Competitive Monetary Policy and Competitive Devaluations, Rules, Discretionary Authorities and Slow Productivity Growth, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, United States International Trade, World Cyclical Slow Growth and Global Recession Risk: Part IV

 

Competitive Monetary Policy and Competitive Devaluations, Rules, Discretionary Authorities and Slow Productivity Growth, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, United States International Trade, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Twenty Seven Million Unemployed or Underemployed

IA1 Summary of the Employment Situation

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

IIB Stagnating Real Wages

II Rules, Discretionary Authorities and Slow Productivity Growth

IIA United States International Trade

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/ns/cs.aspx?id=28) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has changed its forecast of the world economy to 3.0 percent in 2013 but accelerating to 3.6 percent in 2014, 3.9 percent in 2015 and 3.9 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,543 billion of world output of $72,106 billion, or 47.9 percent, but are projected to grow at much lower rates than world output, 2.0 percent on average from 2013 to 2016 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.2 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.5 percent. The difference in dollars of 2012 is rather high: growing by 15.2 percent would add around $11.0 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,938 billion but growing by 8.5 percent would add $6.1 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,080 billion, or 37.6 percent of world output. The EMDEs would grow cumulatively 21.9 percent or at the average yearly rate of 5.1 percent, contributing $5.9 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,229 billion of China in 2012. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,340 billion, or 19.9 percent of world output, which is equivalent to 41.5 percent of the combined output of the major advanced economies of the G7.

Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth

	GDP USD 2012	Real GDP ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
World	72,106	3.0	3.6	3.9	3.9
G7	34,543	1.4	2.2	2.3	2.3
Canada	1,821	2.0	2.3	2.4	2.4
France	2,613	0.3	1.0	1.5	1.7
DE	3,428	0.5	1.7	1.6	1.4
Italy	2,014	-1.8	0.6	1.1	1.3
Japan	5,938	1.5	1.4	1.0	0.7
UK	2,484	1.8	2.9	2.5	2.4
US	16,245	1.9	2.8	3.0	3.0
Euro Area	12,192	-0.5	1.2	1.5	1.5
DE	3,428	0.5	1.7	1.6	1.4
France	2,613	0.3	1.0	1.5	1.7
Italy	2,014	-1.8	0.6	1.1	1.3
POT	212	-1.4	1.2	1.5	1.7
Ireland	211	-0.3	1.7	2.5	2.5
Greece	249	-3.9	0.6	2.9	3.7
Spain	1,323	-1.2	0.9	1.0	1.1
EMDE	27,080	4.7	4.9	5.3	5.4
Brazil	2,248	2.3	1.8	2.7	3.0
Russia	2,004	1.3	1.3	2.3	2.5
India	1,859	4.4	5.4	6.4	6.5
China	8,229	7.7	7.5	7.3	7.0

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

Source: IMF World Economic Outlook databank http://www.imf.org/external/ns/cs.aspx?id=28

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/ns/cs.aspx?id=28). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2013 in Table V-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high in 2013 for the countries with sovereign debt difficulties in Europe: 16.3 percent for Portugal (POT), 13.1 percent for Ireland, 27.3 percent for Greece, 26.4 percent for Spain and 12.2 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.1 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.

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

	% Labor Force 2012	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016
World	NA	NA	NA	NA	NA
G7	7.4	7.1	6.7	6.5	6.3
Canada	7.3	7.0	7.0	6.9	6.8
France	10.2	10.8	11.0	10.7	10.3
DE	5.5	5.3	5.2	5.2	5.2
Italy	10.7	12.2	12.4	11.9	11.1
Japan	4.3	4.0	3.9	3.9	3.9
UK	8.0	7.6	6.9	6.6	6.3
US	8.1	7.4	6.4	6.2	6.1
Euro Area	11.4	12.1	11.9	11.6	11.1
DE	5.5	5.3	5.2	5.2	5.2
France	10.2	10.8	11.0	10.7	10.3
Italy	10.7	12.2	12.4	11.9	11.1
POT	15.7	16.3	15.7	15.1	14.5
Ireland	14.7	13.1	11.2	10.5	10.1
Greece	24.2	27.3	26.3	24.4	21.4
Spain	25.0	26.4	25.5	24.9	24.2
EMDE	NA	NA	NA	NA	NA
Brazil	5.5	5.4	5.6	5.8	6.0
Russia	5.5	5.5	6.2	6.2	6.0
India	NA	NA	NA	NA	NA
China	4.1	4.1	4.1	4.1	4.1

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

Source: IMF World Economic Outlook databank http://www.imf.org/external/ns/cs.aspx?id=28

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IVQ2013 available now for all countries. There are preliminary estimates for all countries for IIQ2014. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 1.0 percent in IQ2012, 4.1 percent at SAAR (seasonally adjusted annual rate) and 3.3 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.5 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 2.2 percent, which is much lower than 4.1 percent in IQ2012. Growth of 3.2 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.7 percent in IIIQ2012 at the SAAR of minus 2.8 percent and decreased 0.2 percent relative to a year earlier. Japan’s GDP decreased 0.1 percent in IVQ2012 at the SAAR of minus 0.3 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.3 percent in IQ2013 at the SAAR of 5.2 percent and increased 0.1 percent relative to a year earlier. Japan’s GDP increased 0.9 percent in IIQ2013 at the SAAR of 3.4 percent and increased 1.2 percent relative to a year earlier. Japan’s GDP grew 0.4 percent in IIIQ2013 at the SAAR of 1.4 percent and increased 2.3 percent relative to a year earlier. In IVQ2013, Japan’s GDP changed 0.2 percent at the SAAR of minus 0.2 percent, increasing 2.5 percent relative to a year earlier. Japan’s GDP increased 1.5 percent in IQ2014 at the SAAR of 6.1 percent and increased 3.0 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 1.7 percent at the SAAR of minus 6.8 percent and fell 0.1 percent relative to a year earlier.
• China. China’s GDP grew 1.4 percent in IQ2012, annualizing to 5.7 percent, and 8.1 percent relative to a year earlier. The GDP of China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent and 7.6 percent relative to a year earlier. China grew at 2.0 percent in IIIQ2012, which annualizes at 8.2 percent and 7.4 percent relative to a year earlier. In IVQ2012, China grew at 1.9 percent, which annualizes at 7.8 percent, and 7.9 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.6 percent, which annualizes at 6.6 percent and 7.7 percent relative to a year earlier. In IIQ2013, China grew at 1.8 percent, which annualizes at 7.4 percent and 7.5 percent relative to a year earlier. China grew at 2.3 percent in IIIQ2013, which annualizes at 9.5 percent and 7.8 percent relative to a year earlier. China grew at 1.7 percent in IVQ2013, which annualized to 7.0 percent and 7.7 percent relative to a year earlier. China’s GDP grew 1.5 percent in IQ2014, which annualizes to 6.1 percent, and 7.4 percent relative to a year earlier. China’s GDP grew 2.0 percent in IIQ2014, which annualizes at 8.2 percent, and 7.5 percent relative to a year earlier. There is decennial change in leadership in China (http://www.xinhuanet.com/english/special/18cpcnc/index.htm). Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2014.
• Euro Area. GDP fell 0.1 percent in the euro area in IQ2012 and decreased 0.2 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.3 percent IIQ2012 and fell 0.5 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.2 percent and declined 0.7 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.5 percent relative to the prior quarter and fell 1.0 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.2 percent and decreased 1.1 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IIQ2013 and fell 0.6 percent relative to a year earlier. In IIIQ2013, euro area GDP increased 0.1 percent and fell 0.3 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IVQ2013 and increased 0.5 percent relative to a year earlier. In IQ2014, the GDP of the euro area increased 0.2 percent and 0.9 percent relative to a year earlier. The GDP of the euro area changed 0.0 percent in IIQ2014 and increased 0.7 percent relative to a year earlier.
• Germany. The GDP of Germany increased 0.3 percent in IQ2012 and 1.5 percent relative to a year earlier. In IIQ2012, Germany’s GDP increased 0.1 percent and increased 0.3 percent relative to a year earlier but 0.8 percent relative to a year earlier when adjusted for calendar (CA) effects. In IIIQ2012, Germany’s GDP increased 0.1 percent and 0.1 percent relative to a year earlier. Germany’s GDP contracted 0.4 percent in IVQ2012 and decreased 0.3 percent relative to a year earlier. In IQ2013, Germany’s GDP decreased 0.4 percent and fell 1.8 percent relative to a year earlier. In IIQ2013, Germany’s GDP increased 0.8 percent and 0.5 percent relative to a year earlier. The GDP of Germany increased 0.3 percent in IIIQ2013 and 0.8 percent relative to a year earlier. In IVQ2013, Germany’s GDP increased 0.4 percent and 1.0 percent relative to a year earlier. The GDP of Germany increased 0.7 percent in IQ2014 and 2.5 percent relative to a year earlier. In IIQ2014, Germany’s GDP contracted 0.2 percent and increased 0.8 percent relative to a year earlier.
• United States. Growth of US GDP in IQ2012 was 0.6 percent, at SAAR of 2.3 percent and higher by 2.6 percent relative to IQ2011. US GDP increased 0.4 percent in IIQ2012, 1.6 percent at SAAR and 2.3 percent relative to a year earlier. In IIIQ2012, US GDP grew 0.6 percent, 2.5 percent at SAAR and 2.7 percent relative to IIIQ2011. In IVQ2012, US GDP grew 0.0 percent, 0.1 percent at SAAR and 1.6 percent relative to IVQ2011. In IQ2013, US GDP grew at 2.7 percent SAAR, 0.7 percent relative to the prior quarter and 1.7 percent relative to the same quarter in 2013. In IIQ2013, US GDP grew at 1.8 percent in SAAR, 0.4 percent relative to the prior quarter and 1.8 percent relative to IIQ2012. US GDP grew at 4.5 percent in SAAR in IIIQ2013, 1.1 percent relative to the prior quarter and 2.3 percent relative to the same quarter a year earlier (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html). In IVQ2013, US GDP grew 0.9 percent at 3.5 percent SAAR and 3.1 percent relative to a year earlier. In IQ2014, US GDP decreased 0.5 percent, increased 1.9 percent relative to a year earlier and fell 2.1 percent at SAAR. In IIQ2014, US GDP increased 1.0 percent at 4.2 percent SAAR and increased 2.5 percent relative to a year earlier.
• United Kingdom. In IQ2012, UK GDP changed 0.0 percent, increasing 0.6 percent relative to a year earlier. UK GDP fell 0.4 percent in IIQ2012 and increased 0.1 percent relative to a year earlier. UK GDP increased 0.8 percent in IIIQ2012 and increased 0.3 percent relative to a year earlier. UK GDP fell 0.2 percent in IVQ2012 relative to IIIQ2012 and increased 0.2 percent relative to a year earlier. UK GDP increased 0.5 percent in IQ2013 and 0.7 percent relative to a year earlier. UK GDP increased 0.7 percent in IIQ2013 and 1.8 percent relative to a year earlier. In IIIQ2013, UK GDP increased 0.8 percent and 1.8 percent relative to a year earlier. UK GDP increased 0.7 percent in IVQ2013 and 2.7 percent relative to a year earlier. In IQ2014, UK GDP increased 0.8 percent and 3.0 percent relative to a year earlier. UK GDP increased 0.8 percent in IIQ2014 and 3.1 percent relative to a year earlier.
• Italy. Italy has experienced decline of GDP in nine consecutive quarters from IIIQ2011 to IIIQ2013 and in IQ2014 and IIQ2014. Italy’s GDP fell 1.1 percent in IQ2012 and declined 1.7 percent relative to IQ2011. Italy’s GDP fell 0.5 percent in IIQ2012 and declined 2.4 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.4 percent and declined 2.6 percent relative to a year earlier. The GDP of Italy contracted 0.9 percent in IVQ2012 and fell 2.9 percent relative to a year earlier. In IQ2013, Italy’s GDP contracted 0.6 percent and fell 2.4 percent relative to a year earlier. Italy’s GDP fell 0.3 percent in IIQ2013 and 2.2 percent relative to a year earlier. The GDP of Italy decreased 0.1 percent in IIIQ2013 and declined 1.9 percent relative to a year earlier. Italy’s GDP increased 0.1 percent in IVQ2013 and decreased 0.9 percent relative to a year earlier. In IQ2014, Italy’s GDP decreased 0.1 percent and fell 0.4 percent relative to a year earlier. The GDP of Italy fell 0.2 percent in IIQ2014 and declined 0.2 percent relative to a year earlier.
• France. France’s GDP increased 0.2 percent in IQ2012 and increased 0.6 percent relative to a year earlier. France’s GDP decreased 0.3 percent in IIQ2012 and increased 0.4 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.3 percent and increased 0.5 percent relative to a year earlier. France’s GDP fell 0.3 percent in IVQ2012 and changed 0.0 percent relative to a year earlier. In IQ2013, France GDP changed 0.0 percent and declined 0.2 percent relative to a year earlier. The GDP of France increased 0.7 percent in IIQ2013 and 0.7 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIIQ2013 and increased 0.3 percent relative to a year earlier. The GDP of France increased 0.2 percent in IVQ2013 and 0.8 percent relative to a year earlier. In IQ2014, France’s GDP changed 0.0 percent and increased 0.8 percent relative to a year earlier. In IIQ2014, France’s GDP changed 0.0 percent and increased 0.1 percent relative to a year earlier.

