20 Cities: 13.3 ∆% Sep SA: 10 Cities 0.9 ; 20 Cities: 1.0 Blog 12/1/13
FHFA House Price Index Purchases Only	Sep SA ∆% 0.3; 12 month NSA ∆%: 8.5 Blog 12/1/13
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 ∆% (Oct NA) ; Permits Oct ∆%: 6.2 Jan-Aug 2013/Jan-Aug 2012 NSA ∆% Starts 22.8; Jan-Oct 2013/Jan-Oct 2012 Permits  ∆% 20.1 Blog 12/1/13
Trade Balance	Balance Sep SA -$41,778 million versus Aug -$38,701 million Exports Sep SA ∆%: -0.2 Imports Sep SA ∆%: 1.2 Goods Exports Jan-Sep 2013/2012 NSA ∆%: 1.6 Goods Imports Jan-Sep 2013/2012 NSA ∆%: -0.9 Blog 11/17/13
Export and Import Prices	Oct 12-month NSA ∆%: Imports -2.0; Exports -2.1 Blog 11/17/13
Consumer Credit	Sep ∆% annual rate: Total 5.4; Revolving minus 2.9; Nonrevolving 8.7 Blog 11/10/13
Net Foreign Purchases of Long-term Treasury Securities	Sep Net Foreign Purchases of Long-term US Securities: $25.5 billion Major Holders of Treasury Securities: China $1294 billion; Japan $1178 billion; Total Foreign US Treasury Holdings Jul $5653 billion Blog 11/24/13
Treasury Budget	Fiscal Year 2014/2013 ∆% Oct: Receipts 7.9; Outlays minus 4.6; Individual Income Taxes minus 2.9 Deficit Fiscal Year 2011 $1,296 billion Deficit Fiscal Year 2012 $1,087 billion Blog 11/17/2013
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	Oct 2013 SAAR ∆%: Securities 2.8 Loans 3.4 Cash Assets 59.9 Deposits 9.2 Blog 12/1/13
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:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

11/10/13 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html

11/3/2013 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-world-inflation.html

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

2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html

11/18/12 http://cmpassocregulationblog.blogspot.com/2012/11/united-states-unsustainable-fiscal.html

Manufacturers’ shipments of durable goods increased 0.2 percent in Oct 2013 and 0.5 percent in Sep 2013, increasing 1.0 percent in Aug 2013. New orders decreased 2.0 percent in Oct 2013 after increasing 4.1 percent in Sep 2013 and 0.5 percent in Aug 2013, as shown in Table VA-1. These data are very volatile. Volatility is illustrated by decrease of 12.9 percent in Nov 2012 after increase of orders for nondefense aircraft of 2642.2 percent in Sep 2012 after decrease of 97.2 percent in Aug and increases of 51.1 percent in Jul 2012 and 32.5 percent in Jun 2012. Nondefense aircraft new orders decreased 15.9 percent in Oct 2013 after increasing 59.2 percent in Sep 2013 and 5.4 percent in Aug 2013. New orders excluding transportation equipment fell 0.1 percent in Oct 2013, increased 0.2 percent in Sep 2013 and fell 0.1 percent in Aug 2013. Capital goods new orders, indicating investment decreased 5.3 percent in Oct 2013, increasing 8.2 percent in Sep 2013 but fell 0.4 percent in Aug 2013. New orders of nondefense capital goods decreased 3.9 percent in Oct 2013, after increasing 6.8 percent in Sep 2013 and falling 0.1 percent in Aug 2013. Capital goods orders excluding more volatile aircraft fell 1.2 percent in Oct 2013, decreased 1.4 percent in Sep 2013 and increased 1.0 percent in Aug 2013.

Table VA-1, US, Durable Goods Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%

	Oct 2013 ∆%	Sep 2013 ∆%	Aug 2013  ∆%
Total
S	0.2	0.5	1.0
NO	-2.0	4.1	0.5
Excluding Transport
S	-0.1	0.5	0.7
NO	-0.1	0.2	-0.1
Excluding Defense
S	0.4	0.6	0.6
NO	-1.3	3.4	0.9
Machinery
S	0.8	0.6	0.5
NO	-0.3	-2.0	0.7
Computers & Electronic Products
S	-2.6	0.7	1.8
NO	0.3	4.9	-4.6
Computers
S	-9.1	5.6	15.6
NO	-7.6	8.7	10.7
Transport Equipment
S	1.1	0.5	1.6
NO	-5.9	13.0	1.8
Motor Vehicles
S	1.7	0.4	1.8
NO	1.7	-0.2	2.1
Nondefense Aircraft
S	2.4	4.0	-5.0
NO	-15.9	59.2	5.4
Capital Goods
S	-0.2	0.0	1.5
NO	-5.3	8.2	-0.4
Nondefense Capital Goods
S	0.0	0.4	0.4
NO	-3.9	6.8	-0.1
Capital Goods ex Aircraft
S	-0.2	-0.2	1.4
NO	-1.2	-1.4	1.0

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

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

Chart VA-1 provides monthly changes in durable goods new orders. There is significant volatility in these data, preventing clear identification of trends.

Chart VA-1, US, Manufacturers’ Durable Goods New Orders 2010-2011

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr021.html

Additional perspective on manufacturers’ shipments and new orders of durable goods is in Table VA-2. Values are cumulative millions of dollars in Jan-Oct 2013 not seasonally adjusted (NSA) and without adjustment for inflation. Shipments of all manufacturing industries in Jan-Oct 2013 total $2304.3 billion and new orders total $2274.1 billion, growing respectively by 3.3 percent and 4.8 percent relative to the same period in 2012. Excluding transportation equipment, shipments grew 1.4 percent and new orders increased 3.4 percent. Excluding defense, shipments grew 3.5 percent and new orders grew 5.8 percent. Important information not in Table VA-2 is the large share of nondurable goods: with shipments of $3 trillion in 2012, growing by 2.0 percent, and new orders of $3 trillion, growing by 2.0 percent, in part driven by higher prices for food and energy. Durable goods were lower in value in 2012, with shipments of $2.7 trillion, growing by 7.0 percent, and new orders of $2.6 trillion, growing by 4.1 percent. Capital goods have relatively high value of $827.3 billion for shipments, growing 2.1 percent, and new orders $863.2 billion, growing 4.2 percent. Excluding aircraft, capital goods shipments reached $654.6 billion, growing by 1.4 percent, and new orders $674.3 billion, growing 4.1 percent. Data weakened in 2013 with effects of lower inflation on nominal values.

Table VA-2, US, Value of Manufacturers’ Shipments and New Orders of Durable Goods, NSA, Millions of Dollars 

Jan-Oct 2013	Shipments	∆% 2013/ 2012	New Orders	∆% 2013/  2012
Total	2,304,347	3.3	2,274,148	4.8
Excluding Transport	1,621,221	1.4	1,574,223	3.4
Excluding Defense	2,184,527	3.5	2,170,774	5.8
Machinery	342,607	3.2	347,619	7.0
Computers & Electronic Products	273,819	-3.8	209,712	-3.2
Computers & Related Products	22,164	-7.3	22,293	-7.7
Transport Equipment	683,126	8.0	699,925	8.0
Motor Vehicles	454,427	10.0	453,435	10.2
Nondefense Aircraft	104,469	9.1	143,241	20.4
Capital Goods	827,266	2.1	863,219	4.2
Nondefense Capital Goods	730,198	2.3	780,131	6.4
Capital Goods ex Aircraft	654,553	1.4	674,324	4.1

Note: Transport: transportation

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

Chart VA-2 of the Board of Governors of the Federal Reserve System shows that output of durable manufacturing accelerated in the 1980s and 1990s with slower growth in the 2000s perhaps because processes matured. Growth was robust after the major drop during the global recession but appears to vacillate in the final segment.

Chart VA-2, US, Output of Durable Manufacturing, 1972-2013

Source: Board of Governors of the Federal Reserve System

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

Manufacturing jobs increased 19,000 in Oct 2013 relative to Sep 2013, seasonally adjusted (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.html). Manufacturing jobs not seasonally adjusted increased 49,000 from Oct 2012 to Oct 2013 or at the average monthly rate of 4,083. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. Industrial production decreased 0.1 percent in Oct 2013 after increasing 0.7 percent in Sep 2013 and increasing 0.5 percent in Aug 2013, as shown in Table I-1, with all data seasonally adjusted. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production edged down 0.1 percent in October after having increased 0.7 percent in September. Manufacturing production rose 0.3 percent in October for its third consecutive monthly gain. The index for mining fell 1.6 percent after having risen for six consecutive months, and the output of utilities dropped 1.1 percent after having jumped 4.5 percent in September. The level of the index for total industrial production in October was equal to its 2007 average and was 3.2 percent above its year-earlier level. Capacity utilization for the industrial sector declined 0.2 percentage point in October to 78.1 percent, a rate 1.1 percentage points above its level of a year earlier and 2.1 percentage points below its long-run (1972-2012) average.“

In the six months ending in Oct 2013, United States national industrial production accumulated increase of 1.3 percent at the annual equivalent rate of 2.6 percent, which is lower than growth of 3.2 percent in the 12 months ending in Oct 2013. Excluding growth of 0.7 percent in Sep 2013, growth in the remaining five months from May 2012 to Oct 2013 accumulated to 0.6 percent or 1.2 percent annual equivalent. Industrial production fell in two of the past six months. Business equipment accumulated growth of 1.7 percent in the six months from May to Oct 2013 at the annual equivalent rate of 3.4 percent, which is much lower than growth of 5.1 percent in the 12 months ending in Oct 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 the industrial sector declined 0.2 percentage point in October to 78.1 percent, a rate 1.1 percentage points above its level of a year earlier and 2.1 percentage points below its long-run (1972-2012) average.” United States industry apparently decelerated to a lower growth rate. Manufacturing increased 0.3 percent in Oct 2013 after increasing 0.1 percent in Sep 2013 and increasing 0.7 percent in Aug 2013 seasonally adjusted, increasing 3.4 percent not seasonally adjusted in 12 months ending in Oct 2013, as shown in Table I-2 (http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html). Manufacturing grew cumulatively 1.2 percent in the six months ending in Oct 2013 or at the annual equivalent rate of 2.4 percent. Excluding the increase of 0.7 percent in Aug 2013, manufacturing accumulated growth of 0.5 percent from May 2013 to Oct 2013 or at the annual equivalent rate of 1.0 percent. 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 21.2 percent from the trough in Apr 2009 to Oct 2013. Manufacturing output in Oct 2013 is 5.3 percent below the peak in Jun 2007.

