Financial Risks, Slow Cyclical United States Growth with GDP Two Trillion Dollars below Trend, United States Commercial Banks Assets and Liabilities, United States Housing, World Cyclical Slow Growth and Global Recession Risk: Part V

 

Financial Risks, Slow Cyclical United States Growth with GDP Two Trillion Dollars below Trend, United States Commercial Banks Assets and Liabilities, United States Housing, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014

Executive Summary

I Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend

IA Mediocre Cyclical United States Economic Growth

IA1 Contracting Real Private Fixed Investment

IIA United States Commercial Banks Assets and Liabilities

IIA1 Transmission of Monetary Policy

IIB1 Functions of Banks

IIC United States Commercial Banks Assets and Liabilities

IID Theory and Reality of Economic History, Cyclical Slow Growth Not Secular Stagnation and Monetary Policy Based on Fear of Deflation

IIB United States Housing Collapse

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 ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
World	72,216	2.9	3.6	4.0	4.1
G7	34,560	1.2	2.0	2.5	2.6
Canada	1,821	1.6	2.2	2.4	2.5
France	2,614	0.2	1.0	1.5	1.7
DE	3,430	0.5	1.4	1.4	1.3
Italy	2,014	-1.8	0.7	1.1	1.4
Japan	5,960	1.9	1.2	1.1	1.2
UK	2,477	1.4	1.9	2.0	2.0
US	16,245	1.6	2.6	3.4	3.5
Euro Area	12,199	-0.4	1.0	1.4	1.5
DE	3,430	0.5	1.4	1.4	1.3
France	2,614	0.2	1.0	1.5	1.7
Italy	2,014	-1.8	0.7	1.1	1.4
POT	212	-1.8	0.8	1.5	1.8
Ireland	211	0.6	1.8	2.5	2.5
Greece	249	-4.2	0.6	2.9	3.7
Spain	1,324	-1.3	0.2	0.5	0.7
EMDE	27,221	4.5	5.1	5.3	5.4
Brazil	2,253	2.5	2.5	3.2	3.3
Russia	2,030	1.5	3.0	3.5	3.5
India	1,842	3.8	5.1	6.3	6.5
China	8,221	7.6	7.3	7.0	7.0

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

Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2012 in Table V-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high for the countries with sovereign debt difficulties in Europe: 15.7 percent for Portugal (POT), 14.7 percent for Ireland, 24.2 percent for Greece, 25.0 percent for Spain and 10.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.4 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.

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

	% Labor Force 2012	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016
World	NA	NA	NA	NA	NA
G7	7.4	7.3	7.3	7.0	6.6
Canada	7.3	7.2	7.1	7.0	6.9
France	10.3	11.0	11.1	10.9	10.5
DE	5.5	5.6	5.5	5.5	5.5
Italy	10.7	12.5	12.4	12.0	11.2
Japan	4.4	4.2	4.3	4.3	4.3
UK	8.0	7.7	7.5	7.3	7.0
US	8.1	7.6	7.4	6.9	6.4
Euro Area	11.4	12.3	12.2	12.0	11.5
DE	5.5	5.6	5.5	5.5	5.5
France	10.3	11.0	11.1	10.9	10.5
Italy	10.7	12.5	12.4	12.0	11.2
POT	15.7	17.4	17.7	17.3	16.8
Ireland	14.7	13.7	13.3	12.8	12.4
Greece	24.2	27.0	26.1	24.0	21.0
Spain	25.0	26.9	26.7	26.5	26.2
EMDE	NA	NA	NA	NA	NA
Brazil	5.5	5.8	6.0	6.5	6.5
Russia	6.0	5.7	5.7	5.5	5.5
India	NA	NA	NA	NA	NA
China	4.1	4.1	4.1	4.1	4.1

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

Source: IMF World Economic Outlook databank http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IIQ2013 available now for all countries. There are preliminary estimates for all countries for IVQ2013. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 0.9 percent in IQ2012 and 3.2 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 0.4 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 1.7 percent, which is much lower than 3.7 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 3.1 percent and decreased 0.2 percent relative to a year earlier. Japan’s GDP contracted percent in IVQ2012 at the SAAR of minus 0.2 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.2 percent in IQ2013 at the SAAR of 4.0 percent and changed 0.0 percent relative to a year earlier. Japan’s GDP increased 1.0 percent in IIQ2013 at the SAAR of 3.9 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 2.3 percent relative to a year earlier. In IVQ2013, Japan’s GDP increased 0.3 percent at the SAAR of 1.0 percent, increasing 2.7 percent relative to a year earlier.
• China. The GDP of 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.
• Euro Area. 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. The GDP of Germany 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.
• United States. 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 Section I and 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 (http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.htmland earlier http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html). In IVQ2013, US GDP grew 0.6 percent at 2.4 percent SAAR and 2.5 percent relative to a year earlier.
• United Kingdom. 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 0.4 percent in IQ2013 and 0.6 percent relative to a year earlier. UK GDP increased 0.7 percent in IIQ2013 and 1.8 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 2.7 percent relative to a year earlier.
• Italy. 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. 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: 3.7	3.2
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: -0.4 SAAR: -1.7	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  SAAR: 2.8	3.1
Japan	QOQ: –0.8 SAAR: –3.1	-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 SAAR: 0.1	2.0
Japan	QOQ: -0.1 SAAR: -0.2	-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 SAAR: 1.1	1.3
Japan	QOQ: 1.2 SAAR: 4.8	0.0
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	0.4	0.6
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.6 SAAR: 2.5	1.6
Japan	QOQ: 1.0 SAAR: 3.9	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	0.7	1.8
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 1.0 SAAR: 4.1	2.0
Japan	QOQ: 0.3 SAAR: 1.1	2.3
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: 0.6 SAAR: 2.4	2.5
Japan	QOQ: 0.3 SAAR: 1.0	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	2.7

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. Japan provides the most worrisome data (Section VB and 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 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 Jan 2014, Japan’s exports grew 9.5 percent in 12 months while imports increased 25.0 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 2.2 percentage points from GDP growth in IIIQ2012 and deducted 0.5 percentage points from GDP growth in IVQ2012. Net trade added 0.4 percentage points to GDP growth in IQ2012, 1.7 percentage points in IQ2013 and 0.5 percentage points in IIQ2013. In IIIQ2013, net trade deducted 2.0 percentage points from GDP growth in Japan. Net trade ducted 2.2 percentage points from GDP growth in Japan in IVQ2013.
• China. In Jan 2014, China exports increased 10.6 percent relative to a year earlier and imports increased 10.0 percent.
• Germany. 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 0.3 percentage points in IQ2013 and added 0.3 percentage points in IIQ2013. Net traded deducted 0.3 percentage points from Germany’s GDP growth in IIIQ2013 and added 1.1 percentage points to GDP growth in IVQ2013.
• United Kingdom. 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 0.8 percentage points to UK’s growth of value added and contributed 0.0 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.1 percentage points from UK growth. Net trade contributed 0.4 percentage points to UK value added in IVQ2013.
• France. 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.
• United States. 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 0.99 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 M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	-1.8 Dec	2.1 Jan-Dec	0.3 Dec	-0.3 Jan-Dec
Japan		Jan 2014 9.5 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		Jan 2014 25.0 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 Dec CSA	2.0 Dec
France Dec	3.5	-0.5	1.9	-1.3
Italy Dec	5.1	4.9	3.6	0.6
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 0.99 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 -2.2 IIIQ2012 -0.5 IVQ2012 1.7 IQ2013 0.5 IIQ2013 -2.0 IIIQ2013 -2.2 IVQ2013
Germany	IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.3 IIQ2013 0.3 IIIQ2013 -0.3 IVQ2013 1.1
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 0.8 IQ2013 0.0 IIQ2013 -1.1 IIIQ2013 0.4 IVQ2013

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 Jan 2014. The share of Asia in Japan’s trade is more than one-half for 51.5 percent of exports and 45.6 percent of imports. Within Asia, exports to China are 16.4 percent of total exports and imports from China 23.7 percent of total imports. While exports to China increased 13.1 percent in the 12 months ending in Jan 2014, imports from China increased 27.2 percent. The largest export market for Japan in Jan 2014 is the US with share of 15.5 percent of total exports, which is close to that of China, and share of imports from the US of 8.2 percent in total imports. Japan’s exports to the US grew 21.9 percent in the 12 months ending in Jan 2014 and imports from the US grew 25.9 percent. Western Europe has share of 11.8 percent in Japan’s exports and of 9.5 percent in imports. Rates of growth of exports of Japan in Jan 2014 are relatively high for several countries and regions with growth of 21.9 percent for exports to the US, 6.6 percent for exports to Brazil and 31.0 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 Jan 2014 are positive for all trading partners. Imports from Asia increased 27.2 percent in the 12 months ending in Jan 2014 while imports from China increased 34.4 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

Jan 2014	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	5,252,882	9.5	8,042,855	25.0
Asia	2,702,690	5.8	3,669,120	27.2
China	862,565	13.1	1,907,358	34.4
USA	1,023,579	21.9	656,382	25.9
Canada	64,763	3.7	88,666	0.0
Brazil	38,084	6.6	100,655	8.2
Mexico	72,503	14.5	35,975	9.8
Western Europe	620,992	18.5	766,988	24.3
Germany	159,764	31.0	228,694	36.3
France	48,803	27.8	98,920	11.4
UK	87,871	-8.3	53,700	5.3
Middle East	204,313	24.9	1,657,065	31.6
Australia	110,155	15.2	476,640	21.9

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’ Index^TM (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 increased to 56.7 in Feb from 53.7 in Jan, which is the highest rate of improvement since May 2010 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7542a2e11a34e0eb2dc6d0da06fef6e). New export orders registered 50.9 in Feb, increasing from 48.4 in Jan, indicating marginal expansion. Chris Williamson, Chief Economist at Markit, finds that manufacturing hiring is growing with creation of about 15,000 jobs in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7542a2e11a34e0eb2dc6d0da06fef6e). 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	Jan 12 months NSA ∆%: 1.6; ex food and energy ∆%: 1.6 Jan month SA ∆%: 0.1; ex food and energy ∆%: 0.1 Blog 2/23/14
Producer Price Index	Finished Goods Jan 12-month NSA ∆%: 1.5; ex food and energy ∆% 1.7 Jan month SA ∆% = 0.6; ex food and energy ∆%: 0.5 Final Demand Jan 12-month NSA ∆%: 1.2; ex food and energy ∆% 1.3 Jan month SA ∆% = 0.2; ex food and energy ∆%: 0.4 Blog 2/23/14
PCE Inflation	Dec 12-month NSA ∆%: headline 1.1; ex food and energy ∆% 1.2 Blog 2/2/14
Employment Situation	Household Survey: Dec Unemployment Rate SA 6.6% Blog calculation People in Job Stress Dec: 30.3 million NSA, 18.5% of Labor Force Establishment Survey: Jan Nonfarm Jobs +113,000; Private +142,000 jobs created  Dec 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.4 Blog 2/9/14
Nonfarm Hiring	Nonfarm Hiring fell from 63.8 million in 2006 to 52.0 million in 2012 or by 11.8 million Private-Sector Hiring Dec 2013 3.005 million lower by 0.630 million than 3.635 million in Dec 2006 Blog 2/16/14
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 3.3 IIQ2012/IIQ2011 2.8 IIIQ2012/IIIQ2011 3.1 IVQ2012/IVQ2011 2.0 IQ2013/IQ2012 1.3 IIQ2013/IIQ2012 1.6 IIIQ2013/IIIQ2012 2.0 IVQ2013/IVQ2012 2.5 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 2.4 Blog 3/2/14
Real Private Fixed Investment	SAAR IVQ2013 3.8 ∆% IVQ2007 to IVQ2013: minus 2.7% Blog 3/2/14
Personal Income and Consumption	Dec month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% minus 0.2 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Dec NSA ∆%: RDPI: minus 2.7; RPCE ∆%: 2.5 Blog 2/2/14
Quarterly Services Report	IIIQ13/IIQ12 NSA ∆%: Information 4.9 Financial & Insurance 0.6 Blog 12/15/13
Employment Cost Index	Compensation Private IVQ2013 SA ∆%: 0.5 Dec 12 months ∆%: 1.9 Blog 2/9/14
Industrial Production	Jan month SA ∆%: -0.3 Jan 12 months SA ∆%: 2.9 Manufacturing Jan SA ∆% minus 0.8 Jan 12 months SA ∆% 1.3, NSA 1.3 Capacity Utilization: 78.5 Blog 2/16/14
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 Jan 12.51 to Feb 4.48 New Orders: From Jan 10.98 to Feb -0.21 Blog 2/23/14
Philadelphia Fed Business Outlook Index	General Index from Jan 9.4 to Feb -6.3 New Orders from Jan 5.1 to Feb -5.12 Blog 2/23/14
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 Blog 2/9/14
Durable Goods	Jan New Orders SA ∆%: minus 1.0; ex transport ∆%: 1.1 Jan 14/Jan 13 New Orders NSA ∆%: 3.4; ex transport ∆% 0.4 Blog 3/2/14
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 Goods: 4.1 Blog 2/16/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Dec 13 12-M NSA ∆%: Sales Total Business 5.2; Manufacturers 2.9 Retailers 3.8; Merchant Wholesalers 9.4 Blog 2/16/14
Sales for Retail and Food Services	Jan 2014/Jan 2012 ∆%: Retail and Food Services 3.0; Retail ∆% 3.0 Blog 2/16/14
Value of Construction Put in Place	Dec SAAR month SA ∆%: 0.1 Dec 12-month NSA: 3.1 Jan-Dec 2013 ∆% 4.8 Blog 2/9/14
Case-Shiller Home Prices	Dec 2013/Dec 2012 ∆% NSA: 10 Cities 13.6; 20 Cities: 13.4 ∆% Dec SA: 10 Cities 0.8 ; 20 Cities: 0.8 Blog 3/2/14
FHFA House Price Index Purchases Only	Dec SA ∆% 0.8; 12 month NSA ∆%: 7.7 Blog 3/2/14
New House Sales	Jan 2014 month SAAR ∆%: 9.6 Jan-Dec 2013/Jan-Dec 2012 NSA ∆%: 16.4 Blog 3/2/14
Housing Starts and Permits	Jan Starts month SA ∆% minus16.0; Permits ∆%: minus 5.4 Jan 2014/Jan 2013 NSA ∆% Starts 18.7; Permits  ∆% 17.7 Blog 2/23/14
Trade Balance	Balance Nov SA -$24,252 million versus Oct -$39,328 million Exports Dec SA ∆%: -1.8 Imports Dec SA ∆%: 0.3 Goods Exports Jan-Dec 2013/2012 NSA ∆%: 2.1 Goods Imports Jan-Dec 2013/2012 NSA ∆%: -0.3 Blog 2/9/14
Export and Import Prices	Jan 12-month NSA ∆%: Imports -1.5; Exports -1.2 Blog 2/16/14
Consumer Credit	Dec ∆% annual rate: Total 7.3; Revolving 7.0; Nonrevolving 7.4 Blog 2/16/14
Net Foreign Purchases of Long-term Treasury Securities	Dec Net Foreign Purchases of Long-term US Securities: -$45.9 billion Major Holders of Treasury Securities: China $1269 billion; Japan $1183 billion; Total Foreign US Treasury Holdings Nov $5795 billion Blog 2/23/14
Treasury Budget	Fiscal Year 2014/2013 ∆% Jan: Receipts 8.2; Outlays minus 2.8; Individual Income Taxes 1.6 Deficit Fiscal Year 2011 $1,300 billion 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	Jan 2014 SAAR ∆%: Securities 1.7 Loans 3.7 Cash Assets 24.9 Deposits 8.9 Blog 3/2/14
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:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

