CMP Associates Regulation Blog: Financial Uncertainty, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars below Trend, Stagnating Real Disposable Income, Financial Repression, United States Commercial Banks, United States Housing, World Cyclical Slow Growth and Global Recession Risk: Part V

Financial Uncertainty, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars below Trend, Stagnating Real Disposable Income, Financial Repression, United States Commercial Banks, United States Housing, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

IA2 Swelling Undistributed Corporate Profits

IB Stagnating Real Disposable Income and Consumption Expenditures

IB1 Stagnating Real Disposable Income and Consumption Expenditures

IB2 Financial Repression

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 3.5 percent in IQ2012. Growth of 3.2 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.8 percent in IIIQ2012 at the SAAR of minus 3.2 percent and decreased 0.2 percent relative to a year earlier. Japan’s GDP changed 0.0 percent in IVQ2012 at the SAAR of minus 0.1 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.1 percent in IQ2013 at the SAAR of 4.5 percent and changed 0.0 percent relative to a year earlier. Japan’s GDP increased 1.1 percent in IIQ2013 at the SAAR of 4.1 percent and increased 1.2 percent relative to a year earlier. Japan’s GDP grew 0.2 percent in IIIQ2013 at the SAAR of 0.9 percent and increased 2.3 percent relative to a year earlier. In IVQ2013, Japan’s GDP increased 0.2 percent at the SAAR of 0.7 percent, increasing 2.6 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 (http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html) with weak hiring (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.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 0.5 percent in IIQ2012 and declined 2.4 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.4 percent and declined 2.6 percent relative to a year earlier. The GDP of Italy contracted 0.9 percent in IVQ2012 and fell 2.8 percent relative to a year earlier. In IQ2013, Italy’s GDP contracted 0.6 percent and fell 2.4 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and 2.1 percent relative to a year earlier. The GDP of Italy decreased 0.1 percent in IIIQ2013 and declined 1.9 percent relative to a year earlier. Italy’s GDP increased 0.1 percent in IVQ2013 and decreased 0.9 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: 3.5	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	-0.5	-2.4
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: –3.2	-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	-2.6
United Kingdom	0.8	0.2
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	2.0
Japan	QOQ: 0.0 SAAR: 0.1	-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	-2.8
United Kingdom	-0.1	0.2
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.3 SAAR: 1.1	1.3
Japan	QOQ: 1.1 SAAR: 4.5	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	-2.4
UK	0.4	0.6
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.6 SAAR: 2.5	1.6
Japan	QOQ: 1.1 SAAR: 4.1	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	-2.1
UK	0.7	1.8
	IIIQ2013/IIQ2013	III/Q2013/ IIIQ2012
USA	QOQ: 1.0 SAAR: 4.1	2.0
Japan	QOQ: 0.2 SAAR: 0.9	2.3
China	2.2	7.8
Euro Area	0.1	-0.3
Germany	0.3	1.1
France	0.0	0.3
Italy	-0.1	-1.9
UK	0.8	1.9
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.6 SAAR: 2.4	2.5
Japan	QOQ: 0.2 SAAR: 0.7	2.6
China	1.8	7.7
Euro Area	0.3	0.5
Germany	0.4	1.3
France	0.3	0.8
Italy	0.1	-0.9
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/2014/03/financial-risks-slow-cyclical-united.html 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 Feb 2014, Japan’s exports grew 9.0 percent in 12 months while imports increased 9.0 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 Feb 2014, China exports decreased 18.1 percent relative to a year earlier and imports increased 10.1 percent.
Germany. Germany’s exports increased 2.2 percent in the month of Jan 2014 and increased 2.9 percent in the 12 months ending in Jan 2014. Germany’s imports increased 4.1 percent in the month of Jan and increased 1.5 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 decreased 1.8 percent in Jan 2013 while imports decreased 0.3 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 increased 0.6 percent in Feb 2014 after decreasing 0.2 percent in Jan 2013 and changing 0.0 percent in Dec 2013, as shown in Table I-1, with all data seasonally adjusted. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production increased 0.6 percent in February after having declined 0.2 percent in January. In February, manufacturing output rose 0.8 percent and nearly reversed its decline of 0.9 percent in January, which resulted, in part, from extreme weather. The gain in factory production in February was the largest since last August. The output of utilities edged down 0.2 percent following a jump of 3.8 percent in January, and the production at mines moved up 0.3 percent. At 101.6 percent of its 2007 average, total industrial production in February was 2.8 percent above its level of a year earlier. The capacity utilization rate for total industry increased in February to 78.8 percent, a rate that is 1.3 percentage points below its long-run (1972–2013) average.”

In the six months ending in Feb 2014, United States national industrial production accumulated increase of 2.0 percent at the annual equivalent rate of 4.1 percent, which is higher than growth of 2.9 percent in the 12 months ending in Jan 2014. Excluding growth of -0.2 percent in Jan 2014, growth in the remaining five months from Sep to Feb 2013 accumulated to 2.2 percent or 5.4 percent annual equivalent. Industrial production fell in one of the past six months. Business equipment accumulated growth of 2.3 percent in the six months from Sep 2013 to Feb 2014 at the annual equivalent rate of 4.7 percent, which is lower than growth of 2.8 percent in the 12 months ending in Feb 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 increased in February to 78.8 percent, a rate that is 1.3 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 increased 0.8 percent in Feb 2014 after decreasing 0.9 percent in Jan 2014 and increasing 0.2 percent in Dec 2013 seasonally adjusted, increasing 1.9 percent not seasonally adjusted in 12 months ending in Feb 2014, as shown in Table I-2. 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 0.9 percent in Jan 2014, manufacturing accumulated growth of 2.1 percent from Sep 2013 to Feb 2013 or at the annual equivalent rate of 5.2 percent. Table I-2 provides a longer perspective of manufacturing in the US. There has been evident deceleration of manufacturing growth in the US from 2010 and the first three months of 2011 into more recent months as shown by 12 months rates of growth. Growth rates appeared to be increasing again closer to 5 percent in Apr-Jun 2012 but deteriorated. The rates of decline of manufacturing in 2009 are quite high with a drop of 18.2 percent in the 12 months ending in Apr 2009. Manufacturing recovered from this decline and led the recovery from the recession. Rates of growth appeared to be returning to the levels at 3 percent or higher in the annual rates before the recession but the pace of manufacturing fell steadily in the past six months with some strength at the margin. The Manufacturing fell 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 19.1 percent from the trough in Apr 2009 to Feb 2014. Manufacturing output in Feb 2014 is 6.9 percent below the peak in Jun 2007.