Table VA-3 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.7 percent in IIQ2013. Most of US national income is in the form of services. In Oct 2013, there were 137.540 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 115.308 million NSA in Oct 2013 accounted for 83.8 percent of total nonfarm jobs of 137.540 million, of which 12.033 million, or 10.4 percent of total private jobs and 8.7 percent of total nonfarm jobs, were in manufacturing. Private service-producing jobs were 96.328 million NSA in Oct 2013, or 70.0 percent of total nonfarm jobs and 83.5 percent of total private-sector jobs. Manufacturing has share of 10.8 percent in US national income in IIQ2013, as shown in Table VA-3. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

Table VA-3, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total

	SAAR IQ2013	% Total	SAAR IIQ2013	% Total
National Income WCCA	14,354.5	100.0	14,471.3	100.0
Domestic Industries	14,117.1	98.3	14,224.4	98.3
Private Industries	12,432.9	86.6	12,544.3	86.7
Agriculture	226.4	1.6	220.3	1.5
Mining	247.6	1.7	252.6	1.7
Utilities	209.1	1.5	216.5	1.5
Construction	618.2	4.3	626.4	4.3
Manufacturing	1568.1	10.9	1561.1	10.8
Durable Goods	878.8	6.1	890.3	6.2
Nondurable Goods	689.2	4.8	670.1	4.6
Wholesale Trade	870.0	6.1	875.3	6.0
Retail Trade	971.4	6.8	994.5	6.9
Transportation & WH	434.0	3.0	437.7	3.0
Information	496.0	3.5	504.8	3.5
Finance, Insurance, RE	2418.9	16.8	2437.1	16.8
Professional, BS	1973.6	13.7	1998.1	13.8
Education, Health Care	1423.7	9.9	1439.4	9.9
Arts, Entertainment	569.7	4.0	575.0	4.0
Other Services	406.1	2.8	408.3	2.8
Government	1684.3	11.7	1680.1	11.6
Rest of the World	237.4	1.7	246.8	1.7

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

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

VB Japan. Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (http://www.boj.or.jp/en/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. Consumer price inflation in Japan excluding fresh food was 0.3 percent in Oct 2013 and 0.9 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm). The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

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

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

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

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

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

1. Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
2. Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
3. Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
4. Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.

Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
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 53.2 in Sep to 56.0 in Oct, which is the highest reading in the six-year history of the survey (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d6234f82c1546af972d0f1efd234068). Claudia Tillbrooke, Economist at Markit and author of the report, finds that the survey data suggest continuing strong growth of the economy of Japan (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d6234f82c1546af972d0f1efd234068). The Markit Business Activity Index of Services increased from 53.0 in Sep to 55.3 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d6234f82c1546af972d0f1efd234068). Claudia Tillbrooke, Economist at Markit and author of the report, finds growth in services with strength in new orders and employment (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d6234f82c1546af972d0f1efd234068). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased from 52.5 in Sep 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	Oct ∆% -0.1 12 months ∆% 2.5 Blog 11/24/13
Consumer Price Index	Oct NSA ∆% 0.1; Sep 12 months NSA ∆% 1.1 Blog 12/1/13
Real GDP Growth	IIIQ2013 ∆%: 0.5 on IIQ2013;  IIIQ2013 SAAR 2.7; ∆% from quarter a year earlier: 1.2 % Blog 6/16/13 8/18/13 9/15/13 11/17/13
Employment Report	Oct Unemployed 2.63 million Change in unemployed since last year: minus 80 thousand Unemployment rate: 4.0 % Blog 12/1/13
All Industry Indices	Sep month SA ∆% 0.4 12-month NSA ∆% 2.2 Blog 11/24/13
Industrial Production	Oct SA month ∆%: 0.5 12-month NSA ∆% 4.7 Blog 12/1/13
Machine Orders	Total Sep ∆% 13.2 Private ∆%: -0.9 Sep ∆% Excluding Volatile Orders -2.1 Blog 11/17/13
Tertiary Index	Sep month SA ∆% -0.2 Sep 12 months NSA ∆% 1.1 Blog 11/17/13
Wholesale and Retail Sales	Oct 12 months: Total ∆%: 1.7 Wholesale ∆%: 1.5 Retail ∆%: 2.3 Blog 12/1/13
Family Income and Expenditure Survey	Oct 12-month ∆% total nominal consumption 2.3, real 0.9 Blog 12/1/13
Trade Balance	Exports Oct 12 months ∆%: 18.6 Imports Oct 12 months ∆% 26.1 Blog 11/24/13

Links to blog comments in Table JPY:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.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 Oct 2013, industrial production in Japan increased 0.5 percent and increased 4.7 percent in the 12 months ending in Oct 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, 1.3 percent in Sep 2013 and 0.5 percent in Oct 2013. Growth in 12 months improved from minus 10.1 percent in Feb 2013 to 4.7 percent in Oct 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
Oct 2013	0.5	4.7
Sep	1.3	5.1
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 Oct 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 rate of unemployment stabilized at 4.0 percent in Oct 2013. The employment rate stood at 57.4 percent in Oct 2013 and increased 0.4 percentage points from a year earlier.

Table VB-2, Japan, Employment Report Sep 2013 

Oct 2013 Unemployed	2.63 million
Change since last year	-80 thousand; ∆% –3.0
Unemployment rate	4.0% SA 0.0; NSA 4.0%, -0.1 from earlier year
Population ≥ 15 years	110.91 million
Change since last year	∆% -0.1
Labor Force	66.29 million
Change since last year	∆% 0.6
Employed	63.66 million
Change since last year	∆% 0.7
Labor force participation rate	59.8
Change since last year	0.4
Employment rate	57.4%
Change since last year	0.4

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

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

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2013. The sharp decline in Sep 2011 was the best reading in 2011 but the rate increased in the final quarter of the year, declining in Feb 2012 and stabilizing in Mar 2012 but increasing to 4.6 percent in Apr 2012 and declining again to 4.4 percent in May 2012 and 4.3 percent in both Jun and Jul 2012 with further decline to 4.2 percent in Aug, Sep and Oct 2012, 4.1 percent in Nov 2012, 4.2 percent in Dec 2012, 4.2 percent in Jan 2013, 4.3 percent in Feb 2013 and 4.1 percent in Mar-May 2013. 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. The rate of unemployment stabilized at 4.0 percent in Oct 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. There was marked improvement in Sep 2013 with growth of nominal consumption of 5.2 percent in 12 months and 3.7 percent in real consumption. Table VB-4 shows growth of nominal consumption of 2.3 percent in the 12 months ending in Oct 2013 and 0.9 percent in real terms. There are multiple segments of increasing real consumption: housing increasing 7.5 percent in nominal terms and 7.8 percent in real terms, transportation/communications increasing 8.8 percent in real terms and 10.7 percent in nominal terms and clothing and footwear increasing 2.4 percent in nominal terms and 1.8 percent in real terms. Education decreased 2.9 percent in real terms and 2.2 percent in nominal terms. Fuel, light and water charges increased 0.7 percent in nominal terms and decreased 4.7 percent in real terms. Real household income decreased 1.3 percent; real disposable income decreased 1.4 percent; and real consumption expenditures decreased 1.0 percent.

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

Oct 2013	Nominal	Real
Households of Two or More Persons
Total Consumption	2.3	0.9
Excluding Housing, Vehicles & Remittance		-1.5
Food	1.6	0.2
Housing	7.5	7.8
Fuel, Light & Water Charges	0.7	-4.7
Furniture & Household Utensils	-4.0	-3.1
Clothing & Footwear	2.4	1.8
Medical Care	-7.7	-7.2
Transport and Communications	10.7	8.8
Education	-2.2	-2.9
Culture & Recreation	-0.2	-0.2
Other Consumption Expenditures	1.9	0.5*
Workers’ Households
Income	0.1	-1.3
Disposable Income	0.0	-1.4
Consumption Expenditures	0.4	-1.0

*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 followed by deterioration 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 0.9 percent in the 12 months ending in Oct 2013 and nominal consumption expenditures increased 2.3 percent. 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 5.1 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/2013/11/risks-of-unwinding-monetary-policy_8749.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 0.8 percent and contribution of 0.2 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 3.7 percent and personal consumption deducted 0.7 percentage points. Japan’s GDP grew at the SAAR of 0.6 percent in IVQ2012 with personal consumption contributing 1.0 percentage points. Japan’s GDP growth in IQ2013 was at 4.3 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 1.4 percentage points. Japan’s GDP grew at 1.9 percent SAAR in IIIQ2013 with personal consumption expenditures contributing 0.2 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
Oct 2013	2.3	0.9
Sep	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, IIQ2013 and IIIQ2013. 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 increased 3.0 percent in the 12 months ending in Sep 2013 and 2.3 percent in the 12 months ending in Oct 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. Retail sales 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, 3.0 percent in Sep 2013 and 2.3 percent in Oct 2013.

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

	Total	Wholesale	Retail
Oct 2013	1.7	1.5	2.3
Sep	2.8	2.7	3.0
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 2012 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 and 56.3 in Oct 2013.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Oct 2013	56.3	51.6	56.1	51.4	60.5
Sep	55.4	53.4	56.7	50.6	60.1
Aug	53.9	50.9	57.1	51.2	62.9
Jul	54.1	50.3	58.2	52.4	63.9
Jun	53.9	50.3	55.0	50.6	61.8
May	54.3	50.1	54.4	50.7	62.9
Apr	54.5	50.9	51.1	47.6	62.5
Mar	55.6	52.0	55.3	50.0	62.4
Feb	54.5	51.8	56.2	51.1	62.7
Jan	56.2	53.7	58.2	50.9	61.4
Dec 2012	56.1	54.3	53.8	50.0	64.6
Nov	55.6	53.2	52.5	48.4	64.6
Oct	55.5	51.6	58.1	50.5	63.4
Sep	53.7	51.8	57.5	51.3	60.9
Aug	56.3	52.7	57.6	51.2	63.2
Jul	55.6	53.2	49.7	48.7	63.9
Jun	56.7	53.7	52.1	48.6	65.5
May	55.2	52.5	53.6	48.5	65.4
Apr	56.1	52.7	57.9	50.3	66.1
Mar	58.0	53.5	60.2	52.0	66.6
Feb	57.3	52.7	59.0	51.2	63.8
Jan	55.7	52.2	58.2	51.1	65.3

Notes: Interm.: Intermediate; Subs: Subscription; Exp: Business Expectations

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/

Chart CIPMNM provides China’s nonmanufacturing purchasing managers’ index. There was slowing of the general index in Apr 2012 after the increase in Jan-Mar 2012 and further decline to 55.2 in May 2012 but increase to 56.7 in Jun 2012 with marginal decline to 55.6 in Jul 2012 and 56.3 in Aug 2012 and sharper drop to 53.7 in Sep 2012, rebounding to 55.5 in Oct 2012, 55.6 in Nov 2012, 56.1 in Dec 2012 and 55.6 in Mar 2013. The index fell again to 54.5 in Apr 2013, 54.3 in May 2013 and 53.9 in Jun 2013, rebounding to 54.1 in Jul 2013. The index stabilized at 53.9 in Aug 2013 climbing to 55.4 in Sep 2013 and 56.3 in Oct 2013.