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

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

Manufacturers’ shipments of durable goods decreased 0.4 percent in Jan 2014, decreasing 1.0 percent in Dec 2013 and increasing 1.4 percent in Nov 2013. New orders decreased 1.0 percent in Jan 2014 after decreasing 5.3 percent in Dec 2013 and increasing 2.7 percent in Nov 2013, as shown in Table VA-1. These data are very volatile. Volatility is illustrated by decrease of 12.9 percent in Nov 2012 after increase of orders for nondefense aircraft of 2642.2 percent in Sep 2012 after decrease of 97.2 percent in Aug and increases of 51.1 percent in Jul 2012 and 32.5 percent in Jun 2012. Nondefense aircraft new orders decreased 20.2 percent in Jan 2014 after decreasing 22.3 percent in Dec 2013 and increasing 21.1 percent in Nov 2013. New orders excluding transportation equipment increased 1.1 percent in Jan 2014, decreased 1.9 percent in Dec 2013 and increased 0.2 percent in Nov 2013. Capital goods new orders, indicating investment, decreased 1.8 percent in Jan 2014, decreasing 8.6 percent in Dec 2013 but increasing 7.4 percent in Nov 2013. New orders of nondefense capital goods decreased 3.9 percent in Jan 2014, after decreasing 6.5 percent in Dec 2013 and increasing 8.2 percent in Nov 2013. Capital goods orders excluding volatile aircraft decreased 1.7 percent in Jan 2014, decreasing 1.8 percent in Dec 2013 and increasing 3.0 percent in Nov 2013.

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

	Jan 2014 ∆%	Dec 2013 ∆%	Nov 2013  ∆%
Total
S	-0.4	-1.8	1.4
NO	-1.0	-5.3	2.7
Excluding Transport
S	-0.5	0.1	1.3
NO	1.1	-1.9	0.2
Excluding Defense
S	-0.5	-1.3	1.0
NO	-1.8	-4.4	2.9
Machinery
S	-2.6	0.6	3.6
NO	-0.4	2.5	3.2
Computers & Electronic Products
S	1.6	2.5	2.4
NO	4.7	-8.5	0.8
Computers
S	1.4	3.8	6.2
NO	-6.7	3.5	5.9
Transport Equipment
S	-0.1	-6.2	1.6
NO	-5.6	-12.0	8.1
Motor Vehicles
S	-2.1	-7.0	2.0
NO	-2.2	-6.6	2.2
Nondefense Aircraft
S	4.0	3.7	-8.3
NO	-20.2	-22.3	21.1
Capital Goods
S	-1.1	0.0	2.1
NO	-1.8	-8.6	7.4
Nondefense Capital Goods
S	-1.0	1.3	1.0
NO	-3.9	-6.5	8.2
Capital Goods ex Aircraft
S	-0.8	0.3	2.4
NO	-1.7	-1.8	3.0

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

Source: US Census Bureau

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

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

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

Source: US Census Bureau

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

Additional perspective on manufacturers’ shipments and new orders of durable goods is in Table VA-2. Values are cumulative millions of dollars in Jan 2014 not seasonally adjusted (NSA) and without adjustment for inflation. Shipments of all manufacturing industries in Jan 2014 total $0.200 billion and new orders total $0.207 billion, growing respectively by 3.4 percent and 3.4 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 3.0 percent and new orders increased 0.4 percent. Excluding defense, shipments grew 3.4 percent and new orders grew 3.1 percent. Important information not in Table VA-2 is the large share of nondurable goods. Capital goods have relatively high value of $0.073 billion for shipments, growing 3.4 percent, and new orders $0.749 billion, growing 2.0 percent. Excluding aircraft, capital goods shipments reached $0.059 billion, growing by 2.5 percent, and new orders $0.64 billion, decreasing 1.7 percent. Data weakened in 2013 with effects of lower inflation on nominal values with recovery later in the year.

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

Jan 2014	Shipments	∆% 2013/ 2012	New Orders	∆% 2013/  2012
Total	211,515	3.4	206,933	3.4
Excluding Transport	152,486	3.0	149,457	0.4
Excluding Defense	201,815	3.4	199,335	3.1
Machinery	30,818	2.1	35,154	2.8
Computers & Electronic Products	27,102	7.5	18,285	0.7
Computers & Related Products	1,715	8.5	1,529	-2.6
Transport Equipment	50,029	4.5	57,476	7.9
Motor Vehicles	40,539	2.6	40,728	2.9
Nondefense Aircraft	8,974	15.7	8,736	54.7
Capital Goods	72,697	3.4	74,909	2.0
Nondefense Capital Goods	64,776	3.4	68,812	2.6
Capital Goods ex Aircraft	59,407	2.5	64,326	-1.7

Note: Transport: transportation

Source: US Census Bureau

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

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

Chart VA-2, US, Output of Durable Manufacturing, 1972-2014

Source: Board of Governors of the Federal Reserve System

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

Manufacturing jobs increased 9,000 in Dec 2013 relative to Nov 2013, seasonally adjusted. Manufacturing jobs not seasonally adjusted increased 89,000 from Dec 2012 to Dec 2013 or at the average monthly rate of 7,417. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. 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 I-3 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.8 percent in IIIQ2013. Most of US national income is in the form of services. In Jan 2014, there were 135.396 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 113.712 million NSA in Jan 2014 accounted for 84.0 percent of total nonfarm jobs of 135.396 million, of which 11.965 million, or 10.5 percent of total private jobs and 8.8 percent of total nonfarm jobs, were in manufacturing. Private service-producing jobs were 95.339 million NSA in Jan 2014, or 70.4 percent of total nonfarm jobs and 83.8 percent of total private-sector jobs. Manufacturing has share of 10.8 percent in US national income in IIIQ2013, as shown in Table I-3. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

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

	SAAR IIQ2013	% Total	SAAR IIIQ2013	% Total
National Income WCCA	14,495.5	100.0	14,642.3	100.0
Domestic Industries	14,248.7	98.3	14,379.4	98.2
Private Industries	12,568.6	86.7	12,704.3	86.8
Agriculture	220.3	1.5	224.2	1.5
Mining	254.3	1.8	253.3	1.7
Utilities	216.5	1.5	221.4	1.5
Construction	629.0	4.3	638.7	4.4
Manufacturing	1558.9	10.8	1575.6	10.8
Durable Goods	888.1	6.1	910.6	6.2
Nondurable Goods	670.1	4.6	665.0	4.5
Wholesale Trade	874.4	6.0	884.6	6.0
Retail Trade	995.8	6.9	998.0	6.8
Transportation & WH	436.3	3.0	442.3	3.0
Information	507.2	3.5	498.9	3.4
Finance, Insurance, RE	2448.1	16.9	2517.6	17.2
Professional & Business Services	2004.7	13.8	2008.0	13.7
Education, Health Care	1438.9	9.9	1445.7	9.8
Arts, Entertainment	577.1	4.0	585.6	4.0
Other Services	409.7	2.8	410.4	2.8
Government	1680.1	11.6	1675.1	11.4
Rest of the World	246.8	1.7	262.9	1.8

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

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

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:

1. Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
2. Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
3. Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
4. Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
5. Bank Lending Facility and Growth Supporting Funding Facility. At the meeting on Feb 18, the Bank of Japan doubled the scale of these lending facilities to prevent their expiration in the near future (http://www.boj.or.jp/en/announcements/release_2014/k140218a.pdf).

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

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
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 Blog 8/9/11 Table 26
Corporate Goods Prices	Jan ∆% 0.1 12 months ∆% 2.4 Blog 2/16/14
Consumer Price Index	Jan NSA ∆% -0.2; Jan 12 months NSA ∆% 1.4 Blog 3/2/14
Real GDP Growth	IVQ2013 ∆%: 0.3 on IIIQ2013;  IVQ2013 SAAR 1.0; ∆% from quarter a year earlier: 2.7 % Blog 6/16/13 8/18/13 9/15/13 11/17/13 12/15/13 2/23/14
Employment Report	Jan Unemployed 2.38 million Change in unemployed since last year: minus 350 thousand Unemployment rate: 3.7 % Blog 3/2/14
All Industry Indices	Dec month SA ∆% -0.1 12-month NSA ∆% 2.2 Blog 2/23/14
Industrial Production	Jan SA month ∆%: 4.0 12-month NSA ∆% 10.6 Blog 3/2/14
Machine Orders	Total Dec ∆% -3.1 Private ∆%: -9.2 Dec ∆% Excluding Volatile Orders -15.7 Blog 2/16/14
Tertiary Index	Dec month SA ∆% -0.4 Dec 12 months NSA ∆% 0.9 Blog 2/16/14
Wholesale and Retail Sales	Jan 12 months: Total ∆%: 4.1 Wholesale ∆%: 3.9 Retail ∆%: 4.4 Blog 3/2/14
Family Income and Expenditure Survey	Jan 12-month ∆% total nominal consumption 2.8, real 1.1 Blog 3/2/14
Trade Balance	Exports Jan 12 months ∆%: 9.5 Imports Dec 12 months ∆% 25.0 Blog 2/23/14

Links to blog comments in Table JPY:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.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

In Jan 2014, industrial production in Japan increased 4.0 percent and increased 10.6 percent in the 12 months ending in Jan 2014, as shown in Table VB-1. Decline of 3.1 percent in Jun interrupted four consecutive monthly increases from Feb through May 2013. Another interruption occurred in Aug with decrease of 0.9 percent and decline of 0.4 percent in 12 months. There was a third interruption with decline of 0.1 percent in Nov 2013 but increase of 4.8 percent in 12 months. Japan’s industrial production is strengthening with growth of 1.4 percent in Dec 2012, 0.9 percent in Feb 2013, 0.1 percent in Mar 2013, 0.9 percent in Apr 2013, 1.9 percent in May 2013, 3.4 percent in Jul 2013, 1.3 percent in Sep 2013, 1.0 percent in Oct 2013 and 0.9 percent in Dec 2013. Improvement continued with 4.0 percent in Jan 2014. Growth in 12 months improved from minus 10.1 percent in Feb 2013 to 7.1 percent in Dec 2013 and 10.6 percent in Jan 2014. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 15.6 percent in 2010. The annual average in calendar year 2011 fell 2.8 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Industrial production increased 0.6 percent in 2012 and fell 0.8 percent in 2013.

Table VB-1, Japan, Industrial Production ∆%

	∆% Month SA	∆% 12 Months NSA
Jan 2014	4.0	10.6
Dec 2013	0.9	7.1
Nov	-0.1	4.8
Oct	1.0	5.4
Sep	1.3	5.1
Aug	-0.9	-0.4
Jul	3.4	1.8
Jun	-3.1	-4.6
May	1.9	-1.1
Apr	0.9	-3.4
Mar	0.1	-7.2
Feb	0.9	-10.1
Jan	-0.6	-6.0
Dec 2012	1.4	-7.6
Nov	-1.0	-5.5
Oct	0.3	-4.7
Sep	-2.2	-7.6
Aug	-1.4	-4.1
Jul	-0.5	0.1
Jun	-0.8	-0.6
May	-1.8	7.6
Apr	-0.5	15.1
Mar	0.2	16.6
Calendar Year
2013		-0.8
2012		0.6
2011		-2.8
2010		15.6

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

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

The employment report for Japan in Jan 2014 is in Table VB-2. The rate of unemployment seasonally adjusted decreased to 4.2 percent in Sep 2012 from 4.3 percent in Jul 2012 and remained at 4.2 percent in Oct 2012, declining to 4.1 percent in Nov 2012, increasing to 4.2 percent in Dec 2012, stabilizing at 4.2 percent in Jan 2013 and increasing to 4.3 percent in Feb 2013. The seasonally adjusted rate of unemployment fell to 4.1 percent in Apr and May 2013. The rate of unemployment not seasonally adjusted stood at 4.1 percent in Apr 2013 and 0.3 percentage points lower from a year earlier. The rate of unemployment fell to 3.9 percent in Jun 2013 seasonally and not seasonally adjusted. In Jul 2013, the rate of unemployment fell to 3.8 percent seasonally adjusted and remained at 3.9 percent not seasonally adjusted. The rate of unemployment rose to 4.1 percent in Aug 2013 and fell to 4.0 percent seasonally adjusted in Sep 2013. The rate of unemployment stabilized at 4.0 percent in Oct 2013 and 4.0 percent in Nov 2013. The rate of unemployment fell to 3.7 percent in Dec 2013 and 3.7 percent in Jan 2014. The employment rate stood at 5.5 percent in Jan 2014 and increased 0.3 percentage points from a year earlier.

Table VB-2, Japan, Employment Report Dec 2013 

Jan 2014 Unemployed	2.38 million
Change since last year	-350 thousand; ∆% –12.8
Unemployment rate	SA 3.7%, 0.0 from earlier month; NSA 3.7%, -0.5 from earlier year
Population ≥ 15 years	110.84 million
Change since last year	∆% -0.1
Labor Force	65.01 million
Change since last year	∆% 0.0
Employed	62.62 million
Change since last year	∆% 0.5
Labor force participation rate	58.7
Change since last year	0.1
Employment rate	56.5%
Change since last year	0.3

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

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

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2013. The sharp decline in Sep 2011 was the best reading in 2011 but the rate increased in the final quarter of the year, declining in Feb 2012 and stabilizing in Mar 2012 but increasing to 4.6 percent in Apr 2012 and declining again to 4.4 percent in May 2012 and 4.3 percent in both Jun and Jul 2012 with further decline to 4.2 percent in Aug, Sep and Oct 2012, 4.1 percent in Nov 2012, 4.2 percent in Dec 2012, 4.2 percent in Jan 2013, 4.3 percent in Feb 2013 and 4.1 percent in Mar-May 2013. The rate of unemployment fell to 3.9 percent in Jun 2013 and 3.8 percent in Jul 2013. The rate of unemployment rose to 4.1 percent in Aug 2013, falling to 4.0 percent in Sep 2013. The rate of unemployment stabilized at 4.0 percent in Oct 2013 and 4.0 percent in Nov 2013. The rate of unemployment fell to 3.7 percent in Dec 2013 and 3.7 percent in Jan 2014.

