Volatility of Valuations of Risk Financial Assets, Rules, Discretionary Authorities and Slow Productivity Growth, United States International Trade, World Cyclical Slow Growth and Global Recession Risk: Part IV

 

Volatility of Valuations of Risk Financial Assets, Rules, Discretionary Authorities and Slow Productivity Growth, United States International Trade, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Rules, Discretionary Authorities and Slow Productivity Growth

II 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

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 55.5 in Jul from 55.4 in Jun, indicating expansion at slightly faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/b30c6463061942a885574801c8fe938b). This index has remained above the contraction territory of 50.0 during 60 consecutive months. The employment index decreased from 52.7 in Jun to 51.6 in Jul with input prices rising at slower rate, new orders increasing at slower rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/b30c6463061942a885574801c8fe938b). Joseph Lupton, Senior Economist at JP Morgan, finds possible higher growth than trend in the second half of the year (http://www.markiteconomics.com/Survey/PressRelease.mvc/b30c6463061942a885574801c8fe938b). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, decreased to 52.5 in Jul from 52.6 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/ec33aaa61b864711beca257c5d3751cf). New export orders expanded for the thirteenth consecutive month (http://www.markiteconomics.com/Survey/PressRelease.mvc/ec33aaa61b864711beca257c5d3751cf). 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/ec33aaa61b864711beca257c5d3751cf). The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 49.9 in Jun to 49.3 in Jul, indicating marginal decline in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa14d4aac2348acb305d4f0b35edd40). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 51.4 in Jun to 50.2 in Jul, indicating marginally expanding services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa14d4aac2348acb305d4f0b35edd40). André Loes, Chief Economist, Brazil, at HSBC, finds risks of weak economic activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/faa14d4aac2348acb305d4f0b35edd40). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased marginally from 48.7 in Jun to 49.1 in Jul, indicating moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d195bcd711d47e0ab2ec6b365ebfbb5). André Loes, Chief Economist, Brazil at HSBC, finds weakening industrial activity in Brazil but with effects of the World Cup in Jun and Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d195bcd711d47e0ab2ec6b365ebfbb5).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 56.3 in Jul from 57.3 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d6537dbfe864b79bd872077f8fed299). New export orders registered 50.9 in Jul, unchanged from 50.9 in Jun, indicating expansion at moderate rate. Chris Williamson, Chief Economist at Markit, finds that manufacturing hiring is growing at the lowest rate since Sep and output is slightly below 8 percent annual equivalent (http://www.markiteconomics.com/Survey/PressRelease.mvc/3d6537dbfe864b79bd872077f8fed299). The Markit Flash US Services PMI™ Business Activity Index did not change from 61.0 in Jun to 61.0 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/85edf9371b6f400186c65d9cfe3041ae). Tim Moore, Senior Economist at Markit, finds that the surveys are consistent with the highest rate of economic activity since before the global recession and good prospects for IIIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/85edf9371b6f400186c65d9cfe3041ae). The Markit US Composite PMI™ Output Index of Manufacturing and Services decreased to 60.6 in Jul from 61.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4d22d88d4f54cf69dcc6e2fa12cb082). The Markit US Services PMI™ Business Activity Index decreased from 61.0 in Jun to 60.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4d22d88d4f54cf69dcc6e2fa12cb082). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at a high rate in IIIQ2014 after annual rate of 4.0 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d4d22d88d4f54cf69dcc6e2fa12cb082). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) decreased to 55.8 in Jul from 57.3 in Jun, which indicates expansion at slowter rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/ef159a10e5db45c08517182a5ee21106). Growth of export orders slowed. Chris Williamson, Chief Economist at Markit, finds that the index suggests output growth at around the fastest pace since the Global Recession in IIQ2014 will continue into IIIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/ef159a10e5db45c08517182a5ee21106). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 0.8 percentage points from 55.3 in Jun to 57.1 in Jul, which indicates growth at higher rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 4.5 percentage points from 58.9 in Jun to 63.4 in Jul. The index of new export orders decreased 1.5 percentage point from 54.5 in Jun to 53.0 in Jul, growing at a slower rate. The Non-Manufacturing ISM Report on Business^® PMI increased 2.7 percentage points from 56.0 in Jun to 58.7 in Jul, indicating growth of business activity/production during 60 consecutive months, while the index of new orders increased 3.7 percentage points from 61.2 in Jun to 64.9 in Jul (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	Jun 12 months NSA ∆%: 2.1; ex food and energy ∆%: 1.9 Jun month SA ∆%: 0.3; ex food and energy ∆%: 0.1 Blog 7/27/14
Producer Price Index	Finished Goods Jun 12-month NSA ∆%: 2.7; ex food and energy ∆% 1.9 Jun month SA ∆% = 0.7; ex food and energy ∆%: 0.2 Final Demand Jun 12-month NSA ∆%: 1.9; ex food and energy ∆% 1.8 Jun month SA ∆% = 0.4; ex food and energy ∆%: 0.2 Blog 7/20/14 7/27/14
PCE Inflation	Jun 12-month NSA ∆%: headline 1.6; ex food and energy ∆% 1.5 Blog 8/3/14
Employment Situation	Household Survey: Jul Unemployment Rate SA 6.2% Blog calculation People in Job Stress Jun: 26.8 million NSA, 16.3% of Labor Force Establishment Survey: Jul Nonfarm Jobs +209,000; Private +198,000 jobs created  Jun 12-month Average Hourly Earnings Inflation Adjusted ∆%: -0.1 Blog 8/3/14
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 May 2014 5.329 million lower by 0.626 million than 5.955million in May 2006 Blog 7/13/14
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.6 IIQ2012/IIQ2011 2.83 IIIQ2012/IIIQ2011 2.7 IVQ2012/IVQ2011 1.6 IQ2013/IQ2012 1.7 IIQ2013/IIQ2012 1.8 IIIQ2013/IIIQ2012 2.3 IVQ2013/IVQ2012 3.1 IQ2014/IQ2013 1.9 IIQ2014/IIQ2013 2.4 IQ2012 SAAR 2.3 IIQ2012 SAAR 1.6 IIIQ2012 SAAR 2.5 IVQ2012 SAAR 0.1 IQ2013 SAAR 2.7 IIQ2013 SAAR 1.8 IIIQ2013 SAAR 4.5 IVQ2013 SAAR 3.5 IQ2014 SAAR -2.1 IIQ2014 SAAR 4.0 Blog 8/3/14
Real Private Fixed Investment	SAAR IIQ2014 5.9 ∆% IVQ2007 to IIQ2014: minus 0.5% Blog 8/3/14
Corporate Profits	IQ2014 SAAR: Corporate Profits -9.1; Undistributed Profits -17.5 Blog 6/29/14
Personal Income and Consumption	Jun month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.2 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Jun NSA ∆%: RDPI: 2.3; RPCE ∆%: 2.3 Blog 8/3/14
Quarterly Services Report	IQ14/IQ13 NSA ∆%: Information 5.8 Financial & Insurance 5.3 Blog 6/15/14
Employment Cost Index	Compensation Private IIQ2014 SA ∆%: 0.7 Jun 12 months ∆%: 2.0 Blog 8/3/14
Industrial Production	Jun month SA ∆%: 0.2 Jun 12 months SA ∆%: 4.3 Manufacturing Jun SA ∆% 0.1 Jun 12 months SA ∆% 3.4, NSA 3.6 Capacity Utilization: 79.1 Blog 7/20/14
Productivity and Costs	Nonfarm Business Productivity IIQ2014∆% SAAE 2.5; IIQ2014/IIQ2013 ∆% 1.2; Unit Labor Costs SAAE IIQ2014 ∆% 0.6; IIQ2014/IIQ2013 ∆%: 1.9 Blog 8/10/14
New York Fed Manufacturing Index	General Business Conditions From Jun 19.28 to Jul 25.60 New Orders: From Jun 18.36 to Jul 18.77 Blog 7/20/14
Philadelphia Fed Business Outlook Index	General Index from May 17.8 to Jul 23.9 New Orders from Jun 16.8 to Jul 34.2 Blog 7/20/14
Manufacturing Shipments and Orders	New Orders SA Jun ∆% 1.1 Ex Transport 1.1 Jan-Jun NSA New Orders ∆% 2.5 Ex transport 2.4 Blog 8/10/14
Durable Goods	Jun New Orders SA ∆%: 0.7; ex transport ∆%: 0.8 Jan-Jun 14/Jan-Jun 13 New Orders NSA ∆%: 3.5; ex transport ∆% 3.9 Blog 7/27/14
Sales of New Motor Vehicles	Jan-Jul 2014 9,599,284; Jan-Jul 2013 9,144,335. Jul 14 SAAR 16.48 million, Jun 14 SAAR 16.90 million, Jul 2013 SAAR 15.76 million Blog 8/10/14
Sales of Merchant Wholesalers	Jan-Jun 2014/Jan-Jun 2013 NSA ∆%: Total 5.7; Durable Goods: 4.9; Nondurable Goods: 6.3 Blog 8/10/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	May 14 12-M NSA ∆%: Sales Total Business 3.3; Manufacturers 1.8 Retailers 4.6; Merchant Wholesalers 3.9 Blog 7/20/14
Sales for Retail and Food Services	Jan-Jun 2014/Jan-Jun 2013 ∆%: Retail and Food Services 3.6; Retail ∆% 3.5 Blog 7/20/14
Value of Construction Put in Place	Jun SAAR month SA ∆%: minus 1.8 Jun 12-month NSA: 4.3 Blog 8/10/14
Case-Shiller Home Prices	May 2014/May 2013 ∆% NSA: 10 Cities 9.4; 20 Cities: 9.3 ∆% May SA: 10 Cities -0.3 ; 20 Cities: -0.3 Blog 8/3/14
FHFA House Price Index Purchases Only	Apr SA ∆% 0.0; 12 month NSA ∆%: 6.0 Blog 6/29/14
New House Sales	Jun 2014 month SAAR ∆%: minus 8.1 Jan-Jun 2014/Jan-May 2013 NSA ∆%: -4.9 Blog 7/27/14
Housing Starts and Permits	Jun Starts month SA ∆% minus -9.3; Permits ∆%: minus 4.2 Jan-Jun 2014/Jan-Jun 2013 NSA ∆% Starts 6.0; Permits  ∆% 2.2 Blog 7/20/14
Trade Balance	Balance Jun SA -$41,538 million versus May -$44,663 million Exports Jun SA ∆%: 0.1 Imports Jun SA ∆%: -1.2 Goods Exports Jan-Jun 2014/Jan-Jun 2013 NSA ∆%: 2.9 Goods Imports Jan-Jun 2014/Jan-Jun 2012 NSA ∆%: 3.2 Blog 8/10/14
Export and Import Prices	Jun 12-month NSA ∆%: Imports 1.2; Exports 0.2 Blog 7/20/14
Consumer Credit	Jun ∆% annual rate: Total 6.5; Revolving 1.3; Nonrevolving 8.4 Blog 8/10/14
Net Foreign Purchases of Long-term Treasury Securities	May Net Foreign Purchases of Long-term US Securities: $19.4 billion Major Holders of Treasury Securities: China $1271 billion; Japan $1220 billion; Total Foreign US Treasury Holdings Apr $5976 billion Blog 7/20/14
Treasury Budget	Fiscal Year 2014/2013 ∆% Jun: Receipts 8.2; Outlays 1.1; Individual Income Taxes 5.4 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Blog 7/13/2014
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	Jun 2014 SAAR ∆%: Securities 9.4 Loans 9.8 Cash Assets 35.2 Deposits 3.5 Blog 7/20/14
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:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/20/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-irrational-exuberance.html

7/13/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-risk-recovery-without-hiring.html

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

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 Jul 2014, light vehicle sales accumulated to 9,599,284, which is higher by 5.0 percent relative to 9,144,335 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 16.48 million in Jul 2014, lower than 16.90 million in May 2014 and higher than 15.76 million in Jul 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 0.5 percent in Jun 2014 and decreased 0.1 percent in May 2014 after increasing 0.4 percent in Apr 2014. New orders increased 1.1 percent in Jun 2014, after decreasing 0.6 percent in May 2014 and increasing 0.8 percent in Apr 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 2012. New orders excluding transportation equipment increased 1.1 percent in Jun 2014 after decreasing 0.2 percent in May 2014 and increasing 0.6 percent in Apr 2014. Capital goods new orders, indicating investment, increased 3.8 percent in Jun 2014 after decreasing 5.2 percent in May 2014 and increasing 3.3 percent in Apr 2014. New orders of nondefense capital goods increased 3.4 percent in Jun 2014 after decreasing 2.3 percent in May 2014 and decreasing 0.6 percent in Apr 2014. Excluding more volatile aircraft, capital goods orders increased 3.3 percent in Jun 2014 after decreasing 1.4 percent in May 2014 and decreasing 1.1 percent in Apr 2014.

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

	Jun 2014 ∆%	May 2013  ∆%	Apr 2014  ∆%
Total
S	0.5	-0.1	0.4
NO	1.1	-0.6	0.8
Excluding Transport
S	0.5	-0.1	0.6
NO	1.1	-0.2	0.6
Excluding Defense
S	0.5	-0.1	0.4
NO	1.0	0.0	0.0
Durable Goods
S	0.4	0.0	0.1
NO	1.7	-0.9	0.9
Machinery
S	-1.6	0.0	-1.1
NO	2.9	-1.0	-2.4
Computers & Electronic Products
S	1.0	-1.5	0.2
NO	2.9	-1,3	-1.8
Computers
S	10.4	3.3	5.8
NO	-13.5	102.0	-11.4
Transport Equipment
S	0.7	-0.1	-0.6
NO	1.3	-2.6	1.8
Automobiles
S	0.3	8.4	-5.6
Motor Vehicles
S	0.0	1.0	0.3
NO	0.0	1.0	0.3
Nondefense Aircraft
S	13.5	-5.2	-1.4
NO	8.4	-2.9	-7.4
Capital Goods
S	1.7	-1.0	-0.4
NO	3.8	-5.2	3.3
Nondefense Capital Goods
S	1.9	-1.0	-0.7
NO	3.4	-2.3	-0.6
Capital Goods ex Aircraft
S	-0.3	0.1	-0.3
NO	3.3	-1.4	-1.1
Nondurable Goods
S	0.6	-0.2	0.7
NO	0.6	-0.2	0.7

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-Jun 2014 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Jun 2014 total $2967.8 billion and new orders total $2965.8 billion, growing respectively by 2.6 percent and 2.5 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 2.5 percent and new orders increased 2.4 percent. Excluding defense, shipments grew 2.7 percent and new orders grew 2.2 percent. Durable goods shipments reached $1422.0 billion in Jan-Jun 2014, or 47.9 percent of the total, growing by 4.0 percent, and new orders $1419.9 billion, or 47.9 percent of the total, growing by 3.7 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $1545.9 billion or 52.1 percent of the total, growing by 1.4 percent. Capital goods have relatively high value of $510.6 billion for shipments, growing 3.2 percent, and new orders $536.2 billion, increasing 1.1 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $406.6 billion, growing 3.4 percent, and new orders $425.1 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-Jun 2014	Shipments	∆% 2014/ 2013	New Orders	∆% 2014/ 2013
Total	2,967,844	2.6	2,965.826	2.5
Excluding Transport	2,548,491	2.5	2,531,803	2.4
Excluding Defense	2,898,387	2.7	2,892,761	2.2
Durable Goods	1,421,961	4.0	1,419,943	3.7
Machinery	215,351	4.0	226,315	7.2
Computers & Electronic Products	168,488	4.3	130,430	3.1
Computers	2,700	-14.1	3,009	-9.4
Transport Equipment	419,353	3.1	434,023	2.8
Automobiles	56,005	-13.0
Motor Vehicles	126,815	8.1	127,040	8.4
Nondefense Aircraft	69,353	8.2	79,382	-10.8
Capital Goods	510,560	3.2	536,246	1.1
Nondefense Capital Goods	453,952	3.9	477,126	-0.5
Capital Goods ex Aircraft	406,606	3.4	425,097	3.0
Nondurable Goods	1,545,883	1.4	1,545,883	1.4
Food Products	386,820	5.9
Petroleum Refineries	409,592	0.1
Chemical Products	381,726	-1.4

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 Jun 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/

Sales and inventories of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-4 for Jan-Jun 2014 NSA and percentage changes from the prior month SA and for Jan-Jun 2014 relative to Jan-Jun 2013. These data are volatile, aggregating diverse categories of durable and nondurable goods without adjustment for price changes. Total sales for the US rose 5.7 percent in Jan-Jun 2014 relative to Jan-Jun 2013 and increased 0.2 percent in Jun 2014 relative to May 2014. The value of total sales is quite high at $2654.3 billion, approaching five trillion dollars in a year. Value in the breakdown is useful in identifying relative importance of individual categories. Sales of durable goods in Jan-Jun 2014 reached $1205.5 billion, over two trillion dollars for a year, increasing 1.4 percent in Jun 2014 relative to May 2014 and increasing 4.9 percent in Jan-Jun 2014 relative to Jan-Jun 2013. Sales of automotive products reached $200.8 billion in Jan-Jun 2014, increasing 2.1 percent in the month and also increasing 3.7 percent relative to a year earlier. There is strong performance of 11.8 percent in machinery but lower of 4.1 percent in electrical products. Sales of nondurable goods rose 6.3 percent over a year earlier. The influence of commodity prices returned as suggested by decrease of 8.1 percent in Jun 2014 and decrease of 0.5 percent in Jan-Jun 2014 relative to a year earlier in farm products with increase of 1.0 percent in petroleum products in Jun 2014 and increase of 10.4 percent relative to a year earlier. The final three columns in Table VA-4 provide the value of inventories and percentage changes from the prior month and relative to the same month a year earlier. US total inventories of wholesalers increased 0.3 percent in Jun 2014 and increased 7.9 percent relative to a year earlier. Inventories of durable goods of $329.4 billion are 62.6 percent of total inventories of $526.1 billion and rose 8.8 percent relative to a year earlier. Automotive inventories increased 9.9 percent relative to a year earlier. Machinery inventories of $96.5 billion rose 12.4 percent relative to a year earlier. Inventories of nondurable goods of $196.7 billion are 37.4 percent of the total and increased 6.5 percent relative to a year earlier. Inventories of farm products decreased 5.3 percent in Jun relative to May and decreased 0.7 percent relative to a year earlier. Inventories of petroleum products increased 1.7 percent in Jun and increased 0.2 percent relative to a year earlier.