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

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	0.6 Jan	3.3 Jan	0.6 Jan	-0.3 Jan
Japan		Feb 2014 9.5 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		Feb 2014 9.0 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 -18.1 Feb 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 10.1 Feb 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	1.0 12-M Jan	0.8 Jan-Dec	-3.2 12-M Dec	-3.3 Jan-Dec
Germany	2.2 Jan CSA	2.9 Jan	4.1 Jan CSA	1.5 Jan
France Dec	-1.8	-0.8	-0.3	0.1
Italy Jan	-1.5	0.2	-1.6	-6.6
UK	-2.2 Feb	0.1 Dec-Feb 14 /Dec-Feb 13	2.3 Dec	-0.4 Dec-Feb 14 13/Dec-Feb 13
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 0.6 IIQ2013 -2.0 IIIQ2013 -2.1 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 Feb 2014. The share of Asia in Japan’s trade is more than one-half for 53.5 percent of exports and 41.7 percent of imports. Within Asia, exports to China are 18.5 percent of total exports and imports from China 18.0 percent of total imports. While exports to China increased 27.7 percent in the 12 months ending in Feb 2014, imports from China increased 5.7 percent. The largest export market for Japan in Feb 2014 is the US with share of 18.3 percent of total exports, which is close to that of China, and share of imports from the US of 8.8 percent in total imports. Japan’s exports to the US grew 5.6 percent in the 12 months ending in Feb 2014 and imports from the US grew 20.8 percent. Western Europe has share of 10.8 percent in Japan’s exports and of 10.7 percent in imports. Rates of growth of exports of Japan in Jan 2014 are 5.6 percent for exports to the US, minus 0.6 percent for exports to Brazil and 21.1 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 Feb 2014 are positive for all trading partners except for declines from France and the Middle East. Imports from Asia increased 7.7 percent in the 12 months ending in Feb 2014 while imports from China increased 5.7 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

Feb 2014	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	5,799,966	9.8	6,600,275	9.0
Asia	3,102,072	12.5	2,749,544	7.7
China	1,074,853	27.7	1,185,620	5.7
USA	1,063,575	5.6	579,923	20.8
Canada	68,826	-5.8	85,997	11.8
Brazil	38,879	-0.6	96,705	1.2
Mexico	83,036	16.4	36,199	24.5
Western Europe	623,929	11.7	707,309	17.6
Germany	165,864	21.1	214,308	33.0
France	50,842	13.8	80,196	-1.0
UK	87,878	-0.6	52,547	5.1
Middle East	230,990	18.7	1,328,897	-2.2
Australia	126,279	-7.3	373,453	6.3