Chart CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/

Table CIPMMFG provides the index of purchasing managers of manufacturing seasonally adjusted of the National Bureau of Statistics of China. The general index (IPM) rose from 50.5 in Jan 2012 to 53.3 in Apr and declined to 50.1 in Jul and to the contraction zone at 49.2 in Aug and 49.8 in Sep, climbing above 50.0 to 50.2 in Oct, 50.6 in Nov-Dec 2012, 50.9 in Mar 2013 and 50.6 in Apr 2013. The index increased to 50.8 in May 2013, falling to 50.1 in Jun 2013 and rebounding to 50.3 in Jul 2013. The index increased to 51.0 in Aug 2013 and 51.1 in Sep 2013 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

http://www.stats.gov.cn/english/

China estimates the manufacturing index of purchasing managers on the basis of a sample of 820 enterprises (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Chart CIPMMFG provides the manufacturing index of purchasing managers. There is deceleration from 51.2 in Sep 2011 to marginal contraction at 49.0 in Nov 2011. Manufacturing activity recovered to 53.3 in Apr 2012 but then declined to 50.4 in May 2012 and 50.1 in Jun 2012, which is the lowest in a year with exception of contraction at 49.0 in Nov 2011. The index then fell to contraction at 49.2 in Aug 2012 and improved to 49.8 in Sep with movement to 50.2 in Oct 2012, 50.6 in Nov 2012, 50.9 in Mar 2013 and 50.6 in Apr 2013 above the neutral zone of 50.0. The index increased to 50.8 in May 2013 and fell to 50.1 in Jun 2013, increasing to 50.3 in Jul 2013. The index increased to 51.0 in Aug 2013, 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

http://www.stats.gov.cn/english/

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/982f1d1602014fc4a5f7ef4b4394f8e3) is slowing. The overall Flash HSBC China Manufacturing PMI^™ decreased from 50.9 in Oct to 50.4 in Nov, which is moderately above the contraction frontier of 50.0, while the Flash HSBC China Manufacturing Output Index decreased from 51.3 in Oct to 51.1 in Nov, 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 slowed because of weakness in new export orders and replenishment of stocks (http://www.markiteconomics.com/Survey/PressRelease.mvc/982f1d1602014fc4a5f7ef4b4394f8e3). 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 51.2 in Sep to 51.8 in Oct, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/59995475378d43528ffca417425078de). 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/59995475378d43528ffca417425078de). The HSBC Business Activity index increased from 52.4 in Sep to 52.6 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/59995475378d43528ffca417425078de). Hongbin Ku, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds strength in services with recovery of manufacturing and improving labor markets (http://www.markiteconomics.com/Survey/PressRelease.mvc/59995475378d43528ffca417425078de). 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	Oct 12-month ∆%: minus 1.5 Oct month ∆%: 0.0 Blog 11/17/13
Consumer Price Index	Oct month ∆%: 0.1 Oct 12 months ∆%: 3.2 Blog 11/17/13
Value Added of Industry	Oct month ∆%: 0.86 Jan-Oct 2013/Jan-Oct 2012 ∆%: 9.7 Oct 12-Month ∆%: 10.3 Blog 11/17/13
GDP Growth Rate	Year IIIQ2013 ∆%: 7.8 Quarter IIQ2013 AE ∆%: 9.1 Blog 10/27/13
Investment in Fixed Assets	Total Jan-Oct 2013 ∆%: 20.1 Real estate development: 19.2 Blog 11/17/13
Retail Sales	Oct month ∆%: 1.19 Oct 12 month ∆%: 13.3 Jan-Oct ∆%: 13.0 Blog 11/17/13
Trade Balance	Oct balance $31.1 billion Exports 12M ∆% 5.6 Imports 12M ∆% 7.6 Cumulative Oct: $200.46 billion Blog 11/10/13

Links to blog comments in Table CNY:

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

11/10/13 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html

10/27/13 http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or.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 1.1 percent in 2014 and 1.7 percent in 2015.

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*			1.1
2015*			1.7

*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, 2014 and 2015 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
2015*	1.7	1.9	1.7	1.2	1.7
2014*	1.1	1.7	0.9	0.7	0.5
2013*	-0.4	0.5	0.2	-1.8	-1.3
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 51.9 in Oct to 51.5 in Nov, which is a three month low after a high in 27 months in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/e05fef5f15ae4a84bc2a2da46660a8f3). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the index is consistent with modest growth of GDP of 0.2 percent based on the first two months of IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/e05fef5f15ae4a84bc2a2da46660a8f3). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP, decreased from 52.2 in Sep to 51.9 in Oct in the fourth consecutive monthly expansion (http://www.markiteconomics.com/Survey/PressRelease.mvc/71569592047842d8b4a3070d32eff19e). Chris Williamson, Chief Economist at Markit, finds growth in IVQ2013 at the rate of about 0.2 percent similar to IIIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/71569592047842d8b4a3070d32eff19e). 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/71569592047842d8b4a3070d32eff19e). The Markit Eurozone Manufacturing PMI^® increased to 51.3 in Oct from 51.3 in Sep (http://www.markiteconomics.com/Survey/PressRelease.mvc/15ea3e8c87c84f588424617cd2576d3a). New orders increased for the fourth consecutive month close to the highest rate in 27 months in Aug. Chris Williamson, Chief Economist at Markit, finds industrial growth in the euro area at an annual rate between 2 and 3 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/15ea3e8c87c84f588424617cd2576d3a). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IIIQ2013 ∆% 0.1; IIIQ2013/IIIQ2012 ∆% -0.4 Blog 11/17/13
Unemployment	Oct 2013: 12.1 % unemployment rate Oct 2013: 19.298 million unemployed Blog 12/1/13
HICP	Oct month ∆%: -0.1 12 months Oct ∆%: 0.7 Blog 11/17/13
Producer Prices	Euro Zone industrial producer prices Sep ∆%: 0.1 Sep 12-month ∆%: -0.9 Blog 11/10/13
Industrial Production	Sep month ∆%: -0.5; Sep 12 months ∆%: 1.1 Blog 11/17/13
Retail Sales	Sep month ∆%: minus 0.6 Sep 12 months ∆%: 0.3 Blog 11/10/13
Confidence and Economic Sentiment Indicator	Sentiment 98.5 Nov 2013 Consumer minus 15.4 Nov 2013 Blog 12/1/13
Trade	Jan-Sep 2013/Jan-Sep 2012 Exports ∆%: 0.9 Imports ∆%: -3.5 Sep 2013 12-month Exports ∆% 2.7 Imports ∆% -0.2 Blog 11/24/13

Links to blog comments in Table EUR:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

11/10/13 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html

EUROSTAT estimates the rate of unemployment in the euro area at 12.1 percent in Oct 2013, as shown in Table VD-1. The number of unemployed in Oct 2013 was 19.298 million, which was 0.435 million higher than 18.863 million in Oct 2012. The rate of unemployment jumped from 11.7 percent in Oct 2012 to 12.1 percent in Oct 2013.

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

	Unemployment Rate %	Number Unemployed Millions
Oct 2013	12.1	19.298
Sep	12.2	19.359
Aug	12.1	19.318
Jul	12.1	19.259
Jun	12.1	19.240
May	12.1	19.228
Apr	12.1	19.184
Mar	12.0	19.129
Feb	12.0	19.115
Jan	12.0	19.089
Dec 2012	11.9	18.855
Nov	11.8	18.800
Oct	11.7	18.863
Sep	11.6	18.449
Aug	11.5	18.290
Jul	11.5	18.226
Jun	11.4	18.119
May	11.3	17.881
Apr	11.2	17.733
Mar	11.0	17.456
Feb	10.9	17.231
Jan	10.7	17.024
Dec 2011	10.7	16.918
Nov	10.6	16.822
Oct	10.5	16.527
Sep	10.4	16.343
Aug	10.2	16.095
Jul	10.1	15.940
Jun	10.0	15.718
May	9.9	15.656
Apr	9.9	15.510
Mar	9.9	15.578
Feb	9.9	15.610
Jan	10.0	15.693
Dec 2010	10.0	15.805

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 12.1 percent for the region as a whole and 19.298 million unemployed but 5.2 percent in Germany and 2.219 million unemployed. At the other extreme is Spain with rate of unemployment of 26.7 percent and 6.058 million unemployed. The rate of unemployment of the European Union in Oct 2013 is 10.9 percent with 26.654 million unemployed.

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

Sep 2013	Unemployment Rate %	Unemployed Millions
Euro Zone	12.1	19.298
Germany	5.2	2.219
France	10.9	3.227
Netherlands	7.0	0.631
Finland	8.1	0.216
Portugal	15.7	0.831
Ireland	12.6	0.269
Italy	12.5	3.189
Greece	NA	NA
Spain	26.7	6.058
Belgium	9.0	0.447
European Union	10.9	26.654

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 88.0 in Dec 2012 to 98.5 in Nov 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	9.2	-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
Nov 2013	98.5	-3.9	-0.8	-15.4	-7.7	-30.6
Oct	97.7	-5.0	-3.7	-14.5	-7.8	-29.7
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