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

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

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

During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid 1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for 1968, 1975, 1980 and 1985 and yearly from 1990 to 2013. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.6 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011, 4.3 percent in 2012 and 4.0 percent in 2013. The participation rate fell from 60.4 percent in 2007 to 59.6 percent in 2010, falling to 59.3 percent in 2011 and 59.1 in 2012 and increasing to 59.3 percent in 2013. The employment rate fell from 58.1 in percent in 2007 to 56.6 percent in 2010 and 56.5 percent in 2011 and 2012, increasing to 56.9 percent in 2013. The global recession adversely affected labor markets in advanced economies.

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

	Participation Rate	Employment Rate	Unemployment Rate
1953	70.0	68.6	1.9
1960	69.2	68.0	1.7
1965	65.7	64.9	1.2
1970	65.4	64.6	1.1
1975	63.0	61.9	1.9
1980	63.3	62.0	2.0
1985	63.0	61.4	2.6
1990	63.3	61.9	2.1
1991	63.8	62.4	2.1
1992	64.0	62.6	2.2
1993	63.8	62.2	2.5
1994	63.6	61.8	2.9
1995	63.4	61.4	3.2
1996	63.5	61.4	3.4
1997	63.7	61.5	3.4
1998	63.3	60.7	4.1
1999	62.9	59.9	4.7
2000	62.4	59.5	4.7
2001	62.0	58.9	5.0
2002	61.2	57.9	5.4
2003	60.8	57.6	5.3
2004	60.4	57.6	4.7
2005	60.4	57.7	4.4
2006	60.4	57.9	4.1
2007	60.4	58.1	3.9
2008	60.2	57.8	4.0
2009	59.9	56.9	5.1
2010	59.6	56.6	5.1
2011	59.3	56.5	4.6
2012	59.1	56.5	4.3
2013	59.3	56.9	4.0

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

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

The survey of household income and consumption of Japan in Table VB-4 is showing noticeable improvement in recent months relative to earlier months. Table VB-4 shows growth of nominal consumption of 2.8 percent in the 12 months ending in Jan 2014 and 1.1 percent in real terms. There are multiple segments of increasing real consumption: housing increasing 14.2 percent in nominal terms and 14.4 percent in real terms and transportation/communications increasing 1.5 percent in real terms and 3.5 percent in nominal terms. Clothing and footwear increased 19.8 percent in nominal terms and 19.4 percent in real terms. Education decreased 12.4 percent in real terms and 11.8 percent in nominal terms. Fuel, light and water charges increased 1.3 percent in nominal terms and decreased 4.1 percent in real terms. Real household income decreased 0.6 percent; real disposable income decreased 0.5 percent; and real consumption expenditures decreased 0.2 percent.

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

Jan 2014	Nominal	Real
Households of Two or More Persons
Total Consumption	2.8	1.1
Excluding Housing, Vehicles & Remittance	2.7	1.0
Food	2.7	1.4
Housing	14.2	14.4
Fuel, Light & Water Charges	1.3	-4.1
Furniture & Household Utensils	7.2	5.2
Clothing & Footwear	19.8	19.4
Medical Care	0.4	0.8
Transport and Communications	3.5	1.5
Education	-11.8	-12.4
Culture & Recreation	4.9	3.9
Other Consumption Expenditures	-0.7	-2.4*
Workers’ Households
Income	1.1	-0.6
Disposable Income	1.2	-0.5
Consumption Expenditures	1.5	-0.2

*Real: nominal deflated by CPI excluding imputed rent

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

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

Chart VB-2 of the Ministry of Internal Affairs and Communication provides year-on-year change of real consumption expenditures. There is improvement followed by deterioration in the final segment with wide oscillations. There was deterioration in Nov 2011, renewed strength in Dec 2011, another decline in Jan 2012 and increase in Feb and Mar 2012 with stabilization in Apr and May 2012 but sharp decline into Jun 2012. Recovery in Jul and Aug 2012 was interrupted in Sep-Oct 2012 and new increases in Nov 2012, Jan 2013, Feb 2013, Mar 2013 and Apr 2013 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption decreased 1.6 percent in real terms in May 2013 and decreased 1.9 percent in nominal terms relative to a year earlier. Real consumption fell 0.4 percent in Jun 2013 and nominal consumption declined 0.1 percent. Consumption rebounded in Jul 2013 with increase of real consumption by 0.1 percent and nominal consumption by 1.0 percent. In Aug 2013, real consumption fell 1.6 percent relative to a year earlier and 0.5 percent in nominal terms. There was marked improvement in Sep 2013 with growth of nominal consumption of 5.2 percent in 12 months and 3.7 percent in real consumption. Nominal consumption increased 2.1 in Nov 2013 and real consumption increased 0.2 percent. Nominal consumption increased 2.7 percent in Dec 2013 and real consumption increased 0.7 percent. In Jan 2014, nominal consumption increased 2.8 percent and real consumption 1.1 percent.

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

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

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

Percentage changes in 12 months of nominal and real consumption expenditures in Japan are provided in Table VB-5. Real consumption expenditures increased 1.1 percent in the 12 months ending in Jan 2014 and nominal consumption expenditures 2.8 percent. Real consumption expenditures increased 0.7 percent in the 12 months ending in Dec 2013 and nominal consumption expenditures increased 2.7 percent. Real consumption expenditures increased 0.2 percent in the 12 months ending in Nov 2013 and nominal consumption expenditures increased 2.1 percent. Real consumption expenditures increased 0.9 percent in the 12 months ending in Oct 2013 and nominal consumption expenditures increased 2.3 percent. Real consumption expenditures increased 3.7 percent in the 12 months ending in Sep 2013 and nominal consumption expenditures 5.2 percent. Real consumption expenditures fell 1.6 percent in Aug 2013 relative to a year earlier and nominal consumption expenditures fell 0.5 percent. There is recovery in Jul 2013 with real consumption expenditures increasing 0.1 percent and nominal consumption expenditures increasing 1.0 percent. Real consumption expenditures decreased 0.4 percent in the 12 months ending in Jun 2013 and 0.1 percent in nominal terms. Declines in May and Jun 2013 interrupted growth from Jan to Apr 2013. There was sharp decline in nominal consumption of 8.8 percent in Mar 2011 and 8.2 percent in real consumption because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Dec was the first month in 2011 with increases in 12 months in both nominal and real consumption expenditures followed by Feb 2012 through Aug 2012. Nominal and real consumption fell in both Sep and Oct 2012 and increased in Nov 2012. Real consumption fell 0.7 percent in the 12 months ending in Dec 2012 and nominal consumption fell 0.8 percent. Real consumption expenditures increased 2.4 percent in the 12 months ending in Jan 2013 and 2.1 percent in nominal terms. Nominal consumption increased 0.8 percent in Feb 2013 and nominal consumption increased 0.1 percent. Real consumption increased 5.2 percent in the 12 months ending in Mar 2013 and nominal consumption 4.1 percent. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 3.7 percent in IQ2012 with private consumption contributing 0.9 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 1.7 percent and contribution of 1.0 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 3.1 percent and personal consumption deducted 1.1 percentage points. Japan’s GDP grew at the SAAR of minus 0.2 percent in IVQ2012 with personal consumption contributing 1.0 percentage points. Japan’s GDP growth in IQ2013 was at 4.8 percent SAAR with highest contribution of 2.6 percentage points by personal consumption expenditures. In IIQ2013, Japan’s GDP grew at 3.9 percent SAAR with personal consumption expenditures contributing 1.6 percentage points. Japan’s GDP grew at 1.1 percent SAAR in IIIQ2013 with personal consumption expenditures contributing 0.5 percentage points. In IVQ2013, Japan’s GDP grew at 1.0 percent SAAR with personal consumption expenditures contributing 1.2 percentage points.

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

	Nominal Consumption Expenditures ∆% Relative to a Year Earlier	Real Consumption Expenditures ∆% Relative to a Year Earlier
Jan 2014	2.8	1.1
Dec 2013	2.7	0.7
Nov	2.1	0.2
Oct	2.3	0.9
Sep	5.2	3.7
Aug	-0.5	-1.6
Jul	1.0	0.1
Jun	-0.1	-0.4
May	-1.9	-1.6
Apr	0.8	1.5
Mar	4.1	5.2
Feb	0.1	0.8
Jan	2.1	2.4
Dec 2012	-0.8	-0.7
Nov	0.1	0.2
Oct	-0.5	-0.1
Sep	-1.2	-0.9
Aug	1.4	1.8
Jul	1.2	1.7
Jun	1.5	1.6
May	4.3	4.0
Apr	3.2	2.6
Mar	4.1	3.4
Feb	2.7	2.3
Jan	-2.1	-2.3
Dec 2011	0.3	0.5
Nov	-3.8	-3.2
Oct	-0.6	-0.4
Sep	-1.9	-1.9
Aug	-3.9	-4.1
Jul	-1.8	-2.1
Jun	-3.9	-3.5
May	-1.6	-1.2
Apr	-2.5	-2.0
Mar	-8.8	-8.2
Feb	-0.1	0.5
Jan	-0.9	-0.3
Dec 2010	-3.2	-3.3
Dec 2009	0.3	2.1

Source:

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

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

Japan is experiencing weak internal demand as in most advanced economies, interrupted by strong growth in IQ2012 but renewed weakening at the end of IIQ2012, beginning of IIIQ2012 with recovery in IVQ2012, IQ2013, IIQ2013 and IIIQ2013. Recovery continued in IVQ2013. Table VB-6 provides Japan’s wholesale and retail sales. There is strong performance in May 2013 with growth of 0.8 percent for retail sales followed by 1.6 percent in Jun 2013. Retail sales fell 0.3 percent in Jul 2013, rebounding 1.1 percent in Aug 2013. Retail sales increased 3.0 percent in the 12 months ending in Sep 2013 and 2.4 percent in the 12 months ending in Oct 2013. Retail sales increased 4.1 percent in the 12 months ending in Nov 2013 and 2.5 percent in the 12 months ending in Dec 2013. Retail sales grew 4.4 percent in the 12 months ending in Jan 2014. Retail sales are recovering from deep drops in Mar and Apr 2011 following the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Retail sales have been increasing in 12-month percentage changes from Dec 2011 through May 2012. Retail sales fell again by 1.3 percent in Jul 2012, increasing 1.3 percent in Aug 2012 and 0.4 percent in Sep 2012 but declining 1.2 percent in Oct 2012, rebounding by 0.9 percent in Nov 2012 and only 0.2 percent in Dec 2012 but contracting 1.1 percent in Jan 2013 and 2.2 percent in Feb 2013. In May 2013, retail sales increased 0.8 percent relative to a year earlier and 1.6 percent in Jun 2013 followed by decline of 0.3 percent in Jul 2013. Retail sales rebounded 1.1 percent in Aug 2013, 3.0 percent in Sep 2013 and 2.4 percent in Oct 2013. Retail sales grew 4.1 percent in the 12 months ending in Nov 2013, 2.5 percent in the 12 months ending in Dec 2013 and 4.4 percent in the 12 months ending in Jan 2014.

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

	Total	Wholesale	Retail
Jan 2014	4.1	3.9	4.4
Dec 2013	2.8	2.9	2.5
Nov	2.9	2.4	4.1
Oct	2.0	1.8	2.4
Sep	2.8	2.7	3.0
Aug	0.6	0.4	1.1
Jul	1.3	2.0	-0.3
Jun	0.5	0.1	1.6
May	0.6	0.5	0.8
Apr	-0.1	-0.1	-0.2
Mar	-1.3	-1.8	-0.3
Feb	-1.6	-1.3	-2.2
Jan	-0.3	0.1	-1.1
Dec 2012	-1.7	-2.5	0.2
Nov	-0.9	-1.6	0.9
Oct	-1.6	-1.8	-1.2
Sep	-3.6	-5.1	0.4
Aug	-2.7	-4.4	1.3
Jul	-3.1	-4.0	-1.3
Jun	-2.6	-3.6	-0.2
May	2.7	2.6	3.0
Apr	1.8	0.4	5.0
Mar	3.2	0.9	9.3
Feb	-0.1	-1.3	3.1
Jan	-2.1	-3.8	1.6
Dec 2011	-0.8	-2.0	2.5
Nov	-2.3	-2.4	-2.2
Oct	1.1	0.8	1.9
Sep	0.3	0.8	-1.1
Aug	3.1	5.2	-2.6
Jul	2.3	3.0	0.6
Jun	3.1	3.8	1.2
May	1.3	2.3	-1.3
Apr	-2.6	-1.7	-4.8
Mar	-1.3	1.2	-8.3
Feb	5.3	7.2	0.1
Jan	3.3	4.6	0.1
Dec 2010	3.5	5.7	-2.1
Calendar Year
2012	-0.9	-2.0	1.8
2011	1.0	1.9	-1.0
2010	2.4	2.3	2.6
2009	-20.5	-25.6	-2.3
2008	1.2	1.5	0.3

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

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

VC China. China estimates an index of nonmanufacturing purchasing managers 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. Input Prices	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/f7b00646382b4353a878a645cbbebf9c) is slowing. The overall Flash HSBC China Manufacturing PMI^™ decreased from 49.5 in Jan to 48.3 in Jan, which is the lowest in seven months, while the Flash HSBC China Manufacturing Output Index decreased from 50.8 in Jan to 49.2 in Feb, indicating moderate contraction. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the index is consistent with weakening manufacturing with policy required to maintain growth in the rest of the year (http://www.markiteconomics.com/Survey/PressRelease.mvc/f7b00646382b4353a878a645cbbebf9c). 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 51.2 in Dec to 50.8 in Jan, indicating moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1499939038f4e74b0144c13ac725218). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need of faster manufacturing expansion to support growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1499939038f4e74b0144c13ac725218). The HSBC Business Activity index decreased from 50.9 in Dec to 50.7 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1499939038f4e74b0144c13ac725218). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that services could pick up in future months (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1499939038f4e74b0144c13ac725218). 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 Blog 2/16/14
Consumer Price Index	Jan month ∆%: 1.0 Jan 12 months ∆%: 2.5 Blog 2/16/14
Value Added of Industry	Dec month ∆%: 0.71 Jan-Dec 2013/Jan-Dec 2012 ∆%: 9.7 Dec 12-Month ∆%: 9.7 Blog 1/26/14
GDP Growth Rate	Year IVQ2013 ∆%: 7.7 Quarter IVQ2013 AE ∆%: 7.4 Blog 1/26/14
Investment in Fixed Assets	Total Jan-Dec 2013 ∆%: 19.6 Real estate development: 19.8 Blog 1/26/14
Retail Sales	Dec month ∆%: 1.24 Dec 12 month ∆%: 13.6 Jan-Dec ∆%: 13.1 Blog 1/26/14
Trade Balance	Jan balance $31.86 billion Exports 12M ∆% 10. Imports 12M ∆% 10.0 Cumulative Jan: $31.86 billion Blog 2/16/14

Links to blog comments in Table CNY:

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html

VD Euro Area. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1996. Growth was very strong at 3.3 percent in 2006 and 3.0 percent in 2007. The global recession had strong impact with growth of only 0.4 percent in 2008 and decline of 4.4 percent in 2009. Recovery was at lower growth rates of 2.0 percent in 2010 and 1.6 percent in 2011. EUROSTAT estimates growth of GDP of the euro area of minus 0.7 percent in 2012 and minus 0.4 percent in 2013 but 1.1 percent in 2014 and 1.7 percent in 2015.

