Geopolitics, Monetary Policy and Competitive Devaluations, Recovery without Hiring, Congressional Budget Office Budget Update, United States Services, United States Import and Export Prices, World Cyclical Slow Growth and Global Recession Risk: Part IV

 

Geopolitics, Monetary Policy and Competitive Devaluations, Recovery without Hiring, Congressional Budget Office Budget Update, United States Services, United States Import and Export Prices, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Recovery without Hiring

IA1 Hiring Collapse

IA2 Labor Underutilization

ICA3 Ten Million Fewer Full-time Jobs

IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and

Middle-Age Unemployment

IIA The Congressional Budget Office Update of Budget Outlook and Long-term Budget Outlook

IIB United States Services

IIC United States Import and Export Prices

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 2.7 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 0.5 percent and decreased 0.3 percent relative to a year earlier. Japan grew 1.2 percent in IQ2013 at the SAAR of 5.1 percent and increased 0.1 percent relative to a year earlier. Japan’s GDP increased 0.8 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 1.8 percent and increased 2.3 percent relative to a year earlier. In IVQ2013, Japan’s GDP decreased 0.1 percent at the SAAR of minus 0.5 percent, increasing 2.5 percent relative to a year earlier. Japan’s GDP increased 1.5 percent in IQ2014 at the SAAR of 6.0 percent and increased 3.0 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 1.8 percent at the SAAR of minus 7.1 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: –2.7	-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: -0.5	-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: 1.2 SAAR: 5.1	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: 0.8 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: 1.8	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: -0.1 SAAR: -0.5	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: 6.0	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: -1.8 SAAR: -7.1	-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 in 12 months while imports increase 2.3 percent. The second part of Table V-4 shows that net trade deducted 1.4 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 4.3 percentage points to GDP growth in IIQ2014.

• China. In Aug 2014, China exports increased 9.4 percent relative to a year earlier and imports decreased 2.4 percent.
• Germany. Germany’s exports increased 4.7 percent in the month of Jul 2014 and increased 8.5 percent in the 12 months ending in Jul 2014. Germany’s imports decreased 1.8 percent in the month of Jul and increased 1.0 percent in the 12 months ending in Jul. 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 decreased 1.7 percent in Jul 2014 while imports decreased 1.3 percent. France’s imports decreased 1.3 percent in the month of Jul 2014 and changed 0.0 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 (http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.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 9.4 Aug 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 -2.4 Aug -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	4.7 Jul CSA	8.5 Jul	-1.8 Jul CSA	1.0 Jul
France Jul	-1.5	-1.3	-1.3	0.0
Italy May	2.2	0.2	3.2	0.9
UK	1.2 Jul	-4.9 May-Jul 14 /May-Jul 13	3.2 Jul	-3.0 May-Jul 14 13/May-Jul 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 -1.4 IIQ2012 -1.9 IIIQ2012 -0.5 IVQ2012 1.7 IQ2013 0.2 IIQ2013 -1.6 IIIQ2013 -2.4 IVQ2013 -0.8 IQ2014 4.3 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

The geographical breakdown of exports and imports of Japan with selected regions and countries is provided in Table V5-5 for Jul 2014. The share of Asia in Japan’s trade is close to one-half for 53.8 percent of exports and 43.2 percent of imports. Within Asia, exports to China are 18.3 percent of total exports and imports from China 20.3 percent of total imports. While exports to China increased 2.6 percent in the 12 months ending in Jul 2014, imports from China decreased 2.5 percent. The second largest export market for Japan in Jul 2014 is the US with share of 18.2 percent of total exports, which is close to that of China, and share of imports from the US of 9.0 percent in total imports. Japan’s exports to the US increased 2.1 percent in the 12 months ending in Jul 2014 and imports from the US increased 6.2 percent. Western Europe has share of 10.7 percent in Japan’s exports and of 10.5 percent in imports. Rates of growth of exports of Japan in Jul 2014 are 2.1 percent for exports to the US, minus 9.0 percent for exports to Brazil and 6.2 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Jul 2014 are mixed. Imports from Asia decreased 1.2 percent in the 12 months ending in Jul 2014 while imports from China decreased 2.5 percent. Data are in millions of yen, which may have effects of recent depreciation of the yen relative to the United States dollar (USD).