Table VA-4, US, Sales and Inventories of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, Month ∆%

2014	Sales $ Billions Jan-Jun 2014 NSA	Sales Jun ∆% SA	Sales∆% Jan-Jun 2014 from Jan-Jun 2013  NSA	INV $ Billions Jun 2014 NSA	INV Jun ∆% SA	INV  ∆% Jun 2014 from Jun 2013 NSA
US Total	2654.3	0.2	5.7	526.1	0.3	7.9
Durable	1205.5	1.4	4.9	329.4	0.7	8.8
Automotive	200.8	2.1	3.7	53.7	-0.3	9.9
Prof. Equip.	225.9	1.8	4.2	40.9	0.3	6.0
Computer Equipment	127.2	0.5	4.2	18.5	1.8	6.7
Electrical	207.9	0.8	4.1	37.0	0.6	7.0
Machinery	230.3	0.6	11.8	96.5	0.3	12.4
Not Durable	1448.8	-0.7	6.3	196.7	-0.2	6.5
Drugs	235.7	0.4	10.6	43.1	-0.2	19.3
Apparel	71.4	-0.2	7.0	25.2	0.3	7.7
Groceries	307.8	-0.8	6.5	33.0	0.7	3.2
Farm Products	126.0	-8.1	-0.5	15.5	-5.3	-0.7
Petroleum	400.3	1.0	10.4	21.8	1.7	0.2

Note: INV: inventories

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Chart VA-5 of the US Census Bureau provides sales of wholesale trade NSA from Jan 1992 to Jun 2014. The jagged curve of wholesale trade sales without adjustment shows strong seasonal variations. There is a strong long-term trend interrupted by sharp drop during the global recession. Growth resumed along a stronger upward trend and the level surpasses the peak before the global recession with stability in the final segment.

Chart VA-5, US, Wholesale Trade Sales, Monthly, NSA, Jan 1992- Jun 2014, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Chart VA-6 of the US Census Bureau provides US wholesale trade sales with seasonal adjustment from Jan 1992 to Jun 2014. The elimination of seasonality permits enhanced comparison of adjacent sales. The final segment identifies another drop followed by increase to a higher level with stability.

Chart VA-6, US, Wholesale Trade Sales, Monthly, SA, Jan 1992-Jun 2014, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Inventory/sales ratios of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-5. The total for the US has remained almost without change at 1.17 in Jun 2014, 1.17 in May 2014 and 1.16 in Jun 2013. Inventory/sales ratios are higher in durable goods industries but remain relatively stable with 1.57 in Jun 2014, 1.58 in May 2014 and 1.54 in Jun 2013. Computer equipment operates with low inventory/sales ratios of 0.82 in Jun 2014, 0.81 in May 2014 and 0.79 in Jun 2013 because of the capacity to fill orders on demand. As expected because of perishable nature, nondurable inventory/sales ratios are quite low with 0.83 in Jun 2014 and 0.83 in May 2014, which are close to 0.83 in Jun 2013. There are exceptions such as 1.96 in Jun 2014 in apparel that is close to 1.95 in May 2014 and close to 1.99 in Jun 2013.

Table VA-5, Inventory/Sales Ratios of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, % SA

	Jun 2014	May 2014	Jun 2013
US Total	1.17	1.17	1.16
Durable	1.57	1.58	1.54
Automotive	1.53	1.57	1.49
Prof. Equip.	1.03	1.04	1.03
Comp. Equip.	0.82	0.81	0.79
Electrical	1.02	1.02	0.98
Machinery	2.44	2.45	2.44
Not Durable	0.83	0.83	0.83
Drugs	1.06	1.07	1.00
Apparel	1.96	1.95	1.99
Groceries	0.65	0.64	0.66
Farm Products	0.99	0.96	0.99
Petroleum	0.32	0.32	0.34

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars NSA are provided in Chart VA-7 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession with recent downward turn followed by increase.

Chart VA-7, US, Inventories of Merchant Wholesalers, Millions of Dollars, NSA, Jan 1992-Jun 2014

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-8 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession with recent downward turn followed by increase.

Chart VA-8, US, Inventories of Merchant Wholesalers, Millions of Dollars, SA, Jan 1992-Jun 2014

Source: US Census Bureau

http://www.census.gov/wholesale/index.html

Chart VA-9 provides the chart of the US Census Bureau with inventories/sales ratios of merchant wholesalers from 2004 to 2014 seasonally adjusted. Inventory/sales ratios rise during contractions as merchants are caught with increasing inventories because of weak sales and fall during expansions as merchants attempt to fill sales with existing stocks. There is an increase in the inventory/sales ratio in 2012 but not yet significantly higher with declining trend in the final segment followed by an increase and new decline/stability.

Chart VA-9, US, Monthly Inventories/Sales Ratios of Merchant Wholesalers, SA, 2005-2014

Source: US Census Bureau

http://www2.census.gov/wholesale/img/mwtsbrf.jpg

Construction spending at seasonally adjusted annualized rate (SAAR) reached $950.1 billion in Jun 2014, which was lower by 1.8 percent than in the prior month of May 2014, as shown in Table VA-6. Residential investment, with $361.3 billion accounting for 38.0 percent of total value of construction, decreased 0.2 percent in Jun and nonresidential investment, with $588.8 billion accounting for 62.0 percent of the total, decreased 2.8 percent. Public construction decreased 4.2 percent while private construction decreased 1.0 percent. Data in Table VA-6 show that nonresidential construction at $588.8 billion is much higher in value than residential construction at $361.3 billion while total private construction at $685.5 billion is much higher than public construction at $264.7 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in all quarters in 2012. Nonresidential investment added 0.20 percentage points to GDP growth in IQ2013 while residential construction added 0.22 percentage points. Nonresidential construction added 0.21 percentage points to GDP growth in IIQ2013 with residential construction adding 0.53 percentage points. Nonresidential construction added 0.67 percentage points to GDP growth in IIIQ2013 while residential construction added 0.34 percentage points. Nonresidential construction added 1.23 percentage points to GDP growth in IVQ2013 while residential construction deducted 0.28 percentage points. In 2012, residential construction added 0.33 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 0.84 percentage points to GDP growth in 2012 and 0.85 percentage points in 2011. Nonresidential construction added 0.37 percentage points to GDP growth in 2013. In IQ2014, residential construction deducted 0.17 percentage points from GDP growth and nonresidential construction added 0.08 percentage points. Nonresidential construction added 0.68 percentage points to GDP growth in IIQ2014 and residential construction added 0.23 percentage points (http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html).

Table VA-6, Construction Put in Place in the United States Seasonally Adjusted Annual Rate Million Dollars and Month and 12-Month ∆%  

Jun 2014	May 2014 SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	950,154	-1.8	5.5
Residential	361,338	-0.2	7.1
Nonresidential	588,816	-2.8	4.6
Total Private	685,455	-1.0	9.2
Private Residential	355,915	-0.3	7.4
New Single Family	184,203	-1.4	8.5
New Multi-Family	41,819	2.5	33.2
Private Nonresidential	329,540	-1.6	11.2
Total Public	264,699	-4.0	-2.9
Public Residential	5,423	6.3	-12.3
Public Nonresidential	259,276	-4.2	-2.7

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-7. 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 five declines in the monthly rate from Dec 2011 to Jun 2014. Growth in 12 months fell from 8.2 percent in Dec 2012 to 4.3 percent in Jun 2014.

Table VA-7, 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*
Jun 2014	85,502	4.3	950,154	-1.8
May	82,301	7.0	967,776	0.8
Apr	76,940	8.5	960,349	1.4
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	4.6	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	4.3	879,609	1.2
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	10.9	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	11.8	861,913	2.3
Apr	67,234	9.4	842,898	1.0
Mar	61,772	9.2	834,810	1.1
Feb	56,761	12.2	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-8. Construction spending in Jan-Jun 2014, not seasonally adjusted, reached $445.1 billion, which is higher by 7.8 percent than $413.0 billion in the same period in 2013. The depth of the contraction is shown by the decline of construction spending from $560.8 billion in Jan-Jun 2006 to $445.1 billion in the same period in 2014, or decline by minus 20.6 percent. The decline in inflation-adjusted terms is much higher. The all-items not seasonally adjusted CPI (consumer price index) increased from 202.9 in Jun 2006 to 238.343 in Jun 2014 (http://www.bls.gov/cpi/data.htm) or by 17.5 percent. The comparable decline from Jan-Jun 2005 to Jan-Jun 2014 is minus 11.5 percent. Construction spending in Jan-Jun 2014 increased by 9.3 percent relative to the same period in 2003. Construction spending is higher by 1.3 percent in Jan-Jun 2014 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

Table VA-8, US, Value of Construction Put in Place in the United States, Not Seasonally Adjusted, $ Millions and ∆%

Jan-Jun 2014 $ MM	445,110
Jan-Jun 2013	413,027
∆% to 2014	7.8
Jan-Jun 2012 $ MM	395,178
∆% to 2014	12.6
Jan-Jun 2011 $ MM	358,326
∆% to 2014	24.2
Jan-Jun 2010 $MM	379,983
∆% to 2014	17.1
Jan-Jun 2009	439,286
∆% to 2014	1.3
Jan-Jun 2006 $ MM	560,817
∆% to 2014	-20.6
Jan-Jun 2005 $ MM	502,943
∆% to 2014	-11.5
Jan-Jun 2003 $ MM	407,397
∆% to 2014	9.3

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

Chart VA-10 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-10, 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-Jun not seasonally adjusted is shown in Table VA-9 for the years between 2002 and 2014. The value of $85.5 billion in Jun 2014 is higher by 4.3 percent than $82.0 billion in Jun 2013. Construction fell by 20.5 percent from the peak of $107.6 billion in Jun 2006 to $85.5 billion in Jun 2014. The data are not adjusted for inflation or changes in quality.

Table VA-9, US, Value of Construction Spending Not Seasonally Adjusted, Millions of Dollars

Year	Jan	Feb	Mar	Apr	May	Jun
2002	59,516	58,588	63,782	69,504	73,384	77,182
2003	59,877	58,526	64,506	69,638	74,473	80,377
2004	64,934	64,138	73,238	78,354	83,736	89,932
2005	71,474	72,048	81,345	85,485	92,959	99,632
2006	81,058	81,478	92,855	95,324	102,495	107,607
2007	79,406	79,177	88,905	93,375	100,534	105,399
2008	77,365	77,253	82,815	87,791	92,843	96,411
2009	67,127	66,490	71,770	75,355	76,971	81,573
2010	55,674	54,112	60,363	66,575	69,059	74,200
2011	51,012	50,590	56,572	61,475	65,827	72,850
2012	56,578	56,761	61,772	67,234	73,571	79,262
2013	59,636	59,188	64,404	70,900	76,938	81,961
2014	66,486	63,817	70,064	76,940	82,301	85,502

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

Chart VA-11 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-11, 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 Feb-Jun is shown in Table VA-10 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-10, US, Value of Construction Spending SAAR Millions of Dollars

Year	Feb	Mar	Apr	May	Jun
2002	862,338	844,551	858,240	850,935	846,777
2003	859,225	851,132	859,459	866,814	880,865
2004	938,656	960,946	967,761	974,158	983,072
2005	1,056,492	1,065,262	1,058,365	1,078,586	1,089,505
2006	1,199,767	1,213,270	1,183,485	1,180,059	1,172,932
2007	1,156,008	1,167,402	1,159,124	1,168,195	1,166,892
2008	1,092,911	1,095,194	1,092,939	1,091,569	1,075,482
2009	962,482	956,133	931,610	914,093	903,987
2010	798,063	807,437	825,626	817,745	817,869
2011	754,970	763,454	772,469	774,148	797,272
2012	825,774	834,810	842,898	861,913	873,069
2013	879,609	871,888	884,966	896,603	900,334
2014	947,088	947,303	960,349	967,776	950,154

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

Chart VA-12 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-12, US, Construction Expenditures SAAR 2002-2014

Source: US Census Bureau

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

Chart VA-13 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-13, 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-14 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-14, 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-11. 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-11, 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

The report of consumer credit outstanding of the Board of Governors of the Federal Reserve System is provided in Table VA-12. The data are in seasonally adjusted annual rates both percentage changes and billions of dollars. The estimate of consumer credit “covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate (http://www.federalreserve.gov/releases/g19/current/default.htm). Consumer credit is divided into two categories. (1) Revolving consumer credit (REV in Table VA-3) consists mainly of unsecured credit cards. (2) Non-revolving consumer credit (NREV in Table VA-6) “includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers or vacations” (http://www.federalreserve.gov/releases/g19/current/default.htm). In Jun 2014, revolving credit was $873 billion, or 27.2 percent of total consumer credit of $3211 billion, and non-revolving credit was $2338 billion, or 72.8 percent of total consumer credit outstanding. Consumer credit grew at relatively high rates before the recession beginning in IVQ2007 (Dec) and extending to IIQ2009 (Jun) as dated by the National Bureau of Economic Research or NBER (http://www.nber.org/cycles/cyclesmain.html). Percentage changes of consumer credit outstanding fell already in 2009. Rates were still negative in 2010 with decline of 1.0 percent in annual data and sharp decline of 7.6 percent in revolving credit. In IVQ 2013, total consumer credit grew at 5.4 percent with increase of revolving credit at 2.0 percent and increase of non-revolving credit at 6.7 percent. Growth continued in Jun 2014 with total credit at 6.5 percent, revolving at 1.3 percent and non-revolving at 8.5 percent.

Table VA-12, US, Consumer Credit Outstanding, SA, Annual Rate and Billions of Dollars

	Total ∆%	REV ∆%	NRV ∆%	Total $B	REV $B	NREV $B
2014
Jun	6.5	1.3	8.4	3211	873	2338
May	7.4	2.4	9.3	3194	872	2322
Apr	9.5	12.3	8.4	3174	870	2304
IIQ	7.8	5.4	8.8	3211	873	2338
IQ	6.7	1.8	8.5	3149	862	2287
2013
IVQ	5.4	2.0	6.7	3097	857	2240
IIIQ	6.3	0.9	8.5	3056	853	2203
IIQ	5.5	1.0	7.3	3009	851	2158
2013	6.0	1.3	7.9	3097	857	2240
2012	6.2	0.6	8.6	2924	847	2077
2011	4.1	0.2	5.9	2756	842	1914
2010	-1.0	-7.6	2.7	2647	840	1807
2009	-3.9	-8.8	-1.0	2553	917	1636
2008	1.3	0.2	2.0	2651	1005	1646
2007	5.9	8.5	4.3	2529	1008	1521

Note: REV: Revolving; NREV: Non-revolving; ∆%: simple annual rate from unrounded data; Total may not add exactly because of rounding

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

Chart VA-15 of the Board of Governors of the Federal Reserve System total consumer credit outstanding in millions of dollars measured in the right axis and the finance rate on 24-month personal loans at commercial banks, not seasonally adjusted, measured on the left axis. There was sharp decline of total consumer loans outstanding during the global recession followed by strong recovery. There is long-term decline of the financing rate.

Chart VA-15, US, Total Consumer Credit Owned and Securitized NSA and Financing Rate on 24-month Personal Loans at Commercial Banks NSA, Millions of Dollars and Percent, Feb 1972-Jun 2014

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

Chart VA-16 of the Board of Governors of the Federal Reserve System provides percentage changes of total consumer credit outstanding in the US and the financing rate on 24-month personal consumer loans at commercial banks, since 1972. The shaded bars are the cyclical contraction dates of the National Bureau of Economic Research (http://www.nber.org/cycles/cyclesmain.html). Consumer credit is cyclical, declining during contractions as shown by negative percentage changes during economic contractions. There is clear upward trend in 2012-2013 but with significant fluctuations and vacillation in the final segment.