Table VD-EUR, Euro Area, Yearly Percentage Change of Harmonized Index of Consumer Prices, Unemployment and GDP ∆%

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	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, decreased from 52.9 in Jan to 52.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/61e35865d2de4a309411277f211a1046). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the index is consistent with growth of GDP as high as 0.5 percent in IQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/61e35865d2de4a309411277f211a1046). 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	Jan 2014: 12.0 % unemployment rate; Jan 2014: 19.056 million unemployed Blog 3/2/14
HICP	Jan month ∆%: -1.1 12 months Jan ∆%: 0.8 Blog 3/2/14
Producer Prices	Euro Zone industrial producer prices Dec ∆%: 0.2 Nov 12-month ∆%: -0.8 Blog 2/9/14
Industrial Production	Dec month ∆%: -0.7; Dec 12 months ∆%: 0.5 Blog 2/16/14
Retail Sales	Dec month ∆%: minus 1.6 Dec 12 months ∆%: minus 1.0 Blog 2/9/14
Confidence and Economic Sentiment Indicator	Sentiment 101.2 Feb 2014 Consumer minus 12.7 Jan 2014 Blog 3/2/14
Trade	Jan-Dec 2013/Jan-Dec 2012 Exports ∆%: 0.8 Imports ∆%: -3.3 Dec 2013 12-month Exports ∆% 3.8 Imports ∆% 1.0 Blog 2/16/14

Links to blog comments in Table EUR:

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.html

EUROSTAT estimates the rate of unemployment in the euro area at 12.0 percent in Jan 2014, as shown in Table VD-1. The number of unemployed in Jan 2014 was 19.056 million, which was 0.047 million lower than 19.103 million in Jan 2013. The rate of unemployment stabilized from 12.0 percent in Jan 2013 to 12.0 percent in Jan 2014.

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

	Unemployment Rate %	Number Unemployed Millions
Jan 2014	12.0	19.056
Dec 2013	12.0	19.043
Nov	12.0	19.157
Oct	12.0	19.159
Sep	12.1	19.261
Aug	12.1	19.246
Jul	12.1	19.210
Jun	12.1	19.191
May	12.1	19.190
Apr	12.1	19.174
Mar	12.0	19.140
Feb	12.0	19.136
Jan	12.0	19.103
Dec 2012	11.9	18.904
Nov	11.8	18.782
Oct	11.7	18.688
Sep	11.6	18.423
Aug	11.5	18.261
Jul	11.5	18.199
Jun	11.4	18.098
May	11.3	17.882
Apr	11.2	17.731
Mar	11.0	17.460
Feb	10.9	17.234
Jan	10.8	17.026
Dec 2011	10.7	16.919
Nov	10.6	16.818
Oct	10.4	16.518
Sep	10.3	16.340
Aug	10.2	16.097
Jul	10.1	15.932
Jun	10.0	15.713
May	9.9	15.646
Apr	9.8	15.489
Mar	9.9	15.579
Feb	9.9	15.604
Jan	10.0	15.694
Dec 2010	10.1	15.808

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

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

Table VD-2 shows the disparity in rates of unemployment in the euro area with 12.0 percent for the region as a whole and 19.056 million unemployed but 5.0 percent in Germany and 2.143 million unemployed. At the other extreme is Spain with rate of unemployment of 25.8 percent and 5.836 million unemployed. The rate of unemployment of the European Union in Jan 2014 is 10.8 percent with 26.231 million unemployed.

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

Jan 2014	Unemployment Rate %	Unemployed Millions
Euro Zone	12.0	19.056
Germany	5.0	2.143
France	10.9	3.199
Netherlands	7.1	0.634
Finland	8.3	0.221
Portugal	15.3	0.814
Ireland	11.9	0.258
Italy	12.9	3.293
Greece	28.0*	1.382*
Spain	25.8	5.836
Belgium	8.5	0.420
European Union	10.8	26.231

*Nov 2013

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

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

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

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

Source: EUROSTAT

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

The Economic Sentiment Indicator of the European Economic Commission, Economic and Financial Affairs, provides correlation with the economic cycle since 1990, capturing all three recessions in the period and even the threat of recession from 1994 to 1995. The latest chart of this index accessible in the link in parenthesis shows trend of decline in 2011 and 2012 that has punctured the historical average of 100 and resumed downward trend in 2012 followed by recovery moving closer to the average (http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm). Table VD-3 provides the index increasing from 90.5 in Mar 2013 to 101.2 in Feb 2014. The index is above the minimum value of 70.1 reached in Mar 2009, surpassing the average of 100.

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

	ESI	IND	SERV	CON	RET	CONS
Historical Average	100.0	-7.0	9.1	-13.3	-9.2	-18.1
Maximum	118.6 05-00	7.9 04-07	35.4     08-98	2.4 05-00	5.2 06-90	6.0 02-90
Minimum	70.1 03-09	-38.1 03-09	-26.1 03-09	-34.3 03-09	-24.8 01-93	-46.0 09-93
Feb 2014	101.2	-3.4	3.2	-12.7	-2.9	-28.5
Jan	101.0	-3.8	2.4	-11.7	-3.4	-29.8
Dec 2013	100.4	-3.4	0.4	13.5	-5.0	-26.4
Nov	98.8	-3.9	-0.8	-15.3	-7.7	-30.4
Oct	98.1	-5.0	-3.6	-14.4	-7.7	-29.1
Sep	97.3	-6.6	-3.2	-14.8	-6.8	-28.3
Aug	95.7	-7.8	-5.1	-15.5	-10.5	-32.6
Jul	92.9	-10.6	-7.7	-17.3	-13.9	-32.1
Jun	91.7	-11.2	-9.5	-18.7	-14.5	-31.2
May	89.8	-13.0	-9.2	-21.7	-16.7	-32.5
Apr	89.0	-13.8	-11.1	-22.1	-18.4	-30.7
Mar	90.5	-12.2	-7.0	-23.3	-17.0	-29.5

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

Source: European Commission Services

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

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1992 to 2012, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.0 percent in 2010, 3.3 percent in 2011 and 0.7 percent in 2012. 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

https://www.destatis.de/DE/PresseService/Presse/Pressekonferenzen/2014/BIP2013/Pressebroschuere_BIP2013.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, increased from 55.5 in Jan to 56.1 in Feb for a 32-month high. The index of manufacturing output reached 657.6 in Feb, declining from a 33-month high of 60.4 in Jan, while the index of services increased to 55.4 in Feb from 53.1 in Jan. The overall Flash Germany Manufacturing PMI^® decreased from 56.5 in Jan, which is a 32-month high, to 54.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/b85e0a161b9f4998be8a2378f57ab4af). New export work volumes increased at the second fastest pace in about three years with business originating in the US, Asia, Middle East, Poland and Russia. Oliver Kolodseike, Economist at Markit, finds expansion of Germany’s private sector at the fastest rate in 32 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/b85e0a161b9f4998be8a2378f57ab4af). 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 3/2/14
Consumer Price Index	Jan month NSA ∆%: -0.6 Jan 12-month NSA ∆%: 1.3 Blog 2/16/14
Producer Price Index	Jan month ∆%: -0.1 CSA, minus 0.4 12-month NSA ∆%: -1.1 Blog 2/23/14
Industrial Production	MFG Dec month CSA ∆%: minus 0.5 12-month NSA: 5.2 Blog 2/9/14
Machine Orders	MFG Dec month ∆%: -0.5 Dec 12-month ∆%: 7.9 Blog 2/9/14
Retail Sales	Nov Month ∆% 0.8 12-Month ∆% 1.1 Blog 2/2/14
Employment Report	Unemployment Rate SA Jan 5.0% Blog 3/2/14
Trade Balance	Exports Dec 12-month NSA ∆%: 4.6 Imports Dec 12 months NSA ∆%: 2.0 Exports Dec month CSA ∆%: minus 0.9; Imports Dec month SA minus 0.6 Blog 2/9/14

Links to blog comments in Table DE:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

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 and 0.4 percent in IVQ2013.

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)

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

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

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 and 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/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

There are strong calendar effects in economic activity in Germany. Table VE-3 provides Germany’s percentage change in a quarter relative to the same quarter a year earlier adjusting for price changes and calendar effects. Germany’s GDP increased 1.1 percent in IIQ2012 calendar-adjusted in contrast with only 0.6 percent without calendar adjustment. GDP growth adjusting for calendar effects was 0.9 percent in IIIQ2012 relative to IIIQ2011 and 0.4 percent without calendar adjustment. Growth in IVQ2012 was 0.3 percent calendar and price adjusted in contrast with 0.0 percent without calendar adjustment. Growth in IQ2013 was minus 0.3 percent relative to a year earlier with adjustment for calendar effects and minus 1.6 percent without adjustment. GDP without calendar adjustment increased 0.9 percent in IIQ2013 relative to a year earlier and 0.5 percent with calendar adjustment. In IIIQ2013, growth without calendar adjustment was 1.1 percent in contrast with 0.6 percent calendar adjusted. In IVQ2013, GDP with calendar adjustment increased 1.4 percent relative to a year earlier and 1.3 percent without calendar adjustment.

Table VE-3, Germany, Quarter GDP ∆% Relative to Same Quarter a Year Earlier, Calendar and Price Adjusted NSA 

	IQ	IIQ	IIIQ	IV
2013	-0.3	0.5	0.6	1.4
2012	1.3	1.1	0.9	0.3
2011	5.3	3.3	3.0	2.1
2010	2.6	4.3	4.4	4.1
2009	-6.7	-6.3	-5.1	-2.3

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_062_811.html

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

Table VE-4 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. Growth in 2013 was 0.4 percent.

Table VE-4, 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_062_811.html

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

The Statistisches Bundesamt (Federal Statistical Office of Germany) provides the analysis of percentage point contributions to GDP on growth from a quarter a year earlier, shown in Table VE-5. The original data are adjusted for price but not for seasonality. There is strong internal demand, or consumption and investment, which is uncommon in advanced economies. Consumption added 0.8 percentage points in IVQ2013. Growth of fixed capital formation (GFCF) added 0.3 percentage points to growth of GDP in IVQ2013. Domestic uses added 0.4 percentage points in IVQ2013. Net exports contributed 0.9 percentage points in IVQ2013. The rates of growth of exports and imports fell from over 10 percent to single. Exports grew 2.0 percent in IVQ2013 and imports 0.5 percent.

Table VE-5, Germany, Percentage Point Contributions of Use of Gross Domestic Product on Growth from Same Quarter of Prior Year, Price Adjusted  

	IQ13 PP	∆% IQ 13	IIQ 13 PP	∆% IIQ 13	IIIQ 13 PP	∆% IIIQ 13	IVQ 13  PP	∆% IVQ 13
Consumption Total	-0.1	1.8	0.8	0.7	1.1	0.1	0.8	0.8
Households Consumption	-0.2	1.7	0.7	0.6	0.9	-0.3	0.6	0.6
Government Consumption	0.1	1.9	0.1	0.9	0.2	1.4	0.2	1.4
Gross Capital Formation	-0.9	-0.1	0.1	-7.7	0.4	-6.4	-0.4	-7.6
Gross Fixed Capital Formation (GFCF)	-1.2	1.1	0.0	-2.4	0.3	-3.0	0.3	-5.1
GFCF in Machinery & Equipment	-0.6	2.4	-0.1	-3.8	0.0	-7.2	0.0	-9.3
GFCF in Construction	-0.6	0.1	0.1	-2.2	0.3	-1.0	0.3	-2.6
Change in Inventories	0.3		0.1		0.1		-0.7
Domestic Uses	-1.0	1.4	0.9	-0.9	1.5	-1.2	0.4	-0.7
Net Exports	-0.5		0.1		-0.5		0.9
Exports		3.5		5.0		4.2		2.0
Imports		3.2		2.5		1.2		0.5
GDP		1.7		0.5		0.4		0.1
GDP per Person in Employment		-2.2		0.4		0.6		0.7
GDP per Hour Worked		0.7		-0.4		0.0		0.7

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_062_811.html

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

Table VE-6 provides segments of Germany’s GDP with growth in IVQ2013 and contributions to growth in percentage points. The impulse of growth of GDP in IVQ2013 contribution of 1.1 percentage points by net exports. Exports grew 2.6 percent in IVQ2013 and imports 0.6 percent.

Table VE-6, Germany, Percentage Point Contributions of Use of Gross Domestic Product on Growth from Prior Quarter, Price Adjusted  

	IQ13 PP	∆% IQ 13	IIQ 13 PP	∆% IIQ 13	IIIQ 13 PP	∆% IIIQ 13	IVQ 13  PP	∆% IVQ 13
Consumption Total	0.2	0.3	0.3	0.4	0.3	0.4	0.0	-0.1
Households Consumption	0.2	0.3	0.4	0.6	0.1	0.2	0.0	-0.1
Government Consumption	0.0	0.2	-0.1	-0.4	0.2	1.2	0.0	0.0
Gross Capital Formation	0.1	0.4	0.1	0.5	0.2	1.4	-0.6	-3.8
Gross Fixed Capital Formation (GFCF)	-0.2	-1.4	0.2	1.2	0.2	1.3	0.2	1.4
GFCF in Machinery & Equipment	-0.1	-1.4	0.0	0.5	0.0	0.1	0.1	1.4
GFCF in Construction	-0.1	-1.5	0.2	1.7	0.2	2.1	0.1	1.4
Change in Inventories	0.3		-0.1		0.0		-0.8
Domestic Uses	0.3	0.3	0.4	0.4	0.6	0.6	-0.7	-0.7
Net Exports	-0.3		0.3		-0.3		1.1
Exports		-1.0		2.4		0.2		2.6
Imports		-0.5		1.9		0.8		0.6
GDP		0.0		0.7		0.3		0.4
GDP per Person in Employment		-0.1		0.6		0.2		0.2
GDP per Hour Worked		0.2		-0.4		-0.1		1.0

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_062_811.html

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

Percentage changes from year earlier of gross value added by economic sectors in Germany are in Table VE-7. Industry ex construction and manufacturing experienced sharp reductions in yearly growth rates from double digits in 2010, upper single digits in 2011, contractions in 2012 and IQ2013 and mild growth in IIQ2013 and IIIQ2013. Industry grew 2.6 percent in IVQ2013 relative to a year earlier and manufacturing 3.0 percent. Finance and insurance rebounded from decline of 1.7 percent in 2007 to growth from 2010 to 2012 and IQ2013 but sharp decline in IIQ2013, IIIQ2013 and IVQ2013. Business services also grew at relatively higher rates from minus 12.3 percent in 2007 to 5.5 percent in 2010, 3.1 percent in 2011, 2.9 percent in 2012, 1.6 percent in IQ2013, 4.0 percent in IIQ2013 and 4.2 percent in IIIQ2013. Business services increased 4.1 percent in IVQ2013 relative to a year earlier.

