Theory and Reality of Cyclical Slow Growth Not Secular Stagnation, Recovery without Hiring, United States Budget Quagmire, United States Industrial Production, World Cyclical Slow Growth and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014
Executive Summary
I Recovery without Hiring
IA1 Hiring Collapse
IA2 Labor Underutilization
ICA3 Ten Million Fewer Full-time Jobs
IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and Middle-Age Unemployment
IIA United States Budget Quagmire
IIB United States Industrial Production
III World Financial Turbulence
IIIA Financial Risks
IIIE Appendix Euro Zone Survival Risk
IIIF Appendix on Sovereign Bond Valuation
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe Haven Currencies
IIIC Appendix on Fiscal Compact
IIID Appendix on European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the Debt Crisis
IIIGA Monetary Policy with Deficit Financing of Economic Growth
IIIGB Adjustment during the Debt Crisis of the 1980s
V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has lowered its forecast of the world economy to 2.9 percent in 2013 but accelerating to 3.6 percent in 2014, 4.0 percent in 2015 and 4.1 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,560 billion of world output of $72,216 billion, or 47.9 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2013 to 2016 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.4 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.6 percent. The difference in dollars of 2012 is rather high: growing by 15.4 percent would add $11.1 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,960 billion but growing by 8.6 percent would add $6.2 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,221 billion, or 37.7 percent of world output. The EMDEs would grow cumulatively 21.9 percent or at the average yearly rate of 5.1 percent, contributing $6.0 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,221 billion of China in 2012. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,346 billion, or 19.9 percent of world output, which is equivalent to 41.5 percent of the combined output of the major advanced economies of the G7.
Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth
| GDP USD 2012 | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| World | 72,216 | 2.9 | 3.6 | 4.0 | 4.1 |
| G7 | 34,560 | 1.2 | 2.0 | 2.5 | 2.6 |
| Canada | 1,821 | 1.6 | 2.2 | 2.4 | 2.5 |
| France | 2,614 | 0.2 | 1.0 | 1.5 | 1.7 |
| DE | 3,430 | 0.5 | 1.4 | 1.4 | 1.3 |
| Italy | 2,014 | -1.8 | 0.7 | 1.1 | 1.4 |
| Japan | 5,960 | 1.9 | 1.2 | 1.1 | 1.2 |
| UK | 2,477 | 1.4 | 1.9 | 2.0 | 2.0 |
| US | 16,245 | 1.6 | 2.6 | 3.4 | 3.5 |
| Euro Area | 12,199 | -0.4 | 1.0 | 1.4 | 1.5 |
| DE | 3,430 | 0.5 | 1.4 | 1.4 | 1.3 |
| France | 2,614 | 0.2 | 1.0 | 1.5 | 1.7 |
| Italy | 2,014 | -1.8 | 0.7 | 1.1 | 1.4 |
| POT | 212 | -1.8 | 0.8 | 1.5 | 1.8 |
| Ireland | 211 | 0.6 | 1.8 | 2.5 | 2.5 |
| Greece | 249 | -4.2 | 0.6 | 2.9 | 3.7 |
| Spain | 1,324 | -1.3 | 0.2 | 0.5 | 0.7 |
| EMDE | 27,221 | 4.5 | 5.1 | 5.3 | 5.4 |
| Brazil | 2,253 | 2.5 | 2.5 | 3.2 | 3.3 |
| Russia | 2,030 | 1.5 | 3.0 | 3.5 | 3.5 |
| India | 1,842 | 3.8 | 5.1 | 6.3 | 6.5 |
| China | 8,221 | 7.6 | 7.3 | 7.0 | 7.0 |
Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries); POT: Portugal
Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx
Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2012 in Table V-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high for the countries with sovereign debt difficulties in Europe: 15.7 percent for Portugal (POT), 14.7 percent for Ireland, 24.2 percent for Greece, 25.0 percent for Spain and 10.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.4 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.
Table V-2, IMF World Economic Outlook Database Projections of Unemployment Rate as Percent of Labor Force
| % Labor Force 2012 | % Labor Force 2013 | % Labor Force 2014 | % Labor Force 2015 | % Labor Force 2016 | |
| World | NA | NA | NA | NA | NA |
| G7 | 7.4 | 7.3 | 7.3 | 7.0 | 6.6 |
| Canada | 7.3 | 7.2 | 7.1 | 7.0 | 6.9 |
| France | 10.3 | 11.0 | 11.1 | 10.9 | 10.5 |
| DE | 5.5 | 5.6 | 5.5 | 5.5 | 5.5 |
| Italy | 10.7 | 12.5 | 12.4 | 12.0 | 11.2 |
| Japan | 4.4 | 4.2 | 4.3 | 4.3 | 4.3 |
| UK | 8.0 | 7.7 | 7.5 | 7.3 | 7.0 |
| US | 8.1 | 7.6 | 7.4 | 6.9 | 6.4 |
| Euro Area | 11.4 | 12.3 | 12.2 | 12.0 | 11.5 |
| DE | 5.5 | 5.6 | 5.5 | 5.5 | 5.5 |
| France | 10.3 | 11.0 | 11.1 | 10.9 | 10.5 |
| Italy | 10.7 | 12.5 | 12.4 | 12.0 | 11.2 |
| POT | 15.7 | 17.4 | 17.7 | 17.3 | 16.8 |
| Ireland | 14.7 | 13.7 | 13.3 | 12.8 | 12.4 |
| Greece | 24.2 | 27.0 | 26.1 | 24.0 | 21.0 |
| Spain | 25.0 | 26.9 | 26.7 | 26.5 | 26.2 |
| EMDE | NA | NA | NA | NA | NA |
| Brazil | 5.5 | 5.8 | 6.0 | 6.5 | 6.5 |
| Russia | 6.0 | 5.7 | 5.7 | 5.5 | 5.5 |
| India | NA | NA | NA | NA | NA |
| China | 4.1 | 4.1 | 4.1 | 4.1 | 4.1 |
Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries)
Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx
Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IIQ2013 available now for all countries. There are preliminary estimates for most countries for IVQ2013. Growth is weak throughout most of the world. Japan’s GDP increased 0.9 percent in IQ2012 and 3.5 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 0.5 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 2.0 percent, which is much lower than 3.5 percent in IQ2012. Growth of 3.2 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 0.8 percent in IIIQ2012 at the SAAR of minus 3.2 percent and decreased 0.2 percent relative to a year earlier. Japan’s GDP grew 0.1 percent in IVQ2012 at the SAAR of 0.6 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.1 percent in IQ2013 at the SAAR of 4.5 percent and 0.1 percent relative to a year earlier. Japan’s GDP increased 0.9 percent in IIQ2013 at the SAAR of 3.6 percent and increased 1.2 percent relative to a year earlier. Japan’s GDP grew 0.3 percent in IIIQ2013 at the SAAR of 1.1 percent and increased 2.4 pecent relative to a year earlier. China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent and 7.6 percent relative to a year earlier. China grew at 2.0 percent in IIIQ2012, which annualizes at 8.2 percent and 7.4 percent relative to a year earlier. In IVQ2012, China grew at 1.9 percent, which annualizes at 7.8 percent, and 7.9 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.5 percent, which annualizes at 6.1 percent and 7.7 percent relative to a year earlier. In IIQ2013, China grew at 1.8 percent, which annualizes at 7.4 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. China grew at 1.8 percent in IVQ2013, which annualized to 7.4 percent and 7.7 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 0.2 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 IIIQ2013, euro area GDP increased 0.1 percent and fell 0.3 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IVQ2013 and increased 0.5 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. In IVQ2013, Germany’s GDP increased 0.4 percent and 1.3 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, US GDP grew 0.7 percent, 2.8 percent at SAAR and 3.1 percent relative to IIIQ2011. In IVQ2012, US 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 4.1 percent in SAAR in IIIQ2013, 1.0 percent relative to the prior quarter and 2.0 percent relative to the same quarter a year earlier (http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html) with weak hiring (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html). In IVQ2013, US GDP grew 0.8 percent at 3.2 percent SAAR and 2.7 percent relative to a year earlier. In IQ2012, UK GDP changed 0.0 percent, increasing 0.6 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and changed 0.0 percent relative to a year earlier. UK GDP increased 0.8 percent in IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP fell 0.1 percent in IVQ2012 relative to IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP increased 0.5 percent in IQ2013 and 0.7 percent relative to a year earlier. UK GDP increased 0.8 percent in IIQ2013 and 2.0 percent relative to a year earlier. In IIIQ2013, UK GDP increased 0.8 percent and 1.9 percent relative to a year earlier. UK GDP increased 0.7 percent in IVQ2013 and 2.8 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 1.7 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 2.6 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and 2.3 percent relative to a year earlier. The GDP of Italy changed 0.0 percent in IIIQ2013 and declined 1.9 percent relative to a year earlier. Italy’s GDP increased 0.1 percent in IVQ2013 and decreased 0.8 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 changed 0.0 percent and declined 0.4 percent relative to a year earlier. The GDP of France increased 0.6 percent in IIQ2013 and 0.5 percent relative to a year earlier. France’s GDP changed 0.0 percent in IIIQ2013 and increased 0.3 percent relative to a year earlier. The GDP of France increased 0.3 percent in IVQ2013 and 0.8 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: 0.9 SAAR: 3.5 | 3.1 |
| China | 1.4 | 8.1 |
| Euro Area | -0.1 | -0.2 |
| Germany | 0.7 | 1.8 |
| France | 0.0 | 0.4 |
| Italy | -1.1 | -1.7 |
| United Kingdom | 0.0 | 0.6 |
| IIQ2012/IQ2012 | IIQ2012/IIQ2011 | |
| United States | QOQ: 0.3 SAAR: 1.2 | 2.8 |
| Japan | QOQ: -0.5 | 3.2 |
| China | 2.1 | 7.6 |
| Euro Area | -0.3 | -0.5 |
| Germany | -0.1 | 0.6 1.1 CA |
| France | -0.3 | 0.1 |
| Italy | -0.6 | -2.6 |
| United Kingdom | -0.4 | 0.0 |
| IIIQ2012/ IIQ2012 | IIIQ2012/ IIIQ2011 | |
| United States | QOQ: 0.7 | 3.1 |
| Japan | QOQ: –0.8 | -0.2 |
| China | 2.0 | 7.4 |
| Euro Area | -0.2 | -0.7 |
| Germany | 0.2 | 0.4 |
| France | 0.2 | 0.0 |
| Italy | -0.4 | -2.8 |
| United Kingdom | 0.8 | 0.2 |
| IVQ2012/IIIQ2012 | IVQ2012/IVQ2011 | |
| United States | QOQ: 0.0 | 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 | -0.1 | 0.2 |
| IQ2013/IVQ2012 | IQ2013/IQ2012 | |
| United States | QOQ: 0.3 | 1.3 |
| Japan | QOQ: 1.1 SAAR: 4.5 | 0.1 |
| China | 1.5 | 7.7 |
| Euro Area | -0.2 | -1.2 |
| Germany | 0.0 | -1.6 |
| France | 0.0 | -0.4 |
| Italy | -0.6 | -2.6 |
| UK | 0.5 | 0.7 |
| IIQ2013/IQ2013 | IIQ2013/IIQ2012 | |
| United States | QOQ: 0.6 SAAR: 2.5 | 1.6 |
| Japan | QOQ: 0.9 SAAR: 3.6 | 1.2 |
| China | 1.8 | 7.5 |
| Euro Area | 0.3 | -0.6 |
| Germany | 0.7 | 0.9 |
| France | 0.6 | 0.5 |
| Italy | -0.3 | -2.3 |
| UK | 0.8 | 2.0 |
| IIIQ2013/IIQ2013 | III/Q2013/ IIIQ2012 | |
| USA | QOQ: 1.0 | 2.0 |
| Japan | QOQ: 0.3 SAAR: 1.1 | 2.4 |
| China | 2.2 | 7.8 |
| Euro Area | 0.1 | -0.3 |
| Germany | 0.3 | 1.1 |
| France | 0.0 | 0.3 |
| Italy | 0.0 | -1.9 |
| UK | 0.8 | 1.9 |
| IVQ2013/IIIQ2013 | IVQ2013/IVQ2012 | |
| USA | QOQ: 0.8 SAAR: 3.2 | 2.7 |
| China | 1.8 | 7.7 |
| Euro Area | 0.3 | 0.5 |
| Germany | 0.4 | 1.3 |
| France | 0.3 | 0.8 |
| Italy | 0.1 | -0.8 |
| UK | 0.7 | 2.8 |
QOQ: Quarter relative to prior quarter; SAAR: seasonally adjusted annual rate
Source: Country Statistical Agencies http://www.census.gov/aboutus/stat_int.html
Table V-4 provides two types of data: growth of exports and imports in the latest available months and in the past 12 months; and contributions of net trade (exports less imports) to growth of real GDP. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html 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 Dec 2013, Japan’s exports grew 15.3 percent in 12 months while imports increased 24.7 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 0.4 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 1.9 percentage points from GDP growth in Japan. In Dec 2013, China exports increased 4.3 percent relative to a year earlier and imports increased 8.3 percent. Germany’s exports decreased 0.9 percent in the month of Dec 2013 and increased 4.6 percent in the 12 months ending in Dec 2013. Germany’s imports decreased 0.6 percent in the month of Dec and increased 2.0 percent in the 12 months ending in Dec. 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 0.8 percentage points in IIQ2012, added 0.7 percentage points in IIIQ2012 and subtracted 0.5 percentage points in IVQ2012. In IQ2013, net trade added 0.5 percentage points to UK’s growth of value added and contributed 0.2 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.2 percentage points from UK GDP growth. France’s exports increased 3.5 percent in Dec 2013 while imports increased 1.9 percent. Net traded added 0.1 percentage points to France’s GDP in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and added 0.2 percentage points in IIQ2013, deducting 0.7 percentage points in IIIQ2013. Net trade added 0.2 percentage points to France’s GDP in IVQ2013. US exports decreased 1.8 percent in Dec 2013 and goods exports increased 2.1 percent in Jan-Dec 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 0.14 percentage points to US GDP growth in IIIQ2013. Net trade added 1.33 percentage points to US GDP growth in IVQ2013. Industrial production decreased 0.3 percent in Jan 2014 after increasing 0.3 percent in Dec 2013 and increasing 0.7 percent in Nov 2013, 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 decreased 0.3 percent in January after having risen 0.3 percent in December. In January, manufacturing output fell 0.8 percent, partly because of the severe weather that curtailed production in some regions of the country. Additionally, manufacturing production is now reported to have been lower in the fourth quarter; the index is now estimated to have advanced at an annual rate of 4.6 percent in the fourth quarter rather than 6.2 percent. The output of utilities rose 4.1 percent in January, as demand for heating was boosted by unseasonably cold temperatures. The production at mines declined 0.9 percent following a gain of 1.8 percent in December. At 101.0 percent of its 2007 average, total industrial production in January was 2.9 percent above its level of a year earlier. The capacity utilization rate for total industry decreased in January to 78.5 percent, a rate that is 1.6 percentage points below its long-run (1972–2013) average.”
In the six months ending in Jan 2014, United States national industrial production accumulated increase of 2.1 percent at the annual equivalent rate of 4.3 percent, which is higher than growth of 2.9 percent in the 12 months ending in Jan 2014. Excluding growth of -0.3 percent in Jan 2014, growth in the remaining five months from Aug to Dec 2013 accumulated to 2.4 percent or 5.9 percent annual equivalent. Industrial production fell in one of the past six months. Business equipment accumulated growth of 0.6 percent in the six months from Aug 2013 to Jan 2014 at the annual equivalent rate of 1.2 percent, which is lower than growth of 2.4 percent in the 12 months ending in Jan 2014. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “The capacity utilization rate for total industry decreased in January to 78.5 percent, a rate that is 1.6 percentage points below its long-run (1972–2013) average.” United States industry apparently decelerated to a lower growth rate with possible acceleration in the past few months.
Manufacturing decreased 0.8 percent in Jan 2014 after increasing 0.3 percent in Dec 2013 and increasing 0.3 percent in Nov 2013 seasonally adjusted, increasing 1.3 percent not seasonally adjusted in 12 months ending in Jan 2014. Manufacturing grew cumulatively 1.2 percent in the six months ending in Jan 2014 or at the annual equivalent rate of 2.4 percent. Excluding the decrease of 0.3 percent in Jan 2014, manufacturing accumulated growth of 2.0 percent from Aug 2013 to Dec 2013 or at the annual equivalent rate of 4.9 percent. There has been evident deceleration of manufacturing growth in the US from 2010 and the first three months of 2011 into more recent months as shown by 12 months rates of growth. Growth rates appeared to be increasing again closer to 5 percent in Apr-Jun 2012 but deteriorated. The rates of decline of manufacturing in 2009 are quite high with a drop of 18.2 percent in the 12 months ending in Apr 2009. Manufacturing recovered from this decline and led the recovery from the recession. Rates of growth appeared to be returning to the levels at 3 percent or higher in the annual rates before the recession but the pace of manufacturing fell steadily in the past six months with some strength at the margin. Manufacturing increased 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 19.1 percent from the trough in Apr 2009 to Dec 2013. Manufacturing grew 17.2 percent from the trough in Apr 2009 to Jan 2014. Manufacturing output in Jan 2013 is 8.5 percent below the peak in Jun 2007.
Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points
| Exports | Exports 12 M ∆% | Imports | Imports 12 M ∆% | |
| USA | -1.8 Dec | 2.1 Jan-Dec | 0.3 Dec | -0.3 Jan-Dec |
| Japan | Dec 2013 15.3 Nov 2013 18.4 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 | Dec 2013 24.7 Nov 2013 21.1 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 | 2014 10.6 Jan 2013 4.3 Dec 12.7 Nov 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 25.0 Jan | 2014 10.0 Jan 2013 8.3 Dec 5.3 Nov 7.6 Oct 7.4 Sep 7.0 Aug 10.9 Jul -0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb 28.8 Jan | ||
| Euro Area | 3.8 12-M Dec | 0.8 Jan-Dec | 1.0 12-M Dec | -3.3 Jan-Dec |
| Germany | -0.9 Dec CSA | 4.6 Dec | -0.6 Nov CSA | 2.0 Dec |
| France Dec | 3.5 | -0.5 | 1.9 | -1.3 |
| Italy Nov | -1.9 | -3.4 | -2.2 | -6.9 |
| UK | 2.1 Dec | -0.1 Oct-Dec 13 /Dec-Oct 12 | -3.8 Dec | -0.4 Oct-Dec 13/Oct-Dec 12 |
| Net Trade % Points GDP Growth | % Points | |||
| USA | IVQ2013 1.33 IIIQ2013 0.14 IIQ2013 -0.07 IQ2013 -0.28 IVQ2012 +0.68 IIIQ2012 -0.03 IIQ2012 +0.10 IQ2012 +0.44 | |||
| Japan | 0.4 IQ2012 -1.3 IIQ2012 -2.1 IIIQ2012 -0.6 IVQ2012 1.6 IQ2013 0.6 IIQ2013 -1.9 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 0.1 IVQ2012 -0.1 IQ2013 0.2 IIQ2013 -0.7 IIIQ2013 0.2 IVQ2013 | |||
| UK | -0.8 IQ2012 -0.8 IIQ2012 +0.7 IIIQ2012 -0.5 IVQ2012 0.5 IQ2013 0.2 IIQ2013 -1.2 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 Dec 2013. The share of Asia in Japan’s trade is more than one-half for 55.0 percent of exports and 43.6percent of imports. Within Asia, exports to China are 19.9 percent of total exports and imports from China 21.6 percent of total imports. While exports to China increased 34.4 percent in the 12 months ending in Dec 2013, imports from China increased 29.2 percent. The second largest export market for Japan in US 2013 is the US with share of 18.5 percent of total exports, which is almost equal to that of China, and share of imports from the US of 7.3 percent in total imports. Western Europe has share of 11.1 percent in Japan’s exports and of 10.4 percent in imports. Rates of growth of exports of Japan in Dec 2013 are relatively high for several countries and regions with growth of 13.0 percent for exports to the US, 17.9 percent for exports to Brazil and 28.9 percent for exports to Germany. 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 Dec 2013 are positive for all trading partners. Imports from Asia increased 23.0 percent in the 12 months ending in Dec 2013 while imports from China increased 29.2 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
| Dec 2013 | Exports | 12 months ∆% | Imports Millions Yen | 12 months ∆% |
| Total | 6,110,510 | 15.3 | 7,412,623 | 24.7 |
| Asia | 3,359,323 | 16.0 | 3,229,984 | 23.0 |
| China | 1,216,540 | 34.4 | 1,600,018 | 29.2 |
| USA | 1,130,094 | 13.0 | 538,484 | 12.1 |
| Canada | 69,480 | 11.8 | 95,207 | 24.9 |
| Brazil | 41,941 | 17.9 | 91,397 | 32.2 |
| Mexico | 80,305 | 10.0 | 34,642 | 10.7 |
| Western Europe | 680,244 | 21.1 | 772,932 | 32.8 |
| Germany | 178,763 | 28.9 | 243,003 | 61.2 |
| France | 62,457 | 46.7 | 89,445 | 15.3 |
| UK | 108,821 | 14.9 | 55,278 | 19.6 |
| Middle East | 241,152 | 22.8 | 1,520,673 | 21.5 |
| Australia | 124,598 | -4.6 | 450,442 | 26.6 |
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 53.9 in Jan from 53.8 in Dec, indicating expansion at almost unchanged rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/2dbfcfb799994f3fb94f1a224708ae76). This index has remained above the contraction territory of 50.0 during 54 consecutive months. The employment index decreased from 52.2 in Dec to 51.9 in Jn with input prices rising at a faster rate, new orders increasing at slower rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/2dbfcfb799994f3fb94f1a224708ae76). David Hensley, Director of Global Economics Coordination at JP Morgan finds expectations of continuing growth in 2014 with world GDP expanding quarter-on-quarter at a rate above 3.0 percent in annual equivalent (http://www.markiteconomics.com/Survey/PressRelease.mvc/2dbfcfb799994f3fb94f1a224708ae76). The JP Morgan Global Manufacturing PMI™, produced by JP Morgan and Markit in association with ISM and IFPSM, was almost unchanged at 52.9 in Jan from 53.0 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/2abe878b5055447b89a369e17c8f4b8b). New export orders expanded at the lowest rate since Sep 2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2abe878b5055447b89a369e17c8f4b8b). David Hensley, Director of Global Economic Coordination at JP Morgan finds continuing growth of output and new orders at rates above average in the expansion period (http://www.markiteconomics.com/Survey/PressRelease.mvc/2abe878b5055447b89a369e17c8f4b8b). The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 51.7 in Dec to 49.9 in Jan, indicating unchanged activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/30abb6a91285494d98cf5a24e2cad184). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 51.7 in Dec to 49.6 in Jan, indicating contraction of services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/30abb6a91285494d98cf5a24e2cad184). André Loes, Chief Economist, Brazil, at HSBC, finds slower services activity together with faster inflation of inputs and outputs (http://www.markiteconomics.com/Survey/PressRelease.mvc/30abb6a91285494d98cf5a24e2cad184). The HSBC Brazil Purchasing Managers’ IndexTM (PMI™) increased marginally from 50.5 in Dec to 50.8 in Jan, indicating marginal improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/5dd1bda2fcb741929f8b24b035b07cef). André Loes, Chief Economist, Brazil at HSBC, finds improvement with slower growth of production compensated by stronger growth of new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/5dd1bda2fcb741929f8b24b035b07cef).
VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index™ (PMI™) seasonally adjusted decreased to 53.7 in Jan from 55.0 in Dec, which is slightly higher than the average at 53.5 in 2013, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/bda141f5c50642788bf2733f4522f28c). New export orders registered 48.9 in Jan, falling from 51.4 in Dec, indicating marginal contraction. Chris Williamson, Chief Economist at Markit, finds that manufacturing output is growing at 2.0 percent per quarter with positive effects on employment (http://www.markiteconomics.com/Survey/PressRelease.mvc/bda141f5c50642788bf2733f4522f28c). The Markit Flash US Services PMI™ Business Activity Index increased from 55.7 in Dec to 56.6 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/979201249645452086dde674d0d375e0). Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with growth of jobs at monthly rate of 200,000 (http://www.markiteconomics.com/Survey/PressRelease.mvc/979201249645452086dde674d0d375e0). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased marginally to 56.2 in Jan from 56.1 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/2c3bb316dbb44b348a768fcc4a9713cc). The Markit US Services PMI™ Business Activity Index increased marginally from 55.7 in Dec to 56.7 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/2c3bb316dbb44b348a768fcc4a9713cc). Chris Williamson, Chief Economist at Markit, finds monthly growth of jobs around 200,000 with 10,000 in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/2c3bb316dbb44b348a768fcc4a9713cc). The Markit US Manufacturing Purchasing Managers’ Index™ (PMI™) decreased to 53.7 in Jan from 55.0 in Dec, which indicates expansion at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/5519007b6dce46c9929b534d255298fd). The index of new exports orders decreased from 51.4 in Dec to 48.4 in Jan while total new orders decreased from 56.1 in Dec to 53.9 in Jan. Chris Williamson, Chief Economist at Markit, finds that the index suggests slowest growth in three months with respondents mentioning weather but underlying strength with no effects on the economy from Fed tapering of quantitative easing (http://www.markiteconomics.com/Survey/PressRelease.mvc/5519007b6dce46c9929b534d255298fd). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® decreased 5.2 percentage points from 56.5 in Dec to 51.3 in Jan, which indicates growth at a slower rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 3.0 percentage points from 60.6 in Oct to 63.6 in Nov. The index of exports decreased 13.2 percentage point from 64.4 in Dec to 51.2 in Nov, growing at a slower rate. The Non-Manufacturing ISM Report on Business® PMI increased 1.0 percentage points from 53.0 in Dec to 54.0 in Jan, indicating growth of business activity/production during 54 consecutive months, while the index of new orders increased 0.5 percentage points from 50.4 in Dec to 50.9 in Jan (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 | Dec 12 months NSA ∆%: 1.5; ex food and energy ∆%: 1.7 Dec month SA ∆%: 0.3; ex food and energy ∆%: 0.1 |
| Producer Price Index | Dec 12-month NSA ∆%: 1.2; ex food and energy ∆% 1.4 |
| PCE Inflation | Dec 12-month NSA ∆%: headline 1.1; ex food and energy ∆% 1.2 |
| Employment Situation | Household Survey: Dec Unemployment Rate SA 6.6% |
| Nonfarm Hiring | Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million |
| GDP Growth | BEA Revised National Income Accounts IIQ2012/IIQ2011 2.8 IIIQ2012/IIIQ2011 3.1 IVQ2012/IVQ2011 2.0 IQ2013/IQ2012 1.3 IIQ2013/IIQ2012 1.6 IIIQ2013/IIIQ2012 2.0 IVQ2013/IVQ2012 2.7 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 4.1 IVQ2013 SAAR 3.2 |
| Real Private Fixed Investment | SAAR IIIQ2013 0.9 ∆% IVQ2007 to IIIQ2013: minus 3.4% Blog 2/2/14 |
| Personal Income and Consumption | Dec month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% minus 0.2 |
| Quarterly Services Report | IIIQ13/IIQ12 NSA ∆%: Financial & Insurance 0.6 |
| Employment Cost Index | Compensation Private IVQ2013 SA ∆%: 0.5 |
| Industrial Production | Jan month SA ∆%: -0.3 Manufacturing Jan SA ∆% minus 0.8 Jan 12 months SA ∆% 1.3, NSA 1.3 |
| Productivity and Costs | Nonfarm Business Productivity IVQ2013∆% SAAE 3.3; IVQ2013/IVQ2012 ∆% 1.7; Unit Labor Costs SAAE IVQ2013 ∆% -1.6; IVQ2013/IVQ2012 ∆%: -1.3 Blog 2/9/2014 |
| New York Fed Manufacturing Index | General Business Conditions From Dec 2.22 to Jan 12.51 |
| Philadelphia Fed Business Outlook Index | General Index from Dec 6.4 to Jan 9.4 |
| Manufacturing Shipments and Orders | New Orders SA Dec ∆% -1.5 Ex Transport 0.2 Jan-Dec NSA New Orders ∆% 2.5 Ex transport 1.5 |
| Durable Goods | Dec New Orders SA ∆%: minus 4.3; ex transport ∆%: minus 1.6 |
| Sales of New Motor Vehicles | Jan 2014 1,012,582; Jan 2013 1,044,655. Jan 14 SAAR 15.24 million, Dec 13 SAAR 15.40 million, Jan 2013 SAAR 15.23 million Blog 2/9/14 |
| Sales of Merchant Wholesalers | Jan-Dec 2013/Jan-Dec 2012 NSA ∆%: Total 4.2; Durable Goods: 4.4; Nondurable |
| Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers | Dec 13 12-M NSA ∆%: Sales Total Business 5.2; Manufacturers 2.9 |
| Sales for Retail and Food Services | Jan 2014/Jan 2012 ∆%: Retail and Food Services 3.0; Retail ∆% 3.0 |
| Value of Construction Put in Place | Dec SAAR month SA ∆%: 0.1 Dec 12-month NSA: 3.1 Jan-Dec 2013 ∆% 4.8 |
| Case-Shiller Home Prices | Nov 2013/Nov 2012 ∆% NSA: 10 Cities 13.8; 20 Cities: 13.7 |
| FHFA House Price Index Purchases Only | Nov SA ∆% 0.1; |
| New House Sales | Dec 2013 month SAAR ∆%: minus 7.0 |
| Housing Starts and Permits | Dec Starts month SA ∆% -9.8; Permits ∆%: -3.0 |
| Trade Balance | Balance Nov SA -$24,252 million versus Oct -$39,328 million |
| Export and Import Prices | Jan 12-month NSA ∆%: Imports -1.5; Exports -1.2 |
| Consumer Credit | Dec ∆% annual rate: Total 7.3; Revolving 7.0; Nonrevolving 7.4 |
| Net Foreign Purchases of Long-term Treasury Securities | Nov Net Foreign Purchases of Long-term US Securities: -$29.3 billion |
| Treasury Budget | Fiscal Year 2014/2013 ∆% Jan: Receipts 8.2; Outlays minus 2.8; Individual Income Taxes 1.6 Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Blog 2/16/2014 |
| CBO Budget and Economic Outlook | 2012 Deficit $1087 B 6.8% GDP Debt 11,281 B 70.1% GDP 2013 Deficit $680 B, 4.1% GDP Debt 11,982 B 72.1% GDP Blog 8/26/12 11/18/12 2/10/13 9/22/13 2/16/14 |
| Commercial Banks Assets and Liabilities | Dec 2013 SAAR ∆%: Securities 11.7 Loans 3.7 Cash Assets -9.0 Deposits 9.4 Blog 1/26/14 |
| Flow of Funds | IIIQ2013 ∆ since 2007 Assets +$8554.2 MM Nonfinancial -$1228.7 MM Real estate -$1838.9 MM Financial +9782.9 MM Net Worth +$9269.0 MM Blog 12/29/13 |
| Current Account Balance of Payments | IIIQ2013 -110,055 MM %GDP 2.2 Blog 12/22/13 |
Links to blog comments in Table USA:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
1/19/14 http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html
1/12/14 http://cmpassocregulationblog.blogspot.com/2014/01/twenty-nine-million-unemployed-or.html
12/29/13 http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html
12/22/13 http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html
12/15/13 http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.html
9/22/13 http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html
2/10/13 http://cmpassocregulationblog.blogspot.com/2013/02/united-states-unsustainable-fiscal.html
Sales of manufacturers increased 0.1 percent in Dec 2013 after increasing 0.7 percent in Nov and increased 5.2 percent in the 12 months ending in Dec, as shown in Table VA-1. Retailers’ sales changed 0.0 percent in Dec after Increasing 0.2 percent in Nov and increased 3.8 percent in 12 months ending in Dec 2013. Sales of merchant wholesalers increased 0.5 percent in Dec, increased 1.0 percent in Nov and increased 9.4 percent in 12 months ending in Dec. These data are not adjusted for price changes such that they reflect increases in both quantities and prices.
Table VA-1, US, Percentage Changes for Sales of Manufacturers, Retailers and Merchant Wholesalers
| Dec 13/ Nov 13 | Dec 2013 | Nov 13/ Oct 13 ∆% SA | Dec 13/ Dec 12 | |
| Total Business | 0.1 | 1,359,756 | 0.7 | 5.2 |
| .Manufacturers | -0.2 | 479,950 | 0.8 | 2.9 |
| Retailers | 0.0 | 438,845 | 0.2 | 3.8 |
| Merchant Wholesalers | 0.5 | 440,961 | 1.0 | 9.4 |
Source: US Census Bureau http://www.census.gov/mtis/
Chart VA-1 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers seasonally adjusted (SA) in millions of dollars. Seasonal adjustment softens adjacent changes for purposes of comparing short-term variations free of seasonal factors. There was sharp drop in the global recession followed by sharp recovery with decline and recovery in the final segment above the peak before the global recession. Data are not adjusted for price changes.
Chart VA-1, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Dec 2013
US Census Bureau
hart VA-2 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers not seasonally adjusted (NSA) in millions of dollars. The series without adjustment shows sharp jagged behavior because of monthly fluctuations following seasonal patterns. There is sharp recovery from the global recession in a robust trend, which is mixture of price and quantity effects because data are not adjusted for price changes. There is stability in the final segment with monthly marginal strength.
Chart VA-2, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Dec 2013
US Census Bureau
Businesses added cautiously to inventories to replenish stocks. Retailers added 0.6 percent to inventories in Dec 2013 and 0.8 percent in Nov 2013 with growth of 7.5 percent in 12 months, as shown in Table VA-2. Total business increased inventories by 0.5 percent in Dec, 0.4 percent in Nov and 4.4 percent in 12 months. Inventories sales/ratios of total business continued at a level close to 1.29 under careful management to avoid costs and risks. Inventory/sales ratios of manufacturers and retailers are higher than for merchant wholesalers. There is stability in inventory/sales ratios in individual months and relative to a year earlier.
Table VA-2, US, Percentage Changes for Inventories of Manufacturers, Retailers and Merchant Wholesalers and Inventory/Sales Ratios
| Inventory Change | Dec 13 | Dec 13/ Nov 13 ∆% SA | Nov 13/ Oct 13 ∆% SA | Dec 13/ Dec 12 ∆% NSA |
| Total Business | 1,687,455 | 0.5 | 0.4 | 4.4 |
| Manufacturers | 619,546 | 0.5 | 0.1 | 2.2 |
| Retailers | 547,303 | 0.6 | 0.8 | 7.5 |
| Merchant | 520,606 | 0.3 | 0.5 | 3.9 |
| Inventory/ | Dec 13 | Dec 2013 SA | Nov 2013 SA | Dec 2012 SA |
| Total Business | 1,687,455 | 1.30 | 1.29 | 1.29 |
| Manufacturers | 619,546 | 1.29 | 1.28 | 1.29 |
| Retailers | 547,303 | 1.45 | 1.44 | 1.40 |
| Merchant Wholesalers | 520,606 | 1.17 | 1.17 | 1.19 |
Source: US Census Bureau http://www.census.gov/mtis/
Chart VA-3 of the US Census Bureau provides total business inventories of manufacturers, retailers and merchant wholesalers seasonally adjusted (SA) in millions of dollars from Jan 1992 to Dec 2013. The impact of the two recessions of 2001 and IVQ2007 to IIQ2009 is evident in the form of sharp reductions in inventories. Inventories have surpassed the peak before the global recession. Data are not adjusted for price changes.
Chart VA-3, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Dec 2013
US Census Bureau
Chart VA-4 provides total business inventories of manufacturers, retailers and merchant wholesalers not seasonally adjusted (NSA) from Jan 1992 to Dec 2013 in millions of dollars. The recessions of 2001 and IVQ2007 to IIQ2009 are evident in the form of sharp reductions of inventories. There is sharp upward trend of inventory accumulation after both recessions. Total business inventories are higher than in the peak before the global recession.
Chart VA-4, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Dec 2013
US Census Bureau
Inventories follow business cycles. When recession hits sales inventories pile up, declining with expansion of the economy. In a fascinating classic opus, Lloyd Meltzer (1941, 129) concludes:
“The dynamic sequences (i) through (6) were intended to show what types of behavior are possible for a system containing a sales output lag. The following conclusions seem to be the most important:
(i) An economy in which business men attempt to recoup inventory losses will always undergo cyclical fluctuations when equilibrium is disturbed, provided the economy is stable.
This is the pure inventory cycle.
(2) The assumption of stability imposes severe limitations upon the possible size of the marginal propensity to consume, particularly if the coefficient of expectation is positive.
(3) The inventory accelerator is a more powerful de-stabilizer than the ordinary acceleration principle. The difference in stability conditions is due to the fact that the former allows for replacement demand whereas the usual analytical formulation of the latter does not. Thus, for inventories, replacement demand acts as a de-stabilizer. Whether it does so for all types of capital goods is a moot question, but I believe cases may occur in which it does not.
(4) Investment for inventory purposes cannot alter the equilibrium of income, which depends only upon the propensity to consume and the amount of non-induced investment.
(5) The apparent instability of a system containing both an accelerator and a coefficient of expectation makes further investigation of possible stabilizers highly desirable.”
Chart VA-5 shows the increase in the inventory/sales ratios during the recession of 2007-2009. The inventory/sales ratio fell during the expansions. The inventory/sales ratio declined to a trough in 2011, climbed and then stabilized at current levels in 2012 and 2013.
Chart VA-5, Total Business Inventories/Sales Ratios 2002 to 2013
Source: US Census Bureau
http://www2.census.gov/retail/releases/historical/mtis/img/mtisbrf.gif
Sales and inventories of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-3 for Jan-Dec 2013 NSA and percentage changes from the prior month SA and for Jan-Dec 2013 relative to Jan-Dec 2012. These data are volatile, aggregating diverse categories of durable and nondurable goods without adjustment for price changes. Total sales for the US rose 4.2 percent in Jan-Dec 2013 relative to Jan-Dec 2012 and increased 0.5 percent in Dec 2013 relative to Nov 2013. The value of total sales is quite high at $5124.7 billion, approaching five trillion dollars in a year. Value in the breakdown is useful in identifying relative importance of individual categories. Sales of durable goods in Jan-Dec 2013 reached $2262.2 billion, over two trillion dollars for a year, increasing 0.3 percent in Dec 2013 relative to Nov 2013 and increasing 4.4 percent in Jan-Dec 2013 relative to Jan-Dec 2012. Sales of automotive products reached $408.0 billion in Jan-Dec 2013, decreasing 0.7 percent in the month and increasing 3.6 percent relative to a year earlier. There is strong performance of 12.3 percent in machinery but lower of 4.5 percent in electrical products. Sales of nondurable goods rose 4.1 percent over a year earlier. The influence of commodity prices returned as suggested by decrease of 2.3 percent in Dec 2013 and increase of 1.6 percent in Jan-Dec 2013 relative to a year earlier in farm products with increase of 1.4 percent in petroleum products in Dec 2013 and increase of 4.1 percent relative to a year earlier. The final three columns in Table VA-4 provide the value of inventories and percentage changes from the prior month and relative to the same month a year earlier. US total inventories of wholesalers increased 0.3 percent in Dec 2013 and increased 3.9 percent relative to a year earlier. Inventories of durable goods of $314.5 billion are 60.4 percent of total inventories of $520.6 billion and rose 5.7 percent relative to a year earlier. Automotive inventories increased 4.4 percent relative to a year earlier. Machinery inventories of $92.7 billion rose 11.1 percent relative to a year earlier. Inventories of nondurable goods of $206.1 billion are 39.6 percent of the total and increased 1.2 percent relative to a year earlier. Inventories of farm products decreased 5.2 percent in Dec relative to Nov and decreased 11.2 percent relative to a year earlier. Inventories of petroleum products decreased 5.1 percent in Dec and decreased 11.7 percent relative to a year earlier.
Table VA-3, US, Sales and Inventories of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, Month ∆%
| 2013 | Sales $ Billions Jan-Dec 2013 | Sales Dec ∆% SA | Sales∆% Jan-Dec 2013 from Jan-Dec 2012 NSA | INV $ Billions Dec 2013 NSA | INV Dec ∆% SA | INV ∆% Dec 2013 from Dec 2012 NSA |
| US Total | 5124.7 | 0.5 | 4.2 | 520.6 | 0.3 | 3.9 |
| Durable | 2362.2 | 0.3 | 4.4 | 314.5 | 1.3 | 5.7 |
| Automotive | 408.0 | -0.7 | 3.6 | 49.8 | 0.6 | 4.4 |
| Prof. Equip. | 483.8 | 1.0 | 2.9 | 38.2 | 1.9 | 6.1 |
| Computer Equipment | 282.6 | 0.4 | 2.3 | 17.0 | 5.3 | 8.8 |
| Electrical | 375.0 | 1.6 | 4.5 | 38.0 | 1.3 | 2.9 |
| Machinery | 418.6 | 0.9 | 12.3 | 92.7 | 2.2 | 11.1 |
| Not Durable | 2762.5 | 0.6 | 4.1 | 206.1 | -1.3 | 1.2 |
| Drugs | 425.6 | 3.4 | 5.4 | 42.3 | 0.1 | 15.0 |
| Apparel | 148.1 | -0.2 | 1.5 | 22.7 | 1.7 | 7.0 |
| Groceries | 590.9 | -1.4 | 5.2 | 34.5 | -0.4 | 4.3 |
| Farm Products | 242.5 | -2.3 | 1.6 | 29.0 | -5.2 | -11.2 |
| Petroleum | 757.3 | 1.4 | 4.1 | 21.2 | -5.1 | -11.7 |
Note: INV: inventories
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Chart VA-6 of the US Census Bureau provides sales of wholesale trade NSA from Jan 1992 to Dec 2013. The jagged curve of wholesale trade sales without adjustment shows strong seasonal variations. There is a strong long-term trend interrupted by sharp drop during the global recession. Growth resumed along a stronger upward trend and the level surpasses the peak before the global recession with stability in the final segment.
Chart VA-6, US, Wholesale Trade Sales, Monthly, NSA, Jan 1992-
Dec, 2013, Millions of Dollars
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Chart VA-7 of the US Census Bureau provides US wholesale trade sales with seasonal adjustment from Jan 1992 to Dec 2013. The elimination of seasonality permits enhanced comparison of adjacent sales. The final segment identifies another drop followed by increase to a higher level with stability.