Chart VA-16, US, Percent Change of Total Consumer Credit, Seasonally Adjusted at an Annual Rate and Finance Rate on 24-month Personal Loans at Commercial Banks NSA, Feb 1972-Jun 2014

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/g19/current/default.htm

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) with changes on Jul 14, 2014 (https://www.boj.or.jp/en/announcements/release_2014/k140715a.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 3.2 to 3.5 percent in 2014, 1.9 to 2.8 percent in 2015 and 2.0 to 3.0 in 2016 (https://www.boj.or.jp/en/announcements/release_2014/k140715a.pdf). Consumer price inflation in Japan excluding fresh food was 0.4 percent in Apr 2014 and 3.4 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm), significantly because of the increase of the tax on value added of consumption in Apr 2014. 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
Jul 2014	+0.6 to +1.3 [+1.0]	+3.2 to +3.5 [+3.3]	+1.2 to +1.5 [+1.3]
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
Jul 2014	+1.2 to +1.6 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
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
Jul 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]
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/announcements/release_2014/k140715a.pdf

The Markit/JMMA Flash Japan Manufacturing PMI Index™ deteriorated with the Flash Japan Manufacturing PMI™ decreasing from 51.5 in Jun to 50.8 in Jul and the Flash Japan Manufacturing Output Index™ decreasing from 52.4 in Jun to 50.0 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/f8d4bd367e0f4b03a2e4ae0c08f76e54). New export orders increased for the first in four months. Amy Brownbill, Economist at Markit, finds improving encouraging increase in employment (http://www.markiteconomics.com/Survey/PressRelease.mvc/f8d4bd367e0f4b03a2e4ae0c08f76e54). Private-sector activity in Japan was in standstill with the Markit Composite Output PMI Index increasing from 50.0 in Jun to 50.2 in Jul, indicating marginal improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/ac0ba8bb14dd46e59803ee221d4091e2). The Markit Business Activity Index of Services increased to 50.4 in Jul from 49.0 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/ac0ba8bb14dd46e59803ee221d4091e2). Amy Brownbill, Ecoomist at Markit and author of the report, finds improvement with growth of output (http://www.markiteconomics.com/Survey/PressRelease.mvc/ac0ba8bb14dd46e59803ee221d4091e2). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 51.5 in Jun to 50.5 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/48ce4a2c82f9461989084f8b3ef12f6e). New orders increased marginally and output decreased moderately. Amy Brownbill, Economist at Markit and author of the report, finds continuing effects of the increase of the sales tax in Apr with output deteriorating and new orders increasing marginally (http://www.markiteconomics.com/Survey/PressRelease.mvc/48ce4a2c82f9461989084f8b3ef12f6e).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	Jun ∆% 0.2 12 months ∆% 4.6 Blog 7/13/14
Consumer Price Index	Jun NSA ∆% -0.1; Jun 12 months NSA ∆% 3.6 Blog 7/27/14
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	Jun Unemployed 2.45 million Change in unemployed since last year: minus 150 thousand Unemployment rate: 3.7 % Blog 8/3/14
All Industry Indices	May month SA ∆% 0.6 12-month NSA ∆% -1.6 Blog 7/27/14
Industrial Production	Jun SA month ∆%: -3.3 12-month NSA ∆% 3.2 Blog 8/3/14
Machine Orders	Total May ∆% -30.5 Private ∆%: -19.6 May ∆% Excluding Volatile Orders -19.5 Blog 7/13/14
Tertiary Index	May month SA ∆% 0.9 Apr 12 months NSA ∆% minus 2.5 Blog 7/13/14
Wholesale and Retail Sales	Jun 12 months: Total ∆%: -0.8 Wholesale ∆%: -0.7 Retail ∆%: -0.6 Blog 8/3/14
Family Income and Expenditure Survey	Jun 12-month ∆% total nominal consumption 1.3, real -3.0 Blog 8/3/14
Trade Balance	Exports Jun 12 months ∆%: minus 2.0 Imports Jun 12 months ∆% 8.4 Blog 7/27/14

Links to blog comments in Table JPY:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/13/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-risk-recovery-without-hiring.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 54.2 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 Jul 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Jul 2014	54.2	50.7	53.4	49.5	61.5
Jun	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 54.2 in Jul 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 51.7 in Jul 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 increase to 53.6 in Jul 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
Jul 2014	51.7	54.2	53.6	49.0	48.3	50.2
Jun	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 51.7 in Jul 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 IIQ2014 relative to the same period in 2013 was 7.4 percent, as shown in Table VC-GDP. Secondary industry accounts for 46.0 percent of cumulative GDP in IIQ2014. In cumulative IIQ2014, industry alone accounts for 39.7 percent of GDP and construction with the remaining 6.3 percent. Tertiary industry accounts for 46.6 percent of cumulative GDP in IIQ2014 and primary industry for 7.4 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 6.6 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 6.1 percent in IQ2014 and increasing to 8.2 percent in IIQ2014.

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

Cumulative GDP IIQ2014	Value Current CNY Billion	2014 Year-on-Year Constant Prices ∆%
GDP	26,904.4	7.4
Primary Industry	1981.2	3.9
Farming	1981.2	3.9
Secondary Industry	12,387.1	7.4
Industry	10,681.4	7.2
Construction	1,705.7	9.2
Tertiary Industry	12,536.1	8.0
Transport, Storage, Post	1411.4	6.8
Wholesale, Retail Trades	2,542.2	9.8
Hotel & Catering Services	531.8	6.2
Financial Intermediation	1,846.3	9.7
Real Estate	1,745.3	2.5
Other	4,459.1	8.9
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2014
IIQ2014	2.0	8.2
IQ2014	1.5	6.1
2013
IVQ2013	1.7	7.0
IIIQ2013	2.3	9.5
IIQ2013	1.8	7.4
IQ2013	1.6	6.6
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 IIQ2014 relative to the same period in 2013 was 7.5 percent, as shown in Table VC-GDPA. Secondary industry accounts for 46.0 percent of GDP of which industry alone for 39.7 percent in cumulative IIQ2014 and construction with the remaining 6.3 percent. Tertiary industry accounts for 46.6 percent of GDP in cumulative IIQ2014 and primary industry for 7.4 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 7.7 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 1.5 percent in IQ2014 that is equivalent to 6.1 percent per year. GP grew 7.5 percent in IIQ2014 relative to a year earlier and 2.0 percent relative to the prior quarter, which is equivalent 8.2 percent.

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	IIQ 2014
GDP	7.7	7.5	7.8	7.7	7.4	7.5
Primary Industry	3.4	3.0	3.4	4.0	3.5	3.9
Secondary Industry	7.8	7.6	7.8	7.8	7.3	7.4
Tertiary Industry	8.3	8.3	8.4	8.3	7.1	8.0
GDP ∆% Relative to a Prior Quarter	1.6	1.8	2.3	1.7	1.5	2.0
	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/c4c0c76c6c43441ca84449c5c6111d16) is improving. The overall Flash HSBC China Manufacturing PMI^™ increased from 50.7 in Jun to 52.0 in Jul, while the Flash HSBC China Manufacturing Output Index increased from 51.8 in Jun to 52.8 in Jul, indicating expansion at the highest rate in sixteen months. Exports orders indicate expansion at faster 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/c4c0c76c6c43441ca84449c5c6111d16). The HSBC China Services PMI^™, compiled by Markit, shows improvement in business activity in China with the HSBC Composite Output, combining manufacturing and services, decreasing from 52.4 in Jun to 51.6 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/d5b7f39661274eb0a160bb2f4cc9e8c6). 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/d5b7f39661274eb0a160bb2f4cc9e8c6). The HSBC China Services Business Activity index decreased from 53.1 in Jun to 50.0 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/d5b7f39661274eb0a160bb2f4cc9e8c6). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that the services PMI at 50.0 was the lowest in the history of the index since 2005 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d5b7f39661274eb0a160bb2f4cc9e8c6). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 51.7 in Jul from 50.7 in May, indicating improving manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/9b4c5a4107d9459ca2c5c4309b3fa267). 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/9b4c5a4107d9459ca2c5c4309b3fa267). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Jun 12-month ∆%: minus 1.1 Jun month ∆%: -0.2 Blog 7/13/14
Consumer Price Index	Jun month ∆%: -0.1 Jun 12 months ∆%: 2.3 Blog 7/13/14
Value Added of Industry	Jun month ∆%: 0.77 Jan-Jun 2014/Jan-Jun 2013 ∆%: 8.8 Blog 7/20/14
GDP Growth Rate	Year IIQ2014 ∆%: 7.5 First Half 2014 ∆%: 7.4 Quarter IIQ2014 AE ∆%: 8.2 Blog 7/20/14
Investment in Fixed Assets	Total Jan-Jun 2014 ∆%: 17.3 Real estate development: 14.1 Blog 7/20/14
Retail Sales	Jun month ∆%: 0.96 Jun 12 month ∆%: 12.4 Jan-Jun ∆%: 12.1 Blog 7/20/14
Trade Balance	Jul balance $47.3 billion Exports 12M ∆% 14.5 Imports 12M ∆% -1.6 Cumulative Jan-Jul: $150.6 billion Blog 8/10/14

Links to blog comments in Table CNY:

7/20/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-irrational-exuberance.html

7/13/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-risk-recovery-without-hiring.html

Table VC-7 provides China’s exports, imports, trade balance and 12-month percentage changes from Dec 2010 to Jul 2014. The trade surplus of China jumped to $47.3 billion in Jul 2014 with growth of exports by 14.5 percent and decrease of imports by 1.6 percent. China’s trade surplus decreased to $31.6 billion in Jun 2014 with growth of exports of 7.2 percent and of 5.5 percent of imports. The trade surplus of China increased to $35.92 billion in May 2014 with growth of exports of 7.0 percent relative to a year earlier and decline of imports by 1.6 percent. The trade surplus of China increased to $18.45 billion in Apr 2014 with growth of exports of 0.9 percent relative to a year earlier and of imports of 0.8 percent. China had a trade surplus of $7.71 billion in Mar 2014 with exports declining 6.6 percent in 12 months and imports decreasing 11.3 percent. China had a rare trade deficit of $22.99 billion in Feb 2014 with exports decreasing 18.1 percent in 12 months while imports increased 10.1 percent. Exports increased 10.6 percent in the 12 months ending in Jan 2014 and imports 10.0 percent for trade surplus of $31.87 billion. Exports increased 4.3 percent in the 12 months ending in Dec 2013 while imports increased 8.3 percent for trade surplus of $25.64 billion. Exports surged 12.7 percent in the 12 months ending in Nov 2013 while imports increased 5.3 percent for trade surplus of $33.8 billion. Exports rebounded with growth of 5.6 percent in the 12 months ending in Oct 2013 while imports increased 7.6 percent for trade surplus of $31.11 billion. Exports fell 0.3 percent in the 12 months ending in Sep 2013 while imports increased 7.4 for reduction of the trade surplus to $15.2 billion. Markets reacted positively to China’s trade data in Aug 2013 with exports growing 7.2 percent relative to a year earlier and imports 7.0 percent for increasing trade surplus of $28.52. Exports increased 5.1 in Jul 2013 and imports 10.9 percent for trade surplus of $17.82 billion. Exports fell 3.1 percent in Jun 2013 and imports declined 0.7 percent. The trade surplus reached $27.12 billion. Exports increased 1.0 percent in May 2013 relative to a year earlier while imports fell 0.3 percent with trade surplus of $20.43 billion. Exports increased 14.7 percent in Apr 2013 relative to a year earlier and imports 16.8 percent for trade surplus of $18.16 billion. Exports increased 10.0 percent in Mar 2013 relative to a year earlier and imports increased 14.1 percent for trade deficit of $0.88 billion. Exports increased 21.8 percent in Feb 2013 relative to a year earlier and imports fell 15.2 percent for trade surplus of $15.25 billion. China’s trade growth was stronger in Jan 2013 with growth of exports of 25.0 percent in 12 months and of imports of 28.8 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.62 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan 2012 while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb 2012, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the Lunar New Year holidays.

Table VC-1, China, Exports, Imports and Trade Balance USD Billion and ∆%

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jul 2014	212.9	14.5	165.6	-1.6	47.3
Jun	186.8	7.2	155.2	5.5	31.6
May	195.47	7.0	159.55	-1.6	35.92
Apr	188.54	0.9	170.09	0.8	18.45
Mar	170.11	-6.6	162.40	-11.3	7.71
Feb	114.09	-18.1	137.08	10.1	-22.99
Jan	207.13	10.6	175.26	10.0	31.87
Dec 2013	207.74	4.3	182.10	8.3	25.64
Nov	202.20	12.7	168.40	5.3	33.8
Oct	185.41	5.6	154.30	7.6	31.11
Sep	185.64	-0.3	170.44	7.4	15.21
Aug	190.61	7.2	162.09	7.0	28.52
Jul	185.99	5.1	168.17	10.9	17.82
Jun	174.32	-3.1	147.19	-0.7	27.12
May	182.77	1.0	162.34	-0.3	20.43
Apr	187.06	14.7	168.90	16.8	18.16
Mar	182.19	10.0	183.07	14.1	-0.88
Feb	139.37	21.8	124.12	-15.2	15.25
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	199.23	14.1	167.61	6.0	31.62
Nov	179.38	2.9	159.75	0.0	19.63
Oct	175.57	11.6	143.58	2.4	31.99
Sep	186.35	9.9	158.68	2.4	27.67
Aug	177.97	2.7	151.31	-2.6	26.66
Jul	176.94	1.0	151.79	4.7	25.15
Jun	180.20	11.3	148.48	6.3	31.72
May	181.14	15.3	162.44	12.7	18.70
Apr	163.25	4.9	144.83	0.3	18.42
Mar	165.66	8.9	160.31	5.3	5.35
Feb	114.47	18.4	145.95	39.6	-31.48
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	174.72	13.4	158.20	11.8	16.52
Nov	174.46	13.8	159.94	22.1	14.53
Oct	157.49	15.9	140.46	28.7	17.03
Sep	169.67	17.1	155.16	20.9	14.51
Aug	173.32	24.5	155.56	30.2	17.76
Jul	175.13	20.4	143.64	22.9	31.48
Jun	161.98	17.9	139.71	19.3	22.27
May	157.16	19.4	144.11	28.4	13.05
Apr	155.69	29.9	144.26	21.8	11.42
Mar	152.20	35.8	152.06	27.3	0.14
Feb	96.74	2.4	104.04	19.4	-7.31
Jan	150.73	37.7	144.27	51.0	6.46
Dec 2010	154.15	17.9	141.07	25.6	13.08

Source: Ministry of Commerce, People’s Republic of China

http://english.mofcom.gov.cn/article/statistic/BriefStatistics/

Table VC-8 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports relative to a year earlier. Exports increased 2.9 percent in the cumulative Jan-July 2014 relative to a year earlier and imports 1.1 percent for cumulative surplus of $150.6 billion. Exports increased 0.9 percent in Jan-Jun 2014 relative to a year earlier and imports increased 1.5 percent for cumulative surplus of $102.7 billion. Exports fell 0.4 percent in Jan-May 2014 relative to a year earlier while imports increased 0.8 percent for cumulative surplus of $71.11 billion. Exports fell 2.3 percent in Jan-Apr 2014 relative to the same period a year earlier and imports increased 1.5 percent for cumulative trade surplus of $35.19 billion.

Exports fell 3.4 percent in Jan-Mar 2014 relative to a year earlier while imports increased 1.6 percent for cumulative surplus of $16.74 billion. Exports fell 1.6 percent and imports increased 10.0 percent for cumulative surplus of $8.88 billion in Jan-Feb 2014. Exports increased 10.6 percent in Jan 2014 and imports 10.0 percent for cumulative surplus of $31.87 billion. Exports increased 7.9 percent in Jan-Dec 2013 relative to the same period a year earlier while imports increased 7.3 percent for cumulative surplus of $259.75 billion. Exports grew 8.3 percent in Jan-Nov 2013 relative to a year earlier while imports increased 7.1 percent for cumulative surplus of $234.15 billion. Exports grew 7.8 percent in Jan-Oct 2013 relative to a year earlier while imports grew 7.3 percent for cumulative trade surplus of $200.46 billion. Exports increased 8.0 percent in Jan-Sep 2013 relative to a year earlier while imports increased 7.3 percent for cumulative surplus of $169.36 billion. Exports increased 9.2 percent in in Jan-Aug 2013 relative to a year earlier and imports 7.3 percent for trade surplus of $154.21 billion. Exports grew 9.5 percent in Jul 2013 relative to a year earlier and imports 7.3 percent with cumulative surplus of $125.71 billion. Exports increased 10.4 percent cumulatively in Jun 2013 and imports 6.7 for cumulative surplus of $107.95 billion. Exports increased 13.5 percent in Jan-May 2013 relative to a year earlier while imports increased 8.2 percent for cumulative surplus of $80.87 billion. Exports increased 17.4 percent in Jan-Apr 2012 relative to a year earlier while imports increased 10.6 percent for cumulative surplus of $60.98 billion. Exports increased 18.4 percent in Jan-Mar 2013 relative to a year earlier while imports increased 8.4 percent for cumulative surplus of $43.07 billion. Cumulative exports in Jan-Feb 2013 grew 23.6 percent relative to a year earlier and imports 5.0 percent for trade surplus of $44.15 billion. There is strong beginning of 2013 with trade surplus of $29.15 in Jan 2013 and growth of exports of 25.0 percent and imports of 28.8 percent. The trade balance of $231.1 billion in 2012 is stronger than the trade balance of $155.14 billion in 2011. The trade balance in 2011 of $155.14 billion is lower than those from 2008 to 2010. China’s trade balance reached $231.1 billion in Jan-Dec 2012 with cumulative growth of exports of 7.9 percent and 4.3 percent of imports, which is much lower than 20.3 percent for exports and 24.9 percent for imports in 2011 and 31.3 percent for exports and 38.7 percent for imports in 2010. There is a rare cumulative deficit of $4.2 billion in Feb 2012 reversed to a small surplus in Mar 2012 and a higher surplus of $19.3 billion in Apr 2012, increasing to $37.9 billion in May, $68.9 billion in Jun 2012, $94.1 billion in Jul 2012, $120.6 billion in Aug 2012, $148.3 billion in Sep 2012, $180.24 billion in Oct 2012, $199.54 billion in Nov 2012 and $231.1 billion in Dec 2012. More observations are required to detect trends of Chinese trade.