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

	IQ2012/IVQ2011	IQ2012/IQ2011
United States	QOQ: 0.6        SAAR: 2.3	2.6
Japan	QOQ: 1.0 SAAR: 4.1	3.3
China	1.4	8.1
Euro Area	-0.1	-0.2
Germany	0.3	1.5
France	0.2	0.6
Italy	-1.1	-1.7
United Kingdom	0.0	0.6
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.4         SAAR: 1.6	2.3
Japan	QOQ: -0.5 SAAR: -2.2	3.2
China	2.1	7.6
Euro Area	-0.3	-0.5
Germany	0.1	0.3 0.8 CA
France	-0.3	0.4
Italy	-0.5	-2.4
United Kingdom	-0.4	0.1
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.6  SAAR: 2.5	2.7
Japan	QOQ: –0.7 SAAR: –2.8	-0.2
China	2.0	7.4
Euro Area	-0.2	-0.7
Germany	0.1	0.1
France	0.3	0.5
Italy	-0.4	-2.6
United Kingdom	0.8	0.3
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	1.6
Japan	QOQ: -0.1 SAAR: -0.3	-0.3
China	1.9	7.9
Euro Area	-0.5	-1.0
Germany	-0.4	-0.3
France	-0.3	0.0
Italy	-0.9	-2.9
United Kingdom	-0.2	0.2
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.7 SAAR: 2.7	1.7
Japan	QOQ: 1.3 SAAR: 5.2	0.1
China	1.6	7.7
Euro Area	-0.2	-1.1
Germany	-0.4	-1.8
France	0.0	-0.2
Italy	-0.6	-2.4
UK	0.5	0.7
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.4 SAAR: 1.8	1.8
Japan	QOQ: 0.9 SAAR: 3.4	1.2
China	1.8	7.5
Euro Area	0.3	-0.6
Germany	0.8	0.5
France	0.7	0.7
Italy	-0.3	-2.2
UK	0.7	1.8
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 1.1 SAAR: 4.5	2.3
Japan	QOQ: 0.4 SAAR: 1.4	2.3
China	2.3	7.8
Euro Area	0.1	-0.3
Germany	0.3	0.8
France	-0.1	0.3
Italy	-0.1	-1.9
UK	0.8	1.8
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.9 SAAR: 3.5	3.1
Japan	QOQ: 0.0 SAAR: -0.2	2.5
China	1.7	7.7
Euro Area	0.3	0.5
Germany	0.4	1.0
France	0.2	0.8
Italy	0.1	-0.9
UK	0.7	2.7
	IQ2014/IVQ2013	IQ2014/IQ2013
USA	QOQ -0.5 SAAR -2.1	1.9
Japan	QOQ: 1.5 SAAR: 6.1	3.0
China	1.5	7.4
Euro Area	0.2	1.0
Germany	0.7	2.5
France	0.0	0.8
Italy	-0.1	-0.4
UK	0.8	3.0
	IIQ2014/IQ2014	IIQ2014/IIQ2013
USA	QOQ 1.0 SAAR 4.2	2.5
Japan	QOQ: -1.7 SAAR: -6.8	-0.1
China	2.0	7.5
Euro Area	0.0	0.7
Germany	-0.2	0.8
France	0.0	0.1
Italy	-0.2	-0.2
UK	0.8	3.2

QOQ: Quarter relative to prior quarter; SAAR: seasonally adjusted annual rate

Source: Country Statistical Agencies http://www.census.gov/aboutus/stat_int.html

Table V-4 provides two types of data: growth of exports and imports in the latest available months and in the past 12 months; and contributions of net trade (exports less imports) to growth of real GDP.

• Japan. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations_8763.html http://cmpass ocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html and earlier http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and_4699.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html and earlier http://cmpassocreulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In Jul 2014, Japan’s exports increased 3.9 percent percent in 12 months while imports increase 2.3 percent. The second part of Table V-4 shows that net trade deducted 1.5 percentage points from Japan’s growth of GDP in IIQ2012, deducted 1.9 percentage points from GDP growth in IIIQ2012 and deducted 0.5 percentage points from GDP growth in IVQ2012. Net trade added 0.4 percentage points to GDP growth in IQ2012, 1.7 percentage points in IQ2013 and 0.2 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.6 percentage points from GDP growth in Japan. Net trade ducted 2.4 percentage points from GDP growth in Japan in IVQ2013. Net trade deducted 0.8 percentage point from GDP growth of Japan in IQ2014. Net trade added 4.4 percentage points to GDP growth in IIQ2014.

• China. In Jul 2014, China exports increased 14.5 percent relative to a year earlier and imports decreased 1.6 percent.
• Germany. Germany’s exports increased 0.9 percent in the month of Jun 2014 and increased 1.1 percent in the 12 months ending in Jun 2014. Germany’s imports increased 4.5 percent in the month of Jun and increased 4.5 percent in the 12 months ending in Jun. Net trade contributed 0.8 percentage points to growth of GDP in IQ2012, contributed 0.3 percentage points in IIQ2012, contributed 0.3 percentage points in IIIQ2012, deducted 0.5 percentage points in IVQ2012, deducted 0.3 percentage points in IQ2013 and added 0.1 percentage points in IIQ2013. Net traded deducted 0.5 percentage points from Germany’s GDP growth in IIIQ2013 and added 0.4 percentage points to GDP growth in IVQ2013. Net trade deducted 0.2 percentage points from GDP growth in IQ2014. Net trade deducted 0.2 percentage points from GDP growth in IIQ2014.
• United Kingdom. Net trade deducted 0.7 percentage points from UK value added in IQ2012, deducted 0.8 percentage points in IIQ2012, added 0.9 percentage points in IIIQ2012 and subtracted 0.4 percentage points in IVQ2012. In IQ2013, net trade added 0.6 percentage points to UK’s growth of value added and contributed 0.0 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.2 percentage points from UK growth. Net trade contributed 0.7 percentage points to UK value added in IVQ2013. Net trade contributed 0.3 percentage points to UK value added in IQ2014.
• France. France’s exports increased 1.8 percent in Jun 2014 while imports increased 2.2 percent. France’s imports increased 2.2 percent in the month of Jun 2014 and 3.2 percent relative to a year earlier. Net traded added 0.1 percentage points to France’s GDP in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and added 0.3 percentage points in IIQ2013, deducting 0.4 percentage points in IIIQ2013. Net trade added 0.3 percentage points to France’s GDP in IVQ2013 and deducted 0.0 percentage points in IQ2014. Net trade deducted 0.1 percentage points from France’s GDP growth in IIQ2014.
• United States. US exports increased 0.9 percent in Jul 2014 and goods exports increased 3.2 percent in Jan-Jul 2014 relative to a year earlier. Imports decreased 0.7 percent in Jul 2014 and goods imports increased 3.3 percent in Jan-Jul 2014 relative to a year earlier. Net trade deducted 0.04 percentage points from GDP growth in IIQ2012 and added 0.39 percentage points in IIIQ2012 and 0.79 percentage points in IVQ2012. Net trade deducted 0.08 percentage points from US GDP growth in IQ2013 and deducted 0.54 percentage points in IIQ2013. Net traded added 0.59 percentage points to US GDP growth in IIIQ2013. Net trade added 1.08 percentage points to US GDP growth in IVQ2013. Net trade deducted 1.66 percentage points from US GDP growth in IQ2014 and deduced 0.43 percentage points in IIQ2014. Industrial production increased 0.4 percent in Jul 2014 after increasing 0.4 percent in Jun 2014 and increasing 0.3 percent in May 2014, as shown in Table I-1, with all data seasonally adjusted. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production increased 0.4 percent in July for its sixth consecutive monthly gain. Manufacturing output advanced 1.0 percent in July, its largest increase since February. The production of motor vehicles and parts jumped 10.1 percent, while output in the rest of the manufacturing sector rose 0.4 percent. The production at mines moved up 0.3 percent, its ninth consecutive monthly increase. The output of utilities dropped 3.4 percent, as weather that was milder than usual for July reduced demand for air conditioning. At 104.4 percent of its 2007 average, total industrial production in July was 5.0 percent above its year-earlier level. Capacity utilization for total industry edged up 0.1 percentage point to 79.2 percent in July, a rate 1.7 percentage points above its level of a year earlier and 0.9 percentage point below its long-run (1972–2013) average.”

In the six months ending in Jul 2014, United States national industrial production accumulated increase of 3.0 percent at the annual equivalent rate of 6.2 percent, which is higher than growth of 5.0 percent in the 12 months ending in Jul 2014. Excluding growth of 0.9 percent in Feb 2014 and 0.9 percent in Mar 2014, growth in the remaining four months from Feb to Jul 2014 accumulated to 1.2 percent or 3.7 percent annual equivalent. Industrial production stagnated in one of the past six months. Industrial production expanded at annual equivalent 4.5 percent in the most recent quarter from May to Jul 2014 and at 7.9 percent in the prior quarter Feb-Apr 2014. Business equipment accumulated growth of 5.4 percent in the six months from Feb to Jul 2014 at the annual equivalent rate of 11.1 percent, which is higher than growth of 7.0 percent in the 12 months ending in Jul 2014. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for total industry edged up 0.1 percentage point to 79.2 percent in July, a rate 1.7 percentage points above its level of a year earlier and 0.9 percentage point below its long-run (1972–2013) average.” United States industry apparently decelerated to a lower growth rate with possible acceleration in past months.

United States industry apparently decelerated to a lower growth rate with possible acceleration in past months. Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 19.9 percent from the trough in Apr 2009 to Dec 2013. Manufacturing grew 22.4 percent from the trough in Apr 2009 to Jul 2014. Manufacturing output in Jul 2014 is 4.4 percent below the peak in Jun 2007. Growth at trend in the entire cycle from IVQ2007 to IIQ2014 would have accumulated to 22.1 percent. GDP in IIQ2014 would be $18,305.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,310.7 billion than actual $15,994.3 billion. There are about two trillion dollars of GDP less than at trend, explaining the 26.9 million unemployed or underemployed equivalent to actual unemployment of 16.4 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2014/07/financial-valuations-twenty-seven.html). US GDP in IIQ2014 is 12.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $15,994.3 billion in IIQ2014 or 6.7 percent at the average annual equivalent rate of 1.0 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jul 2014. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 122.8881 in Jul 2014. The actual index NSA in Jul 2014 is 98.4978, which is 19.8 percent below trend. Manufacturing output grew at average 2.3 percent between Dec 1986 and Dec 2013, raising the index at trend to 115.2650 in Jul 2014. The output of manufacturing at 98.4978 in Jul 2014 is 14.5 percent below trend under this alternative calculation.

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

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	0.9 Jul	3.2 Jan-Jul	0.7 Jun	3.3 Jan-Jul
Japan		Jul 3.9 Jun -2.0 May 2014 -2.7 Apr 2014 5.1 Mar 2014 1.8 Feb 2014 9.5 Jan 2014 9.5 Dec 2013 15.3 Nov 2013 18.4 Oct 2013 18.6 Sep 2013 11.5 Aug 2013 14.7 Jul 2013 12.2 Jun 2013 7.4 May 2013 10.1 Apr 2013 3.8 Mar 2013 1.1 Feb 2013 -2.9 Jan 2013 6.4 Dec -5.8 Nov -4.1 Oct -6.5 Sep -10.3 Aug -5.8 Jul -8.1		Jul 2.3 Jun 8.4 May 2014 -3.6 Apr 2013 3.4 Mar 2014 18.1 Feb 2014 9.0 Jan 2014 25.0 Dec 2013 24.7 Nov 2013 21.1 Oct 2013 26.1 Sep 2013 16.5 Aug 2013 16.0 Jul 2013 19.6 Jun 2013 11.8 May 2013 10.0 Apr 2013 9.4 Mar 2013 5.5 Feb 2013 7.3 Jan 2013 7.3 Dec 1.9 Nov 0.8 Oct -1.6 Sep 4.1 Aug -5.4 Jul 2.1
China		2014 14.5 Jul 7.2 Jun 7.0 May 0.9 Apr -6.6 Mar -18.1 Feb 10.6 Jan 2013 4.3 Dec 12.7 Nov 5.6 Oct -0.3 Sep 7.2 Aug 5.1 Jul -3.1 Jun 1.0 May 14.7 Apr 10.0 Mar 21.8 Feb 25.0 Jan		2014 -1.6 Jul 5.5 Jun -1.6 May -0.8 Apr -11.3 Mar 10.1 Feb 10.0 Jan 2013 8.3 Dec 5.3 Nov 7.6 Oct 7.4 Sep 7.0 Aug 10.9 Jul -0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb 28.8 Jan
Euro Area	2.9 12-M Jun	0.9 Jan-Jun	2.5 12-M Jun	0.1 Jan-Jun
Germany	0.9 Jun CSA	1.1 Jun	4.5 Jun CSA	2.1 Jun
France Jun	1.8	2.2	2.2	3.2
Italy May	2.2	0.2	3.2	0.9
UK	-2.9 Apr	-2.9 Feb-Apr 14 /Feb-Apr 13	0.6 Apr	-3.7 Feb-Apr 14 13/Feb-Apr 13
Net Trade % Points GDP Growth	% Points
USA	IIQ2014 -0.43 IQ2014 -1.66 IVQ2013 1.08 IIIQ2013 0.59 IIQ2013 -0.54 IQ2013 -0.08 IVQ2012 +0.79 IIIQ2012 0.39 IIQ2012 -0.04 IQ2012 -0.11
Japan	0.4 IQ2012 -1.5 IIQ2012 -1.9 IIIQ2012 -0.5 IVQ2012 1.7 IQ2013 0.2 IIQ2013 -1.6 IIIQ2013 -2.4 IVQ2013 -0.8 IQ2014 4.4 IIQ2014
Germany	IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.3 IIQ2013 0.1 IIIQ2013 -0.5 IVQ2013 0.4 IQ2014 -0.2 IIQ2014 -0.2
France	0.1 IIIQ2012 0.1 IVQ2012 -0.1 IQ2013 0.3 IIQ2013 -0.4 IIIQ2013 0.3 IVQ2013 0.0 IQ2014 -0.1 IIQ2014
UK	-0.7 IQ2012 -0.8 IIQ2012 +0.9 IIIQ2012 -0.4 IVQ2012 0.6 IQ2013 0.0 IIQ2013 -1.2 IIIQ2013 0.7 IVQ2013 0.3 IQ2014