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

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

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

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

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

Source: International Monetary Fund World Economic Outlook databank

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, decreased to 53.0 in Feb from 54.0 in Jan, indicating expansion at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/90d6571ed14f442d8ac0a59d7592a77f). This index has remained above the contraction territory of 50.0 during 55 consecutive months. The employment index decreased from 51.9 in Jan to 51.4 in Feb with input prices rising at slower rate, new orders increasing at faster rate and output increasing at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/90d6571ed14f442d8ac0a59d7592a77f). David Hensley, Director of Global Economics Coordination at JP Morgan finds temporary effects of services and weather with expectation of resumption of the growth impulse (http://www.markiteconomics.com/Survey/PressRelease.mvc/90d6571ed14f442d8ac0a59d7592a77f). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased at 53.3 in Feb from 53.0 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/24962c60b7d34a84a661c0c2cb0ab8b8). New export orders expanded for the eighth consecutive month at a faster rate than in Jn (http://www.markiteconomics.com/Survey/PressRelease.mvc/24962c60b7d34a84a661c0c2cb0ab8b8). David Hensley, Director of Global Economic Coordination at JP Morgan finds slowing of the index from the strength at the end of 2013 even excluding the US with weather effects (http://www.markiteconomics.com/Survey/PressRelease.mvc/24962c60b7d34a84a661c0c2cb0ab8b8). The HSBC Brazil Composite Output Index, compiled by Markit, increased from 49.9 in Jan to 50.8 in Feb, indicating expanding activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/71ab794bc85841cf85d5c0b70a6692a2). The HSBC Brazil Services Business Activity index, compiled by Markit, increased from 49.6 in Jan to 50.8 in Feb, indicating expanding services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/71ab794bc85841cf85d5c0b70a6692a2). André Loes, Chief Economist, Brazil, at HSBC, finds improving economy in Feb with more data required to assess conditions (http://www.markiteconomics.com/Survey/PressRelease.mvc/71ab794bc85841cf85d5c0b70a6692a2). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) decreased marginally from 50.8 in Jan to 50.4 in Feb, indicating marginal improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/46aa9d753c9f4f25b7fb307a8fa92821). André Loes, Chief Economist, Brazil at HSBC, finds slower growth of manufacturing with input prices increasing at the fastest rhythm since Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/46aa9d753c9f4f25b7fb307a8fa92821).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 55.5 in Mar from 57.1 in Feb, which is the second highest rate of improvement since Jan 2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/6cbe45feb6f34d4e86b94f05944db01c). New export orders registered 51.0 in Mar, decreasing from 51.6 in Feb, indicating marginal expansion. Chris Williamson, Chief Economist at Markit, finds that manufacturing hiring is growing with creation of about 10,000 to 15,000 jobs per month and growth at annual rate of 4 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/6cbe45feb6f34d4e86b94f05944db01c). The Markit Flash US Services PMI™ Business Activity Index increased from 53.3 in Feb to 55.5 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/a655b90f6ba1492d8fbea2d7ada81977). Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with growth of jobs at monthly rate of 130,000 and GDP growth around 2.5 percent annual rate in IQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/a655b90f6ba1492d8fbea2d7ada81977). The Markit US Composite PMI™ Output Index of Manufacturing and Services decreased to 54.1 in Feb from 56.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/d041468211fe42bdad220ac2d97e2972). The Markit US Services PMI™ Business Activity Index decreased from 56.7 in Jan to 53.3 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/d041468211fe42bdad220ac2d97e2972). Chris Williamson, Chief Economist at Markit, finds weather effects with the indexes suggesting 1.7 percent annual growth in IQ2014 relative to 2.4 percent in IVQ2013 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d041468211fe42bdad220ac2d97e2972). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 57.1 in Feb from 53.7 in Jan, which indicates expansion at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/84b031abddba4c3e829492e8c6209db6). The index of new exports orders increased from 48.5 in Jan to 51.6 in Feb while total new orders increased from 53.9 in Jan to 59.6 in Feb. Chris Williamson, Chief Economist at Markit, finds that the index suggests the fastest improvement in US manufacturing in nearly four years (http://www.markiteconomics.com/Survey/PressRelease.mvc/84b031abddba4c3e829492e8c6209db6). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 1.9 percentage points from 51.3 in Jan to 53.2 in Feb, which indicates growth at a faster 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 decreased 2.4 percentage points from 54.0 in Jan to 51.6 in Feb, indicating growth of business activity/production during 55 consecutive months, while the index of new orders increased 0.4 percentage points from 50.9 in Jan to 51.3 in Feb (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	Feb 12 months NSA ∆%: 1.1; ex food and energy ∆%: 1.6 Feb month SA ∆%: 0.1; ex food and energy ∆%: 0.1 Blog 3/23/14
Producer Price Index	Finished Goods Feb 12-month NSA ∆%: 1.3; ex food and energy ∆% 1.7 Feb month SA ∆% = 0.4; ex food and energy ∆%: 0.1 Final Demand Feb 12-month NSA ∆%: 0.9; ex food and energy ∆% 1.1 Feb month SA ∆% = -0.1; ex food and energy ∆%: -0.2 Blog 3/23/14
PCE Inflation	Feb 12-month NSA ∆%: headline 0.9; ex food and energy ∆% 1.1 Blog 3/30/14
Employment Situation	Household Survey: Feb Unemployment Rate SA 6.7% Blog calculation People in Job Stress Feb: 29.1 million NSA, 17.8% of Labor Force Establishment Survey: Feb Nonfarm Jobs +175,000; Private +162,000 jobs created Jan 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.4 Blog 3/9/14
Nonfarm Hiring	Nonfarm Hiring fell from 63.3 million in 2006 to 54.2 million in 2013 or by 9.1 million Private-Sector Hiring Jan 2014 4.383 million lower by 0.709 million than 5.092 million in Jan 2005 Blog 3/16/14
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 2.6 IQ2012 SAAR 3.7 IIQ2012 SAAR 1.2 IIIQ2012 SAAR 2.8 IVQ2012 SAAR 0.1 IQ2013 SAAR 1.1 IIQ2013 SAAR 2.5 IIIQ2013 SAAR 4.1 IVQ2013 SAAR 2.6 Blog 3/30/14
Real Private Fixed Investment	SAAR IVQ2013 2.8 ∆% IVQ2007 to IVQ2013: minus 2.9% Blog 3/30/14
Corporate Profits	IVQ2013 SAAR: Corporate Profits 2.2; Undistributed Profits -6.7 Blog 3/30/14
Personal Income and Consumption	Feb month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.3 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Feb NSA ∆%: RDPI: 2.1; RPCE ∆%: 2.1 Blog 3/30/14
Quarterly Services Report	IVQ13/IVQ12 NSA ∆%: Information 5.5 Financial & Insurance 5.6 Blog 3/16/14
Employment Cost Index	Compensation Private IVQ2013 SA ∆%: 0.5 Dec 12 months ∆%: 1.9 Blog 2/9/14
Industrial Production	Feb month SA ∆%: 0.6 Feb 12 months SA ∆%: 2.8 Manufacturing Feb SA ∆% 0.8 Feb 12 months SA ∆% 1.5, NSA 1.9 Capacity Utilization: 78.8 Blog 3/23/14
Productivity and Costs	Nonfarm Business Productivity IVQ2013∆% SAAE 1.8; IVQ2013/IVQ2012 ∆% 1.3; Unit Labor Costs SAAE IVQ2013 ∆% -0.1; IVQ2013/IVQ2012 ∆%: -0.9 Blog 3/9/2014
New York Fed Manufacturing Index	General Business Conditions From Feb 4.48 to Mar 5.61 New Orders: From Feb -0.21 to Mar 3.13 Blog 3/23/14
Philadelphia Fed Business Outlook Index	General Index from Feb -6.3 to Mar 9.0 New Orders from Feb -5.2 to Mar 5.7 Blog 3/23/14
Manufacturing Shipments and Orders	New Orders SA Jan ∆% -0.7 Ex Transport 0.2 Jan NSA New Orders ∆% 1.2 Ex transport 0.4 Blog 3/9/14
Durable Goods	Feb New Orders SA ∆%: 2.2; ex transport ∆%: 0.2 Jan-Feb 14/Jan-Feb 13 New Orders NSA ∆%: 0.8; ex transport ∆% 1.0 Blog 3/30/14
Sales of New Motor Vehicles	Jan-Feb 2014 2,206,454; Feb 2013 2,238,820. Feb 14 SAAR 15.34 million, Jan 14 SAAR 15.34 million, Feb 2013 SAAR 15.34 million Blog 3/9/14
Sales of Merchant Wholesalers	Jan 2014/Jan 2013 NSA ∆%: Total 3.5; Durable Goods: 5.0; Nondurable Goods: 1.5 Blog 3/16/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Jan 14 12-M NSA ∆%: Sales Total Business 2.6; Manufacturers 1.8 Retailers 2.3; Merchant Wholesalers 3.6 Blog 3/16/14
Sales for Retail and Food Services	Jan-Feb 2014/Jan-Feb 2013 ∆%: Retail and Food Services 1.9; Retail ∆% 1.8 Blog 3/16/14
Value of Construction Put in Place	Jan SAAR month SA ∆%: 0.1 Jan 12-month NSA: 9.4 Blog 3/9/14
Case-Shiller Home Prices	Jan 2014/Jan 2013 ∆% NSA: 10 Cities 13.5; 20 Cities: 13.2 ∆% Jan SA: 10 Cities 0.8 ; 20 Cities: 0.8 Blog 3/30/14
FHFA House Price Index Purchases Only	Jan SA ∆% 0.5; 12 month NSA ∆%: 7.4 Blog 3/30/14
New House Sales	Feb 2014 month SAAR ∆%: -3.3 Jan-Feb 2013/Jan-Feb 2012 NSA ∆%: -0.1 Blog 3/30/14
Housing Starts and Permits	Feb Starts month SA ∆% minus 0.2; Permits ∆%: 7.7 Jan-Feb 2014/Jan-Feb 2013 NSA ∆% Starts -1.0; Permits ∆% 4.4 Blog 3/23/14
Trade Balance	Balance Jan SA -$39,095 million versus Dec -$38,975 million Exports Jan SA ∆%: 0.6 Imports Jan SA ∆%: 0.6 Goods Exports Jan 2014/Jan 2013 NSA ∆%: 3.3 Goods Imports Jan 2014/Jan 2012 NSA ∆%: -0.3 Blog 3/9/14
Export and Import Prices	Feb 12-month NSA ∆%: Imports -1.2; Exports -1.3 Blog 3/16/14
Consumer Credit	Jan ∆% annual rate: Total 5.3; Revolving -0.3; Nonrevolving 7.5 Blog 3/9/14
Net Foreign Purchases of Long-term Treasury Securities	Jan Net Foreign Purchases of Long-term US Securities: $7.3 billion Major Holders of Treasury Securities: China $1274 billion; Japan $1201 billion; Total Foreign US Treasury Holdings Nov $5833 billion Blog 3/23/14
Treasury Budget	Fiscal Year 2014/2013 ∆% Feb: Receipts 9.3; Outlays minus 1.5; Individual Income Taxes 2.6 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Blog 3/16/2014
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	Feb 2014 SAAR ∆%: Securities 0.5 Loans 2.5 Cash Assets 46.6 Deposits 7.0 Blog 3/30/14
Flow of Funds	IVQ2013 ∆ since 2007 Assets +$12,272.6 BN Nonfinancial -$729.2 BN Real estate -$1380.6 BN Financial +13,001.7 BN Net Worth +$12,910.9 BN Blog 3/16/14
Current Account Balance of Payments	IVQ2013 -83,739 MM %GDP 2.2 Blog 3/23/14