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 https://www.destatis.de/EN/PressServices/Press/pr/2013/11/PE13_381_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, increased from 53.2 in Oct to 54.3 in Nov for the highest reading in ten months. The index of manufacturing output reached 54.0 in Nov from 53.6 in Oct, which is a three-month high, while the index of services increased to 54.5 in Nov from 52.9 in Oct for a nine-month high. The overall Flash Germany Manufacturing PMI^® increased from 51.7 in Oct to 52.5 in Nov, which is a 29-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5eae384809e48d6bf621cfbec90f758). New work volumes increased marginally. Tim Moore, Senior Economist at Markit, finds potential for growth of around 0.5 percent in the calendar year (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5eae384809e48d6bf621cfbec90f758). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, was unchanged from 52.2 in Sep to 52.2 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/92b2f24be3384e999a9cde3204e471db). Tim Moore, Senior Economist at Markit and author of the report, finds strengthening conditions in Germany (http://www.markiteconomics.com/Survey/PressRelease.mvc/92b2f24be3384e999a9cde3204e471db). The Germany Services Business Activity Index decreased from 53.7 in Sep to 52.9 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/92b2f24be3384e999a9cde3204e471db). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 51.1 in Sep to 51.7 in Oct, in movement away from contraction territory below 50.0 during four consecutive months (http://www.markiteconomics.com/Survey/PressRelease.mvc/64e06121429145c6af653a8c13f0b3b9). New export orders increased moderately for the third consecutive month. Tim Moore, Senior Economist at Markit and author of the report, finds improvement in manufacturing conditions with increasing export sales (http://www.markiteconomics.com/Survey/PressRelease.mvc/64e06121429145c6af653a8c13f0b3b9).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IIIQ2013 0.3 ∆%; III/Q2013/IIIQ2012 ∆% 1.1 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 11/17/13 11/24/13
Consumer Price Index	Oct month NSA ∆%: -0.2 Sep 12-month NSA ∆%: 1.2 Blog 11/17/13
Producer Price Index	Oct month ∆%: -0.2 CSA, -0.2 12-month NSA ∆%: -0.7 Blog 11/24/13
Industrial Production	MFG Sep month CSA ∆%: minus 1.1 12-month NSA: 5.0 Blog 11/17/13
Machine Orders	MFG Sep month ∆%: 3.3 Sep 12-month ∆%: 11.0 Blog 11/10/13
Retail Sales	Oct Month ∆% -0.8 12-Month ∆% -0.2 Blog 12/1/13
Employment Report	Unemployment Rate SA Sep 5.2% Blog 12/1/13
Trade Balance	Exports Sep 12-month NSA ∆%: 3.6 Imports Sep 12 months NSA ∆%: -0.3 Exports Sep month CSA ∆%: 1.7; Imports Sep month SA minus 1.9 Blog 11/17/13

Links to blog comments in Table DE:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

11/10/13 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.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, decreased from 2.20 million in Oct 2012 to 2.16 million in Oct 2013, or 1.8 percent, while the unemployment rate fell from 5.2 percent in Oct 2012 to 5.0 percent in Oct 2013. The number of persons in employment, not seasonally adjusted, increased from 40.12 million in Oct 2012 to 40.72 million in Oct 2013, or 1.5 percent, while the employment rate increased from 63.7 percent in Oct 2012 to 64.6 percent in Oct 2013. The number unemployed, seasonally adjusted, fell from 2.23 million in Sep 2013 to 2.22 million in Oct 2013, while the unemployment rate remained at 5.2 percent in Oct 2013 relative to 5.2 percent in Sep 2013. The number of persons in employment, seasonally adjusted, increased from 40.55 million in Sep 2013 to 40.59 million in Oct 2013, or 0.1 percent.

Table VE-1, Germany, Unemployment Labor Force Survey

	Oct 2013	Sep 2013	Oct 2012
NSA
Number Unemployed Millions	2.16 ∆% Oct 2013 /Sep 2013: -1.8 ∆% Oct 2013/Oct 2012: -1.8	2.20	2.20
% Rate Unemployed	5.0	5.1	5.2
Persons in Employment Millions	40.72 ∆% Oct 2013/Sep 2013: -0.6 ∆% Oct 2013/Oct 2012: 1.5	40.96	40.12
Employment Rate	64.6	65.0	63.7
SA
Number Unemployed Millions	2.22 ∆% Oct 2013/Sep  2013: -0.4 ∆% Oct 2013/Oct 2012: –3.1	2.23	2.29
% Rate Unemployed	5.2	5.2	5.4
Persons in Employment Millions	40.59 ∆% Oct 2013/Sep 2013: 0.1 ∆% Oct 2013/Oct 2012: 1.2	40.55	40.09

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland https://www.destatis.de/EN/PressServices/Press/pr/2013/11/PE13_401_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 Mar 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 and Nov 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
Nov 2013	6.5
Oct	6.5
Sep	6.6
Aug	6.8
Jul	6.8
Jun	6.6
May	6.8
Apr	7.1
Mar	7.3
Feb	7.4
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. The rate remained at 6.5 percent in Nov 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 Oct 2013, retail sales decreased 0.8 percent and decreased 0.3 percent in 12 months. Retail sales increased 0.4 percent in Aug 2013 and increased 0.6 percent in 12 months. Retail sales rebounded in Jan 2013 with monthly increase of 3.0 percent and 2.8 percent in 12 months. Retail sales declined in six out of ten months in 2013.

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

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Oct 2013	-0.2	-0.8
Sep	0.3	-0.2
Aug	0.6	0.4
Jul	3.3	-0.2
Jun	-2.5	-1.0
May	0.5	0.8
Apr	2.9	0.2
Mar	-2.8	-0.3
Feb	-2.8	-0.8
Jan	2.8	3.0
Dec 2012	-3.1	-1.8
Nov	0.5	0.7
Oct	1.5	-0.5
Sep	-3.1	0.0
Aug	0.0	0.2
Jul	-0.9	-0.9
Jun	4.6	0.3
May	-0.5	0.2
Apr	-4.6	-0.5
Mar	4.3	0.9
Feb	2.4	0.8
Jan	2.0	-1.7
Dec 2011	0.8	0.8
Nov	0.9	-0.7
Oct	-0.4	0.4
Sep	1.2	0.2
Aug	3.4	-0.5
Jul	-2.4	0.5
Jun	-2.0	2.1
May	4.5	-1.7
Apr	4.8	1.0
Mar	-2.9	-2.8
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=20131114

The Markit Flash France Composite Output Index decreased from 50.5 in Oct to 48.5 in Nov for a five-month low (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c0ea79cfd254761bc386fa76177d900). Jack Kennedy, Senior Economist at Markit and author of the report, finds that the data point to risk of decline of 0.1 percent of GDP in France in IVQ2013 after decline of 0.1 percent in IIIQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c0ea79cfd254761bc386fa76177d900). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, did not change from 50.5 in Sep to 50.5 in Ict, indicating moderate expansion (http://www.markiteconomics.com/Survey/PressRelease.mvc/5190492877554ca99d240fb4e6c9a623). 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/5190492877554ca99d240fb4e6c9a623). The Markit France Services Activity index decreased from 51.0 in Sep to 50.9 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/5190492877554ca99d240fb4e6c9a623). The Markit France Manufacturing Purchasing Managers’ Index^® decreased marginally to 49.1 in Oct from 49.8 in Sep, which indicates marginal deterioration in conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/f2d0f5b4f2d04a61a36714f852faa6d5). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds that export business rose at the highest pace since May 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/f2d0f5b4f2d04a61a36714f852faa6d5). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Oct month ∆% -0.1 12 months ∆%: 0.6 11/17/13
PPI	Oct month ∆%: -0.2 Oct 12 months ∆%: -1.4 Blog 12/1/13
GDP Growth	IIIQ2013/IIQ2013 ∆%: minus 0.1 IIIQ2013/IIIQ2012 ∆%: 0.2 Blog 3/31/13 5/19/12 6/30/13 9/29/13 11/17/13
Industrial Production	Sep ∆%: Manufacturing minus 0.7 12-Month ∆%: Manufacturing minus 1.3 Blog 11/17/13
Consumer Spending	Manufactured Goods Oct ∆%: 0.7 Oct 12-Month Manufactured Goods ∆%: 0.6 Blog 12/1/13
Employment	Unemployment Rate: IIQ2013 10.5% Blog 9/8/13
Trade Balance	Sep Exports ∆%: month 1.8, 12 months -1.3 Sep Imports ∆%: month 3.4, 12 months 0.7 Blog 11/17/13
Confidence Indicators	Historical averages 100 Oct Mfg Business Climate 98 Blog 12/1/13

Links to blog comments in Table FR:

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.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 0.2 percent in Oct 2013 after decreasing 0.1 percent in Sep 2013 and decreasing 0.3 percent in Aug 2013. Consumption of manufactured products increased 0.7 percent in Oct 2013 after decreasing 0.1 percent in Sep 2013 and decreasing 0.2 percent in Aug 2013. Total consumption decreased 0.1 percent in Oct 2013 relative to Oct 2012 and consumption of manufactured goods increased 0.6 percent in Oct 2013 relative to Oct 2012. Consumption of energy fell 4.9 percent in Oct 2013 and 4.1 percent in 12 months, explaining the decline in total consumption. 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
Oct 2013	-0.2	1.4	0.4	-4.9	0.7
Oct 2013/Oct 2012	-0.1	1.4	0.3	-4.1	0.6
Sep	-0.1	-0.2	0.2	-0.7	-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	-0.4	0.6	-4.5	-0.5
May	0.7	1.5	-0.1	1.0	0.9
Apr	-0.7	-3.4	1.2	0.4	-0.5
Mar	1.3	2.7	-0.8	3.6	1.1
Feb	-0.3	-0.7	-0.8	1.7	-0.7
Jan	-0.4	0.7	-2.1	1.6	-1.0
Dec 2012	0.0	0.2	1.5	-3.9	0.6
Nov	0.2	-0.3	-0.2	2.2	-0.1
Oct	-0.2	-0.8	0.2	0.3	0.0
Sep	0.1	-0.1	0.1	0.5	0.0
Aug	-0.5	0.2	-0.5	-2.1	-0.7
Jul	0.0	-0.3	0.4	0.0	0.1
Jun	0.5	1.2	-0.3	1.3	0.5
May	0.1	-0.4	1.8	-2.8	1.0
Apr	0.2	0.0	-2.9	9.2	-1.5
Mar	-3.0	-2.0	1.0	-13.9	-0.8
Feb	2.8	1.8	-0.2	12.4	1.2
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	0.3	0.0	-2.1	-0.1
Oct	-0.2	-0.8	0.4	-0.6	-0.2
Sep	-0.4	0.5	0.0	-3.0	-0.3
Aug	0.9	0.6	0.6	2.7	1.1
Jul	-0.2	-0.1	-0.5	0.5	-0.3
Jun	0.2	-0.4	0.3	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	-5.1	-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=20131129

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 Oct 2013. Consumption of manufactured goods increased above the level before the global recession but shows declining trend in recent months with possible stabilization.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20131129

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-Oct 2013.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20131129

Table VF-2 shows the INSEE business climate indicator for manufacturing. The headline composite indicator decreased from 92 in Jan 2013 to 88 in Apr 2013 but rebounded to 92 in May 2013, 93 in Jun 2013, 95 in Jul 2013 and 98 in Aug 2013. The index fell marginally to 97 in Sep 2013 and increased to 98 in Oct 13 and 98 in Nov 2013, approaching the long-term average of 100 since 1976. The final row shows general production expectations deteriorating from minus 34 in Feb 2013 to minus 49 in Apr 2013 and improving to minus 46 in May 2013, minus 41 in Jun 2013 and minus 30 in Jul 2013. There is further improvement of general production expectations to minus 18 in Aug 2013, to minus 10 in Sep 2013 and to minus 0.6 in Oct 2013, which is close to the long-term average of minus 10. General production expectations deteriorated to minus 16 in Nov 2013. The indicator of demand and export order levels improved from minus 30 in Feb 2013 to minus 29 in May 2013 and minus 28 in Jun 2013, continuing improvement to minus 22 in Aug. There is further improvement to minus 21 in Sep 2013, minus 21 in Oct 2013 and minus 21 in Nov 2013.