Chart VA-7, US, Wholesale Trade Sales, Monthly, SA, Jan 1992-Dec 2013, Millions of Dollars
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Inventory/sales ratios of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-4. The total for the US has remained almost without change at 1.17 in Dec 2013, 1.17 in Nov 2013 and 1.19 in Dec 2012. Inventory/sales ratios are higher in durable goods industries but remain relatively stable with 1.58 in Dec 2013, 1.57 in Nov 2013 and 1.58 in Dec 2012. Computer equipment operates with low inventory/sales ratios of 0.73 in Dec 2013, 0.70 in Dec 2013 and 0.70 in Dec 2012 because of the capacity to fill orders on demand. As expected because of perishable nature, nondurable inventory/sales ratios are quite low with 0.83 in Dec 2013 and 0.84 in Nov 2013, which are close to 0.86 in Dec 2012. There are exceptions such as 1.80 in Dec 2013 in apparel that is close to 1.77 in Nov 2013 and close to 1.78 in Dec 2012.
Table VA-4, Inventory/Sales Ratios of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, % SA
| Dec 2013 | Nov 2013 | Dec 2012 | |
| US Total | 1.17 | 1.17 | 1.19 |
| Durable | 1.58 | 1.57 | 1.58 |
| Automotive | 1.44 | 1.42 | 1.44 |
| Prof. Equip. | 0.94 | 0.93 | 0.93 |
| Comp. Equip. | 0.73 | 0.70 | 0.70 |
| Electrical | 1.20 | 1.20 | 1.21 |
| Machinery | 2.56 | 2.53 | 2.69 |
| Not Durable | 0.83 | 0.84 | 0.86 |
| Drugs | 1.06 | 1.10 | 0.97 |
| Apparel | 1.80 | 1.77 | 1.78 |
| Groceries | 0.69 | 0.68 | 0.68 |
| Farm Products | 1.17 | 1.20 | 1.27 |
| Petroleum | 0.30 | 0.32 | 0.39 |
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-8 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession with recent downward turn followed by stability.
Chart VA-8, US, Inventories of Merchant Wholesalers, Millions of Dollars, NSA, Jan 1992-Dec 2013
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-9 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession with recent downward turn followed by increase.
Chart VA-9, US, Inventories of Merchant Wholesalers, Millions of Dollars, SA, Jan 1992-Nov 2013
Source: US Census Bureau
http://www.census.gov/wholesale/index.html
Chart VA-10 provides the chart of the US Census Bureau with inventories/sales ratios of merchant wholesalers from 2004 to 2013 seasonally adjusted. Inventory/sales ratios rise during contractions as merchants are caught with increasing inventories because of weak sales and fall during expansions as merchants attempt to fill sales with existing stocks. There is an increase in the inventory/sales ratio in 2012 but not yet significantly higher with declining trend in the final segment followed by an increase and new decline/stability.
Chart VA-10, US, Monthly Inventories/Sales Ratios of Merchant Wholesalers, SA, 2004-2013
Source: US Census Bureau
http://www2.census.gov/wholesale/img/mwtsbrf.jpg
Sales of retail and food services decreased 0.4 percent in Jan 2014 after decreasing 0.1 percent in Dec 2013 seasonally adjusted (SA), growing 3.0 percent in Jan 2014 relative to Jan 2013 not seasonally adjusted (NSA), as shown in Table VA-5. Excluding motor vehicles and parts, retail sales changed 0.0 percent in Jan 2014, increasing 0.3 percent in Dec 2013 SA and increasing 2.8 percent NSA in Jan 2014 relative to a year earlier. Sales of motor vehicles and parts decreased 2.1 percent in Jan 2014 after decreasing 1.8 percent in Dec 2013 SA and increasing 3.8 percent NSA in Jan 2014 relative to a year earlier. Gasoline station sales increased 1.1 percent SA in Jan 2014 after increasing 1.5 percent in Dec 2013 in oscillating prices of gasoline that are moderating, increasing 1.4 percent in Jan 2014 relative to a year earlier.
Table VA-5, US, Percentage Change in Monthly Sales for Retail and Food Services, ∆%
| Jan/Dec ∆% SA | Dec/Nov ∆% SA | Jan 2014 Million Dollars NSA | Jan 2014 from Jan 2013 ∆% NSA | |
| Retail and Food Services | -0.4 | -0.1 | 392,332 | 3.0 |
| Excluding Motor Vehicles and Parts | 0.0 | 0.3 | 320,670 | 2.8 |
| Motor Vehicles & Parts Dealers | -2.1 | -1.8 | 71,662 | 3.8 |
| Retail | -0.4 | 0.0 | 348,726 | 3.0 |
| Building Materials | 1.4 | 0.0 | 20,679 | 3.3 |
| Food and Beverage | 0.2 | 1.7 | 54,885 | 5.1 |
| Grocery | 0.4 | 1.7 | 49,696 | 4.8 |
| Health & Personal Care Stores | -0.6 | 0.4 | 24,441 | 3.1 |
| Clothing & Clothing Accessories Stores | -0.9 | 0.7 | 15,694 | 1.4 |
| Gasoline Stations | 1.1 | 1.5 | 42,115 | 1.4 |
| General Merchandise Stores | -0.1 | -0.4 | 48,066 | 1.4 |
| Food Services & Drinking Places | -0.6 | -0.7 | 43,606 | 3.2 |
Source: US Census Bureau http://www.census.gov/retail/
Chart VA-11 of the US Bureau of the Census shows percentage change of retail and food services sales. Auto sales have been increasing monthly, and particularly relative to a year earlier, but with weakness in the total excluding auto sales and declines or mild growth in general merchandise. Auto sales weakened in Dec 2013 and Jan 2014.
Chart VA-11, US, Percentage Change of Retail and Food Services Sales
Source: US Census Bureau
http://www2.census.gov/retail/releases/historical/marts/img/martsbrf.gif
Chart VA-12 of the US Census Bureau provides total sales of retail trade and food services seasonally adjusted (SA) from Jan 1992 to Jan 2014 in millions of dollars. The impact on sales of the shallow recession of 2001 was much milder than the sharp contraction in the global recession from IVQ2007 to IIQ2009. There is flattening in the final segment of the series followed by another increase. Data are not adjusted for price changes.
Chart VA-12, US, Total Sales of Retail Trade and Food Services, SA, Jan 1992-Jan 2014, Millions of Dollars
Source: US Census Bureau
Chart VA-13 of the US Census Bureau provides total sales of retail trade and food services not seasonally adjusted (NSA) in millions of dollars from Jan 1992 to Jan 2014. Data are not adjusted for seasonality, which explains sharp jagged behavior, or price changes. There was contraction during the global recession from IVQ2007 to IIQ2009 with strong rebound to a higher level and stability followed by strong increase in the final segment.
Chart VA-13, US, Total Sales of Retail Trade and Food Services, NSA, Jan 1992-Jan 2014, Millions of Dollars
Source: US Census Bureau
Chart IIA2-1 provides prices of total US imports 2001-2014. Prices fell during the contraction of 2001. Import price inflation accelerated after unconventional monetary policy of near zero interest rates in 2003-2004 and quantitative easing by withdrawing supply with the suspension of 30-year Treasury bond auctions. Slow pace of adjusting fed funds rates from 1 percent by increments of 25 basis points in 17 consecutive meetings of the Federal Open Market Committee (FOMC) between Jun 2004 and Jun 2006 continued to give impetus to carry trades. The reduction of fed funds rates toward zero in 2008 fueled a spectacular global hunt for yields that caused commodity price inflation in the middle of a global recession. After risk aversion in 2009 because of the announcement of TARP (Troubled Asset Relief Program) creating anxiety on “toxic assets” in bank balance sheets (see Cochrane and Zingales 2009), prices collapsed because of unwinding carry trades. Renewed price increases returned with zero interest rates and quantitative easing. Monetary policy impulses in massive doses have driven inflation and valuation of risk financial assets in wide fluctuations over a decade.
Chart IIA2-1, US, Prices of Total US Imports 2001=100, 2001-2014
Source: Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-2 provides 12-month percentage changes of prices of total US imports from 2001 to 2014. The only plausible explanation for the wide oscillations is by the carry trade originating in unconventional monetary policy. Import prices jumped in 2008 during deep and protracted global recession driven by carry trades from zero interest rates to long, leveraged positions in commodity futures. Carry trades were unwound during the financial panic in the final quarter of 2008 that resulted in flight to government obligations. Import prices jumped again in 2009 with subdued risk aversion because US banks did not have unsustainable toxic assets. Import prices then fluctuated as carry trades were resumed during periods of risk appetite and unwound during risk aversion resulting from the European debt crisis.
Chart IIA2-2, US, Prices of Total US Imports, 12-Month Percentage Changes, 2001-2014
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IIA2-3 provides prices of US imports from 1982 to 2014. There is no similar episode to that of the increase of commodity prices in 2008 during a protracted and deep global recession with subsequent collapse during a flight into government obligations. Trade prices have been driven by carry trades created by unconventional monetary policy in the past decade.
Chart IIA2-3, US, Prices of Total US Imports, 2001=100, 1982-2014
Source: Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-4 provides 12-month percentage changes of US total imports from 1982 to 2014. There have not been wide consecutive oscillations as the ones during the global recession of IVQ2007 to IIQ2009.
Chart IIA2-4, US, Prices of Total US Imports, 12-Month Percentage Changes, 1982-2014
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IIA2-5 provides the index of US export prices from 2001 to 2014. Import and export prices have been driven by impulses of unconventional monetary policy in massive doses. The most recent segment in Chart IIA2-5 shows declining trend resulting from a combination of the world economic slowdown and the decline of commodity prices as carry trade exposures are unwound because of risk aversion to the sovereign debt crisis in Europe and slowdown in the world economy.
Chart IIA2-5, US, Prices of Total US Exports, 2001=100, 2001-2014
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IIA2-6 provides prices of US total exports from 1982 to 2014. The rise before the global recession from 2003 to 2008, driven by carry trades, is also unique in the series and is followed by another steep increase after risk aversion moderated in IQ2009.
Chart IIA2-6, US, Prices of Total US Exports, 2001=100, 1982-2014
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Chart IIA2-7 provides 12-month percentage changes of total US exports from 1982 to 2014. The uniqueness of the oscillations around the global recession of IVQ2007 to IIQ2009 is clearly revealed.
Chart IIA2-7, US, Prices of Total US Exports, 12-Month Percentage Changes, 1982-2014
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Twelve-month percentage changes of US prices of exports and imports are provided in Table IIA2-1. Import prices have been driven since 2003 by unconventional monetary policy of near zero interest rates influencing commodity prices according to moods of risk aversion and portfolio reallocations. In a global recession without risk aversion until the panic of Sep 2008 with flight to government obligations, import prices increased 21.4 percent in the 12 months ending in Jul 2008, 18.1 percent in the 12 months ending in Aug 2008, 13.1 percent in the 12 months ending in Sep 2008, 4.9 percent in the twelve months ending in Oct 2008. Import prices fell 10.1 percent in the 12 months ending in Dec 2008 when risk aversion developed in 2008 until mid 2009 (http://www.bls.gov/mxp/data.htm). Import prices rose again sharply in Dec 2009 by 8.6 percent and in Dec 2010 by 5.3 percent in the presence of zero interest rates with relaxed mood of risk aversion. Carry trades were unwound in May 2011 and following months as shown by decrease of import prices by 2.0 percent in the 12 months ending in Dec 2012 and 1.3 percent in Dec 2013. Import prices increased 15.2 percent in the 12 months ending in Mar 2008, fell 14.9 percent in the 12 months ending in Mar 2009 and increased 11.2 percent in the 12 months ending in Mar 2010. Fluctuations are much sharper in imports because of the high content of oil that as all commodities futures contracts increases sharply with zero interest rates and risk appetite, contracting under risk aversion. There is similar behavior of prices of imports ex fuels, exports and exports ex agricultural goods but less pronounced than for commodity-rich prices dominated by carry trades from zero interest rates. A critical event resulting from unconventional monetary policy driving higher commodity prices by carry trades is the deterioration of the terms of trade, or export prices relative to import prices, that has adversely affected US real income growth relative to what it would have been in the absence of unconventional monetary policy. Europe, Japan and other advanced economies have experienced similar deterioration of their terms of trade. Because of unwinding carry trades of commodity futures because of risk aversion and portfolio reallocations, import prices decreased 1.5 percent in the 12 months ending in Jan 2014, export prices decreased 1.2 percent and prices of nonagricultural exports fell 0.5 percent. Imports excluding fuel fell 1.1 percent in the 12 months ending in Jan 2014. At the margin, price changes over the year in world exports and imports are decreasing or increasing moderately because of unwinding carry trades in a temporary mood of risk aversion and relative allocation of asset classes toward equities that reverses exposures in commodity futures.
Table IIA2-1, US, Twelve-Month Percentage Rates of Change of Prices of Exports and Imports
| Imports | Imports Ex Fuels | Exports | Exports Non-Ag | |
| Jan 2014 | -1.5 | -1.1 | -1.2 | -0.5 |
| Jan 2013 | -1.5 | 0.0 | 1.2 | 0.0 |
| Jan 2012 | 6.9 | 2.9 | 2.6 | 3.2 |
| Jan 2011 | 5.6 | 3.4 | 7.0 | 5.4 |
| Jan 2010 | 11.4 | 1.3 | 3.5 | 3.3 |
| Jan 2009 | -12.5 | -0.3 | -3.4 | -2.7 |
| Jan 2008 | 13.6 | 3.5 | 6.8 | 4.9 |
| Jan 2007 | 0.0 | 2.8 | 4.1 | 3.3 |
| Jan 2006 | 8.7 | 0.9 | 2.7 | 2.6 |
| Jan 2005 | 5.7 | 3.0 | 4.0 | 5.1 |
| Jan 2004 | 2.2 | 1.5 | 2.6 | 1.6 |
| Jan 2003 | 5.8 | 0.0 | 1.4 | 1.0 |
| Jan 2002 | -8.9 | NA | -2.8 | -2.9 |
| Jan 2001 | 2.8 | NA | 1.1 | 0.9 |
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
Table IIA2-2 provides 12-month percentage changes of the import price index all commodities from 2001 to 2014. Interest rates moving toward zero during unconventional monetary policy in 2008 induced carry trades into highly leveraged commodity derivatives positions that caused increases in 12-month percentage changes of import prices of around 20 percent. The flight into dollars and Treasury securities by fears of toxic assets in banks in the proposal of TARP (Cochrane and Zingales 2009) caused reversion of carry trades and collapse of commodity futures explaining sharp declines in trade prices in 2009. Twelve-month percentage changes of import prices at the end of 2012 and into 2013 occurred during another bout of risk aversion and portfolio reallocation. There is a new shock of risk aversion in late 2013 with marginally increasing exposures in commodities.
Table IIA2-2, US, Twelve-Month Percentage Changes of Import Price Index All Commodities, 2001-2014
| Year | Jan | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2001 | 2.8 | -0.8 | -2.6 | -4.1 | -4.4 | -5.6 | -7.4 | -8.8 | -9.1 |
| 2002 | -8.9 | -3.7 | -3.6 | -1.7 | -1.3 | -0.4 | 1.9 | 2.5 | 4.2 |
| 2003 | 5.8 | 1.0 | 2.2 | 2.3 | 2.0 | 0.7 | 0.8 | 2.3 | 2.4 |
| 2004 | 2.2 | 6.9 | 5.7 | 5.6 | 7.1 | 8.2 | 9.9 | 9.0 | 6.7 |
| 2005 | 5.7 | 5.9 | 7.4 | 8.2 | 8.2 | 9.9 | 8.2 | 6.4 | 8.0 |
| 2006 | 8.7 | 8.6 | 7.4 | 7.0 | 6.0 | 1.6 | -1.0 | 1.3 | 2.5 |
| 2007 | 0.0 | 1.2 | 2.3 | 2.8 | 1.9 | 4.8 | 9.1 | 12.0 | 10.6 |
| 2008 | 13.6 | 19.1 | 21.3 | 21.4 | 18.1 | 13.1 | 4.9 | -5.9 | -10.1 |
| 2009 | -12.5 | -17.3 | -17.5 | -19.1 | -15.3 | -12.0 | -5.6 | 3.4 | 8.6 |
| 2010 | 11.4 | 8.5 | 4.3 | 4.9 | 3.8 | 3.6 | 3.9 | 4.1 | 5.3 |
| 2011 | 5.6 | 12.9 | 13.6 | 13.7 | 12.9 | 12.7 | 11.1 | 10.1 | 8.5 |
| 2012 | 6.9 | -0.8 | -2.5 | -3.3 | -1.8 | -0.6 | 0.0 | -1.4 | -2.0 |
| 2013 | -1.5 | -1.8 | 0.1 | 0.9 | 0.0 | -0.7 | -1.6 | -1.9 | -1.1 |
| 2014 | -1.5 |
Source: Bureau of Labor Statistics http://www.bls.gov/mxp/data.htm
There is finer detail in one-month percentage changes of imports of the US in Table IIA2-3. Carry trades into commodity futures induced by interest rates moving to zero in unconventional monetary policy caused sharp monthly increases in import prices for cumulative increase of 13.8 percent from Mar to Jul 2008 at average rate of 2.6 percent per month or annual equivalent in five months of 36.4 percent (3.1 percent in Mar 2008, 2.8 percent in Apr 2008, 2.8 percent in May 2008, 3.0 percent in Jun 2008 and 1.4 percent in Jul 2008, data from http://www.bls.gov/mxp/data.htm). There is no other explanation for increases in import prices during sharp global recession and contracting world trade. Import prices then fell 23.4 percent from Aug 2008 to Jan 2009 or at the annual equivalent rate of minus 41.4 percent in the flight to US government securities in fear of the need to buy toxic assets from banks in the TARP program (Cochrane and Zingales 2009). Risk aversion during the first sovereign debt crisis of the euro area in May-Jun 2010 caused decline of US import prices at the annual equivalent rate of 11.4 percent. US import prices have been driven by combinations of carry trades induced by unconventional monetary policy and bouts of risk aversion and portfolio reallocation (http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html). US import prices increased 0.5 percent in Jan 2013 and 0.9 percent in Feb 2013 for annual equivalent rate of 8.7 percent, similar to those in national price indexes worldwide, originating in carry trades from zero interest rates to commodity futures. Import prices fell 0.1 percent in Mar 2013, 0.7 percent in Apr 2013, 0.6 percent in May 2013 and 0.4 percent in Jun 2013. Import prices changed 0.1 percent in Jul 2013, increased 0.4 percent in Aug 2013 and increased 0.3 percent in Sep 2013. Portfolio reallocations into asset classes other than commodities explains declines of import prices by 0.6 percent in Oct 2013 and 0.9 percent in Nov 2013. Import prices increased 0.2 percent in Dec 2013 and 0.1 percent in Jan 2014.
Table IIA2-3, US, One-Month Percentage Changes of Import Price Index All Commodities, 2001-2014
| Year | Jan | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2001 | 0.0 | 0.2 | -0.4 | -1.5 | -0.1 | -0.1 | -2.3 | -1.5 | -1.0 |
| 2002 | 0.2 | 0.1 | -0.3 | 0.4 | 0.3 | 0.7 | 0.0 | -0.9 | 0.6 |
| 2003 | 1.8 | -0.7 | 0.9 | 0.5 | 0.0 | -0.5 | 0.1 | 0.5 | 0.7 |
| 2004 | 1.5 | 1.5 | -0.2 | 0.4 | 1.5 | 0.5 | 1.6 | -0.3 | -1.4 |
| 2005 | 0.6 | -0.8 | 1.2 | 1.2 | 1.4 | 2.1 | 0.1 | -1.9 | 0.0 |
| 2006 | 1.2 | 1.8 | 0.1 | 0.8 | 0.5 | -2.2 | -2.5 | 0.4 | 1.1 |
| 2007 | -1.2 | 0.9 | 1.2 | 1.3 | -0.3 | 0.6 | 1.5 | 3.2 | -0.2 |
| 2008 | 1.5 | 2.8 | 3.0 | 1.4 | -3.1 | -3.6 | -6.0 | -7.4 | -4.6 |
| 2009 | -1.3 | 1.7 | 2.7 | -0.6 | 1.5 | 0.2 | 0.8 | 1.5 | 0.2 |
| 2010 | 1.2 | -0.8 | -1.2 | 0.0 | 0.4 | 0.0 | 1.1 | 1.7 | 1.4 |
| 2011 | 1.5 | 0.1 | -0.6 | 0.1 | -0.4 | -0.1 | -0.4 | 0.7 | 0.0 |
| 2012 | 0.0 | -1.5 | -2.3 | -0.7 | 1.2 | 1.0 | 0.3 | -0.7 | -0.6 |
| 2013 | 0.5 | -0.6 | -0.4 | 0.1 | 0.4 | 0.3 | -0.6 | -0.9 | 0.2 |
| 2014 | 0.1 |
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-8 shows the US monthly import price index of all commodities excluding fuels from 2001 to 2014. All curves of nominal values follow the same behavior under the influence of unconventional monetary policy. Zero interest rates without risk aversion result in jumps of nominal values while under strong risk aversion even with zero interest rates there are declines of nominal values.
Chart IIA2-8, US, Import Price Index All Commodities Excluding Fuels, 2001=100, 2001-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-9 provides 12-month percentage changes of the US import price index excluding fuels between 2001 and 2014. There is the same behavior of carry trades driving up without risk aversion and down with risk aversion prices of raw materials, commodities and food in international trade during the global recession of IVQ2007 to IIQ2009 and in previous and subsequent periods.
Chart IIA2-9, US, Import Price Index All Commodities Excluding Fuels, 12-Month Percentage Changes, 2002-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-10 provides the monthly US import price index ex petroleum from 2001 to 2014. Prices including or excluding commodities follow the same fluctuations and trends originating in impulses of unconventional monetary policy of zero interest rates.