Links to blog comments in Table USA:

3/23/14 http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/9/14 http://cmpassocregulationblog.blogspot.com/2014/03/rules-discretionary-authorities-and.html

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

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 increased 0.9 percent in Feb 2014, decreasing 0.6 percent in Jan 2014 and decreasing 1.7 percent in Dec 2013. New orders increased 2.2 percent in Feb 2014 after decreasing 1.3 percent in Jan 2014 and decreasing 5.3 percent in Dec 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 increased 13.6 percent in Feb 2014 after decreasing 22.1 percent in Jan 2014 and decreasing 22.3 percent in Dec 2013. New orders excluding transportation equipment increased 0.2 percent in Feb 2014, increased 0.9 percent in Jan 2014 and decreased 1.8 percent in Dec 2013. Capital goods new orders, indicating investment, decreased 1.5 percent in Feb 2014, decreasing 3.7 percent in Jan 2014 and decreasing 8.5 percent in Dec 2013. New orders of nondefense capital goods decreased 2.8 percent in Feb 2014, after decreasing 5.3 percent in Jan 2014 and decreasing 6.3 percent in Dec 2013. Capital goods orders excluding volatile aircraft decreased 1.3 percent in Feb 2014, increasing 0.8 percent in Jan 2014 and decreasing 1.6 percent in Dec 2013.

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

	Feb 2014 ∆%	Jan 2014 ∆%	Dec 2013 ∆%
Total
S	0.9	-0.6	-1.7
NO	2.2	-1.3	-5.3
Excluding Transport
S	0.7	-0.6	0.2
NO	0.2	0.9	-1.8
Excluding Defense
S	1.0	-0.7	-1.2
NO	1.8	-1.9	-4.3
Machinery
S	1.6	-3.1	0.9
NO	-1.5	-1.3	3.0
Computers & Electronic Products
S	-1.3	-0.2	2.5
NO	0.4	3.2	-8.7
Computers
S	-8.0	-0.3	3.4
NO	-0.5	-8.5	3.2
Transport Equipment
S	1.3	-0.5	-6.1
NO	6.9	-6.2	-12.1
Motor Vehicles
S	3.9	-1.9	-7.0
NO	3.6	-1.9	-6.6
Nondefense Aircraft
S	-5.3	3.5	3.7
NO	13.6	-22.1	-22.3
Capital Goods
S	-0.1	-1.8	0.2
NO	-1.5	-3.7	-8.5
Nondefense Capital Goods
S	0.1	-1.7	1.5
NO	-2.8	-5.3	-6.3
Capital Goods ex Aircraft
S	0.5	-1.4	0.6
NO	-1.3	0.8	-1.6

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 2013-2014

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-Feb 2014 not seasonally adjusted (NSA) and without adjustment for inflation. Shipments of all manufacturing industries in Jan-Feb 2014 total $430 billion and new orders total $430 billion, growing respectively by 3.3 percent and 0.8 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 2.9 percent and new orders increased 1.0 percent. Excluding defense, shipments grew 3.6 percent and new orders grew 1.6 percent. Important information not in Table VA-2 is the large share of nondurable goods. Capital goods have relatively high value of $150 billion for shipments, growing 2.8 percent, and new orders $155 billion, decreasing 5.2 percent. Excluding aircraft, capital goods shipments reached $120 billion, growing by 1.7 percent, and new orders $129 billion, increasing 0.1 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-Feb 2014	Shipments	∆% 2014/ 2013	New Orders	∆% 2014/ 2013
Total	430,191	3.3	430,198	0.8
Excluding Transport	305,209	2.9	302,328	1.0
Excluding Defense	409,498	3.6	412,998	1.6
Machinery	63,512	1.5	69,776	3.7
Computers & Electronic Products	51,464	4.6	37,740	0.3
Computers & Related Products	3,208	1.6	3,018	-11.0
Transport Equipment	124,982	4.4	127,870	0.5
Motor Vehicles	86,014	3.5	86,697	3.5
Nondefense Aircraft	18,929	17.1	23,331	-7.3
Capital Goods	150,053	2.8	155,127	-5.2
Nondefense Capital Goods	132,955	3.3	141,203	-4.3
Capital Goods ex Aircraft	120,838	1.7	129,523	0.1

Note: Transport: transportation

Source: US Census Bureau

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

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

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

Source: Board of Governors of the Federal Reserve System

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

Manufacturing jobs increased 6,000 in Feb 2014 relative to Jan 2014, seasonally adjusted. Manufacturing jobs not seasonally adjusted increased 63,000 from Feb 2013 to Feb 2014 or at the average monthly rate of 5,250. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics.

Industrial production increased 0.6 percent in Feb 2014 after decreasing 0.2 percent in Jan 2013 and changing 0.0 percent in Dec 2013, as shown in Table I-1, with all data seasonally adjusted. The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

Manufacturing increased 0.8 percent in Feb 2014 after decreasing 0.9 percent in Jan 2014 and increasing 0.2 percent in Dec 2013 seasonally adjusted, increasing 1.9 percent not seasonally adjusted in 12 months ending in Feb 2014, as shown in Table I-2. 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 0.9 percent in Jan 2014, manufacturing accumulated growth of 2.1 percent from Sep 2013 to Feb 2013 or at the annual equivalent rate of 5.2 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 fell 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 19.1 percent from the trough in Apr 2009 to Feb 2014. Manufacturing output in Feb 2014 is 6.9 percent below the peak in Jun 2007.