Table V-5, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen

Jul 2014	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,188,609	3.9	7,152,602	2.3
Asia	3,330,875 % Total 53.8	3.4	3,086,704 % Total 43.2	-1.2
China	1,132,758 % Total 18.3	2.6	1,454,358 % Total 20.3	-2.5
USA	1,128,273 % Total 18.2	2.1	644,579 % Total 9.0	6.2
Canada	71,509	7.8	128,546	13.1
Brazil	47,825	-9.0	85,933	-5.6
Mexico	99,683	15.9	35,922	-10.5
Western Europe	662,768 % Total 10.7	13.3	751,376 % Total 10.5	2.0
Germany	169,170	6.2	208,457	3.8
France	55,490	2.6	100,915	-0.9
UK	115,035	22.5	60,792	10.8
Middle East	255,167	23.0	1,371,583	9.6
Australia	146,203	0.9	465,077	0.4

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

World trade projections of the IMF are in Table V-6. There is increasing growth of the volume of world trade of goods and services from 3.0 percent in 2013 to 5.3 percent in 2015 and 5.7 percent on average from 2016 to 2019. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would be more challenging with lower growth of world trade.

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

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

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

Source: International Monetary Fund World Economic Outlook databank

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

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, 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 Jul 2014 4.982 million lower by 0.519 million than 5.501 million in Jul 2006 Blog 9/14/14
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	IIQ14/IIQ13 NSA ∆%: Information 5.6 Financial & Insurance 4.8 Blog 9/14/14
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-Jul 2014/Jan-Jul 2013 NSA ∆%: Total 6.0; Durable Goods: 4.9; Nondurable Goods: 6.5 Blog 9/14/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Jul 14 12-M NSA ∆%: Sales Total Business 5.6; Manufacturers 4.5 Retailers 4.6; Merchant Wholesalers 7.7 Blog 9/14/14
Sales for Retail and Food Services	Jan-Aug 2014/Jan-Aug 2013 ∆%: Retail and Food Services 3.7; Retail ∆% 3.6 Blog 9/14/14
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	Aug 12-month NSA ∆%: Imports -0.4; Exports 0.4 Blog 9/14/14
Consumer Credit	Jul ∆% annual rate: Total 9.7; Revolving 7.4; Nonrevolving 10.6 Blog 9/14/14
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 ∆% Aug: Receipts 7.7; Outlays 0.8; 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 9/14/2014
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 $11,983 B 72.0% GDP 2024 Deficit $960B, 3.6% GDP Debt $20,554B 77.2% 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 9/14/14
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:

9/7/14 http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html

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

8/3/14 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

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

Sales of manufacturers increased 1.2 percent in Jul 2014 after increasing 0.8 percent in Jun and increased 4.5 percent in the 12 months ending in Jul, as shown in Table VA-1. Retailers’ sales increased 0.3 percent in Jul 2014 after increasing 0.4 percent in Jun and increased 4.6 percent in 12 months ending in Jul 2014. Sales of merchant wholesalers increased 0.7 percent in Jul, increased 0.4 percent in Jun and increased 7.7 percent in 12 months ending in Jul. Sales of total business increased 0.8 percent in Jul after increasing 0.6 percent in Jun and increased 5.6 percent in 12 months.