Table VE-7, Germany, Percentage Change from Year Earlier of Gross Value Added by Economic Sector, Price Adjusted NSA

	2013	IQ2013	IIQ   2013	IIIQ 2013	IVQ2013
Agriculture	-0.2	-1.4	-0.2	0.0	0.8
Industry ex Construction	0.0	-4.3	0.7	1.0	2.6
Manufacturing	0.1	-4.5	1.0	1.1	3.0
Construction	-0.4	-7.3	-0.7	1.4	4.6
Trade, Transport, Accommodation & Food Services	0.9	-2.4	1.4	2.3	2.2
Information & Communications	1.2	1.2	1.5	0.9	1.0
Finance & Insurance	-4.7	1.1	-5.3	-5.9	-8.5
Real Estate	0.9	0.7	1.0	1.0	1.0
Business Services	3.5	1.6	4.0	4.2	4.1
Public Services, Education & Health	0.2	-0.1	0.3	0.1	0.5
Other Services	-0.9	-1.9	-0.5	-1.0	-0.3
Total Gross Value Added	0.5	-1.5	0.8	1.1	1.5

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_062_811.html

https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.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, 2005-2014

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 increasing again.

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 2.3 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 second estimate of GDP for IVQ2013 (http://www.bea.gov/newsreleases/national/gdp/2014/pdf/gdp4q13_2nd.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 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.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, 5.0 percent from IQ1983 to IIQ1987 and at 7.8 percent from IQ1983 to IVQ1983 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html). 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 $2,107.4 billion than actual $15,932.9 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). US GDP grew from $14,996.1 billion in IVQ2007 in constant dollars to $15,932.9 billion in IVQ2013 or 6.2 percent at the average annual equivalent rate of 1.0 percent. 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. 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). 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, 2009-2014

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

Table VE-8 provides Germany’s GDP of €697.88 billion in IVQ2013 and €703.88 billion in IIIQ2013 and its uses. Annual 2013 GDP is €2737.60 billion. Private consumption is 57.5 percent of GDP in IVQ2013 and gross capital formation 14.7 percent with government consumption of 20.6 percent and net exports 7.2 percent. Germany’s savings ratio has been in the range of 8.5 percent to 11.5 percent. Structural reforms in the early 2000s provided strength and dynamism to Germany’s economic performance.

Table VE-8, Germany, GDP and Uses, Euro Billions and %

	IIIQ2013	IVQ2013	2013
GDP Euro Billions	703.88	697.88	2737.60
Percent Distribution of Uses
Gross Capital Formation	18.4	14.7	16.7
Household and NPISH Consumption	57.8	57.5	57.4
Balance of Exports and Imports	5.2	7.2	6.3
Government Consumption	18.6	20.6	19.5
Memo: Savings Ratio %	8.5	8.8	10.0
2013		10.0
2012		10.3
2011		10.4
2010		10.9
2009		10.9
2008		11.5

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_062_811.html

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

Chart VE-3 provides US personal savings as a percentage of disposable personal income from IQ1980 to IVQ2013. The US savings ratio recovered during the global recession but fell again because of financial repression of zero interest rates.

Chart VE-3, US, Personal Savings as Percent of Disposable Personal Income, Quarterly, 1980-2014

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

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-9. The number unemployed, not seasonally adjusted, decreased from 2.50 million in Jan 2013 to 2.36 million in Jan 2014, or 5.6 percent, while the unemployment rate fell from 5.9 percent in Jan 2013 to 5.5 percent in Jan 2014. The number of persons in employment, not seasonally adjusted, increased from 39.70 million in Jan 2013 to 40.23 million in Jan 2014, or 1.3 percent, while the employment rate increased from 63.0 percent in Jan 2013 to 63.9 percent in Jan 2014. The number unemployed, seasonally adjusted, fell from 2.17 million in Dec 2013 to 2.14 million in Jan 2014, while the unemployment rate remained fell to 5.0 percent in Jan 2014 relative to 5.1 percent in Dec 2013. The number of persons in employment, seasonally adjusted, increased from 40.54 million in Dec 2013 to 40.59 million in Jan 2014, or 0.1 percent. The employment rate seasonally adjusted did not change from 64.5 in Dec 2013 to 64.5 in Jan 2014.

Table VE-9, Germany, Unemployment Labor Force Survey

	Jan 2014	Dec 2013	Jan 2013
NSA
Number Unemployed Millions	2.36 ∆% Jan 2014 /Dec 2013: 12.4 ∆% Jan 2014/Jan 2013: -5.6	2.10	2.50
% Rate Unemployed	5.5	4.9	5.9
Persons in Employment Millions	40.23 ∆% Jan 2014/Dec 2013: -0.7 ∆% Jan 2014/Jan 2013: 1.3	40.51	39.70
Employment Rate	63.9	64.4	63.0
SA
Number Unemployed Millions	2.14 ∆% Jan 2014/Dec  2013: -1.4 ∆% Jan 2014/Jan 2013: –6.6	2.17	2.29
% Rate Unemployed	5.0	5.1	5.4
Persons in Employment Millions	40.59 ∆% Jan 2014/Dec 2013: 0.1 ∆% Jan 2014/Jan 2013: 1.1	40.54	40.13
Employment Rate	64.5	64.5	63.7

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_067_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-10 stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Mar 2013 and 7.1 percent in Apr 2013. The unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 2013 and rose to 6.8 percent in Jul-Aug 2013. The rate fell to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013 and Nov 2013. The unemployment rate increased to 6.7 percent in Dec 2013 and 7.3 percent in Jan 2013. The unemployment rate reached 7.3 percent in Feb 2014. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

Table VE-10, Germany, Unemployment Rate in Percent of Labor Force

	Percent of Labor Force
Feb 2014	7.3
Jan 2014	7.3
Dec 2013	6.7
Nov	6.5
Oct	6.5
Sep	6.6
Aug	6.8
Jul	6.8
Jun	6.6
May	6.8
Apr	7.1
Mar	7.3
Feb	7.4
Jan	7.4
Dec 2012	6.7
Nov	6.5
Oct	6.5
Sep	6.5
Aug	6.8
Jul	6.8
Jun	6.6
May	6.7
Apr	7.0
Mar	7.2
Feb	7.4
Jan	7.3
Dec 2011	6.6
Nov	6.4
Oct	6.5
Sep	6.6
Aug	7.0
Jul	7.0
Jun	6.9
May	7.0
Apr	7.3
Mar	7.6
Feb	7.9
Jan	7.9
Dec 2010	7.1
Dec 2009	7.8
Dec 2008	7.4
Dec 2007	8.1
Dec 2006	9.6
Dec 2005	11.1

Source: Statistisches Bundesamt Deutschland

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

Chart VE-4 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, increasing to 6.7 percent in Dec 2012, 6.8 percent in Apr 2013 and 6.6 percent in May 2013. The unemployment rate rose slightly to 6.8 percent in Aug 2013, falling to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013. The rate remained at 6.5 percent in Nov 2013, increasing to 6.7 percent in Dec 2013 and 7.3 in Jan 2014. The rate remained at 7.3 percent in Feb 2014.

Chart VE-4, Germany, Unemployment Rate, Unadjusted, Percent

Source: Statistisches Bundesamt Deutschland

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

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

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

Period	Average ∆%
1949-2013	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 decreased from 48.9 in Jan to 47.6 in Feb for a two-month low (http://www.markiteconomics.com/Survey/PressRelease.mvc/585c6448d40f4edc9370242b2832df48). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing economic weakness in the French private sector with favorable growth in manufacturing but moderate increase in new export orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/585c6448d40f4edc9370242b2832df48). 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	Jan month ∆% -0.6 12 months ∆%: 0.7 2/23/14
PPI	Jan month ∆%: -0.6 Jan 12 months ∆%: -1.2 Blog 3/2/14
GDP Growth	IVQ2013/IIIQ2013 ∆%:0.3 IVQ2013/IVQ2012 ∆%: 0.8 Blog 3/31/13 5/19/12 6/30/13 9/29/13 11/17/13 12/29/13 2/16/14
Industrial Production	Dec ∆%: Manufacturing 0.0 12-Month ∆%: Manufacturing 0.5 Blog 2/16/14
Consumer Spending	Manufactured Goods Jan ∆%: -1.5 Dec 12-Month Manufactured Goods ∆%: 0.6 Blog 3/2/14
Employment	Unemployment Rate: IIIQ2013 10.5% Blog 12/8/13
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 average 100 Feb Mfg Business Climate 100 Blog 3/2/14

Links to blog comments in Table FR:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

2/9/14 http://cmpassocregulationblog.blogspot.com/2014/02/financial-instability-rules.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

The monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption decreased 2.1 percent in Jan 2014 after increasing 0.2 percent in Dec 2013 and 1.4 percent in Nov 2013. Consumption of manufactured products decreased 1.5 percent in Jan 2014 after increasing 0.8 percent in Dec 2013 and 0.2 percent in Nov 2013. Total consumption decreased 0.5 percent in Jan 2014 relative to Jan 2013 and consumption of manufactured goods increased 0.6 percent in Jan 2014 relative to Jan 2013. Consumption of energy decreased 6.3 percent in Jan 2014 and decreased 5.5 percent in 12 months. Internal demand is weak throughout most advanced economies.

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

	Total	Food	Eng. Goods	Energy	Mfg Goods
Jan 2014	-2.1	-0.5	-1.6	-6.3	-1.5
Jan 2014/Jan 2013	-0.5	0.1	1.2	-5.5	0.6
Dec 2013	0.2	0.1	1.0	-1.3	0.8
Nov 2013	1.4	-0.5	0.7	7.0	0.2
Oct	-0.2	1.5	0.2	-4.2	0.6
Sep	0.0	-0.2	0.3	-0.5	-0.1
Aug	-0.2	-0.5	0.2	-0.9	-0.2
Jul	0.3	0.5	0.2	0.3	0.6
Jun	-0.6	-0.3	0.8	-4.5	-0.3
May	0.7	1.4	-0.1	1.1	0.8
Apr	-0.6	-3.1	1.1	0.2	-0.5
Mar	1.2	2.6	-1.0	3.4	1.0
Feb	-0.4	-0.9	-0.6	0.9	-0.8
Jan	0.0	0.4	-0.9	1.7	-0.2
Dec 2012	0.0	0.2	0.9	-2.7	0.3
Nov	-0.2	-0.4	-0.7	1.5	-0.4
Oct	-0.1	-0.8	0.3	0.6	0.1
Sep	0.0	-0.2	0.0	0.6	0.0
Aug	-0.6	0.2	-0.6	-2.2	-0.7
Jul	0.1	-0.3	0.4	-0.1	0.1
Jun	0.7	1.3	-0.1	1.3	0.6
May	0.0	-0.4	1.6	-2.8	0.9
Apr	0.3	0.1	-2.8	9.1	-1.4
Mar	-3.1	-2.0	0.8	-14.0	-0.9
Feb	2.6	1.5	-0.1	11.8	1.0
Jan	0.4	1.2	-0.6	1.5	0.3
Dec 2011	-0.5	-0.9	-0.3	0.1	-0.7
Nov	-0.4	0.3	-0.2	-2.3	-0.3
Oct	-0.2	-0.8	0.4	-0.4	-0.2
Sep	-0.4	0.5	-0.1	-2.9	-0.3
Aug	0.9	0.5	0.6	2.5	1.0
Jul	-0.2	-0.2	-0.4	0.5	-0.3
Jun	0.3	-0.3	0.4	1.6	0.5
May	0.3	-0.6	-0.4	4.2	-0.7
Apr	-2.1	0.6	-2.6	-6.2	-1.5
Mar	-0.8	-0.4	-1.0	-1.1	-1.0
Feb	0.7	0.7	1.9	-2.3	1.3
Jan	-0.7	-0.6	0.8	-5.1	0.2
Dec 2010	0.6	0.4	-0.4	4.1	0.1

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20140228

Chart VF-3 of the Institut National de la Statistique et des Études Économiques of France provides consumption of manufactured goods in France in volumes of chained 2005 billion euro from Jan 1980 to Jan 2014. Consumption of manufactured goods increased above the level before the global recession but shows declining trend in recent months with possible stabilization.

Chart VF-1, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion, Seasonally and Working Day Adjusted, Jan 1980 to Jan 2014

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20140228

Chart VF-4 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. There is downward trend of monthly consumption with fluctuations and stability in the final segment followed by another drop in Jan-Feb 2013 and increase in Mar 2013 but renewed decrease in Apr 2013. Consumption rose again in May 2013 and fell in Jun 2013. Consumption increased in Jul 2013 and fell in Aug-Oct 2013. Consumption rose in Nov 2013 driven by electricity and fell marginally in Dec 2013. Consumption fell in Jan 2014.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20140228

Table VF-2 shows the INSEE business climate indicator for manufacturing. The headline composite indicator decreased from 92 in Jan 2013 to 88 in Apr 2013 but rebounded to 92 in May 2013, 93 in Jun 2013, 95 in Jul 2013 and 98 in Aug 2013. The index fell marginally to 97 in Sep 2013 and increased to 98 in Oct 13 and 98 in Nov 2013, approaching the long-term average of 100 since 1976. The index reached 100 in Dec 2013, 100 in Jan 2014 and 100 in Feb 2014. The final row shows general production expectations deteriorating from minus 34 in Feb 2013 to minus 49 in Apr 2013 and improving to minus 46 in May 2013, minus 41 in Jun 2013 and minus 30 in Jul 2013. There is further improvement of general production expectations to minus 18 in Aug 2013, to minus 10 in Sep 2013 and to minus 6 in Oct 2013, which is close to the long-term average of minus 10. General production expectations deteriorated to minus 17 in Nov 2013, improving to minus 11 in Dec 2013. There is further improvement to -5 in Jan 2014 with decline to -6 in Feb 2014. The indicator of demand and export order levels improved from minus 30 in Feb 2013 to minus 29 in May 2013 and minus 28 in Jun 2013, continuing improvement to minus 22 in Aug. There is further improvement to minus 21 in Sep 2013, minus 21 in Oct 2013 and minus 21 in Nov 2013. The index improved to minus 20 in Dec 2013 and minus 18 in Jan 2014, deteriorating to minus 21 in Feb 2014.

