Financial Valuations, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, United States International Trade, World Cyclical Slow Growth and Global Recession Risk: Part IV

 

Financial Valuations, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, United States International Trade, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

Executive Summary

I Twenty Seven Million Unemployed or Underemployed

IA1 Summary of the Employment Situation

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

IB Stagnating Real Wages

IIA United States International Trade

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/ns/cs.aspx?id=28) 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 changed its forecast of the world economy to 3.0 percent in 2013 but accelerating to 3.6 percent in 2014, 3.9 percent in 2015 and 3.9 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,543 billion of world output of $72,106 billion, or 47.9 percent, but are projected to grow at much lower rates than world output, 2.0 percent on average from 2013 to 2016 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.2 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.5 percent. The difference in dollars of 2012 is rather high: growing by 15.2 percent would add around $11.0 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,938 billion but growing by 8.5 percent would add $6.1 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 $27,080 billion, or 37.6 percent of world output. The EMDEs would grow cumulatively 21.9 percent or at the average yearly rate of 5.1 percent, contributing $5.9 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,229 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 $14,340 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	72,106	3.0	3.6	3.9	3.9
G7	34,543	1.4	2.2	2.3	2.3
Canada	1,821	2.0	2.3	2.4	2.4
France	2,613	0.3	1.0	1.5	1.7
DE	3,428	0.5	1.7	1.6	1.4
Italy	2,014	-1.8	0.6	1.1	1.3
Japan	5,938	1.5	1.4	1.0	0.7
UK	2,484	1.8	2.9	2.5	2.4
US	16,245	1.9	2.8	3.0	3.0
Euro Area	12,192	-0.5	1.2	1.5	1.5
DE	3,428	0.5	1.7	1.6	1.4
France	2,613	0.3	1.0	1.5	1.7
Italy	2,014	-1.8	0.6	1.1	1.3
POT	212	-1.4	1.2	1.5	1.7
Ireland	211	-0.3	1.7	2.5	2.5
Greece	249	-3.9	0.6	2.9	3.7
Spain	1,323	-1.2	0.9	1.0	1.1
EMDE	27,080	4.7	4.9	5.3	5.4
Brazil	2,248	2.3	1.8	2.7	3.0
Russia	2,004	1.3	1.3	2.3	2.5
India	1,859	4.4	5.4	6.4	6.5
China	8,229	7.7	7.5	7.3	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/ns/cs.aspx?id=28

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/ns/cs.aspx?id=28). 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 2013 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 in 2013 for the countries with sovereign debt difficulties in Europe: 16.3 percent for Portugal (POT), 13.1 percent for Ireland, 27.3 percent for Greece, 26.4 percent for Spain and 12.2 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.1 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	7.1	6.7	6.5	6.3
Canada	7.3	7.0	7.0	6.9	6.8
France	10.2	10.8	11.0	10.7	10.3
DE	5.5	5.3	5.2	5.2	5.2
Italy	10.7	12.2	12.4	11.9	11.1
Japan	4.3	4.0	3.9	3.9	3.9
UK	8.0	7.6	6.9	6.6	6.3
US	8.1	7.4	6.4	6.2	6.1
Euro Area	11.4	12.1	11.9	11.6	11.1
DE	5.5	5.3	5.2	5.2	5.2
France	10.2	10.8	11.0	10.7	10.3
Italy	10.7	12.2	12.4	11.9	11.1
POT	15.7	16.3	15.7	15.1	14.5
Ireland	14.7	13.1	11.2	10.5	10.1
Greece	24.2	27.3	26.3	24.4	21.4
Spain	25.0	26.4	25.5	24.9	24.2
EMDE	NA	NA	NA	NA	NA
Brazil	5.5	5.4	5.6	5.8	6.0
Russia	5.5	5.5	6.2	6.2	6.0
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/ns/cs.aspx?id=28

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IVQ2013 available now for all countries. There are preliminary estimates for all countries for IQ2014. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 1.0 percent in IQ2012, 4.1 percent at SAAR (seasonally adjusted annual rate) 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 0.6 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 2.5 percent, which is much lower than 4.1 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 3.0 percent and decreased 0.2 percent relative to a year earlier. Japan’s GDP increased 0.1 percent in IVQ2012 at the SAAR of 0.2 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.3 percent in IQ2013 at the SAAR of 5.3 percent and increased 0.1 percent relative to a year earlier. Japan’s GDP increased 0.7 percent in IIQ2013 at the SAAR of 2.9 percent and increased 1.2 percent relative to a year earlier. Japan’s GDP grew 0.3 percent in IIIQ2013 at the SAAR of 1.3 percent and increased 2.3 percent relative to a year earlier. In IVQ2013, Japan’s GDP increased 0.1 percent at the SAAR of 0.3 percent, increasing 2.5 percent relative to a year earlier. Japan’s GDP increased 1.6 percent in IQ2014 at the SAAR of 6.7 percent and increased 3.0 percent relative to a year earlier.
• China. China’s GDP grew 1.4 percent in IQ2012, annualizing to 5.7 percent, and 8.1 percent relative to a year earlier. 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 2.3 percent in IIIQ2013, which annualizes at 9.5 percent and 7.8 percent relative to a year earlier. China grew at 1.7 percent in IVQ2013, which annualized to 7.0 percent and 7.7 percent relative to a year earlier. China’s GDP grew 1.4 percent in IQ2014, which annualizes to 5.7 percent, and 7.4 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 2014.
• 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 1.1 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. In IQ2014, the GDP of the euro area increased 0.2 percent and 0.9 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 changed 0.0 percent relative to a year earlier. In IQ2013, Germany’s GDP changed 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. The GDP of Germany increased 0.8 percent in IQ2014 and 2.5 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/2014/06/financial-indecision-mediocre-cyclical.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/06/financial-instability-mediocre-cyclical.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2014/05/rules-discretionary-authorities-and.html). In IVQ2013, US GDP grew 0.7 percent at 2.6 percent SAAR and 2.6 percent relative to a year earlier. In IQ2014, US GDP decreased 0.7 percent, increased 1.5 percent relative to a year earlier and fell 2.9 percent at SAAR.
• 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 increased 0.1 percent relative to a year earlier. UK GDP increased 0.8 percent in IIIQ2012 and increased 0.3 percent relative to a year earlier. UK GDP fell 0.2 percent in IVQ2012 relative to IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP increased 0.5 percent in IQ2013 and 0.7 percent relative to a year earlier. UK GDP increased 0.7 percent in IIQ2013 and 1.8 percent relative to a year earlier. In IIIQ2013, UK GDP increased 0.8 percent and 1.8 percent relative to a year earlier. UK GDP increased 0.7 percent in IVQ2013 and 2.7 percent relative to a year earlier. In IQ2014, UK GDP increased 0.8 percent and 3.0 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 2.2 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. In IQ2014, Italy’s GDP decreased 0.1 percent and fell 0.5 percent relative to a year earlier.
• France. France’s GDP increased 0.2 percent in IQ2012 and increased 0.6 percent relative to a year earlier. France’s GDP decreased 0.3 percent in IIQ2012 and increased 0.4 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.3 percent and increased 0.5 percent relative to a year earlier. France’s GDP fell 0.3 percent in IVQ2012 and changed 0.0 percent relative to a year earlier. In IQ2013, France GDP changed 0.0 percent and declined 0.2 percent relative to a year earlier. The GDP of France increased 0.6 percent in IIQ2013 and 0.7 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIIQ2013 and increased 0.3 percent relative to a year earlier. The GDP of France increased 0.2 percent in IVQ2013 and 0.7 percent relative to a year earlier. In IVQ2014, France’s GDP changed 0.0 percent and increased 0.7 percent relative to a year earlier.

Table V-3, Percentage Changes of GDP Quarter on Prior Quarter and on Same Quarter Year Earlier, ∆%

	IQ2012/IVQ2011	IQ2012/IQ2011
United States	QOQ: 0.9        SAAR: 3.7	3.3
Japan	QOQ: 1.0 SAAR: 4.1	3.2
China	1.4	8.1
Euro Area	-0.1	-0.2
Germany	0.7	1.8
France	0.2	0.6
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: -0.6 SAAR: -2.5	3.2
China	2.1	7.6
Euro Area	-0.3	-0.5
Germany	-0.1	0.6 1.1 CA
France	-0.3	0.4
Italy	-0.5	-2.4
United Kingdom	-0.4	0.1
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.7  SAAR: 2.8	3.1
Japan	QOQ: –0.8 SAAR: –3.0	-0.2
China	2.0	7.4
Euro Area	-0.2	-0.7
Germany	0.2	0.4
France	0.3	0.5
Italy	-0.4	-2.6
United Kingdom	0.8	0.3
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	2.0
Japan	QOQ: 0.1 SAAR: 0.2	-0.3
China	1.9	7.9
Euro Area	-0.5	-1.0
Germany	-0.5	0.0
France	-0.3	0.0
Italy	-0.9	-2.8
United Kingdom	-0.2	0.2
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.3 SAAR: 1.1	1.3
Japan	QOQ: 1.3 SAAR: 5.3	0.1
China	1.5	7.7
Euro Area	-0.2	-1.1
Germany	0.0	-1.6
France	0.0	-0.2
Italy	-0.6	-2.4
UK	0.5	0.7
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.6 SAAR: 2.5	1.6
Japan	QOQ: 0.7 SAAR: 2.9	1.2
China	1.8	7.5
Euro Area	0.3	-0.6
Germany	0.7	0.9
France	0.6	0.7
Italy	-0.3	-2.2
UK	0.7	1.8
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 1.0 SAAR: 4.1	2.0
Japan	QOQ: 0.3 SAAR: 1.3	2.3
China	2.3	7.8
Euro Area	0.1	-0.3
Germany	0.3	1.1
France	-0.1	0.3
Italy	-0.1	-1.9
UK	0.8	1.8
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.7 SAAR: 2.6	2.6
Japan	QOQ: 0.1 SAAR: 0.3	2.5
China	1.7	7.7
Euro Area	0.3	0.5
Germany	0.4	1.3
France	0.2	0.7
Italy	0.1	-0.9
UK	0.7	2.7
	IQ2014/IVQ2013	IQ2014/IQ2013
USA	QOQ -0.7 SAAR -2.9	1.5
Japan	QOQ: 1.6 SAAR: 6.7	3.0
China	1.4	7.4
Euro Area	0.2	0.9
Germany	0.8	2.5
France	0.0	0.7
Italy	-0.1	-0.5
UK	0.8	3.0

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 (http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html 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 May 2014, Japan’s exports fell 2.7 percent in 12 months while imports decreased 3.6 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. Net trade deducted 1.1 percentage point from GDP growth of Japan in IQ2014.
• China. In May 2014, China exports increased 7.0 percent relative to a year earlier and imports decreased 1.6 percent.
• Germany. Germany’s exports increased 3.0 percent in the month of Apr 2014 and decreased 0.2 percent in the 12 months ending in Apr 2014. Germany’s imports decreased 0.2 percent in the month of Apr and increased 0.6 percent in the 12 months ending in Apr. Net trade contributed 0.8 percentage points to growth of GDP in IQ2012, contributed 0.3 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 0.1 percentage points in IIQ2013. Net traded deducted 0.5 percentage points from Germany’s GDP growth in IIIQ2013 and added 0.4 percentage points to GDP growth in IVQ2013. Net trade added 0.1 percentage points to GDP growth in IQ2014.
• United Kingdom. Net trade deducted 0.7 percentage points from UK value added in IQ2012, deducted 0.8 percentage points in IIQ2012, added 0.9 percentage points in IIIQ2012 and subtracted 0.4 percentage points in IVQ2012. In IQ2013, net trade added 0.6 percentage points to UK’s growth of value added and contributed 0.0 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.2 percentage points from UK growth. Net trade contributed 0.7 percentage points to UK value added in IVQ2013. Net trade contributed 0.3 percentage points to UK value added in IQ2014.
• France. France’s exports decreased 0.7 percent in Apr 2014 while imports decreased 2.9 percent. Net traded added 0.1 percentage points to France’s GDP in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and added 0.3 percentage points in IIQ2013, deducting 0.5 percentage points in IIIQ2013. Net trade added 0.3 percentage points to France’s GDP in IVQ2013 and deducted 0.1 percentage points in IQ2014.
• United States. US exports increased 1.0 percent in May 2014 and goods exports increased 3.0 percent in Jan-May 2014 relative to a year earlier. 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. Net trade deducted 1.53 percentage points from US GDP growth in IQ2014. United States national industrial production increased 0.6 percent in May 2014 after decreasing 0.3 percent in Apr 2014 and increasing 0.8 percent in Mar 2014 with all data seasonally adjusted. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production rose 0.6 percent in May after having declined 0.3 percent in April. The decrease in April was previously reported to have been 0.6 percent. Manufacturing output increased 0.6 percent in May after having moved down 0.1 percent in the previous month. In May, the output of mines gained 1.3 percent and the production of utilities decreased 0.8 percent. At 103.7 percent of its 2007 average, total industrial production in May was 4.3 percent above its level of a year earlier. The capacity utilization rate for total industry increased 0.2 percentage point in May to 79.1 percent, a rate that is 1.0 percentage point below its long-run (1972–2013) average.”

In the six months ending in May 2014, United States national industrial production accumulated increase of 2.2 percent at the annual equivalent rate of 4.5 percent, which is higher than growth of 4.3 percent in the 12 months ending in May 2014. Excluding growth of 1.1 percent in Feb 2014, growth in the remaining five months from Dec to May 2014 accumulated to 1.1 percent or 2.7 percent annual equivalent. Industrial production fell in two of the past six months. Business equipment accumulated growth of 3.7 percent in the six months from Dec 2013 to May 2014 at the annual equivalent rate of 7.6 percent, which is higher than growth of 5.3 percent in the 12 months ending in May 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 0.2 percentage point in May to 79.1 percent, a rate that is 1.0 percentage points below its long-run (1972–2013) average.” United States industry apparently decelerated to a lower growth rate with possible acceleration in past months.