Table VA-1, US, Percentage Changes for Sales of Manufacturers, Retailers and Merchant Wholesalers

	Jul 14/May 14 ∆% SA	Jul 2014 Millions of Dollars NSA	Jun 14/ May 14  ∆% SA	Jul 14/ Jul 13 ∆% NSA
Total Business	0.8	1,361,643	0.6	5.6
Manufacturers	1.2	496,460	0.8	4.5
Retailers	0.3	400,395	0.4	4.6
Merchant Wholesalers	0.7	464,788	0.4	7.7

Source: US Census Bureau http://www.census.gov/mtis/

Chart VA-1 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers seasonally adjusted (SA) in millions of dollars. Seasonal adjustment softens adjacent changes for purposes of comparing short-term variations free of seasonal factors. There was sharp drop in the global recession followed by sharp recovery with decline and recovery in the final segment above the peak before the global recession. Data are not adjusted for price changes.

Chart VA-1, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Jul 2014

US Census Bureau

http://www.census.gov/mtis/

Chart VA-2 of the US Census Bureau provides total US sales of manufacturing, retailers and wholesalers not seasonally adjusted (NSA) in millions of dollars. The series without adjustment shows sharp jagged behavior because of monthly fluctuations following seasonal patterns. There is sharp recovery from the global recession in a robust trend, which is mixture of price and quantity effects because data are not adjusted for price changes. There is stability in the final segment with monthly marginal strength.

Chart VA-2, US, Total Business Sales of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Jul 2014

US Census Bureau

http://www.census.gov/mtis/

Businesses added cautiously to inventories to replenish stocks. Retailers’ inventories added 1.0 percent in Jul 2014 and 0.7 percent in Jun with growth of 6.5 percent in 12 months, as shown in Table VA-2. Total business increased inventories by 0.4 percent in Jul, 0.4 percent in Jun and 5.9 percent in 12 months. Inventories sales/ratios of total business continued at a level close to 1.29 under careful management to avoid costs and risks. Inventory/sales ratios of manufacturers and retailers are higher than for merchant wholesalers. There is stability in inventory/sales ratios in individual months and relative to a year earlier.

Table VA-2, US, Percentage Changes for Inventories of Manufacturers, Retailers and Merchant Wholesalers and Inventory/Sales Ratios

Inventory Change	Jul 14 Millions of Dollars NSA	Jul 14/ Jun 14 ∆% SA	Jun 14/  May 14 ∆% SA	Jul 14/ Jul 13 ∆% NSA
Total Business	1,732,704	0.4	0.4	5.9
Manufacturers	656,465	0.1	0.2	3.8
Retailers	546,871	1.0	0.7	6.5
Merchant Wholesalers	529,368	0.1	0.2	7.9
Inventory/ Sales Ratio	Jul 14 Millions of Dollars NSA	Jul 2014 SA	Jun 2014 SA	Jul 2013 SA
Total Business	1,732,704	1.29	1.29	1.28
Manufacturers	656,465	1.29	1.30	1.29
Retailers	546,871	1.43	1.42	1.39
Merchant Wholesalers	592,368	1.16	1.17	1.16

Source: US Census Bureau http://www.census.gov/mtis/

Chart VA-3 of the US Census Bureau provides total business inventories of manufacturers, retailers and merchant wholesalers seasonally adjusted (SA) in millions of dollars from Jan 1992 to Jun 2014. The impact of the two recessions of 2001 and IVQ2007 to IIQ2009 is evident in the form of sharp reductions in inventories. Inventories have surpassed the peak before the global recession. Data are not adjusted for price changes.

Chart VA-3, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, SA, Millions of Dollars, Jan 1992-Jul 2014

US Census Bureau

http://www.census.gov/mtis/

Chart VA-4 provides total business inventories of manufacturers, retailers and merchant wholesalers not seasonally adjusted (NSA) from Jan 1992 to Jul 2014 in millions of dollars. The recessions of 2001 and IVQ2007 to IIQ2009 are evident in the form of sharp reductions of inventories. There is sharp upward trend of inventory accumulation after both recessions. Total business inventories are higher than in the peak before the global recession.