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

Mfg 2013-2014	Average since 1976	Nov 13	Dec 13	Jan 14	Feb 14
Composite Indicator	100	98	100	100	100
Past Activity	4	9	11	-1	6
Finished- Goods Inventory Level	13	13	9	5	8
Global Order Books	-18	-23	-21	-19	-21
Export Order Books	-14	-21	-20	-17	-21
Personal Production Expectations	5	1	4	10	9
General Production Expectations	-9	-17	-11	-4	-6

Source: Institut National de la Statistique et des Études Économique

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20140225

Chart VF-3 of the Institut National de la Statistique et des Études Économiques (INSEE) provides the history of the manufacturing business climate indicator of INSEE since 1992. The index fell during the contractions of 1991, 2001 and 2008. After rapid recovery beginning in 2009 the synthetic index shows declining trend in 2011 with upward reversal in 2012 interrupted in Apr through Jul 2012 and a marginal upward move in Aug-Sep 2012 but new decline in Oct 2012. The manufacturing composite indicator marginally reversed in Nov 2012 with stability in Dec 2012 and decline in Jan 2013 but improvement in Feb 2013 and stability in Mar 2013, deteriorating in Apr 2013 and recovering in May-Aug 2013. The composite indicator of manufacturing eased slightly in Sep 2013 and improved marginally in Oct-Nov 2013, close to the long-term average of 100. The index reached 100 in Dec 2013, 100 in Jan 2014 and 100 in Feb 2014.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20140225

Chart VF-4 of the Institut National de la Statistique et des Études Économiques (INSEE) shows strong drops of the turning point indicator in the recessions of 1991, 2001 and 2008. There have been other drops of this index. The turning point indicator has fallen to levels in the direction of past contractions and after rebounding in Oct and Nov 2011 is showing declining trend in Jan 2012 with slight reversal in Feb followed by significant improvement in Mar and deterioration in Apr through Jul 2012. There is new improvement in Aug 2012 followed by decline in Sep-Oct 2012 followed by rebound in Nov 2012 and stability in Dec 2012 to Jan-Mar 2013, deteriorating in Apr-May 2013. The index improved in Jun-Sep 2013 and stabilized in Oct 2013, declining in Nov 2013. The index increased in Dec 2013 and in Jan 2014, declining in Feb 2014.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20140225

Chart VF-4 of the Institut National de la Statistique et des Études Économiques (INSEE) of France provides the composite climate indicator for French business. There is recovery in Jul-Sep 2013 and stability in Oct-Nov 2013. The index fell marginally in Dec 2013 and in Jan-Feb 2014.

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=105&date=20140225

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	Feb month ∆%: -0.1 Feb 12-month ∆%: 0.5 Blog 3/2/14
Producer Price Index	Dec month ∆%: -0.1 Dec 12-month ∆%: -2.1 Blog 2/2/14
GDP Growth	IVQ2013/IIIQ2013 SA ∆%: 0.1 IVQ2013/IVQ2012 NSA ∆%: minus 0.8 Blog 3/17/13 6/16/13 8/11/13 9/15/13 11/17/13 12/15/13 2/16/14
Labor Report	Jan 2014 Participation rate 63.6% Employment ratio 55.3% Unemployment rate 12.9% Youth Unemployment 42.4% Blog 3/2/14
Industrial Production	Dec month ∆%: -0.9 12 months CA ∆%: -0.7 Blog 2/16/14
Retail Sales	Dec month ∆%: -0.3 Dec 12-month ∆%: -2.6 Blog 3/2/13
Business Confidence	Mfg Feb 99.1, Oct 97.4 Construction Feb 77.1, Oct 80.9 Blog 3/2/14
Trade Balance	Balance Dec SA €3617 million versus Nov €3034 Exports Dec month SA ∆%: 5.1; Imports Dec month ∆%: 3.6 Exports 12 months Dec NSA ∆%: 4.9 Imports 12 months NSA ∆%: 0.6 Blog 2/23/14

Links to blog comments in Table IT:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

2/16/14 http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html

2/2/14 http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.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

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.2 percent in Dec 2006 to 12.9 percent in Jan 2014. The rate of youth unemployment for ages 15 to 24 years increased from 20.2 percent in Dec 2006 to 42.4 percent in Jan 2014. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %	Unemployment Rate 15-24 Years %
Jan 2014	63.6	55.3	12.9	42.4
Dec 2013	63.5	55.3	12.7	41.7
Nov	63.6	55.4	12.8	41.7
Oct	63.5	55.5	12.5	41.5
Sep	63.5	55.4	12.5	40.9
Aug	63.4	55.5	12.4	40.6
Jul	63.5	55.6	12.1	39.7
Jun	63.4	55.7	12.1	39.4
May	63.4	55.6	12.2	38.5
Apr	63.4	55.7	12.0	39.4
Mar	63.6	55.9	11.9	39.1
Feb	63.7	56.0	11.9	38.7
Jan	63.7	56.0	11.8	38.4
Dec 2012	63.7	56.3	11.5	37.5
Nov	63.7	56.4	11.3	37.5
Oct	63.8	56.5	11.3	36.4
Sep	63.6	56.6	10.9	36.1
Aug	63.6	56.7	10.7	34.6
Jul	63.7	56.8	10.8	35.4
Jun	63.8	56.8	10.8	34.7
May	63.7	57.0	10.4	35.7
Apr	63.7	56.9	10.6	34.8
Mar	63.5	56.9	10.3	35.0
Feb	63.4	57.0	10.0	33.6
Jan	63.1	57.0	9.5	32.2
Dec 2011	63.0	56.9	9.5	31.9
Nov	62.7	56.8	9.3	31.9
Oct	62.6	57.0	8.8	30.4
Sep	62.5	56.8	8.9	30.5
Aug	62.4	57.0	8.5	29.3
Jul	62.2	56.9	8.3	28.7
Jun	62.0	57.0	8.0	27.9
May	62.1	57.0	8.1	27.8
Apr	61.8	56.9	7.7	27.3
Mar	62.1	57.1	7.9	27.8
Feb	61.8	56.8	7.9	27.6
Jan	62.0	56.9	8.0	28.2
Dec 2010	62.1	56.9	8.2	28.4
Dec 2009	62.4	57.1	8.4	26.7
Dec 2008	62.5	58.2	6.8	22.7
Dec 2007	63.1	58.9	6.5	21.6
Dec 2006	62.4	58.5	6.2	20.2
Dec 2005	62.6	57.8	7.6	23.4
Dec 2004	62.5	57.5	7.9	23.7

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/113952

Table VG-2 provides more detail on the labor report for Italy in Jan 2014. The level of employment decreased 8,000 from Dec 2013 to Jan 2014 and fell 330,000 from Jan 2013 to Jan 2014. Unemployment increased 60,000 in Jan 2014 and increased 260,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 42.4 percent in Jan 2014 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

Jan 2014	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22,259	-8	0.0	-330	-1.5
UNE	3,293	60	1.9	260	8.6
INA   15-64	14,364	-45	-0.3	-9	-0.1
EMP 15-24	937	-7	-0.7	-97	-9.4
UNE 15-24	690	16	2.4	45	6.9
INA 15-24	4,372	-14	-0.3	20	0.5
EMP %	55.3		-0.1		-0.7
UNE %	12.9		0.2		1.1
Youth UNE %  15-24	42.4		0.7		4.0
INA % 15-64	36.4		-0.1		0.1

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

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/113952

Chart VG-1 of the Istituto Nazionale di Statistica provides the rate of unemployment in Italy. The rate increased from 11.8 percent in Jan 2013 to 12.9 percent in Jan 2014.

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment dropped from 21.929 million in Jan 2013 to 22.259 million in Jan 2014.

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

Source: Istituto Nazionale di Statistica

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

An important part of the analysis of Blanchard (2011WEOSep, 2012WEOApr) is the much more difficult adjustment of economies with need of fiscal consolidation in the presence of weak economic growth. Demand has significantly weakened throughout the advanced economies. There are many sound fundamentals in Italy such as high income and competitive companies. The restraints consist of low economic growth with high debt/GDP ratio. Table VG-3 provides growth of retail sales for Italy. Retail sales decreased 0.3 percent in Dec 2013 relative to Nov 2013, decreased 0.4 percent in Oct-Dec 2013 relative to Jul-Sep 2013, decreased 2.6 percent in Dec 2013 relative to Dec 2012 and decreased 2.1 percent cumulatively in Jan-Dec 2013 relative to Jan-Dec 2012. Food retail sales outperform non-food retail sales.

Table VG-3, Italy, Retail Sales ∆%

	Dec 2013/  Nov 2013 SA	Oct-Dec 13/   Jul-Sep 13 SA	Dec 2013/ Dec 2012 NSA	Jan-Dec 2013/ Jan-Dec 2012
Food	-0.5	-0.3	-2.3	-1.1
Non-food	-0.3	-0.4	-2.7	-2.7
Total	-0.3	-0.4	-2.6	-2.1

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/113440

Chart VG-3 provides 12-month percentage changes of retail sales at current prices. There is improvement in the final segment from Feb to May 2013 with sharper decline in Jun 2013 and recovery in Jul-Aug 2013. Sales declined again in Sep 2013, increasing in Oct-Nov 2013. Sales fell in Dec 2013.

Chart VG-3, Italy, Percentage Changes of Retail Sales in 12 Months

Source: Istituto Nazionale di Statistica

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

A longer perspective of retail sales in Italy is provided by monthly and 12-month percentage changes in 2011, Jan-Dec 2012, Jan-Dec 2013 and annual rates for 2011, 2012 and 2013 in Table VG-4. Retail sales did not decline very sharply during the global recession but fell 0.8 percent in 2011, 1.7 percent in 2012 and 2.1 percent in 2013. There is an evident declining trend in 2011 with few monthly increases and similar weakness in 2012 with multiple monthly declines. Negative percentage changes in 12 months increased to more than 3 percent with decrease of 3.2 percent in the 12 months ending in Mar 2013 and decrease of 3.0 percent in the 12 months ending in Jun 2013. Retail sales decreased 0.3 percent in Dec 2013 and fell 2.6 percent in 12 months.

Table VG-4, Italy, Retail Sales Month and 12-Month ∆%

	Month ∆% SA	12-Month ∆% NSA
Dec 2013	-0.3	-2.6
Nov	0.0	0.2
Oct	-0.1	-1.6
Sep	-0.3	-2.8
Aug	-0.1	0.2
Jul	-0.2	-0.8
Jun	-0.1	-3.0
May	0.1	-1.2
Apr	0.0	-2.9
Mar	-0.2	-3.2
Feb	-0.1	-4.8
Jan	-0.4	-2.8
Dec 2012	0.1	-3.4
Nov	-0.2	-2.4
Oct	-0.7	-3.4
Sep	-0.1	-1.0
Aug	0.0	-0.4
Jul	-0.2	-3.1
Jun	-0.1	0.2
May	-0.1	-1.1
Apr	-1.2	-6.3
Mar	0.3	2.3
Feb	-0.4	0.7
Jan	1.0	-0.9
Dec 2011	-0.9	-3.2
Nov	-0.5	-1.5
Oct	0.7	-0.9
Sep	-0.3	-1.1
Aug	-0.4	0.1
July	0.0	-1.7
Jun	-0.4	-0.6
May	-0.5	-0.3
Apr	0.9	3.3
Mar	-0.2	-1.9
Feb	-0.3	0.1
Jan	-0.2	-0.5
Dec 2010	0.5	0.6
2013		-2.1
2012		-1.7
2011		-0.8

Source: Istituto Nazionale di Statistica http://www.istat.it/it/archivio/113440

Italy’s index of business confidence in manufacturing and construction is provided in Table VG-5. There has been improvement of manufacturing confidence below the historical average of 100 from 97.4 in Oct 2013 to 98.3 in Dec 2013 with decline to 97.7 in Jan 2014 and increase to 99.1 in Feb 2014. Order books improved from minus 27 in Sep 2013 to minus 25 in Feb 2014. There is oscillation in construction with the index moving from 80.9 in Oct 2013 to 82.0 in Dec 2013, declining to 77.1 in Feb 2014.

Table VG-5, Italy, Index of Business Confidence in Manufacturing and Construction 2005=100

	Feb  2014	Jan      2014	Dec       2013	Nov     2013	Oct      2013
Mfg Confidence	99.1	97.7	98.3	98.0	97.4
Order Books	-25	-27	-27	-25	-27
Stocks Finished Products	-4	-1	-4	-1	-2
Production Expectation	5	5	4	5	4
Construction Confidence	77.1	76.3	82.0	79.9	80.9
Order Books	-49	-49	-42	-45	-46
Employment	-21	-23	-21	-21	-19

Mfg: manufacturing

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/113842

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	1.8
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*	-1.3
2000-2013	1.5

*Absolute change from 2007 to 2012

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/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	Jan month ∆%: -0.6 Jan 12-month ∆%: 1.9 Blog 2/23/14
Output/Input Prices	Output Prices: Jan 12-month NSA ∆%: 0.9; excluding food, petroleum ∆%: 1.2 Input Prices: Jan 12-month NSA ∆%: -3.1 Excluding ∆%: -2.8 Blog 2/23/14
GDP Growth	IVQ2013 prior quarter ∆% 0.7; year earlier same quarter ∆%: 2.7 Blog 3/31/13 4/28/13 5/26/13 7/28/13 8/25/13 9/29/13 10/27/13 12/1/13 12/22/13 2/2/14 3/2/14
Industrial Production	Dec 2013/Dec 2012 ∆%: Production Industries 1.8; Manufacturing 1.5 Blog 2/9/14
Retail Sales	Jan month ∆%: -1.5 Jan 12-month ∆%: 4.3 Blog 2/23/14
Labor Market	Oct-Dec Unemployment Rate: 7.2%; Claimant Count 3.6%; Earnings Growth 1.1% Blog 2/23/14 LMGDP 3/2/14
GDP and the Labor Market	IVQ2013 Weekly Hours 101.8, GDP 98.6, Employment 102.2 IQ2008 =100 GDP IVQ13 98.6 IQ2008=100 Blog 3/2/14
Trade Balance	Balance SA Dec minus ₤1026 million Exports Dec ∆%: 2.1; Oct-Dec ∆%: -0.1 Imports Dec ∆%: -3.8 Oct-Dec ∆%: -0.4 Blog 2/9/14

Links to blog comments in Table UK:

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

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

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

The UK Office for National Statistics provides important analysis of the relation of GDP and the labor market (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-labour-market-update/index.html

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--january-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--december-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q2--august-labour-market-update/index.html

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

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2012-q4--january-gdp-update/sum-jan13.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2012-q4--february-labour-market-update/sum-2012-q4---february-labour-update.html). The UK economy grew 0.7 percent in IVQ2013 but output is still 1.4 percent below the level before the global recession in IQ2008 (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--january-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--december-gdp-update/sum-dec-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html). Chart VH-1 of the UK Office for National Statistics (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/sum-may13-labour.html) shows weakening output but relatively faster increases in employment and hours worked. Output growth and labor market improvement are converging.