Table VC-2, China, Year to Date Exports, Imports and Trade Balance USD Billion and ∆%

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Jul 2014	1275.0	2.9	1125.0	1.1	150.6
Jun	1062.1	0.9	959.4	1.5	102.7
May	875.32	-0.4	804.21	0.8	71.11
Apr	679.85	-2.3	644.66	1.5	35.19
Mar	491.31	-3.4	474.57	1.6	16.74
Feb	321.23	-1.6	312.35	10.0	8.88
Jan	207.13	10.6	175.26	10.0	31.87
Dec 2013	2210.04	7.9	1950.29	7.3	259.75
Nov	2002.32	8.3	1768.17	7.1	234.15
Oct	1800.21	7.8	1599.75	7.3	200.46
Sep	1614.86	8.0	1445.50	7.3	169.36
Aug	1429.26	9.2	1275.05	7.3	154.21
Jul	1238.73	9.5	1113.02	7.3	125.71
Jun	1052.82	10.4	944.87	6.7	107.95
May	878.56	13.5	797.69	8.2	80.87
Apr	695.87	17.4	634.88	10.6	60.98
Mar	508.87	18.4	465.80	8.4	43.07
Feb	326.73	23.6	282.58	5.0	44.15
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	2048.93	7.9	1817.83	4.3	231.11
Nov	1849.91	7.3	1650.37	4.1	199.54
Oct	1670.90	7.8	1490.67	4.6	180.24
Sep	1495.39	7.4	1347.08	4.8	148.31
Aug	1309.11	7.1	1188.51	5.1	120.61
Jul	1131.24	7.8	1037.14	6.4	94.10
Jun	954.38	9.2	885.46	6.7	68.91
May	774.40	8.7	736.49	6.7	37.92
Apr	593.24	6.9	573.94	5.1	19.3
Mar	430.02	7.6	429.36	6.6	0.66
Feb	264.40	6.9	268.64	7.7	-4.24
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	1,898.60	20.3	1,743.46	24.9	155.14
Nov	1,724.01	21.1	1585.61	26.4	138.40
Oct	1,549.71	22.0	1,425.68	26.9	124.03
Sep	1,392.27	22.7	1,285.17	26.7	107.10
Aug	1,222.63	23.6	1,129.90	27.5	92.73
Jul	1,049.38	23.4	973.17	26.9	76.21
Jun	874.3	24.0	829.37	27.6	44.93
May	712.37	25.5	689.41	29.4	22.96
Apr	555.30	27.4	545.02	29.6	10.28
Mar	399.64	26.5	400.66	32.6	-1.02
Feb	247.47	21.3	248.36	36.0	-0.89
Jan	150.7	37.7	144.27	51.0	6.46
Dec 2010	1577.93	31.3	1394.83	38.7	183.10

Source: Ministry of Commerce, People’s Republic of China

http://english.mofcom.gov.cn/article/statistic/BriefStatistics/

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

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

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	9.6	2.9
2000	2.2	8.8	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, increased from 52.8 in Jun to 54.0 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/c2dc947fd9f74fa6a2de939f06d47a08). 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/c2dc947fd9f74fa6a2de939f06d47a08). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP increased from 52.8 in Jun to 53.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/f523dd67e3de47928407770a6c24107b). Chris Williamson, Chief Economist at Markit, finds growth of GDP at close to 0.4 percent per quarter (http://www.markiteconomics.com/Survey/PressRelease.mvc/f523dd67e3de47928407770a6c24107b). The Markit Eurozone Services Business Activity Index increased from 52.8 in Jun to 54.2 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/f523dd67e3de47928407770a6c24107b). The Markit Eurozone Manufacturing PMI^® did not change to 51.8 in Jul from 51.8 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/40d26e0db4184aecb5106f6deae2bb2c). New orders and export orders increased for the thirteenth consecutive month. Chris Williamson, Chief Economist at Markit, finds slowing industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/40d26e0db4184aecb5106f6deae2bb2c). 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	Jun 2014: 11.5 % unemployment rate; Jun 2014: 18.412 million unemployed Blog 8/3/14
HICP	Jun month ∆%: 0.1 12 months Jun ∆%: 0.5 Blog 7/20/14
Producer Prices	Euro Zone industrial producer prices Jun ∆%: 0.1 Jun 12-month ∆%: -0.8 Blog 7/6/14
Industrial Production	May month ∆%: -1.1; May 12 months ∆%: 0.5 Blog 7/20/14
Retail Sales	Jun month ∆%: 0.4 Jun 12 months ∆%: 2.4 Blog 8/10/14
Confidence and Economic Sentiment Indicator	Sentiment 102.2 Jul 2014 Consumer minus 8.4 Jul 2014 Blog 8/3/14
Trade	Jan-May 2014/Jan-May 2013 Exports ∆%: 0.4 Imports ∆%: -0.5 May 2014 12-month Exports ∆% 0.2 Imports ∆% -0.3 Blog 7/20/14

Links to blog comments in Table EUR:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/20/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-irrational-exuberance.html

7/6/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-valuations-twenty-seven.html

Retail sales increased 0.4 percent in Jun 2014 and increased 2.4 percent in 12 months in the euro zone, as shown in Table VD-1. The 12-month rates of growth became negative between Mar 2011 and Dec 2013 with exception of 0.6 percent in Apr 2011, 0.0 percent in Mar 2012 and 1.6 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 changed 0.0 percent in 2013.

Table VD-1, Euro Zone, Volume of Retail Sales, Deflated ∆%

	Month ∆%	12-Month CA ∆%
Jun 2014	0.4	2.4
May	0.3	0.6
Apr	0.1	1.7
Mar	-0.1	1.0
Feb	0.2	1.2
Jan	0.9	0.8
Dec 2013	-1.1	0.0
Nov	1.3	1.6
Oct	-0.4	-0.4
Sep	-0.9	-0.2
Aug	0.6	-0.3
Jul	0.7	-0.9
Jun	-0.9	-1.7
May	1.1	-0.2
Apr	-0.1	-1.4
Mar	-0.1	-2.4
Feb	-0.4	-2.2
Jan	0.5	-2.1
Dec 2012	-0.1	-2.6
Nov	-0.2	-1.9
Oct	-0.3	-3.1
Sep	-1.4	-1.9
Aug	0.3	-0.7
Jul	-0.2	-1.4
Jun	0.4	-0.9
May	0.4	-0.7
Apr	-1.5	-3.5
Mar	0.2	0.0
Feb	0.0	-2.1
Jan	-0.2	-1.0
Dec 2011	0.3	-1.9
Nov	-0.8	-1.5
Oct	0.3	-0.8
Sep	-0.3	-1.4
Aug	-0.1	-0.3
Jul	0.1	-0.6
Jun	0.9	-1.0
May	-2.0	-1.9
Apr	1.3	0.6
Mar	-1.6	-1.6
Feb	0.7	1.2
Jan	-0.2	0.6
Dec ∆%
2013		0.0
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-2. Total sales increased 0.4 percent in Jun 2014 and increased 2.4 percent in the 12 months ending in Jun 2014. Food sales increased 0.5 percent in Jun 2014 and increased 2.0 percent in 12 months and nonfood products increased 0.3 percent in Jun and increased 3.0 percent in 12 months. Sales of automotive fuel stores decreased 0.1 percent in Jun and decreased 0.8 percent in 12 months.

Table VD-2, Euro Zone, Volume of Retail Sales by Products, ∆%

Jun 2014	Month ∆%	12-Month ∆%
Total	0.4	2.4
Food, Drinks, Tobacco	0.5	2.0
Nonfood Products ex Automotive Fuel	0.3	3.0
Automotive Fuel in Specialized Stores	-0.1	-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-3 for Jun 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 4.9 percent for France, 4.4 percent Ireland, 2.7 percent Germany and 0.2 percent for Spain. The 12-month percentage change for the UK, which is not a member of the euro zone, was 3.5 percent. The European Union’s 12-month percentage change was 2.4 percent.

Table VD-3, Euro Zone, Volume of Retail Sales by Member Countries, ∆%

Jun 2014	Month ∆%	12-Month ∆%
Euro Zone	0.4	2.4
Germany	1.3	2.7
France	0.2	4.9
Netherlands	-0.3*	0.6*
Finland	-1.8	-1.5
Belgium	-0.4	0.3
Portugal	-1.4	0.0
Ireland	0.2	4.4
Italy	-0.3*	-0.1*
Greece	-2.0*	-3.8*
Spain	-0.8	0.2
UK	0.1	3.5
European Union	0.3	2.5

*May 2014 **Apr 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, increased from 54.0 in Jun to 55.9 in Jul. The index of manufacturing output reached 54.7 in Jul, increasing from 52.8 in Jun, while the index of services increased to 56.6 in Jul from 54.6 in Jun. The overall Flash Germany Manufacturing PMI^® increased from 52.0 in Jun to 52.9 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/61aa9dc2d3d642d4bbd2a582561fb15f). New export work volumes increased for a twelfth consecutive month with business originating Austria and Switzerland. Oliver Kolodseike, 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/61aa9dc2d3d642d4bbd2a582561fb15f). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, increased from 54.0 in Jun to 55.7 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/659bfdc5b6d44d75bffafd870277bb48). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds prospects of improvement in the beginning of the third quarter of 2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/659bfdc5b6d44d75bffafd870277bb48). The Germany Services Business Activity Index increased from 54.6 in Jun to 56.7 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/659bfdc5b6d44d75bffafd870277bb48). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 52.0 in Jun to 52.4 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/b13c2accb1ef47dea9c9f27e6e5231a7). New export orders increased for the twelfth consecutive month. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds renewed strength in new export orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/b13c2accb1ef47dea9c9f27e6e5231a7).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	Jun month NSA ∆%: 0.3 Jun 12-month NSA ∆%: 1.0 Blog 7/13/14
Producer Price Index	Jun month ∆%: 0.0 NSA, 0.0 CSA 12-month NSA ∆%: -0.7 Blog 7/27/14
Industrial Production	MFG Jun month CSA ∆%: minus 0.0 12-month NSA: -2.5 Blog 8/10/14
Machine Orders	MFG Jun month ∆%: -3.2 Jun 12-month ∆%: -4.3 Blog 8/10/14
Retail Sales	Jun Month ∆% 0.4 12-Month ∆% 1.3 Blog 7/6/14
Employment Report	Unemployment Rate SA Jun 5.1% Blog 8/3/14
Trade Balance	Exports Jun 12-month NSA ∆%: 1.1 Imports Jun 12 months NSA ∆%: 2.1 Exports Jun month CSA ∆%: 0.9; Imports Jun month CSA minus 4.5 Blog 8/10/14

Links to blog comments in Table DE:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/13/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-risk-recovery-without-hiring.html

7/6/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-valuations-twenty-seven.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

There is significantly stronger performance of production in Germany with wide monthly fluctuations. The production industries index of Germany in Table VE-1 shows increase of 0.3 percent in Dec 2012 and decrease of 9.4 percent in the 12 months ending in Dec 2012. The index decreased 0.6 percent in Jan 2013 and 1.3 percent in 12 months and increased 0.7 percent in Feb 2013, declining 4.9 percent in 12 months. In Mar 2013, the production index of Germany increased 1.0 percent and fell 8.5 percent in 12 months. The production index jumped 1.1 percent in Apr 2013 and 7.5 percent in 12 months. In May 2013, the production index fell 1.3 percent and 4.4 percent in 12 months. The production index of Germany increased 1.8 percent in Jun 2013 and fell 0.4 percent in 12 months. In Jul 2013, the production industries index fell 0.8 percent and increased 1.9 percent in 12 months. The production industries index increased 1.4 percent in Aug 2013 and fell 2.8 percent in 12 months. In Sep 2013, the production index fell 0.5 percent and increased 4.2 percent in 12 months. In Oct 2013, the production index of Germany fell 0.8 percent and increased 1.3 percent in 12 months. The index of production industries increased 1.7 percent in Nov 2013 and 0.4 percent in 12 months. The index of production industries increased 0.2 percent in Dec 2013 and increased 5.9 percent in 12 months. The production industries index increased 0.5 percent in Jan 2014 and 3.3 percent in 12 months. In Feb 2014, the production industries index increased 0.2 percent and 5.8 percent in 12 months. The production industries index fell 0.6 percent in Mar 2014 and increased 4.7 percent relative to a year earlier. The production industries index of Germany decreased 0.1 percent in Apr 2014 and fell 2.0 percent in 12 months. The production index fell 1.7 percent in May 2014, increasing 3.5 percent in 12 months. The production index of Germany increased 0.3 percent in Jun 2014 an fell 2.8 percent in 12 months. Germany’s production industries suffered decline of 7.3 percent in Dec 2008 relative to Dec 2007 and decline of 2.3 percent in 2009. Recovery was vigorous with 17.1 percent in the 12 months ending in Dec 2010. The first quarter of 2011 was quite strong when the German economy outperformed the other advanced economies. The performance of Germany’s production industries from 2002 to 2006 was vigorous with average rate of 4.5 percent. Data for the production industries index of Germany fluctuate sharply from month to month and in 12-month rates.

Table VE-1, Germany, Production Industries, Month and 12-Month ∆%

	12-Month ∆% NSA	Month ∆% Calendar SA
Jun 2014	-2.8	0.3
May	3.5	-1.7
Apr	-2.0	-0.1
Mar	4.7	-0.6
Feb	5.8	0.2
Jan	3.3	0.5
Dec 2013	5.9	0.2
Nov	0.4	1.7
Oct	1.3	-0.8
Sep	4.2	-0.5
Aug	-2.8	1.4
Jul	1.9	-0.8
Jun	-0.4	1.8
May	-4.4	-1.3
Apr	7.5	1.1
Mar	-8.5	1.0
Feb	-4.9	0.7
Jan	-1.3	-0.6
Dec 2012	-9.4	0.3
Nov	-2.9	-0.8
Oct	4.1	-1.3
Sep	-6.7	-1.0
Aug	-0.6	-0.5
Jul	2.4	1.2
Jun	4.2	-1.0
May	-6.3	1.4
Apr	-0.6	-1.9
Mar	-0.1	2.2
Feb	2.4	-0.5
Jan	4.8	0.9
Dec 2011	2.0	-1.7
Nov	3.9	-0.4
Oct	0.1	1.3
Sep	4.5	-1.6
Aug	10.2	-0.9
Jul	5.8	3.1
Jun	-0.8	-1.6
May	18.2	0.8
Apr	5.3	0.3
Mar	9.8	0.6
Feb	15.8	1.1
Jan	15.1	1.2
Dec 2010	17.1
Dec 2009	-2.3
Dec 2008	-7.3
Dec 2007	-0.1
Dec 2006	2.5
Dec 2005	4.9
Dec 2004	5.3
Dec 2003	5.1
Dec 2002	2.0
Dec 2001	-8.8
Dec 2000	0.2
Dec 1999	6.4
Average ∆% per Year
Dec 1995 to Dec 2013	1.5
Dec 1995 to Dec 2000	2.7
Dec 1995 to Dec 2006	2.2
Dec 2002 to Dec 2006	4.5

Source: Statistiche Bundesamt Deutschland (Destatis)

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

Table VE-2 provides monthly percentage changes of the German production industries index by components from Nov 2013 to Jun 2014. The index increased 0.3 percent in Jun 2014 with decrease of 0.9 percent in capital goods and increase of 2.2 percent in durable goods. There was change of 0.0 percent in manufacturing and increase of 0.5 percent in intermediate goods. The index increased 1.7 percent in Nov 2013 with increases in all segments except decline of 1.8 percent in energy. The index fell 1.7 percent in May 2014 with all segments declining with exception of 0.4 percent for energy.