Sources: Country Statistical Agencies http://www.census.gov/foreign-trade/ http://www.bea.gov/iTable/index_nipa.cfm

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, decreased to 55.1 in Aug from 55.5 in Jul, indicating expansion at slightly slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa0f580159104585b0d16e2fd5a30f21). This index has remained above the contraction territory of 50.0 during 61 consecutive months. The employment index decreased from 51.6 in Jul to 51.4 in Aug with input prices rising at faster rate, new orders increasing at faster rate and output increasing at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa0f580159104585b0d16e2fd5a30f21). David Hensley, Director of Global Economic Coordination at JP Morgan, finds growing world economic output (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa0f580159104585b0d16e2fd5a30f21). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 52.6 in Aug from 52.4 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/f97bd4c02a58405dac4ce0b0afb4f57a). New export orders expanded for the fourteenth consecutive month (http://www.markiteconomics.com/Survey/PressRelease.mvc/f97bd4c02a58405dac4ce0b0afb4f57a). The HSBC Brazil Composite Output Index, compiled by Markit, increased from 49.3 in Jul to 49.6 in Aug, indicating marginal decline in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/e7f67861c29147ada8e7eaf582bbaf47). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 50.2 in Jul to 49.2 in Aug, indicating marginally contracting services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/e7f67861c29147ada8e7eaf582bbaf47). André Loes, Chief Economist, Brazil, at HSBC, finds challenges to economic activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/e7f67861c29147ada8e7eaf582bbaf47). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased marginally from 49.1 in Jul to 50.2 in Aug, indicating moderate improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/fee51b0fff3249848696a237672ec967). André Loes, Chief Economist, Brazil at HSBC, finds improving industrial activity in Brazil but after effects of the World Cup in Jun and Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/fee51b0fff3249848696a237672ec967).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted increased to 58.0 in Aug from 55.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/5412a5fceb6b4d4794ccb3fd07bd9f72). New export orders increased at a faster rate of expansion. Tim More, Senior Economist at Markit, finds that manufacturing activity is expansing at the highest rate in more than four years (http://www.markiteconomics.com/Survey/PressRelease.mvc/5412a5fceb6b4d4794ccb3fd07bd9f72). The Markit Flash US Services PMI™ Business Activity Index decreased from 60.8 in Jul to 58.5 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/9f51d7a717f841d191c745ada1947cd6). Tim Moore, Senior Economist at Markit, finds that the surveys are consistent with sustained strong growth of GDP in IIIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9f51d7a717f841d191c745ada1947cd6). The Markit US Composite PMI™ Output Index of Manufacturing and Services decreased to 59.7 in Aug from 60.6 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/7040f3cd6f2241ea9db475d3ff3a7e9c). The Markit US Services PMI™ Business Activity Index decreased from 60.8 in Jul to 59.5 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/7040f3cd6f2241ea9db475d3ff3a7e9c). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at a high rate in IIIQ2014 around the annual rate of 4.2 percent in IIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/7040f3cd6f2241ea9db475d3ff3a7e9c). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 57.9 in Aug from 55.8 in Jul, which indicates expansion at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/b48149c3c59b4c53a64d791f0fd3bfe5). Growth of export orders continued. Tim Moore, Senior Economist at Markit, finds that the index suggests output growth with gains in employment and foreign demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/b48149c3c59b4c53a64d791f0fd3bfe5). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 1.9 percentage points from 57.1 in Jul to 59.0 in Aug, which indicates growth at higher rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 3.3 percentage points from 63.4 in Jul to 66.7 in Aug. The index of new export orders increased 2.0 percentage point from 53.0 in Jul to 55.0 in Aug, growing at a faster rate. The Non-Manufacturing ISM Report on Business^® PMI increased 0.9 percentage points from 58.7 in Jul to 59.6 in Aug, indicating growth of business activity/production during 61 consecutive months, while the index of new orders decreased 1.1 percentage points from 64.9 in Jul to 63.8 in Aug (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	Jul 12 months NSA ∆%: 2.0; ex food and energy ∆%: 1.9 Jul month SA ∆%: 0.1; ex food and energy ∆%: 0.1 Blog 8/24/14
Producer Price Index	Finished Goods Jul 12-month NSA ∆%: 2.9; ex food and energy ∆% 1.8 Jul month SA ∆% = 0.1; ex food and energy ∆%: 0.1 Final Demand Jul 12-month NSA ∆%: 1.7; ex food and energy ∆% 1.6 Jul month SA ∆% = 0.1; ex food and energy ∆%: 0.2 Blog 8/17/14 8/24/14
PCE Inflation	Jul 12-month NSA ∆%: headline 1.6; ex food and energy ∆% 1.5 Blog 8/31/14
Employment Situation	Household Survey: Aug Unemployment Rate SA 6.1% Blog calculation People in Job Stress Jun: 26.9 million NSA, 16.4% of Labor Force Establishment Survey: Aug Nonfarm Jobs +142,000; Private +134,000 jobs created  Jul 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.1 Blog 9/7/14
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 Jun 2014 5.555 million lower by 0.490 million than 6.045 million in Jun 2006 Blog 8/17/14
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.6 IIQ2012/IIQ2011 2.3 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 2.5 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 4.2 Blog 8/31/14
Real Private Fixed Investment	SAAR IIQ2014 8.1 ∆% IVQ2007 to IIQ2014: 0.0% Blog 8/31/14
Corporate Profits	IIQ2014 SAAR: Corporate Profits 8.0; Undistributed Profits 24.4 Blog 8/31/14
Personal Income and Consumption	Jul month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.1 Real Personal Consumption Expenditures (RPCE): -0.2 12-month Jul NSA ∆%: RDPI: 2.6; RPCE ∆%: 2.0 Blog 8/31/14
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	Jul month SA ∆%: 0.4 Jul 12 months SA ∆%: 5.0 Manufacturing Jul SA ∆% 1.0 Jul 12 months SA ∆% 4.9, NSA 4.2 Capacity Utilization: 79.2 Blog 8/17/14
Productivity and Costs	Nonfarm Business Productivity IIQ2014∆% SAAE 2.3; IIQ2014/IIQ2013 ∆% 1.1; Unit Labor Costs SAAE IIQ2014 ∆% -0.1; IIQ2014/IIQ2013 ∆%: 1.7 Blog 9/7/14
New York Fed Manufacturing Index	General Business Conditions From Jul 25.60 to Aug 14.69 New Orders: From Jul 18.77 to Aug 14.14 Blog 8/17/14
Philadelphia Fed Business Outlook Index	General Index from Jul 23.9 to Aug 28.0 New Orders from Jul 34.2 to Aug 14.7 Blog 8/24/14
Manufacturing Shipments and Orders	New Orders SA Jul ∆% 10.5 Ex Transport -0.8 Jan-Jul NSA New Orders ∆% 4.5 Ex transport 2.5 Blog 9/7/14
Durable Goods	Jul New Orders SA ∆%: 22.6; ex transport ∆%: -0.8 Jan-Jul 14/Jan-Jul 13 New Orders NSA ∆%: 8.2; ex transport ∆% 4.8 Blog 8/31/14
Sales of New Motor Vehicles	Jan-Aug 2014 11,185,299; Jan-Aug 2013 10,647,486. Aug 14 SAAR 17.53 million, Jul 14 SAAR 16.48 million, Aug 2013 SAAR 15.94 million Blog 9/7/14
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	Jun 14 12-M NSA ∆%: Sales Total Business 6.1; Manufacturers 4.6 Retailers 4.2; Merchant Wholesalers 9.4 Blog 8/17/14
Sales for Retail and Food Services	Jan-Jul 2014/Jan-Jun 2013 ∆%: Retail and Food Services 3.7; Retail ∆% 3.6 Blog 8/17/14
Value of Construction Put in Place	Jul SAAR month SA ∆%: 1.8 Jun 12-month NSA: 6.4 Blog 9/7/14
Case-Shiller Home Prices	Jun 2014/Jun 2013 ∆% NSA: 10 Cities 8.1; 20 Cities: 8.1 ∆% Jun SA: 10 Cities -0.1 ; 20 Cities: -0.2 Blog 8/31/14
FHFA House Price Index Purchases Only	Jun SA ∆% 0.4; 12 month NSA ∆%: 5.2 Blog 8/31/14
New House Sales	Jul 2014 month SAAR ∆%: minus 0.7 Jan-Jul 2014/Jan-Jul 2013 NSA ∆%: -4.9 Blog 8/31/14
Housing Starts and Permits	Jul Starts month SA ∆% minus 15.7; Permits ∆%: minus 8.1 Jan-Jul 2014/Jan-Jul 2013 NSA ∆% Starts 9.1; Permits  ∆% 3.2 Blog 8/24/14
Trade Balance	Balance Jul SA -$40,546 million versus Jun -$40,810 million Exports Jul SA ∆%: 0.9 Imports Jul SA ∆%: 0.7 Goods Exports Jan-Jul 2014/Jan-Jul 2013 NSA ∆%: 3.2 Goods Imports Jan-Jul 2014/Jan-Jul 2012 NSA ∆%: 3.3 Blog 9/7/14
Export and Import Prices	Jul 12-month NSA ∆%: Imports 0.8; Exports 0.4 Blog 8/17/14
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	Jun Net Foreign Purchases of Long-term US Securities: minus $18.7 billion Major Holders of Treasury Securities: China $1268 billion; Japan $1220 billion; Total Foreign US Treasury Holdings Jun $6013 billion Blog 8/17/14
Treasury Budget	Fiscal Year 2014/2013 ∆% Jul: Receipts 8.0; Outlays 1.2; Individual Income Taxes 4.9 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Blog 8/17/2014
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 2039: Long-term Debt/GDP 106% Blog 8/26/12 11/18/12 2/10/13 9/22/13 2/16/14 8/24/14
Commercial Banks Assets and Liabilities	Jul 2014 SAAR ∆%: Securities 11.5 Loans 9.q Cash Assets 6.8 Deposits 7.9 Blog 8/24/14
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
Collapse of United States Dynamism of Income Growth and Employment Creation	Blog 8/24/14

Links to blog comments in Table USA:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/24/14 http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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 Aug 2014, light vehicle sales accumulated to 11,185,299, which is higher by 5.1 percent relative to 10,647,486 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 17.53 million in Aug 2014, higher than 16.48 million in Jun 2014 and higher than 15.94 million in Aug 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 1.2 percent in Jul 2014 and increased 0.8 percent in Jun 2014 after decreasing 0.1 percent in May 2014. New orders increased 10.5 percent in Jul 2014, after increasing 1.5 percent in Jun 2014 and decreasing 0.6 percent in May 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 decreased 0.8 percent in Jul 2014 after increasing 1.4 percent in Jun 2014 and decreasing 0.2 percent in May 2014. Capital goods new orders, indicating investment, increased 52.5 percent in Jul 2014 after increasing 4.9 percent in Jun 2014 and decreasing 5.2 percent in May 2014. New orders of nondefense capital goods increased 60.6 percent in Jul 2014 after increasing 5.1 percent in Jun 2014 and decreasing 2.3 percent in May 2014. Excluding more volatile aircraft, capital goods orders decreased 0.7 percent in Jul 2014 after increasing 5.4 percent in Jun 2014 and decreasing 1.4 percent in May 2014.

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

	Jul 2014  ∆%	Jun 2014 ∆%	May 2013  ∆%
Total
S	1.2	0.8	-0.1
NO	10.5	1.5	-0.6
Excluding Transport
S	0.1	0.7	-0.1
NO	-0.8	1.4	-0.2
Excluding Defense
S	1.2	0.8	-0.1
NO	11.3	1.5	0.0
Durable Goods
S	3.5	1.2	0.0
NO	22.6	2.7	-0.9
Machinery
S	3.0	-0.4	0.0
NO	-1.2	5.0	-1.0
Computers & Electronic Products
S	2.4	2.2	-1.5
NO	-1.7	3.8	-1.3
Computers
S	-7.1	4.7	3.3
NO	-14.7	-15.7	102.0
Transport Equipment
S	-8.1	1.5	-0.1
NO	74.1	2.2	-2.6
Automobiles
S	3.1	1.2	8.4
Motor Vehicles
S	7.8	0.9	0.5
NO	7.3	0.9	1.0
Nondefense Aircraft
S	3.3	14.2	-5.2
NO	317.3	11.2	-2.9
Capital Goods
S	1.3	2.6	-1.0
NO	52.5	4.9	-5.2
Nondefense Capital Goods
S	-1.3	3.1	-1.0
NO	60.6	5.1	-2.3
Capital Goods ex Aircraft
S	1.4	1.0	0.1
NO	-0.7	5.4	-1.4
Nondurable Goods
S	-0.9	0.4	-0.2
NO	-0.9	0.4	-0.2

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-Jul 2014 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Jul 2014 total $3465.5 billion and new orders total $3510.7 billion, growing respectively by 2.9 percent and 4.5 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 2.6 percent and new orders grew 2.5 percent. Durable goods shipments reached $1659.5 billion in Jan-Jul 2014, or 47.9 percent of the total, growing by 4.8 percent, and new orders $1704.7 billion, or 48.6 percent of the total, growing by 8.2 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $1806.0 billion or 52.1 percent of the total, growing by 1.2 percent. Capital goods have relatively high value of $594.2 billion for shipments, growing 3.9 percent, and new orders $674.3 billion, increasing 11.0 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $473.7 billion, growing 4.2 percent, and new orders $494.8 billion, increasing 4.2 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.0 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-Jul 2014	Shipments	∆% 2014/ 2013	New Orders	∆% 2014/ 2013
Total	3,465,501	2.9	3,510,695	4.5
Excluding Transport	2,981,104	2.6	2,956,145	2.5
Excluding Defense	3,385,712	3.0	3,429,986	4.3
Durable Goods	1,695,466	4.8	1,704,660	8.2
Machinery	251,634	4.9	263,983	7.8
Computers & Electronic Products	198,145	5.4	150,207	3.6
Computers	3,024	-13.6	3,470	-6.2
Transport Equipment	484,397	4.6	554,550	16.2
Automobiles	63,998	-11.6
Motor Vehicles	146,785	9.6	146,800	9.9
Nondefense Aircraft	81,059	9.3	148,584	48.8
Capital Goods	594,165	3.9	674,271	11.0
Nondefense Capital Goods	529,176	4.7	609,135	10.8
Capital Goods ex Aircraft	473,718	4.2	494,817	4.2
Nondurable Goods	1,806,035	1.2	1,806,035	1.2
Food Products	451,381	6.0
Petroleum Refineries	479,534	-0.7
Chemical Products	444,315	-1.5

Note: Transport: transportation Source: US Census Bureau

Source: US Census Bureau

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

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

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

Source: US Census Bureau

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

Construction spending at seasonally adjusted annualized rate (SAAR) reached $981/3 billion in Jul 2014, which was higher by 1.8 percent than in the prior month of Jun 2014, as shown in Table VA-4. Residential investment, with $363.5 billion accounting for 37.0 percent of total value of construction, increased 0.7 percent in Jul and nonresidential investment, with $617.8 billion accounting for 63.0 percent of the total, increased 2.5 percent. Public construction increased 3.0 percent while private construction increased 1.4 percent. Data in Table VA-6 show that nonresidential construction at $617.8 billion is much higher in value than residential construction at $363.5 billion while total private construction at $701.7 billion is much higher than public construction at $279.6 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 1.03 percentage points to GDP growth in IIQ2014 and residential construction added 0.22 percentage points (http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html).