Chart IIA2-10, US, Import Price Index ex Petroleum, 2001=100, 2000-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-11 provides the US import price index ex petroleum from 1985 to 2014. There is the same unique hump in 2008 caused by carry trades from zero interest rates to prices of commodities and raw materials.
Chart IIA2-11, US, Import Price Index ex Petroleum, 2001=100, 1985-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-12 provides 12-month percentage changes of the import price index ex petroleum from 1986 to 2014. The oscillations caused by the carry trade in increasing prices of commodities and raw materials without risk aversion and subsequently decreasing them during risk aversion are unique.
Chart IIA2-12, US, Import Price Index ex Petroleum, 12-Month Percentage Changes, 1986-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-13 of the US Energy Information Administration shows the price of WTI crude oil since the 1980s. Chart IA2-13 captures commodity price shocks during the past decade. The costly mirage of deflation was caused by the decline in oil prices during the recession of 2001. The upward trend after 2003 was promoted by the carry trade from near zero interest rates. The jump above $140/barrel during the global recession in 2008 at $145.29/barrel on Jul 3, 2008, can only be explained by the carry trade promoted by monetary policy of zero fed funds rate. After moderation of risk aversion, the carry trade returned with resulting sharp upward trend of crude prices. Risk aversion resulted in another drop in recent weeks followed by some recovery and renewed deterioration/increase.
Chart IIA2-13, US, Crude Oil Futures Contract
Source: US Energy Information Administration
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RCLC1&f=D
The price index of US imports of petroleum and petroleum products in shown in Chart IIA2-14. There is similar behavior of the curves all driven by the same impulses of monetary policy.
Chart IIA2-14, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 2001-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-15 provides the price index of petroleum and petroleum products from 1982 to 2014. The rise in prices during the global recession in 2008 and the decline after the flight to government obligations is unique in the history of the series. Increases in prices of trade in petroleum and petroleum products were induced by carry trades and declines by unwinding carry trades in flight to government obligations.
Chart IIA2-15, US, Import Price Index of Petroleum and Petroleum Products, 2001=100, 1982-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-16 provides 12-month percentage changes of the price index of US imports of petroleum and petroleum products from 1982 to 2014. There were wider oscillations in this index from 1999 to 2001 (see Barsky and Killian 2004 for an explanation).
Chart IIA2-16, US, Import Price Index of Petroleum and Petroleum Products, 12-Month Percentage Changes, 1982-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
The price index of US exports of agricultural commodities is in Chart IIA2-17 from 2001 to 2014. There are similar fluctuations and trends as in all other price index originating in unconventional monetary policy repeated over a decade. The most recent segment in 2011 has declining trend in a new flight from risk resulting from the sovereign debt crisis in Europe followed by declines in Jun 2012 and Nov 2012 with stability/decline in Dec 2012 into 2013.
Chart IIA2-17, US, Exports Price Index of Agricultural Commodities, 2001=100, 2001-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-18 provides the price index of US exports of agricultural commodities from 1982 to 2014. The increase in 2008 in the middle of deep, protracted contraction was induced by unconventional monetary policy. The decline from 2008 into 2009 was caused by unwinding carry trades in a flight to government obligations. The increase into 2011 and current pause were also induced by unconventional monetary policy in waves of increases during relaxed risk aversion and declines during unwinding of positions because of aversion to financial risk.
Chart IIA2-18, US, Exports Price Index of Agricultural Commodities, 2001=100, 1982-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-19 provides 12-month percentage changes of the index of US exports of agricultural commodities from 1986 to 2014. The wide swings in 2008, 2009 and 2011 are only explained by unconventional monetary policy inducing carry trades from zero interest rates to commodity futures and reversals during risk aversion.
Chart IIA2-19, US, Exports Price Index of Agricultural Commodities, 12-Month Percentage Changes, 1986-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-20 shows the export price index of nonagricultural commodities from 2001 to 2014. Unconventional monetary policy of zero interest rates drove price behavior during the past decade. Policy has been based on the myth of stimulating the economy by climbing the negative slope of an imaginary short-term Phillips curve.
Chart IIA2-20, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 2001-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Chart IIA2-21 provides a longer perspective of the price index of US nonagricultural commodities from 1982 to 2014. Increases and decreases around the global contraction after 2007 were caused by carry trade induced by unconventional monetary policy.
Chart IIA2-21, US, Exports Price Index of Nonagricultural Commodities, 2001=100, 1982-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
Finally, Chart IIA2-22 provides 12-month percentage changes of the price index of US exports of nonagricultural commodities from 1986 to 2014. The wide swings before, during and after the global recession beginning in 2007 were caused by carry trades induced by unconventional monetary policy.
Chart IIA2-22, US, Exports Price Index of Nonagricultural Commodities, 12-Month Percentage Changes, 1986-2014
Source: US Bureau of Labor Statistics
http://www.bls.gov/mxp/data.htm
The report of consumer credit outstanding of the Board of Governors of the Federal Reserve System is provided in Table VA-6. The data are in seasonally adjusted annual rates both percentage changes and billions of dollars. The estimate of consumer credit “covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate (http://www.federalreserve.gov/releases/g19/current/default.htm). Consumer credit is divided into two categories. (1) Revolving consumer credit (REV in Table VA-6) consists mainly of unsecured credit cards. (2) Non-revolving consumer credit (NREV in Table VA-6) “includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers or vacations” (http://www.federalreserve.gov/releases/g19/current/default.htm). In Dec 2013, revolving credit was $862 billion, or 27.8 percent of total consumer credit of $3106 billion, and non-revolving credit was $2244 billion, or 72.2 percent of total consumer credit outstanding. Consumer credit grew at relatively high rates before the recession beginning in IVQ2007 (Dec) and extending to IIQ2009 (Jun) as dated by the National Bureau of Economic Research or NBER (http://www.nber.org/cycles/cyclesmain.html). Percentage changes of consumer credit outstanding fell already in 2009. Rates were still negative in 2010 with decline of 1.0 percent in annual data and sharp decline of 7.6 percent in revolving credit. In IVQ 2012, total consumer credit grew at 6.5 percent with increase of revolving credit at 0.3 percent and increase of non-revolving credit at 9.1 percent. Growth continued in Dec 2013 with total credit at 7.3 percent, revolving at 7.0 percent and non-revolving at 7.4 percent.
Table VA-6, US, Consumer Credit Outstanding, SA, Annual Rate and Billions of Dollars
| Total ∆% | REV ∆% | NRV ∆% | Total $B | REV $B | NREV $B | |
| 2013 | ||||||
| Dec | 7.3 | 7.0 | 7.4 | 3106 | 862 | 2244 |
| Nov | 4.8 | 0.7 | 6.5 | 3087 | 857 | 2230 |
| Oct | 7.0 | 5.6 | 7.5 | 3075 | 856 | 2219 |
| IVQ | 6.4 | 4.4 | 7.2 | 3106 | 862 | 2244 |
| IIIQ | 5.9 | 0.4 | 8.1 | 3057 | 852 | 2205 |
| IIQ | 5.8 | 1.2 | 7.6 | 3012 | 851 | 2161 |
| IQ | 6.2 | 1.5 | 8.1 | 2969 | 849 | 2120 |
| 2012 | ||||||
| IVQ | 6.5 | 0.3 | 9.1 | 2924 | 846 | 2078 |
| 2013 | 6.2 | 1.9 | 8.0 | 3106 | 862 | 2244 |
| 2012 | 6.1 | 0.4 | 8.7 | 2924 | 846 | 2078 |
| 2011 | 4.1 | 0.2 | 5.9 | 2757 | 842 | 1915 |
| 2010 | -1.0 | -7.6 | 2.7 | 2648 | 841 | 1807 |
| 2009 | -3.9 | -8.8 | -1.0 | 2553 | 917 | 1636 |
| 2008 | 1.3 | 0.2 | 2.0 | 2651 | 1005 | 1646 |
| 2007 | 5.9 | 8.5 | 4.3 | 2529 | 1008 | 1521 |
Note: REV: Revolving; NREV: Non-revolving; ∆%: simple annual rate from unrounded data; Total may not add exactly because of rounding
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g19/current/default.htm
Chart VA-14 of the Board of Governors of the Federal Reserve System total consumer credit outstanding in millions of dollars measured in the right axis and the finance rate on 24-month personal loans at commercial banks, not seasonally adjusted, measured on the left axis. There was sharp decline of total consumer loans outstanding during the global recession followed by strong recovery. There is long-term decline of the financing rate.
Chart VA-14, US, Total Consumer Credit Owned and Securitized NSA and Financing Rate on 24-month Personal Loans at Commercial Banks NSA, Millions of Dollars and Percent, Feb 1972-Nov 2013
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g19/current/default.htm
Chart VA-15 of the Board of Governors of the Federal Reserve System provides percentage changes of total consumer credit outstanding in the US and the financing rate on 24-month personal consumer loans at commercial banks, since 1972. The shaded bars are the cyclical contraction dates of the National Bureau of Economic Research (http://www.nber.org/cycles/cyclesmain.html). Consumer credit is cyclical, declining during contractions as shown by negative percentage changes during economic contractions. There is clear upward trend in 2012-2013 but with significant fluctuations.
Chart VA-15, US, Percent Change of Total Consumer Credit, Seasonally Adjusted at an Annual Rate and Finance Rate on 24-month Personal Loans at Commercial Banks NSA, Feb 1972-Nov 2013
Source: Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/releases/g19/current/default.htm
Table VA-12 provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2014 fiscal year ending; federal fiscal data for the years from 2009 to 2013; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2013. Receipts increased 8.2 percent in the cumulative fiscal year 2014 ending in Jan 2014 relative to the cumulative in fiscal year 2013. Individual income taxes increased 1.6 percent relative to the same fiscal period a year earlier. Outlays decreased 2.8 percent relative to a year earlier. There are also receipts, outlays, deficit and debt for fiscal year 2013. Total revenues of the US from 2009 to 2012 accumulate to $9021 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,109 billion, or $14.1 trillion, with the deficit accumulating to $5090 billion, or $5.1 trillion. Revenues decreased 6.5 percent from $9653 billion in the four years from 2005 to 2008 to $9021 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and also by growth of only 2.4 percent on average in the cyclical expansion from IIIQ2009 to IVQ2013. In contrast, the expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.7 percent and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html). Because of mediocre GDP growth, there are 30.3 million unemployed or underemployed in the United States for an effective unemployment rate of 18.5 percent (http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html). Weakness of growth and employment creation is analyzed in IB Collapse of United States Dynamism of Income Growth and Employment Creation (http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html). In contrast with the decline of revenue, outlays or expenditures increased 30.2 percent from $10,839 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,109 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.2 percent while revenue declined by 6.5 percent caused the increase in the federal deficit from $1186 billion in 2005-2008 to $5090 billion in 2009-2012. Federal revenue was 14.9 percent of GDP on average in the years from 2009 to 2012, which is well below 17.4 percent of GDP on average from 1973 to 2012. Federal outlays were 23.3 percent of GDP on average from 2009 to 2012, which is well above 20.4 percent of GDP on average from 1973 to 2012. The lower part of Table I-2 shows that debt held by the public swelled from $5803 billion in 2008 to $11,982 billion in 2013, by $5478 billion or 106.5 percent. Debt held by the public as percent of GDP or economic activity jumped from 39.3 percent in 2008 to 72.1 percent in 2013, which is well above the average of 38.0 percent from 1973 to 2012. The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures.
Table VA-7, US, Treasury Budget in Fiscal Year to Date Million Dollars
| Jan 2014 | Fiscal Year 2014 | Fiscal Year 2013 | ∆% |
| Receipts | 960,598 | 887,778 | 8.2 |
| Outlays | 1,144,617 | 1,178,191 | -2.8 |
| Deficit | -184,019 | -290,413 | |
| Individual Income Tax | 475,814 | 468,365 | 1.6 |
| Corporation Income Tax | 77,407 | 70,260 | 10.2 |
| Social Insurance | 228,611 | 187,193 | 22.1 |
| Receipts | Outlays | Deficit (-), Surplus (+) | |
| $ Billions | |||
| Fiscal Year 2013 | 2,774 | 3,454 | -680 |
| % GDP | 16.7 | 20.8 | -4.1 |
| Fiscal Year 2012 | 2,450 | 3,537 | -1,087 |
| % GDP | 15.2 | 22.0 | -6.8 |
| Fiscal Year 2011 | 2,304 | 3,603 | -1,300 |
| % GDP | 15.0 | 23.4 | -8.4 |
| Fiscal Year 2010 | 2,163 | 3,457 | -1,294 |
| % GDP | 14.6 | 23.4 | -8.8 |
| Fiscal Year 2009 | 2,105 | 3,518 | -1,413 |
| % GDP | 14.6 | 24.4 | -9.8 |
| Total 2009-2012 | 9,021 | 14,109 | -5,090 |
| Average % GDP 2009-2012 | 14.9 | 23.3 | -8.4 |
| Fiscal Year 2008 | 2,524 | 2,983 | -459 |
| % GDP | 17.1 | 20.2 | -3.1 |
| Fiscal Year 2007 | 2,568 | 2,729 | -161 |
| % GDP | 17.9 | 19.0 | -1.1 |
| Fiscal Year 2006 | 2,407 | 2,655 | -248 |
| % GDP | 17.6 | 19.4 | -1.8 |
| Fiscal Year 2005 | 2,154 | 2,472 | -318 |
| % GDP | 16.7 | 19.2 | -2.5 |
| Total 2005-2008 | 9,653 | 10,839 | -1,186 |
| Average % GDP 2005-2008 | 17.3 | 19.5 | -2.1 |
| Debt Held by the Public | Billions of Dollars | Percent of GDP | |
| 2005 | 4,592 | 35.6 | |
| 2006 | 4,829 | 35.3 | |
| 2007 | 5,035 | 35.1 | |
| 2008 | 5,803 | 39.3 | |
| 2009 | 7,545 | 52.3 | |
| 2010 | 9,019 | 61.0 | |
| 2011 | 10,128 | 65.8 | |
| 2012 | 11,281 | 70.1 | |
| 2013 | 11,982 | 72.1 |
Source: http://www.fms.treas.gov/mts/index.html CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO (2013Aug12). 2013AugHBD. Historical budget data—August 2013. Washington, DC, Congressional Budget Office, Aug. CBO, Historical Budget Data—February 2014, Washington, DC, Congressional Budget Office, Feb.
VB Japan. Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (http://www.boj.or.jp/en/announcements/release_2013/k130711a.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.5 and 2.9 percent, with the all items CPI less fresh food of 0.7 to 0.9 percent (http://www.boj.or.jp/en/announcements/release_2014/k140122a.pdf). The critical difference is forecast of the CPI excluding fresh food of 2.9 to 3.6 percent in 2014 and 1.7 to 2.9 percent in 2015. Consumer price inflation in Japan excluding fresh food was 0.0 percent in Nov 2013 and 1.2 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:
- Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
- Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
- Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
Table VB-BOJF, Bank of Japan, Forecasts of the Majority of Members of the Policy Board, % Year on Year
| Fiscal Year | Real GDP | CPI All Items Less Fresh Food | Excluding Effects of Consumption Tax Hikes |
| 2013 | |||
| Jan 2014 | +2.5 to +2.9 [+2.7] | +0.7 to +0.9 [+0.7] | |
| 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 | |||
| Jan 2014 | +0.9 to 1.5 [+1.4] | +2.9 to +3.6 [+3.3] | +0.9 to +1.6 [+1.3] |
| 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 | |||
| Jan 2014 | +1.2 to +1.8 [+1.5] | +1.7 to +2.9 [+2.6] | +1.0 to +2.2 [+1.9] |
| 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 54.0 in Dec to 54.1 in Jan, indicating strong growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad438c99cbe46cb87a9d4c4467a6d58). Claudia Tillbrooke, Economist at Markit and author of the report, finds that the survey data suggest continuing strong growth of the economy of Japan with strength in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad438c99cbe46cb87a9d4c4467a6d58). The Markit Business Activity Index of Services decreased from the record of 51.8 in Nov to 52.1 in Dec and 51.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad438c99cbe46cb87a9d4c4467a6d58). Claudia Tillbrooke, Economist at Markit and author of the report, finds growth in services diverging from manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad438c99cbe46cb87a9d4c4467a6d58). The Markit/JMMA Purchasing Managers’ Index™ (PMI™), seasonally adjusted, increased from 55.2 in Dec to 55.6 in Jan, which is the highest level since Feb 2006 (http://www.markiteconomics.com/Survey/PressRelease.mvc/1c224403252848b1be511ebfc5f94cc2). New orders grew at a high rate for the eleventh consecutive month at the fastest since Feb 2006. New export orders increased for the fifth consecutive month at the slowest pace in this sequence. Claudia Tillbrooke, Economist at Markit and author of the report, finds improving manufacturing conditions at the highest levels since 2006 with some concerns about the sales tax increase in Apr and employment expanding (http://www.markiteconomics.com/Survey/PressRelease.mvc/1c224403252848b1be511ebfc5f94cc2).Table JPY provides the country data table for Japan.
Table JPY, Japan, Economic Indicators
| Historical GDP and CPI | 1981-2010 Real GDP Growth and CPI Inflation 1981-2010 |
| Corporate Goods Prices | Jan ∆% 0.1 |
| Consumer Price Index | Dec NSA ∆% 0.1; Dec 12 months NSA ∆% 1.6 |
| Real GDP Growth | IIIQ2013 ∆%: 0.3 on IIQ2013; IIIQ2013 SAAR 1.1; |
| Employment Report | Dec Unemployed 2.25 million Change in unemployed since last year: minus 340 thousand |
| All Industry Indices | Nov month SA ∆% 0.3 Blog 1/26/14 |
| Industrial Production | Dec SA month ∆%: 1.1 |
| Machine Orders | Total Dec ∆% -3.1 Private ∆%: -9.2 Dec ∆% Excluding Volatile Orders -15.7 |
| Tertiary Index | Dec month SA ∆% -0.4 |
| Wholesale and Retail Sales | Dec 12 months: |
| Family Income and Expenditure Survey | Dec 12-month ∆% total nominal consumption 2.7, real 0.7 Blog 2/2/14 |
| Trade Balance | Exports Dec 12 months ∆%: 15.3 Imports Nov 12 months ∆% 24.8 Blog 2/2/14 |
Links to blog comments in Table JPY:
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
12/15/13 http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.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
The tertiary activity index of Japan decreased 0.4 percent SA in Dec 2013 and increased 0.9 percent NSA in the 12 months ending in Dec 2013, as shown in Table VB-1. The index is showing significant volatility with increases of 1.3 percent in Feb 2013 and 1.2 percent in May 2013 but decreases in multiple months. The tertiary activity index fell 5.2 percent in 2009, growing 1.3 percent in 2010, 0.1 percent in 2011 and 1.4 percent in 2012. The tertiary activity index increased 0.6 percent in 2013.
Table VB-1, Japan, Tertiary Activity Index, ∆%
| Month ∆% SA | 12 Months ∆% NSA | |
| Dec 2013 | -0.4 | 0.9 |
| Nov | 0.8 | 0.5 |
| Oct | -1.0 | 0.1 |
| Sep | 0.1 | 1.4 |
| Aug | 0.6 | 0.7 |
| Jul | -0.4 | 1.3 |
| Jun | -0.7 | 0.5 |
| May | 1.2 | 1.7 |
| Apr | -0.5 | 1.3 |
| Mar | 0.2 | 0.7 |
| Feb | 1.3 | -1.6 |
| Jan | -0.8 | 0.1 |
| Dec 2012 | 0.2 | -0.1 |
| Nov | -0.1 | 1.0 |
| Oct | 0.2 | 1.3 |
| Sep | 0.0 | 0.1 |
| Aug | 0.2 | 0.6 |
| Jul | -0.3 | 0.8 |
| Jun | 0.0 | 0.8 |
| May | 0.5 | 3.1 |
| Apr | -0.2 | 2.4 |
| Mar | -0.3 | 4.2 |
| Feb | 0.2 | 2.4 |
| Jan | -0.8 | 0.3 |
| Calendar Year | ||
| 2013 | 0.6 | |
| 2012 | 1.4 | |
| 2011 | 0.1 | |
| 2010 | 1.3 | |
| 2009 | -5.2 | |
| 2008 | -1.0 | |
| 2007 | 1.0 | |
| 2006 | 1.8 | |
| 2005 | 1.9 | |
| 2004 | 1.8 |
Source: Japan, Ministry of Economy, Trade and Industry (METI)
http://www.meti.go.jp/english/statistics/index.html
Month and 12-month rates of growth of the tertiary activity index of Japan and components in Dec 2013 are provided in Table VB-2. Electricity, gas, heat supply and water decreased 0.2 percent in Dec 2013 and decreased 2.2 percent in the 12 months ending in Dec 2013. Wholesale and retail trade decreased 1.2 percent in the month of Dec and decreased 1.1 percent in 12 months. Information and communications increased 1.4 percent in Dec and increased 4.5 percent in 12 months.