Table VA-3 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 86.7 percent in IVQ2013. Most of US national income is in the form of services. In Feb 2014, there were 136.183 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 114.021 million NSA in Feb 2014 accounted for 83.7 percent of total nonfarm jobs of 136.183 million, of which 11.964 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 96.658 million NSA in Feb 2014, or 71.0 percent of total nonfarm jobs and 84.8 percent of total private-sector jobs. Manufacturing has share of 11.1 percent in US national income in IVQ2013, as shown in Table VA-3. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

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

	SAAR IIIQ2013	% Total	SAAR IV2013	% Total
National Income WCCA	14,642.3	100.0	14,814.5	100.0
Domestic Industries	14,379.4	98.2	14,530.5	98.1
Private Industries	12,704.3	86.8	12,847.1	86.7
Agriculture	224.2	1.5	206.1	1.4
Mining	253.3	1.7	260.5	1.8
Utilities	221.4	1.5	208.8	1.4
Construction	638.7	4.4	647.1	4.4
Manufacturing	1575.6	10.8	1637.1	11.1
Durable Goods	910.6	6.2	919.7	6.2
Nondurable Goods	665.0	4.5	717.4	4.8
Wholesale Trade	884.6	6.0	890.7	6.0
Retail Trade	998.0	6.8	996.9	6.7
Transportation & WH	442.3	3.0	450.2	3.0
Information	498.9	3.4	509.6	3.4
Finance, Insurance, RE	2517.6	17.2	2525.9	17.1
Professional & Business Services	2008.0	13.7	2048.7	13.8
Education, Health Care	1445.7	9.8	1455.9	9.8
Arts, Entertainment	585.6	4.0	592.8	4.0
Other Services	410.4	2.8	416.8	2.8
Government	1675.1	11.4	1683.4	11.4
Rest of the World	262.9	1.8	284.0	1.9

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:

Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html ), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
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 decreasing from 54.1 in Jan to 52.0 in Feb, indicating slower growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/6d69e0d951cf45b4a3f0e45809ba5b4c). Paul Smith, Director at Markit and author of the report, finds that the survey data suggest weakening conditions because of weather effects (http://www.markiteconomics.com/Survey/PressRelease.mvc/6d69e0d951cf45b4a3f0e45809ba5b4c). The Markit Business Activity Index of Services decreased from the record of 51.8 in Nov to 52.1 in Dec, 51.2 in Jan and 49.3 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/6d69e0d951cf45b4a3f0e45809ba5b4c). Paul Smith, Director at Markit and author of the report, finds concerns with the increase in sales taxes (http://www.markiteconomics.com/Survey/PressRelease.mvc/6d69e0d951cf45b4a3f0e45809ba5b4c). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 56.6 in Jan, which is the highest level since Feb 2006, to 55.5 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/18431136559044cfbbe099e870c915b5). New orders grew at a high rate for the twelfth consecutive month. New export orders increased for the sixth consecutive month at slow pace. Paul Smith, Economist at Markit and author of the report, finds improving manufacturing conditions with some concerns about the sales tax increase in Apr with price increases providing some compensation (http://www.markiteconomics.com/Survey/PressRelease.mvc/18431136559044cfbbe099e870c915b5).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	Feb ∆% -0.2 12 months ∆% 1.8 Blog 3/16/14
Consumer Price Index	Feb NSA ∆% 0.0; Jan 12 months NSA ∆% 1.5 Blog 3/30/14
Real GDP Growth	IVQ2013 ∆%: 0.2 on IIIQ2013; IVQ2013 SAAR 0.7; ∆% from quarter a year earlier: 2.6 % Blog 6/16/13 8/18/13 9/15/13 11/17/13 12/15/13 2/23/14 3/16/14
Employment Report	Feb Unemployed 2.32 million Change in unemployed since last year: minus 450 thousand Unemployment rate: 3.6 % Blog 3/30/14
All Industry Indices	Jan month SA ∆% 1.0 12-month NSA ∆% 3.3 Blog 3/23/14
Industrial Production	Feb SA month ∆%: -2.3 12-month NSA ∆% 6.9 Blog 3/30/14
Machine Orders	Total Jan ∆% 12.6 Private ∆%: 18.3 Jan ∆% Excluding Volatile Orders 13.4 Blog 3/16/14
Tertiary Index	Jan month SA ∆% 0.9 Jan 12 months NSA ∆% 2.0 Blog 3/16/14
Wholesale and Retail Sales	Feb 12 months: Total ∆%: 2.8 Wholesale ∆%: 2.4 Retail ∆%: 3.6 Blog 3/30/14
Family Income and Expenditure Survey	Feb 12-month ∆% total nominal consumption minus 0.6, real minus 2.5 Blog 3/30/14
Trade Balance	Exports Feb 12 months ∆%: 9.8 Imports Feb 12 months ∆% 9.0 Blog 3/23/14

Links to blog comments in Table JPY:

3/23/14 http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/2/14 http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.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 Feb 2014, industrial production in Japan decreased 2.3 percent and increased 6.9 percent in the 12 months ending in Feb 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 3.8 percent in Jan 2014. Growth in 12 months improved from minus 10.1 percent in Feb 2013 to 7.1 percent in Dec 2013, 10.6 percent in Jan 2014 and 6.9 percent in Feb 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
Feb 2014	-2.3	6.9
Jan	3.8	10.3
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 Feb 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 rate of unemployment fell to 3.6 percent in Feb 2014. The employment rate stood at 56.7 percent in Feb 2014 and increased 0.4 percentage points from a year earlier.

Table VB-2, Japan, Employment Report Feb 2014

Feb 2014 Unemployed	2.32 million
Change since last year	-450 thousand; ∆% –16.2
Unemployment rate	SA 3.6%, -0.1 from earlier month; NSA 3.6%, -0.6 from earlier year
Population ≥ 15 years	110.79 million
Change since last year	∆% -0.1
Labor Force	65.16 million
Change since last year	∆% 0.0
Employed	62.83 million
Change since last year	∆% 0.7
Labor force participation rate	58.8
Change since last year	0.0
Employment rate	56.7%
Change since last year	0.4

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

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

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2010 to 2014. 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. The rate of unemployment fell to 3.6 percent in Feb 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 decline of nominal consumption of 0.6 percent in the 12 months ending in Feb 2014 and minus 2.5 percent in real terms. There are multiple segments of increasing real consumption: housing increasing 10.0 percent in nominal terms and 10.2 percent in real terms. Transportation/communications decreased 4.1 percent in real terms and 2.9 percent in nominal terms. Clothing and footwear decreased 8.0 percent in nominal terms and 9.2 percent in real terms. Education decreased 13.4 percent in real terms and 12.8 percent in nominal terms. Fuel, light and water charges increased 4.2 percent in nominal terms and decreased 1.5 percent in real terms. Real household income decreased 1.3 percent; real disposable income decreased 1.3 percent; and real consumption expenditures decreased 3.2 percent.