Table VF-2, France, Manufacturing Business Climate Indicators of INSEE

Mfg 2013	Average since 1976	Aug 13	Sep 13	Oct 13	Nov 13
Composite Indicator	100	98	97	98	98
Past Activity	4	4	-11	-1	8
Finished- Goods Inventory Level	13	12	12	10	13
Global Order Books	-18	-22	-26	-24	-23
Export Order Books	-14	-22	-21	-21	-21
Personal Production Expectations	5	3	13	8	1
General Production Expectations	-9	-18	-10	-6	-16

Source: Institut National de la Statistique et des Études Économique

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20131125

Chart VF-3 of the Institut National de la Statistique et des Études Économiques (INSEE) provides the history of the manufacturing business climate indicator of INSEE since 1992. The index fell during the contractions of 1991, 2001 and 2008. After rapid recovery beginning in 2009 the synthetic index shows declining trend in 2011 with upward reversal in 2012 interrupted in Apr through Jul 2012 and a marginal upward move in Aug-Sep 2012 but new decline in Oct 2012. The manufacturing composite indicator marginally reversed in Nov 2012 with stability in Dec 2012 and decline in Jan 2013 but improvement in Feb 2013 and stability in Mar 2013, deteriorating in Apr 2013 and recovering in May-Aug 2013. The composite indicator of manufacturing eased slightly in Sep 2013 and improved marginally in Oct-Nov 2013, close to the long-term average of 100.

Chart VF-3, France, INSEE Industrial Business Climate Composite Indicator

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20131125

Chart VF-4 of the Institut National de la Statistique et des Études Économiques (INSEE) shows strong drops of the turning point indicator in the recessions of 1991, 2001 and 2008. There have been other drops of this index. The turning point indicator has fallen to levels in the direction of past contractions and after rebounding in Oct and Nov 2011 is showing declining trend in Jan 2012 with slight reversal in Feb followed by significant improvement in Mar and deterioration in Apr through Jul 2012. There is new improvement in Aug 2012 followed by decline in Sep-Oct 2012 followed by rebound in Nov 2012 and stability in Dec 2012 to Jan-Mar 2013, deteriorating in Apr-May 2013. The index improved in Jun-Sep 2013 and stabilized in Oct 2013, declining in Nov 2013.

Chart VF-4, INSEE Business Climate Manufacturing Turning Point Indicator

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20131125

Chart VF-5 of the Institut National de la Statistique et des Études Économiques (INSEE) of France provides the composite climate indicator for French business. There is recovery in Jul-Sep 2013 and stability in Oct-Nov 2013.

Chart VF-5, France, Composite Indicator of Business Climate of INSEE

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20131125

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 0.6 percent in IVQ2011 to minus 3.0 percent in IVQ2012, minus 2.5 percent in IQ2013, minus 2.2 percent in IIQ2013 and minus 1.9 percent in IIIQ2013. 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
IIIQ2013	-1.9
II	-2.2	-4.6	-2.4	-5.9	0.2
IQ	-2.5	-5.0	-2.7	-7.1	-0.4
2012
IVQ	-3.0	-6.8	-4.3	-7.9	1.7
IIIQ	-2.8	-8.1	-4.3	-8.1	2.5
IIQ	-2.6	-7.5	-3.8	-8.3	2.5
IQ	-1.8	-8.9	-3.3	-7.6	2.1
2011
IVQ	-0.6	-6.9	-1.8	-3.2	3.1
IIIQ	0.5	0.1	-0.7	-2.1	5.6
IIQ	1.1	3.1	0.6	-0.7	7.0
IQ	1.4	8.8	0.9	0.6	10.9
2010
IVQ	2.3	15.3	1.1	0.8	13.2
IIIQ	1.8	13.2	1.3	2.4	12.0
IIQ	1.8	13.5	0.8	1.1	12.0
IQ	0.9	7.2	0.8	-2.0	7.3
2009
IVQ	-3.5	-6.4	0.2	-7.8	-9.3
IIIQ	-5.0	-12.2	-0.8	-12.6	-16.4
IIQ	-6.6	-17.9	-1.5	-13.6	-21.4
IQ	-6.9	-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

http://www.istat.it/it/archivio/103477

The Markit/ADACI Business Activity Index decreased from 52.7 in Sep to 50.5 in Oct, (http://www.markiteconomics.com/Survey/PressRelease.mvc/cd59620a6b7a4ecd80e55ca91d034bad). 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/cd59620a6b7a4ecd80e55ca91d034bad). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased marginally from 50.8 in Sep to 50.7 in Sep for the fourth consecutive reading above 50.0 with strong increase in foreign orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b3139c705f54ef7b6a5aacf0d3dd01a). Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds growth at a slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b3139c705f54ef7b6a5aacf0d3dd01a). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Nov month ∆%: -0.4 Nov 12-month ∆%: 0.6 Blog 12/17/13
Producer Price Index	Oct month ∆%: -1.3 Oct 12-month ∆%: -2.7 Blog 12/1/13
GDP Growth	IIIQ2013/IIQ2013 SA ∆%: minus 0.1 IIIQ2013/IIIQ2012 NSA ∆%: minus 1.9 Blog 3/17/13 6/16/13 8/11/13 9/15/13 11/17/13
Labor Report	Oct 2013 Participation rate 63.6% Employment ratio 55.5% Unemployment rate 12.5% Blog 12/1/13
Industrial Production	Sep month ∆%: 0.2 12 months CA ∆%: -3.0 Blog 11/17/13
Retail Sales	Sep month ∆%: -0.3 Sep 12-month ∆%: -2.8 Blog 11/24/13
Business Confidence	Mfg Nov 98.1, Jun 92.3 Construction Nov 80.0, Jun 77.1 Blog 12/1/13
Trade Balance	Balance Sep SA €2131 million versus Aug €2506 Exports Sep month SA ∆%: 0.6; Imports Sep month ∆%: 1.9 Exports 12 months Sep NSA ∆%: 2.0 Imports 12 months NSA ∆%: -0.1 Blog 11/24/13

Links to blog comments in Table IT:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.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 Oct 2013. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %
Oct 2013	63.6	55.5	12.5
Sep	63.5	55.4	12.5
Aug	63.5	55.6	12.4
Jul	63.5	55.7	12.1
Jun	63.5	55.7	12.1
May	63.5	55.6	12.2
Apr	63.4	55.7	12.0
Mar	63.6	55.9	11.8
Feb	63.7	56.0	11.8
Jan	63.7	56.0	11.9
Dec 2012	63.6	56.3	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	63.7	56.9	10.6
Mar	63.5	56.9	10.3
Feb	63.4	57.0	10.0
Jan	63.2	57.0	9.5
Dec 2011	63.0	56.9	9.5
Nov	62.7	56.8	9.3
Oct	62.6	57.0	8.8
Sep	62.5	56.8	8.9
Aug	62.4	57.0	8.5
Jul	62.2	57.0	8.4
Jun	62.0	57.0	8.0
May	62.1	57.0	8.1
Apr	61.8	56.9	7.8
Mar	62.1	57.1	7.9
Feb	61.8	56.8	7.9
Jan	62.0	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	62.4	58.5	6.2
Dec 2005	62.6	57.8	7.5
Dec 2004	62.5	57.5	7.9

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/105198

Table VG-2 provides more detail on the labor report for Italy in Oct 2012. The level of employment increased 9,000 from Sep to Oct 2013 and fell 408,000 from Oct 2012 to Oct 2013. Unemployment decreased 2,000 in Oct 2013 and increased 387,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 41.2 percent in Oct 2013 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

Oct 2013	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22.358	9	0.0	-408	-1.8
UNE	3.189	-2.0	0.0	287	9.9
INA   15-64	14.393	-25	-0.2	55	0.4
EMP %	55.5		0.1		-1.0
UNE %	12.5		0.0		1.2
Youth UNE %  15-24	41.2		0.7		4.8
INA % 15-64	36.4		-0.1		0.2

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/105198

Chart VG-1 of the Istituto Nazionale di Statistica provides the rate of unemployment in Italy. The rate increase from 11.3 percent in Oct 2012 to 12.5 percent in Oct 2013.

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment dropped from 22.766 million in Oct 2012 to 22.358 million in Oct 2013.

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

Source: Istituto Nazionale di Statistica

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

Italy’s index of business confidence in manufacturing and construction is provided in Table VG-3. There has been improvement of manufacturing confidence below the historical average of 100 from 92.3 in Jul 2013 to 98.1 in Nov 2013. Order books deteriorated to minus 36 in Jul 2013 but improved to minus 25 in Nov 2013. There is oscillation in construction with the index moving from 77.1 in Jul 2013 to 80.0 in Nov 2013.

Table VG-3, Italy, Index of Business Confidence in Manufacturing and Construction 2005=100

	Nov     2013	Oct      2013	Sep  2013	Aug      2013	Jul       2013
Mfg Confidence	98.1	97.4	96.8	93.5	92.3
Order Books	-25	-27	-28	-32	-36
Stocks Finished Products	-1	-2	-1	0	0
Production Expectation	5	4	4	0	1
Construction Confidence	80.0	80.9	79.0	76.8	77.1
Order Books	-45	-46	-48	-52	-51
Employment	-21	-19	-16	-18	-20

Mfg: manufacturing

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/104956

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 5.2 percent in 2009 after dropping 0.8 percent in 2008. Recovery of 1.7 percent in 2010 is relatively low in comparison with annual growth rates in 2007 and earlier years. Growth was only 1.1 percent in 2011 and 0.1 percent in 2012. The bottom part of Table VH-UK provides average growth rates of UK GDP since 1948. The UK economy grew at 2.6 percent per year on average between 1948 and 2012, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.1 percent. Growth in the current cyclical expansion has been only at 1.0 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2012 was lower by 3.1 percent relative to 2007.