Table VB-2, Japan, Tertiary Index and Components, Month and 12-Month Percentage Changes ∆%
| Dec 2013 | Weight | Month ∆% SA | 12 Months ∆% NSA |
| Tertiary Index | 10,000.0 | -0.4 | 0.9 |
| Electricity, Gas, Heat Supply & Water | 372.9 | -0.2 | -2.2 |
| Information & Communications | 951.2 | 1.4 | 4.5 |
| Wholesale & Retail Trade | 2,641.2 | -1.2 | -1.1 |
| Finance & Insurance | 971.1 | -0.7 | 6.5 |
| Real Estate & Goods Rental & Leasing | 903.4 | -0.4 | -1.1 |
| Scientific Research, Professional & Technical Services | 551.3 | 0.3 | -1.3 |
| Accommodations, Eating, Drinking | 496.0 | -0.3 | 0.5 |
| Living-Related, Personal, Amusement Services | 552.7 | -0.6 | -0.4 |
| Learning Support | 116.9 | -1.0 | -0.9 |
| Medical, Health Care, Welfare | 921.1 | 0.2 | 2.1 |
| Miscellaneous ex Government | 626.7 | 0.0 | -2.5 |
Source: Japan, Ministry of Economy, Trade and Industry (METI)
http://www.meti.go.jp/english/statistics/index.html
Japan’s total machinery orders seasonally adjusted in Table VB-3 decreased 3.1 percent seasonally adjusted in Dec 2013. Private sector orders decreased 9.2 percent and decreased 17.3 percent excluding volatile orders. Orders from overseas increased 8.6 percent and manufacturing orders decreased 17.3 percent. Government orders increased 6.5 percent.
Table VB-3, Japan, Machinery Orders, Month ∆%, SA
| 2013 | Dec 13 | Nov 13 | Oct 13 | Sep 13 |
| Total | -3.1 | 5.8 | -4.6 | 13.2 |
| Private Sector | -9.2 | -1.3 | 7.0 | -0.9 |
| Excluding Volatile Orders | -15.7 | 9.3 | 0.6 | -2.1 |
| Manufacturing | -17.3 | 6.0 | -0.2 | 4.1 |
| Non-Manufacturing ex Volatile | -17.2 | 8.1 | 11.5 | -7.0 |
| Government | 6.5 | -11.9 | -26.2 | 42.9 |
| From Overseas | 8.6 | -12.2 | -16.0 | 12.1 |
| Through Agencies | 3.0 | -5.5 | 13.2 | -4.2 |
Note: Mfg: manufacturing
Source: Japan Economic and Social Research Institute, Cabinet Office
http://www.esri.cao.go.jp/index-e.html
Total orders for machinery and total private-sector orders excluding volatile orders for Japan are shown in Chart VB-1 of Japan’s Economic and Social Research Institute at the Cabinet Office. The trend of private-sector orders excluding volatile orders was showing recovery from the drop after Mar 2011 because of the earthquake/tsunami. There was reversal of the trend of increase in total orders with recent decreases and an upward movement in the final data point. Fluctuations still prevent detecting longer-term trends but recovery is still evident from the global recession. There was a major setback by the declines in May 2012 shown in the final segment of Chart VB-1 with partial recovery in Jun 2012, decline again in Jul and Aug 2012 and rebound in total orders in Nov reversed in Dec but decline in orders excluding volatile segments with increase in Nov-Dec 2012. The final segment shows growth in Feb-Mar 2013 interrupted by decline in Apr 2013 followed by increase in May 2013. Orders fell again in Jun 2013, rebounding in Jul-Sep 2013 followed by another fall in Oct 2013. Orders recovered in Nov 2013 but declined in Dec 2013.
Chart VB-1, Japan, Machinery Orders
Source: Japan Economic and Social Research Institute, Cabinet Office
http://www.esri.cao.go.jp/index-e.html
Table VB-4 provides values and percentage changes from a year earlier of Japan’s machinery orders without seasonal adjustment. Total orders of JPY 2,311,470 million in Dec 2013 are divided between JPY 876,402 million overseas orders, or 42.2 percent of the total, and domestic orders of JPY 1,233,165 million, or 53.4 percent of the total, with orders through agencies of JPY 101,903 million, or 4.4 percent of the total. Orders through agencies are not in Table VB-4 because of the minor value and appear only in the note to the table. Twelve-month percentages changes in Dec 2013 continued strongly with increases of 15.1 percent for total orders, 8.3 percent for domestic orders and 6.7 percent for orders excluding volatile components. Overseas orders rose 25.0 percent in 12 months partly because of yen devaluation.
Table VB-4, Japan, Machinery Orders, 12 Months ∆% and Million Yen, Original Series
| Total | Overseas | Domestic | Private ex Volatile | |
| Value Dec 2013 | 2,311,470 | 976,402 | 1,233,165 | 793,039 |
| % Total | 100.0 | 42.2 | 53.4 | 34.3 |
| Value Dec 2012 | 2,007,600 | 780,945 | 1,138,266 | 743,330 |
| % Total | 100.0 | 38.9 | 56.7 | 37.0 |
| 12-month ∆% | 15.1 | 25.0 | 8.3 | 6.7 |
| Dec 2013 | 15.1 | 25.0 | 8.3 | 6.7 |
| Nov 2013 | 8.9 | 1.3 | 14.4 | 16.6 |
| Oct 2013 | 24.6 | 29.7 | 21.4 | 17.8 |
| Sep 2013 | 30.3 | 57.4 | 18.4 | 11.4 |
| Aug 2013 | 25.9 | 41.8 | 17.1 | 10.3 |
| Jul 2013 | 5.3 | 4.4 | 6.9 | 6.5 |
| Jun 2013 | 2.7 | 0.1 | 4.1 | 4.9 |
| May 2013 | 18.1 | 17.1 | 20.8 | 16.5 |
| Apr 2013 | -4.3 | 6.7 | -9.9 | -1.1 |
| Mar 2013 | 11.5 | 27.5 | 3.3 | 2.4 |
| Feb 2013 | -14.8 | -21.0 | -10.7 | -11.3 |
| Jan 2013 | -24.8 | -36.7 | -11.8 | -9.7 |
| Dec 2012 | -12.5 | -24.1 | -3.3 | -3.4 |
| Nov 2012 | -8.6 | -9.6 | -8.5 | 0.3 |
| Oct 2012 | -6.9 | -12.8 | -2.6 | 1.2 |
| Sep 2012 | -7.8 | -18.4 | -1.8 | -7.8 |
| Aug 2012 | -18.6 | -31.1 | -10.2 | -6.1 |
| Jul 2012 | 2.6 | -1.9 | 3.2 | 1.7 |
| Jun 2012 | -10.9 | -11.3 | -12.4 | -9.9 |
| May 2012 | -6.8 | -7.0 | -8.6 | 1.0 |
| Apr 2012 | 7.5 | -9.6 | 23.0 | 6.6 |
| Mar 2012 | 8.1 | -10.0 | 19.0 | -1.1 |
| Feb 2012 | -9.3 | -8.9 | -11.2 | 8.9 |
| Jan 2012 | 9.8 | 18.3 | 0.5 | 5.7 |
| Dec 2011 | 0.8 | 12.6 | -8.5 | 6.3 |
| Nov 2011 | 11.0 | 8.0 | 13.5 | 12.5 |
| Oct 2011 | -6.8 | -15.6 | -1.0 | 1.5 |
| Dec 2010 | 9.4 | 3.5 | 14.1 | -0.6 |
| Dec 2009 | 1.8 | 0.4 | 3.6 | -1.9 |
| Dec 2008 | -23.3 | -29.4 | -17.4 | -24.7 |
| Dec 2007 | 1.3 | 9.8 | -4.3 | -6.4 |
| Dec 2006 | 0.8 | 0.9 | -0.1 | 0.1 |
Note: Total machinery orders = overseas + domestic demand + orders through agencies. Orders through agencies in Dec 2013 were JPY 101,903 million or 4.4 percent of the total and JPY 88,389 or 4.4 percent of the total in Dec 2012, and are not shown in the table. The data are the original numbers without any adjustments and differ from the seasonally adjusted
http://www.esri.cao.go.jp/index-e.html
VC China. China estimates an index of nonmanufacturing purchasing managers based on 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 total index increased from 55.7 in Mar 2012 to 58.0 in Mar 2012, decreasing to 53.9 in Aug 2013. The index decreased from 56.0 in Nov 2013 to 54.6 in Dec 2013, easing to 53.4 in Jan 2014. The index of new orders increased from 52.2 in Jan 2012 to 54.3 in Dec 2012 but fell to 50.1 in May 2013, barely above the neutral frontier of 50.0. The index of new orders stabilized at 51.0 in Nov-Dec 2013, easing to 50.9 in Jan 2014.
Table CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| Total Index | New Orders | Interm. | Subs Prices | Exp | |
| Jan 2014 | 53.4 | 50.9 | 54.5 | 50.1 | 58.1 |
| Dec 2013 | 54.6 | 51.0 | 56.9 | 52.0 | 58.7 |
| Nov | 56.0 | 51.0 | 54.8 | 49.5 | 61.3 |
| Oct | 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. The index fell from 56.1 in Dec 2012 to 53.9 in Jun 2013. The index recovered to 56.3 in Oct 2013, decreasing marginally to 54.6 in Dec 2013. The index fell to 43.4 in Jan 2014.
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 2012, falling to 49.2 in Aug 2012, rebounding to 50.6 in Dec 2012. The index fell to 50.1 in Jun 2013, barely above the neutral frontier at 50.0, recovering to 51.4 in Nov 2013 but falling to 51.0 in Dec 2013. The index fell to 50.5 in Jan 2014. The index of new orders fell from 57.2 in Apr 2012 to 52.0 in Dec 2012. The index of new orders fell from 54.5 in Nov 2013 to 53.9 in Dec 2013. The index fell to 53.0 in Jan 2014.
Table CIPMMFG, China, Manufacturing Index of Purchasing Managers, %, Seasonally Adjusted
| IPM | PI | NOI | INV | EMP | SDEL | |
| Jan 2014 | 50.5 | 53.0 | 50.9 | 47.8 | 48.2 | 49.8 |
| Dec 2013 | 51.0 | 53.9 | 52.0 | 47.6 | 48.7 | 50.5 |
| Nov | 51.4 | 54.5 | 52.3 | 47.8 | 49.6 | 50.6 |
| Oct | 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. The index fell to 50.1 in Feb 2013 and in Jun 2013. The index decreased from 51.4 in Nov 2013 to 51.0 in Dec 2013. The index fell to 50.5 in Jan 2014.
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 IVQ2013 relative to the same period in 2012 was 7.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 43.9 percent of GDP in IVQ2013. In IVQ2013, industry alone accounts for 37.0 percent in IVQ2013 and construction with the remaining 6.9 percent in the four quarters of 2013. Tertiary industry accounts for 46.1 percent of cumulative GDP in IVQ2013 and primary industry for 10.0 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 10.4 percent in IIQ2011 to 7.4 percent in IVQ2011 and 5.7 percent in IQ2012, rebounding to 8.7 percent in IIQ2012, 8.2 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 fell to 6.1 percent and to 7.4 percent in IIQ2013, rebounding to 9.1 percent in IIIQ2013. Annual equivalent growth was 7.4 percent in IVQ2013.
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 | 56,884.5 | 7.7 |
| Primary Industry | 5,695.7 | 4.0 |
| Farming | 5,695.7 | 4.0 |
| Secondary Industry | 24,968.4 | 7.8 |
| Industry | 21,068.9 | 7.6 |
| Construction | 3899.5 | 9.5 |
| Tertiary Industry | 26,220.4 | 8.3 |
| Transport, Storage, Post | 2728.3 | 7.2 |
| Wholesale, Retail Trades | 5,567.2 | 10.3 |
| Hotel & Catering Services | 1149.4 | 5.3 |
| Financial Intermediation | 3353.5 | 10.1 |
| Real Estate | 3329.5 | 6.6 |
| Other | 10,092.5 | 7.7 |
| Growth in Quarter Relative to Prior Quarter | ∆% on Prior Quarter | ∆% Annual Equivalent |
| 2013 | ||
| IVQ2013 | 1.8 | 7.4 |
| IIIQ2013 | 2.2 | 9.1 |
| IIQ2013 | 1.8 | 7.4 |
| IQ2013 | 1.5 | 6.1 |
| 2012 | ||
| IVQ2012 | 1.9 | 7.8 |
| IIIQ2012 | 2.0 | 8.2 |
| IIQ2012 | 2.1 | 8.7 |
| IQ2012 | 1.4 | 5.7 |
| 2011 | ||
| IVQ2011 | 1.8 | 7.4 |
| IIIQ2011 | 2.2 | 9.1 |
| IIQ2011 | 2.5 | 10.4 |
| IQ2011 | 2.3 | 9.5 |
Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/
Growth of China’s GDP in IVQ2013 relative to the same period in 2012 was 7.7 percent, as shown in Table VC-GDPA. Secondary industry accounts for 43.9 percent of GDP of which industry alone for 37.0 percent in cumulative IVQ2013 and construction with the remaining 6.9 percent in the four quarters of 2013. Tertiary industry accounts for 45.1 percent of GDP in the cumulative to IVQ2013 and primary industry for 10.0 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. GDP grew 7.7 percent in IVQ2013 relative to a year earlier and 1.8 percent relative to IIIQ2013, which is equivalent to 7.4 percent per year.
Table VC-GDPA, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter
| IQ 2013 | IIQ 2013 | IIIQ 2013 | IVQ 2013 | |||||
| GDP | 7.7 | 7.5 | 7.8 | 7.7 | ||||
| Primary Industry | 3.4 | 3.0 | 3.4 | 4.0 | ||||
| Secondary Industry | 7.8 | 7.6 | 7.8 | 7.8 | ||||
| Tertiary Industry | 8.3 | 8.3 | 8.4 | 8.3 | ||||
| GDP ∆% Relative to a Prior Quarter | 1.5 | 1.8 | 2.2 | 1.8 | ||||
| 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 | 2.5 | 2.2 | 1.8 | 1.4 | 2.1 | 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/a5d1371973e1486d93f290b9dfe5fe22) is slowing. The overall Flash HSBC China Manufacturing PMI™ decreased from 50.5 in Dec to 49.6 in Jan, which is moderately below the contraction frontier of 50.0, while the Flash HSBC China Manufacturing Output Index decreased from 51.4 in Dec to 51.3 in Jan, remaining in moderate expansion territory. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the index is consistent with softening domestic demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/a5d1371973e1486d93f290b9dfe5fe22). 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, decreasing from 52.3 in Nov to 51.2 in Dec, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4eff443fc7a4ad8ba13150b37fa7ff3). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds support of manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4eff443fc7a4ad8ba13150b37fa7ff3). The HSBC Business Activity index decreased from 52.5 in Nov to 50.9 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4eff443fc7a4ad8ba13150b37fa7ff3). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds manufacturing supporting growth of services (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4eff443fc7a4ad8ba13150b37fa7ff3). The HSBC Purchasing Managers’ Index™ (PMI™), compiled by Markit, decreased marginally to 49.5 in Jan from 50.5 in Dec, indicating marginally deteriorating manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7b61a78e6454a91a38a5ab84e9846df). New export orders decreased for the second month with uncganged growth of total new orders. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds soft manufacturing in China with weakness in export orders and decelerating domestic demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7b61a78e6454a91a38a5ab84e9846df). Table CNY provides the country data table for China.
Table CNY, China, Economic Indicators
| Price Indexes for Industry | Jan 12-month ∆%: minus 1.6 Jan month ∆%: -0.1 |
| Consumer Price Index | Jan month ∆%: 1.0 Jan 12 months ∆%: 2.5 |
| Value Added of Industry | Dec month ∆%: 0.71 Jan-Dec 2013/Jan-Dec 2012 ∆%: 9.7 Dec 12-Month ∆%: 9.7 |
| GDP Growth Rate | Year IVQ2013 ∆%: 7.7 |
| Investment in Fixed Assets | Total Jan-Dec 2013 ∆%: 19.6 Real estate development: 19.8 |
| Retail Sales | Dec month ∆%: 1.24 Jan-Dec ∆%: 13.1 |
| Trade Balance | Jan balance $31.86 billion Cumulative Jan: $31.86 billion |
Links to blog comments in Table CNY:
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
Table VC-1 provides China’s exports, imports, trade balance and 12-month percentage changes from Dec 2010 to Jan 2014. Exports increased 10.6 percent in the 12 months ending in Jan 2014 and imports 10.0 percent for trade surplus of $31.86 billion. Exports increased 4.3 percent in the 12 months ending in Dec 2013 while imports increased 8.3 percent for trade surplus of $25.64 billion. Exports surged 12.7 percent in the 12 months ending in Nov 2013 while imports increased 5.3 percent for trade surplus of $33.8 billion. Exports rebounded with growth of 5.6 percent in the 12 months ending in Oct 2013 while imports increased 7.6 percent for trade surplus of $31.11 billion. Exports fell 0.3 percent in the 12 months ending in Sep 2013 while imports increased 7.4 for reduction of the trade surplus to $15.2 billion. Markets reacted positively to China’s trade data in Aug 2013 with exports growing 7.2 percent relative to a year earlier and imports 7.1 percent for increasing trade surplus of $28.52. Exports fell 3.1 percent in Jun 2013 and imports declined 0.7 percent with growth of 5.1 percent of exports in Jul 2013 and 10.9 percent of imports. The trade surplus reached $17.82 billion. Exports increased 1.0 percent in May 2013 relative to a year earlier while imports fell 0.3 percent with trade surplus of $20.43 billion. Exports increased 14.7 percent in Apr 2013 relative to a year earlier and imports 16.8 percent for trade surplus of $18.16 billion. Exports increased 10.0 percent in Mar 2013 relative to a year earlier and imports increased 14.1 percent for trade deficit of $0.88 billion. Exports increased 21.8 percent in Feb 2013 relative to a year earlier and imports fell 15.2 percent for trade surplus of $15.25 billion. China’s trade growth was stronger in Jan 2013 with growth of exports of 25.0 percent in 12 months and of imports of 28.8 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.62 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan 2012 while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the New Year holidays.
Table VC-1, China, Exports, Imports and Trade Balance USD Billion and ∆%
| Exports | ∆% Relative | Imports USD | ∆% Relative | Balance | |
| Jan 2014 | 207.13 | 10.6 | 175.27 | 10.0 | 31.86 |
| Dec 2013 | 207.74 | 4.3 | 182.10 | 8.3 | 25.64 |
| Nov | 202.20 | 12.7 | 168.40 | 5.3 | 33.8 |
| Oct | 185.41 | 5.6 | 154.30 | 7.6 | 31.11 |
| Sep | 185.64 | -0.3 | 170.44 | 7.4 | 15.21 |
| Aug | 190.61 | 7.2 | 162.09 | 7.0 | 28.52 |
| Jul | 185.99 | 5.1 | 168.17 | 10.9 | 17.82 |
| Jun | 174.32 | -3.1 | 147.19 | -0.7 | 27.12 |
| May | 182.77 | 1.0 | 162.34 | -0.3 | 20.43 |
| Apr | 187.06 | 14.7 | 168.90 | 16.8 | 18.16 |
| Mar | 182.19 | 10.0 | 183.07 | 14.1 | -0.88 |
| Feb | 139.37 | 21.8 | 124.12 | -15.2 | 15.25 |
| Jan | 187.37 | 25.0 | 158.22 | 28.8 | 29.15 |
| Dec 2012 | 199.23 | 14.1 | 167.61 | 6.0 | 31.62 |
| Nov | 179.38 | 2.9 | 159.75 | 0.0 | 19.63 |
| Oct | 175.57 | 11.6 | 143.58 | 2.4 | 31.99 |
| Sep | 186.35 | 9.9 | 158.68 | 2.4 | 27.67 |
| Aug | 177.97 | 2.7 | 151.31 | -2.6 | 26.66 |
| Jul | 176.94 | 1.0 | 151.79 | 4.7 | 25.15 |
| Jun | 180.20 | 11.3 | 148.48 | 6.3 | 31.72 |
| May | 181.14 | 15.3 | 162.44 | 12.7 | 18.70 |
| Apr | 163.25 | 4.9 | 144.83 | 0.3 | 18.42 |
| Mar | 165.66 | 8.9 | 160.31 | 5.3 | 5.35 |
| Feb | 114.47 | 18.4 | 145.95 | 39.6 | -31.48 |
| Jan | 149.94 | -0.5 | 122.66 | -15.3 | 27.28 |
| Dec 2011 | 174.72 | 13.4 | 158.20 | 11.8 | 16.52 |
| Nov | 174.46 | 13.8 | 159.94 | 22.1 | 14.53 |
| Oct | 157.49 | 15.9 | 140.46 | 28.7 | 17.03 |
| Sep | 169.67 | 17.1 | 155.16 | 20.9 | 14.51 |
| Aug | 173.32 | 24.5 | 155.56 | 30.2 | 17.76 |
| Jul | 175.13 | 20.4 | 143.64 | 22.9 | 31.48 |
| Jun | 161.98 | 17.9 | 139.71 | 19.3 | 22.27 |
| May | 157.16 | 19.4 | 144.11 | 28.4 | 13.05 |
| Apr | 155.69 | 29.9 | 144.26 | 21.8 | 11.42 |
| Mar | 152.20 | 35.8 | 152.06 | 27.3 | 0.14 |
| Feb | 96.74 | 2.4 | 104.04 | 19.4 | -7.31 |
| Jan | 150.73 | 37.7 | 144.27 | 51.0 | 6.46 |
| Dec 2010 | 154.15 | 17.9 | 141.07 | 25.6 | 13.08 |
Source: http://english.mofcom.gov.cn/article/statistic/BriefStatistics/?