Manufacturing increased 0.6 percent in May 2014 after decreasing 0.1 percent in Feb 2014 and increasing 0.8 percent in Mar 2014 seasonally adjusted, increasing 3.6 percent not seasonally adjusted in the 12 months ending in May 2014. Manufacturing grew cumulatively 2.0 percent in the six months ending in May 2014 or at the annual equivalent rate of 4.0 percent. Excluding the increase of 1.4 percent in Feb 2014, manufacturing accumulated growth of 0.6 percent from Dec 2013 to May 2014 or at the annual equivalent rate of 1.2 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 Board of Governors of the Federal Reserve System conducted the annual revision of industrial production released on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):

“The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. The annual revision for 2014 was more limited than in recent years because the source data required to extend the annual benchmark indexes of production into 2012 were mostly unavailable. Consequently, the IP indexes published with this revision are very little changed from previous estimates. Measured from fourth quarter to fourth quarter, total IP is now reported to have increased about 3 1/3 percent in each year from 2011 to 2013. Relative to the rates of change for total IP published earlier, the new rates are 1/2 percentage point higher in 2012 and little changed in any other year. Total IP still shows a peak-to-trough decline of about 17 percent for the most recent recession, and it still returned to its pre-recession peak in the fourth quarter of 2013.”

Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 19.9 percent from the trough in Apr 2009 to Dec 2013. Manufacturing grew 23.8 percent from the trough in Apr 2009 to May 2014. Manufacturing output in May 2014 is 3.3 percent below the peak in Jun 2007.

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

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	1.0 May	3.0 Jan-May	-0.3 May	2.6 Jan-May
Japan		May 2014 -2.7 Apr 2014 5.1 Mar 2014 1.8 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		May 2014 -3.6 Apr 2013 3.4 Mar 2014 18.1 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 7.0 May 0.9 Apr -6.6 Mar -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 -1.6 May -0.8 Apr -11.3 Mar 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	-1.5 12-M Apr	0.5 Jan-Apr	-2.8 12-M Apr	-0.6 Jan-Apr
Germany	3.0 Apr CSA	-0.2 Apr	0.1 Apr CSA	0.6 Apr
France Mar	-0.7	-6.4	-2.9	-5.5
Italy Apr	0.4	2.0	-0.6	-2.9
UK	-2.9 Apr	-2.9 Feb-Apr 14 /Feb-Apr 13	0.6 Apr	-3.7 Feb-Apr 14 13/Feb-Apr 13
Net Trade % Points GDP Growth	% Points
USA	IQ2014 -1.53 IVQ2013 0.99 IIIQ2013 0.14 IIQ2013 -0.07 IQ2013 -0.28 IVQ2012 +0.68 IIIQ2012 -0.03 IIQ2012 +0.10 IQ2012 +0.44
Japan	0.4 IQ2012 -1.3 IIQ2012 -2.2 IIIQ2012 -0.5 IVQ2012 1.7 IQ2013 0.5 IIQ2013 -2.0 IIIQ2013 -2.2 IVQ2013 -1.1 IQ2014
Germany	IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.3 IIQ2013 0.1 IIIQ2013 -0.5 IVQ2013 0.4 IQ2014 0.1
France	0.1 IIIQ2012 0.1 IVQ2012 -0.1 IQ2013 0.3 IIQ2013 -0.5 IIIQ2013 0.3 IVQ2013 -0.1 IQ2014
UK	-0.7 IQ2012 -0.8 IIQ2012 +0.9 IIIQ2012 -0.4 IVQ2012 0.6 IQ2013 0.0 IIQ2013 -1.2 IIIQ2013 0.7 IVQ2013 0.3 IQ2014

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-4 for May 2014. The share of Asia in Japan’s trade is more than one-half for 55.1 percent of exports and 45.2 percent of imports. Within Asia, exports to China are 18.7 percent of total exports and imports from China 21.8 percent of total imports. While exports to China increased 0.4 percent in the 12 months ending in May 2014, imports from China decreased 0.5 percent. The second largest export market for Japan in May 2014 is the US with share of 18.0 percent of total exports, which is close to that of China, and share of imports from the US of 9.4 percent in total imports. Japan’s exports to the US fell 2.8 percent in the 12 months ending in May 2014 and imports from the US fell 0.5 percent. Western Europe has share of 11.1 percent in Japan’s exports and of 10.9 percent in imports. Rates of growth of exports of Japan in May 2014 are minus 2.8 percent for exports to the US, minus 10.7 percent for exports to Brazil and 22.5 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 May 2014 are mixed. Imports from Asia decreased 1.2 percent in the 12 months ending in May 2014 while imports from China decreased 2.7 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-4, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen

May 2014	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	5,607,581	-2.7	6,516,544	-3.6
Asia	3,087,914 % Total 55.1	-3.4	2,945,032 % Total 45.2	-1.2
China	1,049,696 % Total 18.7	0.4	1,419,105 % Total 21.8	-2.7
USA	1,010,694 % Total 18.0	-2.8	611,193 % Total 9.4	-0.5
Canada	59,414	-14.2	101,133	-9.3
Brazil	41,339	-10.7	75,075	-28.9
Mexico	81,962	3.3	47,485	22.4
Western Europe	622,770 % Total 11.1	15.2	709,880 % Total 10.9	6.1
Germany	165,641	22.5	192,516	7.1
France	47,659	-1.7	88,854	1.2
UK	92,016	3.6	52,249	-13.6
Middle East	215,002	10.9	1,102,296	-10.5
Australia	104,308	-30.4	391,700	-12.8

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 3.0 percent in 2013 to 5.3 percent in 2015 and 5.7 percent on average from 2016 to 2019. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would be more challenging with lower growth of world trade.

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

	2013	2014	2015	Average ∆% 2016-2019
World Trade Volume (Goods and Services)	3.0	4.3	5.3	5.7
Exports Goods & Services	3.1	4.5	5.3	5.7
Imports Goods & Services	2.9	4.2	5.2	5.7
World Trade Value of Exports Goods & Services USD Billion	23,083	23,990	25,123	Average ∆% 2006-2015 20,390
Value of Exports of Goods USD Billion	18,591	19,281	20,132	Average ∆% 2006-2015 16,396
Average Oil Price USD/Barrel	104.07	104.17	97.92	Average ∆% 2006-2015 88.84
Average Annual ∆% Export Unit Value of Manufactures	-1.1	-0.3	-0.4	Average ∆% 2006-2015 1.4
Exports of Goods & Services	2013	2014	2015	Average ∆% 2016-2019
Euro Area	1.4	3.4	4.2	4.7
EMDE	4.4	5.0	6.2	6.2
G7	1.4	3.9	4.5	4.9
Imports Goods & Services
Euro Area	0.3	2.8	3.5	4.7
EMDE	5.6	5.2	6.3	6.4
G7	1.1	3.2	4.2	4.9
Terms of Trade of Goods & Services
Euro Area	-0.3	-0.2	-0.7	-0.1
EMDE	0.7	-0.4	-0.6	-0.4
G7	0.7	-0.044	0.3	0.0
Terms of Trade of Goods
Euro Area	0.8	-0.044	0.1	-0.2
EMDE	-0.6	-0.9	-0.9	-0.8
G7	-0.1	-0.3	-0.9	-0.7

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

Source: International Monetary Fund World Economic Outlook databank

http://www.imf.org/external/ns/cs.aspx?id=28

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, increased to 55.4 in Jun from 54.2 in May, indicating expansion at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/f4caa5bd611d4a568ab1a28c8f2816a5). This index has remained above the contraction territory of 50.0 during 59 consecutive months. The employment index increased from 51.6 in May to 52.7 in Jun with input prices rising at faster rate, new orders increasing at faster rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/f4caa5bd611d4a568ab1a28c8f2816a5). David Hensley, Director of Global Economics Coordination at JP Morgan finds possible higher growth than trend in the second half of the year (http://www.markiteconomics.com/Survey/PressRelease.mvc/f4caa5bd611d4a568ab1a28c8f2816a5). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 52.7 in Jun from 52.1 in Mat (http://www.markiteconomics.com/Survey/PressRelease.mvc/ce22ed75fd824bb2a6de0856a5049151). New export orders expanded for the twelfth consecutive month (http://www.markiteconomics.com/Survey/PressRelease.mvc/ce22ed75fd824bb2a6de0856a5049151). David Hensley, Director of Global Economic Coordination at JP Morgan finds improvement of the index with above-trend growth at 4.5 percent annual equivalent (http://www.markiteconomics.com/Survey/PressRelease.mvc/ce22ed75fd824bb2a6de0856a5049151). The HSBC Brazil Composite Output Index, compiled by Markit, increased from 49.9 in Apr to 49.9 in Jun, indicating unchanged activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/eb41cd65ef7342758ff5e778a4548620). The HSBC Brazil Services Business Activity index, compiled by Markit, increased from 50.6 in May to 51.4 in Jun, indicating expanding services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/1b1eac66368b4c93b0488de12835096a). André Loes, Chief Economist, Brazil, at HSBC, finds risks of weak economic activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/1b1eac66368b4c93b0488de12835096a). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) decreased marginally from 48.8 in May to 48.7 in Jun, indicating moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/35d4c5e2b0af4e9b9d535d5979613a1b). André Loes, Chief Economist, Brazil at HSBC, finds weakening industrial activity in Brazil (http://www.markiteconomics.com/Survey/PressRelease.mvc/35d4c5e2b0af4e9b9d535d5979613a1b).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted increased to 57.5 in Jun from 56.4 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/eaa9c08442964117981ead1ac971a652). New export orders registered 50.9 in Jun, decreasing from 52.2 in May, indicating expansion at a slower rate. Chris Williamson, Chief Economist at Markit, finds that manufacturing hiring is growing with creation of about 12,000 jobs, 200.000 new nonfarm payroll jobs and 3.0 percent GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/eaa9c08442964117981ead1ac971a652). The Markit Flash US Services PMI™ Business Activity Index increased from 58.1 in May to 61.2 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1b973b6faa84a18bfb1ce9eb4538725). Chris Williamson, Senior Economist at Markit, finds that the surveys are consistent with the highest rate of economic activity since before the global recession (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1b973b6faa84a18bfb1ce9eb4538725). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased to 61.0 in Jun from 58.4 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/a0ce20b0b3d544f1b2e1c97acbc94e0d). The Markit US Services PMI™ Business Activity Index increased from 58.1 in May to 61.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/a0ce20b0b3d544f1b2e1c97acbc94e0d). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at annual rate of 4.0 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/a0ce20b0b3d544f1b2e1c97acbc94e0d). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 57.3 in Jun from 56.4 in May, which indicates expansion at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/a5254670de854235b620ac5824418514). The index of new exports orders decreased from 52.2 in May to 50.6 in Jun while total new orders increased from 58.8 in May to 61.2 in Jun. Chris Williamson, Chief Economist at Markit, finds that the index suggests output growth at aroun the fastest pace since the Global Recession (http://www.markiteconomics.com/Survey/PressRelease.mvc/a5254670de854235b620ac5824418514). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® decreased 0.1 percentage points from 55.4 in May to 55.3 in Jun, which indicates growth at almost unchaged rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 2.0 percentage points from 56.9 in May to 58.9 in Jun. The index of exports decreased 2.0 percentage point from 56.5 in May to 54.5 in Jun, growing at a slower rate. The Non-Manufacturing ISM Report on Business^® PMI decreased 0.3 percentage points from 56.3 in May to 56.0 in Jun, indicating growth of business activity/production during 59 consecutive months, while the index of new orders increased 0.7 percentage points from 60.5 in May to 61.2 in Jun (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	May 12 months NSA ∆%: 2.0; ex food and energy ∆%: 2.0 May month SA ∆%: 0.4; ex food and energy ∆%: 0.3 Blog 6/22/14
Producer Price Index	Finished Goods May 12-month NSA ∆%: 2.4; ex food and energy ∆% 1.8 May month SA ∆% = 0.0; ex food and energy ∆%: 0.1 Final Demand May 12-month NSA ∆%: 2.0; ex food and energy ∆% 2.0 May month SA ∆% = -0.2; ex food and energy ∆%: -0.1 Blog 6/22/14
PCE Inflation	May 12-month NSA ∆%: headline 1.8; ex food and energy ∆% 1.5 Blog 6/29/14
Employment Situation	Household Survey: Jun Unemployment Rate SA 6.1% Blog calculation People in Job Stress May: 26.8 million NSA, 16.3% of Labor Force Establishment Survey: Jun Nonfarm Jobs +288,000; Private +262,000 jobs created  May 12-month Average Hourly Earnings Inflation Adjusted ∆%: -0.1 Blog 7/6/14
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 Apr 2014 5.197 million lower by 0.649 million than 5.846 million in Apr 2005 Blog 6/15/14
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 IQ2014/IQ2013 1.5 IQ2012 SAAR 3.7 IIQ2012 SAAR 1.2 IIIQ2012 SAAR 2.8 IVQ2012 SAAR 0.1 IQ2013 SAAR 1.1 IIQ2013 SAAR 2.5 IIIQ2013 SAAR 4.1 IVQ2013 SAAR 2.6 IQ2014 SAAR -2.9 Blog 6/29/14
Real Private Fixed Investment	SAAR IQ2014 minus 1.8 ∆% IVQ2007 to IQ2014: minus 3.3% Blog 6/29/14
Corporate Profits	IQ2014 SAAR: Corporate Profits -9.1; Undistributed Profits -17.5 Blog 6/29/14
Personal Income and Consumption	May month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.2 Real Personal Consumption Expenditures (RPCE): minus 0.1 12-month May NSA ∆%: RDPI: 1.9; RPCE ∆%: 1.4 Blog 6/29/14
Quarterly Services Report	IQ14/IQ13 NSA ∆%: Information 5.8 Financial & Insurance 5.3 Blog 6/15/14
Employment Cost Index	Compensation Private IQ2014 SA ∆%: 0.3 Mar 12 months ∆%: 1.7 Blog 5/4/14
Industrial Production	May month SA ∆%: 0.6 May 12 months SA ∆%: 4.3 Manufacturing May SA ∆% 0.6 May 12 months SA ∆% 3.6, NSA 3.6 Capacity Utilization: 79.1 Blog 6/22/14
Productivity and Costs	Nonfarm Business Productivity IQ2014∆% SAAE -3.2; IQ2014/IQ2013 ∆% 1.0; Unit Labor Costs SAAE IQ2014 ∆% 5.7; IQ2014/IQ2013 ∆%: 1.2 Blog 6/8/2014
New York Fed Manufacturing Index	General Business Conditions From May 19.01 to Jun 19.28 New Orders: From May 10.44 to Jun 18.36 Blog 6/22/14
Philadelphia Fed Business Outlook Index	General Index from May 15.4 to Jun 17.8 New Orders from May 10.5 to Jun 16.8 Blog 6/22/14
Manufacturing Shipments and Orders	New Orders SA May ∆% -0.5 Ex Transport -0.1 Jan-May NSA New Orders ∆% 2.5 Ex transport 1.9 Blog 7/6/14
Durable Goods	May New Orders SA ∆%: minus 1.0; ex transport ∆%: minus 0.1 Jan-May 14/Jan-May 13 New Orders NSA ∆%: 4.2; ex transport ∆% 3.4 Blog 6/29/14
Sales of New Motor Vehicles	Jan-Jun 2014 8,163,942; Jan-Jun 2013 7,829,141. Jun 14 SAAR 16.98 million, May 14 SAAR 16.77 million, Jun 2013 SAAR 15.88 million Blog 7/6/14
Sales of Merchant Wholesalers	Jan-Apr 2014/Jan-Apr 2013 NSA ∆%: Total 5.2; Durable Goods: 4.0; Nondurable Goods: 6.2 Blog 6/15/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Apr 14 12-M NSA ∆%: Sales Total Business 5.6; Manufacturers 3.8 Retailers 5.7; Merchant Wholesalers 7.6 Blog 6/15/14
Sales for Retail and Food Services	Jan-May 2014/Jan-May 2013 ∆%: Retail and Food Services 3.4; Retail ∆% 3.3 Blog 6/15/14
Value of Construction Put in Place	May SAAR month SA ∆%: 0.1 May 12-month NSA: 5.7 Blog 7/6/14
Case-Shiller Home Prices	Apr 2014/Apr 2013 ∆% NSA: 10 Cities 10.8; 20 Cities: 10.8 ∆% Apr SA: 10 Cities 0.0 ; 20 Cities: 0.2 Blog 6/29/14
FHFA House Price Index Purchases Only	Apr SA ∆% 0.0; 12 month NSA ∆%: 6.0 Blog 6/29/14
New House Sales	May 2014 month SAAR ∆%: 18.6 Jan-May 2014/Jan-May 2013 NSA ∆%: 2.1 Blog 6/29/14
Housing Starts and Permits	May Starts month SA ∆% minus 6.5; Permits ∆%: minus 6.4 Jan-May 2014/Jan-May 2013 NSA ∆% Starts 6.5; Permits  ∆% 1.0 Blog 6/22/14
Trade Balance	Balance May SA -$44,392 million versus Apr -$47,037 million Exports May SA ∆%: 1.0 Imports May SA ∆%: -0.3 Goods Exports Jan-May 2014/Jan-May 2013 NSA ∆%: 3.0 Goods Imports Jan-May 2014/Jan-May 2012 NSA ∆%: 2.6 Blog 7/6/14
Export and Import Prices	May 12-month NSA ∆%: Imports 0.4; Exports 0.5 Blog 6/15/14
Consumer Credit	Apr ∆% annual rate: Total 10.2; Revolving 12.3; Nonrevolving 9.5 Blog 6/15/14
Net Foreign Purchases of Long-term Treasury Securities	Apr Net Foreign Purchases of Long-term US Securities: minus $24.2 billion Major Holders of Treasury Securities: China $1263 billion; Japan $1210 billion; Total Foreign US Treasury Holdings Apr $5961 billion Blog 6/22/14
Treasury Budget	Fiscal Year 2014/2013 ∆% May: Receipts 7.5; Outlays minus 2.3; Individual Income Taxes 3.3 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Blog 6/15/2014
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	May 2014 SAAR ∆%: Securities 10.4 Loans 7.6 Cash Assets 1.6 Deposits 7.6 Blog 6/29/14
Flow of Funds	IQ2014 ∆ since 2007 Assets +$13,322.5 BN Nonfinancial $120.8 BN Real estate -$565.4 BN Financial +13,201.7 BN Net Worth +$13,931.7 BN Blog 6/29/14
Current Account Balance of Payments	IQ2014 -86,131 MM % GDP 2.6 Blog 6/22/14