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

Feb 2014	Nominal	Real
Households of Two or More Persons
Total Consumption	-0.6	-2.5
Excluding Housing, Vehicles & Remittance	-0.3	-2.2
Food	1.7	-0.3
Housing	10.0	10.2
Fuel, Light & Water Charges	4.2	-1.5
Furniture & Household Utensils	28.0	25.4
Clothing & Footwear	-8.0	-9.2
Medical Care	7.3	7.8
Transport and Communications	-2.9	-4.1
Education	-12.8	-13.4
Culture & Recreation	-10.4	-11.8
Other Consumption Expenditures	-4.1	-5.9*
Workers’ Households
Income	0.6	-1.3
Disposable Income	0.6	-1.3
Consumption Expenditures	-1.4	-3.2

*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. Nominal consumption decreased 0.6 percent in Feb 2014 and real consumption decreased 2.5 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 fell 2.5 percent in the 12 months ending in Feb 2014 and nominal consumption fell 0.6 percent. 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/2014/03/global-financial-risks-recovery-without_5314.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 3.2 percent and personal consumption deducted 1.1 percentage points. Japan’s GDP grew at the SAAR of 0.1 percent in IVQ2012 with personal consumption contributing 1.1 percentage points. Japan’s GDP growth in IQ2013 was at 4.5 percent SAAR with highest contribution of 2.6 percentage points by personal consumption expenditures. In IIQ2013, Japan’s GDP grew at 4.1 percent SAAR with personal consumption expenditures contributing 1.6 percentage points. Japan’s GDP grew at 0.9 percent SAAR in IIIQ2013 with personal consumption expenditures contributing 0.5 percentage points. In IVQ2013, Japan’s GDP grew at 0.7 percent SAAR with personal consumption expenditures contributing 1.0 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
Feb 2014	-0.6	-2.5
Jan	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 and 3.6 percent in the 12 months ending in Feb 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. Retail sales increased 3.6 percent in the 12 months ending in Feb 2014.

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

	Total	Wholesale	Retail
Feb 2014	2.8	2.4	3.6
Jan	4.4	4.4	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
2013	0.9	0.8	1.0
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 total index increased to 55.0 in Feb 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. The index of new orders increased to 51.4 in Feb 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Feb 2014	55.0	51.4	52.1	49.0	59.9
Jan	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 53.4 in Jan 2014, increasing to 55.0 in Feb 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 and 50.2 in Feb 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 and 52.6 in Feb 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
Feb 2014	50.2	52.6	50.5	47.4	48.0	49.9
Jan	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 and 50.2 in Feb 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 2013 is still high at 7.7 percent but at the lowest rhythm in five years.

Chart VC-GDP, China, Gross Domestic Product, Million Yuan and ∆%, 2009-2013

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

Chart VC-FXR provides China’s foreign exchange reserves. FX reserves grew from $2399.2 billion in 2009 to $3821.3 billion in 2013 driven by high growth of China’s trade surplus.

Chart VC-FXR, China, Foreign Exchange Reserves, 2009-2013

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

Chart VC-Trade provides China’s imports and exports. Exports exceeded imports with resulting large trade balance surpluses that increased foreign exchange reserves.

Chart VC-Trade, China, Imports and Exports of Goods, 2009-2013, $100 Million US Dollars

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/b6e487b86c1a4ec48044fb9e79b0e282) is slowing. The overall Flash HSBC China Manufacturing PMI^™ decreased from 48.5 in Feb to 48.1 in Mar, which is the lowest in eight months, while the Flash HSBC China Manufacturing Output Index decreased from 48.8 in Feb to 47.3 in Mar, indicating moderate contraction at the lowest reading in eighteen months. 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 stabilize growth in the rest of the year (http://www.markiteconomics.com/Survey/PressRelease.mvc/b6e487b86c1a4ec48044fb9e79b0e282). The HSBC China Services PMI^™, compiled by Markit, shows marginal deterioration in business activity in China with the HSBC Composite Output, combining manufacturing and services, decreasing from 50.8 in Jan to 49.8 in Feb, indicating standstill (http://www.markiteconomics.com/Survey/PressRelease.mvc/593829170f8f412a91d70e6be09de93a). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need of policies to prevent decelerating growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/593829170f8f412a91d70e6be09de93a). The HSBC Business Activity index decreased from 50.7 in Jan to 51.0 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/593829170f8f412a91d70e6be09de93a). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that services could stabilize at low levels of activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/593829170f8f412a91d70e6be09de93a). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased marginally to 48.5 in Feb from 49.5 in Jan, indicating marginally deteriorating manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/0226a44496724665886d4d265e64cfb0). New export orders decreased moderately with moderate contraction of total new orders. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds soft manufacturing in China, posing risks to GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/0226a44496724665886d4d265e64cfb0). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Feb 12-month ∆%: minus 2.0 Feb month ∆%: -0.2 Blog 3/16/14
Consumer Price Index	Feb month ∆%: 0.5 Feb 12 months ∆%: 2.0 Blog 3/16/14
Value Added of Industry	Feb month ∆%: 0.61 Jan-Feb 2014/Jan-Feb 2013 ∆%: 8.6 Jan-Feb ∆%: 8.6 Blog 3/16/14
GDP Growth Rate	Year IVQ2013 ∆%: 7.7 Quarter IVQ2013 AE ∆%: 7.4 Blog 1/26/14
Investment in Fixed Assets	Total Jan-Feb 2013 ∆%: 17.9 Real estate development: 19.3 Blog 3/16/14
Retail Sales	Feb month ∆%: 0.71 Dec 12 month ∆%: 13.6 Jan-Feb ∆%: 11.8 Blog 3/16/14
Trade Balance	Feb balance minus $22.98 billion Exports 12M ∆% minus 18.1 Imports 12M ∆% 10.1 Cumulative Jan-Feb: $8.89 billion Blog 3/16/14

Links to blog comments in Table CNY:

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.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	-0.5
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*	-0.5	0.4	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 53.3 in Feb to 53.2 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/32ff643865a64f0d8b398fa42e9a575d). 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/32ff643865a64f0d8b398fa42e9a575d). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP, increased from 52.9 in Jan to 53.3 in Feb, which is the second highest since the first half 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/655b401c3aa2488f91f124a1d03ba66c). Chris Williamson, Chief Economist at Markit, finds growth of GDP at 0.4 to 0.5 percent in IQ2014 if Jan-Feb activity is sustained (http://www.markiteconomics.com/Survey/PressRelease.mvc/655b401c3aa2488f91f124a1d03ba66c). The Markit Eurozone Services Business Activity Index increased from 51.6 in Jan to 52.6 in Feb, which is a high in 32 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/655b401c3aa2488f91f124a1d03ba66c). The Markit Eurozone Manufacturing PMI^® decreased to 53.2 in Feb from 54.0 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad8aed8211d4e59aaca92f8d31a36e9). New orders and export orders increased. Chris Williamson, Chief Economist at Markit, finds industrial growth in the euro area at a quarterly rate around 1.0 percent. (http://www.markiteconomics.com/Survey/PressRelease.mvc/cad8aed8211d4e59aaca92f8d31a36e9). 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 3/9/14
Unemployment	Jan 2014: 12.0 % unemployment rate; Jan 2014: 19.056 million unemployed Blog 3/2/14
HICP	Feb month ∆%: 0.3 12 months Feb ∆%: 0.7 Blog 3/23/14
Producer Prices	Euro Zone industrial producer prices Jan ∆%: -0.3 Jan 12-month ∆%: -1.4 Blog 3/9/14
Industrial Production	Jan month ∆%: -0.2; Jan 12 months ∆%: 2.1 Blog 3/16/14
Retail Sales	Jan month ∆%: 1.6 Jan 12 months ∆%: 1.3 Blog 3/9/14
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 Jan 2014 12-month Exports ∆% 1.0 Imports ∆% -3.2 Blog 3/23/14