Table VC-2 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports relative to a year earlier. Exports increased 10.6 percent in Jan 2014 and imports 10.0 percent for cumulative surplus of $31.86 billion. Exports increased 7.9 percent in Jan-Dec 2013 relative to the same period a year earlier while imports increased 7.3 percent for cumulative surplus of $259.75 billion. Exports grew 8.3 percent in Jan-Nov 2013 relative to a year earlier while imports increased 7.1 percent for cumulative surplus of $234.15 billion. Exports grew 7.8 percent in Jan-Oct 2013 relative to a year earlier while imports grew 7.3 percent for cumulative trade surplus of $200.46 billion. Exports increased 8.0 percent in Jan-Sep 2013 relative to a year earlier while imports increased 7.3 percent for cumulative surplus of $169.36 billion. Exports increased 9.2 percent in in Jan-Aug 2013 relative to a year earlier and imports 7.3 percent for trade surplus of $154.21 billion. Exports grew 9.5 percent in Jul 2013 relative to a year earlier and imports 7.3 percent with cumulative surplus of $125.71 billion. Exports increased 10.4 percent cumulatively in Jun 2013 and imports 6.7 for cumulative surplus of $107.95 billion. Exports increased 13.5 percent in Jan-May 2013 relative to a year earlier while imports increased 8.2 percent for cumulative surplus of $80.87 billion. Exports increased 17.4 percent in Jan-Apr 2012 relative to a year earlier while imports increased 10.6 percent for cumulative surplus of $60.98 billion. Exports increased 18.4 percent in Jan-Mar 2013 relative to a year earlier while imports increased 8.4 percent for cumulative surplus of $43.07 billion. Cumulative exports in Jan-Feb 2013 grew 23.6 percent relative to a year earlier and imports 5.0 percent for trade surplus of $44.15 billion. There is strong beginning of 2013 with trade surplus of $29.15 in Jan 2013 and growth of exports of 25.0 percent and imports of 28.8 percent. The trade balance of $231.1 billion in 2012 is stronger than the trade balance of $155.14 billion in 2011. The trade balance in 2011 of $155.14 billion is lower than those from 2008 to 2010. China’s trade balance reached $231.1 billion in Jan-Dec 2012 with cumulative growth of exports of 7.9 percent and 4.3 percent of imports, which is much lower than 20.3 percent for exports and 24.9 percent for imports in 2011 and 31.3 percent for exports and 38.7 percent for imports in 2010. There is a rare cumulative deficit of $4.2 billion in Feb 2012 reversed to a small surplus in Mar 2012 and a higher surplus of $19.3 billion in Apr 2012, increasing to $37.9 billion in May, $68.9 billion in Jun 2012, $94.1 billion in Jul 2012, $120.6 billion in Aug 2012, $148.3 billion in Sep 2012, $180.24 billion in Oct 2012, $199.54 billion in Nov 2012 and $231.1 billion in Dec 2012. More observations are required to detect trends of Chinese trade but available data suggest deceleration that would be expected from the large share of trade with Europe.
Table VC-2, China, Year to Date Exports, Imports and Trade Balance USD Billion and ∆%
| Exports | ∆% Relative | Imports USD | ∆% Relative | Balance | |
| Jan 2014 | 207.13 | 10.6 | 175.27 | 10.0 | 31.86 |
| Dec 2013 | 2210.04 | 7.9 | 1950.29 | 7.3 | 259.75 |
| Nov | 2002.32 | 8.3 | 1768.17 | 7.1 | 234.15 |
| Oct | 1800.21 | 7.8 | 1599.75 | 7.3 | 200.46 |
| Sep | 1614.86 | 8.0 | 1445.50 | 7.3 | 169.36 |
| Aug | 1429.26 | 9.2 | 1275.05 | 7.3 | 154.21 |
| Jul | 1238.73 | 9.5 | 1113.02 | 7.3 | 125.71 |
| Jun | 1052.82 | 10.4 | 944.87 | 6.7 | 107.95 |
| May | 878.56 | 13.5 | 797.69 | 8.2 | 80.87 |
| Apr | 695.87 | 17.4 | 634.88 | 10.6 | 60.98 |
| Mar | 508.87 | 18.4 | 465.80 | 8.4 | 43.07 |
| Feb | 326.73 | 23.6 | 282.58 | 5.0 | 44.15 |
| Jan | 187.37 | 25.0 | 158.22 | 28.8 | 29.15 |
| Dec 2012 | 2048.93 | 7.9 | 1817.83 | 4.3 | 231.11 |
| Nov | 1849.91 | 7.3 | 1650.37 | 4.1 | 199.54 |
| Oct | 1670.90 | 7.8 | 1490.67 | 4.6 | 180.24 |
| Sep | 1495.39 | 7.4 | 1347.08 | 4.8 | 148.31 |
| Aug | 1309.11 | 7.1 | 1188.51 | 5.1 | 120.61 |
| Jul | 1131.24 | 7.8 | 1037.14 | 6.4 | 94.10 |
| Jun | 954.38 | 9.2 | 885.46 | 6.7 | 68.91 |
| May | 774.40 | 8.7 | 736.49 | 6.7 | 37.92 |
| Apr | 593.24 | 6.9 | 573.94 | 5.1 | 19.3 |
| Mar | 430.02 | 7.6 | 429.36 | 6.6 | 0.66 |
| Feb | 264.40 | 6.9 | 268.64 | 7.7 | -4.24 |
| Jan | 149.94 | -0.5 | 122.66 | -15.3 | 27.28 |
| Dec 2011 | 1,898.60 | 20.3 | 1,743.46 | 24.9 | 155.14 |
| Nov | 1,724.01 | 21.1 | 1585.61 | 26.4 | 138.40 |
| Oct | 1,549.71 | 22.0 | 1,425.68 | 26.9 | 124.03 |
| Sep | 1,392.27 | 22.7 | 1,285.17 | 26.7 | 107.10 |
| Aug | 1,222.63 | 23.6 | 1,129.90 | 27.5 | 92.73 |
| Jul | 1,049.38 | 23.4 | 973.17 | 26.9 | 76.21 |
| Jun | 874.3 | 24.0 | 829.37 | 27.6 | 44.93 |
| May | 712.37 | 25.5 | 689.41 | 29.4 | 22.96 |
| Apr | 555.30 | 27.4 | 545.02 | 29.6 | 10.28 |
| Mar | 399.64 | 26.5 | 400.66 | 32.6 | -1.02 |
| Feb | 247.47 | 21.3 | 248.36 | 36.0 | -0.89 |
| Jan | 150.7 | 37.7 | 144.27 | 51.0 | 6.46 |
| Dec 2010 | 1577.93 | 31.3 | 1394.83 | 38.7 | 183.10 |
Source:
http://english.mofcom.gov.cn/article/statistic/BriefStatistics/?
VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.3 percent in 2006 and 3.0 percent in 2007. The global recession had strong impact with growth of only 0.4 percent in 2008 and decline of 4.4 percent in 2009. Recovery was at lower growth rates of 2.0 percent in 2010 and 1.6 percent in 2011. EUROSTAT estimates growth of GDP of the euro area of minus 0.7 percent in 2012 and minus 0.4 percent in 2013 but 1.1 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 | 9.6 | 2.9 |
| 2000 | 2.2 | 8.7 | 3.8 |
| 2001 | 2.4 | 8.1 | 2.0 |
| 2002 | 2.3 | 8.5 | 0.9 |
| 2003 | 2.1 | 9.0 | 0.7 |
| 2004 | 2.2 | 9.3 | 2.2 |
| 2005 | 2.2 | 9.2 | 1.7 |
| 2006 | 2.2 | 8.5 | 3.3 |
| 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 | 10.1 | 1.6 |
| 2012 | 2.5 | 11.4 | -0.7 |
| 2013* | 1.4 | 12.1 | -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, increased from 52.1 in Dec to 53.2 in Jan, which is a high in 31 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/9265238f7fd24e47ae4c056350e1944c). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the index is consistent with growth of GDP of 0.4 to 0.5 percent in IQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9265238f7fd24e47ae4c056350e1944c). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP, increased from 52.1 in Dec to 52.9 in Jan, which is the second highest since Jun 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/8234c73e83714049a57e79337b91f438). Chris Williamson, Chief Economist at Markit, finds growth of GDP at 0.5 percent in IQ2014 if Jan activity is sustained (http://www.markiteconomics.com/Survey/PressRelease.mvc/8234c73e83714049a57e79337b91f438). The Markit Eurozone Services Business Activity Index increased from 52.1 in Dec to 52.9 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/8234c73e83714049a57e79337b91f438). The Markit Eurozone Manufacturing PMI® increased to 54.0 in Jan from 52.7 in Dec with the reading at the highest since May 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/fa8005f424084e018d665383c341ef75). New orders increased and export orders grew at the fastest rate since Apr 2011. Chris Williamson, Chief Economist at Markit, finds industrial growth in the euro area at a quarterly rate exeeding 1.0 percent. (http://www.markiteconomics.com/Survey/PressRelease.mvc/fa8005f424084e018d665383c341ef75). Table EUR provides the data table for the euro area.
Table EUR, Euro Area Economic Indicators
| GDP | IVQ2013 ∆% 0.3; IVQ2013/IVQ2012 ∆% 0.5 Blog 2/16/14 |
| Unemployment | Dec 2013: 12.0 % unemployment rate; Dec 2013: 19.010 million unemployed Blog 2/2/14 |
| HICP | Dec month ∆%: 0.3 12 months Dec ∆%: 0.8 |
| Producer Prices | Euro Zone industrial producer prices Dec ∆%: 0.2 |
| Industrial Production | Dec month ∆%: -0.7; Dec 12 months ∆%: 0.5 |
| Retail Sales | Dec month ∆%: minus 1.6 |
| Confidence and Economic Sentiment Indicator | Sentiment 100.9 Jan 2014 Consumer minus 11.7 Jan 2014 Blog 2/2/14 |
| Trade | Jan-Dec 2013/Jan-Dec 2012 Exports ∆%: 0.8 Dec 2013 12-month Exports ∆% 3.8 Imports ∆% 1.0 |
Links to blog comments in Table EUR:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/19/14 http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html
Table VD-1 provides percentage changes of euro area real GDP in a quarter relative to the prior quarter. Real GDP fell 0.2 percent in IVQ2011, fell 0.1 in IQ2012 and fell in the final three quarters of 2012: 0.3 percent in IIQ2012, 0.2 percent in IIIQ2012 and 0.5 percent in IVQ2012. GDP fell 0.2 percent in IQ2013 and increased 0.3 percent in IIQ2013. Growth slowed at 0.1 percent in IIIQ2013. GDP increased 0.3 percent in IVQ2013. The global recession manifested in the euro area in five consecutive quarterly declines from IIQ2008 to IIQ2009. The strongest impact was contraction of 2.8 percent in IQ2009. Recovery began in IIIQ2009 with cumulative growth of 3.9 percent to IQ2011 or at the annual equivalent rate of 2.2 percent. Growth was much more vigorous from IVQ2003 to IQ2008.
Table VD-1, Euro Area, Real GDP, Percentage Change from Prior Quarter, Calendar and Seasonally and Working Day Adjusted ∆%
| IQ | IIQ | IIIQ | IVQ | |
| 2013 | -0.2 | 0.3 | 0.1 | 0.3 |
| 2012 | -0.1 | -0.3 | -0.2 | -0.5 |
| 2011 | 0.8 | 0.0 | 0.1 | -0.2 |
| 2010 | 0.4 | 0.9 | 0.4 | 0.5 |
| 2009 | -2.8 | -0.3 | 0.4 | 0.5 |
| 2008 | 0.6 | -0.4 | -0.6 | -1.7 |
| 2007 | 0.8 | 0.5 | 0.6 | 0.4 |
| 2006 | 0.9 | 1.1 | 0.6 | 1.1 |
| 2005 | 0.2 | 0.7 | 0.6 | 0.7 |
| 2004 | 0.5 | 0.6 | 0.4 | 0.3 |
| 2003 | -0.1 | 0.1 | 0.5 | 0.7 |
| 2002 | 0.2 | 0.6 | 0.3 | 0.1 |
| 2001 | 0.9 | 0.1 | 0.1 | 0.2 |
| 2000 | 1.3 | 0.9 | 0.5 | 0.7 |
| 1999 | 0.8 | 0.7 | 1.1 | 1.1 |
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Table VD-2 provides percentage change in real GDP in the euro area in a quarter relative to the same quarter a year earlier. Growth rates were quite strong from 2004 to 2007. There were five consecutive quarters of sharp declines in GDP in a quarter relative to the same quarter a year earlier from IVQ2008 to IVQ2009 with sharp contractions of 5.5 percent in IQ2009, 5.3 percent in IIQ2009 and 4.4 percent in IIIQ2009. Growth rates decline in magnitude with 1.4 percent in IIIQ2011, 0.7 percent in IVQ211 and -0.2 percent in IQ2012 followed by contractions of 0.5 percent in IIQ2012, 0.7 percent in IIIQ2012 and 1.0 percent in IVQ2012. GDP contracted 1.2 percent in IQ2013 relative to a year earlier and contracted 0.6 percent in IIQ2013 relative to a year earlier. Euro area GDP contracted 0.3 percent in IIIQ2013 relative to a year earlier. The GDP of the euro area increased 0.5 percent in IVQ2013 relative to a year earlier.
Table VD-2, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a
Year Earlier, Seasonally and Working Day Adjusted ∆%
| IQ | IIQ | IIIQ | IV | |
| 2013 | -1.2 | -0.6 | -0.3 | 0.5 |
| 2012 | -0.2 | -0.5 | -0.7 | -1.0 |
| 2011 | 2.7 | 1.8 | 1.4 | 0.7 |
| 2010 | 1.0 | 2.2 | 2.2 | 2.3 |
| 2009 | -5.5 | -5.3 | -4.4 | -2.3 |
| 2008 | 2.1 | 1.2 | 0.0 | -2.1 |
| 2007 | 3.7 | 3.0 | 3.0 | 2.3 |
| 2006 | 2.9 | 3.4 | 3.4 | 3.8 |
| 2005 | 1.5 | 1.6 | 1.9 | 2.2 |
| 2004 | 1.8 | 2.2 | 2.2 | 1.8 |
| 2003 | 0.8 | 0.4 | 0.5 | 1.2 |
| 2002 | 0.5 | 1.0 | 1.2 | 1.1 |
| 2001 | 2.9 | 2.1 | 1.7 | 1.2 |
| 2000 | 4.3 | 4.4 | 3.8 | 3.3 |
| 1999 | 2.1 | 2.4 | 2.9 | 3.8 |
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Table VD-3 provides growth of euro area real GDP in a quarter relative to the same quarter a year earlier not seasonally adjusted. GDP changed 0.0 percent in IIIQ2013 NSA relative to a year earlier. GDP fell 0.5 percent in IIQ2013 relative to a year earlier without seasonal adjustment and declined 1.8 percent in IQ2013 relative to a year earlier without seasonal adjustment. Growth rates in 2006 and 2007 were quite strong followed by sharp declines of 5.6 percent in IQ2009, 5.9 percent in IIQ2009 and 4.2 percent in IQ2009.
Table VD-3, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a Year Earlier, Not Seasonally Adjusted ∆%
| IQ | IIQ | IIIQ | IV | |
| 2013 | -1.8 | -0.5 | 0.0 | |
| 2012 | 0.2 | -0.9 | -0.9 | -1.1 |
| 2011 | 2.8 | 1.9 | 1.5 | 0.2 |
| 2010 | 1.1 | 2.4 | 2.2 | 2.1 |
| 2009 | -5.6 | -5.9 | -4.2 | -2.0 |
| 2008 | 1.7 | 1.6 | 0.5 | -2.1 |
| 2007 | 3.5 | 3.1 | 3.0 | 2.4 |
| 2006 | 3.5 | 2.6 | 3.1 | 3.7 |
| 2005 | 1.0 | 2.1 | 1.9 | 1.8 |
| 2004 | 2.1 | 2.5 | 2.2 | 2.0 |
| 2003 | 1.0 | 0.1 | 0.5 | 1.2 |
| 2002 | 0.1 | 1.2 | 1.5 | 0.9 |
| 2001 | 2.8 | 2.0 | 1.7 | 1.5 |
| 2000 | 4.9 | 4.2 | 3.3 | 2.7 |
| 1999 | 2.2 | 2.6 | 2.8 | 3.8 |
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-4 provides GDP growth in IVQ2013 and relative to the same quarter a year earlier with SAWDA (seasonal and working day adjustment) and NSA (not seasonally adjusted) for the euro zone, European Union, Japan and the US. The GDP of the euro zone increased 0.3 percent in IVQ2013 and increased 0.5 percent relative to a year earlier SWDA and 0.0 percent NSA for IIIQ2013. The GDP of the European Union increased 0.4 percent in IVQ2013, increased 1.0 percent SWDA in IVQ2013 relative to a year earlier and increased 0.4 percent relative to a year earlier NSA in IIIQ2013. Growth in IIIQ2013 was weak worldwide with somewhat stronger performance by the US but still insufficient to reduce unemployment and underemployment (http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.htmland earlier http://cmpassocregulationblog.blogspot.com/2013/12/risks-of-zero-interest-rates-mediocre.html) and motivate hiring (Section I and earlier http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.html).
Table VD-4, Euro Zone, European Union, Japan and USA, Real GDP Growth
| ∆% IVQ2013/ IIIQ2013 SAWDA | ∆% IVQ2013/ IVQ2012 SWDA | ∆% IIIQ2013/ IIIQ2012 NSA | |
| Euro Zone | 0.3 | 0.5 | 0.0 |
| European Union | 0.4 | 1.0 | 0.4 |
| Germany | 0.4 | 1.4 | 1.1 |
| France | 0.3 | 0.8 | 0.5 |
| Netherlands | 0.7 | 0.7 | -0.4 |
| Finland | -0.8 | -1.4 | -1.0 |
| Belgium | 0.4 | 0.9 | 0.4 |
| Portugal | 0.5 | 1.6 | -1.7 |
| Ireland** | 1.5 | 1.7 | 1.7 |
| Italy | 0.1 | -0.8 | -1.6 |
| Greece | NA | -2.6*** | -3.0 |
| Spain | 0.3 | -0.1 | -0.7 |
| United Kingdom | 0.7 | 2.8 | 1.2 |
| Japan** | 0.3 | 2.4 | 2.4 |
| USA | 0.8 | 2.7 | NA |
*SAWDA: Seasonally and Working Day Adjusted except UK, Japan and USA
**IIIQ2013 ***NSA
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Table VD-5 provides monthly industrial production percentage changes for total production and major segments in the euro area. Total production decreased 0.7 percent in Dec 2013 with decreases of 2.1 percent in capital goods, 2.1 percent in energy and 0.1 percent in nondurable goods. Durable goods increased 0.4 percent. Intermediate goods increased 0.9 percent. Industrial production increased in all months from Dec 2012 to Jun 2013 with exception of declines of 0.5 percent in May 2013 and 0.4 percent in Jan 2013. Industrial production fell 0.9 percent in Jul 2013, 0.2 percent in Sep 2013 and 0.7 percent in Oct 2013.
Table VD-5, Euro Zone, Industrial Production Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Dec 2013 | -0.7 | 0.9 | -2.1 | -2.1 | 0.4 | -0.1 |
| Nov | 1.6 | 0.7 | 2.3 | 2.8 | 2.3 | 0.3 |
| Oct | -0.7 | 0.4 | -3.3 | -0.9 | -1.9 | 0.3 |
| Sep | -0.2 | -0.4 | 1.5 | -0.8 | -1.4 | 0.1 |
| Aug | 0.9 | 0.8 | -0.7 | 2.0 | 0.1 | 0.4 |
| Jul | -0.9 | -0.3 | -0.5 | -1.8 | -1.0 | -0.3 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Table VD-6 provides monthly and 12-month percentage changes of industrial production and major industrial categories in the euro zone. Most 12-month percentage changes in Table VD-6 are negative in the 12 months ending in Dec 2013 with exception of increase of 3.6 percent in intermediate goods. Industrial production decreased 0.7 percent in the month of Dec 2013 and increased 0.5 percent in the 12 months ending in Dec 2013.
Table VD-6, Euro Zone, Industrial Production, Month and 12-Month ∆%
| 2013 | Dec Month ∆% | Dec 12-Month ∆% |
| Total | -0.7 | 0.5 |
| Intermediate Goods | 0.9 | 3.6 |
| Energy | -2.1 | -1.9 |
| Capital Goods | -2.1 | -0.3 |
| Durable Consumer Goods | 0.4 | -1.2 |
| Nondurable Consumer Goods | -0.1 | -0.9 |
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
There has been significant decline in percentage changes of industrial production and major categories in 12-month rates into 2012 and 2013 as shown in Table VD-7. Negative percentage changes moderated from the high rates in Oct-Nov 2012 but are still high. All 12-month percentage changes are negative for the various segments of euro area industrial production from May to Aug 2013 with exception of capital goods in Jun but there is improvement in Sep to Dec 2013 with total positive rates.