Links to blog comments in Table USA:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

6/8/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-risks-rules-discretionary.html

5/4/2014 http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html

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

Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jun 2014, light vehicle sales accumulated to 8,163,942, which is higher by 4.3 percent relative to 7,829,141 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 16.98 million in Jun 2014, higher than 16.77 million in May 2014 and higher than 15.88 million in Jun 2013 (http://motorintelligence.com/m_frameset.html).

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

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

Source: US Census Bureau

http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html

Chart VA-1 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2014. Output virtually stagnated since the late 1990s.

Chart VA-1, US, Motor Vehicles and Parts Output, 1972-2014

Source: Board of Governors of the Federal Reserve System

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

Manufacturers’ shipments increased 0.1 percent in May 2014 and 0.4 percent in Apr 2014 after increasing 0.4 percent in Mar 2014. New orders decreased 0.5 percent in May 2014, after increasing 0.8 percent in Apr 2014 and increasing 1.5 percent in Mar 2014, as shown in Table VA-2. These data are very volatile. Volatility is illustrated by increase of 2642.2 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.2 percent in Aug. New orders excluding transportation equipment decreased 0.1 percent in May 2014 after increasing 0.6 percent in Apr 2014 and increasing 0.8 percent in Mar 2014. Capital goods new orders, indicating investment, decreased 4.6 percent in May 2014 after increasing 3.3 percent in Apr 2014 and increasing 10.5 percent in Mar 2014. New orders of nondefense capital goods decreased 0.5 percent in May 2014 after decreasing 0.6 percent in Apr 2014 and increasing 9.7 percent in Mar 2014. Excluding more volatile aircraft, capital goods orders increased 0.7 percent in May 2014 after decreasing 1.1 percent in Apr 2014 and increasing 4.7 percent in Mar 2014.

Table VA-2, US, Value of Manufacturers’ Shipments and New Orders, SA, Month ∆%

	May 2013  ∆%	Apr 2014  ∆%	Mar 2013 ∆%
Total
S	0.1	0.4	0.4
NO	-0.5	0.8	1.5
Excluding Transport
S	0.0	0.6	0.3
NO	-0.1	0.6	0.8
Excluding Defense
S	0.1	0.4	0.3
NO	0.2	0.0	1.1
Durable Goods
S	0.3	0.1	1.4
NO	-0.9	0.9	3.7
Machinery
S	0.7	-1.1	3.0
NO	-0.3	-2.4	4.3
Computers & Electronic Products
S	-1.3	0.2	1.2
NO	-2.0	-1.8	7.2
Computers
S	-0.7	5.8	0.5
NO	97.5	-11.4	7.3
Transport Equipment
S	0.2	-0.6	1.0
NO	-2.9	1.8	5.2
Automobiles
S	8.2	-5.6	-6.5
Motor Vehicles
S	0.6	0.4	0.0
NO	0.5	0.3	0.5
Nondefense Aircraft
S	-5.8	-1.4	4.0
NO	-4.0	-7.4	12.3
Capital Goods
S	-0.8	-0.4	2.3
NO	-4.6	3.3	10.5
Nondefense Capital Goods
S	-0.6	-0.7	2.5
NO	-0.5	-0.6	9.7
Capital Goods ex Aircraft
S	0.5	-0.3	2.2
NO	0.7	-1.1	4.7
Nondurable Goods
S	-0.2	0.7	-0.5
NO	-0.2	0.7	-0.5

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

Source: US Census Bureau

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

Chart VA-2 of the US Census Bureau provides new orders of manufacturers from Apr 2013 to Mar 2014. There is significant volatility that prevents discerning clear trends.

Chart VA-2, US, Manufacturers’ New Orders 2013-2014 Seasonally Adjusted, Month ∆%

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr022.html

Chart VA-3 of the US Census Bureau provides total value of manufacturers’ new orders, seasonally adjusted, from 1992 to 2014. Seasonal adjustment reduces sharp oscillations. The series dropped nearly vertically during the global recession but rose along a path even steeper than in the high-growth period before the recession. The final segment suggests deceleration but similar segments occurred in earlier periods followed with continuing growth and stability currently.

Chart VA-3, US, Value of Total Manufacturers’ New Orders, Seasonally Adjusted, 1992-2014

Source: US Census Bureau

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

Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-3. Values are cumulative millions of dollars in Jan-May 2014 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-May 2014 total $2447.8 billion and new orders total $2442.5 billion, growing respectively by 2.2 percent and 2.5 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 2.0 percent and new orders increased 1.9 percent. Excluding defense, shipments grew 2.1 percent and new orders grew 1.9 percent. Durable goods shipments reached $1165.5 billion in Jan-May 2014, or 47.6 percent of the total, growing by 3.7 percent, and new orders $1160.2 billion, or 47.5 percent of the total, growing by 4.2 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $1282.3 billion or 52.4 percent of the total, growing by 0.9 percent. Capital goods have relatively high value of $414.8 billion for shipments, growing 2.9 percent, and new orders $433.5 billion, increasing 3.2 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $331.9 billion, growing 3.1 percent, and new orders $349.9 billion, increasing 3.0 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 10.9 percent of US national income in IQ2014. These data are not adjusted for inflation.

Table VA-3, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars 

Jan-May 2014	Shipments	∆% 2013/ 2012	New Orders	∆% 2013/ 2012
Total	2,447,795	2.2	2,442,466	2.5
Excluding Transport	2,104,957	2.1	2,092,615	1.9
Excluding Defense	2,391,051	2.3	2,387,974	2.2
Durable Goods	1,165,506	3.7	1.160,177	4.2
Machinery	177,277	3.6	187,314	6.9
Computers & Electronic Products	136,838	4.2	104,391	2.8
Computers	2,000	-21.4	2,124	-23.6
Transport Equipment	342,838	3.1	349,851	6.1
Automobiles	46,007	-13.8
Motor Vehicles	104,798	7.9	105,030	8.0
Nondefense Aircraft	54,279	8.3	61,345	2.0
Capital Goods	414,841	2.9	433,538	3.2
Nondefense Capital Goods	368,461	3.6	389,108	1.6
Capital Goods ex Aircraft	331,867	3.1	349,958	3.0
Nondurable Goods	1,282,289	0.9	1,282,289	0.9
Food Products	322,284	5.8
Petroleum Refineries	339,915	-0.9
Chemical Products	317,333	-1.5

Note: Transport: transportation Source: US Census Bureau

Source: US Census Bureau

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

Chart VA-4 of the US Census Bureau provides value of manufacturer’s new orders not seasonally adjusted from Jan 1992 to May 2014. Fluctuations are evident, which are smoothed by seasonal adjustment in the above Chart VA-3. The series drops nearly vertically during the global contraction and then resumes growth in a steep upward trend, flattening recently.

Chart VA-4, US, Value of Total Manufacturers’ New Orders, Not Seasonally Adjusted, 1992-2014

Source: US Census Bureau

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

Construction spending at seasonally adjusted annualized rate (SAAR) reached $956.1 billion in May 2014, which was higher by 0.1 percent than in the prior month of Apr 2014, as shown in Table VA-4. Residential investment, with $359.9 billion accounting for 37.6 percent of total value of construction, decreased 1.4 percent in May and nonresidential investment, with $596.2 billion accounting for 62.4 percent of the total, increased 1.1 percent. Public construction increased 1.0 percent while private construction decreased 0.3 percent. Data in Table VA-4 show that nonresidential construction at $596.2 billion is much higher in value than residential construction at $359.9 billion while total private construction at $682.8 billion is much higher than public construction at $273.3 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in all quarters in 2012. Nonresidential investment deducted 0.57 percentage points from GDP growth in IQ2013 while residential construction added 0.34 percentage points. Nonresidential construction added 0.56 percentage points to GDP growth in IIQ2013 with residential construction adding 0.40 percentage points. Nonresidential construction added 0.58 percentage points to GDP growth in IIIQ2013 while residential construction added 0.31 percentage points. Nonresidential construction added 0.68 percentage points to GDP growth in IVQ2013 while residential construction deducted 0.26 percentage points. In 2012, residential construction added 0.32 percentage points to GDP growth and added 0.01 percentage points in 2011. Residential construction added 0.33 percentage points to GDP growth in 2013. Nonresidential construction added 0.85 percentage points to GDP growth in 2012 and 0.84 percentage points in 2011. Nonresidential construction added 0.33 percentage points to GDP growth in 2013. In IQ2014, residential construction deducted 0.13 percentage points from GDP growth and nonresidential construction deducted 0.14 percentage points (http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html).

Table VA-4, Construction Put in Place in the United States Seasonally Adjusted Annual Rate Million Dollars and Month and 12-Month ∆%  

May 2014	May 2014 SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	956,137	0.1	6.6
Residential	359,951	-1.4	7.0
Nonresidential	596,186	1.1	6.4
Total Private	682,820	-0.3	9.0
Private Residential	354,776	-1.5	7.5
New Single Family	187,557	-1.4	10.9
New Multi-Family	40,453	-0.6	30.7
Private Nonresidential	328,044	1.1	10.7
Total Public	273,317	1.0	1.2
Public Residential	5,175	1.8	-17.9
Public Nonresidential	268,142	1.0	1.6

SAAR: seasonally adjusted annual rate; B: billions

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Further information on construction spending is provided in Table VA-5. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAARs and their monthly changes are provided in the final two columns. There has been improvement in construction in the US. There are only four declines in the monthly rate from Dec 2011 to May 2014. Growth in 12 months fell from 8.2 percent in Dec 2012 to 5.7 percent in May 2014.