Links to blog comments in Table EUR:

3/23/14 http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/9/14 http://cmpassocregulationblog.blogspot.com/2014/03/rules-discretionary-authorities-and.html

3/2/14 http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html

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, decreased from 56.4 in Feb to 55.0 in Mar. The index of manufacturing output reached 57.0 in Mar, declining from 57.4 in Feb, while the index of services decreased to 54.0 in Mar from 55.9 in Feb. The overall Flash Germany Manufacturing PMI^® decreased from 54.8 in Feb to 53.8 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/d968b7b4783742c2bacfba4d0fa40632). New export work volumes increased for an eighth consecutive month with business originating in the US, China and Spain. Oliver Kolodseike, Economist at Markit, finds expansion of Germany’s private sector in the quarter ending in Mar at the highest pace since the middle of 2011 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d968b7b4783742c2bacfba4d0fa40632). 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 55.5 in Dec to 56.4 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/4eb457ed6b1d48efba316e6bc71a1b0f). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improving activity by the German private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/4eb457ed6b1d48efba316e6bc71a1b0f). The Germany Services Business Activity Index increased from 53.1 in Jan to 55.9 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/4eb457ed6b1d48efba316e6bc71a1b0f). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 5.5 in Jan to 54.8 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/83b8290ad0914aa099bc0641cc917a1b). New export orders increased for the eighth consecutive month with demand from the US and emerging markets. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds continuing growth with strength in new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/83b8290ad0914aa099bc0641cc917a1b).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	Feb month NSA ∆%: 0.5 Feb 12-month NSA ∆%: 1.2 Blog 3/16/14
Producer Price Index	Feb month ∆%: 0.0 CSA, minus 0.0 12-month NSA ∆%: -0.9 Blog 3/23/14
Industrial Production	MFG Jan month CSA ∆%: 0.3 12-month NSA: 3.0 Blog 3/9/14
Machine Orders	MFG Jan month ∆%: 1.2 Jan 12-month ∆%: 7.1 Blog 3/9/14
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 Jan 12-month NSA ∆%: 2.9 Imports Jan 12 months NSA ∆%: 1.5 Exports Jan month CSA ∆%: 2.2; Imports Jan month SA minus 4.1 Blog 3/16/14

Links to blog comments in Table DE:

3/23/14 http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/9/14 http://cmpassocregulationblog.blogspot.com/2014/03/rules-discretionary-authorities-and.html

3/2/14 http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.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

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

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

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

Period	Average ∆%
1949-2013	3.2
2000-2013	1.0
2000-2012	1.0
2000-2007	1.7
1990-1999	1.9
1980-1989	2.5
1970-1979	3.8
1960-1969	5.7
1950-1959	4.2

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20140214

The Markit Flash France Composite Output Index increased from 47.9 in Feb to 51.6 in Mar for a 31-month high (http://www.markiteconomics.com/Survey/PressRelease.mvc/66202d09e60b46eab9d481f475f0996f). Jack Kennedy, Senior Economist at Markit and author of the report, finds improvement at home and overseas (http://www.markiteconomics.com/Survey/PressRelease.mvc/66202d09e60b46eab9d481f475f0996f). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 48.9 in Jan to 47.9 in Feb, indicating faster contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/27f0badb834f41eaad07e33201a393ba). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds continuing weakness with marginally improving confidence (http://www.markiteconomics.com/Survey/PressRelease.mvc/27f0badb834f41eaad07e33201a393ba). The Markit France Services Activity index decreased from 48.9 in Jan to 47.9 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/27f0badb834f41eaad07e33201a393ba). The Markit France Manufacturing Purchasing Managers’ Index^® increased to 49.7 in Feb from 49.3 in Jan for the highest reading in four months (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c80a28d4c7b44918b8ffc8e952f27b5). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds stabilizing manufacturing conditions (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c80a28d4c7b44918b8ffc8e952f27b5). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Feb month ∆% 0.6 12 months ∆%: 0.9 3/16/14
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	Jan ∆%: Manufacturing 0.7 12-Month ∆%: Manufacturing 1.4 Blog 3/16/14
Consumer Spending	Manufactured Goods Jan ∆%: -1.5 Dec 12-Month Manufactured Goods ∆%: 0.6 Blog 3/2/14
Employment	Unemployment Rate: IVQ2013 9.8% Blog 3/9/13
Trade Balance	Jan Exports ∆%: month -1.8, 12 months -0.8 Jan Imports ∆%: month -0.3, 12 months 0.1 Blog 3/9/14
Confidence Indicators	Historical average 100 Mar Mfg Business Climate 100 Blog 3/30/14

Links to blog comments in Table FR:

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/9/14 http://cmpassocregulationblog.blogspot.com/2014/03/rules-discretionary-authorities-and.html

3/2/14 http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html

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

12/29/13 http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.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

Table VF-1 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 index continued at 100 in Mar 2013. 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 -4 in Jan 2014 with decline to -6 in Feb 2014 and -11 in Mar 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 21 in Dec 2013 and minus 19 in Jan 2014, deteriorating to minus 22 in Feb 2014 and -21 in Mar 2013.

Table VF-1, France, Manufacturing Business Climate Indicators of INSEE

Mfg 2013-2014	Average since 1976	Mar 13	Feb 14	Jan 14	Dec 13
Composite Indicator	100	100	100	100	100
Past Activity	4	4	4	-1	11
Finished- Goods Inventory Level	13	9	9	5	9
Global Order Books	-18	-21	-22	-19	-21
Export Order Books	-14	-13	-21	-17	-20
Personal Production Expectations	5	9	8	10	4
General Production Expectations	-9	-11	-6	-4	-11

Source: Institut National de la Statistique et des Études Économique

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20140325

Chart VF-1 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, 100 in Feb 2014 and 100 in Mar 2014.

Chart VF-1, 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=20140325

Chart VF-2 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 and stabilizing in Mar 2014.