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-gdp-update/index.html

Table VH-L1 of the UK Office for national Statistics provides the data for GDP and the labor market (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-gdp-update/index.html

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-labour-market-update/index.html

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--january-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--december-gdp-update/sum-dec-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--november-gdp-update/sum-nov-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q3-2013--october-gdp-update/sum-october-gdp.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q2--august-labour-market update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-gdp-update/index.html http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/2013-q1--may-labour-market-update/sum-may13-labour.html) provides total weekly hours, output and employment quarterly from 2008 to 2013. Improving output has been accompanied recently by improvements in hours worked and employment. From IQ2008 to IVQ2013, employment increased 2.2 percent and hours worked 1.8 percent while GDP is still 1.4 percent lower.

Table VH-L1, UK, Indices of Quarterly Employment Ages 16 and Over, Total Hours Worked and GDP, 2008-2013

			Index, Q1 2008 =100
	GDP, CVM	Employment, Aged 16 +	Total weekly hours, Aged 16 +
	ABMI	MGRZ	YBUS
2008 Q1	100.0	100.0	100.0
Q2	99.1	100.1	98.9
Q3	97.7	99.6	98.9
Q4	95.6	99.4	98.3
2009 Q1	93.2	98.9	96.7
Q2	92.8	97.9	96.3
Q3	92.8	97.8	95.8
Q4	93.2	97.9	95.8
2010 Q1	93.7	97.6	95.7
Q2	94.7	98.2	96.5
Q3	95.0	98.9	97.0
Q4	94.8	98.7	97.4
2011 Q1	95.3	99.0	97.4
Q2	95.4	99.0	96.3
Q3	95.9	98.5	97.1
Q4	95.8	98.8	97.3
2012 Q1	95.8	99.2	98.0
Q2	95.4	99.9	98.5
Q3	96.2	100.2	99.6
Q4	96.0	100.8	99.8
2013 Q1	96.4	100.7	100.1
Q2	97.1	100.9	100.4
Q2	97.9	101.5	101.4
Q4	98.6	102.2	101.8

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-gdp-update/index.html

Chart VH-2 of the UK Office for National Statistics provides comparison of output performance during four cycles in the 1970s, 1980s, 1990s and 2000s. Output is indexed to the pre-recession peak. For example, the index for the current economic cycles is 100 for IQ2008. Output performance was stronger in the earlier economic cycles.

Chart VH-2, UK, Index of Output in Economic Cycles

UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--january-gdp-update/index.html

Table VH-L2 provides output in the four economic cycles. Output increased 8.8 percent in the cycle of the early 1970s, 11.7 percent in the cycle of the 1980s and 15.8 percent in the cycle of the 1990s. Output is 1.3 percent below the pre-recession peak in IQ2008.

Table VH-L2, Index of Output in Economic Cycles, Pre-Contraction = 100

Early 70s (1973 Q2=100)	Early 80s (1979 Q4=100)	Early 90s (1990 Q2=100)	Latest (2008 Q1=100)
ABMI	ABMI	ABMI	ABMI
100.0	100.0	100.0	100.0
99.1	99.0	99.1	99.1
99.1	97.3	98.4	97.6
96.8	97.1	98.3	95.6
98.6	95.8	97.9	93.2
99.5	95.4	97.6	92.8
98.4	95.4	97.9	92.8
98.6	96.6	98.4	93.2
97.2	96.6	98.6	93.7
97.0	97.1	99.4	94.6
98.4	98.3	100.3	95.0
100.0	98.3	101.4	94.8
99.1	99.0	102.1	95.3
100.0	100.4	103.2	95.4
102.1	101.3	104.1	95.9
102.3	102.5	105.5	95.8
101.8	103.8	107.1	95.7
102.5	104.8	108.7	95.4
104.1	104.2	109.6	96.1
104.6	104.6	110.1	96.0
105.5	106.3	110.9	96.5
106.7	107.5	112.3	97.3
107.6	109.2	112.9	98.0
106.7	109.2	114.2	98.7
111.3	110.1	114.8
108.8	111.7	115.8

UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--january-gdp-update/index.html

Table VH-1 provides quarter on quarter chained value measures of GDP since 1998 in the second estimate for IVQ2013 (http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html). GDP grew 0.7 percent in IVQ2013 relative to IIIQ2013. Growth of 0.8 percent in IIIQ2012 interrupted three consecutive quarters of weakness in GDP growth. Most advanced economies are underperforming relative to the period before the global recession. The UK Office for National Statistics analyzes that the decline in the impulse of growth in the UK originated in weakness in markets in the UK and worldwide. The UK Office for National Statistics estimates that GDP in IVQ2013 is lower by 1.4 percent relative to the peak in IQ2008 (http://www.ons.gov.uk/ons/rel/elmr/gdp-and-the-labour-market/q4-2013--february-gdp-update/index.html). The UK Office for National Statistics estimates the contraction of 7.2 percent from peak to trough (http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2013/index.html), which is roughly equal at 7.1 percent to compounding the quarterly rates in Table VH-1 from IIQ2008 to IIQ2009.

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

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

There are four periods in growth of GDP in a quarter relative to the same quarter a year earlier in the UK in the years from 2000 to the present as shown in Table VH-2. (1) Growth rates were quite high from 2000 to 2007. (2) There were six consecutive quarters of contraction of GDP from IIIQ2008 to IVQ2009. Contractions relative to the quarter a year earlier were quite sharp with the highest of 4.3 percent in IVQ2008, 6.8 percent in IQ2009, 6.3 percent in IIQ2009 and 5.0 percent in IIIQ2009. (3) The economy bounced strongly with 2.0 percent in IIQ2010, 2.4 percent in IIIQ2010 and 1.8 percent in IVQ2010. (4) Recovery in 2011 did not continue at rates comparable to those in 2000 to 2007 and even relative to those in the final three quarters of 2010. Growth relative to the same quarter a year earlier fell from 1.8 percent in IVQ2010 to 1.7 percent in IQ2011, 0.8 percent in IIQ2011, 1.0 percent in IIIQ2011 and 1.1 percent in IVQ2011 but only 0.6 percent in IQ2012, change of 0.0 percent in IIQ2012 relative to IQ2011, increase of 0.2 percent in IIIQ2012 and 0.2 percent in IVQ2012. Growth increased to 0.6 percent in IQ2013 relative to a year earlier and 0.4 percent in IQ2013 relative to IVQ2012. GDP increased 0.7 percent in IIQ2013 relative to IQ2013 and 1.8 percent in IIQ2013 relative to IIQ2012. GDP increased 0.8 percent in IIIQ2013 and 1.9 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2013 and 2.7 percent relative to a year earlier. In IQ2012, GDP changed 0.0 percent and increased 0.6 percent relative to a year earlier. In IIQ2012, GDP fell 0.4 percent relative to IQ2012 and changed 0.0 percent relative to a year earlier. In IIIQ2012, GDP increased 0.8 percent and increased 0.2 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.1 percent and increased 0.2 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. In IIQ2013, GDP increased 0.7 percent and 1.8 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 1.9 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2013 and 2.7 percent relative to a year earlier.

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

	IQ	IIQ	IIIQ	IV
2013	0.6	1.8	1.9	2.7
2012	0.6	0.0	0.2	0.2
2011	1.7	0.8	1.0	1.1
2010	0.5	2.0	2.4	1.8
2009	-6.8	-6.3	-5.0	-2.5
2008	2.8	0.6	-2.1	-4.3
2007	2.4	3.3	4.3	3.7
2006	4.0	3.0	2.3	1.8
2005	2.0	2.8	3.7	4.4
2004	4.7	3.7	2.5	1.9
2003	3.2	3.8	4.3	4.5
2002	1.8	1.9	2.3	3.2
2001	2.4	2.1	2.2	2.0
2000	4.7	5.7	4.1	3.0
1999	2.8	2.1	3.2	3.6
1998	4.0	3.5	3.4	3.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-3 provides annual percentage changes of gross value added and key components. Production fell 9.5 percent in 2009 and its most important component manufacturing fell 10.2 percent. Services fell 3.9 percent in 2009. Services grew in all years from 2010 to 2013 while manufacturing fell 1.7 percent in 2012 and 0.6 percent in 2013.

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

	TP	MF	CONS	SERV	GVA BP	GVA EX
2010 Weights	152	104	63	778	1000	981
1998	1.2	0.5	1.4	5.0	3.8	3.8
1999	1.2	0.5	1.3	3.8	3.1	2.9
2000	1.8	2.1	0.8	5.6	4.5	4.9
2001	-1.6	-1.7	1.8	3.0	1.8	2.2
2002	-1.4	-2.4	5.7	2.3	2.0	2.1
2003	-0.6	-0.5	4.9	5.2	4.1	4.5
2004	0.7	1.9	5.2	3.4	3.0	3.5
2005	-0.8	-0.2	-2.4	5.2	3.6	4.0
2006	0.2	1.8	0.7	3.4	2.7	3.1
2007	0.4	0.8	2.1	4.4	3.5	3.6
2008	-2.9	-2.8	-2.5	0.0	-0.6	-0.5
2009	-9.5	-10.2	-13.3	-3.9	-5.4	-5.4
2010	2.8	4.2	8.3	0.8	1.6	1.8
2011	-1.2	1.8	2.3	1.5	1.2	1.6
2012	-2.5	-1.7	-7.5	1.3	0.3	0.5
2013	-0.3	-0.6	1.3	1.9	1.7	1.9

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Percentage changes of gross value added and components are in Table VH-4A. Gross value added increased 0.7 percent in IVQ2013 with growth of services of 0.8 percent and production of 0.5 percent while manufacturing expanded 0.7 percent.

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

	TP	MF	CONS	SERV	GVA	GVA EX
2010 Weights	152	104	63	778	1000	981
1998 Q2	0.0	-0.4	-1.9	1.6	1.0	1.0
1998 Q3	-0.6	-0.7	0.4	0.9	0.5	0.6
1998 Q4	-0.2	-0.7	0.2	1.6	1.1	1.0
1999 Q1	0.2	0.1	0.1	0.3	0.3	0.2
1999 Q2	0.3	0.3	0.7	0.2	0.3	0.3
1999 Q3	2.2	2.2	2.3	1.5	1.7	1.6
1999 Q4	0.5	0.3	-0.9	1.7	1.2	1.3
2000 Q1	0.2	0.4	1.4	1.6	1.3	1.3
2000 Q2	0.2	0.2	-0.7	2.0	1.5	1.8
2000 Q3	-0.3	-0.2	-1.7	0.6	0.3	0.4
2000 Q4	0.3	1.0	1.0	0.1	0.2	0.4
2001 Q1	-0.5	-0.7	-0.4	1.5	0.8	0.9
2001 Q2	-1.1	-1.7	2.8	0.5	0.2	0.2
2001 Q3	-0.1	0.0	0.2	0.4	0.3	0.4
2001 Q4	-1.3	-1.6	1.1	0.3	0.0	0.0
2002 Q1	0.3	0.1	1.1	0.4	0.6	0.7
2002 Q2	-0.5	-1.3	1.1	0.8	0.6	0.4
2002 Q3	0.0	1.0	3.6	0.9	0.9	1.3
2002 Q4	-0.2	-1.5	1.1	1.3	1.0	0.7
2003 Q1	-0.7	-0.4	-2.3	1.4	0.8	0.9
2003 Q2	-0.2	0.4	3.0	1.5	1.3	1.6
2003 Q3	0.8	0.7	2.7	1.3	1.3	1.4
2003 Q4	0.5	0.8	2.5	1.4	1.3	1.4
2004 Q1	0.2	0.9	2.9	0.4	0.5	0.6
2004 Q2	0.6	0.5	-1.3	0.5	0.4	0.4
2004 Q3	-1.8	-1.4	-0.7	0.6	0.1	0.3
2004 Q4	0.7	1.3	-1.0	0.9	0.7	0.8
2005 Q1	-0.6	-0.9	0.3	1.5	1.0	1.1
2005 Q2	0.9	0.8	-0.4	1.7	1.4	1.5
2005 Q3	-1.3	-0.6	-1.8	1.7	0.9	1.2
2005 Q4	0.4	0.1	-0.4	1.7	1.4	1.4
2006 Q1	0.8	0.7	0.7	0.3	0.4	0.4
2006 Q2	-0.6	0.9	0.8	0.3	0.2	0.4
2006 Q3	0.0	0.4	0.5	0.3	0.3	0.3
2006 Q4	0.2	0.8	1.8	0.8	0.7	0.8
2007 Q1	0.2	-0.5	1.0	1.3	1.1	1.0
2007 Q2	0.2	0.2	-0.4	1.8	1.3	1.4
2007 Q3	-0.2	0.0	-1.4	1.8	1.2	1.3
2007 Q4	0.4	0.2	1.3	0.0	0.1	0.1
2008 Q1	-0.6	0.1	0.9	0.1	0.2	0.2
2008 Q2	-1.0	-1.5	-1.4	-0.5	-0.6	-0.6
2008 Q3	-1.5	-1.6	-2.7	-1.3	-1.5	-1.5
2008 Q4	-4.6	-4.9	-5.3	-1.5	-2.3	-2.3
2009 Q1	-4.9	-5.8	-7.1	-1.6	-2.5	-2.5
2009 Q2	-0.1	0.1	-1.9	-0.6	-0.6	-0.7
2009 Q3	-0.9	-0.2	0.3	0.1	0.0	0.1
2009 Q4	0.7	1.3	1.0	0.2	0.3	0.3
2010 Q1	1.3	0.9	3.1	0.3	0.6	0.6
2010 Q2	1.7	2.0	5.9	0.4	1.0	1.0
2010 Q3	0.1	1.2	1.7	0.5	0.5	0.6
2010 Q4	0.7	0.8	-2.2	-0.3	-0.3	-0.2
2011 Q1	-1.0	0.2	1.6	0.5	0.4	0.5
2011 Q2	-1.1	0.2	1.0	0.4	0.2	0.4
2011 Q3	-0.3	-0.4	-1.1	1.0	0.6	0.7
2011 Q4	-0.6	-0.4	-0.6	0.0	-0.1	0.0
2012 Q1	-0.5	-0.1	-3.7	0.3	-0.1	0.0
2012 Q2	-1.0	-1.3	-3.5	-0.1	-0.4	-0.4
2012 Q3	0.1	0.5	-2.0	1.0	0.8	0.8
2012 Q4	-2.0	-1.7	1.4	-0.1	-0.1	0.1
2013 Q1	0.5	-0.2	-1.0	0.6	0.4	0.3
2013 Q2	0.7	0.6	2.5	0.5	0.7	0.7
2013 Q3	0.5	0.8	2.6	0.8	0.8	0.8
2013 Q4	0.5	0.7	0.2	0.8	0.7	0.8