Table VA-5, US, Value and Percentage Change in Value of Construction Put in Place, Dollars Millions and ∆%

	Value NSA Month $ Millions	12-Month ∆% NSA	Value SAAR $ Millions	Month ∆% SA*
May 2014	81,353	5.7	956,137	0.1
Apr	76,417	7.8	955,118	0.8
Mar	70,064	8.8	947,303	0.0
Feb	63,817	7.8	947,088	-0.8
Jan	66,486	11.5	954,642	-0.7
Dec 2013	73,893	9.6	961,158	0.9
Nov	80,373	7.5	952,531	1.3
Oct	87,163	5.8	939,933	1.7
Sep	86,101	6.4	924,153	1.0
Aug	86,909	5.8	915,286	1.0
Jul	83,299	6.2	906,644	0.7
Jun	81,961	3.4	900,334	0.4
May	76,938	4.3	896,603	1.3
Apr	70,900	5.5	884,966	1.5
Mar	64,404	4.3	871,888	-0.9
Feb	59,188	4.6	879,609	1.1
Jan	59,636	5.4	869,232	-1.5
Dec 2012	67,431	8.2	882,637	0.4
Nov	74,754	8.6	879,539	-0.5
Oct	82,353	14.0	883,853	0.9
Sep	80,890	7.3	876,091	0.9
Aug	82,183	6.6	868,246	0.4
Jul	78,457	8.8	864,687	-1.0
Jun	79,262	8.8	873,069	1.3
May	73,751	12.0	861,913	2.3
Apr	67,234	9.4	842,898	1.0
Mar	61,772	9.2	834,810	1.1
Feb	56,571	11.2	825,774	0.3
Jan	56,578	10.9	823,583	0.8
Dec 2011	62,319	3.4	817,198	0.9

SAAR: Seasonally Adjusted Annual Rate

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

The sharp contraction of the value of construction in the US is revealed by Table VA-6. Construction spending in Jan-May 2014, not seasonally adjusted, reached $358.1 billion, which is higher by 8.2 percent than $331.1 billion in the same period in 2013. The depth of the contraction is shown by the decline of construction spending from $453.2 billion in Jan-May 2006 to $358.1 billion in the same period in 2014, or decline by minus 21.0 percent. The decline in inflation-adjusted terms is much higher. The all-items not seasonally adjusted CPI (consumer price index) increased from 202.5 in May 2006 to 237.900 in May 2014 (http://www.bls.gov/cpi/data.htm) or by 17.5 percent. The comparable decline from Jan-Apr 2005 to Jan-Apr 2014 is minus 11.2 percent. Construction spending in Jan-Apr 2014 increased by 9.5 percent relative to the same period in 2003. Construction spending is higher by 0.1 percent in Jan-May 2014 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

Table VA-6, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%

Jan-May 2014 $ MM	358,137
Jan-May 2013	331,066
∆% to 2014	8.2
Jan-May 2012 $ MM	315,916
∆% to 2014	13.4
Jan-May 2011 $ MM	285,476
∆% to 2014	25.5
Jan-May 2010 $MM	305,783
∆% to 2014	17.1
Jan-May 2009	357,713
∆% to 2014	0.1
Jan-May 2006 $ MM	453,210
∆% to 2014	-21.0
Jan-May 2005 $ MM	403,311
∆% to 2014	-11.2
Jan-May 2003 $ MM	327,020
∆% to 2014	9.5

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Chart VA-5 of the US Census Bureau provides value of construction spending in the US not seasonally adjusted from 2002 to 2014. There are wide oscillations requiring seasonal adjustment to compare adjacent data. There was sharp decline during the global recession followed in recent periods by a stationary series that may be moving upward again with vacillation in the final segment.

Chart VA-5, Value of Construction Spending not Seasonally Adjusted, Millions of Dollars, 2002-2014

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Monthly construction spending in the US in Jan-May and Dec not seasonally adjusted is shown in Table VA-7 for the years between 2002 and 2014. The value of $81.4 billion in May 2014 is higher by 5.7 percent than $76.9 billion in May 2013. Construction fell by 20.6 percent from the peak of $102.5 billion in May 2006 to $81.4 billion in May 2014. The data are not adjusted for inflation or changes in quality.

Table VA-7, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars

Year	Jan	Feb	Mar	Apr	May	Dec
2002	59,516	58,588	63,782	69,504	73,384	63,984
2003	59,877	58,526	64,506	69,638	74,473	71,050
2004	64,934	64,138	73,238	78,354	83,736	77,733
2005	71,474	72,048	81,345	85,485	92,959	88,172
2006	81,058	81,478	92,855	95,324	102,495	86,436
2007	79,406	79,177	88,905	93,375	100,534	84,218
2008	77,365	77,253	82,815	87,791	92,843	76,763
2009	67,127	66,490	71,770	75,355	76,971	64,178
2010	55,674	54,112	60,363	66,575	69,059	60,246
2011	51,012	50,590	56,572	61,475	65,827	62,319
2012	56,578	56,761	61,772	67,234	73,571	67,431
2013	59,636	59,188	64,404	70,900	76,938	73,893
2014	66,486	63,817	70,064	76,417	81,353	NA

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Chart VA-6 of the US Census Bureau shows SAARs of construction spending for the US since 1993. Construction spending surged in nearly vertical slope after the stimulus of 2003 combining near zero interest rates together with other housing subsidies and subsequent slow adjustment in 17 doses of increases by 25 basis points between Jun 2004 and Jun 2006. Construction spending collapsed after subprime mortgages defaulted with the fed funds rate increasing from 1.00 percent in Jun 2004 to 5.25 percent in Jun 2006. Subprime mortgages were programmed for refinancing in two years after increases in homeowner equity in the assumption that fed funds rates would remain low forever or increase in small increments (Gorton 2009EFM see http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html). Price declines of houses or even uncertainty prevented refinancing of subprime mortgages that defaulted, causing the financial crisis that eventually triggered the global recession. Chart VA-9 shows a trend of increase in the final segment but it is difficult to assess if it is sustainable.

Chart VA-6, US, Construction Expenditures SAAR 1993-2014

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr050.html

Construction spending at SAARs in the five months Jan-May is shown in Table VA-8 for the years between 2002 and 2014. There is a peak in 2005 to 2007 with subsequent collapse of SAARs and rebound in 2012-2014.

Table VA-8, US, Value of Construction Spending SAAR Millions of Dollars

Year	Jan	Feb	Mar	Apr	May
2002	858,654	862,338	844,551	858,240	850,935
2003	863,855	859,225	851,132	859,459	866,814
2004	938,826	938,656	960,946	967,761	974,158
2005	1,036,187	1,056,492	1,065,262	1,058,365	1,078,586
2006	1,183,861	1,199,767	1,213,270	1,183,485	1,180,059
2007	1,149,899	1,156,008	1,167,402	1,159,124	1,168,195
2008	1,106,498	1,092,911	1,095,194	1,092,939	1,091,569
2009	965,270	962,482	956,133	931,610	914,093
2010	818,468	798,063	807,437	825,626	817,745
2011	757,900	754,970	763,454	772,469	774,148
2012	823,583	825,774	834,810	842,898	861,913
2013	869,232	879,609	871,888	884,966	896,603
2014	954,642	947,088	947,303	955,118	956,137

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr050.html

Chart VA-7 of the US Census Bureau provides SAARs of value of construction from 2002 to 2014. There is clear acceleration after 2003 when fed funds rates were fixed at 1.0 percent from Jun 2003 until Jun 2004. Construction peaked in 2005-2006, stabilizing in 2007 at a lower level and then collapsed in a nearly vertical drop until 2011 with increases into 2012 and marginal drop in Jan 2013 followed by increase in Feb 2013 and decline in Mar 2013 followed by continuing increase in Apr-May 2013 and Aug-Nov 2013. The rate of growth slowed in 2014.

Chart VA-7, US, Construction Expenditures SAAR 2002-2014

Source: US Census Bureau

http://www.census.gov/construction/c30/c30index.html

Chart VA-8 of the US Census Bureau provides monthly residential construction in the US not seasonally adjusted from 2002 to 2014. There was steep increase until 2006 followed by sharp contraction. The series stabilized at the bottom and increased in the final segment with subsequent stability.

Chart VA-8, US, Residential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2014

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

Chart VA-9 of the US Census Bureau provides monthly nonresidential construction in the US not seasonally adjusted. There is similar acceleration until 2006 followed by milder contraction than for residential construction. The final segment appears stationary.

Chart VA-9, US, Nonresidential Construction, Not Seasonally Adjusted, Millions of Dollars, 2002-2014

http://www.census.gov/construction/c30/c30index.html

Annual available data for the value of construction put in place in the US between 1993 and 2013 are provided in Table VA-9. Data from 1993 to 2001 are available for public and private construction with breakdown in residential and nonresidential only for private construction. Data beginning in 2002 provide aggregate residential and nonresidential values. Total construction value put in place in the US increased 87.6 percent between 1993 and 2013 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 13.5 percent between 2000 and 2013. Total value of construction increased 7.4 percent between 2002 and 2013 with value of nonresidential construction increasing 27.5 percent while value of residential construction fell 14.9 percent. Value of total construction fell 17.5 percent between 2005 and 2013, with value of residential construction declining 44.6 percent while value of nonresidential construction rose 16.8 percent. Value of total construction fell 22.0 percent between 2006 and 2013, with value of nonresidential construction increasing 3.9 percent while value of residential construction fell 44.8 percent. In 2002, nonresidential construction had share of 52.6 percent in total construction while the share of residential construction was 47.4 percent. In 2013, the share of nonresidential construction in total value rose to 62.4 percent while that of residential construction fell to 37.6 percent.

Table VA-9, Annual Value of Construction Put in Place 1993-2013, Millions of Dollars and ∆% 

	Total	Private Nonresidential	Private Residential
1993	485,548	150,006	208,180
1994	531,892	160,438	241,033
1995	548,666	180,534	228,121
1996	599,693	195,523	257,495
1997	631,853	213,720	264,696
1998	688,515	237,394	296,343
1999	744,551	249,167	326,302
2000	802,756	275,293	346,138
2001	840,249	273,922	364,414
	Total	Total Nonresidential	Total Residential
2002	847,874	445,914	401,960
2003	891,497	440,246	451,251
2004	991,356	452,948	538,408
2005	1,104,136	486,629	617,507
2006	1,167,222	547,408	619,814
2007	1,152,351	651,883	500,468
2008	1,068,346	710,690	357,746
2009	904,929	651,001	253,928
2010	806,040	556,928	249,112
2011	788,343	535,686	252,657
2012	861,245	574,399	286,847
2013	910,764	568,561	342,203
∆% 1993-2013	87.6
∆% 1993-2000	65.3
∆% 2000-2013	13.5
∆% 2002-2013	7.4	27.5	-14.9
∆% 2005-2013	-17.5	16.8	-44.6
∆% 2006-2013	-22.0	3.9	-44.8

Source: US Census Bureau http://www.census.gov/construction/c30/c30index.html

VB Japan. The GDP of Japan grew at 1.0 percent per year on average from 1991 to 2002, with the GDP implicit deflator falling at 0.8 percent per year on average. The average growth rate of Japan’s GDP was 4 percent per year on average from the middle of the 1970s to 1992 (Ito 2004). Low growth in Japan in the 1990s is commonly labeled as “the lost decade” (see Pelaez and Pelaez, The Global Recession Risk (2007), 81-115). Table VB-GDP provides yearly growth rates of Japan’s GDP from 1995 to 2013. Growth weakened from 2.7 per cent in 1995 and 1996 to contractions of 1.5 percent in 1999 and 0.4 percent in 2001 and growth rates below 2 percent with exception of 2.3 percent in 2003. Japan’s GDP contracted sharply by 3.7 percent in 2006 and 2.0 percent in 2009. As in most advanced economies, growth was robust at 3.4 percent in 2010 but mediocre at 0.3 percent in 2011 and 0.7 percent in 2013. Japan’s GDP grew 2.3 percent in 2013.

Table VB-GDP, Japan, Yearly Percentage Change of GDP  ∆%

Calendar Year	∆%
1995	2.7
1996	2.7
1997	0.1
1998	-1.5
1999	0.5
2000	2.0
2001	-0.4
2002	1.1
2003	2.3
2004	1.5
2005	1.9
2006	1.8
2007	1.8
2008	-3.7
2009	-2.0
2010	3.4
2011	0.3
2012	0.7
2013	2.3

Source: Source: Japan Economic and Social Research Institute, Cabinet Office

http://www.esri.cao.go.jp/index-e.html

http://www.esri.cao.go.jp/en/sna/sokuhou/sokuhou_top.html

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 (https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.2 and 2.3 percent, with the all items CPI less fresh food of 0.8 percent (https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf). The critical difference is forecast of the CPI excluding fresh food of 3.0 to 3.5 percent in 2014, 1.9 to 2.8 percent in 2015 and 2.0 to 3.0 in 2016. Consumer price inflation in Japan excluding fresh food was 0.3 percent in Mar 2013 and 1.3 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm). The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

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

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

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

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

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

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

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

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
Apr 2014	+2.2 to +2.3 [+2.2]	+0.8
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
Apr 2014	+0.8 to +1.3 [+1.1]	+3.0 to +3.5 [+3.3]	+1.0 to +1.5 [+1.3]
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
Apr 2014	+1.2 to +1.5 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
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]
2016
Apr 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]

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

Source: Policy Board, Bank of Japan

https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf

The Markit/JMMA Flash Japan Manufacturing PMI Index™ improved with the Flash Japan Manufacturing PMI™ increasing from 49.9 in May to 51.1 in Jun and the Flash Japan Manufacturing Output Index™ increasing from 48.9 in May to 51.8 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/3e2cd94bc4564eba933efdcec0db2e5f). New export orders decreased at an unchanged rate. Amy Brownbill, Economist at Markit, finds improving conditions with return to growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/3e2cd94bc4564eba933efdcec0db2e5f). Private-sector activity in Japan was in standstill with the Markit Composite Output PMI Index increasing from 49.2 in May to 50.0 in Jun, indicating no change (http://www.markiteconomics.com/Survey/PressRelease.mvc/e540626b804c494389853be6beefc0f6). The Markit Business Activity Index of Services decreased to 49.0 in Jun from 49.3 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/e540626b804c494389853be6beefc0f6). Amy Brownbill, Ecoomist at Markit and author of the report, finds strengthening new orders in services with potential growth ahead (http://www.markiteconomics.com/Survey/PressRelease.mvc/e540626b804c494389853be6beefc0f6). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased from 49.9 in May to 51.5 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5b24eff8cfd489abf44c7f8cb545876). New orders and output increased. Amy Brownbill, Economist at Markit and author of the report, finds growth on strengthening demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5b24eff8cfd489abf44c7f8cb545876).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	May ∆% 0.3 12 months ∆% 4.4 Blog 6/15/14
Consumer Price Index	May NSA ∆% 0.4; May 12 months NSA ∆% 3.7 Blog 6/29/14
Real GDP Growth	IQ2014 ∆%: 1.6 on IVQ2013;  IQ2014 SAAR 6.7; ∆% from quarter a year earlier: 3.0 % Blog 6/16/13 8/18/13 9/15/13 11/17/13 12/15/13 2/23/14 3/16/14 5/18/14 6/15/14
Employment Report	May Unemployed 2.42 million Change in unemployed since last year: minus 370 thousand Unemployment rate: 3.5 % Blog 6/29/14
All Industry Indices	Apr month SA ∆% -4.3 12-month NSA ∆% -1.1 Blog 6/22/14
Industrial Production	May SA month ∆%: 0.5 12-month NSA ∆% 0.8 Blog 6/29/14
Machine Orders	Total Apr ∆% 34.8 Private ∆%: -2.1 Apr ∆% Excluding Volatile Orders -9.1 Blog 6/15/14
Tertiary Index	Apr month SA ∆% -5.4 Apr 12 months NSA ∆% minus 2.5 Blog 6/15/14
Wholesale and Retail Sales	May 12 months: Total ∆%: -0.8 Wholesale ∆%: -0.9 Retail ∆%: -0.4 Blog 6/29/14
Family Income and Expenditure Survey	May 12-month ∆% total nominal consumption -3.9, real -8.0 Blog 6/29/14
Trade Balance	Exports May 12 months ∆%: minus 2.7 Imports May 12 months ∆% -3.6 Blog 6/22/14

Links to blog comments in Table JPY:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

5/18/14 http://cmpassocregulationblog.blogspot.com/2014/05/world-inflation-waves-squeeze-of.html

4/27/14

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

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 Jan 2011 to 58.0 in Mar 2012, decreasing to 53.9 in Aug 2013. The index decreased from 56.0 in Nov 2013 to 54.6 in Dec 2013, easing to 53.4 in Jan 2014. The index decreased to 55.0 in Jun 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 decreased to 50.7 in Jun 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Jun 2014	55.0	50.7	56.0	50.8	60.4
May	55.5	52.7	54.5	49.0	60.7
Apr	54.8	50.8	52.4	49.4	61.5
Mar	54.5	50.8	52.8	49.5	61.5
Feb	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, easing to 55.0 in Jun 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 51.0 in Jun 2014. The index of new orders fell from 54.5 in Apr 2012 to 51.2 in Dec 2012. The index of new orders fell from 52.3 in Nov 2013 to 52.0 in Dec 2013. The index fell to 50.9 in Jan 2014 and 52.8 in Jun 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
Jun 2014	51.0	53.0	52.8	48.0	48.6	50.5
May	50.8	52.8	52.3	48.0	48.2	50.3
Apr	50.4	52.5	51.2	48.1	48.3	50.1
Mar	50.3	52.7	50.6	47.8	48.3	49.8
Feb	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 Jun 2013. The index decreased from 51.4 in Nov 2013 to 51.0 in Dec 2013. The index increased to 51.0 in Jun 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 IQ2014 relative to the same period in 2013 was 7.4 percent, as shown in Table VC-GDP. Secondary industry accounts for 44.9 percent of GDP in IQ2014. In IQ2014, industry alone accounts for 39.9 percent of GDP and construction with the remaining 5.0 percent. Tertiary industry accounts for 49.0 percent of cumulative GDP in IQ2014 and primary industry for 6.1 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 strategy is shifting to lower growth rates with improvement in living standards. 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 9.5 percent in IIIQ2013. Annual equivalent growth was 7.0 percent in IVQ2013, declining to 5.7 percent in IQ2014.