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

Jul 2014	Jul 2014 SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	981,305	1.8	8.2
Residential	363,473	0.7	7.6
Nonresidential	617,832	2.5	8.6
Total Private	701,657	1.4	10.9
Private Residential	358,054	0.7	8.0
New Single Family	187,165	0.5	9.4
New Multi-Family	43,287	0.2	41.0
Private Nonresidential	343,603	2.1	14.1
Total Public	279,648	3.0	2.1
Public Residential	5,420	4.2	-15.9
Public Nonresidential	274,229	3.0	2.5

SAAR: seasonally adjusted annual rate; B: billions

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

Further information on construction spending is provided in Table VA-5. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAARs and their monthly changes are provided in the final two columns. There has been improvement in construction in the US. There are only five declines in the monthly rate from Dec 2011 to Jul 2014. Growth in 12 months fell from 8.2 percent in Dec 2012 to 6.4 percent in Jul 2014.

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

	Value NSA Month $ Millions	12-Month ∆% NSA	Value SAAR $ Millions	Month ∆% SA*
Jul 2014	88,639	6.4	981,305	1.8
Jun	86,697	5.8	963,675	-0.9
May	82,778	7.6	972,844	1.3
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	73,571	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-6. Construction spending in Jan-Jul 2014, not seasonally adjusted, reached $535.4 billion, which is higher by 7.9 percent than $496.3 billion in the same period in 2013. The depth of the contraction is shown by the decline of construction spending from $669.2 billion in Jan-Jul 2006 to $535.4 billion in the same period in 2014, or decline by minus 20.0 percent. The decline in inflation-adjusted terms is much higher. The all-items not seasonally adjusted CPI (consumer price index) increased from 203.5 in Jul 2006 to 238.250 in Jul 2014 (http://www.bls.gov/cpi/data.htm) or by 17.1 percent. The comparable decline from Jan-Jul 2005 to Jan-Jul 2014 is minus 11.7 percent. Construction spending in Jan-Jul 2014 increased by 9.2 percent relative to the same period in 2003. Construction spending is higher by 2.4 percent in Jan-Jul 2014 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

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

Jan-Jul 2014 $ MM	535,421
Jan-Jul 2013	496,326
∆% to 2014	7.9
Jan-Jul 2012 $ MM	473,635
∆% to 2014	13.0
Jan-Jul 2011 $ MM	430,438
∆% to 2014	24.4
Jan-Jul 2010 $MM	453,216
∆% to 2014	18.1
Jan-Jul 2009	522,814
∆% to 2014	2.4
Jan-Jul 2006 $ MM	669,240
∆% to 2014	-20.0
Jan-Jul 2005 $ MM	606,101
∆% to 2014	-11.7
Jan-Jul 2003 $ MM	480,368
∆% to 2014	9.2

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

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

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

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

Monthly construction spending in the US in Feb-Jul not seasonally adjusted is shown in Table VA-7 for the years between 2002 and 2014. The value of $88.6 billion in Jul 2014 is higher by 6.4 percent than $83.3 billion in Jul 2013. Construction fell by 18.2 percent from the peak of $108.4 billion in Jul 2006 to $88.6 billion in Jul 2014. The data are not adjusted for inflation or changes in quality.

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

Year	Feb	Mar	Apr	May	Jun	Jul
2002	58,588	63,782	69,504	73,384	77,182	78,863
2003	58,526	64,506	69,638	74,473	80,377	82,971
2004	64,138	73,238	78,354	83,736	89,932	93,614
2005	72,048	81,345	85,485	92,959	99,632	103,158
2006	81,478	92,855	95,324	102,495	107,607	108,423
2007	79,177	88,905	93,375	100,534	105,399	107,090
2008	77,253	82,815	87,791	92,843	96,411	98,563
2009	66,490	71,770	75,355	76,971	81,573	83,528
2010	54,112	60,363	66,575	69,059	74,200	73,233
2011	50,590	56,572	61,475	65,827	72,850	72,112
2012	56,761	61,772	67,234	73,571	79,262	78,457
2013	59,188	64,404	70,900	76,938	81,961	83,299
2014	63,817	70,064	76,940	82,778	86,697	88,639

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

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

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

Source: US Census Bureau

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

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

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

Year	Apr	May	Jun	Jul
2002	858,240	850,935	846,777	847,129
2003	859,459	866,814	880,865	891,264
2004	967,761	974,158	983,072	1,006,119
2005	1,058,365	1,078,586	1,089,505	1,109,691
2006	1,183,485	1,180,059	1,172,932	1,165,093
2007	1,159,124	1,168,195	1,166,892	1,154,018
2008	1,092,939	1,091,569	1,075,482	1,067,380
2009	931,610	914,093	903,987	901,735
2010	825,626	817,745	817,869	790,519
2011	772,469	774,148	797,272	789,632
2012	842,898	861,913	873,069	864,687
2013	884,966	896,603	900,334	906,644
2014	960,349	972,844	963,675	981,305

Source: US Census Bureau

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

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

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

Source: US Census Bureau

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf) 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™ improved with the Flash Japan Manufacturing PMI™ increasing from 50.5 in Jul to 52.4 in Aug and the Flash Japan Manufacturing Output Index™ increasing from 49.8 in Jul to 53.2 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1f27ed3360242288e275d1fd7414f37). New export orders increased at a faster pace. Amy Brownbill, Economist at Markit, finds improving Japan’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/f1f27ed3360242288e275d1fd7414f37). Private-sector activity in Japan improved marginally with the Markit Composite Output PMI Index increasing from 50.2 in Jul to 50.8 in Aug, indicating modest improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ea363e87fca480583b5bb557fc2e190). The Markit Business Activity Index of Services decreased to 49.9 in Aug from 50.4 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ea363e87fca480583b5bb557fc2e190). Amy Brownbill, Ecoomist at Markit and author of the report, finds modest deterioration of private-sector activity but with growth of new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ea363e87fca480583b5bb557fc2e190). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased from 50.5 in Jul to 52.2 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/6ee8cf09ff8a48a7a23f407f821b8d28). New orders, output and foreign orders increased. Amy Brownbill, Economist at Markit and author of the report, finds higher growth after the increase of the sales tax in Apr with output improving and new orders increasing (http://www.markiteconomics.com/Survey/PressRelease.mvc/6ee8cf09ff8a48a7a23f407f821b8d28).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	Jul ∆% 0.3 12 months ∆% 4.3 Blog 8/17/14
Consumer Price Index	Jul NSA ∆% 0.0; Jul 12 months NSA ∆% 3.4 Blog 8/31/14
Real GDP Growth	IIQ2014 ∆%: -1.7 on IQ2014;  IIQ2014 SAAR -6.8; ∆% from quarter a year earlier: -0.1 % 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 8/17/14
Employment Report	Jul Unemployed 2.48 million Change in unemployed since last year: minus 70 thousand Unemployment rate: 3.8 % Blog 8/31/14
All Industry Indices	Jun month SA ∆% -0.4 12-month NSA ∆% -0.5 Blog 8/24/14
Industrial Production	Jul SA month ∆%: 0.2 12-month NSA ∆% -0.9 Blog 8/31/14
Machine Orders	Total Jun ∆% -17.1 Private ∆%: 0.5 Jun ∆% Excluding Volatile Orders 8.8 Blog 8/17/14
Tertiary Index	Jun month SA ∆% 0.1 Jun 12 months NSA ∆% minus 1.5 Blog 8/17/14
Wholesale and Retail Sales	Jul 12 months: Total ∆%: 0.1 Wholesale ∆%: -0.2 Retail ∆%: 0.5 Blog 8/31/14
Family Income and Expenditure Survey	Jul 12-month ∆% total nominal consumption -2.0, real -5.9 Blog 8/31/14
Trade Balance	Exports Jul 12 months ∆%: minus 3.9 Imports Jul 12 months ∆% 2.3 Blog 8/24/14

Links to blog comments in Table JPY:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/24/14 http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.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

2/23/14 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 moved to 54.4 in Aug 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 50.0 in Aug 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Aug 2014	54.4	50.0	52.2	48.3	61.2
Jul	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 54.4 in Aug 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 51.1 in Aug 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 increased to 52.5 in Aug 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
Aug 2014	51.1	53.2	52.5	48.6	48.2	50.0
Jul	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 moved to 51.1 in Aug 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/7e343c74b29f40e9bbaf5ed95d6a04a7) is deteriorating. The overall Flash HSBC China Manufacturing PMI^™ decreased from 51.7 in Jul to 50.3 in Aug, while the Flash HSBC China Manufacturing Output Index decreased from 52.8 in Jul to 51.3 in Aug, indicating expansion at the lowest rate in three months. Exports orders indicate expansion at slower rate. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need for monetary and fiscal stimulus (http://www.markiteconomics.com/Survey/PressRelease.mvc/7e343c74b29f40e9bbaf5ed95d6a04a7). The HSBC China Services PMI^™, compiled by Markit, shows improvement in business activity in China with the HSBC Composite Output, combining manufacturing and services, increasing from 51.6 in Jul to 52.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/e45ad099b00744fbb41b746f47efe4ef). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need of easing policies in consolidating growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/e45ad099b00744fbb41b746f47efe4ef). The HSBC China Services Business Activity index increased from 50.0 in Jul to 54.1 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/e45ad099b00744fbb41b746f47efe4ef). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that the services PMI rose from 50.0 in Jul, which was the lowest in the history of the index since 2005, to 54.1 in Aug that is the highest in seventeen months (http://www.markiteconomics.com/Survey/PressRelease.mvc/e45ad099b00744fbb41b746f47efe4ef). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, decreased to 50.2 in Aug from 51.7 in Jul, indicating near neutral manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/8522abed75f6421e9351b4633808ce90). New export orders and total new orders softened. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds weakening demand in China with possible need of policy enhancement (http://www.markiteconomics.com/Survey/PressRelease.mvc/8522abed75f6421e9351b4633808ce90). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Jul 12-month ∆%: minus 0.9 Jul month ∆%: -0.1 Blog 8/17/14
Consumer Price Index	Jul month ∆%: 0.1 Jul 12 months ∆%: 2.3 Blog 8/17/14
Value Added of Industry	Jul month ∆%: 0.68 Jan-Jul 2014/Jan-Jul 2013 ∆%: 8.8 Blog 8/17/14
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-Jul 2014 ∆%: 17.0 Real estate development: 13.7 Blog 8/17/14
Retail Sales	Jul month ∆%: 0.86 Jul 12 month ∆%: 12.2 Jan-Jul ∆%: 12.1 Blog 8/17/14
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:

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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

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

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	9.6	2.9
2000	2.2	8.8	3.8
2001	2.4	8.2	2.0
2002	2.3	8.5	0.9
2003	2.1	9.0	0.7
2004	2.2	9.2	2.2
2005	2.2	9.1	1.7
2006	2.2	8.4	3.3
2007	2.2	7.5	3.0
2008	3.3	7.6	0.4
2009	0.3	9.6	-4.5
2010	1.6	10.1	1.9
2011	2.7	10.1	1.6
2012	2.5	11.3	-0.7
2013*	1.3	12.0	-0.4
2014*			1.1
2015*			1.7

*EUROSTAT forecast Source: EUROSTAT

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

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

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

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

	Euro Area	Germany	France	Italy	Spain
2015*	1.7	1.9	1.7	1.2	1.7
2014*	1.1	1.7	0.9	0.7	0.5
2013*	-0.4	0.4	0.2	-1.9	-1.2
2012	-0.7	0.7	0.0	-2.4	-1.6
2011	1.6	3.3	2.0	0.4	0.1
2010	1.9	4.0	1.7	1.7	-0.2
2009	-4.5	-5.1	-3.1	-5.5	-3.8
2008	0.4	1.1	-0.1	-1.2	0.9
2007	3.0	3.3	2.3	1.7	3.5
2006	3.3	3.7	2.5	2.2	4.1
2005	1.7	0.7	1.8	0.9	3.6
2004	2.2	1.2	2.5	1.7	3.3
2003	0.7	-0.4	0.9	0.0	3.1
2002	0.9	0.0	0.9	0.5	2.7
2001	2.0	1.5	1.8	1.9	3.7
2000	3.8	3.1	3.7	3.7	5.0
1999	2.9	1.9	3.3	1.5	4.7
1998	2.8	1.9	3.4	1.4	4.5
1997	2.6	1.7	2.2	1.9	3.9
1996	1.5	0.8	1.1	1.1	2.5