Table VE-2, Germany, Production Industries, Industry and Components, Month ∆%

	Jun 2014	May	Apr	Mar	Feb	Jan	Dec 2013	Nov
Production Industries	0.3	-1.7	-0.1	-0.6	0.2	0.5	0.2	1.7
Industry	0.1	-1.6	0.2	-0.4	0.4	0.0	0.2	2.2
Mfg	0.0	-1.7	0.3	-0.4	0.4	0.0	0.2	2.2
Intermediate Goods	0.5	-2.3	0.0	-0.7	0.9	-0.2	0.8	0.7
Capital Goods	-0.9	-0.3	-0.2	-0.3	0.0	0.3	-0.7	4.0
Durable Goods	2.2	-0.9	-2.3	0.9	2.8	-1.5	0.4	2.7
Nondurable Goods	1.6	-3.7	1.8	0.3	-0.5	-0.3	1.2	1.1
Energy	0.8	0.4	-0.1	1.4	-3.0	0.8	-2.3	-1.8

Seasonally Calendar Adjusted

Source: Source: Statistisches Bundesamt Deutschland (Destatis)

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

Table VE-3 provides 12-month unadjusted percentage changes of industry and components in Germany. There were percentage declines of 12-month rates in the production index of Germany and all segments in the four months from Dec 2012 to Mar 2013 with exception of nondurables in Jan 2013 and energy in Jan and Mar 2013. There is sharp recovery in Apr 2013 with growth of manufacturing by 7.9 percent and capital goods by 11.1 percent. All segments show declines in 12 months in May 2013. There are increases in the 12 months ending in Jun of 1.2 percent in capital goods and 2.8 percent in durable goods. All segments increased in Jul 2013. All segments fell in Aug 2013 with sharp declines. There is strong recovery in Sep with high rates of increase. Many segments increased in the 12 months ending in Oct 2013 with 1.7 percent growth in manufacturing and 2.0 percent in capital goods. Most segments increased in Nov 2013 with 1.1 percent in manufacturing and 1.9 percent in capital goods. All segments increased in Dec 2013 with exception of energy. Most segments increased in Jan 2014 with exception of declines for durable goods and energy. All segments increased in Feb 2014 with exception of energy. All segments increased in Mar 2014 with exception of energy. All segments decreased in Apr 2014 with exception of intermediate goods and nondurable goods. All segments increased in May 2014 with exception of energy. All segments fell in Jun 2014 with exception of nondurable goods. Percentage declines in 12 months are quite sharp in Dec 2012 with many percentage changes negative around two-digits. Although there are sharp fluctuations in the data, there is suggestion of deceleration that would be expected from much higher earlier rates. The deceleration is quite evident in single-digit percentage changes from Sep 2011 to Dec 2012 relative to high double-digit percentage changes in Jan-Mar 2011. There are multiple negative 12-month percentage changes across many segments. Growth rates in the recovery from the global recession from IVQ2007 to IIQ2009 were initially very vigorous in comparison with the growth rates before the contraction that are shown in the bottom part of Table VE-3.

Table VE-3, Germany, Industry and Components, 12-Month ∆% Unadjusted

	IND	MFG	INTG	CG	DG	NDG	EN
2014
Jun	-2.3	-2.5	-2.0	-3.2	-6.3	0.7	-5.0
May	4.5	4.5	2.0	7.2	6.6	2.2	-2.4
Apr	-1.4	-1.2	0.3	-3.6	-4.3	2.0	-6.5
Mar	5.3	5.2	5.0	5.8	4.9	4.8	-9.0
Feb	5.9	5.9	6.5	5.9	4.4	4.7	-5.2
Jan	3.4	3.3	2.4	5.5	-1.4	1.3	-2.3
2013
Dec	6.2	6.1	7.1	6.4	5.2	4.2	-0.1
Nov	1.1	1.1	0.6	1.9	-0.4	0.5	-1.6
Oct	1.8	1.7	2.3	2.0	-0.4	0.0	-0.3
Sep	4.7	4.6	4.0	5.8	6.1	2.5	0.8
Aug	-2.9	-3.0	-4.0	-1.8	-7.5	-2.4	-3.1
Jul	1.6	1.6	2.1	0.5	4.1	3.5	0.7
Jun	-0.1	0.0	-1.6	1.2	2.8	-1.1	-1.6
May	-4.5	-4.4	-3.6	-5.9	-10.2	-0.9	-4.6
Apr	8.1	7.9	4.3	11.1	9.3	8.9	0.4
Mar	-8.4	-8.3	-7.3	-9.6	-9.0	-7.0	2.4
Feb	-5.1	-5.2	-5.7	-5.4	-6.1	-2.3	-8.9
Jan	-1.2	-1.1	-1.3	-2.7	-2.8	3.8	0.1
2012
Dec	-9.6	-9.4	-11.8	-8.5	-12.5	-7.0	-2.4
Nov	-3.1	-3.1	-3.9	-2.7	-7.6	-1.2	0.7
Oct	3.9	3.8	2.8	4.0	0.7	7.0	3.2
Sep	-7.6	-7.5	-8.8	-7.1	-11.2	-5.2	4.0
Aug	-1.1	-1.0	-3.2	0.3	0.4	0.7	4.5
Jul	2.0	2.0	0.3	4.6	-2.4	-0.7	2.2
Jun	3.8	3.7	1.9	6.5	7.2	0.3	6.7
May	-7.0	-6.8	-7.5	-6.1	-10.6	-7.7	4.0
Apr	-1.1	-1.1	-2.0	1.9	-5.3	-5.9	3.7
Mar	-0.5	-0.4	-3.1	2.8	-6.2	-2.3	-0.8
Feb	3.2	3.3	0.9	7.3	-0.1	-2.3	5.9
Jan	5.6	5.6	3.0	10.4	4.7	0.1	-3.3
2011
Dec	1.5	1.4	1.8	1.3	0.2	1.4	-9.2
Nov	4.6	4.5	2.9	8.1	2.3	-1.0	-5.8
Oct	0.6	0.7	-0.3	3.2	-2.3	-3.4	-6.1
Sep	5.7	5.7	4.6	9.2	3.4	-0.8	-6.1
Aug	12.4	12.2	9.3	20.4	4.8	1.4	-3.0
Jul	7.9	7.8	5.0	13.7	6.8	0.1	-5.7
Jun	0.5	0.5	0.2	2.3	-10.2	-2.1	-4.7
May	21.5	21.2	17.9	28.3	20.8	12.8	-7.3
Apr	7.5	7.5	6.1	11.1	4.6	1.6	-5.5
Mar	11.2	11.2	10.8	15.0	8.6	2.0	2.8
Feb	17.3	17.1	16.3	23.1	10.1	6.3	-0.4
Jan	17.2	16.9	17.5	23.1	9.9	3.6	-2.6
2010
Dec	17.6	17.6	14.8	25.9	8.5	1.7	2.6
Nov	13.9	13.9	12.9	19.2	7.7	3.9	3.5
Oct	9.9	9.9	9.7	14.0	6.3	0.8	2.5
Sep	9.8	9.5	12.2	10.1	8.3	2.6	2.1
Aug	16.9	17.0	19.3	19.9	18.3	6.9	1.3
Jul	9.0	8.9	13.2	8.7	7.4	0.8	1.9
Jun	16.4	16.2	20.8	16.1	19.7	5.1	-2.8
May	13.1	13.3	20.0	12.0	11.2	1.4	11.1
Apr	14.9	14.9	21.7	15.5	8.8	0.2	9.4
Mar	14.3	14.5	20.4	12.3	11.8	5.8	4.2
Feb	6.8	7.4	10.6	6.5	7.9	-1.0	3.7
Jan	0.4	0.9	6.3	-3.8	0.8	-3.0	0.8
Dec 2010	17.6	17.6	14.8	25.9	8.5	1.7	2.6
Dec 2009	-3.2	-3.1	3.3	-9.9	-0.1	1.1	3.7
Dec 2008	-7.6	-7.4	-14.3	-5.4	-11.2	3.7	-9.0
Dec 2007	0.0	-0.3	-0.6	2.5	-10.0	-2.7	1.6
Dec 2006	3.2	3.1	5.2	2.3	8.6	-0.9	-5.3
Dec 2005	5.8	5.9	3.5	9.0	3.2	2.1	0.6
Dec 2004	5.3	5.5	7.7	3.4	0.8	5.7	9.6
Dec 2003	5.5	5.3	5.5	6.4	1.7	4.4	0.3
Dec 2002	3.7	3.3	5.4	3.4	-5.9	2.3	-2.6

Note: IND: Industry; MFG: Manufacturing; INTG: Intermediate Goods; CG: Capital Goods; DG: Durable Goods; NDG: Nondurable Goods; EN: Energy

Source: Statistisches Bundesamt Deutschland (Destatis

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

Broader perspective since 2005 is provided by Chart VE-1 of the Statistisches Bundesamt Deutschland, Federal Statistical Agency of Germany. The index of production industries not seasonally adjusted rises by more than one third between 2003 and 2008 with sharp fluctuations and then collapses during the global recession in 2008. Recovery has been in a steep upward trajectory that has recovered at the more recent peaks the losses during the contraction. Recovery stalled recently.

Chart VE-1, Germany, Production Industries, Not Adjusted, 2010=100

Source: Statistiche Bundesamt Deutschland

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

More detail is provided by Chart VE-2 of the Statistiche Bundesamt Deutschland, or Federal Statistical Agency of Germany, with the unadjusted production industries index and trend from 2010 to 2014. There could be some flattening in recent months probably leading into stagnation, mild downturn and recent recovery as depicted by trend. There is weakness in the current segment.

Chart VE-2, Germany, Production Industries, Not Adjusted, 2010=100

Source: Statistiche Bundesamt Deutschland

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

Table VE-4 provides month and 12-month rates of growth of manufacturing in Germany from Dec 2010 to Jun 2014. There are fluctuations in both monthly rates and in the past 12 months. In Jan 2013, manufacturing fell 1.2 percent and decreased 1.1 percent in 12 months. Manufacturing increased 1.0 percent in Feb 2013, declining 5.2 percent in 12 months. In Mar 2013, manufacturing increased 1.0 percent but fell 8.3 percent in 12 months. There is strong recovery in Apr 2013 with growth of 0.7 percent and 7.9 percent in 12 months. Manufacturing fell 1.2 percent in May 2013 and declined 4.4 percent in 12 months. Recovery is strong in Jun 2013 with growth of 1.8 percent in the month but change of 0.0 percent in 12 months. Manufacturing fell 1.3 percent in Jul 2013 and increased 1.6 percent in 12 months. In Aug 2013, manufacturing increased 1.9 percent and fell 3.0 percent in 12 months. Manufacturing fell 0.7 percent in Sep 2013 and increased 4.6 percent in 12 months. Manufacturing increased 2.2 percent in Nov 2013 and 1.1 percent in 12 months. In Dec 2013, manufacturing increased 0.2 percent and increased 6.1 percent in 12 months. Manufacturing changed 0.0 percent in Jan 2014 and 3.3 percent in 12 months. In Feb 2014, manufacturing increased 0.4 percent and 5.9 percent in 12 months. Manufacturing fell 0.4 percent in Mar 2014 and increased 5.2 percent in 12 months. Manufacturing increased 0.3 percent in Apr 2014 and fell 1.2 percent in 12 months. Manufacturing fell 1.7 percent in May, increasing 4.5 percent in 12 months. Manufacturing changed 0.0 percent in Jun 2014 an fell 2.5 percent in 12 months.

Table VE-4, Germany, Manufacturing Month and 12-Month ∆%

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Jun 2014	-2.5	0.0
May	4.5	-1.7
Apr	-1.2	0.3
Mar	5.2	-0.4
Feb	5.9	0.4
Jan	3.3	0.0
Dec 2013	6.1	0.2
Nov	1.1	2.2
Oct	1.7	-0.6
Sep	4.6	-0.7
Aug	-3.0	1.9
Jul	1.6	-1.3
Jun	0.0	1.8
May	-4.4	-1.2
Apr	7.9	0.7
Mar	-8.3	1.0
Feb	-5.2	1.0
Jan	-1.1	-1.2
Dec 2012	-9.4	1.0
Nov	-3.1	-0.7
Oct	3.8	-1.3
Sep	-7.5	-1.4
Aug	-1.0	-0.5
Jul	2.0	1.7
Jun	3.7	-1.4
May	-6.8	1.8
Apr	-1.1	-1.7
Mar	-0.4	1.0
Feb	3.3	0.2
Jan	5.6	0.8
Dec 2011	1.4	-1.6
Nov	4.5	-0.8
Oct	0.7	1.2
Sep	5.7	-1.7
Aug	12.2	-0.9
Jul	7.8	3.4
Jun	0.5	-1.7
May	21.2	1.1
Apr	7.5	0.7
Mar	11.2	0.7
Feb	17.1	1.3
Jan	16.9	0.0
Dec 2010	17.6	1.4

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-3 of the Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, provides the manufacturing index of Germany from 2010 to 2014. Manufacturing was already flattening in 2007 and fell sharply in 2008 to the beginning of 2010. Manufacturing grew sharply in the initial phase of recovery but has flattened in recent months as revealed by the trend that may be turning upward.

Chart VE-3, Germany, Production Index, Manufacturing, Not Adjusted Index and Trend, 2010=100

Source: Statistiche Bundesamt Deutschland https://www.destatis.de/EN/FactsFigures/Indicators/ShortTermIndicators/ShortTermIndicators.html

Table VE-5 provides month and 12-month rates of growth of new orders of manufacturing in Germany from Jan 2010 to Jun 2014. There are fluctuations in both monthly rates and in the past 12 months. Table VE-5 reveals strong fluctuations in an evident deceleration of total orders for industry of Germany with recent improvement. Total orders for manufacturing decreased 3.2 percent in Jun 2014 and decreased 4.3 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-5, 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
Jun	-4.3	-3.2	-5.4	-4.1	-2.8	-1.9
May	7.7	-1.6	7.6	-1.0	7.8	-2.4
Apr	3.7	3.2	4.6	4.9	2.5	0.9
Mar	3.2	-2.7	2.5	-4.5	4.2	-0.2
Feb	7.6	1.0	9.3	0.8	5.6	1.2
Jan	5.8	0.0	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	2.4
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	-2.2	5.5	-3.8	4.8	0.1
Jun	4.8	4.9	7.9	5.6	0.7	3.7
May	-3.6	-0.9	-1.6	-0.1	-6.2	-1.8
Apr	5.9	-1.9	7.6	-1.1	3.6	-2.8
Mar	-5.6	2.1	-4.4	2.2	-7.2	1.9
Feb	-2.7	1.6	-1.5	1.9	-4.2	1.3
Jan	0.3	-1.0	1.9	-2.2	-1.7	0.6
2012
Dec	-9.1	1.5	-6.7	2.0	-12.6	0.7
Nov	-0.9	-2.9	2.4	-4.8	-5.1	-0.4
Oct	4.5	4.2	7.0	7.2	1.3	0.5
Sep	-8.9	-2.1	-6.6	-3.1	-11.7	-0.7
Aug	-4.4	-0.8	-2.1	-0.2	-7.1	-1.6
Jul	-1.6	0.8	0.6	1.1	-4.2	0.5
Jun	-4.5	-2.3	-6.4	-2.3	-1.7	-2.2
May	-11.0	0.8	-3.7	2.0	-18.8	-0.8
Apr	-3.9	-1.7	-4.4	-2.8	-3.1	-0.5
Mar	-2.2	2.4	-1.2	3.2	-3.3	1.5
Feb	-4.3	0.6	-4.7	1.8	-3.8	-0.8
Jan	-2.6	-2.3	-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	-0.6
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	-0.8	5.2	0.4	9.4	-2.2
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	2.8	16.0	-3.8	31.8	11.1
Apr	6.7	1.7	9.6	2.1	3.0	1.1
Mar	9.8	-3.1	12.3	-3.2	6.9	-2.9
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	-1.0
Nov	21.4	5.3	27.1	8.5	15.0	1.3
Oct	14.2	0.6	18.2	0.3	10.0	1.1
Sep	13.9	-1.2	15.6	-3.2	11.9	1.4
Aug	22.2	2.3	29.7	4.3	14.5	-0.1
Jul	14.1	-0.6	21.4	-0.6	6.4	-0.7
Jun	27.6	2.5	30.6	3.3	24.2	1.6
May	24.8	-0.2	29.6	0.6	19.4	-1.1
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	-0.6
Jan	17.0	3.8	23.8	4.2	9.8	3.1
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-6. Total capital goods orders decreased 6.4 percent in Jun 2014 and decreased 8.0 percent in 12 months. Domestic orders decreased 3.8 percent in Jun and foreign orders decreased 7.9 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-5 and VE-6 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-6, 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
Jun	-8.0	-6.4	-9.5	-7.9	-5.2	-3.8
May	10.1	-0.9	10.0	0.4	10.5	-3.0
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-4 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-4, 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-5 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-5, 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

Twelve-month rates of growth Germany’s exports and imports are shown in Table VE-7. There was sharp decline in the rates in Jun and Jul 2011 to single-digit levels especially for exports. Exports increased 1.1 percent in the 12 months ending in Jun 2014 while imports increased 2.1 percent. In the 12 months ending in Aug 2011, exports rose 14.6 percent and imports 13.2 percent. In Sep 2011, exports grew 10.4 percent relative to a year earlier and imports grew 11.7 percent. Growth rates in 12 months ending in Oct 2011 fell significantly to 3.5 percent for exports and 9.2 percent for imports. Lower prices may explain part of the decline in nominal values. Exports fell 3.8 percent in 12 months ending in Sep 2012, rebounding to growth of 10.5 percent in Oct 2012 and minus 0.5 percent in Nov 2012 but sharp decline of 7.3 percent in Dec 2012 followed by rebound of 2.4 percent in Jan 2013. Exports fell 3.2 percent in the 12 months ending in Feb 2013 and declined 4.6 percent in the 12 months ending in Mar 2013. In Apr 2013, exports increased 7.7 percent relative to a year earlier. Exports fell 4.8 percent in the 12 months ending in May 2013. Exports fell 5.7 percent in the 12 months ending in Aug 2013 and imports fell 2.3 percent. In the 12 months ending in Sep 2013, exports increased 3.5 percent and imports fell 0.3 percent. Exports increased 0.7 percent in the 12 months ending in Oct 2013 while imports fell 1.5 percent. Exports increased 1.1 percent in the 12 months ending in Nov 2013 and imports fell 0.4 percent. Exports increased 4.5 percent in the 12 months ending in Dec 2013 while imports increased 2.4 percent. Exports increased 2.9 percent in the 12 months ending in Jan 2014 while imports increased 1.5 percent. Exports increased 4.6 percent in the 12 months ending in Feb 2014 and imports increased 6.5 percent. Exports increased 1.9 percent in the 12 months ending in Mar 2014 and imports 5.3 percent. Exports fell 0.3 percent in the 12 months ending in Apr 2014 while imports increased 0.7 percent. In May 2014, exports increased 4.3 percent in 12 months. Exports increased 1.1 percent in the 12 months ending in Jun 2014. Imports decreased 4.1 percent in the 12 months ending in Sep 2012, rebounding to growth of 5.7 percent in Oct 2012, decreasing 1.5 percent in Nov 2012 and 7.8 percent in Dec 2012 and rebounding 2.7 percent in Jan 2013. Imports fell 5.7 percent in the 12 months ending in Feb 2013 and declined 7.5 percent in Mar 2013. In Apr 2013, imports increased 4.3 percent relative to a year earlier. In May 2013, imports fell 3.1 percent relative to a year earlier. Imports fell 1.2 percent in the 12 months ending in Jun 2013. In Jul 2013, imports increased 0.9 percent relative to a year earlier. Imports fell 2.3 percent in the 12 months ending in Aug 2013. In the 12 months ending in Sep 2013, exports declined 0.3 percent. Imports fell 1.5 percent in the 12 months ending in Oct 2013. Imports fell 0.4 percent in the 12 months ending in Nov 2013 and increased 2.4 percent in the 12 months ending in Dec 2013. Imports increased 1.5 percent in the 12 months ending in Jan 2014 and 6.5 percent in the 12 months ending in Feb 2014. Imports increased 5.3 percent in the 12 months ending in Mar 2014 and 0.7 percent in the 12 months ending in Apr 2014. Imports fell 0.4 percent in the 12 months ending in May 2014 and increased 2.1 percent in the 12 months ending in Jun 2014. Growth was much stronger in the recovery during 2010 and 2011 from the fall from 2007 to 2009. Germany’s trade grew at high rates in 2006 and 2005.