Chart VF-2, 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=20140325

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. The index increased marginally in Mar 2014.

Chart VF-3, 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=20140325

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 2.8 percent in IVQ2012, minus 2.4 percent in IQ2013, minus 2.1 percent in IIQ2013 and minus 1.9 percent in IIIQ2013. GDP fell 0.9 percent in IVQ2013 relative to a year earlier. 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 and IVQ2013 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	-0.9	-0.1	-1.1	-2.4	1.0
IIIQ	-1.9	-2.0	-1.8	-4.4	-0.4
IIQ	-2.1	-4.4	-2.8	-5.0	0.0
IQ	-2.4	-5.0	-2.9	-6.6	-0.7
2012
IVQ	-2.8	-6.5	-4.1	-7.4	1.0
IIIQ	-2.6	-7.1	-3.9	-8.3	2.0
IIQ	-2.4	-6.9	-3.4	-8.5	2.2
IQ	-1.7	-7.9	-3.2	-8.0	3.0
2011
IVQ	-0.6	-6.8	-1.9	-3.8	3.5
IIIQ	0.4	0.6	-1.1	-2.4	6.1
IIQ	1.1	3.6	0.3	-1.0	7.5
IQ	1.4	9.1	0.6	0.6	11.0
2010
IVQ	2.2	15.6	1.0	1.3	13.4
IIIQ	1.8	13.2	1.2	2.3	12.1
IIQ	1.8	13.4	0.8	1.0	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/114963

The Markit/ADACI Business Activity Index increased from 49.4 in Jan to 52.9 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b17493de9e44c38ab7dff3365122111). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds the index suggesting strong growth of services with the highest rate of increase of new orders in about four years (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b17493de9e44c38ab7dff3365122111). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased from 53.1 in Jan to 52.3 in Feb for continuing growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/e8afa393e01a401f969fdefd9c391ea0). New export orders grew around the trend of the fastest rate in 32 months in Nov and Dec and continued growing in Feb 2014. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds continuing growth with new export orders from neighbor countries (http://www.markiteconomics.com/Survey/PressRelease.mvc/e8afa393e01a401f969fdefd9c391ea0). 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 3/16/14
Producer Price Index	Jan month ∆%: -0.2 Jan 12-month ∆%: -1.7 Blog 3/9/14
GDP Growth	IVQ2013/IIIQ2013 SA ∆%: 0.1 IVQ2013/IVQ2012 NSA ∆%: minus 0.9 Blog 3/17/13 6/16/13 8/11/13 9/15/13 11/17/13 12/15/13 2/16/14 3/16/14
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	Jan month ∆%: 1.0 12 months CA ∆%: 1.4 Blog 3/16/14
Retail Sales	Jan month ∆%: 0.0 Jan 12-month ∆%: -0.9 Blog 3/30/13
Business Confidence	Mfg Feb 99.1, Oct 97.4 Construction Feb 77.1, Oct 80.9 Blog 3/2/14
Trade Balance	Balance Jan SA €3689 million versus Dec €3701 Exports Jan month SA ∆%: -1.5; Imports Jan month ∆%: -1.6 Exports 12 months Jan NSA ∆%: 0.2 Imports 12 months NSA ∆%: -6.6 Blog 3/23/14

Links to blog comments in Table IT:

3/23/14 http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

3/9/14 http://cmpassocregulationblog.blogspot.com/2014/03/rules-discretionary-authorities-and.html

3/2/14 http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.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

8/11/13 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

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-1 provides growth of retail sales for Italy. Retail sales changed 0.0 percent in Jan 2014 relative to Dec 2013, decreased 0.4 percent in Nov-Jan 2014 relative to Aug-Oct 2013, decreased 0.9 percent in Jan 2014 relative to Jan 2013 and decreased 0.9 percent cumulatively in Jan 2014 relative to Jan 2013. Food retail sales outperform non-food retail sales.

Table VG-3, Italy, Retail Sales ∆%

	Jan 2014/ Dec 2013 SA	Nov-Jan 14/ Aug-Oct 13 SA	Jan 2014/ Jan 2013 NSA	Jan 2014/ Jan 2013
Food	0.0	-0.3	-0.1	-0.1
Non-food	-0.1	-0.5	-1.3	-1.3
Total	0.0	-0.4	-0.9	-0.9

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/116504

Chart VG-1 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 and improved in Jan 2014.

Chart VG-1, 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, Jan 2014 and annual rates for 2011, 2012 and 2013 in Table VG-2. 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 changed 0.0 percent in Jan 2014 and fell 0.9 percent in 12 months.

Table VG-2, Italy, Retail Sales Month and 12-Month ∆%

	Month ∆% SA	12-Month ∆% NSA
Jan 2014	0.0	-0.9
Dec 2013	-0.3	-2.6
Nov	0.0	0.2
Oct	-0.2	-1.6
Sep	-0.2	-2.8
Aug	0.0	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	0.0	-4.8
Jan	-0.5	-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/116504

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 58.3 in Jan to 58.2 in Feb, which is still close to high historical levels and above long-term trend (http://www.markiteconomics.com/Survey/PressRelease.mvc/9996492c13d04da5b922b471ceb3bc33). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at 0.7 percent in IQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9996492c13d04da5b922b471ceb3bc33). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased to 56.9 in Feb from 56.6 in Jan with job creation at the highest pace in 33 months (http://www.markiteconomics.com/Survey/PressRelease.mvc/e798f00cca5b44a783d568ee8ed7845b). New export orders increased for the eleventh consecutive month. New orders increased from the US Africa, China and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions continue above trend (http://www.markiteconomics.com/Survey/PressRelease.mvc/e798f00cca5b44a783d568ee8ed7845b). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Feb month ∆%: 0.5 Feb 12-month ∆%: 1.7 Blog 3/30/14
Output/Input Prices	Output Prices: Feb 12-month NSA ∆%: 0.5; excluding food, petroleum ∆%: 1.1 Input Prices: Feb 12-month NSA ∆%: -5.7 Excluding ∆%: -5.3 Blog 3/30/14
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	Jan 2014/Jan 2013 ∆%: Production Industries 2.9; Manufacturing 3.3 Blog 3/16/14
Retail Sales	Jan month ∆%: -1.5 Jan 12-month ∆%: 4.3 Blog 2/23/14
Labor Market	Nov-Jan Unemployment Rate: 7.2%; Claimant Count 3.5%; Earnings Growth 1.4% Blog 3/23/14 LMGDP 3/23/14
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 3/23/14
Trade Balance	Balance SA Feb minus ₤2565 million Exports Feb ∆%: -2.2; Dec-Feb ∆%: 0.1 Imports Feb ∆%: 2.3 Dec-Feb ∆%: -0.4 Blog 3/16/14