Source: EUROSTAT

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

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

The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI^®, combining activity in manufacturing and services, decreased from 53.8 in Jun to 52.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/df839e9df3334511bc07ff6b990e4ce6). Rob Dobson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests that the index is consistent with growth of GDP about 0.3 to 0.4 percent in IIIQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/df839e9df3334511bc07ff6b990e4ce6). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP decreased from 53.8 in Jul to 52.5 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/0bdd0b3b190a4eee9180e1180d572ce5). Chris Williamson, Chief Economist at Markit, finds slowing growth of GDP (http://www.markiteconomics.com/Survey/PressRelease.mvc/0bdd0b3b190a4eee9180e1180d572ce5). The Markit Eurozone Services Business Activity Index decreased from 54.2 in Jul to 52.5 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/0bdd0b3b190a4eee9180e1180d572ce5). The Markit Eurozone Manufacturing PMI^® decreased to 50.7 in Aug from 51.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/057f1e9c278b4c53baae13c9bd9e9ceb). New orders and export orders increased for the fourteenth consecutive month. Rob Dobson, Senior Economist at Markit, finds slowing industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/057f1e9c278b4c53baae13c9bd9e9ceb). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IIQ2014 ∆% 0.0; IIQ2014/IIQ2013 ∆% 0.7 Blog 9/7/14
Unemployment	Jul 2014: 11.5 % unemployment rate; Jul 2014: 18.409 million unemployed Blog 8/31/14
HICP	Jul month ∆%: -0.7 12 months Jul ∆%: 0.4 Blog 8/17/14
Producer Prices	Euro Zone industrial producer prices Jul ∆%: -0.1 Jul 12-month ∆%: -1.1 Blog 9/7/14
Industrial Production	Jun month ∆%: -0.3; Jun 12 months ∆%: 0.0 Blog 8/17/14
Retail Sales	Jul month ∆%: -0.4 Jul 12 months ∆%: 0.8 Blog 9/7/14
Confidence and Economic Sentiment Indicator	Sentiment 100.6 Aug 2014 Consumer minus 10.0 Aug 2014 Blog 8/31/14
Trade	Jan-Jun 2014/Jan-Jun 2013 Exports ∆%: 0.9 Imports ∆%: 0.1 Jun 2014 12-month Exports ∆% 2.8 Imports ∆% 2.5 Blog 8/24/14

Links to blog comments in Table EUR:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/24/14 http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

Table VD-1 provides percentage changes of euro area real GDP in a quarter relative to the prior quarter. Real GDP fell 0.2 percent in IVQ2011, fell 0.1 in IQ2012 and fell in the final three quarters of 2012: 0.3 percent in IIQ2012, 0.2 percent in IIIQ2012 and 0.5 percent in IVQ2012. GDP fell 0.2 percent in IQ2013 and increased 0.3 percent in IIQ2013. Growth slowed at 0.1 percent in IIIQ2013. GDP increased 0.3 percent in IVQ2013. The GDP of the euro area increased 0.2 percent in IQ2014 and changed 0.0 percent in IIQ2014. The global recession manifested in the euro area in five consecutive quarterly declines from IIQ2008 to IIQ2009. The strongest impact was contraction of 2.9 percent in IQ2009. Recovery began in IIIQ2009 with cumulative growth of 4.1 percent to IQ2011 or at the annual equivalent rate of 2.3 percent. Growth was much more vigorous from IVQ2003 to IQ2008.

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

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

Source: EUROSTAT

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

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

Table VD-2 provides percentage change in real GDP in the euro area in a quarter relative to the same quarter a year earlier. Growth rates were quite strong from 2004 to 2007. There were five consecutive quarters of sharp declines in GDP in a quarter relative to the same quarter a year earlier from IVQ2008 to IVQ2009 with sharp contractions of 5.5 percent in IQ2009, 5.4 percent in IIQ2009 and 4.4 percent in IIIQ2009. Growth rates decline in magnitude with 1.5 percent in IIIQ2011, 0.7 percent in IVQ211 and -0.2 percent in IQ2012 followed by contractions of 0.5 percent in IIQ2012, 0.7 percent in IIIQ2012 and 1.0 percent in IVQ2012. GDP contracted 1.1 percent in IQ2013 relative to a year earlier and contracted 0.6 percent in IIQ2013 relative to a year earlier. Euro area GDP contracted 0.3 percent in IIIQ2013 relative to a year earlier. The GDP of the euro area increased 0.5 percent in IVQ2013 relative to a year earlier. The GDP of the euro area increased 1.0 percent in IQ2014 relative to a year earlier. In IIQ2014, the GDP of the euro area increased 0.7 percent relative to a year earlier.

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

Year Earlier, Seasonally and Working Day Adjusted ∆%

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

Source: EUROSTAT

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

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

Table VD-3 provides growth of euro area real GDP in a quarter relative to the same quarter a year earlier not seasonally adjusted. GDP increased 0.1 percent in IIIQ2013 NSA relative to a year earlier and increased 0.5 percent in IVQ2013 relative to a year earlier. GDP increased 0.9 percent in IQ2014 relative to a year earlier and 0.5 percent in IIQ2014 relative to a year earlier. GDP fell 0.5 percent in IIQ2013 relative to a year earlier without seasonal adjustment and declined 1.8 percent in IQ2013 relative to a year earlier without seasonal adjustment. Growth rates in 2006 and 2007 were quite strong followed by sharp declines of 5.7 percent in IQ2009, 5.9 percent in IIQ2009 and 4.2 percent in IQ2009.

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

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

Source: EUROSTAT

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

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

Table VD-4 provides GDP growth in IIQ2014 and relative to the same quarter a year earlier with SAWDA (seasonal and working day adjustment) and NSA (not seasonally adjusted) for the euro zone, European Union, Japan and the US. The GDP of the euro zone changed 0.0 percent in IIQ2014 and increased 0.7 percent relative to a year earlier SWDA and 0.5 percent NSA for IIQ2014. The GDP of the European Union increased 0.2 percent in IIQ2014, increased 1.2 percent SWDA in IIQ2014 relative to a year earlier and increased 1.3 percent relative to a year earlier NSA in IIQ2014. Growth in IIQ2014 was weak worldwide with somewhat stronger performance by the US but still insufficient to reduce unemployment and underemployment (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html) and motivate hiring (http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html).

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

	∆% IIQ2014/ IQ2014 SAWDA	∆% IIQ2014/ IIQ2013 SWDA	∆% IIQ2014/ IIQ2013 NSA
Euro Zone	0.0	0.7	0.5
European Union	0.2	1.2	1.3
Germany	-0.2	1.3	NA
France	0.0	0.1	0.1
Netherlands	0.5	0.9	NA
Finland	0.2	-0.1	NA
Belgium	0.1	1.0	1.0
Portugal	0.6	0.8	NA
Ireland	NA	NA	NA
Italy	-0.2	-0.2	-0.6
Greece	NA	NA	-0.3
Spain	0.6	1.2	1.1
United Kingdom	0.8	3.1	5.5
Japan	-1.7	NA	-0.1
USA	1.0	2.5	NA

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

***NSA

Source: EUROSTAT

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

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

Retail sales in the euro zone decreased 0.4 percent in Jul 2014 and increased 0.8 percent in 12 months, as shown in Table VD-5. 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 1.5 percent in Nov 2013. The lower part of Table VD-5 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-5, Euro Zone, Volume of Retail Sales, Deflated ∆%

	Month ∆%	12-Month CA ∆%
Jul 2014	-0.4	0.8
Jun	0.3	1.9
May	0.2	0.6
Apr	0.1	1.7
Mar	0.0	1.0
Feb	0.1	1.2
Jan	0.8	0.8
Dec 2013	-1.0	0.0
Nov	1.2	1.5
Oct	-0.3	-0.4
Sep	-0.5	-0.2
Aug	0.3	-0.3
Jul	0.7	-0.9
Jun	-1.0	-1.7
May	1.0	-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	-0.1	-1.9
Oct	-0.3	-3.1
Sep	-1.2	-1.8
Aug	0.2	-0.7
Jul	-0.2	-1.4
Jun	0.4	-0.9
May	0.3	-0.7
Apr	-1.4	-3.5
Mar	0.1	0.0
Feb	0.0	-2.1
Jan	-0.2	-1.0
Dec 2011	0.2	-1.9
Nov	-0.7	-1.5
Oct	0.3	-0.8
Sep	-0.2	-1.4
Aug	-0.1	-0.3
Jul	0.0	-0.6
Jun	0.9	-1.0
May	-1.8	-1.8
Apr	1.2	0.6
Mar	-1.5	-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-6. Total sales decreased 0.4 percent in Jul 2014 and increased 0.8 percent in the 12 months ending in Jul 2014. Food sales decreased 0.6 percent in Jul 2014 and decreased 0.2 percent in 12 months and sales of nonfood products decreased 0.2 percent in Jul and increased 1.5 percent in 12 months. Sales of automotive fuel stores increased 0.5 percent in Jul and decreased 2.9 percent in 12 months.

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

Jul 2014	Month ∆%	12-Month ∆%
Total	-0.4	0.8
Food, Drinks, Tobacco	-0.6	-0.2
Nonfood Products ex Automotive Fuel	-0.2	1.5
Automotive Fuel in Specialized Stores	0.5	-2.9

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

Month and 12-month percentage rates of change of retail sales by member countries of the euro zone are shown in Table VD-7 for Jul 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 0.6 percent for France, 4.0 percent Ireland, 0.7 percent Germany and 1.1 percent for Portugal. The 12-month percentage change for the UK, which is not a member of the euro zone, was 2.1 percent. The European Union’s 12-month percentage change was 1.0 percent.

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

Jul 2014	Month ∆%	12-Month ∆%
Euro Zone	-0.4	0.8
Germany	-1.4	0.7
France	-0.3	0.6
Netherlands	0.0*	0.5*
Finland	0.4	-0.6
Belgium	0.3	-1.0
Portugal	2.6	1.1
Ireland	-0.5	4.0
Italy	0.0*	-0.2*
Greece	2.2*	-3.9*
Spain	-0.4	-0.4
UK	-0.2	2.1
European Union	-0.4	1.0

*Jun 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 5.6 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 4.1 percent in 2010, 3.6 percent in 2011 and 0.4 percent in 2012. Growth decelerated to 0.1 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-4 provides annual growth rates of the German economy from 1970 to 2013, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.6 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 4.1 percent in 2010, 3.6 percent in 2011 and 0.4 percent in 2012. Growth in 2013 was 0.1 percent.

Table VE-DE, Germany, GDP ∆% on Prior Year

	Price Adjusted Chain-Linked	Price- and Calendar-Adjusted Chain Linked
Average ∆% 1991-2013	1.3
Average ∆% 1991-1999	1.5
Average ∆% 2000-2007	1.4
Average ∆% 2003-2007	2.2
Average ∆% 2007-2013	0.5
Average ∆% 2009-2013	2.0
2013	0.1	0.2
2012	0.4	0.6
2011	3.6	3.7
2010	4.1	3.9
2009	-5.6	-5.6
2008	1.1	0.8
2007	3.3	3.4
2006	3.7	3.9
2005	0.7	0.9
2004	1.2	0.7
2003	-0.7	-0.7
2002	0.0	0.0
2001	1.7	1.8
2000	3.0	3.2
1999	2.0	1.9
1998	2.0	1.7
1997	1.8	1.9
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/FactsFigures/NationalEconomyEnvironment/NationalAccounts/NationalAccounts.html

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/CurrentRevision.html

https://www.destatis.de/EN/Methods/NationalAccountRevision/Revision2014_BackgroundPaper.pdf?__blob=publicationFile

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 55.7 in Jul to 54.9 in Aug. The index of manufacturing output reached 51.9 in Aug, decreasing from 53.8 in Jul, while the index of services decreased to 56.4 in Aug from 56.4 in Jul. The overall Flash Germany Manufacturing PMI^® decreased from 52.4 in Jul to 52.0 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/a2f4ac116982481f8ce1820b6658581d). New export work volumes increased. Oliver Kolodseike, Economist at Markit, finds continuing expansion of Germany’s private sector with strength in new orders and output (http://www.markiteconomics.com/Survey/PressRelease.mvc/a2f4ac116982481f8ce1820b6658581d). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, decreased from 55.7 in Jul to 53.7 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/9b02b77969fb43eea3d19b1500330fc0). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds slowing private output (http://www.markiteconomics.com/Survey/PressRelease.mvc/9b02b77969fb43eea3d19b1500330fc0). The Germany Services Business Activity Index decreased from 56.7 in Jul to 54.9 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/9b02b77969fb43eea3d19b1500330fc0). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 52.4 in Jul to 51.4 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/d2b45f292bc14215a67c279a2a5d13b1). New export orders increased for the thirteenth consecutive month. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds slowing output and new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/d2b45f292bc14215a67c279a2a5d13b1).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IIQ2014 -0.2 ∆%; II/Q2014/IIQ2013 ∆% 0.8 2013/2012: 0.1% 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 8/17/14 9/7/14
Consumer Price Index	Jul month NSA ∆%: 0.3 Jul 12-month NSA ∆%: 0.8 Blog 8/17/14
Producer Price Index	Jul month ∆%: -0.01 NSA, minus 0.1 CSA 12-month NSA ∆%: -0.8 Blog 8/24/14
Industrial Production	MFG Jul month CSA ∆%: 2.6 12-month NSA: 4.3 Blog 9/7/14
Machine Orders	MFG Jul month ∆%: 4.6 Jul 12-month ∆%: 5.0 Blog 9/7/14
Retail Sales	Jul Month ∆% 0.7 12-Month ∆% -1.4 Blog 8/31/14
Employment Report	Unemployment Rate SA Jul 4.9% Blog 8/31/14
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:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/24/14 http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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

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

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

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

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

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

8/18/13 http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html

Table VE-1 provides percentage change of Germany’s GDP in one quarter relative to the prior quarter from 2001 to 2014. Germany’s GDP contracted during four consecutive quarters from IIQ2008 to IQ2009. The deepest contraction was 4.5 percent in IQ2009. Growth was quite strong from IIIQ2009 to IQ2011 for cumulative growth of 7.8 percent in seven quarters or at the average rate of 1.1 percent per quarter, which is equivalent to 4.4 percent per year. Economic growth decelerated in IIQ2011 to 0.2 percent and 0.4 percent in IIIQ2011. The economy grew 0.0 percent in IVQ2011 and grew 0.3 percent in IQ2012 but at 0.1 percent in IIQ2012. GDP growth in IIIQ2012 was 0.1 percent relative to IIQ2012. Germany’s GDP contracted 0.4 percent in IVQ2012 relative to IIIQ2012. GDP decreased 0.4 percent in IQ2013 and increased 0.8 percent in IIQ2013. Growth of GDP was 0.3 percent in IIIQ2013 and 0.4 percent in IVQ2013. Germany’s growth was robust at 0.7 percent in IQ2014 or 2.8 percent in annual equivalent. GDP contracted 0.2 percent in IIQ2014.