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

	∆% on Prior Year
1998	3.6
1999	2.9
2000	4.4
2001	2.2
2002	2.3
2003	3.9
2004	3.2
2005	3.2
2006	2.8
2007	3.4
2008	-0.8
2009	-5.2
2010	1.7
2011	1.1
2012	0.1
Average Growth Rates ∆% per Year
1948-2012	2.6
1950-1959	2.7
1960-1969	3.3
1970-1979	2.5
1980-1989	3.2
1990-1999	2.9
2000-2007	3.0
2007-2012*	-3.1
2000-2012	1.5

*Absolute change from 2007 to 2012

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q3-2013/index.html

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 60.3 in Sep to 62.5 in Sep, indicating increase in activity in every month since the beginning of 2013 at the highest rate since May 1997 (http://www.markiteconomics.com/Survey/PressRelease.mvc/886a8bb8c5af427ea8579b03fdb46ffe). Chris Williamson, Chief Economist at Markit, finds continuing improvement in the UK’s economy with possible higher growth of GDP in IVQ2013 at the quarterly rate of 1.3 percent, which would be the highest since the period before the 2007 financial crisis while creation of new jobs exceeds 100,000 per quarter (http://www.markiteconomics.com/Survey/PressRelease.mvc/886a8bb8c5af427ea8579b03fdb46ffe). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) decreased marginally to 56.0 in Oct from 56.3 in Sep with continuing strength of production and new orders above long-term averages (http://www.markiteconomics.com/Survey/PressRelease.mvc/9620f11fc5c748d8aaf417b28e6f9b1b). Respondents indicated increase in new foreign orders at the highest rate since Feb 2011. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions continue around the levels in Aug with output and new orders close to the fastest pace in 19 years (http://www.markiteconomics.com/Survey/PressRelease.mvc/9620f11fc5c748d8aaf417b28e6f9b1b). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Oct month ∆%: 0.1 Oct 12-month ∆%: 2.2 Blog 11/17/13
Output/Input Prices	Output Prices: Oct 12-month NSA ∆%: 0.8; excluding food, petroleum ∆%: 0.9 Input Prices: Oct 12-month NSA ∆%: -0.3 Excluding ∆%: -0.4 Blog 11/17/13
GDP Growth	IIIQ2013 prior quarter ∆% 0.8; year earlier same quarter ∆%: 1.5 Blog 3/31/13 4/28/13 5/26/13 7/28/13 8/25/13 9/29/13 10/27/13 12/1/13
Industrial Production	Sep 2013/Sep 2012 ∆%: Production Industries 2.2; Manufacturing 0.8 Blog 11/10/13
Retail Sales	Oct month ∆%: -0.7 Oct 12-month ∆%: 1.8 Blog 11/24/13
Labor Market	Jul-Sep Unemployment Rate: 7.6%; Claimant Count 3.9%; Earnings Growth 0.7% Blog 11/17/13 LMGDP
GDP and the Labor Market	IIIQ2013 Weekly Hours 101.4, GDP 97.5, Employment 101.5 IQ2008 =100 Blog 12/1/13
Trade Balance	Balance SA Aug minus ₤3268 million Exports Sep ∆%: 0.1; Jul-Sep ∆%: 0.1 Imports Sep ∆%: 0.2 Jul-Sep ∆%: 1.8 Blog 11/17/13

Links to blog comments in Table UK:

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

11/10/13 http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html

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

9/29/13 http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html

8/25/13 http://cmpassocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html

7/28/13 http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.html

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

4/28/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states_28.html

03/31/13 http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html

The UK Office for National Statistics provides important analysis of the relation of GDP and the labor market (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q2--august-labour-market-update/index.html

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/sum-may13-labour.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/index.html

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2012-q4--january-gdp-update/sum-jan13.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2012-q4--february-labour-market-update/sum-2012-q4---february-labour-update.html). The UK economy grew 0.8 percent in IIIQ2013 but output is still 2.5 percent below the level before the global recession in IQ2008 (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html). Chart VH-1 of the UK Office for National Statistics (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/sum-may13-labour.html) shows weakening output but relatively faster increases in employment and hours worked. Output growth and labor market improvement are converging.

Chart VH-1, UK, Employment Level Ages 16 and Over, Total Weekly Hours and GDP, 2008-2013

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html

Table VH-1A of the UK Office for national Statistics (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q2--august-labour-market update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/sum-may13-labour.html) provides total weekly hours, output and employment quarterly from 2008 to 2013. Improving output has been accompanied recently by improvements in hours worked and employment. From IQ2008 IIIQ2008, employment increased 1.5 percent and hours worked 1.4 percent while GDP is still 2.5 percent lower.

Table VH-1A, UK, Indices of Quarterly Employment Ages 16 and Over, Total Hours Worked and GDP, 2008-2013

			Index, Q1 2008 =100
	Total weekly hours, Aged 16 +	GDP, CVM	Employment, Aged 16 +
	YBUS	ABMI	MGRZ
2008 Q1	100.0	100.0	100.0
Q2	98.9	99.1	100.1
Q3	98.9	97.7	99.6
Q4	98.3	95.6	99.4
2009 Q1	96.7	93.2	98.9
Q2	96.3	92.8	97.9
Q3	95.8	92.8	97.8
Q4	95.8	93.2	97.9
2010 Q1	95.7	93.7	97.6
Q2	96.5	94.7	98.2
Q3	97.0	95.0	98.9
Q4	97.4	94.8	98.7
2011 Q1	97.4	95.3	99.0
Q2	96.3	95.4	99.0
Q3	97.1	95.9	98.5
Q4	97.3	95.8	98.8
2012 Q1	98.0	95.8	99.2
Q2	98.5	95.4	99.9
Q3	99.6	96.0	100.2
Q4	99.8	95.7	100.8
2013 Q1	100.1	96.1	100.7
Q2	100.4	96.7	100.9
Q3	101.4	97.5	101.5

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html

The new data, additions and revisions are analyzed here. Table VH-1 provides quarter on quarter chained value measures of GDP since 1998 in the second estimate for IIIQ2013 (http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html). GDP grew 0.8 percent in IIIQ2013 relative to IIQ2013. Growth of 0.6 percent in IIIQ2012 interrupted three consecutive quarters of weakness in GDP growth. Most advanced economies are underperforming relative to the period before the global recession. The UK Office for National Statistics analyzes that the decline in the impulse of growth in the UK originated in weakness in markets in the UK and worldwide. The UK Office for National Statistics estimates that GDP in IIQ2013 is lower by 2.5 percent relative to the peak in IQ2008 (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q3-2013/stb-gdp-preliminary-estimate--q3-2013.html). The UK Office for National Statistics estimates the contraction of 7.2 percent from peak to trough (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q3-2013/stb-gdp-preliminary-estimate--q3-2013.html), which is roughly equal at 7.1 percent to compounding the quarterly rates in Table VH-2 from IIQ2008 to IIQ2009.

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

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

There are four periods in growth of GDP in a quarter relative to the same quarter a year earlier in the UK in the years from 2000 to the present as shown in Table VH-2. (1) Growth rates were quite high from 2000 to 2007. (2) There were six consecutive quarters of contraction of GDP from IIIQ2008 to IVQ2009. Contractions relative to the quarter a year earlier were quite sharp with the highest of 4.3 percent in IVQ2008, 6.8 percent in IQ2009, 6.3 percent in IIQ2009 and 5.0 percent in IIIQ2009. (3) The economy bounced strongly with 2.0 percent in IIQ2010, 2.4 percent in IIIQ2010 and 1.8 percent in IVQ2010. (4) Recovery in 2011 did not continue at rates comparable to those in 2000 to 2007 and even relative to those in the final three quarters of 2010. Growth relative to the same quarter a year earlier fell from 1.8 percent in IVQ2010 to 1.7 percent in IQ2011, 0.8 percent in IIQ2011, 1.0 percent in IIIQ2011 and 1.1 percent in IVQ2011 but only 0.6 percent in IQ2012, change of 0.0 percent in IIQ2012 relative to IQ2011, change of 0.0 percent in IIIQ2012 and -0.2 percent in IVQ2012. Growth increased to 0.2 percent in IQ2013 relative to a year earlier and 0.4 percent in IQ2013 relative to IVQ2012. GDP increased 0.7 percent in IIQ2013 relative to IQ2013 and 1.3 percent in IIQ2013 relative to IIQ2012. GDP increased 0.8 percent in IIIQ2013 and 1.5 percent relative to a year earlier. In IQ2012, GDP changed 0.0 percent and increased 0.6 percent relative to a year earlier. In IIQ2012, GDP fell 0.5 percent relative to IQ2012 and changed 0.0 percent relative to a year earlier. In IIIQ2012, GDP increased 0.6 percent and changed 0.0 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.3 percent and fell 0.2 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. In IIQ2013, GDP increased 0.7 percent and 1.3 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 1.5 percent relative to a year earlier.

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

	IQ	IIQ	IIIQ	IV
2013	0.2	1.3	1.5
2012	0.6	0.0	0.0	-0.2
2011	1.7	0.8	1.0	1.1
2010	0.5	2.0	2.4	1.8
2009	-6.8	-6.3	-5.0	-2.5
2008	2.8	0.6	-2.1	-4.3
2007	2.4	3.3	4.3	3.7
2006	4.0	3.0	2.3	1.8
2005	2.0	2.8	3.7	4.4
2004	4.7	3.7	2.5	1.9
2003	3.2	3.8	4.3	4.5
2002	1.8	1.9	2.3	3.2
2001	2.4	2.1	2.2	2.0
2000	4.7	5.7	4.1	3.0
1999	2.8	2.1	3.2	3.6
1998	4.0	3.5	3.4	3.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

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

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

	TP	MFG	CONST	SERV	GVA BP	GVA EX
2010 Weights	152	104	63	778	1000	981
1998	1.2	0.5	1.4	5.0	3.8	3.8
1999	1.2	0.5	1.3	3.8	3.1	2.9
2000	1.8	2.1	0.8	5.6	4.5	4.9
2001	-1.6	-1.7	1.8	3.0	1.8	2.2
2002	-1.4	-2.4	5.7	2.3	2.0	2.1
2003	-0.6	-0.5	4.9	5.2	4.1	4.5
2004	0.7	1.9	5.2	3.4	3.0	3.5
2005	-0.8	-0.2	-2.4	5.2	3.6	4.0
2006	0.2	1.8	0.7	3.4	2.7	3.1
2007	0.4	0.8	2.1	4.4	3.5	3.6
2008	-2.9	-2.8	-2.5	0.0	-0.6	-0.5
2009	-9.5	-10.2	-13.3	-3.9	-5.4	-5.4
2010	2.8	4.2	8.3	0.8	1.6	1.8
2011	-1.2	1.8	2.3	1.5	1.2	1.6
2012	-2.5	-1.7	-7.9	1.2	0.2	0.4

TP: Total Production; MFG: Manufacturing; CONST: Construction; SERV: Total Services; GVA BP: Gross Value Added at Basic prices; GVA EX: Gross Value Added Excluding Oil and Gas

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Percentage changes of gross value added and components are in Table VH-4A. Gross value added increased 0.8 percent in IIIQ2013 with growth of services of 0.7 percent and production of 0.6 percent while manufacturing expanded 0.9 percent.