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Growth rates of gross value added (GVA) and output components of gross value added in a quarter from the preceding quarter are in Table VH-4. Growth of GVA in IVQ2013 originated in growth of services of 0.8 percent and total production of 0.5 percent while manufacturing grew 0.7 percent and construction 0.2 percent.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Agriculture	-2.0	-1.9	-0.1	0.2	-5.0	1.6	-2.7	-0.1
Total Production	-0.5	-1.0	0.1	-2.0	0.5	0.7	0.5	0.5
Manufacturing	-0.1	-1.3	0.5	-1.7	-0.2	0.6	0.8	0.7
Extraction	-2.8	-2.9	0.1	-9.5	5.3	2.1	0.3	-1.9
Electricity, gas and air	-0.3	4.9	-2.7	3.5	1.2	-2.1	-5.9	1.8
Water & sewerage	-0.6	-1.6	0.5	0.6	-0.6	2.6	4.7	0.8
Construction	-3.7	-3.5	-2.0	1.4	-1.0	2.5	2.6	0.2
Total Services	0.3	-0.1	1.0	-0.1	0.6	0.5	0.8	0.8
Distn, hotels & catering	0.4	-0.1	1.7	-0.6	1.3	1.6	1.2	0.5
Transport, storage & comms	0.8	-1.5	-0.4	0.5	1.6	0.0	-0.1	0.5
Business services & finance	0.0	0.2	0.9	0.5	0.1	0.7	1.1	1.2
Government & other	0.5	0.0	1.3	-0.8	0.2	0.0	0.4	0.6

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Services contributed 0.6 percentage points to growth of GVA in IVQ2013, 0.6 percentage points in IIIQ2013, 0.5 percentage points in IQ2013 and 0.5 percentage points in IQ2013, as shown in Table VH-5. Business services and finance contributed 0.4 percentage points in IIIQ2013 and 0.4 percentage points in IVQ2013. Manufacturing did not contribute to growth in IQ2013 and manufacturing and production contributed 0.1 percentage points in IIQ2013, 0.1 percentage points in IIIQ2013 and 0.1 percentage points in IVQ2013.

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

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-6 provides UK growth of value added by output components in a quarter relative to the same quarter a year earlier for 2012 and 2013. Total production and manufacturing fell in all four quarters of 2012 and in the first three quarters of 2013 relative to the same quarter a year earlier. Total production increased 2.3 percent in IVQ2013 relative to a year earlier while manufacturing increased 1.9 percent. Total services supported the economy with growth in all quarters relative to a year earlier from IQ2012 to IVQ2013. Construction fell sharply in all four quarters of 2012 and in the first quarter of 2013 relative to a year earlier with growth of 0.8 percent in IIQ2013, 5.6 percent in IIIQ2013 and 4.3 percent in IVQ2013.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Agriculture	-2.2	-3.8	-3.7	-3.7	-6.7	-3.4	-5.9	-6.2
Total Production	-2.4	-2.3	-1.9	-3.4	-2.4	-0.7	-0.3	2.3
Manufacturing	-0.7	-2.1	-1.3	-2.6	-2.7	-0.9	-0.5	1.9
Extraction	-11.5	-7.2	-6.0	-14.5	-7.3	-2.6	-2.4	5.8
Electricity, gas and air	-5.7	2.4	-2.9	5.3	6.9	-0.2	-3.5	-5.1
Water & sewerage	1.0	-1.1	0.5	-1.1	-1.2	3.0	7.3	7.6
Construction	-4.2	-8.6	-9.4	-7.7	-5.1	0.8	5.6	4.3
Total Services	1.8	1.2	1.2	1.1	1.3	2.0	1.8	2.7
Distn, hotels & catering	0.7	0.0	1.4	1.3	2.3	4.0	3.5	4.7
Transport, storage & comms	2.3	0.1	-1.8	-0.6	0.2	1.7	2.0	2.0
Business services & finance	2.8	2.4	1.6	1.6	1.7	2.1	2.4	3.1
Government & other	0.8	0.8	2.1	1.0	0.8	0.7	-0.3	1.2

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Total production subtracted from growth of value added in all quarters of 2012 and the first three quarters of 2013 relative to a year earlier, contributing 0.2 percentage points in IVQ2013, as shown in Table VH-7. Total services added to growth of value added in all four quarters of 2012 and all four quarters of 2013 relative to a year earlier. Construction also deducted in all four quarters of 2012 and the first quarter of 2013 relative to a year earlier with contribution of 0.1 percentage points in IIQ2013, adding 0.3 percentage points in IIIQ2013 and IVQ2013.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Agriculture	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total Production	-0.4	-0.3	-0.3	-0.5	-0.3	-0.1	-0.1	0.3
Manufacturing	-0.1	-0.2	-0.1	-0.3	-0.3	-0.1	-0.1	0.2
Extraction	-0.2	-0.1	-0.1	-0.3	-0.1	0.0	0.0	0.1
Electricity, gas and air	-0.1	0.0	0.0	0.1	0.1	0.0	0.0	-0.1
Water & sewerage	0.0	0.0	0.0	0.0	0.0	0.0	0.1	0.1
Construction	-0.3	-0.6	-0.6	-0.5	-0.3	0.1	0.3	0.3
Total Services	1.3	0.9	0.9	0.8	1.1	1.6	1.5	2.1
Distn, hotels & catering	0.1	0.0	0.2	0.2	0.3	0.5	0.5	0.7
Transport, storage & comms	0.3	0.0	-0.2	-0.1	0.0	0.2	0.2	0.2
Business services & finance	0.9	0.8	0.5	0.5	0.5	0.7	0.8	1.0
Government & other	0.2	0.2	0.5	0.2	0.2	0.2	-0.1	0.3

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Quarter-on-quarter growth of value added by expenditure components is in Table VH-8. Household final consumption expenditure grew 0.9 percent in IQ2013 relative to IVQ2012, 0.2 percent in IIQ2013, 0.9 percent in IIIQ2013 and 0.4 percent in IVQ2013. General government consumption decreased 0.8 percent in IQ2013 and increased 1.8 percent in IIQ2013, 0.6 percent in IIIQ2013 and 0.3 percent in IVQ2013. Gross capital formation increased 7.9 percent in IIIQ2013 and gross fixed capital formation (GFCF) increased 1.7 percent. Gross capital formation increased 1.1 percent in IVQ2013 and GFCF 2.4 percent. Exports changed 0.0 percent in IQ2013 but grew 3.1 percent in IIQ2013 while imports fell 2.4 percent in IQ2013 and increased 3.0 percent in IIQ2013. In IIIQ2013, exports fell 2.8 percent and imports increased 0.7 percent. In IVQ2013, exports increased 0.4 percent and imports fell 0.9 percent.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Household final consumption expenditure	0.6	0.3	0.3	0.7	0.9	0.2	0.9	0.4
NPISH final consumption expenditure	-1.8	4.6	-2.5	0.1	7.8	-8.6	6.4	-7.3
General government final consumption expenditure	2.5	-1.5	0.1	0.4	-0.8	1.8	0.6	0.3
Gross capital formation	0.3	3.3	0.0	-0.8	-5.5	3.6	7.9	1.1
- of which GFCF	5.1	-2.8	-2.2	-4.5	0.5	3.9	1.7	2.4
- of which Business investment	7.1	-1.8	0.4	-7.8	3.1	0.7	2.0	2.4
Exports	-1.7	-1.0	2.9	-1.9	0.0	3.1	-2.8	0.4
less Imports	0.7	1.4	0.6	-0.2	-2.4	3.0	0.7	-0.9

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-9 provides contributions to value added by expenditure components in a quarter relative to the prior quarter. In IQ2013, household final consumption expenditure contributed 0.6 percentage points to growth, 0.1 percentage points in IIQ2013, 0.6 percentage points in IIIQ2013 and 0.3 percentage points in IVQ2013. Net trade deducted 0.5 percentage points in IVQ2012 but added 0.8 percentage points in IQ2013 and 0.0 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.1 percentage points, adding 0.4 percentage points in IVQ2013. Gross fixed capital formation (GFCF) deducted 0.3 percentage points in IIIQ2012 and 0.6 percentage points IVQ2012, adding 0.1 percentage points in IQ2013, 0.5 percentage points in IIQ2013, 0.2 percentage points in IIIQ2013 and 0.3 percentage points in IVQ2013.

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

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-10 provides UK growth of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure grew 2.2 percent in IQ2013 relative to a year earlier, 2.1 percent in IIQ2013, 2.7 percent in IIIQ2013 and 2.4 percent in IVQ2013. Household final consumption grew 1.9 percent in IVQ2012 after growing 1.8 percent in IIIQ2012, 1.4 percent in IIQ2012 and 1.0 percent in IQ2012. General government final consumption expenditure decreased 1.7 percent in IQ2013 and grew 1.6 percent in IIQ2013, 2.0 percent in IIIQ2013 and 1.9 percent in IVQ2013. Gross fixed capital formation (GFCF) fell 8.7 percent in IQ2013 and 2.5 percent in IIQ2013, increasing 1.4 percent in IIIQ2013 and 8.7 percent in IVQ2013. Exports changed 0.0 percent in IQ2013 with imports decreasing 0.7 percent but exports increased 4.2 percent in IIQ2013 and imports grew 0.9 percent. In IIIQ2013, exports fell 1.6 percent and imports increased 1.1 percent. Exports increased 0.7 percent in IVQ2013 while imports increased 0.4 percent.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Household final consumption expenditure	1.0	1.4	1.8	1.9	2.2	2.1	2.7	2.4
NPISH final consumption expenditure	-0.2	0.1	0.2	0.2	10.0	-3.9	4.9	-2.8
General government final consumption expenditure	2.6	0.9	1.5	1.5	-1.7	1.6	2.0	1.9
Gross capital formation	4.9	-2.1	-6.8	2.8	-3.2	-2.9	4.8	6.8
- of which GFCF	9.3	-0.2	-1.3	-4.6	-8.7	-2.5	1.4	8.7
- of which Business investment	14.6	0.3	4.2	-2.7	-6.3	-3.9	-2.4	8.5
Exports	-1.4	3.0	4.9	-1.7	0.0	4.2	-1.6	0.7
less Imports	2.1	4.2	3.8	2.4	-0.7	0.9	1.1	0.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-11 provides contribution of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure contributed 1.1 percentage points in IIIQ2012 and 1.2 percentage points in IVQ2012. In IQ2013, household final consumption added 1.4 percentage points, 1.3 percentage points in IIQ2013, 1.7 percentage points in IIIQ2013 and 1.5 percentage points in IVQ2013. General government final consumption expenditure contributed 0.3 percentage points in IVQ2012, deducting 0.4 percentage points in IQ2013 and adding 0.4 percentage points in IIQ2013, 0.5 percentage points in IIIQ2013 and 0.4 percentage points in IVQ2013. Net trade added 1.0 percentage points in IIQ2013 and added 0.2 percentage points in IQ2013. In IIIQ2013, net trade deducted 0.9 percentage points, adding 0.1 percentage points in IVQ2013.

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

Component	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1	2013 Q2	2013 Q3	2013 Q4
Household final consumption expenditure	0.6	0.9	1.1	1.2	1.4	1.3	1.7	1.5
NPISH final consumption expenditure	0.0	0.0	0.0	0.0	0.3	-0.1	0.1	-0.1
General government final consumption expenditure	0.6	0.2	0.3	0.3	-0.4	0.4	0.5	0.4
Gross capital formation	0.7	-0.3	-1.1	0.4	-0.5	-0.4	0.7	1.0
- of which GFCF	1.3	0.0	-0.2	-0.7	-1.3	-0.4	0.2	1.2
- of which Business investment	1.1	0.0	0.3	-0.2	-0.5	-0.3	-0.2	0.7
Exports	-0.5	0.9	1.5	-0.5	0.0	1.3	-0.5	0.2
less Imports	0.7	1.3	1.2	0.8	-0.2	0.3	0.4	0.1
Net trade	-1.1	-0.4	0.3	-1.3	0.2	1.0	-0.9	0.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Table VH-12 provides growth of value added by expenditure components in a year relative to the prior year. Household final consumption expenditure grew 2.4 percent in 2013 compared with increase of 1.5 percent in 2012. General government final consumption expenditure grew 0.9 percent in 2013 but increased 1.6 percent in 2012. Gross capital formation increased 1.4 percent in 2013 and fell 0.5 percent in 2012. GFCF fell 0.5 percent in 2013 but increased 0.7 percent in 2012. Exports grew 0.8 percent in 2013 and 1.1 percent in 2012.

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

Component	2012	2013
Household final consumption expenditure	1.5	2.4
NPISH final consumption expenditure	0.1	2.0
General government final consumption expenditure	1.6	0.9
Gross capital formation	-0.5	1.4
- of which GFCF	0.7	-0.5
- of which Business investment	3.9	-1.2
Exports	1.1	0.8
less Imports	3.1	0.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

Contributions of value added by expenditure components in a year relative to the prior year are in Table VH-13. Household final consumption added 1.5 percentage points in 2013 and 0.9 percentage points in 2012. Gross capital formation contributed 0.2 percentage points in 2013 and deducted 0.1 percentage points in 2012 but GFCF deducted 0.1 percentage points in 2013, adding 0.1 percentage points in 2012. Net trade added 0.1 percentage points in 2013 but deducted 0.7 percentage points in 2012.

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

Component	2012	2013
Household final consumption expenditure	0.9	1.5
NPISH final consumption expenditure	0.0	0.1
General government final consumption expenditure	0.4	0.2
Gross capital formation	-0.1	0.2
- of which GFCF	0.1	-0.1
- of which Business investment	0.3	-0.1
Exports	0.3	0.2
less Imports	1.0	0.1
Net trade	-0.7	0.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q4-2013/index.html

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014