Table VE-1, Germany Quarter GDP ∆% Relative to Prior Quarter, Seasonally and Calendar Adjusted 

	IQ	IIQ	IIIQ	IV
2014	0.7	-0.2
2013	-0.4	0.8	0.3	0.4
2012	0.3	0.1	0.1	-0.4
2011	1.8	0.2	0.4	0.0
2010	0.8	2.1	0.8	0.7
2009	-4.5	0.1	0.5	0.9
2008	0.8	-0.2	-0.4	-2.0
2007	0.5	0.7	0.8	0.3
2006	1.0	1.6	1.0	1.3
2005	-0.2	0.7	0.8	0.3
2004	0.0	0.4	-0.2	0.1
2003	-1.2	0.1	0.5	0.3
2002	-0.3	0.2	0.5	-0.2
2001	1.6	0.1	-0.3	0.2

Seasonal and calendar adjusted Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/NationalAccounts.html

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/CurrentRevision.html

https://www.destatis.de/EN/Methods/NationalAccountRevision/Revision2014_BackgroundPaper.pdf?__blob=publicationFile

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

Table VE-2 provides percentage changes of Germany’s GDP in a quarter relative to the same quarter a year earlier. Growth was weak in the recovery from the recession of 2001 through 2005, as in most of the euro area (see Pelaez and Pelaez, The Global Recession Risk (2007), 116-46). Germany’s economy then grew robustly in 2006 and 2007 until the global recession after 2007. Germany recovered with strong growth in 2010 and vigorous 6.0 percent in IQ2011. The economy decelerated in the final three quarters of 2011, growing 1.5 percent in IQ2012 relative to IQ2011. Growth decelerated further to 0.3 percent in IIQ2012 without calendar adjustment and 0.8 percent with calendar adjustment and to 0.1 percent in IIIQ2012. Growth in IVQ2012 relative to IVQ2011 was minus 0.3 percent. GDP fell 1.8 percent in IQ2013 relative to a year earlier and increased 0.5 percent in IIQ2013 relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 relative to a year earlier and 1.0 percent in IVQ2013 relative to a year earlier. GDP increased 2.5 percent in IQ2014 relative to a year earlier and 0.8 percent in IIQ2014 relative to a year earlier.

Table VE-2, Germany, Quarter GDP ∆% Relative to Same Quarter a Year Earlier, Price Adjusted NCSA 

	IQ	IIQ	IIIQ	IV
2014	2.5	0.8
2013	-1.8	0.5	0.8	1.0
2012	1.5	0.3	0.1	-0.3
2011	6.0	3.6	3.1	1.8
2010	2.6	4.7	4.6	4.4
2009	-6.6	-7.9	-5.6	-2.4
2008	2.0	3.0	1.1	-1.9
2007	4.3	3.4	3.3	2.1
2006	4.3	2.4	3.5	4.6
2005	-0.7	1.3	1.3	1.0
2004	1.6	1.6	0.6	0.9
2003	-0.4	-1.3	-0.8	-0.3
2002	-1.1	0.2	1.1	-0.1
2001	2.4	1.6	1.5	1.4

Price adjusted NSA Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/NationalAccounts.html

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/CurrentRevision.html

https://www.destatis.de/EN/Methods/NationalAccountRevision/Revision2014_BackgroundPaper.pdf?__blob=publicationFile

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

There are strong calendar effects in economic activity in Germany. Table VE-3 provides Germany’s percentage change in a quarter relative to the same quarter a year earlier adjusting for price changes and calendar effects. Germany’s GDP increased 0.8 percent in IIQ2012 calendar-adjusted in contrast with only 0.3 percent without calendar adjustment. GDP growth adjusting for calendar effects was 0.5 percent in IIIQ2012 relative to IIIQ2011 and 0.1 percent without calendar adjustment. Growth in IVQ2012 was 0.0 percent calendar and price adjusted in contrast with minus 0.3 percent without calendar adjustment. Growth in IQ2013 was minus 0.5 percent relative to a year earlier with adjustment for calendar effects and minus 1.8 percent without adjustment. GDP without calendar adjustment changed 0.0 percent in IIQ2013 relative to a year earlier and 0.5 percent with calendar adjustment. In IIIQ2013, growth without calendar adjustment was 0.8 percent in contrast with 0.3 percent calendar adjusted. In IVQ2013, GDP with calendar adjustment increased 1.1 percent relative to a year earlier and 1.0 percent without calendar adjustment. In IQ2014, GDP increased 2.5 percent without calendar adjustment and 2.3 percent with calendar adjustment. GDP increased 1.2 percent in IIQ2014 with calendar adjustment and 0.8 percent without calendar adjustment.

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

	IQ	IIQ	IIIQ	IV
2014	2.3	1.2
2013	-0.5	0.0	0.3	1.1
2012	1.0	0.8	0.5	0.0
2011	5.7	3.5	3.2	2.3
2010	2.5	4.3	4.6	4.3

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/NationalAccounts.html

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/CurrentRevision.html

https://www.destatis.de/EN/Methods/NationalAccountRevision/Revision2014_BackgroundPaper.pdf?__blob=publicationFile

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

Table VE-4 provides annual growth rates of the German economy from 1970 to 2013, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.6 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 4.1 percent in 2010, 3.6 percent in 2011 and 0.4 percent in 2012. Growth in 2013 was 0.1 percent.

Table VE-4, Germany, GDP ∆% on Prior Year

	Price Adjusted Chain-Linked	Price- and Calendar-Adjusted Chain Linked
Average ∆% 1991-2013	1.3
Average ∆% 1991-1999	1.5
Average ∆% 2000-2007	1.4
Average ∆% 2003-2007	2.2
Average ∆% 2007-2013	0.5
Average ∆% 2009-2013	2.0
2013	0.1	0.2
2012	0.4	0.6
2011	3.6	3.7
2010	4.1	3.9
2009	-5.6	-5.6
2008	1.1	0.8
2007	3.3	3.4
2006	3.7	3.9
2005	0.7	0.9
2004	1.2	0.7
2003	-0.7	-0.7
2002	0.0	0.0
2001	1.7	1.8
2000	3.0	3.2
1999	2.0	1.9
1998	2.0	1.7
1997	1.8	1.9
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/FactsFigures/NationalEconomyEnvironment/NationalAccounts/NationalAccounts.html

https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/CurrentRevision.html

https://www.destatis.de/EN/Methods/NationalAccountRevision/Revision2014_BackgroundPaper.pdf?__blob=publicationFile

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

The Statistisches Bundesamt (Federal Statistical Office of Germany) provides the analysis of percentage point contributions to GDP on growth from a quarter a year earlier, shown in Table VE-5. The original data are adjusted for price but not for seasonality. There is strong internal demand, or consumption and investment, which is uncommon in advanced economies. Consumption added 0.7 percentage points in IIQ2014. Growth of fixed capital formation (GFCF) added 0.3 percentage points to growth of GDP in IIQ2014. Domestic uses added 1.3 percentage points in IIQ2014. Net exports deducted 0.5 percentage points in IIQ2014. The rates of growth of exports and imports fell from over 10 percent to single digits. Exports grew 2.5 percent in IIQ2014 relative to the same quarter a year earlier and imports 4.1 percent.

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

	IIIQ 13 PP	∆% 2012	IVQ 13  PP	∆% 2013	IQ14 PP	∆% IQ 14	IIQ 14 PP	∆% IIQ 14
Consumption Total	0.6	0.8	0.6	0.8	0.7	1.0	0.7	1.0
Household Consumption	0.4	0.7	0.5	0.8	0.6	1.0	0.6	1.0
Government Consumption	0.2	1.2	0.1	0.7	0.2	0.8	0.2	1.0
Gross Capital Formation	-1.5	-7.3	0.0	0.2	1.6	8.0	0.6	3.1
Gross Fixed Capital Formation (GFCF)	-0.1	-0.7	-0.1	-0.7	1.5	8.6	0.3	1.3
GFCF in Machinery & Equipment	-0.2	-2.9	-0.2	-2.7	0.4	6.9	0.1	2.1
GFCF in Construction	0.1	0.6	0.0	-0.1	1.1	12.7	0.1	0.7
Change in Inventories	-1.4		0.2		0.1		0.3
Domestic Uses	-0.9	-0.9	0.6	0.7	2.3	2.5	1.3	1.4
Net Exports	1.3		-0.5		0.2		-0.5
Exports		2.8		1.6		4.3		2.5
Imports		0.0		3.1		4.4		4.1
GDP		0.4		0.1		2.5		0.8
GDP per Person in Employment		-0.7		-0.5		1.8		0.0
GDP per Hour Worked		0.6		0.4		0.1		0.3

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

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

Table VE-6 provides segments of Germany’s GDP with growth in IIQ2014 and contributions to growth in percentage points. The deterioration of growth of GDP in IIQ2014 consisted of deduction of 0.5 percentage points by gross fixed capital formation (GFCF). Total consumption contributed 0.1 percentage points. Net exports deducted 0.2 percentage points. Exports grew 0.9 percent in IIQ2014 and imports 1.6 percent.

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

	IIIQ 13 PP	∆% IIIQ 13	IVQ 13  PP	∆% IVQ 13	IQ14 PP	∆% IQ 14	IIQ 14 PP	∆% IIQ 14
Consumption Total	0.5	0.6	-0.5	-0.6	0.5	0.7	0.1	0.1
Household Consumption	0.4	0.7	-0.4	-0.8	0.4	0.8	0.1	0.1
Government Consumption	0.1	0.6	0.0	-0.1	0.1	0.4	0.0	0.1
Gross Capital Formation	0.2	1.0	0.4	2.1	0.4	1.8	0.0	-0.2
Gross Fixed Capital Formation (GFCF)	0.2	0.8	0.2	1.1	0.6	2.9	-0.5	-2.3
GFCF in Machinery & Equipment	0.0	-0.5	0.1	2.1	0.1	2.1	0.0	-0.4
GFCF in Construction	0.2	1.8	0.1	0.7	0.4	4.1	-0.4	-4.2
Change in Inventories	0.0		0.2		-0.2		0.4
Domestic Uses	0.7	0.7	-0.1	0.0	0.9	0.9	0.1	0.1
Net Exports	-0.4		0.5		-0.2		-0.2
Exports		0.7		1.7		0.0		0.9
Imports		1.7		0.7		0.5		1.6
GDP		0.3		0.4		0.7		-0.2
GDP per Person in Employment		0.1		0.4		0.4		-0.4
GDP per Hour Worked		0.0		0.9		-0.6		0.0

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

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

Percentage changes from year earlier of gross value added by economic sectors in Germany are in Table VE-7. Industry ex construction contracted 0.3 percent in IIQ2014 relative to a year earlier. Business services increased 1.6 percent in IIQ2014 relative to a year earlier. Construction increased 1.3 percent in IIQ2014 relative to a year earlier. Total gross value added expanded 0.7 percent in IIQ2014 relative to a year earlier.

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

	2011	2012	2013	IQ2014	II2014
Agriculture	-13.9	14.3	-1.9	3.1	2.7
Industry ex Construction	5.8	1.4	0.2	3.3	-0.3
Manufacturing	8.9	-0.5	0.3	4.5	0.4
Construction	4.0	0.1	-0.3	11.6	1.3
Trade, Transport, Accommodation & Food Services	4.0	-2.3	0.0	2.9	1.2
Information & Communications	11.0	5.3	1.2	1.8	1.5
Finance & Insurance	0.8	2.0	-1.5	0.1	-0.1
Real Estate	3.4	-2.0	0.5	0.9	1.2
Business Services	2.2	0.6	0.9	2.8	1.6
Public Services, Education & Health	1.1	1.0	-0.1	1.3	0.7
Other Services	0.7	0.1	-1.6	0.8	-0.5
Total Gross Value Added	3.6	0.5	0.1	2.5	0.7

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

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

Chart VE-1 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides GDP at current prices from 2005 to 2013. The German economy is productive with significant dynamism over the long term. There are fluctuations in an increasing trend since 2009. Growth is stalling.

Chart VE-1, Germany, GDP, Current Prices, Billion Euro

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Table VE-1A provides US GDP in current prices at seasonally adjusted annual rates (SAAR) from 2005 to 2014. There is sharp decline with the recession beginning in IVQ2007 and upward trend during the expansion after IIIQ2009.