Table VE-7, Germany, Exports and Imports NSA Euro Billions and 12-Month ∆%

	Exports EURO Billions	12- Month ∆%	Imports EURO Billions	12-Month ∆%
Jun 2014	93.4	1.1	77.0	2.1
May	92.1	4.3	74.3	-0.4
Apr	93.7	-0.3	76.5	0.7
Mar	96.0	1.9	79.4	5.3
Feb	92.4	4.6	76.2	6.5
Jan	90.7	2.9	75.7	1.5
Dec 2013	82.1	4.5	68.2	2.4
Nov	94.7	1.1	76.5	-0.4
Oct	99.1	0.7	81.3	-1.5
Sep	94.6	3.5	74.3	-0.3
Aug	85.0	-5.7	71.7	-2.3
Jul	93.1	-0.3	76.8	0.9
Jun	92.4	-2.0	75.4	-1.2
May	88.2	-4.8	74.6	-3.1
Apr	94.0	7.7	76.0	4.3
Mar	94.2	-4.6	75.4	-7.5
Feb	88.3	-3.2	71.5	-5.7
Jan	88.2	2.4	74.6	2.7
Dec 2012	78.6	-7.3	66.6	-7.8
Nov	93.7	-0.5	76.8	-1.5
Oct	98.4	10.5	82.5	5.7
Sep	91.4	-3.8	74.5	-4.1
Aug	90.2	5.7	73.4	-0.1
Jul	93.3	9.1	76.2	1.5
Jun	94.3	7.0	76.3	1.4
May	92.7	0.3	77.0	-0.7
Apr	87.2	3.2	72.9	-1.1
Mar	98.7	0.1	81.5	2.1
Feb	91.2	7.9	75.8	4.6
Jan	86.1	8.6	72.6	4.6
Dec 2011	84.8	4.7	72.3	5.6
Nov	94.1	7.4	78.0	5.8
Oct	89.1	3.5	78.1	9.2
Sep	95.0	10.4	77.7	11.7
Aug	85.3	14.6	73.5	13.2
Jul	85.6	5.2	75.0	9.7
Jun	88.1	3.3	75.2	5.6
May	92.4	21.2	77.5	17.4
Apr	84.5	12.4	73.7	18.5
Mar	98.7	15.3	79.8	15.1
Feb	84.5	20.8	72.5	27.6
Jan	79.3	25.2	69.4	26.0
Dec 2010	81.0	20.0	68.4	24.4
Nov	87.6	21.2	73.7	30.9
Oct	86.0	18.7	71.5	19.2
Sep	86.0	21.2	69.5	17.0
Aug	74.4	23.8	64.9	27.1
Jul	81.4	15.3	68.4	24.4
Jun	85.3	27.5	71.2	33.9
May	76.2	25.6	66.1	31.3
Apr	75.2	16.8	62.2	14.4
Mar	85.6	22.0	69.3	18.0
Feb	70.0	9.7	56.8	3.2
Jan	63.4	-0.3	55.1	-1.9
Dec 2009	67.5	1.2	55.0	-7.3
Dec 2008	66.7	-8.6	59.4	-5.1
Dec 2007	73.0	-0.6	62.5	-0.1
Dec 2006	73.4	10.2	62.6	8.5
Dec 2005	66.6	11.5	57.7	18.1
Dec 2004	59.7	9.2	48.9	10.8
Dec 2003	54.7	7.6	44.1	3.9
Dec 2002	50.8	5.5	42.5	6.4
Dec 2001	48.2	-3.7	39.9	-17.5
Dec 2000	50.0		48.4

Source: Statistisches Bundesamt Deutschland

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

Chart VE-6 of the Statistisches Bundesamt Deutschland shows exports and trend of German exports. Growth has been with fluctuations around a strong upward trend that is milder than earlier in the recovery but could be moving upwardly after flattening.

Chart VE-6, Germany, Exports Original Value and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Imports in Chart VE-7 also fell sharply and have been recovering with fluctuations around a strong upward trend that could be flattening. There could be new upward trend.

Chart VE-7, Germany, Imports Original Value and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Chart VE-8 of the Statistisches Bundesamt Deutschland shows the trade balance of Germany since 2010. There was sharp decline during the global recession and fluctuations around a mild upward trend during the recovery with stabilization followed by stronger trend in recent months and flattening/declining recently. The final segment could be an upward movement again.

Chart VE-8, Germany, Trade Balance Original and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Table VE-8 provides monthly rates of growth of exports and imports of Germany. Exports increased 0.9 percent calendar and seasonally adjusted (CSA) in Jun 2014 while imports increased 4.5 percent. Export growth had been relatively strong from Dec 2012 to Apr 2013 with only one monthly decline of 1.0 percent in Feb 2013. Exports fell 1.1 percent in May 2013 and 0.8 percent in Jul 2013. Exports grew in four consecutive months from Aug to Nov 2013. Exports fell in Dec 2013, Feb-Mar 2014 and May 2014, increasing in Jan, Apr and Jun 2014. Export growth and import growth were vigorous in Jan-Mar 2011 when Germany’s economy outperformed most advanced economies but less dynamic and consistent in following months as world trade weakens.

Table VE-8, Germany, Exports and Imports Month ∆% Calendar and Seasonally Adjusted 

	Exports	Imports
Jun 2014	0.9	4.5
May	-1.1	-3.4
Apr	2.6	0.2
Mar	-1.8	-1.1
Feb	-1.3	0.4
Jan	2.3	3.2
Dec 2013	-1.0	-1.0
Nov	0.6	-0.6
Oct	0.2	2.3
Sep	1.4	-1.5
Aug	1.0	0.2
Jul	-0.8	0.2
Jun	0.4	-0.6
May	-1.1	0.9
Apr	0.4	1.7
Mar	1.4	0.4
Feb	-1.0	-2.8
Jan	0.8	2.0
Dec 2012	0.5	-0.9
Nov	-2.4	-3.4
Oct	0.3	2.0
Sep	-2.7	-0.1
Aug	1.7	-0.1
Jul	0.6	0.3
Jun	-1.5	-2.1
May	4.8	4.2
Apr	-1.9	-4.0
Mar	0.2	1.1
Feb	1.4	3.3
Jan	2.1	-0.8
Dec 2011	-2.7	-1.4
Nov	3.0	0.1
Oct	-3.5	-0.9
Sep	1.4	0.4
Aug	2.6	-0.1
Jul	-1.2	0.3
Jun	-0.5	0.5
May	2.9	0.8
Apr	-3.9	-0.3
Mar	4.9	1.8
Feb	1.6	2.5
Jan	0.4	2.6
Dec 2010	0.1	-1.7

Source: Statistisches Bundesamt Deutschland

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

There is extremely important information in Table VE-9 for the current sovereign risk crisis in the euro zone. Table VE-9 provides the structure of regional and country relations of Germany’s exports and imports with newly available data for Jun 2014. German exports to other European Union (EU) members are 58.7 percent of total exports in Jun 2014 and 58.6 percent in cumulative Jan-Jun 2014. Exports to the euro area are 37.3 percent of the total in Jun and 37.4 percent cumulative in Jan-Jun. Exports to third countries are 41.3 percent of the total in Jun and 41.4 percent cumulative in Jan-Jun. There is similar distribution for imports. Exports to non-euro countries are increasing 7.1 percent in the 12 months ending in Jun 2014, increasing 9.2 percent cumulative in Jan-Jun 2014 while exports to the euro area are increasing 0.3 percent in the 12 months ending in Jun 2014 and increasing 2.2 percent cumulative in Jan-Jun 2014. Exports to third countries, accounting for 41.3 percent of the total in Jun 2014, are decreasing 0.9 percent in the 12 months ending in Jun 2014 and decreasing 0.7 percent cumulative in Jan-Jun 2014, accounting for 41.4 percent of the cumulative total in Jan-Jun 2014. Price competitiveness through devaluation could improve export performance and growth. Economic performance in Germany is closely related to Germany’s high competitiveness in world markets. Weakness in the euro zone and the European Union in general could affect the German economy. This may be the major reason for choosing the “fiscal abuse” of the European Central Bank considered by Buiter (2011Oct31) over the breakdown of the euro zone. There is a tough analytical, empirical and forecasting doubt of growth and trade in the euro zone and the world with or without maintenance of the European Monetary Union (EMU) or euro zone. Germany could benefit from depreciation of the euro because of high share in its exports to countries not in the euro zone but breakdown of the euro zone raises doubts on the region’s economic growth that could affect German exports to other member states.

Table VE-9, Germany, Structure of Exports and Imports by Region, € Billions and ∆%

	Jun 2014  € Billions	Jun 12-Month ∆%	Cumulative Jan-Jun 2014 € Billions	Cumulative Jan-Jun 2014/ Jan-Jun 2013 ∆%
Total Exports	93.4	1.1	558.3	2.4
A. EU Members	54.8 % 58.7	2.6	327.3 % 58.6	4.7
Euro Area	34.8 % 37.3	0.3	208.6 % 37.4	2.2
Non-euro Area	20.0 % 21.4	7.1	118.7 % 21.3	9.2
B. Third Countries	38.6 % 41.3	-0.9	231.0 % 41.4	-0.7
Total Imports	77.0	2.1	459.0	2.6
C EU Members	51.1 % 66.4	5.0	301.1 % 65.6	4.2
Euro Area	35.7 % 46.4	4.0	207.3 % 45.2	2.5
Non-euro Area	15.4 % 20.0	7.5	93.8 % 20.4	8.0
D Third Countries	25.8 % 33.5	-3.2	157.9 % 34.4	-0.3

Notes: Total Exports = A+B; Total Imports = C+D

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2014/07/PE14_244_51.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 increased from 48.1 in Jun to 49.4 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/b09a3eaae1af4a96b3ecee2e8da57b73). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing weak performance (http://www.markiteconomics.com/Survey/PressRelease.mvc/b09a3eaae1af4a96b3ecee2e8da57b73). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 48.1 in Jun to 49.4 in Jul, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/77f782d26579400b8cb020e60fea14d3). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds weak demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/77f782d26579400b8cb020e60fea14d3). The Markit France Services Activity index increased from 48.2 in Jun to 50.4 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/77f782d26579400b8cb020e60fea14d3). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 47.8 in Jul from 48.2 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/f270cecbb6274c17af2d703d3c9cf913). Jack Kennedy, 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/f270cecbb6274c17af2d703d3c9cf913). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Jun month ∆% 0.0 12 months ∆%: 0.5 7/13/14
PPI	Jun month ∆%: 0.0 Jun 12 months ∆%: 0.4 Blog 8/3/14
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	Jun ∆%: Manufacturing 1.6 12-Month ∆%: Manufacturing minus 0.1 Blog 8/10/14
Consumer Spending	Manufactured Goods Jun ∆%: 1.3 Jun 12-Month Manufactured Goods ∆%: 2.0 Blog 8/3/14
Employment	Unemployment Rate: IQ2014 9.7% Blog 6/8/14
Trade Balance	Jun Exports ∆%: month 1.8, 12 months 2.2 Jun Imports ∆%: month 2.2, 12 months minus 3.2 Blog 8/10/14
Confidence Indicators	Historical average 100 Jul Mfg Business Climate 97.0 Blog 7/27/14

Links to blog comments in Table FR:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/13/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-risk-recovery-without-hiring.html

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

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

Table VF-1 provides longer historical perspective of manufacturing in France. Output of manufacturing increased 1.6 percent in Jun 2014 and increased 0.1 percent in the 12 months ending in Jun 2014. Manufacturing in France fell 13.9 percent in the 12 months ending in Dec 2008 and 4.2 percent in Dec 2009. Manufacturing recovered with growth of 6.1 percent in the 12 months ending in Dec 2010. Manufacturing fell 0.6 percent in the 12 months ending in Dec 2011 and 3.3 percent in the 12 months ending in Dec 2012. Manufacturing increased 0.6 percent in the 12 months ending in Dec 2013.

Table VF-1, France, Manufacturing, Month and 12-Month ∆%

	Month ∆%	12-Month ∆%
Jun 2014	1.6	0.1
May	-2.3	-2.6
Apr	-0.1	-0.3
Mar	-0.4	1.9
Feb	0.6	1.5
Jan	0.2	1.7
Dec 2013	0.2	0.6
Nov	0.1	1.3
Oct	0.5	0.3
Sep	-0.6	-1.5
Aug	0.9	-3.4
Jul	-0.6	-2.4
Jun	-1.1	-0.5
May	0.0	-0.1
Apr	2.1	0.0
Mar	-0.8	-3.8
Feb	0.8	-1.3
Jan	-0.9	-4.1
Dec 2012	0.9	-3.3
Nov	-0.9	-6.0
Oct	-1.3	-3.2
Sep	-2.5	-2.2
Aug	2.0	-0.7
Jul	1.3	-2.6
Jun	-0.7	-3.5
May	0.1	-5.1
Apr	-1.8	-3.3
Mar	1.8	-2.4
Feb	-2.1	-5.3
Jan	-0.1	-2.8
Dec 2011	-1.9	-0.6
Nov	2.1	1.9
Oct	-0.3	2.1
Sep	-1.0	1.4
Aug	0.0	3.8
Jul	0.4	3.5
Jun	-2.4	3.4
May	2.0	5.1
Apr	-0.9	4.0
Mar	-1.2	5.4
Feb	0.6	9.1
Jan	2.1	8.4
Dec 2013		0.6
Dec 2012		-3.3
Dec 2011		-0.6
Dec 2010		6.1
Dec 2009		-4.2
Dec 2008		-13.9
Dec 2007		-0.7
Dec 2006		2.8
Dec 2005		0.9
Dec 2004		1.1
Dec 2003		0.5
Dec 2002		-1.0
Dec 2001		-5.3
Dec 2000		4.8

Source:

Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=10&date=20140808

Chart VF-1 of the Institut National de la Statistique et des Études Économiques provides France’s index of manufacturing, adjusted for working days and seasonal effects, from Jan 1990 to Jun 2014. Growth was robust in the 1990s and in recovery from the 2001 recession. Manufacturing output fell sharply during the global recession followed by recovery and another trend of decline followed by increase and new decline.

Chart VF-1, France, Index of Manufacturing 2010=100, Jan 1990-Jun 2014, Seasonal and Working-Day Adjusted

Source:

Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=10&date=20140808

Chart VF-2 of France’s Institut National de la Statistique et des Études Économiques shows indices of manufacturing in France from 2010 to 2014. Manufacturing, which is CZ in Chart VF-2, fell deeply in 2008 and part of 2009. All curves of industrial indices tend to flatten recently with oscillations and declines and marginal improvement followed by renewed decline/stability in the final segment with jump in Mar-Apr 2013. Manufacturing fell in May-Jul 2013 with mild recovery in Aug 2013 and decline in Sep 2013. Manufacturing increased in Oct-Nov 2013 and fell in Dec 2013. Manufacturing rebounded in Jan-Feb 2014, decreasing in Mar 2014. Manufacturing increased in Apr 2014 and contracted in May 2014. Manufacturing expanded in Jun 2014.