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

	TP	MFG	CONST	SERV	GVA BP	GVA EX
2010 Weights	152	104	63	778	1000	981
1997 Q4	0.3	0.5	1.5	1.4	1.1	1.1
1998 Q1	1.0	0.8	1.3	0.8	0.9	0.9
1998 Q2	0.0	-0.4	-1.9	1.6	1.0	1.0
1998 Q3	-0.6	-0.7	0.4	0.9	0.5	0.6
1998 Q4	-0.2	-0.7	0.2	1.6	1.1	1.0
1999 Q1	0.2	0.1	0.1	0.3	0.3	0.2
1999 Q2	0.3	0.3	0.7	0.2	0.3	0.3
1999 Q3	2.2	2.2	2.3	1.5	1.7	1.6
1999 Q4	0.5	0.3	-0.9	1.7	1.2	1.3
2000 Q1	0.2	0.4	1.4	1.6	1.3	1.3
2000 Q2	0.2	0.2	-0.7	2.0	1.5	1.8
2000 Q3	-0.3	-0.2	-1.7	0.6	0.3	0.4
2000 Q4	0.3	1.0	1.0	0.1	0.2	0.4
2001 Q1	-0.5	-0.7	-0.4	1.5	0.8	0.9
2001 Q2	-1.1	-1.7	2.8	0.5	0.2	0.2
2001 Q3	-0.1	0.0	0.2	0.4	0.3	0.4
2001 Q4	-1.3	-1.6	1.1	0.3	0.0	0.0
2002 Q1	0.3	0.1	1.1	0.4	0.6	0.7
2002 Q2	-0.5	-1.3	1.1	0.8	0.6	0.4
2002 Q3	0.0	1.0	3.6	0.9	0.9	1.3
2002 Q4	-0.2	-1.5	1.1	1.3	1.0	0.7
2003 Q1	-0.7	-0.4	-2.3	1.4	0.8	0.9
2003 Q2	-0.2	0.4	3.0	1.5	1.3	1.6
2003 Q3	0.8	0.7	2.7	1.3	1.3	1.4
2003 Q4	0.5	0.8	2.5	1.4	1.3	1.4
2004 Q1	0.2	0.9	2.9	0.4	0.5	0.6
2004 Q2	0.6	0.5	-1.3	0.5	0.4	0.4
2004 Q3	-1.8	-1.4	-0.7	0.6	0.1	0.3
2004 Q4	0.7	1.3	-1.0	0.9	0.7	0.8
2005 Q1	-0.6	-0.9	0.3	1.5	1.0	1.1
2005 Q2	0.9	0.8	-0.4	1.7	1.4	1.5
2005 Q3	-1.3	-0.6	-1.8	1.7	0.9	1.2
2005 Q4	0.4	0.1	-0.4	1.7	1.4	1.4
2006 Q1	0.8	0.7	0.7	0.3	0.4	0.4
2006 Q2	-0.6	0.9	0.8	0.3	0.2	0.4
2006 Q3	0.0	0.4	0.5	0.3	0.3	0.3
2006 Q4	0.2	0.8	1.8	0.8	0.7	0.8
2007 Q1	0.2	-0.5	1.0	1.3	1.1	1.0
2007 Q2	0.2	0.2	-0.4	1.8	1.3	1.4
2007 Q3	-0.2	0.0	-1.4	1.8	1.2	1.3
2007 Q4	0.4	0.2	1.3	0.0	0.1	0.1
2008 Q1	-0.6	0.1	0.9	0.1	0.2	0.2
2008 Q2	-1.0	-1.5	-1.4	-0.5	-0.6	-0.6
2008 Q3	-1.5	-1.6	-2.7	-1.3	-1.5	-1.5
2008 Q4	-4.6	-4.9	-5.3	-1.5	-2.3	-2.3
2009 Q1	-4.9	-5.8	-7.1	-1.6	-2.5	-2.5
2009 Q2	-0.1	0.1	-1.9	-0.6	-0.6	-0.7
2009 Q3	-0.9	-0.2	0.3	0.1	0.0	0.1
2009 Q4	0.7	1.3	1.0	0.2	0.3	0.3
2010 Q1	1.3	0.9	3.1	0.3	0.6	0.6
2010 Q2	1.7	2.0	5.9	0.4	1.0	1.0
2010 Q3	0.1	1.2	1.7	0.5	0.5	0.6
2010 Q4	0.7	0.8	-2.2	-0.3	-0.3	-0.2
2011 Q1	-1.0	0.2	1.6	0.5	0.4	0.5
2011 Q2	-1.1	0.2	1.0	0.4	0.2	0.4
2011 Q3	-0.3	-0.4	-1.1	1.0	0.6	0.7
2011 Q4	-0.6	-0.4	-0.6	0.0	-0.1	0.0
2012 Q1	-0.5	0.0	-4.1	0.2	0.0	0.1
2012 Q2	-1.1	-1.4	-3.8	-0.1	-0.4	-0.4
2012 Q3	0.1	0.4	-1.9	0.9	0.6	0.6
2012 Q4	-2.0	-1.6	1.8	-0.1	-0.3	-0.2
2013 Q1	0.5	0.0	-1.3	0.6	0.4	0.3
2013 Q2	0.8	0.9	1.9	0.6	0.6	0.6
2013 Q3	0.6	0.9	1.7	0.7	0.8	0.8

IOP: Total Production, Index of Production; MFG: Manufacturing; CONST: Construction; SERV: Total Services; GVA BP: Gross Value Added at Basic prices; GVA EX: Gross Value Added Excluding Oil and Gas

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Growth rates of gross value added (GVA) and output components of gross value added in a quarter from the preceding quarter are in Table VH-4. Growth of GVA of 0.8 percent in IIIQ2013 originated in growth of services of 0.7 percent and total production of 0.6 percent while manufacturing grew 0.9 percent and construction 1.7 percent. Growth of GVA of 0.6 percent in IIQ2013 originated in growth of production of 0.8 percent with manufacturing growing 0.9 percent and services 0.6 percent. Growth of GVA of 0.4 percent in IQ2013 resulted from change of manufacturing by 0.0 percent with total production increasing 0.5 percent. Construction fell 1.3 percent and services grew 0.6 percent. There is significant improvement away from the contraction of total production of 2.0 percent in IVQ2012 with manufacturing contracting 1.6 percent and services falling 0.1 percent.

VH-4, UK, Quarter on Quarter Growth of Value Added by Output Components, ∆% on Prior

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Agriculture	-1.8	-2.2	-0.4	0.4	-5.1	2.0	-1.4
Total Production	-0.5	-1.1	0.1	-2.0	0.5	0.8	0.6
Manufacturing	0.0	-1.4	0.4	-1.6	0.0	0.9	0.9
Extraction	-3.0	-2.8	0.3	-9.4	3.9	1.5	1.6
Electricity, gas and air	-0.3	5.3	-3.1	3.3	1.4	-2.1	-5.7
Water & sewerage	-0.7	-1.5	0.5	0.1	-0.7	2.0	3.5
Construction	-4.1	-3.8	-1.9	1.8	-1.3	1.9	1.7
Total Services	0.2	-0.1	0.9	-0.1	0.6	0.6	0.7
Distn, hotels & catering	0.3	-0.1	1.7	-0.6	1.3	1.8	1.1
Transport, storage & comms	0.8	-1.3	-0.4	0.4	1.7	0.2	0.0
Business services & finance	-0.1	0.1	0.8	0.4	0.1	0.7	1.1
Government & other	0.4	0.1	1.3	-0.7	0.5	0.0	0.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Services contributed 0.5 percentage points to growth of GVA in IIIQ2013, 0.5 percentage points in IIQ2013 and 0.5 percentage points in IQ2013, as shown in Table VH-5. Business services and finance contributed 0.2 percentage points in IIQ2013 and 0.4 percentage points in IIIQ2013. Manufacturing did not contribute to growth in IQ2013 and manufacturing and production contributed 0.1 percentage points in IIQ2013 and 0.1 percentage points in IIIQ2013.

Table VH-5, UK, Contribution to Quarter on Prior Quarter of Growth of Value Added by Output Components, %

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Agriculture	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total Production	-0.1	-0.1	0.0	-0.3	0.1	0.1	0.1
Manufacturing	0.0	-0.2	0.0	-0.2	0.0	0.1	0.1
Extraction	-0.1	-0.1	0.0	-0.2	0.1	0.0	0.0
Electricity, gas and air	0.0	0.1	0.0	0.0	0.0	0.0	-0.1
Water & sewerage	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Construction	-0.3	-0.2	-0.1	0.1	-0.1	0.1	0.1
Total Services	0.2	-0.2	0.8	-0.1	0.5	0.5	0.5
Distn, hotels & catering	0.0	0.0	0.2	-0.1	0.2	0.2	0.2
Transport, storage & comms	0.1	-0.1	0.0	0.0	0.2	0.0	0.0
Business services & finance	0.0	0.0	0.2	0.2	0.0	0.2	0.4
Government & other	0.1	0.0	0.3	-0.2	0.1	0.0	0.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Table VH-6 provides UK growth of value added by output components in a quarter relative to the same quarter a year earlier for 2012 and 2013. Total production and manufacturing fell in all four quarters of 2012 and in the first two quarters of 2013 relative to the same quarter a year earlier. Total production fell 0.2 percent in IIIQ2013 relative to a year earlier while manufacturing increased 0.1 percent. Total services supported the economy with growth in all quarters relative to a year earlier from IQ2012 to IIIQ2013. Construction fell sharply in all four quarters of 2012 and in the first quarter of 2013 relative to a year earlier with growth of 0.5 percent in IIQ2013 and 4.1 percent in IIIQ2013.