Chart VE-1A, US, Gross Domestic Product, Current Prices, Seasonally Adjusted at Annual Rates, Billions of Dollars, 2005-2014

Sources: Bureau of Economic Analysis

http://www.bea.gov/iTable/index_nipa.cfm

Chart VE-2 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides the index of price-adjusted chain-linked GDP of Germany from 2009 to 2013. Germany was growing rapidly before the global contraction and rebounded with significant strength along a strong upward trend that could be increasing again.

Chart VE-2, Germany, Index of Price-Adjusted Chain-Linked GDP, 2000=100

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-2A provides US real GDP, seasonally adjusted at annual rates (SAAR) in billions of chained dollars of 2009 from 2009 to 2014. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 20 quarters from IIIQ2009 to IIQ2014. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the second estimate of GDP for IIQ2014 (http://www.bea.gov/newsreleases/national/gdp/2014/pdf/gdp2q14_2nd.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987 and at 7.8 percent from IQ1983 to IVQ1983 (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IIQ2014 would have accumulated to 22.1 percent. GDP in IIQ2014 would be $18,305.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,310.7 billion than actual $15,994.3 billion. There are about two trillion dollars of GDP less than at trend, explaining the 26.9 million unemployed or underemployed equivalent to actual unemployment of 16.4 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2014/07/financial-valuations-twenty-seven.html). US GDP in IIQ2014 is 12.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $15,994.3 billion in IIQ2014 or 6.7 percent at the average annual equivalent rate of 1.0 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jul 2014. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 122.8881 in Jul 2014. The actual index NSA in Jul 2014 is 98.4978, which is 19.8 percent below trend. Manufacturing output grew at average 2.3 percent between Dec 1986 and Dec 2013, raising the index at trend to 115.2650 in Jul 2014. The output of manufacturing at 98.4978 in Jul 2014 is 14.5 percent below trend under this alternative calculation.

Chart VE-2A, US, Real Gross Domestic Product, Seasonally Adjusted at Annual Rates, Billions of Chained 2009 Dollars, 2010-2014

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

Table VE-8 provides the savings as percent of disposable income and percentage growth of disposable income year-on-year from 2010 to 2014. The savings ratio remained at a relatively high level for an advanced economy, exceeding 9.0 percent from 2010 to 2013. The savings ratio increased to 12.6 percent in IQ2014 and fell to 8.7 percent in IIQ2014.

Table VE-8, Germany, Savings as Percent of Disposable Income and Yearly Change of Disposable Income, % and ∆%

	Savings as % Percent of Disposable Income	Year on Year ∆% of Disposable Income
IIQ2014	8.7	2.1
IQ2014	12.6	2.3
2013	9.1	1.8
2012	9.4	2.0
2011	9.6	3.8
2010	9.9	2.7

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_306_811.html

Chart IB-14A provides the US personal savings rate, or personal savings as percent of disposable personal income, on an annual basis from 1929 to 2013. The US savings rate shows decline from around 10 percent in the 1960s to around 5 percent currently.

Chart IB-14A, US, Personal Savings as a Percentage of Disposable Personal Income, Annual, 1929-2013

Source: US Bureau of Economic Analysis

http://www.bea.gov/iTable/index_nipa.cfm

Table IB-7 provides personal savings as percent of disposable income and annual change of real disposable personal income in selected years since 1930. Savings fell from 4.4 percent of disposable personal income in 1930 to minus 0.8 percent in 1933 while real disposable income contracted 5.3 percent in 1930 and 2.9 percent in 1933. Savings as percent of disposable personal income swelled during World War II to 27.9 percent in 1944 with increase of real disposable income of 3.1 percent. Savings as percent of personal disposable income fell steadily over decades from 11.5 percent in 1982 to 2.5 percent in 2005. Savings as percent of disposable personal income was 4.9 percent in 2013 while real disposable income fell 0.2 percent. The average ratio of savings as percent of disposable income fell from 9.3 percent from 1980 to 1989 to 5.4 percent on average from 2007 to 2013. Real disposable income grew on average at 3.5 percent from 1980 to 1989 and at 1.2 percent on average from 2007 to 2013.

Table IB-7, US, Personal Savings as Percent of Disposable Personal Income, Annual, Selected Years 1929-1913

	Personal Savings as Percent of Disposable Personal Income	Annual Change of Real Disposable Personal Income
1930	4.4	-5.3
1933	-0.8	-2.9
1944	27.9	3.1
1947	6.3	-4.1
1954	10.3	1.4
1958	11.4	1.1
1960	10.0	2.6
1970	12.6	4.6
1975	13.0	2.5
1982	11.5	2.1
1989	7.8	3.0
1992	8.9	4.3
2002	5.0	3.1
2003	4.8	2.7
2004	4.6	3.6
2005	2.5	1.5
2006	3.3	4.0
2007	3.0	2.1
2008	4.9	1.5
2009	6.1	-0.4
2010	5.6	1.0
2011	6.0	2.5
2012	7.2	3.0
2013	4.9	-0.2
Average Savings Ratio
1980-1989	9.3
2007-2013	5.4
Average Yearly ∆% Real Disposable Income
1980-1989		3.5
2007-2013		1.2

Source: US Bureau of Economic Analysis

http://www.bea.gov/iTable/index_nipa.cfm

Chart IB-15 of the US Bureau of Economic Analysis provides personal savings as percent of personal disposable income, or savings ratio, from Jan 2007 to Mar 2014. The uncertainties caused by the global recession resulted in sharp increase in the savings ratio that peaked at 7.9 percent in May 2008 (http://www.bea.gov/iTable/index_nipa.cfm). The second peak occurred at 8.1 percent in May 2009. There was another rising trend until 5.9 percent in Jun 2010 and then steady downward trend until 5.3 percent in Nov 2011. This was followed by an upward trend with 7.1 percent in Jun 2012 but decline to 6.4 percent in Aug 2012 followed by jump to 10.5 percent in Dec 2012. Swelling realization of income in Oct-Dec 2012 in anticipation of tax increases in Jan 2013 caused the jump of the savings rate to 10.5 percent in Dec 2012. The BEA explains as: Personal income in November and December was boosted by accelerated and special dividend payments to persons and by accelerated bonus payments and other irregular pay in private wages and salaries in anticipation of changes in individual income tax rates. Personal income in December was also boosted by lump-sum social security benefit payments” (page 2 at http://www.bea.gov/newsreleases/national/pi/2013/pdf/pi1212.pdf). There was a reverse effect in Jan 2013 with decline of the savings rate to 3.6 percent. Real disposable personal income fell 5.1 percent and real disposable per capita income fell from $38,175 in Dec 2012 to $36,195 in Jan 2013 or by 5.2 percent, which is explained by the Bureau of Economic Analysis as follows (page 3 http://www.bea.gov/newsreleases/national/pi/2013/pdf/pi0213.pdf):

“Contributions for government social insurance -- a subtraction in calculating personal income --increased $6.4 billion in February, compared with an increase of $126.8 billion in January. The

January estimate reflected increases in both employer and employee contributions for government social insurance. The January estimate of employee contributions for government social insurance reflected the expiration of the “payroll tax holiday,” that increased the social security contribution rate for employees and self-employed workers by 2.0 percentage points, or $114.1 billion at an annual rate. For additional information, see FAQ on “How did the expiration of the payroll tax holiday affect personal income for January 2013?” at www.bea.gov. The January estimate of employee contributions for government social insurance also reflected an increase in the monthly premiums paid by participants in the supplementary medical insurance program, in the hospital insurance provisions of the Patient Protection and Affordable Care Act, and in the social security taxable wage base; together, these changes added $12.9 billion to January. Employer contributions were boosted $5.9 billion in January, which reflected increases in the social security taxable wage base (from $110,100 to $113,700), in the tax rates paid by employers to state unemployment insurance, and in employer contributions for the federal unemployment tax and for pension guaranty. The total contribution of special factors to the January change in contributions for government social insurance was $132.9 billion.”

Chart IB-15, US, Personal Savings as a Percentage of Disposable Income, Monthly 2007-2014

Source: US Bureau of Economic Analysis

http://www.bea.gov/iTable/index_nipa.cfm

Table IB-8 provides personal saving as percent of disposable income, change of real disposable income relative to Dec 2007 (RDPI ∆% 12/07), monthly percentage change of real disposable income (RDPI ∆% Month) and percentage of real disposable income in a month relative to the same month a year earlier (RDPI ∆% YOY). The ratio of personal saving to disposable income eased to 5.7 percent in Jul 2014 with cumulative growth of real disposable income of 10.1 percent since Dec 2007 at the rate of 1.5 percent in annual equivalent that is much lower than 3.2 percent over the long-term from 1929 to 2013.

Table IB-8, US, Savings Ratio and Real Disposable Income, % and ∆%

	Personal Saving as % Disposable Income	RDPI ∆% 12/07	RDPI ∆% Month	RDPI ∆% YOY
May 2008	7.9	5.1	4.8	5.7
May 2009	8.1	2.5	1.6	-2.5
Jun 2010	5.9	1.8	0.0	1.0
Nov 2011	5.6	4.2	-0.1	1.5
Jun 2012	7.1	6.9	0.1	2.7
Aug 2012	6.4	6.5	-0.2	1.9
Dec 2012	10.5	12.3	2.8	7.0
Jan 2013	4.5	5.6	-5.9	-0.1
Feb 2013	4.7	6.2	0.5	-0.2
Mar 2013	4.9	6.5	0.4	0.0
Apr 2013	5.1	6.8	0.2	0.0
May 2013	5.2	7.2	0.4	0.4
Jun 2013	5.3	7.4	0.2	0.4
Jul 2013	5.1	7.3	-0.1	0.6
Aug 2013	5.3	7.7	0.4	1.1
Sep 2013	5.2	8.0	0.3	0.9
Oct 2013	4.7	7.7	-0.3	0.0
Nov 2013	4.3	7.8	0.1	-1.3
Dec 2013	4.1	7.6	-0.2	-4.2
Jan 2014	4.9	8.1	0.5	2.3
Feb 2014	5.0	8.6	0.5	2.3
Mar 2014	4.8	9.1	0.5	2.4
Apr 2014	5.2	9.4	0.3	2.5
May 2014	5.4	9.7	0.3	2.4
Jun 2014	5.4	10.0	0.3	2.5
Jul 2014	5.7	10.1	0.1	2.6

Source: US Bureau of Economic Analysis

http://www.bea.gov/iTable/index_nipa.cfm

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 0.2 percent in Dec 2012 and decrease of 9.4 percent in the 12 months ending in Dec 2012. The index decreased 0.5 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 0.7 percent and increased 1.9 percent in 12 months. The production industries index increased 1.3 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 0.2 percent in Apr 2014 and fell 2.0 percent in 12 months. The production index fell 1.6 percent in May 2014, increasing 3.5 percent in 12 months. The production index of Germany increased 0.4 percent in Jun 2014 and fell 2.7 percent in 12 months. In Jul 2014, the production industries index of Germany increased 1.9 percent and 2.6 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
Jul 2014	2.6	1.9
Jun	-2.7	0.4
May	3.5	-1.6
Apr	-2.0	-0.2
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	1.3
Jul	1.9	-0.7
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	-0.5
Dec 2012	-9.4	0.2
Nov	-2.9	-0.8
Oct	4.1	-1.3
Sep	-6.7	-1.1
Aug	-0.6	-0.5
Jul	2.4	1.3
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	3.2
Jun	-0.8	-1.7
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 Dec 2013 to Jul 2014. The index increased 1.9 percent in Jul 2014 with increase of 5.0 percent in capital goods and increase of 0.3 percent in durable goods. There was increase of 2.6 percent in manufacturing and increase of 0.8 percent in intermediate goods. The index increased 0.4 percent in Jun 2013 with increases in all segments except decline of 0.4 percent in capital goods and change of 0.0 percent in energy. The index fell 1.6 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 ∆%

	Jul 2014	Jun	May	Apr	Mar	Feb	Jan	Dec 2013
Production Industries	1.9	0.4	-1.6	-0.2	-0.6	0.2	0.5	0.2
Industry	2.6	0.3	-1.6	0.2	-0.4	0.4	0.0	0.2
Mfg	2.6	0.2	-1.7	0.3	-0.4	0.4	0.0	0.2
Intermediate Goods	0.8	0.4	-2.3	0.0	-0.7	0.9	-0.2	0.8
Capital Goods	5.0	-0.4	-0.3	-0.2	-0.3	0.0	0.3	-0.7
Durable Goods	0.3	2.1	-0.9	-2.3	0.9	2.8	-1.5	0.4
Nondurable Goods	0.0	1.7	-3.7	1.8	0.3	-0.5	-0.3	1.2
Energy	-3.7	0.0	0.4	-0.2	1.4	-3.1	0.8	-2.3

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. All segments increased in Jul 2014 with exception of energy. 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
Jul	4.4	4.3	1.3	8.1	0.1	2.5	-9.4
Jun	-2.2	-2.3	-2.1	-2.8	-6.4	0.8	-5.8
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 Jul 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, increasing 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 increased 0.2 percent in Jun 2014 and fell 2.3 percent in 12 months. In Jul 2014, manufacturing jumped 2.6 percent and increased 4.3 percent in 12 months.