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

Cumulative GDP IQ2014	Value Current CNY Billion	2014 Year-on-Year Constant Prices ∆%
GDP	12,821.3	7.4
Primary Industry	777.6	3.5
Farming	777.6	3.5
Secondary Industry	5,758.7	7.3
Industry	5,121.7	7.1
Construction	637.0	9.3
Tertiary Industry	6,285.0	7.8
Transport, Storage, Post	691.7	5.7
Wholesale, Retail Trades	1,298.2	9.8
Hotel & Catering Services	266.8	5.9
Financial Intermediation	929.1	9.5
Real Estate	880.5	3.0
Other	2,218.7	8.9
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2014
IQ2014	1.4	5.7
2013
IVQ2013	1.7	7.0
IIIQ2013	2.3	9.5
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 IQ2014 relative to the same period in 2013 was 7.4 percent, as shown in Table VC-GDPA. Secondary industry accounts for 44.9 percent of GDP of which industry alone for 39.9 percent in cumulative IQ2014 and construction with the remaining 5.0 percent. Tertiary industry accounts for 49.0 percent of GDP in cumulative IQ2014 and primary industry for 6.1 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 strategy is changing to lower growth rates while improving living standards. 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 7.4 percent in IVQ2013 relative to a year earlier and 1.7 percent relative to IIIQ2013, which is equivalent to 7.0 percent per year. GDP grew 7.4 percent in IQ2014 relative to a year earlier and 1.4 percent in IQ2014 that is equivalent to 5.7 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	IQ 2014
GDP	7.7	7.5	7.8	7.7	7.4
Primary Industry	3.4	3.0	3.4	4.0	3.5
Secondary Industry	7.8	7.6	7.8	7.8	7.3
Tertiary Industry	8.3	8.3	8.4	8.3	7.1
GDP ∆% Relative to a Prior Quarter	1.5	1.8	2.3	1.7	1.4
	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/66db1e58cfc3406d9d959c694960354d) is improving. The overall Flash HSBC China Manufacturing PMI^™ increased from 49.4 in May to 50.8 in Jun, while the Flash HSBC China Manufacturing Output Index increased from 49.8 in May to 51.8 in Jun, indicating moderate expansion. Exports orders changed direction to expansion at slower rate. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that the index is consistent with manufacturing improving (http://www.markiteconomics.com/Survey/PressRelease.mvc/66db1e58cfc3406d9d959c694960354d). The HSBC China Services PMI^™, compiled by Markit, shows improvement in business activity in China with the HSBC Composite Output, combining manufacturing and services, increasing from 50.2 in May to 52.4 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d11adec59894b0cb77b2455a702ee13). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need of policies in consolidating growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d11adec59894b0cb77b2455a702ee13). The HSBC China Services Business Activity index increased from 50.7 in May to 53.1 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d11adec59894b0cb77b2455a702ee13). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that services continue improving (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d11adec59894b0cb77b2455a702ee13). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 50.7 in Jun from 49.4 in May, indicating marginally improving manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/2b0421f80f994ed2ad934d837d29db03). New export orders and total new orders increased. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds strengthening demand in China with possible need of policy enhancement (http://www.markiteconomics.com/Survey/PressRelease.mvc/2b0421f80f994ed2ad934d837d29db03). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	May 12-month ∆%: minus 1,4 May month ∆%: -0.1 Blog 6/15/14
Consumer Price Index	May month ∆%: 0.1 May 12 months ∆%: 2.5 Blog 6/15/14
Value Added of Industry	May month ∆%: 0.71 Jan-May 2014/Jan-Apr 2013 ∆%: 8.7 Blog 6/15/14
GDP Growth Rate	Year IQ2014 ∆%: 7.4 Quarter IQ2014 AE ∆%: 5.7 Blog 4/20/14
Investment in Fixed Assets	Total Jan-May 2013 ∆%: 17.2 Real estate development: 14.7 Blog 6/15/14
Retail Sales	May month ∆%: 1.16 May 12 month ∆%: 12.5 Jan-May ∆%: 12.1 Blog 6/15/14
Trade Balance	May balance $35.92 billion Exports 12M ∆% 7.0 Imports 12M ∆% -1.6 Cumulative Jan-May: $71.11 billion Blog 6/15/14

Links to blog comments in Table CNY:

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

4/20/14 http://cmpassocregulationblog.blogspot.com/2014/04/imf-view-world-inflation-waves-squeeze.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	8.8	3.8
2001	2.4	8.2	2.0
2002	2.3	8.5	0.9
2003	2.1	9.0	0.7
2004	2.2	9.2	2.2
2005	2.2	9.1	1.7
2006	2.2	8.4	3.3
2007	2.2	7.5	3.0
2008	3.3	7.6	0.4
2009	0.3	9.6	-4.5
2010	1.6	10.1	1.9
2011	2.7	10.1	1.6
2012	2.5	11.3	-0.7
2013*	1.3	12.0	-0.4
2014*			1.1
2015*			1.7

*EUROSTAT forecast Source: EUROSTAT

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

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

The GDP of the euro area in 2012 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $12,199.1 billion or 16.9 percent of world GDP of $72,216.4 billion (http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/index.aspx). The sum of the GDP of France $2613.9 billion with the GDP of Germany of $3429.5 billion, Italy of $2014.1 billion and Spain $1323.5 billion is $9381.0 billion or 76.9 percent of total euro area GDP and 13.0 percent of World GDP. The four largest economies account for slightly more than three quarters of economic activity of the euro area. Table VD-EUR1 is constructed with the dataset of EUROSTAT, providing growth rates of the euro area as a whole and of the largest four economies of Germany, France, Italy and Spain annually from 1996 to 2011 with the estimate of 2012 and forecasts for 2013, 2014 and 2015 by EUROSTAT. The impact of the global recession on the overall euro area economy and on the four largest economies was quite strong. There was sharp contraction in 2009 and growth rates have not rebounded to earlier growth with exception of Germany in 2010 and 2011.

Table VD-EUR1, Euro Area, Real GDP Growth Rate, ∆%

	Euro Area	Germany	France	Italy	Spain
2015*	1.7	1.9	1.7	1.2	1.7
2014*	1.1	1.7	0.9	0.7	0.5
2013*	-0.4	0.4	0.2	-1.9	-1.2
2012	-0.7	0.7	0.0	-2.4	-1.6
2011	1.6	3.3	2.0	0.4	0.1
2010	1.9	4.0	1.7	1.7	-0.2
2009	-4.5	-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 53.5 in May to 52.8 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/d01cb6468d804425ad8c4e0470e9b51e). 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 0.4 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d01cb6468d804425ad8c4e0470e9b51e). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP decreased from 53.5 in May, to 52.8 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/f6673c9bc1a3475eb40c87b42f7f5ae7). Chris Williamson, Chief Economist at Markit, finds growth of GDP at close to 0.4 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/f6673c9bc1a3475eb40c87b42f7f5ae7). The Markit Eurozone Services Business Activity Index decreased from 53.2 in May to 52.8 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/f6673c9bc1a3475eb40c87b42f7f5ae7). The Markit Eurozone Manufacturing PMI^® decreased to 51.8 in Jun from 52.2 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/d5693f89c80d4c249248adbe9f5bf744). New orders and export orders increased for the twelfth consecutive month. Chris Williamson, Chief Economist at Markit, finds slowing industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/d5693f89c80d4c249248adbe9f5bf744). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IQ2014 ∆% 0.2; IQ2014/IQ2013 ∆% 0.9 Blog 7/6/14
Unemployment	May 2014: 11.6 % unemployment rate; Apr 2014: 18.552 million unemployed Blog 7/6/14
HICP	May month ∆%: -0.1 12 months May ∆%: 0.5 Blog 6/22/14
Producer Prices	Euro Zone industrial producer prices May ∆%: -0.1 May 12-month ∆%: -1.0 Blog 7/6/14
Industrial Production	Apr month ∆%: 0.8; Apr 12 months ∆%: 1.4 Blog 6/15/14
Retail Sales	May month ∆%: 0.0 May 12 months ∆%: 0.7 Blog 7/6/14
Confidence and Economic Sentiment Indicator	Sentiment 102.0 Jun 2014 Consumer minus 7.5 Jun 2014 Blog 6/29/14
Trade	Jan-Apr 2014/Jan-Apr 2013 Exports ∆%: 0.5 Imports ∆%: -0.6 Apr 2014 12-month Exports ∆% 1.5 Imports ∆% -2.8 Blog 6/15/14

Links to blog comments in Table EUR:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

Table VD-1 provides percentage changes of euro area real GDP in a quarter relative to the prior quarter. Real GDP fell 0.2 percent in IVQ2011, fell 0.1 in IQ2012 and fell in the final three quarters of 2012: 0.3 percent in IIQ2012, 0.2 percent in IIIQ2012 and 0.5 percent in IVQ2012. GDP fell 0.2 percent in IQ2013 and increased 0.3 percent in IIQ2013. Growth slowed at 0.1 percent in IIIQ2013. GDP increased 0.3 percent in IVQ2013. The GDP of the euro area increased 0.2 percent in IQ2014. The global recession manifested in the euro area in five consecutive quarterly declines from IIQ2008 to IIQ2009. The strongest impact was contraction of 2.9 percent in IQ2009. Recovery began in IIIQ2009 with cumulative growth of 4.1 percent to IQ2011 or at the annual equivalent rate of 2.3 percent. Growth was much more vigorous from IVQ2003 to IQ2008.

Table VD-1, Euro Area, Real GDP, Percentage Change from Prior Quarter, Calendar and Seasonally and Working Day Adjusted ∆%

	IQ	IIQ	IIIQ	IVQ
2014	0.2
2013	-0.2	0.3	0.1	0.3
2012	-0.1	-0.3	-0.2	-0.5
2011	0.8	0.1	0.0	-0.2
2010	0.4	0.9	0.4	0.6
2009	-2.9	-0.3	0.4	0.5
2008	0.6	-0.4	-0.6	-1.7
2007	0.8	0.5	0.6	0.4
2006	0.9	1.1	0.6	1.1
2005	0.2	0.7	0.6	0.7
2004	0.5	0.5	0.4	0.3
2003	-0.1	0.1	0.4	0.7
2002	0.1	0.6	0.3	0.1
2001	0.9	0.1	0.1	0.2
2000	1.3	0.9	0.5	0.7
1999	0.8	0.7	1.1	1.1

Source: EUROSTAT

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

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

Table VD-2 provides percentage change in real GDP in the euro area in a quarter relative to the same quarter a year earlier. Growth rates were quite strong from 2004 to 2007. There were five consecutive quarters of sharp declines in GDP in a quarter relative to the same quarter a year earlier from IVQ2008 to IVQ2009 with sharp contractions of 5.5 percent in IQ2009, 5.4 percent in IIQ2009 and 4.4 percent in IIIQ2009. Growth rates decline in magnitude with 1.5 percent in IIIQ2011, 0.7 percent in IVQ211 and -0.2 percent in IQ2012 followed by contractions of 0.5 percent in IIQ2012, 0.7 percent in IIIQ2012 and 1.0 percent in IVQ2012. GDP contracted 1.1 percent in IQ2013 relative to a year earlier and contracted 0.6 percent in IIQ2013 relative to a year earlier. Euro area GDP contracted 0.3 percent in IIIQ2013 relative to a year earlier. The GDP of the euro area increased 0.5 percent in IVQ2013 relative to a year earlier. The GDP of the euro area increased 0.9 percent in IQ2014 relative to a year earlier.

Table VD-2, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a

Year Earlier, Seasonally and Working Day Adjusted ∆%

	IQ	IIQ	IIIQ	IV
2014	0.9
2013	-1.1	-0.6	-0.3	0.5
2012	-0.2	-0.5	-0.7	-1.0
2011	2.6	1.8	1.5	0.7
2010	1.0	2.2	2.2	2.3
2009	-5.5	-5.4	-4.4	-2.3
2008	2.1	1.2	-0.1	-2.2
2007	3.7	3.0	3.0	2.3
2006	2.9	3.4	3.4	3.8
2005	1.5	1.6	1.9	2.2
2004	1.8	2.2	2.2	1.8
2003	0.8	0.4	0.5	1.2
2002	0.5	1.0	1.2	1.1
2001	2.9	2.1	1.7	1.2
2000	4.3	4.4	3.8	3.3
1999	2.1	2.4	2.9	3.8

Source: EUROSTAT

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

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

Table VD-3 provides growth of euro area real GDP in a quarter relative to the same quarter a year earlier not seasonally adjusted. GDP increased 0.1 percent in IIIQ2013 NSA relative to a year earlier and increased 0.5 percent in IVQ2013 relative to a year earlier. GDP increased 0.9 percent in IQ2014 relative to a year earlier. GDP fell 0.5 percent in IIQ2013 relative to a year earlier without seasonal adjustment and declined 1.8 percent in IQ2013 relative to a year earlier without seasonal adjustment. Growth rates in 2006 and 2007 were quite strong followed by sharp declines of 5.7 percent in IQ2009, 5.9 percent in IIQ2009 and 4.2 percent in IQ2009.