Chart VF-2, France, Industrial Production Indices 2010-2014 Legend: CZ : Manufacturing – (C1) : Manufacture of food products and beverages – (C3) : Electrical and electronic equipment; machine equipment – (C4) : Manufacture of transport equipment – (C5) : Other manufacturing

Source: Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=10&date=20140808

France has been running a trade deficit fluctuating around €5,000 million as shown in Table VF-2. Exports increased 1.8 percent in Jun 2014 while imports increased 2.2 percent. The trade deficit increased from revised €5129 million in May 2014 to €5380 million in Jun 2014.

Table VF-2, France, Exports, Imports and Trade Balance, € Millions 

	Exports	Imports	Trade Balance
Jun 2014	36,735	42,115	-5,380
May	36,086	41,215	-5,129
Apr	36,042	40,192	-4,150
Mar	36,255	41,163	-4,908
Feb	36,276	40,097	-3,821
Jan	36,055	41,879	-5,824
Dec 2013	36,673	42,028	-5,355
Nov	35,668	41,160	-5,492
Oct	36,333	41,128	-4,795
Sep	36,461	42,176	-5,715
Aug	35,072	41,127	-5,055
Jul	36,585	42,100	-5,515
Jun	35,949	40,813	-4,864
May	35,998	41,639	-5,641
Apr	38,484	42,526	-4,042
Mar	36,142	40,843	-4,701
Feb	35,443	41,644	-6,201
Jan	36,576	41,806	-5,230
Dec 2012	37,010	42,420	-5,410
Dec 2011	35,751	41,068	-5,317
Dec 2010	33,764	39,146	-5,382

Source: France, Direction générale des douanes et droits indirects

http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

Table VF-3 provides month and 12-month percentage changes of France’s exports and imports. Exports increased 1.8 percent in Jun 2014 and increased 2.2 percent in the 12 months ending in Jun 2014. Imports increased 2.2 percent in Jun 2014 and increased 3.2 percent in 12 months. Growth of exports and imports has fluctuated in 2011, 2012 and 2013-2014 because of price surges of commodities and raw materials. Weak economic conditions worldwide also influence trade performance.

Table VF-3, France, Exports and Imports, Month and 12-Month ∆%

	Exports Month ∆%	Exports 12-Month ∆%	Imports Month ∆%	Imports 12-Month ∆%
Jun 2014	1.8	2.2	2.2	3.2
Jan 2014	-1.7	-1.4	-0.4	0.2
Dec 2013	2.8	-0.9	2.1	-0.9
Dec 2012		3.5		3.3
Dec 2011		5.9		4.9
Dec 2010		13.1		14.0
Dec 2009		-9.6		-1.9
Dec 2008		-6.8		-10.9
Dec 2007		5.7		7.8
Dec 2006		6.6		6.4
Dec 2005		11.8		15.6
Dec 2004		-3.7		5.8
Dec 2003		7.1		1.6

Source: France, Direction générale des douanes et droits indirects

http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

Annual data for France’s exports, imports and trade balance are provided in Table VF-4. France’s trade balance deteriorated sharply from 2007 to 2011 with the deficit increasing from €42,494 million in 2007 to €74,504 million in 2011. Annual growth rates of exports have not been sufficiently high to compensate for growth of imports driven in part by commodity price increases. In 2012, the trade deficit declined to €67,616 million with growth of exports of 3.1 percent and of imports of 1.2 percent. The trade deficit declined to €61,661 million in 2013 with declines of exports of 1.3 percent and of 2.3 percent for imports.

Table VF-4, France, Exports, Imports and Balance Year € Millions and ∆%

	Exports € Millions	∆%	Imports € Millions	∆%	Balance € Millions
Jun 2014 12 Months	432,946		493,782		-60,836
Year
2013	435,690	-1.3	497,351	-2.3	-61,661
2012	441,552	3.1	509,168	1.2	-67,616
2011	428,479	8.5	502,983	12.4	-74,504
2010	395,039	14.0	447,483	14.2	-52,444
2009	346,481	-17.0	391,872	-17.3	-45,391
2008	417,636	2.7	473,853	5.5	-56,217
2007	406,487	3.0	448,981	5.8	-42,494
2006	394,621	9.5	424,549	10.4	-29,928
2005	360,376	4.4	384,588	9.6	-24,212
2004	345,256	5.4	350,996	7.0	-5,740
2003	327,653		327,884		-231

Source: France, Direction générale des douanes et droits indirects

http://lekiosque.finances.gouv.fr/AppChiffre/Portail_default.asp

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 2.9 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. GDP fell 0.4 percent in IQ2014 relative to a year earlier and fell 0.3 percent in IIQ2014 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
2014
IQ	-0.4	1.3	-0.3	-1.3	3.3
IIQ	-0.3
2013
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	-2.9	-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 decreased from 53.9 in Jun to 52.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/10c71c8a34f143f3b7ad790e00b2088c). 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/10c71c8a34f143f3b7ad790e00b2088c). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased from 52.6 in Jun to 51.9 in Jul, which constitutes improvement in Italy’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/2f64b0ede0c340bf927e6d020d85edd8). Growth of new export orders was strong at slower rate. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds continuing growth of manufacturing with slowing from the prior quarterly index at the highest performance in about three years (http://www.markiteconomics.com/Survey/PressRelease.mvc/2f64b0ede0c340bf927e6d020d85edd8). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Jul month ∆%: -0.1 Jul 12-month ∆%: 0.1 Blog 8/3/14
Producer Price Index	Jun month ∆%: 0.1 Jun 12-month ∆%: -1.9 Blog 8/3/14
GDP Growth	IIQ2014/IQ2014 SA ∆%: minus 0.2 IIQ2014/IIQ2013 NSA ∆%: minus 0.3 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 8/10/14
Labor Report	Jun 2014 Participation rate 63.7% Employment ratio 55.7% Unemployment rate 12.3% Youth Unemployment 43.7% Blog 8/3/14
Industrial Production	Jun month ∆%: 0.9 12 months CA ∆%: 0.4 Blog 8/10/14
Retail Sales	May month ∆%: -0.7 May 12-month ∆%: -0.5 Blog 7/27/14
Business Confidence	Mfg Jul 99.7, Mar 99.3 Construction Jul 83.2, Mar 76.0 Blog 8/3/14
Trade Balance	Balance May SA €3592 million versus Apr €3796 Exports May month SA ∆%: 2.2; Imports May month ∆%: 3.2 Exports 12 months May NSA ∆%: 0.2 Imports 12 months NSA ∆%: 0.9 Blog 7/20/14

Links to blog comments in Table IT:

8/3/14 http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/20/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-irrational-exuberance.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

Table VG-1 provides revised percentage changes of GDP in Italy of quarter on prior quarter and quarter on same quarter a year earlier. Italy’s GDP fell 0.2 percent in IIQ2014 and declined 0.3 percent relative to a year earlier. The GDP of Italy contracted 0.1 percent in IQ2014 and fell 0.4 percent relative to a year earlier. Italy’s GDP increased 0.1 percent in IVQ2013, interrupting nine consecutive quarterly declines, and fell 0.9 percent relative to a year earlier. The GDP of Italy decreased 0.1 percent in IIIQ2013 and fell 1.9 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and fell 2.2 percent relative to a year earlier. Italy’s GDP fell 0.6 percent in IQ2013 and declined 2.4 percent relative to IQ2012. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011. Italy’s GDP has fallen in nine consecutive quarters from IIIQ2011 to IIIQ2013 at increasingly higher rates of contraction from 0.2 percent in IIIQ2011 to 0.7 percent in IVQ2011, 1.1 percent in IQ2012 and 0.5 percent in IIQ2012 but at lower 0.4 percent in IIIQ2012. The pace of decline accelerated to minus 0.9 percent in IVQ2012 and 0.6 percent in IQ2013, declining to minus 0.3 percent in IIQ2013 and 0.1 percent in IIIQ2013. GDP contracted cumulatively 4.7 percent in nine consecutive quarterly contractions from IIIQ2011 to IIIQ2013 at the annual equivalent rate of 2.1 percent. The yearly rate has fallen from 2.2 percent in IVQ2010 to 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 0.4 percent in IQ2014 relative to a year earlier and fell 0.3 percent in IIQ2014 relative to a year earlier. The fiscal adjustment of Italy is significantly more difficult with the economy not growing especially on the prospects of increasing government revenue. The strategy is for reforms to improve productivity, facilitating future fiscal consolidation.

Table VG-1, Italy, GDP ∆%

	Quarter ∆% Relative to Preceding Quarter	Quarter ∆% Relative to Same Quarter Year Earlier
IIQ2014	-0.2	-0.3
IQ2014	-0.1	-0.4
IVQ2013	0.1	-0.9
IIIQ2013	-0.1	-1.9
IIQ2013	-0.3	-2.2
IQ2013	-0.6	-2.4
IVQ2012	-0.9	-2.9
IIIQ2012	-0.4	-2.6
IIQ2012	-0.5	-2.4
IQ2012	-1.1	-1.7
IVQ2011	-0.7	-0.6
IIIQ2011	-0.2	0.4
IIQ2011	0.2	1.1
IQ2011	0.1	1.4
IVQ2010	0.3	2.2
IIIQ2010	0.4	1.8
IIQ2010	0.6	1.8
IQ2010	0.8	0.9
IVQ2009	-0.1	-3.5
IIIQ2009	0.4	-5.0
IIQ2009	-0.3	-6.6
IQ2009	-3.5	-6.9
IVQ2008	-1.6	-3.0
IIIQ2008	-1.3	-1.9
IIQ2008	-0.5	-0.2
IQ2008	0.5	0.5
IV2007	-0.4	0.1
IIIQ2007	0.3	1.7
IIQ2007	0.2	2.0
IQ2007	0.0	2.4

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/124710

http://www.istat.it/it/archivio/130059

Chart VG-1 of the Italian National Institute of Statistics (ISTAT) provides growth of GDP of Italy at market prices. The year on year rate of growth pulled strongly out of the contraction. There is evident trend of deceleration with increasingly sharper contraction and mild moderation in 2013 and 2014.

Chart VG-1, Italy, GDP at Market Prices, ∆% on Same Quarter Year Earlier

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

Italy’s industrial production increased 0.9 percent in Jun 2014 seasonally adjusted and increased 0.4 percent in 12 months calendar adjusted, as shown in Table VG-2. Industrial production increased 0.4 percent in Apr 2014 and 0.1 percent in 12 months. Industrial production decreased 1.2 percent in May 2014 and fell 1.7 percent in 12 months. Industrial production increased 0.5 percent in Apr 2014 an 1.5 percent in 12 months. Industrial production decreased 0.3 percent in Mar 2014 and 0.1 percent in 12 months. Industrial production fell 0.5 percent in Feb 2014 but increased 0.4 percent in 12 months. Industrial production increased 1.1 percent in Jan 2014 and grew 1.3 percent in 12 months. Industrial production fell 0.9 percent in Dec 2013 and 1.2 percent in 12 months. Industrial production increased 0.2 percent in Nov 2013 and 0.9 percent CA relative to a year earlier. Industrial production increased 0.7 percent in Oct 2013 and fell 0.4 percent in 12 months. Industrial production increased 0.3 percent in Sep 2013 and fell 2.9 percent in 12 months. In Aug 2013, industrial production decreased 0.3 percent and fell 4.6 percent in 12 months. Industrial production decreased 0.3 percent in Jul 2013 and fell 3.8 percent in the 12 months ending in Jul 2013. In the quarter Sep-Nov 2012, industrial production fell cumulatively 4.1 percent, at the annual equivalent rate of 15.6 percent. Industrial production fell 7.7 percent in the 12 months ending in Nov 2012. There have been negative changes with oscillations in monthly industrial production. Industrial production fell 18.8 percent in 2009 after falling 3.2 percent in 2008. Industrial production fell 6.4 percent in 2012 and decreased 3.2 percent in 2013.

Table VG-2, Italy, Industrial Production ∆%

			Index CA	∆% CA	Index	∆%
2012	-	-	94.7	-6.4	94.3	-6.1
2013	-	-	91.7	-3.2	91.4	-3.1
2013	Index SA	Quarter ∆%	Index CA	4Q ∆%	Index	∆%
IIIQ	91.3	-0.2	87.2	-3.6	87.0	-2.0
IVQ	91.9	0.7	92.5	-0.2	92.3	-0.3
2014
IQ	92.0	0.1	92.7	0.4	91.5	-0.1
IIQ	91.6	-0.4	94.9	0.0	93.1	-1.6
2012
Jun	94.1	-1.8	99.1	-7.0	99.5	-7.0
Jul	94.7	0.6	108.6	-5.6	107.6	-2.6
Aug	95.5	0.8	61.4	-4.8	62.2	-4.7
Sep	94.1	-1.5	101.4	-4.7	96.5	-10.5
Oct	92.8	-1.4	101.2	-5.7	103.4	0.4
Nov	91.6	-1.3	95.6	-7.7	96.0	-7.7
Dec	92.3	0.8	81.3	-7.2	78.4	-10.0
2013
Jan	92.3	0.0	85.9	-3.4	89.0	-0.2
Feb	91.9	-0.4	92.1	-4.5	90.9	-8.2
Mar	91.5	-0.4	98.8	-5.8	94.8	-10.0
Apr	91.0	-0.5	88.6	-4.9	89.0	-0.4
May	91.9	1.0	99.3	-4.6	100.6	-4.6
Jun	91.7	-0.2	96.8	-2.3	94.2	-5.3
Jul	91.4	-0.3	104.5	-3.8	106.8	-0.7
Aug	91.1	-0.3	58.6	-4.6	57.5	-7.6
Sep	91.4	0.3	98.5	-2.9	96.7	0.2
Oct	92.0	0.7	100.8	-0.4	103.0	-0.4
Nov	92.2	0.2	96.5	0.9	93.9	-2.2
Dec	91.4	-0.9	80.3	-1.2	79.9	1.9
2014
Jan	92.4	1.1	87.0	1.3	87.3	-1.9
Feb	91.9	-0.5	92.5	0.4	91.3	0.4
Mar	91.6	-0.3	98.7	-0.1	96.0	1.3
Apr	92.1	0.5	89.9	1.5	89.0	0.0
May	91.0	-1.2	97.6	-1.7	95.8	-4.8
Jun	91.8	0.9	97.2	0.4	94.6	0.4

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/130028

Chart VG-2 provides 12-month percentage changes of Italy’s index of industrial production. Industrial production improved from decline of 2.3 percent the 12 months ending in Jun 2013 to increase of 0.4 percent in the 12 months ending in Jun 2014.

Chart VG-1, Italy, Industrial Production, 12-Month Percentage Changes

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

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 57.7 in Jun to 59.1 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/b2c8dc66ce114ec28cc28545223ee38e). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at 0.8 percent in IIIQ2014 if activity continues at current rates (http://www.markiteconomics.com/Survey/PressRelease.mvc/b2c8dc66ce114ec28cc28545223ee38e). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) decreased to 55.4 in Jul from 57.2 in Jun (http://www.markiteconomics.com/Survey/PressRelease.mvc/fddb65e3f7734f7489a302482e5a00bf). New export orders increased for the sixteenth consecutive month. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions continue at solid pace significantly higher than long-term trends (http://www.markiteconomics.com/Survey/PressRelease.mvc/fddb65e3f7734f7489a302482e5a00bf). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Jun month ∆%: 0.2 Jun 12-month ∆%: 1.9 Blog 7/20/14
Output/Input Prices	Output Prices: Jun 12-month NSA ∆%: 0.2; excluding food, petroleum ∆%: 1.0 Input Prices: Jun 12-month NSA ∆%: -4.4 Excluding ∆%: -4.3 Blog 7/20/14
GDP Growth	IIQ2014 prior quarter ∆% 0.8; year earlier same quarter ∆%: 3.1 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 7/27/14
Industrial Production	Jun 2014/Jun 2013 ∆%: Production Industries 1.2; Manufacturing 1.9 Blog 8/10/14
Retail Sales	Jun month ∆%: 0.8 Jun 12-month ∆%: 3.6 Blog 7/27/14
Labor Market	Mar-May Unemployment Rate: 6.5%; Claimant Count 3.1%; Earnings Growth 0.3% Blog 7/20/14 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 Jun minus ₤2459 million Exports Jun ∆%: -0.9; Apr-Jun ∆%: -5.7 Imports Jun ∆%: -0.6 Apr-Jun ∆%: -3.4 Blog 8/10/14

Links to blog comments in Table UK:

7/27/14 http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html

7/20/14 http://cmpassocregulationblog.blogspot.com/2014/07/financial-irrational-exuberance.html

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

The UK Office for National Statistics provides the output of production industries with revisions. Table VH-1 incorporates the revisions released in Dec 2011 (http://www.ons.gov.uk/ons/rel/iop/index-of-production/november-2012/index.html) and the latest available data for Jun 2014. Manufacturing accounts for 68.4 percent of the production industries of the UK and increased 1.9 percent in the 12 months ending in Jun 2014. Capital goods industries increased 3.0 percent in the 12 months ending in Jun 2014 after increasing 4.6 percent in the 12 months ending in May 2014 and 4.1 percent in the 12 months ending in Apr 2014. Output of capital goods industries decreased 1.8 percent in the 12 months ending in Dec 2013, increasing 1.4 percent in the 12 months ending in Nov 2013. Capital goods industries fell 2.3 percent in the 12 months ending in May 2013, grew 2.5 percent in the 12 months ending in Apr 2013 and had been growing at very high rates during the current cyclical recovery but falling from the unsustainable high of 12.0 percent in the 12 months ending in Feb 2011. Mining and quarrying increased 11.1 percent in the 12 months ending in Oct 2013 and 3.6 percent in the 12 months ending in Dec 2013, decreasing 1.9 percent in the 12 months ending in Jan 2014. Mining and quarrying increased 2.0 percent in the 12 months ending in Apr 2014. The 12-month rates of growth of the entire index of production industries registered declines for all 12 months from Mar 2011 to Aug 2013 with exception of 1.3 percent in the 12 months ending in Jun 2013. With exception of most months for capital goods and Sep to Dec 2012 for consumer durables, 12-month percentage changes of all segments are mostly negative from Jan to Dec 2012. Energy and mining have been drivers of decline. The upper part of Table VH-1 provides rates of change of yearly output. Manufacturing output fell 10.2 percent in 2009 after falling 2.8 percent in 2008 but grew at 4.2 percent in the initial phase of the recovery in 2010 and 1.8 percent in 2011 but fell 1.7 percent in 2012. Manufacturing fell 0.8 percent in 2013.