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

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Jul 2014	4.3	2.6
Jun	-2.3	0.2
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 Jul 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 increased 4.6 percent in Jul 2014 and increased 5.0 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
Jul	5.0	4.6	7.6	6.9	1.7	1.7
Jun	-4.0	-2.7	-5.0	-3.4	-2.4	-1.5
May	7.7	-1.7	7.6	-1.2	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	0.9	5.6	1.2
Jan	5.8	0.0	8.2	-1.5	2.9	2.0
2013
Dec	8.4	0.1	10.7	1.9	5.0	-2.2
Nov	4.5	0.8	6.0	-0.4	2.5	2.4
Oct	3.7	-0.4	4.1	0.0	3.1	-0.9
Sep	11.2	3.1	13.7	6.3	8.0	-0.7
Aug	0.0	-0.3	-0.9	-1.8	1.0	1.6
Jul	5.1	-2.2	5.5	-3.9	4.8	0.1
Jun	4.8	5.1	7.9	6.0	0.7	3.7
May	-3.6	-1.0	-1.6	-0.3	-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	1.7	-1.5	2.0	-4.2	1.3
Jan	0.3	-1.1	1.9	-2.3	-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	-3.0	-11.7	-0.7
Aug	-4.4	-0.9	-2.1	-0.4	-7.1	-1.6
Jul	-1.6	0.8	0.6	1.0	-4.2	0.5
Jun	-4.5	-2.1	-6.4	-2.0	-1.7	-2.2
May	-11.0	0.7	-3.7	1.9	-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	1.9	-3.8	-0.8
Jan	-2.6	-2.3	-4.6	-3.9	-0.2	-0.5
2011
Dec	0.0	2.7	-0.3	4.9	0.5	0.1
Nov	-4.8	-3.1	-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	-4.1	2.6	-2.3
Aug	7.1	-0.8	5.2	0.2	9.4	-2.2
Jul	4.9	-2.1	4.6	-5.9	5.4	3.2
Jun	3.5	-0.5	7.8	8.8	-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	1.2	24.1	0.7	18.4	1.7
Jan	22.5	3.5	26.1	3.3	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	8.7	15.0	1.3
Oct	14.2	0.6	18.2	0.2	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	-0.7	21.4	-0.7	6.4	-0.7
Jun	27.6	2.6	30.6	3.4	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 increased 8.5 percent in Jul 2014 and increased 7.0 percent in 12 months. Domestic orders increased 4.0 percent in Jul and foreign orders increased 11.0 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
Jul	7.0	8.5	9.6	11.0	2.3	4.0
Jun	-7.6	-5.7	-9.0	-6.9	-4.7	-3.4
May	10.1	-0.9	10.0	0.3	10.5	-3.0
Apr	5.4	4.3	6.4	6.7	3.6	0.5
Mar	3.2	-3.3	1.2	-5.8	6.5	1.0
Feb	7.4	0.7	9.0	0.2	4.7	1.7
Jan	7.0	-1.2	9.4	-3.5	3.2	3.3
2013
Dec	10.7	1.4	14.8	5.0	3.2	-4.8
Nov	6.8	2.2	7.4	1.1	5.3	4.0
Oct	2.7	-2.8	2.1	-3.3	3.3	-2.1
Sep	14.6	4.5	17.1	8.5	10.3	-2.0
Aug	3.1	-0.2	1.5	-2.3	5.7	3.4
Jul	6.3	-4.5	7.3	-6.5	5.0	-0.7
Jun	9.1	8.9	13.5	9.8	1.8	7.0
May	-3.1	-1.3	-0.4	0.3	-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	2.8	2.7	2.7	-4.0	2.9
Jan	3.1	-1.1	5.8	-1.6	-1.4	-0.4
2012
Dec	-7.7	2.4	-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	-2.0	-11.6	-0.1
Aug	-4.6	-2.2	-2.6	-1.3	-7.4	-3.7
Jul	-0.3	1.1	1.2	1.6	-2.7	0.5
Jun	-7.1	-2.1	-9.9	-2.4	-1.9	-1.8
May	-12.0	0.6	-2.8	1.5	-23.9	-0.8
Apr	-3.3	-3.3	-4.2	-4.3	-1.7	-1.5
Mar	2.2	5.1	3.3	7.4	0.2	1.4
Feb	-5.9	1.7	-7.0	2.2	-4.2	1.1
Jan	-3.7	-4.3	-6.5	-4.9	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	-7.1	0.7	1.3
Oct	3.1	3.6	6.2	6.0	-2.0	-0.3
Sep	2.9	-3.7	2.2	-4.7	4.0	-1.9
Aug	6.7	-0.5	4.5	0.7	10.6	-2.3
Jul	7.2	-5.8	6.4	-9.8	8.8	1.4
Jun	9.1	1.0	13.3	13.6	2.0	-16.0
May	27.5	4.5	17.7	-4.8	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	3.7	17.7	2.7
2010
Dec	27.4	-5.0	31.2	-7.0	21.1	-1.4
Nov	30.4	9.1	37.0	13.3	20.1	2.3
Oct	20.5	0.3	24.9	-0.8	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	-1.9	28.1	-2.0	-2.5	-1.8
Jun	32.0	3.5	38.7	5.2	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	6.5	33.8	7.4	15.7	4.9
Feb	21.2	-0.7	31.3	0.6	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 and could be stabilizing.

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

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, 1949-2013

Period	Average ∆%
1949-2013	3.2
2007-2013	0.3
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=26&date=20140814

The Markit Flash France Composite Output Index increased from 49.4 in Jul to 50.0 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/0fc100060e304796884a24175e8066c0). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing weak performance (http://www.markiteconomics.com/Survey/PressRelease.mvc/0fc100060e304796884a24175e8066c0). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 49.4 in Jul to 49.5 in Aug, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/72adfd6d1e164ed2900cda30dff94717). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds weak demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/72adfd6d1e164ed2900cda30dff94717). The Markit France Services Activity index decreased from 50.4 in Jul to 50.3 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/72adfd6d1e164ed2900cda30dff94717). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 46.9 in Aug from 47.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/45f4c75be3eb49f6a552c9a33232cabd). 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/45f4c75be3eb49f6a552c9a33232cabd). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Jul month ∆% -0.3 12 months ∆%: 0.5 8/17/14
PPI	Jul month ∆%: -0.3 Jul 12 months ∆%: -0.6 Blog 8/31/14
GDP Growth	IIQ2014/IQ2014 ∆%:0.0 IIQ2014/IIQ2013 ∆%: 0.1 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 8/17/14
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: IIQ2014 9.7% Blog 9/7/14
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 Aug Mfg Business Climate 96.0 Blog 8/31/14

Links to blog comments in Table FR:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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

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

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

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

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

11/17/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-unwinding-monetary-policy.html

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

6/30/13 http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html

5/19/13 http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html

The number of unemployed in France rose from 1.980 million in IVQ2007, for a rate of unemployment of 7.1 percent, to 2.784 million in IIQ2014, for a rate of unemployment of 9.7 percent, as shown in Table VF-1. At the same time, the rate of employment fell from 64.7 percent in IVQ2007 to 64.2 percent in IIQ2014. 

Table VF-1, France, Metropolitan France, Employment Rate, Unemployed and Unemployment Rate, Millions and %

	Unemployed Millions	Unemployed Percent	Employment Rate
IIQ2014	2.784	9.7	64.2
IQ2014	2.758	9.7	64.2
IVQ2013	2.832	9.7	64.2
IIIQ2013	2.832	9.9	64.1
IIQ2013	2.844	9.9	64.0
IQ2013	2.825	9.9	63.9
IVQ2012	2.781	9.7	64.2
IIIQ2012	2.676	9.4	64.0
IIQ2012	2.645	9.3	64.0
IQ2012	2.581	9.1	63.9
IVQ2011	2.531	8.9	64.0
IIIQ2011	2.477	8.8	63.9
IIQ2011	2.434	8.6	64.0
IQ2011	2.460	8.7	64.0
IVQ2010	2.482	8.8	63.9
IIIQ2010	2.495	8.8	64.0
IIQ2010	2.505	8.9	64.0
IQ2010	2.538	9.0	64.0
IVQ2009	2.573	9.1	63.8
IIIQ2009	2.473	8.8	63.9
IIQ2009	2.485	8.8	64.2
IQ2009	2.305	8.2	64.5
IVQ2008	2.068	7.4	64.9
IIIQ2008	1.976	7.1	64.9
IIQ2008	1.937	7.0	64.9
IQ2008	1.897	6.8	65.0
IV2007	1.980	7.1	64.7
IIIQ2007	2.121	7.6	64.4
IIQ2007	2.157	7.8	64.2
IQ2007	2.238	8.1	64.0
IVQ2006	2.202	8.0	64.0
IVQ2005	2.374	8.7	63.6
IVQ2004	2.318	8.5	63.8
IVQ2003	2.263	8.4	63.8
IVQ2002	2.045	7.6
IVQ2001	1.974	7.5
IVQ2000	2.017	7.7
IVQ1999	2.363	9.1
IVQ1995	2.441	9.6
IVQ1990	1.873	7.6
IVQ1985	2.086	8.5
IVQ1980	1.272	5.3
IVQ1975	0.812	3.6

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=14&date=20140904

Chart VF-1 of the Institut National de la Statistique et des Études Économiques of France provides an excellent view of the unemployment rate in France. The rate of unemployment rose from 1975 to 1987 and then fell sharply. The rate of unemployment increased in the recession of the early 1990s followed by sharp decline. The rate of unemployment increased in the recession of the early 2000s and fell again during the expansion. The rate of unemployment rose sharply during the global recession with initial recovery followed by another increase and stability.

Chart VF-1, Metropolitan France, ILO Definition Unemployment Rate, IQ1975-IIQ2014

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=14&date=20140904

Chart VF-2 of the Institut National de la Statistique et des Études Économiques of France provides an excellent view of the unemployment rate in France. The rate of unemployment rose from 2003 to 2006 and then fell sharply in 2007. The global recession caused sharp increase in the French rate of unemployment that has declined from the peak, stabilized at a high level and is climbing/stabilizing.

Chart VF-2, France, Unemployment Rate International Labor Organization Criterion, Seasonally Adjusted Average over Quarter, Percent

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=14&date=20140904

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 0.4 percent in IQ2014 relative to a year earlier and decreased 0.2 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. Consumption fell 0.3 percent in IQ2014 and GFCF fell 2.1 percent. In IIQ2014, consumption increased 0.2 percent relative to a year earlier and GFCF fell 2.1 percent.

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

	GDP	Imports	Consumption	GFCF	Exports
2014
IIQ	-0.2	2.0	0.2	-2.1	1.9
IQ	-0.4	0.9	-0.3	-1.2	2.5
2013
IVQ	-0.9	-0.1	-1.1	-2.8	1.0
IIIQ	-1.9	-2.0	-1.7	-4.6	-0.4
IIQ	-2.2	-4.4	-2.9	-4.8	0.1
IQ	-2.4	-5.0	-3.0	-6.1	-0.8
2012
IVQ	-2.9	-6.5	-4.0	-7.3	0.9
IIIQ	-2.6	-7.1	-4.0	-8.3	2.0
IIQ	-2.4	-7.0	-3.4	-8.5	2.3
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/130505

The Markit/ADACI Business Activity Index decreased from 52.8 in Jul to 49.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/4eb69c87a1504ec58672dbdbda1c4eb1). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds services with contracting with slowing manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4eb69c87a1504ec58672dbdbda1c4eb1). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), decreased from 51.9 in Jul to 49.8 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/23313b9fd48142e89e95bf5cf3eae536). Growth of new export orders was strong at slower rate. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds deteriorating conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/23313b9fd48142e89e95bf5cf3eae536). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Aug month ∆%: 0.2 Aug 12-month ∆%: -0.1 Blog 8/31/14
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 0.2 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 8/31/14
Labor Report	Jul 2014 Participation rate 63.7% Employment ratio 55.6% Unemployment rate 12.6% Youth Unemployment 42.9% Blog 8/31/14
Industrial Production	Jun month ∆%: 0.0 12 months CA ∆%: -2.6 Blog 8/10/14
Retail Sales	Jun month ∆%: -0.7 Jun 12-month ∆%: -0.5 Blog 8/31/14
Business Confidence	Mfg Aug 95.7, Apr 99.6 Construction Aug 77.0, Apr 75.1 Blog 8/31/14
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:

8/31/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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

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 59.1 in Jul to 60.5 in Aug (http://www.markiteconomics.com/Survey/PressRelease.mvc/c376e02b9014499a8c402bdadf5f7451). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.8 percent in IIIQ2014 if activity continues at current rates (http://www.markiteconomics.com/Survey/PressRelease.mvc/c376e02b9014499a8c402bdadf5f7451). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) decreased to 52.5 in Aug from 54.8 in Jul (http://www.markiteconomics.com/Survey/PressRelease.mvc/491cc76cd6bf47f7b8f99e39c5be6fe1). New export orders increased for the seventeenth consecutive month from the US, Canada, Asia and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions are slowing (http://www.markiteconomics.com/Survey/PressRelease.mvc/491cc76cd6bf47f7b8f99e39c5be6fe1). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Jul month ∆%: -0.3 Jul 12-month ∆%: 1.6 Blog 8/24/14
Output/Input Prices	Output Prices: Jul 12-month NSA ∆%: -0.1; excluding food, petroleum ∆%: 0.9 Input Prices: Jul 12-month NSA ∆%: -7.3 Excluding ∆%: -5.2 Blog 8/24/14
GDP Growth	IIQ2014 prior quarter ∆% 0.8; year earlier same quarter ∆%: 3.2 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 8/17/14
Industrial Production	Jun 2014/Jun 2013 ∆%: Production Industries 1.2; Manufacturing 1.9 Blog 8/10/14
Retail Sales	Jul month ∆%: -0.1 Jul 12-month ∆%: 2.6 Blog 8/24/14
Labor Market	Apr-Jun Unemployment Rate: 6.4%; Claimant Count 3.0%; Earnings Growth -0.2% Blog 8/17/14 LMGDP 8/17/14
GDP and the Labor Market	IIQ2014 Weekly Hours 103.8, GDP 100.2, Employment 103.7 IQ2008 =100 GDP IIQ14 100.2 IQ2008=100 Blog 8/17/14
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:

8/24/14 http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html

8/17/2014 http://cmpassocregulationblog.blogspot.com/2014/08/weakening-world-economic-growth.html

8/10/14 http://cmpassocregulationblog.blogspot.com/2014/08/volatility-of-valuations-of-risk_10.html

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

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