Table VD-3, Euro Area, Real GDP Percentage Change in a Quarter Relative to Same Quarter a Year Earlier, Not Seasonally Adjusted ∆%

	IQ	IIQ	IIIQ	IV
2014	0.9
2013	-1.8	-0.5	0.1	0.5
2012	0.2	-0.9	-0.9	-1.0
2011	2.8	1.9	1.4	0.2
2010	1.1	2.4	2.2	2.1
2009	-5.7	-5.9	-4.2	-2.0
2008	1.7	1.6	0.4	-2.2
2007	3.5	3.1	3.1	2.4
2006	3.6	2.6	3.1	3.7
2005	1.0	2.1	1.9	1.9
2004	2.1	2.6	2.2	2.0
2003	1.0	0.1	0.5	1.2
2002	0.1	1.2	1.5	0.9
2001	2.8	2.0	1.7	1.5
2000	4.9	4.2	3.3	2.7
1999	2.2	2.6	2.8	3.8

Source: EUROSTAT

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

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

Table VD-4 provides GDP growth in IVQ2013 and relative to the same quarter a year earlier with SAWDA (seasonal and working day adjustment) and NSA (not seasonally adjusted) for the euro zone, European Union, Japan and the US. The GDP of the euro zone increased 0.2 percent in IQ2014 and increased 0.9 percent relative to a year earlier SWDA and 0.9 percent NSA for IQ2014. The GDP of the European Union increased 0.3 percent in IQ2014, increased 1.4 percent SWDA in IQ2014 relative to a year earlier and increased 1.5 percent relative to a year earlier NSA in IQ2014. Growth in IQ2014 was weak worldwide with somewhat stronger performance by the US but still insufficient to reduce unemployment and underemployment (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-instability-mediocre-cyclical.html) and motivate hiring (http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html).

Table VD-4, Euro Zone, European Union, Japan and USA, Real GDP Growth

	∆% IQ2014/ IVQ2013 SAWDA	∆% IQ2014/ IQ2013 SWDA	∆% IQ2014/ IQ2013 NSA
Euro Zone	0.2	0.9	0.9
European Union	0.3	1.4	1.5
Germany	0.8	2.3	2.5
France	0.0	0.7	0.7
Netherlands	-1.4	-0.3	-0.5
Finland	-0.4	-0.5	-0.1
Belgium	0.4	1.2	1.2
Portugal	-0.7	NA	0.0
Ireland	NA	NA	NA
Italy	-0.1	-0.5	-0.8
Greece	NA	NA	-0.9
Spain	0.4	0.5	0.8
United Kingdom	0.8	3.1	3.6
Japan	1.5	NA	3.0
USA	-0.2	1.5	NA

*SAWDA: Seasonally and Working Day Adjusted except UK, Japan and USA

***NSA

Source: EUROSTAT

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

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

EUROSTAT estimates the rate of unemployment in the euro area at 11.6 percent in May 2014, as shown in Table VD-5. The number of unemployed in May 2014 was 18.552 million, which was 0.636 million lower than 19.188 million in May 2013. The rate of unemployment stabilized from 12.0 percent in Apr 2013 to 11.6 percent in May 2014.

Table VD-5, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA 

	Unemployment Rate %	Number Unemployed Millions
May 2014	11.6	18.552
Apr	11.6	18.580
Mar	11.7	18.686
Feb	11.7	18.771
Jan	11.8	18.860
Dec 2013	11.8	18.874
Nov	11.9	19.051
Oct	11.9	19.075
Sep	12.0	19.188
Aug	12.0	19.143
Jul	11.9	19.131
Jun	12.0	19.162
May	12.0	19.188
Apr	12.0	19.213
Mar	12.0	19.159
Feb	12.0	19.142
Jan	11.9	19.110
Dec 2012	11.8	18.899
Nov	11.7	18.786
Oct	11.7	18.704
Sep	11.5	18.451
Aug	11.4	18.278
Jul	11.4	18.228
Jun	11.3	18.144
May	11.2	17.924
Apr	11.1	17.778
Mar	11.0	17.486
Feb	10.8	17.249
Jan	10.7	17.029
Dec 2011	10.6	16.917
Nov	10.5	16.804
Oct	10.4	16.537
Sep	10.3	16.372
Aug	10.1	16.121
Jul	10.1	15.968
Jun	9.9	15.751
May	9.9	15.692
Apr	9.8	15.546
Mar	9.9	15.634
Feb	9.9	15.654
Jan	9.9	15.730
Dec 2010	10.0	15.845

Source: EUROSTAT

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

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

Table VD-6 shows the disparity in rates of unemployment in the euro area with 11.6 percent for the region as a whole and 18.552 million unemployed but 5.1 percent in Germany and 2.187 million unemployed. At the other extreme is Spain with rate of unemployment of 25.1 percent and 5.698 million unemployed. The rate of unemployment of the European Union in May 2014 is 10.3 percent with 25.184 million unemployed.

Table VD-6, Unemployed and Unemployment Rate in Countries and Regions, Millions and %

Apr 2014	Unemployment Rate %	Unemployed Millions
Euro Zone	11.6	18.552
Germany	5.1	2.187
France	10.1	2.960
Netherlands	7.0	0.623
Finland	8.5	0.228
Portugal	14.3	0.736
Ireland	12.0	0.257
Italy	12.6	3.222
Greece	26.8*	1.275*
Spain	25.1	5.698
Belgium	8.5	0.422
European Union	10.3	25.184

*Mar 2014

Source: EUROSTAT

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

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

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

Source: EUROSTAT

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

Retail sales changed 0.0 percent in May 2014 and increased 0.7 percent in 12 months in the euro zone, as shown in Table VD-6. The 12-month rates of growth became negative between Mar 2011 and Dec 2013 with exception of 0.5 percent in Apr 2011, 0.0 percent in Mar 2012 and 1.3 percent in Nov 2013. The lower part of Table VD-7 provides annual percentage changes of inflation-adjusted retail sales in the euro zone since 2001. Retail sales fell 0.6 percent in 2010 after falling 0.5 percent in 2009 and 1.8 percent in 2008 and fell again by 1.9 percent in 2011 and 2.6 percent in 2012. Retail sales fell 0.4 percent in 2013.

Table VD-6, Euro Zone, Volume of Retail Sales, Deflated ∆%

	Month ∆%	12-Month CA ∆%
May 2014	0.0	0.7
Apr	-0.2	1.8
Mar	0.3	1.2
Feb	0.2	1.0
Jan	1.0	0.7
Dec 2013	-1.2	-0.4
Nov	1.1	1.3
Oct	-0.4	-0.5
Sep	-0.9	-0.2
Aug	0.6	-0.3
Jul	0.6	-1.0
Jun	-0.8	-1.6
May	1.1	-0.2
Apr	-0.2	-1.4
Mar	-0.1	-2.4
Feb	-0.3	-2.2
Jan	0.3	-2.1
Dec 2012	-0.1	-2.6
Nov	-0.1	-1.9
Oct	-0.3	-3.1
Sep	-1.5	-1.8
Aug	0.4	-0.7
Jul	-0.2	-1.4
Jun	0.4	-0.9
May	0.5	-0.7
Apr	-1.5	-3.4
Mar	0.3	0.0
Feb	-0.1	-2.1
Jan	-0.1	-1.0
Dec 2011	0.3	-1.9
Nov	-0.7	-1.5
Oct	0.3	-0.8
Sep	-0.4	-1.4
Aug	0.0	-0.3
Jul	0.1	-0.6
Jun	0.8	-0.9
May	-1.8	-1.9
Apr	1.2	0.5
Mar	-1.5	-1.5
Feb	0.6	1.2
Jan	-0.1	0.6
Dec ∆%
2013		-0.4
2012		-2.6
2011		-1.9
2010		-0.6
2009		-0.5
2008		-1.8
2007		-0.9
2006		2.3
2005		1.1
2004		2.3
2003		0.7
2002		-0.3
2001		1.9

Source: EUROSTAT

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

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

Growth rates of retail sales of the euro zone by major segments are in Table VD-7. Total sales changed 0.0 percent in May 2014 and increased 0.7 percent in the 12 months ending in May 2014. Food sales decreased 0.3 percent in May 2014 and increased 0.3 percent in 12 months and nonfood products increased 0.3 percent in May and increased 1.0 percent in 12 months. Sales of automotive fuel stores changed 0.0 percent in May and increased 0.8 percent in 12 months.

Table VD-7, Euro Zone, Volume of Retail Sales by Products, ∆%

May 2014	Month ∆%	12-Month ∆%
Total	0.0	0.7
Food, Drinks, Tobacco	-0.3	0.3
Nonfood Products ex Automotive Fuel	0.3	1.0
Automotive Fuel in Specialized Stores	0.0	0.8

Source: EUROSTAT

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

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

Month and 12-month percentage rates of change of retail sales by member countries of the euro zone are shown in Table VD-8 for May 2014. Retail sales are mixed throughout the euro zone. The 12-month percentage changes are positive for several members in Table VD-8 such as 2.1 percent for France, 3.6 percent Ireland and 0.7 percent for Spain. The 12-month percentage change for the UK, which is not a member of the euro zone, was 3.7 percent. The European Union’s 12-month percentage change was 1.2 percent.

Table VD-8, Euro Zone, Volume of Retail Sales by Member Countries, ∆%

May 2014	Month ∆%	12-Month ∆%
Euro Zone	0.0	0.7
Germany	-0.6	-0.6
France	0.8	2.1
Netherlands	0.0*	2.2*
Finland	-0.3	-0.6
Belgium	1.3	2.3
Portugal	2.9	1.3
Ireland	-0.3	3.6
Italy	0.4*	2.3*
Greece	0.7*	7.3*
Spain	0.9	0.7
UK	-0.9	3.7
European Union	-0.1	1.2

*Apr 2014 **Mar 2014

Source: EUROSTAT

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

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

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1971 to 2013, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.1 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.0 percent in 2010, 3.3 percent in 2011 and 0.7 percent in 2012. Growth 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 ∆% on Prior 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	1.7
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
1991	5.1	5.2
1990	5.3	5.5
1989	3.9	4.0
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.3
1984	2.8	2.9
1983	1.6	1.5
1982	-0.4	-0.5
1981	0.5	0.6
1980	1.4	1.3
1979	4.2	4.3
1978	3.0	3.1
1977	3.3	3.5
1976	4.9	4.5
1975	-0.9	-0.9
1974	0.9	1.0
1973	4.8	5.0
1972	4.3	4.3
1971	3.1	3.0
1970	NA	NA

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/05/PE14_167_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 55.6 in May to 54.2 in Jun. The index of manufacturing output reached 52.9 in Jun, decreasing from 54.7 in May, while the index of services decreased to 54.8 in Jun from 56.0 in May. The overall Flash Germany Manufacturing PMI^® increased from 52.3 in May to 52.4 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/4406526053dd42d884314b32acff5bd0). New export work volumes increased for an eleventh consecutive month with business originating in Europe, the Middle East and Asia. Pollyanna De Lima, Economist at Markit, finds continuing expansion of Germany’s private sector with strength in new orders and activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/4406526053dd42d884314b32acff5bd0). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, decreased from 55.6 in May to 54.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/07f2a0cf3d044923876a48316c6b23ee). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds prospects of growth of GDP at 0.7 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/07f2a0cf3d044923876a48316c6b23ee). The Germany Services Business Activity Index decreased from 56.0 in May to 54.6 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/07f2a0cf3d044923876a48316c6b23ee). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 52.3 in May to 52.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa6656c83d664be7ba533b342bcaa733). New export orders increased for the eleventh consecutive month. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds slowing manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa6656c83d664be7ba533b342bcaa733).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IQ2014 0.8 ∆%; I/Q2014/IQ2013 ∆% 2.5 2013/2012: 0.4% GDP ∆% 1970-2013 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 5/18/14 5/25/14
Consumer Price Index	May month NSA ∆%: -0.1 May 12-month NSA ∆%: 0.9 Blog 6/15/14
Producer Price Index	May month ∆%: -0.2 NSA, 0.0 CSA 12-month NSA ∆%: -0.8 Blog 6/22/14
Industrial Production	MFG Apr month CSA ∆%: 0.2 12-month NSA: -1.1 Blog 6/8/14
Machine Orders	MFG May month ∆%: -1.7 May 12-month ∆%: 7.8 Blog 7/6/14
Retail Sales	May Month ∆% -0.6 12-Month ∆% 1.9 Blog 7/6/14
Employment Report	Unemployment Rate SA May 5.0% Blog 7/6/14
Trade Balance	Exports Apr 12-month NSA ∆%: -0.2 Imports Apr 12 months NSA ∆%: 0.6 Exports Apr month CSA ∆%: 3.0; Imports Apr month CSA 0.1 Blog 6/8/14

Links to blog comments in Table DE:

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

6/8/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-risks-rules-discretionary.html

5/25/14 http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html

5/18/14 http://cmpassocregulationblog.blogspot.com/2014/05/world-inflation-waves-squeeze-of.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

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

Table VE-1 provides month and 12-month rates of growth of new orders of manufacturing in Germany from Jan 2010 to May 2014. There are fluctuations in both monthly rates and in the past 12 months. Table VE-1 reveals strong fluctuations in an evident deceleration of total orders for industry of Germany with recent improvement. Total orders for manufacturing decreased 1.7 percent in May 2014 and increased 7.8 percent in 12 months. There is the same behavior for total, foreign and domestic orders with decline in 12-month rates from two-digit levels to single digits and negative changes. An important aspect of Germany is that the bulk of orders is domestic or from other European countries while foreign orders have been growing rapidly. There is weakening world trade affecting export economies. As in other countries, data on orders for manufacturing are highly volatile. Most 12-month percentage changes from Jan 2012 to Sep 2012 in Table VE-5 are negative largely because of the unusual strength of the Germany economy in the beginning of 2011 but more recently because of slowing world economy in 2012-2014.