Table VD-7, Euro Zone, Industrial Production 12-Month ∆%
| Total | INT | ENE | CG | DUR | NDUR | |
| Dec | 0.5 | 3.6 | -1.9 | -0.3 | -1.2 | -0.9 |
| Nov | 2.8 | 3.2 | 0.0 | 4.3 | 0.0 | 2.0 |
| Oct | 0.5 | 1.5 | -3.1 | 1.4 | -4.8 | 0.2 |
| Sep | 0.2 | 0.1 | -0.7 | 0.2 | -2.5 | 1.1 |
| Aug | -1.5 | -0.6 | -3.6 | -0.9 | -4.0 | -2.0 |
| Jul | -2.0 | -1.4 | -1.8 | -3.2 | -4.2 | -0.9 |
Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods
Source: EUROSTAT
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Euro zone trade growth continues to be relatively resilient as shown in Table VD-8 but with deceleration at the margin. Exports grew at 0.8 percent and imports fell 3.3 percent in Jan-Dec 2013 relative to Jan-Dec 2012. The 12-month rate of growth of exports was minus 3.8 percent in Dec 2013 while imports increased 1.0 percent. In Nov 2013, exports decreased 2.2 percent in 12 months and imports decreased 5.4 percent. At the margin, rates of growth of trade are declining in part because of moderation of commodity prices.
Table VD-8, Euro Zone, Exports, Imports and Trade Balance, Billions of Euros and Percent, NSA
| Exports | Imports | |
| Jan-Dec 2013 | 1,887.4 | 1,733.6 |
| Jan-Dec 2012 | 1,872.6 | 1,792.8 |
| ∆% | 0.8 | -3.3 |
| Dec 2013 | 148.8 | 134.9 |
| Dec 2012 | 143.3 | 133.5 |
| ∆% | 3.8 | 1.0 |
| Nov 2013 | 160.9 | 143.8 |
| Nov 2012 | 164.5 | 152.0 |
| ∆% | -2.2 | -5.4 |
| Trade Balance | Jan-Dec 2013 | Jan-Dec 2012 |
| € Billions | 79.7 | 153.8 |
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
The structure of trade of the euro zone in Jan-Nov 2013 is provided in Table VD-9. Data are still not available for trade structure for Dec 2013. Manufactured exports increased 0.7 percent in Jan-Nov 2013 relative to Jan-Nov 2012 while imports decreased 2.1 percent. The trade surplus in manufactured products was higher than the trade deficit in primary products in Jan-Nov 2013 but only marginally higher in Jan-Nov 2012 partly because of the commodity shock caused by carry trades.
Table VD-9, Euro Zone, Structure of Exports, Imports and Trade Balance, € Billions, NSA, ∆%
| Primary | Manufactured | Other | Total | |
| Exports | ||||
| Jan-Nov 2013 € B | 275.9 | 1,414.5 | 48.3 | 1,738.7 |
| Jan-Nov 2012 € B | 274.4 | 1,404.8 | 50.1 | 1,729.3 |
| ∆% | 0.5 | 0.7 | -3.6 | 0.5 |
| Imports | ||||
| Jan-Nov 2013 € B | 576.6 | 991.6 | 30.5 | 1,598.8 |
| Jan-Nov 2012 € B | 615.4 | 1,012.4 | 31.4 | 1,659.3 |
| ∆% | -6.3 | -2.1 | -2.9 | -3.6 |
| Trade Balance € B | ||||
| Jan-Nov 2013 | -300.8 | 422.9 | 17.8 | 139.9 |
| Jan-Nov 2012 | -341.1 | 392.4 | 18.7 | 70.0 |
Note: there are minor rounding errors
Source: EUROSTAT http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 2012, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.0 percent in 2010, 3.3 percent in 2011 and 0.7 percent in 2012. Growth decelerated to 0.4 percent in 2013.
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 | |
| 2013 | 0.4 | 0.5 |
| 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/2014/02/PE14_048_811.html
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
https://www.destatis.de/EN/PressServices/Press/pr/2014/01/PE14_016_811.html
The Flash Germany Composite Output Index of the Markit Flash Germany PMI®, combining manufacturing and services, increased from 55.0 in Dec to 55.9 in Jan. The index of manufacturing output reached 60.4 in Jan, for a 33-month high, from 57.9 in Dec, while the index of services increased to 53.6 in Jan from 53.5 in Dec. The overall Flash Germany Manufacturing PMI® increased from 54.3 in Dec to 56.3 in Jan, which is a 32-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/cf093f72c48b48159b0c25f222a80354). New export work volumes increased at the fastest pace since Apr 2011 for the sixth consecutive month. Tim Moore, Senior Economist at Markit, finds expansion of Germany’s private sector at the fastest rate since Jun 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/cf093f72c48b48159b0c25f222a80354). The Markit Germany Composite Output Index of the Markit Germany Services PMI®, combining manufacturing and services with close association with Germany’s GDP, increased from 55.0 in Dec to 55.5 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/2705803f88894a45939f4c46a6b60727). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improving expectations by German private sector companies with activity at the highest since Jun 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2705803f88894a45939f4c46a6b60727). The Germany Services Business Activity Index decreased from 53.5 in Dec to 53.1 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/2705803f88894a45939f4c46a6b60727). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, increased from 54.3 in Dec to 56.5 in Jan, in the best reading in thirty two months (http://www.markiteconomics.com/Survey/PressRelease.mvc/73deb353a6e84484975bd015f3774e0f). New export orders increased for the seventh consecutive month at accelerated rate with demand from Asia and the US. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds the highest growth of manufacturing production and new orders in three years (http://www.markiteconomics.com/Survey/PressRelease.mvc/73deb353a6e84484975bd015f3774e0f).Table DE provides the country data table for Germany.
Table DE, Germany, Economic Indicators
| GDP | IVQ2013 0.4 ∆%; IV/Q2013/IVQ2012 ∆% 1.3 2013/2012: 0.4% GDP ∆% 1992-2013 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 1/26/14 2/16/14 |
| Consumer Price Index | Jan month NSA ∆%: -0.6 |
| Producer Price Index | Dec month ∆%: 0.1 CSA, 0.2 |
| Industrial Production | MFG Dec month CSA ∆%: minus 0.5 |
| Machine Orders | MFG Dec month ∆%: -0.5 |
| Retail Sales | Nov Month ∆% 0.8 12-Month ∆% 1.1 Blog 2/2/14 |
| Employment Report | Unemployment Rate SA Dec 5.1% |
| Trade Balance | Exports Dec 12-month NSA ∆%: 4.6 Blog 2/9/14 |
Links to blog comments in Table DE:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
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
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
Table VE-1 provides percentage change of Germany’s GDP in one quarter relative to the prior quarter from 2001 to 2013. Germany’s GDP contracted during four consecutive quarters from IIQ2008 to IQ2009. The deepest contraction was 4.1 percent in IQ2009. Growth was quite strong from IIIQ2009 to IQ2011 for cumulative growth of 7.5 percent in seven quarters or at the average rate of 1.0 percent per quarter, which is equivalent to 4.2 percent per year. Economic growth decelerated in IIQ2011 to 0.1 percent and 0.4 percent in IIIQ2011. The economy grew 0.1 percent in IVQ2011 and grew 0.7 percent in IQ2012 but contracted 0.1 percent in IIQ2012. GDP growth in IIIQ2012 was 0.2 percent relative to IIQ2012. Germany’s GDP contracted 0.5 percent in IVQ2012 relative to IIIQ2012. GDP changed 0.0 percent in IQ2013 and increased 0.7 percent in IIQ2013. Growth of GDP was 0.3 percent in IIIQ2013. GDP grew 0.5 percent in IVQ2013. The Federal Statistical Office of Germany (Destatis) finds that growth in IIQ213 originated mostly in domestic demand with contributions by consumption of households and government and fixed capital formation while net trade (balance of exports less imports) deducted from growth (https://www.destatis.de/EN/PressServices/Press/pr/2013/11/PE13_381_811.html).
Table VE-1, Germany Quarter GDP ∆% Relative to Prior Quarter, Seasonally and Calendar Adjusted
| IQ | IIQ | IIIQ | IV | |
| 2013 | 0.0 | 0.7 | 0.3 | 0.4 |
| 2012 | 0.7 | -0.1 | 0.2 | -0.5 |
| 2011 | 1.5 | 0.1 | 0.4 | 0.1 |
| 2010 | 0.5 | 2.0 | 0.8 | 0.8 |
| 2009 | -4.1 | 0.2 | 0.7 | 1.0 |
| 2008 | 1.0 | -0.4 | -0.5 | -2.0 |
| 2007 | 0.6 | 0.6 | 0.8 | 0.4 |
| 2006 | 1.1 | 1.5 | 1.0 | 1.3 |
| 2005 | -0.1 | 0.6 | 0.8 | 0.3 |
| 2004 | 0.0 | 0.3 | -0.2 | 0.0 |
| 2003 | -0.8 | -0.1 | 0.5 | 0.4 |
| 2002 | -0.3 | 0.3 | 0.4 | -0.2 |
| 2001 | 1.5 | 0.1 | -0.3 | 0.2 |
Seasonal and calendar adjusted Source: Statistisches Bundesamt Deutschland (Destatis)
https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_048_811.html
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Table VE-2 provides percentage changes of Germany’s GDP in a quarter relative to the same quarter a year earlier. Growth was weak in the recovery from the recession of 2001 through 2005, as in most of the euro area (see Pelaez and Pelaez, The Global Recession Risk (2007), 116-46). Germany’s economy then grew robustly in 2006 and 2007 until the global recession after 2007. Germany recovered with strong growth in 2010 and vigorous 5.7 percent in IQ2011. The economy decelerated in the final three quarters of 2011, growing 1.8 percent in IQ2012 relative to IQ2011. Growth decelerated further to 0.6 percent in IIQ2012 without calendar adjustment and 1.1 percent with calendar adjustment and to 0.4 percent in IIIQ2012. Growth in IVQ2012 relative to IVQ2011 was 0.0 percent. GDP fell 1.6 percent in IQ2013 relative to a year earlier and increased 0.9 percent in IIQ2013 relative to a year earlier. GDP increased 1.1 percent in IIIQ2013 relative to a year earlier. GDP increased 1.3 percent in IVQ2013 relative to a year earlier.
Table VE-2, Germany, Quarter GDP ∆% Relative to Same Quarter a Year Earlier, Price Adjusted NCSA
| IQ | IIQ | IIIQ | IV | |
| 2013 | -1.6 | 0.9 | 1.1 | 1.3 |
| 2012 | 1.8 | 0.6 | 0.4 | 0.0 |
| 2011 | 5.7 | 3.4 | 2.9 | 1.6 |
| 2010 | 2.7 | 4.7 | 4.4 | 4.2 |
| 2009 | -6.5 | -7.5 | -5.0 | -1.6 |
| 2008 | 2.1 | 3.1 | 1.1 | -1.9 |
| 2007 | 4.3 | 3.4 | 3.3 | 2.2 |
| 2006 | 4.3 | 2.4 | 3.5 | 4.6 |
| 2005 | -0.8 | 1.2 | 1.2 | 1.0 |
| 2004 | 1.5 | 1.6 | 0.6 | 0.9 |
| 2003 | 0.0 | -1.1 | -0.5 | 0.1 |
Price adjusted NSA Source: Statistisches Bundesamt Deutschland (Destatis)
https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_048_811.html
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Table VE-3 provides annual growth rates of the German economy from 1992 to 2013, 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. GDP in Germany increased 0.4 percent in 2013.
Table VE-3, Germany, GDP Year ∆%
| Price Adjusted Chain-Linked | Price- and Calendar-Adjusted Chain Linked | |
| 2013 | 0.4 | 0.5 |
| 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/2014/02/PE14_048_811.html
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
https://www.destatis.de/EN/PressServices/Press/pr/2014/01/PE14_016_811.html
Chart VE-1 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides GDP at current prices from 2005 to 2013. The German economy is productive with significant dynamism over the long term. There are fluctuations in an increasing trend since 2009.
Chart VE-1, Germany, GDP, Current Prices, Billion Euro
Source: Statistisches Bundesamt Deutschland (Destatis)
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Table VE-1A provides US GDP in current prices at seasonally adjusted annual rates (SAAR) from 2005 to 2013. There is sharp decline with the recession beginning in IVQ2007 and upward trend during the expansion after IIIQ2009.
Chart VE-1A, US, Gross Domestic Product, Current Prices, Seasonally Adjusted at Annual Rates, Billions of Dollars, 2005-2013
Sources: Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
Chart VE-2 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides the index of price-adjusted chain-linked GDP of Germany from 2009 to 2013. Germany was growing rapidly before the global contraction and rebounded with significant strength along a strong upward trend that could be flattening.
Chart VE-2, Germany, Index of Price-Adjusted Chain-Linked GDP, 2000=100
Source: Statistisches Bundesamt Deutschland (Destatis)
https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html
Chart VE-2A provides US real GDP, seasonally adjusted at annual rates (SAAR) in billions of chained dollars of 2005 from 2009 to 2013. US economic growth has been at only 2.4 percent on average in the cyclical expansion in the 18 quarters from IVQ2009 to IVQ2013. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the first estimate of GDP for IVQ2013 (http://www.bea.gov/newsreleases/national/gdp/2013/pdf/gdp3q13_3rd.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,738.0 billion in IIQ2010 by GDP of $14,356.9 billion in IIQ2009 {[$14,738.0/$14,356.9 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html). As a result, there are 30.3 million unemployed or underemployed in the United States for an effective underutilization rate of 18.5 percent (http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2014/01/twenty-nine-million-unemployed-or.html). The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). US GDP grew 6.5 percent from $14,996.1 billion in IVQ2007 in constant dollars to $15,965.6 billion in IVQ2013 or 6.5 percent. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. US GDP grew 6.5 percent from $14,996.1 billion in IVQ2007 in constant dollars to $15,965.6 billion in IVQ2013 or 6.5 percent. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth under trend in the entire cycle from IVQ2007 to IV2013 would have accumulated to 20.3 percent. GDP in IVQ2013 would be $18,040.3 billion if the US had grown at trend, which is higher by $2,074.7 billion than actual $15,965.6 billion. There are about two trillion dollars of GDP less than under trend, explaining the 30.3 million unemployed or underemployed equivalent to actual unemployment of 18.5 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html and earlier http://cmpassocregulationblog.blogspot.com/2014/01/twenty-nine-million-unemployed-or.html). The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because rates in the final periods of expansions tend to decline. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation.
Chart VE-2A, US, Real Gross Domestic Product, Seasonally Adjusted at Annual Rates, Billions of Chained 2009 Dollars, 2009-2013
Sources: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
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 ∆% |
| 1949-2013 | 3.2 |
| 2000-2013 | 1.0 |
| 2000-2012 | 1.0 |
| 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=20140214
The Markit Flash France Composite Output Index increased from 47.3 in Dec to 48.5 in Jan for a three-month low (http://www.markiteconomics.com/Survey/PressRelease.mvc/228631c479cf456f8a42312cc0864fd1). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing economic weakness in the French private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/228631c479cf456f8a42312cc0864fd1). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 47.3 in Dec to 48.9 in Jan, indicating milder contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa120777f894df7a50f2fa2ddbe02c4). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI®, finds continuing weakness with log business confidence (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa120777f894df7a50f2fa2ddbe02c4). The Markit France Services Activity index decreased from 48.0 in Nov to 47.9 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa120777f894df7a50f2fa2ddbe02c4). The Markit France Manufacturing Purchasing Managers’ Index® increased to 49.3 in Jan from 47.0 in Dec for the highest reading in four months (http://www.markiteconomics.com/Survey/PressRelease.mvc/dc5e49104c5147e089d08e7351a59309). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI®, finds slower decline of output (http://www.markiteconomics.com/Survey/PressRelease.mvc/dc5e49104c5147e089d08e7351a59309). Table FR provides the country data table for France.
Table FR, France, Economic Indicators
| CPI | Dec month ∆% 0.3 |
| PPI | Dec month ∆%: 0.2 Blog 2/2/14 |
| GDP Growth | IVQ2013/IIIQ2013 ∆%:0.3 |
| Industrial Production | Dec ∆%: |
| Consumer Spending | Manufactured Goods |
| Employment | Unemployment Rate: IIIQ2013 10.5% |
| Trade Balance | Dec Exports ∆%: month 3.5, 12 months -0.5 Dec Imports ∆%: month 1.9, 12 months -1.3 Blog 2/9/14 |
| Confidence Indicators | Historical averages 100 Jan Mfg Business Climate 100 Blog 1/26/14 |
Links to blog comments in Table FR:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
1/19/14 http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html
12/29/13 http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html
12/8/13 http://cmpassocregulationblog.blogspot.com/2013/12/exit-risks-of-zero-interest-rates-world.html
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
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
Growth of GDP in a quarter relative to the prior quarter is provided for France in Table VF-1. GDP fell 0.2 percent in IVQ2012 and changed 0.0 percent in IQ2013, rebounding with growth of 0.6 percent in IIQ2013. GDP changed 0.0 percent in IIIQ2013. GDP increased 0.3 percent in IVQ2013. The French economy grew 0.1 percent in IVQ2011, stagnating in IQ2012, contracting 0.3 percent in IIQ2011 and growing 0.2 percent in IIIQ2012. In the four quarters of 2012 and the first quarter of 2013, France’s GDP contracted in two quarters and stagnated in one. Growth in the ten quarters of expansion from IIIQ2009 to IVQ2011 accumulated 4.2 percent at the annual equivalent rate of 1.6 percent. Recovery has been much weaker than the cumulative 2.6 percent in the four quarters of 2006. Weak recoveries in advanced economies have prevented full utilization of labor, capital and productive resources.
Table VF-1, France, Quarterly Real GDP Growth, Quarter on Prior Quarter ∆%
| IQ | IIQ | IIIQ | IVQ | |
| 2013 | 0.0 | 0.6 | 0.0 | 0.3 |
| 2012 | 0.0 | -0.3 | 0.2 | -0.2 |
| 2011 | 1.1 | -0.1 | 0.3 | 0.1 |
| 2010 | 0.3 | 0.6 | 0.5 | 0.5 |
| 2009 | -1.7 | 0.0 | 0.1 | 0.7 |
| 2008 | 0.4 | -0.7 | -0.4 | -1.6 |
| 2007 | 0.7 | 0.6 | 0.4 | 0.2 |
| 2006 | 0.7 | 1.1 | 0.0 | 0.8 |
| 2005 | 0.2 | 0.3 | 0.6 | 0.7 |
| 2004 | 0.5 | 0.7 | 0.4 | 0.8 |
| 2003 | 0.2 | 0.0 | 0.6 | 0.7 |
| 2002 | 0.6 | 0.5 | 0.1 | 0.0 |
| 2001 | 0.6 | 0.1 | 0.3 | -0.3 |
| 2000 | 1.2 | 0.7 | 0.5 | 0.9 |
| 1999 | 0.5 | 0.9 | 1.0 | 1.2 |
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214
Growth rates of France’s real GDP in a quarter relative to the same quarter a year earlier are shown in Table VF-2. France has not recovered the rates of growth in excess of 2 percent prior to the global recession. GDP fell 4.3 percent in IQ2009, 3.7 percent in IIQ2009, 3.2 percent in IIIQ2009 and 1.0 percent in IVQ2009. Growth in IVQ2011 relative to IVQ2010 was 1.5 percent and GDP growth declined to 0.4 percent in IQ2012, 0.1 percent in IIQ2012 relative to the same quarter a year earlier, 0.0 percent in IIIQ2012 relative to a year earlier and minus 0.3 percent in IVQ2012 relative to a year earlier. Growth in IQ2013 relative to a year earlier was minus 0.4 percent. France’s GDP increased 0.5 percent in IIQ2013 relative to a year earlier and 0.3 percent in IIIQ2013 relative to a year earlier. GDP increased 0.8 percent in IVQ2013 relative to a year earlier.
Table VF-2, France, Real GDP Growth Current Quarter Relative to Same Quarter Year Earlier ∆%
| IQ | IIQ | IIIQ | IVQ | |
| 2013 | -0.4 | 0.5 | 0.3 | 0.8 |
| 2012 | 0.4 | 0.1 | 0.0 | -0.3 |
| 2011 | 2.7 | 2.1 | 1.8 | 1.5 |
| 2010 | 1.0 | 1.6 | 2.1 | 1.9 |
| 2009 | -4.3 | -3.7 | -3.2 | -1.0 |
| 2008 | 1.6 | 0.4 | -0.5 | -2.3 |
| 2007 | 2.6 | 2.1 | 2.4 | 1.9 |
| 2006 | 2.3 | 3.2 | 2.6 | 2.6 |
| 2005 | 2.1 | 1.6 | 1.8 | 1.8 |
| 2004 | 1.9 | 2.6 | 2.4 | 2.5 |
| 2003 | 0.8 | 0.4 | 0.8 | 1.6 |
| 2002 | 0.6 | 1.0 | 0.9 | 1.2 |
| 2001 | 2.7 | 2.1 | 1.8 | 0.6 |
| 2000 | 4.3 | 4.2 | 3.6 | 3.3 |
| 1999 | 2.9 | 2.9 | 3.2 | 3.7 |
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214
Chart VF-1 of the Institut National de la Statistique et des Études Économiques provides France’s quarterly real GDP from IQ1949 to IVQ2013. France’s economy has grown dynamically over decades. Recovery from the global recession in 2008-2009 has flattened.
Chart VF-1, France, Quarterly Real GDP, Seasonally and Working Day Adjusted, IQ1949-IVQ2013
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214
Percentage changes and contributions of segments of GDP in France are provided in Table VF-3. Internal demand deducted 0.1 percentage points from GDP growth in IQ2013 and added 0.4 percentage points in IIQ2013. Internal demand did not contribute to growth in IIIQ2013 and added 0.5 percentage points in IVQ2013. Net foreign trade deducted 0.1 percentage from growth in IQ2013, added 0.2 percentage points in IIQ2013 and deducted 0.7 percentage points in IIIQ2013. Net trade added 0.2 percentage points to growth in IVQ2013.