Table VH-1, UK, Output of the Production Industries, Chained Volume Indices of Gross Value Added, 12-Month ∆%

	PRO IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENERGY
2009	-9.5	-9.7	-10.2	-6.8	-0.8	-12.1	-6.5
2010	2.8	-2.4	4.2	-4.1	-0.3	10.4	-2.5
2011	-1.2	-14.8	1.8	0.6	-0.7	6.7	-10.7
2012	-2.4	-8.7	-1.7	-3.1	-3.8	1.5	-7.0
2013	-0.4	-2.5	-0.8	-2.3	-1.2	1.0	-3.5

		PROD IND	MNG	MFG	CONS DUR	CON NDUR	CAP	ENERGY
2012	Apr	-1.3	-9.7	-1.2	-2.7	-5.0	2.7	-5.9
	May	-1.4	-5.6	-1.2	-3.4	-5.9	2.8	-4.4
	Jun	-4.0	-3.0	-4.0	-10.9	-6.3	0.3	-4.8
	Jul	-0.7	-0.4	-0.8	-3.5	-5.0	4.4	-3.6
	Aug	-0.9	1.5	-1.5	-2.9	-3.9	2.1	-2.4
	Sep	-3.7	-16.1	-1.6	1.2	-1.7	0.1	-11.9
	Oct	-3.7	-18.8	-2.5	4.1	-4.7	0.1	-10.7
	Nov	-2.9	-11.8	-2.8	0.5	-5.5	-0.5	-6.9
	Dec	-3.0	-8.1	-2.7	0.7	-6.3	1.1	-5.7
2013	Jan	-3.1	-5.1	-4.1	-1.4	-6.1	0.1	-3.2
	Feb	-2.3	-7.5	-2.6	-4.5	-5.7	3.0	-7.4
	Mar	-1.9	-11.7	-1.9	0.1	-4.9	2.2	-3.5
	Apr	-1.4	-5.3	-1.4	-2.3	-0.3	2.5	-4.2
	May	-2.4	-1.4	-3.4	-4.8	-0.1	-2.3	-3.4
	Jun	1.3	-3.3	1.5	1.1	2.1	2.2	-5.7
	Jul	-1.4	-7.3	-1.3	0.6	0.1	0.7	-6.4
	Aug	-1.7	-9.8	-1.0	-3.3	-2.9	0.1	-7.9
	Sep	2.0	10.9	0.1	-2.5	-1.5	1.1	3.3
	Oct	2.7	11.1	1.9	-5.2	1.1	2.9	0.5
	Nov	2.0	1.4	1.9	-2.9	1.3	1.4	-1.9
	Dec	1.7	3.6	1.4	-2.9	3.1	-1.8	-0.6
2014	Jan	2.3	-1.9	3.2	1.0	-1.3	2.6	-6.1
	Feb	2.5	2.9	4.0	6.6	2.7	3.3	-4.4
	Mar	2.5	6.6	3.5	0.9	3.6	2.0	-4.5
	Apr	2.9	2.0	4.3	3.8	1.4	4.1	-4.8
	May	2.3	0.6	3.7	3.0	0.8	4.6	-3.9
	Jun	1.2	-1.0	1.9	1.8	-1.0	3.0	-1.9

Notes: PROD IND: Production Industries; MNG: Mining; MFG: Manufacturing; ENGY: Energy; CON DUR: Consumer Durables; CONS NDUR: Consumer Nondurables; CAP: Capital Goods

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/june-2014/index.html

Percentage changes in the production industries and major components in a month relative to the prior month are shown in Table VH-2. The UK index of production increased 0.3 percent in Jun 2014 with increase of manufacturing of 0.3 percent and increase of capital goods of 1.7 percent. Energy decreased 0.5 percent. The UK index of production decreased 0.6 percent in May 2014 with contraction of manufacturing of 1.3 percent and decrease of capital goods of 2.1 percent. Energy increased 1.9 percent and mining and quarrying increased 1.7 percent. The production index increased 0.3 percent in Apr 2014 with growth of manufacturing of 0.3 percent and capital goods of 1.3 percent. The index of production increased 0.1 percent in Mar 2009 with growth of manufacturing of 0.5 percent and of capital goods of 0.2 percent. The index of production increased 0.9 percent in Feb 2014 with manufacturing increasing 1.1 percent and capital goods 1.0 percent. The index of production decreased 0.2 percent in Jan 2014 with manufacturing increasing 0.3 percent. Mining and quarrying decreased 3.6 percent in Jan 2014 and capital goods increased 2.0 percent. Energy decreased 3.8 percent. The index of production increased 0.3 percent in Dec 2013 with manufacturing increasing 0.6 percent while capital goods fell 0.9 percent. There is significant fluctuation in monthly percentage changes. Many segments fell in May and Apr 2013. Capital goods industries fell 2.4 percent in Jan 2013 and increased 1.4 percent in Mar and 3.3 percent in Jun while manufacturing fell 1.5 percent in Jan 2013 but increased 1.1 percent in Mar and 2.1 percent in Jun. Performance was strong in Dec 2012 with growth of manufacturing of 1.1 percent and capital goods of 2.3 percent. Fluctuations of monthly production are quite wide.

Table VH-2, UK, Output of the Production Industries, Chained Volume Indices of Gross Value Added, Latest Month on Previous Month ∆%

		PROD IND	MNG	MFG	CON DUR	CON NDUR	CAP	ENERGY
2012	Apr	-0.6	-3.8	-1.0	1.3	-3.0	-1.1	1.0
	May	0.9	-1.0	1.3	-	-	2.3	-
	Jun	-2.3	2.6	-2.9	-3.3	-1.2	-1.3	-0.1
	Jul	2.8	3.8	2.9	3.4	1.6	3.0	1.4
	Aug	-0.7	1.8	-1.3	-1.9	0.3	-2.5	0.8
	Sep	-2.7	-18.3	0.2	1.1	0.4	0.5	-10.6
	Oct	-0.7	-1.4	-1.7	2.4	-3.2	-1.0	0.7
	Nov	0.6	7.7	-0.2	-2.7	-1.0	0.7	3.4
	Dec	0.6	1.1	1.1	0.6	0.2	2.3	-0.3
2013	Jan	-0.8	1.9	-1.5	-1.5	1.0	-2.4	1.8
	Feb	0.8	-0.1	0.3	-3.9	-0.5	0.4	-0.6
	Mar	0.1	-4.4	1.1	5.1	0.4	1.4	-0.3
	Apr	-0.1	3.2	-0.5	-1.1	1.7	-0.8	0.3
	May	-0.1	3.2	-0.8	-2.6	0.2	-2.5	0.9
	Jun	1.3	0.6	2.1	2.7	1.0	3.3	-2.5
	Jul	0.1	-0.5	-	2.9	-0.4	1.4	0.7
	Aug	-0.9	-0.9	-1.0	-5.6	-2.7	-3.0	-0.9
	Sep	1.0	0.6	1.3	1.8	1.9	1.6	0.3
	Oct	-	-1.3	0.1	-0.3	-0.7	0.8	-2.1
	Nov	-0.1	-1.7	-0.2	-0.4	-0.8	-0.9	0.9
	Dec	0.3	3.4	0.5	0.6	2.1	-0.9	1.0
2014	Jan	-0.2	-3.6	0.3	2.4	-3.3	2.0	-3.8
	Feb	0.9	4.8	1.1	1.4	3.5	1.0	1.2
	Mar	0.1	-0.9	0.5	-0.6	1.3	0.2	-0.4
	Apr	0.3	-1.2	0.3	1.8	-0.4	1.3	-
	May	-0.6	1.7	-1.3	-3.4	-0.5	-2.1	1.9
	Jun	0.3	-1.0	0.3	1.5	-0.8	1.7	-0.5

Notes: PROD IND: Production Industries; MNG: Mining; MFG: Manufacturing; ENGY: Energy; CON DUR: Consumer Durables; CONS NDUR: Consumer Nondurables; CAP: Capital Goods

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/june-2014/index.html

Weights of components of the production index and contributions by components to the monthly and 12-month percentage changes of volume are provided by the UK Office for National Statistics and shown in Table VH-3. The 12-month rate of output of the production industries of 1.2 percent was driven by positive contribution of 1.34 percentage points by manufacturing and 0.04 percentage points by water and sewage. The contribution of manufacturing is strong because of its share of 68.4 percent in the production index with growth of 1.9 percent in 12 months. The contributions do not add exactly because of rounding. Mining and quarrying deducted 0.12 percentage points to the output of the production industries in the 12 months ending in Jun 2014. Manufacturing increased 0.3 percent in Jun 2014, adding 0.24 percentage points. Mining decreased 1.0 percent in Jun 2014, deducting 0.12 percentage points. Electricity increased 0.9 percent in Jun, adding 0.07 percentage points.

Table VH-3, UK, Weights of Components, Volume 12-Month and Month ∆% and Percentage Point Contributions of Production Industries by Components

	Weight %	Volume 12-Month ∆% Ending in Jun 2014	% Point Contrib.	Volume Month ∆% Jun 2014	% Point Contrib.
PROD IND	100.0	1.2	1.2	0.3	0.3
MNG	15.1	-1.0	-0.12	-1.0	-0.12
Division 06	12.4	-0.6	-0.05	-1.3	-0.11
MFG	68.4	1.9	1.34	0.3	0.24
ELEC	8.6	-0.4	-0.03	0.9	0.07
WATER & SEW	7.9	0.4	0.04	1.0	0.09

Notes: Cont: Contribution; PROD IND: Index of Production; MNG: Mining and Quarrying (of which 14.4 percent of the total weight in oil and gas extraction); MNG 06: Subdivision of Mining including oil and gas extraction; MFG: Manufacturing; ELEC: Electricity, gas, steam and air conditioning; WATER & SEW: water supply, sewerage and waste management

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/june-2014/index.html

Table VH-4 provides the breakdown of production in 12-month and monthly growth and percentage contributions.

Table VH-4, UK, Growth Rates and Percentage Point Contributions to the Index of Production

Sector	Summary Description	% of production	Month on same month a year ago growth (%)	Contribution to production (% points)
IoP	Index of Production	100.0	1.2	1.2
B	Total Mining & Quarrying	15.1	-1.0	-0.12
5	Coal & Lignite	0.2	-10.7	-0.01
6	Crude petroleum & Natural gas	12.4	-0.6	-0.05
789	Other mining & Quarrying	2.5	-1.6	-0.06
C	Total Manufacturing	68.4	1.9	1.34
CA	Food, beverages and tobacco	10.9	3.4	0.38
CB	Textiles and leather products	2.1	-3.1	-0.06
CC	Wood, paper and printing	5.5	-1.1	-0.06
CD	Coke and petroleum	1.7	-18.2	-0.29
CE	Chemical Products	4.2	0.8	0.03
CF	Pharmaceutical Products	6.4	-8.0	-0.43
CG	Rubber and plastic products	5.7	11.6	0.63
CH	Metal products	7.7	5.1	0.40
CI	Computer, electronic & optical	4.3	-2.2	-0.09
CJ	Electrical equipment	2.1	-9.9	-0.23
CK	Machinery and equipment	5.0	5.1	0.25
CL	Transport equipment	7.7	4.7	0.48
CM	Other manufacturing & repair	5.4	5.9	0.34
D	Total Electricity & Gas	8.6	-0.4	-0.03
35.1	Electric power generation, transmission & distribution	6.0	0.9	0.05
35.2-3	Manufacture of gas; distribution of gaseous fuels through mains; steam & aircon supply	2.6	-4	-0.08
E	Total Water	7.9	0.4	0.04
36	Water collection, Treatment & Supply	2.1	0.3	0.01
37	Sewerage	2.2	-1.5	-0.04
38	Waste Collection, Treatment & Disposal Activities; Materials Recovery	3.6	1.6	0.07
39	Remediation Activities & Other Waste Management Services	0.1	4.6	0.00

Sector	Summary Description	% of production	Month on previous month growth (%)	Contribution to production (% points)
IoP	Index of Production	100.0	0.3	0.3
B	Total Mining & Quarrying	15.1	-1.0	-0.12
5	Coal & Lignite	0.2	2.8	0.00
6	Crude petroleum & Natural gas	12.4	-1.3	-0.11
789	Other mining & Quarrying	2.5	-0.4	-0.01
C	Total Manufacturing	68.4	0.3	0.24
CA	Food, beverages and tobacco	10.9	0.5	0.06
CB	Textiles and leather products	2.1	-8.4	-0.18
CC	Wood, paper and printing	5.5	-0.2	-0.01
CD	Coke and petroleum	1.7	-4.9	-0.07
CE	Chemical Products	4.2	-0.9	-0.04
CF	Pharmaceutical Products	6.4	-1.4	-0.07
CG	Rubber and plastic products	5.7	-0.8	-0.05
CH	Metal products	7.7	1.9	0.15
CI	Computer, electronic & optical	4.3	-0.2	-0.01
CJ	Electrical equipment	2.1	1.7	0.04
CK	Machinery and equipment	5.0	-0.5	-0.02
CL	Transport equipment	7.7	3.9	0.40
CM	Other manufacturing & repair	5.4	0.6	0.04
D	Total Electricity & Gas	8.6	0.9	0.07
35.1	Electric power generation, transmission & distribution	6.0	-0.3	-0.02
35.2-3	Manufacture of gas; distribution of gaseous fuels through mains; steam & aircon supply	2.6	4.5	0.09
E	Total Water	7.9	1	0.09
36	Water collection, Treatment & Supply	2.1	0.3	0.01
37	Sewerage	2.2	-0.5	-0.01
38	Waste Collection, Treatment & Disposal Activities; Materials Recovery	3.6	2.4	0.10
39	Remediation Activities & Other Waste Management Services	0.1	4.4	0.00

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/iop/index-of-production/june-2014/index.html

The UK’s trade account is in Table VH-5. In Jun 2014, the UK ran a deficit in trade of goods and services (total trade) of ₤2459 million. The deficits in trade of goods was ₤9413 million and ₤8564 million in goods excluding oil. A surplus in services of ₤6954 million contributed to reducing the overall deficit in goods and services (-₤9413 million plus ₤6954 million equal to ₤2459 million). Services have contributed to lower deficits and have softened the impact of the global recession on the UK economy. Exports of goods and services decreased 0.9 percent in Jun 2014 and decreased 5.7 percent in the quarter Apr 2014-Jun 2014 relative to the same quarter a year earlier with imports decreasing 0.6 percent in Jun and decreasing 3.4 percent in Apr 2014-Jun 2014 relative to the same quarter a year earlier. Excluding oil, UK exports of goods decreased 1.3 percent in Jun and fell 7.5 percent in Apr 2014-Jun 2014 relative to the same quarter a year earlier. Imports of goods excluding oil increased 0.7 percent in Jun and fell 3.2 percent in Apr 2014-Jun 2014 relative to the same quarter a year earlier. Services exports increased 0.1 percent in Jun and increased 0.1 percent in Apr 2014-Jun 2014 relative to the same quarter a year earlier while services imports decreased 1.5 percent in Jun and increased 2.7 percent in Apr 2014-Jun 2014 relative to the same quarter a year earlier.

Table VH-5, Value of UK Trade in Goods and Services, Balance of Payments Basis, ₤ Million SA and ∆%

	₤ Million SA Jun 2014		Month ∆%    Jun 2014	Apr 2014-Jun 2014 ∆% Apr 2013-Jun 2013
Total Trade
Exports	40,328		-0.9	-5.7
Imports	42,787		-0.6	-3.4
Balance	-2,459
Trade in Goods
Exports	23,500		-1.6	-9.3
Imports	32,913		-0.4	-5.2
Balance	-9,413
Trade in Goods Excluding Oil
Exports	21,060		-1.3	-7.5
Imports	29,624		0.7	-3.2
Balance	-8,564
Trade in Services
Exports	16,828		0.1	0.1
Imports	9,874		-1.5	2.7
Balance	6,954

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/uktrade/uk-trade/june-2014/index.html

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