Table VE-1, Germany, Volume of Orders Received in Manufacturing, Total, Domestic and Foreign, ∆%  

	Total 12 M	Total M	Foreign 12 M	Foreign M	Home 12 M	Home M
2014
May	7.8	-1.7	7.6	-1.2	8.0	-2.5
Apr	3.7	3.4	4.6	5.0	2.5	1.1
Mar	3.2	-2.8	2.5	-4.5	4.2	-0.6
Feb	7.6	0.9	9.3	0.7	5.6	1.2
Jan	5.8	0.1	8.2	-1.3	2.9	2.0
2013
Dec	8.4	0.1	10.7	1.8	5.0	-2.2
Nov	4.5	0.7	6.0	-0.4	2.5	2.5
Oct	3.7	-0.3	4.1	0.1	3.1	-0.9
Sep	11.2	3.1	13.7	6.2	8.0	-0.7
Aug	0.0	-0.2	-0.9	-1.6	1.0	1.6
Jul	5.1	-2.1	5.5	-3.8	4.8	0.2
Jun	4.8	4.8	7.9	5.6	0.7	3.7
May	-3.6	-1.0	-1.6	-0.2	-6.2	-2.0
Apr	5.9	-1.7	7.6	-1.0	3.6	-2.5
Mar	-5.6	1.9	-4.4	2.2	-7.2	1.5
Feb	-2.7	1.7	-1.5	1.9	-4.2	1.3
Jan	0.3	-1.0	1.9	-2.2	-1.7	0.7
2012
Dec	-9.1	1.5	-6.7	2.0	-12.6	0.8
Nov	-0.9	-2.9	2.4	-4.8	-5.1	-0.4
Oct	4.5	4.3	7.0	7.2	1.3	0.6
Sep	-8.9	-2.1	-6.6	-3.1	-11.7	-0.7
Aug	-4.4	-0.8	-2.1	-0.2	-7.1	-1.7
Jul	-1.6	0.8	0.6	1.1	-4.2	0.6
Jun	-4.5	-2.2	-6.4	-2.3	-1.7	-2.2
May	-11.0	0.7	-3.7	2.0	-18.8	-1.0
Apr	-3.9	-1.7	-4.4	-2.8	-3.1	-0.3
Mar	-2.2	2.3	-1.2	3.2	-3.3	1.3
Feb	-4.3	0.6	-4.7	1.8	-3.8	-0.8
Jan	-2.6	-2.2	-4.6	-3.7	-0.2	-0.5
2011
Dec	0.0	2.6	-0.3	4.7	0.5	0.1
Nov	-4.8	-3.0	-8.2	-5.1	-0.3	-0.5
Oct	0.1	1.7	2.1	3.2	-2.1	0.0
Sep	2.2	-3.4	1.9	-4.2	2.6	-2.3
Aug	7.1	-0.7	5.2	0.4	9.4	-2.1
Jul	4.9	-2.0	4.6	-5.9	5.4	3.2
Jun	3.5	-0.6	7.8	8.6	-2.0	-10.8
May	23.1	2.6	16.0	-3.9	31.8	11.0
Apr	6.7	1.9	9.6	2.2	3.0	1.2
Mar	9.8	-3.2	12.3	-3.2	6.9	-3.1
Feb	21.5	1.1	24.1	0.6	18.4	1.7
Jan	22.5	3.6	26.1	3.4	18.2	3.9
2010
Dec	21.8	-2.5	26.8	-3.7	15.4	-0.9
Nov	21.4	5.3	27.1	8.5	15.0	1.3
Oct	14.2	0.7	18.2	0.3	10.0	1.2
Sep	13.9	-1.3	15.6	-3.2	11.9	1.3
Aug	22.2	2.3	29.7	4.3	14.5	-0.1
Jul	14.1	-0.6	21.4	-0.6	6.4	-0.6
Jun	27.6	2.5	30.6	3.3	24.2	1.6
May	24.8	-0.2	29.6	0.6	19.4	-1.2
Apr	29.9	3.0	34.0	3.1	25.7	3.0
Mar	29.4	5.0	32.9	5.1	25.8	5.0
Feb	24.0	0.1	28.7	0.8	18.6	-0.7
Jan	17.0	3.8	23.8	4.2	9.8	3.2
Dec 2009	9.1	-1.7	10.5	-2.6	7.3	-0.5
Dec 2008	-28.3	-6.7	-31.5	-9.5	-23.7	-2.9
Dec 2007	7.1	-0.9	9.1	-2.0	4.4	0.2
Dec 2006	2.8	0.8	3.4	0.5	2.2	1.1
Dec 2005	5.0	-0.5	10.4	-1.1	-1.4	0.3
Dec 2004	12.7	6.5	13.0	8.5	12.7	4.9
Dec 2003	10.7	2.4	16.4	5.4	5.1	-0.8
Dec 2002	-0.2	-3.4	-0.8	-6.6	0.2	-0.3
Average ∆% 2003-2007	7.6		10.4		4.5
Average ∆% 2003-2012	2.3		3.9		0.3

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally adjusted; 12 M: Non-adjusted Source: Statistisches Bundesamt Deutschland

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

Orders for capital goods of Germany are shown in Table VE-2. Total capital goods orders decreased 0.7 percent in May 2014 and increased 10.3 percent in 12 months. Domestic orders decreased 2.7 percent in May and foreign orders increased 0.4 percent. There has been deceleration from 2010 and early 2011 with growth rates falling from two digit levels to single digits, and multiple negative changes with recent improvement. An important aspect of Germany’s economy shown in Tables VE-1 and VE-2 is the success in increasing the competitiveness of its economic activities as shown by rapid growth of orders for industry after the recession of 2001 in the period before the global recession beginning in late 2007. Germany adopted fiscal and labor market reforms to increase productivity.

Table VE-2, Germany, Volume of Orders Received of Capital Goods Industries, Total, Foreign and Domestic, ∆%

	Total 12 M	Total M	Foreign 12 M	Foreign M	Domestic 12 M	Domestic M
2014
May	10.3	-0.7	10.0	0.4	10.8	-2.7
Apr	5.4	4.4	6.4	6.8	3.6	0.5
Mar	3.2	-3.3	1.2	-5.8	6.5	1.0
Feb	7.4	0.6	9.0	0.1	4.7	1.7
Jan	7.0	-1.0	9.4	-3.3	3.2	3.3
2013
Dec	10.7	1.2	14.8	4.7	3.2	-4.8
Nov	6.8	2.2	7.4	1.2	5.3	4.0
Oct	2.7	-2.8	2.1	-3.3	3.3	-2.1
Sep	14.6	4.4	17.1	8.3	10.3	-2.0
Aug	3.1	0.0	1.5	-2.0	5.7	3.4
Jul	6.3	-4.4	7.3	-6.3	5.0	-0.7
Jun	9.1	8.4	13.5	9.3	1.8	7.0
May	-3.1	-1.1	-0.4	0.5	-7.8	-3.9
Apr	6.0	-2.0	7.3	-2.1	3.7	-1.9
Mar	-5.9	1.1	-4.4	1.7	-8.2	-0.1
Feb	0.1	2.7	2.7	2.6	-4.0	2.9
Jan	3.1	-0.9	5.8	-1.4	-1.4	-0.4
2012
Dec	-7.7	2.3	-4.6	2.3	-13.3	2.6
Nov	-0.7	-4.3	3.1	-6.2	-6.5	-1.1
Oct	4.6	5.9	6.3	8.7	2.1	1.3
Sep	-7.5	-1.3	-4.8	-2.1	-11.6	-0.1
Aug	-4.6	-2.1	-2.6	-1.1	-7.4	-3.7
Jul	-0.3	1.3	1.2	1.8	-2.7	0.5
Jun	-7.1	-2.5	-9.9	-2.8	-1.9	-1.8
May	-12.0	0.7	-2.8	1.7	-23.9	-0.8
Apr	-3.3	-3.3	-4.2	-4.3	-1.7	-1.5
Mar	2.2	5.0	3.3	7.3	0.2	1.4
Feb	-5.9	1.7	-7.0	2.2	-4.2	1.1
Jan	-3.7	-4.2	-6.5	-4.8	1.0	-3.2
2011
Dec	1.2	3.0	-0.1	3.9	3.5	1.5
Nov	-6.5	-4.0	-10.5	-7.2	0.7	1.3
Oct	3.1	3.6	6.2	6.1	-2.0	-0.3
Sep	2.9	-3.8	2.2	-4.8	4.0	-1.9
Aug	6.7	-0.4	4.5	0.8	10.6	-2.3
Jul	7.2	-5.6	6.4	-9.5	8.8	1.4
Jun	9.1	0.6	13.3	13.1	2.0	-16.0
May	27.5	4.6	17.7	-4.7	43.5	20.3
Apr	11.0	3.9	14.1	4.9	6.3	2.2
Mar	12.0	-6.0	14.4	-5.6	8.5	-6.6
Feb	29.3	2.9	32.5	1.6	24.8	5.1
Jan	26.8	3.4	32.8	3.8	17.7	2.7
2010
Dec	27.4	-5.0	31.2	-7.1	21.1	-1.4
Nov	30.4	9.1	37.0	13.2	20.1	2.3
Oct	20.5	0.3	24.9	-0.7	14.3	2.1
Sep	18.2	-2.3	20.3	-4.6	14.7	1.5
Aug	27.5	5.1	40.0	7.2	11.5	1.8
Jul	14.1	-1.8	28.1	-1.8	-2.5	-1.8
Jun	32.0	3.4	38.7	5.0	22.1	0.6
May	26.2	1.4	36.6	1.5	12.8	1.5
Apr	31.0	3.0	41.4	3.7	18.1	2.0
Mar	25.8	6.3	33.8	7.3	15.7	4.9
Feb	21.2	-0.6	31.3	0.7	8.3	-2.7
Jan	17.0	4.0	29.6	2.3	2.8	7.1
Dec 2009	8.1	-1.2	13.6	-1.5	0.3	-1.0
Dec 2008	-32.2	-7.2	-36.8	-10.0	-24.5	-3.6
Dec 2007	9.4	-0.6	11.6	-2.3	6.1	2.2
Dec 2006	3.5	2.2	3.9	2.9	2.9	1.2
Dec 2005	1.8	-2.1	9.7	-2.5	-8.4	-1.6
Dec 2004	19.5	11.2	18.6	12.2	20.6	9.7
Dec 2003	11.7	2.1	17.2	5.0	5.4	-1.6
Dec 2002	-2.8	-4.3	-3.7	-8.1	-1.8	0.2
Average ∆% 2003-2007	9.0		12.1		4.9
Average ∆% 2003-2012	3.0		4.7		0.5

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally-adjusted; 12 M: Non-adjusted

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of the German Statistisches Bundesamt Deutschland shows the sharp upward trend of total orders in manufacturing before the global recession. There is also an obvious upward trend in the recovery from the recession with Germany’s economy being among the most dynamic in the advanced economies until the slowdown beginning in the final months of 2011 and what could be stationary series from late 2011 into 2012 but risk of decline/stability in the final segment.

Chart VE-1, Germany, Volume of Total Orders in Manufacturing, Non-Adjusted, 2010=100

Source:  Statistisches Bundesamt Deutschland

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

Chart VE-2 shows non-adjusted total orders in manufacturing and trend. There was sharp recovery from the global recession with subsequent decline. Trend reversed upwardly.

Chart VE-2, Germany, Volume of Total Orders in Manufacturing and Trend, Non-Adjusted, 2010=100

Source: Statistisches Bundesamt Deutschland

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

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-3. The number unemployed, not seasonally adjusted, decreased from 2.22 million in May 2013 to 2.12 million in May 2014, or 4.6 percent, while the unemployment rate decreased from 5.2 percent in May 2013 to 5.0 percent in May 2014. The number of persons in employment, not seasonally adjusted, increased from 40.52 million in May 2013 to 40.63 million in May 2014, or 0.3 percent, while the employment rate increased from 64.4 percent in May 2013 to 64.7 percent in May 2014. The number unemployed, seasonally adjusted, stabilized from 2.20 million in Apr 2014 to 2.19 million in May 2014, while the unemployment rate remained at 5.1 percent in May 2014 relative to 5.1 percent in May 2014. The number of persons in employment, seasonally adjusted, stabilized from 40.54 million in Apr 2014 to 40.55 million in May 2014, or 0.0 percent. The employment rate seasonally adjusted increased from 64.4 in Apr 2014 to 64.5 in May 2014.

Table VE-3, Germany, Unemployment Labor Force Survey

	May 2014	Apr 2014	May 2013
NSA
Number Unemployed Millions	2.12 ∆% May 2014 /Apr 2013: -6.2 ∆% May 2014/May 2013: -4.5	2.26	2.22
% Rate Unemployed	5.0	5.3	5.2
Persons in Employment Millions	40.63 ∆% May 2014/Apr 2014: 1.3 ∆% May 2014/May 2013: 0.3	40.12	40.52
Employment Rate	64.7	63.7	64.4
SA
Number Unemployed Millions	2.19 ∆% May 2014/Apr  2014: -0.5 ∆% May 2014/May 2013: –3.5	2.20	2.27
% Rate Unemployed	5.1	5.1	5.3
Persons in Employment Millions	40.55 ∆% May 2014/Apr 2014: 0.0 ∆% May 2014/May 2013: 0.5	40.54	40.35
Employment Rate	64.5	64.4	64.1

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2014/07/PE14_236_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-4 stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Mar 2013 and 7.1 percent in Apr 2013. The unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 2013 and rose to 6.8 percent in Jul-Aug 2013. The rate fell to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013 and Nov 2013. The unemployment rate increased to 6.7 percent in Dec 2013 and 7.3 percent in Jan 2013. The unemployment rate reached 7.3 percent in Feb 2014 and 7.1 percent in Mar 2014. The unemployment rate fell to 6.8 percent in Apr 2014 and 6.6 percent in May 2014. The unemployment rate fell to 6.5 percent in Jun 2014. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

Table VE-4, Germany, Unemployment Rate in Percent of Labor Force

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

Source: Statistisches Bundesamt Deutschland

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

Chart VE-3 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, increasing to 6.7 percent in Dec 2012, 6.8 percent in Apr 2013 and 6.6 percent in May 2013. The unemployment rate rose slightly to 6.8 percent in Aug 2013, falling to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013. The rate remained at 6.5 percent in Nov 2013, increasing to 6.7 percent in Dec 2013 and 7.3 in Jan 2014. The rate remained at 7.3 percent in Feb 2014, declining to 7.1 percent in Mar 2014. The rate fell to 6.8 percent in Apr 2014, 6.6 percent in May 2014 and 6.5 percent in Jun 2014.