Table VH-6, UK, Growth of Value Added by Output Components, ∆% on Same Quarter of Prior Year

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Agriculture	-2.0	-3.9	-4.1	-3.9	-7.2	-3.3	-4.2
Total Production	-2.4	-2.4	-2.0	-3.4	-2.5	-0.7	-0.2
Manufacturing	-0.6	-2.2	-1.5	-2.6	-2.7	-0.4	0.1
Extraction	-11.7	-7.4	-5.9	-14.3	-8.2	-4.1	-2.9
Electricity, gas and air	-5.7	2.8	-2.9	5.1	6.9	-0.7	-3.4
Water & sewerage	0.9	-1.1	0.5	-1.5	-1.5	2.0	4.9
Construction	-4.6	-9.2	-9.9	-7.8	-5.2	0.5	4.1
Total Services	1.7	1.1	1.1	0.9	1.3	2.1	1.9
Distn, hotels & catering	0.6	-0.1	1.4	1.3	2.2	4.2	3.6
Transport, storage & comms	2.4	0.3	-1.6	-0.6	0.2	1.8	2.3
Business services & finance	2.7	2.2	1.2	1.2	1.4	1.9	2.3
Government & other	0.7	0.8	2.0	1.1	1.2	1.0	0.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Total production subtracted from growth of value added in all quarters of 2012 and the first two quarters of 2013 relative to a year earlier with zero contribution in IIIQ2013, as shown in Table VH-7. Total services added to growth of value added in all four quarters of 2012 and the first three quarters of 2013 relative to a year earlier. Construction also deducted in all four quarters of 2012 and the first quarter of 2013 relative to a year earlier with zero contribution in IIQ2013, adding 0.2 percentage points in IIIQ2013.

VH-7, UK, Contribution to Growth on Same Quarter of Prior Year of Value Added by Output Components, %

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Agriculture	0.0	0.0	0.0	0.0	-0.1	0.0	0.0
Total Production	-0.4	-0.3	-0.3	-0.5	-0.4	-0.1	0.0
Manufacturing	-0.1	-0.2	-0.2	-0.3	-0.3	0.0	0.0
Extraction	-0.2	-0.1	-0.1	-0.3	-0.1	-0.1	-0.1
Electricity, gas and air	-0.1	0.0	0.0	0.1	0.1	0.0	0.0
Water & sewerage	0.0	0.0	0.0	0.0	0.0	0.0	0.1
Construction	-0.3	-0.6	-0.6	-0.5	-0.3	0.0	0.2
Total Services	1.3	0.8	0.8	0.8	1.0	1.7	1.5
Distn, hotels & catering	0.1	0.0	0.2	0.2	0.3	0.6	0.5
Transport, storage & comms	0.3	0.0	-0.2	-0.1	0.0	0.2	0.2
Business services & finance	0.9	0.7	0.4	0.4	0.5	0.6	0.7
Government & other	0.2	0.2	0.4	0.2	0.3	0.2	0.0

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Quarter-on-quarter growth of value added by expenditure components is in Table VH-8. Household final consumption expenditure grew 0.6 percent in IQ2013 relative to IVQ2012, 0.3 percent in IIQ2013 and 0.8 percent in IIIQ2013 while general government consumption decreased 0.2 percent in IQ2013 and increased 0.5 percent in IIQ2013 and 0.5 percent in IIIQ2013. Gross capital formation increased 7.7 percent in IIIQ2013 and gross fixed capital formation (GFCF) increased 1.4 percent. Exports increased 0.1 percent in IQ2013 but grew 3.0 percent in IIQ2013 while imports fell 0.8 percent in IQ2013 and increased 2.9 percent in IIQ2013. In IIIQ2013, exports fell 2.4 percent and imports increased 0.4 percent.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Household final consumption expenditure	0.4	0.2	0.2	0.7	0.6	0.3	0.8
NPISH final consumption expenditure	-1.3	5.9	-2.2	-3.4	-0.2	0.7	1.2
General government final consumption expenditure	2.4	-1.4	0.2	0.3	-0.2	0.5	0.5
Gross capital formation	1.4	1.6	0.9	-3.6	-1.9	1.9	7.7
- of which GFCF	3.6	-0.8	-2.4	-3.8	0.1	0.8	1.4
- of which Business investment	6.6	-2.4	-1.0	-6.6	1.7	-2.7	1.4
Exports	-1.8	-0.4	2.0	-1.7	0.1	3.0	-2.4
less Imports	0.6	1.4	0.8	-0.9	-0.8	2.9	0.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Table VH-9 provides contributions to value added by expenditure components in a quarter relative to the prior quarter. In IQ2013, household final consumption expenditure contributed 0.4 percentage points to growth, 0.2 percentage points in IIQ2013 and 0.5 percentage points in IIIQ2013. Net trade deducted 0.3 percentage points in IVQ2012 but added 0.3 percentage points in IQ2013 and 0.0 percentage points in IIQ2013. In IIIQ2013, net trade deducted 0.9 percentage points. Gross fixed capital formation (GFCF) deducted 0.4 percentage points in IIIQ2012, 0.6 percentage points IVQ2012 and 0.0 percentage points in IQ2013, adding 0.1 percentage points in IIQ2013 and 0.2 percentage points in IIIQ2013.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Household final consumption expenditure	0.2	0.1	0.1	0.5	0.4	0.2	0.5
NPISH final consumption expenditure	0.0	0.1	-0.1	-0.1	0.0	0.0	0.0
General government final consumption expenditure	0.5	-0.3	0.1	0.1	0.0	0.1	0.1
Gross capital formation	0.2	0.2	0.1	-0.5	-0.3	0.3	1.1
- of which GFCF	0.5	-0.1	-0.4	-0.6	0.0	0.1	0.2
- of which Business investment	0.5	-0.2	-0.1	-0.5	0.1	-0.2	0.1
Exports	-0.6	-0.1	0.6	-0.5	0.0	0.9	-0.8
less Imports	0.2	0.5	0.3	-0.3	-0.3	0.9	0.1
Net trade	-0.8	-0.6	0.4	-0.2	0.3	0.0	-0.9

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Table VH-10 provides UK growth of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure grew 1.7 percent in IQ2013 relative to a year earlier, 1.8 percent in IIQ2013 and 2.4 percent in IIIQ2013. Household final consumption grew 1.5 percent in IVQ2012 after growing 1.4 percent in IIIQ2012, 1.1 percent in IIQ2012 and 0.7 percent in IQ2012. General government final consumption expenditure decreased 1.1 percent in IQ2013 and grew 0.8 percent in IIQ2013 and 1.1 percent in IIIQ2013. Gross fixed capital formation (GFCF) fell 6.8 percent in IQ2013, 5.3 percent in IIQ2013 and 1.6 percent in IIIQ2013. Exports fell 0.1 percent in IQ2013 with imports increasing 0.5 percent but exports increased 3.3 percent in IIQ2013 and imports grew 1.9 percent. In IIIQ2013, exports fell 1.1 percent and imports increased 1.5 percent.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Household final consumption expenditure	0.7	1.1	1.4	1.5	1.7	1.8	2.4
NPISH final consumption expenditure	0.3	1.8	2.2	-1.3	-0.2	-5.1	-1.8
General government final consumption expenditure	2.6	1.0	1.7	1.5	-1.1	0.8	1.1
Gross capital formation	6.0	-2.7	-6.6	0.2	-3.1	-2.9	3.7
- of which GFCF	7.8	0.5	-0.9	-3.5	-6.8	-5.3	-1.6
- of which Business investment	14.1	-0.8	1.8	-3.7	-8.2	-8.5	-6.3
Exports	-1.5	3.5	4.5	-2.0	-0.1	3.3	-1.1
less Imports	2.0	4.3	4.1	1.9	0.5	1.9	1.5

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Table VH-11 provides contribution of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure contributed 0.8 percentage points in IIIQ2012 and 0.9 percentage points in IVQ2013. In IQ2013, household final consumption added 1.1 percentage points, 1.1 percentage points in IIQ2013 and 1.5 percentage points in IIIQ2013. General government final consumption expenditure contributed 0.3 percentage points in IVQ2012, deducting 0.2 percentage points in IQ2013 and adding 0.2 percentage points in IIQ2013 and 0.2 percentage points in IIIQ2013. Net trade added 0.4 percentage points in IIQ2013 and deducted 0.2 percentage points in IQ2013. In IIIQ2013, net trade deducted 0.9 percentage points.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3
Household final consumption expenditure	0.4	0.7	0.8	0.9	1.1	1.1	1.5
NPISH final consumption expenditure	0.0	0.0	0.1	0.0	0.0	-0.1	0.0
General government final consumption expenditure	0.6	0.2	0.4	0.3	-0.2	0.2	0.2
Gross capital formation	0.8	-0.4	-1.1	0.0	-0.5	-0.4	0.6
- of which GFCF	1.1	0.1	-0.1	-0.5	-1.0	-0.8	-0.2
- of which Business investment	1.1	-0.1	0.1	-0.3	-0.7	-0.7	-0.5
Exports	-0.5	1.0	1.4	-0.6	0.0	1.0	-0.3
less Imports	0.7	1.4	1.3	0.6	0.2	0.6	0.5
Net trade	-1.1	-0.3	0.1	-1.3	-0.2	0.4	-0.9

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Table VH-12 provides growth of value added by expenditure components in a year relative to the prior year. Household final consumption expenditure grew 1.2 percent in 2012 compared with decline of 0.5 percent in 2011. General government final consumption expenditure grew 1.7 percent in 2012 but changed 0.0 percent in 2011. Gross capital formation increased 0.9 percent in 2011 and fell 1.0 percent in 2012. GFCF fell 2.4 percent in 2011 but increased 0.9 percent in 2012. Exports grew 4.5 percent in 2011 and 1.0 percent in 2012.

Table VH-12, UK, Growth of Value Added by Expenditure Components, ∆% on Prior Year

Component	2011	2012
Household final consumption expenditure	-0.5	1.2
NPISH final consumption expenditure	2.0	0.8
General government final consumption expenditure	0.0	1.7
Gross capital formation	0.9	-1.0
- of which GFCF	-2.4	0.9
- of which Business investment	-1.3	2.6
Exports	4.5	1.0
less Imports	0.3	3.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

Contributions of value added by expenditure components in a year relative to the prior year are in Table VH-13. Household final consumption deducted 0.3 percentage points in 2011 but added 0.7 percentage points in 2012. Gross capital formation contributed 0.1 percentage points in 2011 and deducted 0.2 percentage points in 2012 but GFCF deducted 0.4 percentage points in 2011, adding 0.1 percentage points in 2012. Net trade added 1.2 percentage points in 2011 but deducted 0.7 percentage points in 2012.

VH-13, UK, Contribution to Growth on Prior Year of Value Added by Expenditure Components, %

Component	2011	2012
Household final consumption expenditure	-0.3	0.7
NPISH final consumption expenditure	0.1	0.0
General government final consumption expenditure	0.0	0.4
Gross capital formation	0.1	-0.2
- of which GFCF	-0.4	0.1
- of which Business investment	-0.1	0.2
Exports	1.3	0.3
less Imports	0.1	1.0
Net trade	1.2	-0.7

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2013/index.html

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