Table VF-3, France, Contributions to GDP Growth, Calendar and Seasonally Adjusted, %
| ∆% from Prior Period | IQ 2013 | IIQ 2013 | IIIQ | IVQ | 2012 | 2013 |
| GDP | 0.0 | 0.6 | 0.0 | 0.3 | 0.0 | 0.3 |
| Imports | 0.1 | 1.5 | 0.8 | 0.5 | -0.9 | 0.8 |
| Household Consump. | 0.0 | 0.4 | 0.1 | 0.5 | -0.4 | 0.4 |
| Govt. | 0.4 | 0.7 | 0.2 | 0.4 | 1.4 | 1.7 |
| GFCF | -0.7 | -0.3 | -0.3 | -0.6 | -1.2 | -2.1 |
| Exports | -0.5 | 2.4 | -1.6 | 1.2 | 2.5 | 0.6 |
| % Point | ||||||
| Internal Demand ex Inventory Changes | -0.1 | 0.4 | 0.0 | 0.5 | -0.1 | 0.2 |
| Inventory Changes | 0.2 | 0.0 | 0.6 | -0.3 | -0.8 | 0.1 |
| Net Foreign Trade | -0.1 | 0.2 | -0.7 | 0.2 | 1.0 | -0.1 |
Notes: Consump.: Consumption; Gvt.: Government; GFCF: Gross Fixed Capital Formation; Contribus.: Contributions; OVHG: “annual growth rate carried over at the mid-year point.
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214
Chart VF-2 of France’s Institut National de la Statistique et des Études Économiques provides percentage point contributions to GDP growth. The economy was driven in IQ2013 by changes in inventories with net trade and gross fixed capital formation (GFCF) deducting from growth. Final consumption drove the economy in IIQ2013 together with inventory changes while net trade was neutral and gross fixed capital formation deducted from growth. Gross fixed capital formation and net trade contracted the economy in IIIQ2013. Inventory changed deducted from growth in IVQ2013 with contributions by consumption, GFCF and net trade.
Chart VF-2, France, Percentage Point Contributions to GDP Growth
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214
Table VF-1 provides longer historical perspective of manufacturing in France. Output of manufacturing changed 0.0 percent in Dec 2013 and increased 0.5 percent in the 12 months ending in Dec 2013. Manufacturing in France fell 14.2 percent in the 12 months ending in Dec 2008 and 4.1 percent in Dec 2009.
Table VF-4, France, Manufacturing, Month and 12-Month ∆%
| Month ∆% | 12-Month ∆% | |
| Dec 2013 | 0.0 | 0.5 |
| Nov | 0.2 | 1.6 |
| Oct | 0.4 | 0.5 |
| Sep | -0.6 | -1.2 |
| Aug | 1.0 | -3.2 |
| Jul | -0.9 | -2.1 |
| Jun | -0.3 | 0.0 |
| May | -1.0 | 0.1 |
| Apr | 2.4 | 0.5 |
| Mar | -0.8 | -3.5 |
| Feb | 0.7 | -1.0 |
| Jan | -0.6 | -3.7 |
| Dec 2012 | 1.1 | -3.3 |
| Nov | -0.9 | -6.1 |
| Oct | -1.3 | -3.2 |
| Sep | -2.6 | -2.3 |
| Aug | 2.2 | -0.6 |
| Jul | 1.2 | -2.6 |
| Jun | -0.2 | -3.5 |
| May | -0.6 | -5.3 |
| Apr | -1.7 | -3.1 |
| Mar | 1.8 | -2.4 |
| Feb | -2.1 | -5.4 |
| Jan | -0.2 | -2.8 |
| Dec 2011 | -1.8 | -0.5 |
| Nov | 2.2 | 1.9 |
| Oct | -0.4 | 2.0 |
| Sep | -0.9 | 1.4 |
| Aug | 0.1 | 3.7 |
| Jul | 0.3 | 3.3 |
| Jun | -2.1 | 3.3 |
| May | 1.7 | 4.8 |
| Apr | -1.0 | 3.9 |
| Mar | -1.3 | 5.5 |
| Feb | 0.7 | 9.1 |
| Jan | 2.1 | 8.4 |
| Dec 2013 | 0.5 | |
| Dec 2012 | -3.3 | |
| Dec 2011 | -0.5 | |
| Dec 2010 | 5.9 | |
| Dec 2009 | -4.1 | |
| Dec 2008 | -14.2 | |
| Dec 2007 | -0.8 | |
| Dec 2006 | 2.6 | |
| Dec 2005 | 0.7 | |
| Dec 2004 | 0.9 | |
| Dec 2003 | 0.3 | |
| Dec 2002 | -1.1 | |
| Dec 2001 | -5.4 | |
| Dec 2000 | 4.6 |
Source:
Institut National de la Statistique et des Études
http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140210
Chart VF-3 of the Institut National de la Statistique et des Études Économiques provides France’s index of manufacturing, adjusted for working days and seasonal effects, from Jan 1990 to Dec 2013. Growth was robust in the 1990s and in recovery from the 2001 recession. Manufacturing output fell sharply during the global recession followed by recovery and another trend of decline followed by increase.
Chart VF-3, France, Index of Manufacturing 2010=100, Jan 1990-Dec 2013, Seasonal and Working-Day Adjusted
Source:
Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140210
Chart VF-2 of France’s Institut National de la Statistique et des Études Économiques shows indices of manufacturing in France from 2009 to 2013. Manufacturing, which is CZ in Chart VF-2, fell deeply in 2008 and part of 2009. All curves of industrial indices tend to flatten recently with oscillations and declines and marginal improvement followed by renewed decline/stability in the final segment with jump in Mar-Apr 2013. Manufacturing fell in May-Jul 2013 with mild recovery in Aug 2013 and decline in Sep 2013. Manufacturing increased in Oct-Nov 2013 and fell in Dec 2013.
Chart VF-4, France, Industrial Production Indices 2009-2013 Legend: CZ : Manufacturing – (C1) : Manufacture of food products and beverages – (C3) : Electrical and electronic equipment; machine equipment – (C4) : Manufacture of transport equipment – (C5) : Other manufacturing
Source: Institut National de la Statistique et des Études Économiques
http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140210
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 1.8 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 IIIQ2013, 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 | |||||
| IVQ | -0.8 | ||||
| IIIQ | -1.9 | -1.2 | -1.5 | -5.1 | 0.0 |
| IIQ | -2.3 | -4.7 | -2.5 | -5.8 | 0.2 |
| IQ | -2.6 | -4.8 | -2.6 | -7.3 | -0.6 |
| 2012 | |||||
| IVQ | -3.0 | -6.9 | -4.0 | -8.1 | 0.8 |
| IIIQ | -2.8 | -7.5 | -4.1 | -8.7 | 1.8 |
| IIQ | -2.6 | -7.3 | -3.6 | -8.8 | 2.1 |
| IQ | -1.7 | -8.2 | -3.4 | -8.1 | 2.8 |
| 2011 | |||||
| IVQ | -0.6 | -6.8 | -2.0 | -3.8 | 3.5 |
| IIIQ | 0.5 | 0.5 | -1.0 | -2.4 | 6.0 |
| IIQ | 1.1 | 3.7 | 0.4 | -0.7 | 7.5 |
| IQ | 1.4 | 9.1 | 0.7 | 0.6 | 11.0 |
| 2010 | |||||
| IVQ | 2.3 | 15.6 | 1.1 | 1.3 | 13.4 |
| IIIQ | 1.8 | 13.2 | 1.3 | 2.4 | 12.1 |
| IIQ | 1.8 | 13.4 | 0.8 | 0.9 | 12.0 |
| IQ | 0.9 | 7.0 | 1.0 | -2.4 | 7.1 |
| 2009 | |||||
| IVQ | -3.5 | -6.3 | 0.2 | -8.2 | -9.3 |
| IIIQ | -5.0 | -12.2 | -0.8 | -12.6 | -16.4 |
| IIQ | -6.6 | -17.9 | -1.4 | -13.6 | -21.4 |
| IQ | -6.9 | -17.2 | -1.8 | -12.4 | -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/106657
The Markit/ADACI Business Activity Index increased from 47.9 in Dec to 49.4 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/5f7e4ddd86a940cf8aacf02d30fb724a). Phil Smith, Economist at Markit and author of the Italy Services PMI®, finds the index suggesting services is not restraining overall activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/5f7e4ddd86a940cf8aacf02d30fb724a). The Markit/ADACI Purchasing Managers’ Index® (PMI®), decreased marginally from 53.3 in Dec to 53.1 in Jan for continuing growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/96b0cc2204e6440b8bf31f7575c03bd8). New export orders grew around the trend of the fastest rate in 32 months in Nov and Dec. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI®, finds the best conditions in more than two-and-a-half years with continuing concern on the margins of sales prices relative to input costs (http://www.markiteconomics.com/Survey/PressRelease.mvc/96b0cc2204e6440b8bf31f7575c03bd8). Table IT provides the country data table for Italy.
Table IT, Italy, Economic Indicators
| Consumer Price Index | Jan month ∆%: 0.2 |
| Producer Price Index | Dec month ∆%: -0.1 Blog 2/2/14 |
| GDP Growth | IVQ2013/IIIQ2013 SA ∆%: 0.1 |
| Labor Report | Dec 2013 Participation rate 63.5% Employment ratio 55.3% Unemployment rate 12.7% Youth Unemployment 41.6% Blog 2/2/14 |
| Industrial Production | Dec month ∆%: -0.9 |
| Retail Sales | Dec month ∆%: 0.0 Dec 12-month ∆%: 0.1 Blog 1/26/13 |
| Business Confidence | Mfg Jan 97.7, Sep 96.8 Construction Jan 76.5, Sep 79.0 Blog 2/2/14 |
| Trade Balance | Balance Nov SA €2993 million versus Oct €2957 |
Links to blog comments in Table IT:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html
1/19/14 http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html
12/15/13 http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.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
Table VG-1 provides revised percentage changes of GDP in Italy of quarter on prior quarter and quarter on same quarter a year earlier. The GDP of Italy increased 0.1 percent in IVQ2013, which is the first increase since 0.2 percent in IIQ2011, and fell 0.8 percent relative to a year earlier. The GDP of Italy changed 0.0 percent in IIIQ2013 and fell 1.9 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and fell 2.3 percent relative to a year earlier. Italy’s GDP fell 0.6 percent in IQ2013 and declined 2.6 percent relative to IQ2012. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011. Italy’s GDP has fallen in eight consecutive quarters from IIIQ2011 to IIQ2013 at increasingly higher rates of contraction from 0.2 percent in IIIQ2011 to 0.7 percent in IVQ2011, 1.1 percent in IQ2012 and 0.6 percent in IIQ2012 but at lower 0.4 percent in IIIQ2012. The pace of decline accelerated to minus 0.9 percent in IVQ2012 and 0.6 percent in IQ2013, declining to minus 0.3 percent in IIQ2013 and 0.0 percent in IIIQ2013. GDP contracted cumulatively 4.7percent in eight consecutive quarterly contractions from IIIQ2011 to IIQ2013 at the annual equivalent rate of 2.4 percent. The yearly rate has fallen from 2.3 percent in IVQ2010 to minus 2.6 percent in IQ2013, minus 2.3 percent in IIQ2013 and minus 1.9 percent in IIIQ2013. Italy’s GDP fell 0.8 percent in IVQ2013 relative to a year earlier. The fiscal adjustment of Italy is significantly more difficult with the economy not growing especially on the prospects of increasing government revenue. The strategy is for reforms to improve productivity, facilitating future fiscal consolidation.
Table VG-1, Italy, GDP ∆%
| Quarter ∆% Relative to Preceding Quarter | Quarter ∆% Relative to Same Quarter Year Earlier | |
| IVQ2013 | 0.1 | -0.8 |
| IIIQ2013 | 0.0 | -1.9 |
| IIQ2013 | -0.3 | -2.3 |
| IQ2013 | -0.6 | -2.6 |
| IVQ2012 | -0.9 | -3.0 |
| IIIQ2012 | -0.4 | -2.8 |
| IIQ2012 | -0.6 | -2.6 |
| IQ2012 | -1.1 | -1.7 |
| IVQ2011 | -0.7 | -0.6 |
| IIIQ2011 | -0.2 | 0.5 |
| IIQ2011 | 0.2 | 1.1 |
| IQ2011 | 0.1 | 1.4 |
| IVQ2010 | 0.3 | 2.3 |
| IIIQ2010 | 0.5 | 1.8 |
| IIQ2010 | 0.6 | 1.8 |
| IQ2010 | 0.9 | 0.9 |
| IVQ2009 | -0.1 | -3.5 |
| IIIQ2009 | 0.4 | -5.0 |
| IIQ2009 | -0.3 | -6.6 |
| IQ2009 | -3.5 | -6.9 |
| IVQ2008 | -1.6 | -3.0 |
| IIIQ2008 | -1.3 | -1.9 |
| IIQ2008 | -0.5 | -0.2 |
| IQ2008 | 0.5 | 0.5 |
| IV2007 | -0.4 | 0.1 |
| IIIQ2007 | 0.3 | 1.7 |
| IIQ2007 | 0.2 | 2.0 |
| IQ2007 | 0.0 | 2.4 |
Source: Istituto Nazionale di Statistica
http://www.istat.it/it/archivio/112596
Chart VG-1 of the Italian National Institute of Statistics (ISTAT) provides growth of GDP of Italy at market prices. The year on year rate of growth pulled strongly out of the contraction. There is evident trend of deceleration with increasingly sharper contraction and mild moderation in IQ2013, IIQ2013 and IIIQ2013.
Chart VG-1, Italy, GDP at Market Prices, ∆% on Same Quarter Year Earlier
Source: Istituto Nazionale di Statistica http://www.istat.it/en/
Italy’s industrial production decreased 0.9 percent in Dec 2013 seasonally adjusted and decreased 0.7 percent in 12 months calendar adjusted, as shown in Table VG-2. Industrial production increased 0.3 percent in Nov 2013 and 1.5 percent CA relative to a year earlier. Industrial production increased 0.5 percent in Oct 2013 and fell 0.4 percent in 12 months. Industrial production increased 0.3 percent in Sep 2013 and fell 2.9 percent in 12 months. In Aug 2013, industrial production decreased 0.1 percent and fell 4.6 percent in 12 months. Industrial production decreased 0.9 percent in Jul 2013 and fell 4.2 percent in the 12 months ending in Jul 2013. In the quarter Sep-Nov 2012, industrial production fell cumulatively 4.2 percent, at the annual equivalent rate of 15.9 percent. Industrial production fell 7.8 percent in the 12 months ending in Nov 2012. There have been negative changes with oscillations in monthly industrial production. Industrial production fell 18.8 percent in 2009 after falling 3.2 percent in 2008.
Table VG-2, Italy, Industrial Production ∆%
| Index CA | ∆% CA | Index | ∆% | |||
| 2011 | - | - | 101.1 | 1.1 | 100.3 | 0.3 |
| 2012 | - | - | 94.6 | -6.4 | 94.2 | -6.1 |
| 2013 | - | - | 91.8 | -3.0 | 91.4 | -3.0 |
| 2013 | Index SA | Quarter ∆% | Index CA | 4Q ∆% | Index | ∆% |
| IQ | 92.1 | 0.1 | 92.5 | -4.3 | 91.8 | -6.1 |
| IIQ | 91.6 | -0.5 | 95.1 | -3.6 | 94.8 | -3.3 |
| IIIQ | 91.1 | -0.5 | 87.0 | -3.8 | 86.7 | -2.3 |
| IVQ | 91.7 | 0.7 | 92.6 | 0.1 | 92.3 | -0.1 |
| 2011 | Index SA | Month ∆% | Index CA | 12-Month ∆% | Index NCA | 12-Month ∆% |
| Dec | 99.1 | 0.3 | 87.5 | -2.5 | 87.1 | -8.3 |
| 2012 | ||||||
| Jan | 96.4 | -2.7 | 88.9 | -4.9 | 89.2 | -2.0 |
| Feb | 95.9 | -0.5 | 96.3 | -7.2 | 98.8 | -3.6 |
| Mar | 96.2 | 0.3 | 104.8 | -6.9 | 105.3 | -6.9 |
| Apr | 95.0 | -1.2 | 93.3 | -9.2 | 89.5 | -11.9 |
| May | 95.5 | 0.5 | 103.9 | -5.8 | 105.2 | -5.8 |
| Jun | 94.1 | -1.5 | 99.0 | -7.0 | 99.4 | -7.0 |
| Jul | 94.8 | 0.7 | 108.4 | -5.7 | 107.4 | -2.7 |
| Aug | 95.4 | 0.6 | 61.3 | -5.0 | 62.1 | -4.9 |
| Sep | 94.0 | -1.5 | 101.4 | -4.6 | 96.5 | -10.4 |
| Oct | 92.6 | -1.5 | 101.0 | -5.8 | 103.2 | 0.3 |
| Nov | 91.4 | -1.3 | 95.4 | -7.8 | 95.8 | -7.8 |
| Dec | 91.9 | 0.5 | 81.0 | -7.4 | 78.1 | -10.3 |
| 2013 | ||||||
| Jan | 92.8 | 1.0 | 86.0 | -3.3 | 89.0 | -0.2 |
| Feb | 92.1 | -0.8 | 92.4 | -4.0 | 91.2 | -7.7 |
| Mar | 91.5 | -0.7 | 99.2 | -5.3 | 95.1 | -9.7 |
| Apr | 91.3 | -0.2 | 88.9 | -4.7 | 89.3 | -0.2 |
| May | 91.5 | 0.2 | 99.4 | -4.3 | 100.7 | -4.3 |
| Jun | 91.9 | 0.4 | 96.9 | -2.1 | 94.3 | -5.1 |
| Jul | 91.1 | -0.9 | 103.9 | -4.2 | 106.1 | -1.2 |
| Aug | 91.0 | -0.1 | 58.5 | -4.6 | 57.4 | -7.6 |
| Sep | 91.3 | 0.3 | 98.5 | -2.9 | 96.7 | 0.2 |
| Oct | 91.8 | 0.5 | 100.6 | -0.4 | 102.8 | -0.4 |
| Nov | 92.1 | 0.3 | 96.8 | 1.5 | 94.2 | -1.7 |
| Dec | 91.3 | -0.9 | 80.4 | -0.7 | 80.0 | 2.4 |
SA: Seasonally Adjusted; CA: Calendar Adjusted Source: Istituto Nazionale di Statistica
http://www.istat.it/it/archivio/112057
There is worsening trend of Italy’s industrial production in Chart VG-2 after Aug 2012, sharply deteriorating until Dec 2012 with marginal recovery in Jun 2013 followed by deterioration. Industrial production recovered until declines in Jul-Aug 2013. There is improvement in Sep-Nov 2013 with deterioration in Dec 2013.
Chart VG-2, Italy, Industrial Production, 12-Month Percentage Changes
Source: Istituto Nazionale di Statistica
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 0.3 percent in 2012. Growth increased to 1.9 percent in 2013. 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 2013, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.0 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 2013 was lower by 1.2 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 | 0.3 |
| 2013 | 1.9 |
| Average Growth Rates ∆% per Year | |
| 1948-2013 | 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* | -3.0 |
| 2007-2013* | -1.2 |
| 2000-2013 | 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/q4-2013/index.html
The Business Activity Index of the Markit/CIPS UK Services PMI® decreased from 58.8 in Dec to 58.3 in Jan, which is still close to high historical levels and above long-term trend (http://www.markiteconomics.com/Survey/PressRelease.mvc/06f532c69fb148b9a4f74c23bf3d1f27). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at 0.8 percent in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/06f532c69fb148b9a4f74c23bf3d1f27). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) decreased to 56.7 in Jan from 57.2 in Dec with continuing strength close to the highest reading since Feb 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/1961e83a75274808a59a2fdff2cf4579). New export orders increased for the tenth consecutive month at the highest rate of growth in about three years. New orders increased from North America, Europe, Asia, Brazil, Scandinavia and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI®, finds that manufacturing conditions continue around the levels in Nov with output and new orders close to the fastest pace in 22 years and the unemployment rate possibly falling below 7 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/1961e83a75274808a59a2fdff2cf4579). Table UK provides the economic indicators for the United Kingdom.
Table UK, UK Economic Indicators
| CPI | Dec month ∆%: 0.4 |
| Output/Input Prices | Output Prices: Dec 12-month NSA ∆%: 1.0; excluding food, petroleum ∆%: 1.0 |
| GDP Growth | IVQ2013 prior quarter ∆% 0.7; year earlier same quarter ∆%: 2.8 |
| Industrial Production | Dec 2013/Dec 2012 ∆%: Production Industries 1.8; Manufacturing 1.5 |
| Retail Sales | Dec month ∆%: 2.6 |
| Labor Market | Sep-Nov Unemployment Rate: 7.1%; Claimant Count 3.7%; Earnings Growth 0.9% |
| GDP and the Labor Market | IIIQ2013 Weekly Hours 101.4, GDP 98.0, Employment 101.5 IQ2008 =100 GDP IVQ14 98.7 IQ2008=100 Blog 2/2/14 |
| Trade Balance | Balance SA Dec minus ₤1026 million |
Links to blog comments in Table UK:
2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html
2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html
1/19/14 http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html
12/22/13 http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html
12/1/13 http://cmpassocregulationblog.blogspot.com/2013/12/exit-risks-of-zero-interest-rates-world.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
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014
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