Chart VE-3, Germany, Unemployment Rate, Unadjusted, Percent

Source: Statistisches Bundesamt Deutschland

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

Retail sales in Germany adjusted for inflation re provided in Table VE-5. There have been sharp fluctuations in monthly and 12-month percentage changes. In May 2014, retail sales decreased 0.6 percent and increased 1.9 percent in 12 months. Retail sales decreased 1.5 percent in Apr 2014 and increased 3.2 percent in 12 months.

Table VE-5, Retail Sales in Germany Adjusted for Inflation

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
May 2014	1.9	-0.6
Apr	3.2	-1.5
Mar	-0.7	0.6
Feb	1.9	0.6
Jan	0.7	1.9
Dec 2013	-1.0	-1.6
Nov	1.0	1.1
Oct	-0.2	-0.6
Sep	0.4	-0.1
Aug	0.4	0.2
Jul	3.3	0.1
Jun	-2.8	-0.8
May	0.2	0.5
Apr	2.7	0.2
Mar	-3.0	0.2
Feb	-3.2	-0.8
Jan	2.5	1.4
Dec 2012	-3.1	-0.7
Nov	0.5	0.6
Oct	1.5	-0.5
Sep	-3.1	-0.1
Aug	0.0	0.3
Jul	-1.0	-1.0
Jun	4.6	0.5
May	-0.7	0.1
Apr	-4.7	-0.5
Mar	4.2	0.9
Feb	2.5	0.8
Jan	2.0	-2.2
Dec 2011	0.8	1.3
Nov	0.9	-0.8
Oct	-0.4	0.5
Sep	1.2	0.1
Aug	3.4	-0.6
Jul	-2.4	0.6
Jun	-2.0	2.0
May	4.5	-1.6
Apr	4.8	0.9
Mar	-2.9	-2.5
Feb	3.0	1.2
Jan	3.3	0.8
Dec 2010	-0.2	0.3
Dec 2009	-2.2
Dec 2008	3.4
Dec 2007	-6.2
Dec 2006	1.3

Source: Statistisches Bundesamt Deutschland (Destatis)

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

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

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

Chart VE-4 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2010 to 2014. There appear to be fluctuations without trend.

Chart VE-4, Germany, Turnover in Retail Trade at Constant Prices 2010=100

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

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

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

Chart VE-5, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2010=100

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

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

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2012 is quite high at 3.2 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.0 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 2.0 percent in the 1990s and 1.8 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using fourth quarter data, is 1.1 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. The growth rate from 2000 to 2012 is 1.1 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	1.1
2000-2012	1.1
2000-2007	1.8
1990-1999	2.0
1980-1989	2.6
1970-1979	3.7
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=28&date=20140627

The Markit Flash France Composite Output Index decreased from 49.3 in May to 48.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/91598c31441e4996ba754ac072e02409). Paul Smith, Senior Economist at Markit and author of the report, finds continuing weak performance in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/91598c31441e4996ba754ac072e02409). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 49.3 in May to 48.2 in Jun, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/65d5095957304a4a8bf7f06b20669310). Duncan Head, Economist at Markit and author of the France Services PMI^®, finds weak demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/65d5095957304a4a8bf7f06b20669310). The Markit France Services Activity index decreased from 49.1 in May to 48.2 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/65d5095957304a4a8bf7f06b20669310). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 48.2 in Jun from 49.6 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/302bc48aeb1145f7ab60d5a7bb831100). Tim Moore, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds deteriorating conditions because of weakness in new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/302bc48aeb1145f7ab60d5a7bb831100). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	May month ∆% 0.0 12 months ∆%: 0.7 6/15/14
PPI	May month ∆%: -0.6 May 12 months ∆%: -0.3 Blog 6/1/14
GDP Growth	IQ2014/IVQ2013 ∆%:0.0 IQ2014/IQ2013 ∆%: 0.7 Blog 3/31/13 5/19/12 6/30/13 9/29/13 11/17/13 12/29/13 2/16/14 4/6/14 5/18/14 6/29/14
Industrial Production	Apr ∆%: Manufacturing 0.3 12-Month ∆%: 0.0 Manufacturing 1.5 Blog 6/15/14
Consumer Spending	Manufactured Goods May ∆%: -0.4 May 12-Month Manufactured Goods ∆%: -0.3 Blog 6/29/14
Employment	Unemployment Rate: IQ2014 9.7% Blog 6/8/14
Trade Balance	Apr Exports ∆%: month minus 0.7, 12 months minus 6.4 Apr Imports ∆%: month minus 2.9, 12 months minus 5.5 Blog 6/8/14
Confidence Indicators	Historical average 100 Jun Mfg Business Climate 98.0 Blog 6/29/14

Links to blog comments in Table FR:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

6/8/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-risks-rules-discretionary.html

6/1/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-instability-mediocre-cyclical.html

5/18/14 http://cmpassocregulationblog.blogspot.com/2014/05/world-inflation-waves-squeeze-of.html

4/6/14 http://cmpassocregulationblog.blogspot.com/2014/04/interest-rate-risks-twenty-eight.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

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 2.2 percent in IIQ2013 and minus 1.9 percent in IIIQ2013. GDP fell 0.9 percent in IVQ2013 relative to a year earlier. GDP fell 0.9 percent in IQ2014 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. In IQ2014, consumption fell 0.3 percent relative to a year earlier and GFCF fell 1.3 percent.

Table VG-IT, Italy, GDP and Expenditure Components, Chained Volume Measures, Quarter ∆% on Same Quarter Year Earlier

	GDP	Imports	Consumption	GFCF	Exports
2013
IQ2014	-0.5	1.3	-0.3	-1.3	3.3
IVQ	-0.9	-0.1	-1.1	-2.8	1.0
IIIQ	-1.9	-2.0	-1.8	-4.6	-0.4
IIQ	-2.2	-4.4	-2.8	-4.8	0.0
IQ	-2.4	-5.0	-3.0	-6.1	-0.7
2012
IVQ	-2.8	-6.4	-4.0	-7.3	1.0
IIIQ	-2.6	-7.1	-4.0	-8.3	2.0
IIQ	-2.4	-7.0	-3.4	-8.5	2.2
IQ	-1.7	-7.9	-3.2	-8.1	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/124710

The Markit/ADACI Business Activity Index increased from 51.6 in May to 53.9 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/df7d4a9752744ddcb1dc5efff001e00a). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds services with the highest quarterly growth in four years (http://www.markiteconomics.com/Survey/PressRelease.mvc/df7d4a9752744ddcb1dc5efff001e00a). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased from 53.2 in May to 52.6 in Jun, which constitutes strong improvement in Italy’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b33bc99a5fd4a63b5879891082635dc). New export orders was strong. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds continuing growth of manufacturing with the quarterly index at the highest performance in about three years (http://www.markiteconomics.com/Survey/PressRelease.mvc/6b33bc99a5fd4a63b5879891082635dc). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Jun month ∆%: 0.1 Jun 12-month ∆%: 0.3 Blog 7/6/14
Producer Price Index	May month ∆%: -0.1 May 12-month ∆%: -1.7 Blog 7/6/14
GDP Growth	IQ2014/IVQ2013 SA ∆%: minus 0.1 IQ2014/IQ2013 NSA ∆%: minus 0.5 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 5/18/14 6/15/14
Labor Report	May 2014 Participation rate 63.7% Employment ratio 55.5% Unemployment rate 12.6% Youth Unemployment 43.0% Blog 7/6/14
Industrial Production	Apr month ∆%: 0.7 12 months CA ∆%: 1.6 Blog 6/15/14
Retail Sales	Apr month ∆%: 0.4 Apr 12-month ∆%: 2.6 Blog 6/29/14
Business Confidence	Mfg Jun 100.0, Feb 99.1 Construction Jun 81.1, Feb 76.9 Blog 6/29/14
Trade Balance	Balance Apr SA €3927 million versus Mar €3612 Exports Apr month SA ∆%: 0.4; Imports A[r month ∆%: minus 0.6 Exports 12 months Apr NSA ∆%: 2.0 Imports 12 months NSA ∆%: -2.9 Blog 6/22/14

Links to blog comments in Table IT:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

5/18/14 http://cmpassocregulationblog.blogspot.com/2014/05/world-inflation-waves-squeeze-of.html

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

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.2 percent in Dec 2006 to 12.6 percent in May 2014. The rate of youth unemployment for ages 15 to 24 years increased from 20.2 percent in Dec 2006 to 43.0 percent in May 2014. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %	Unemployment Rate 15-24 Years %
May 2014	63.7	55.5	12.6	43.0
Apr	63.5	55.4	12.5	43.2
Mar	63.8	55.7	12.6	42.9
Feb	63.7	55.5	12.7	42.8
Jan	63.6	55.4	12.7	42.8
Dec 2013	63.5	55.4	12.5	42.0
Nov	63.7	55.5	12.7	41.9
Oct	63.5	55.5	12.4	41.4
Sep	63.4	55.4	12.5	41.0
Aug	63.5	55.6	12.3	40.8
Jul	63.5	55.7	12.1	39.6
Jun	63.4	55.6	12.1	39.3
May	63.4	55.6	12.1	38.7
Apr	63.5	55.7	12.0	39.3
Mar	63.5	55.8	12.0	39.1
Feb	63.7	56.0	11.9	38.7
Jan	63.7	56.0	11.9	38.4
Dec 2012	63.7	56.3	11.5	37.4
Nov	63.6	56.4	11.2	37.5
Oct	63.8	56.5	11.3	36.5
Sep	63.6	56.6	10.9	36.1
Aug	63.6	56.7	10.7	34.5
Jul	63.7	56.8	10.8	35.4
Jun	63.7	56.7	10.8	34.7
May	63.8	57.0	10.4	35.6
Apr	63.7	56.9	10.6	34.8
Mar	63.5	56.9	10.3	35.1
Feb	63.4	56.9	10.0	33.6
Jan	63.2	57.1	9.5	32.2
Dec 2011	63.0	57.0	9.5	31.8
Nov	62.6	56.7	9.3	31.9
Oct	62.6	57.0	8.8	30.5
Sep	62.5	56.8	8.9	30.4
Aug	62.4	57.0	8.5	29.3
Jul	62.2	57.0	8.3	28.8
Jun	62.0	57.0	8.0	27.9
May	62.1	57.0	8.1	27.8
Apr	61.8	56.9	7.7	27.3
Mar	62.1	57.1	7.9	27.8
Feb	61.8	56.8	7.9	27.6
Jan	62.0	56.9	8.0	28.2
Dec 2010	62.1	57.0	8.2	28.4
Dec 2009	62.3	57.0	8.4	26.7
Dec 2008	62.4	58.1	6.8	22.8
Dec 2007	63.1	58.9	6.5	21.5
Dec 2006	62.5	58.6	6.2	20.2
Dec 2005	62.6	57.8	7.5	23.4
Dec 2004	62.4	57.5	7.9	23.7

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/127514

Table VG-2 provides more detail on the labor report for Italy in May 2014. The level of employment increased 52,000 from Apr 2014 to May 2014 and fell 61,000 from May 2013 to May 2014. Unemployment increased 26,000 in May 2014 and increased 127,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 43.0 percent in May 2014 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

May 2014	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22,360	52	0.2	-61	-0.3
UNE	3,222	26	0.8	127	4.1
INA   15-64	14,317	-67	-0.5	-151	-1.0
EMP 15-24	928	24	2.7	-77	-7.7
UNE 15-24	700	11	1.6	64	10.0
INA 15-24	4,355	-40	-0.9	-28	-0.6
EMP %	55.5		0.1		-0.1
UNE %	12.6		0.1		0.5
Youth UNE %  15-24	43.0		-0.3		4.2
INA % 15-64	36.3		-0.2		-0.3

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

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/127514

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment dropped from 22.476 million in Apr 2013 to 22.295 million in Apr 2014.

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment dropped from 22.299 million in May 2013 to 22.360 million in May 2014.

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

Source: Istituto Nazionale di Statistica

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

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 1.7 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 1.2 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2013 was lower by 1.4 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	1.7
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 an from 2007 to 2013

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q1-2014/index.html

Table VI-1, Vo The Business Activity Index of the Markit/CIPS UK Services PMI^® decreased from 58.6 in May to 57.7 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c9d0c8dec61431eacdd97f3c0575533). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at 0.8 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/7c9d0c8dec61431eacdd97f3c0575533). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased to 57.5 in Jun from 57.0 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/a7cf7600aa4e4125b7e58b397c4a065a). New export orders increased for the fifteenth consecutive month. New orders increased from Europe, Asia and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions continue at solid pace with probable growth at 1.5 percent for IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/a7cf7600aa4e4125b7e58b397c4a065a). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	May month ∆%: -0.1 May 12-month ∆%: 1.5 Blog 6/22/14
Output/Input Prices	Output Prices: May 12-month NSA ∆%: 0.5; excluding food, petroleum ∆%: 1.0 Input Prices: May 12-month NSA ∆%: -5.0 Excluding ∆%: -4.3 Blog 6/22/14
GDP Growth	IQ2014 prior quarter ∆% 0.8; year earlier same quarter ∆%: 3.0 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 4/6/14 5/4/14 5/25/14 6/29/14
Industrial Production	Apr 2014/Apr 2013 ∆%: Production Industries 3.0; Manufacturing 4.4 Blog 6/15/14
Retail Sales	May month ∆%: -0.5 May 12-month ∆%: 3.9 Blog 6/22/14
Labor Market	Feb-Apr Unemployment Rate: 6.6%; Claimant Count 3.2%; Earnings Growth 0.7% Blog 6/15/14 LMGDP 5/25/14
GDP and the Labor Market	IQ2014 Weekly Hours 102.8, GDP 99.3, Employment 103.1 IQ2008 =100 GDP IQ14 99.3 IQ2008=100 Blog 5/25/14
Trade Balance	Balance SA Apr minus ₤2543 million Exports Apr ∆%: -2.9; Feb-Apr ∆%: -2.9 Imports Mar ∆%: 0.6 Feb-Apr ∆%: -3.7 Blog 6/8/14

Links to blog comments in Table UK:

6/29/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html

6/22/14 http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

6/8/14 http://cmpassocregulationblog.blogspot.com/2014/06/financial-risks-rules-discretionary.html

5/25/14 http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html

5/4/2014 http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html

4/6/14 http://cmpassocregulationblog.blogspot.com/2014/04/interest-rate-risks-twenty-eight.html

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

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

12/22/13 http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html

12/1/13 http://cmpassocregulationblog.blogspot.com/2013/12/exit-risks-of-zero-interest-rates-world.html

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

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

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

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

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

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

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

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