Chart VA-4, US, Total Business Inventories of Manufacturers, Retailers and Merchant Wholesalers, NSA, Millions of Dollars, Jan 1992-Jul 2014

US Census Bureau

http://www.census.gov/mtis/

Inventories follow business cycles. When recession hits sales inventories pile up, declining with expansion of the economy. In a fascinating classic opus, Lloyd Meltzer (1941, 129) concludes:

“The dynamic sequences (i) through (6) were intended to show what types of behavior are possible for a system containing a sales output lag. The following conclusions seem to be the most important:

(i) An economy in which business men attempt to recoup inventory losses will always undergo cyclical fluctuations when equilibrium is disturbed, provided the economy is stable.

This is the pure inventory cycle.

(2) The assumption of stability imposes severe limitations upon the possible size of the marginal propensity to consume, particularly if the coefficient of expectation is positive.

(3) The inventory accelerator is a more powerful de-stabilizer than the ordinary acceleration principle. The difference in stability conditions is due to the fact that the former allows for replacement demand whereas the usual analytical formulation of the latter does not. Thus, for inventories, replacement demand acts as a de-stabilizer. Whether it does so for all types of capital goods is a moot question, but I believe cases may occur in which it does not.

(4) Investment for inventory purposes cannot alter the equilibrium of income, which depends only upon the propensity to consume and the amount of non-induced investment.

(5) The apparent instability of a system containing both an accelerator and a coefficient of expectation makes further investigation of possible stabilizers highly desirable.”

Chart VA-5 shows the increase in the inventory/sales ratios during the recession of 2007-2009. The inventory/sales ratio fell during the expansions. The inventory/sales ratio declined to a trough in 2011, climbed and then stabilized at current levels in 2012, 2013 and 2014.

Chart VA-5, Total Business Inventories/Sales Ratios 2005 to 2014

Source: US Census Bureau

http://www2.census.gov/retail/releases/historical/mtis/img/mtisbrf.gif

Sales and inventories of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-3 for Jan-Jul 2014 NSA and percentage changes from the prior month SA and for Jan-Jul 2014 relative to Jan-Jul 2013. These data are volatile, aggregating diverse categories of durable and nondurable goods without adjustment for price changes. Total sales for the US rose 6.0 percent in Jan-Jul 2014 relative to Jan-Jul 2013 and increased 0.7 percent in Jul 2014 relative to Jun 2014. The value of total sales is quite high at $3119.9 billion, approaching five trillion dollars in a year. Value in the breakdown is useful in identifying relative importance of individual categories. Sales of durable goods in Jan-Jun 2014 reached $1419.4 billion, over two trillion dollars for a year, increasing 0.4 percent in Jul 2014 relative to Jun 2014 and increasing 4.9 percent in Jan-Jul 2014 relative to Jan-Jul 2013. Sales of automotive products reached $235.8 billion in Jan-Jul 2014, decreasing 0.2 percent in the month and increasing 4.5 percent relative to a year earlier. There is strong performance of 12.0 percent in machinery but lower of 4.1 percent in electrical products. Sales of nondurable goods rose 6.5 percent over a year earlier. The influence of commodity prices returned as suggested by decrease of 0.5 percent in Jul 2014 and decrease of 0.6 percent in Jan-Jul 2014 relative to a year earlier in farm products with increase of 2.6 percent in petroleum products in Jul 2014 and increase of 10.1 percent relative to a year earlier. The final three columns in Table VA-3 provide the value of inventories and percentage changes from the prior month and relative to the same month a year earlier. US total inventories of wholesalers increased 0.1 percent in Jul 2014 and increased 7.9 percent relative to a year earlier. Inventories of durable goods of $332.9 billion are 62.9 percent of total inventories of $529.4 billion and rose 8.4 percent relative to a year earlier. Automotive inventories increased 11.0 percent relative to a year earlier. Machinery inventories of $97.4 billion rose 11.3 percent relative to a year earlier. Inventories of nondurable goods of $196.4 billion are 37.1 percent of the total and increased 7.1 percent relative to a year earlier. Inventories of farm products decreased 8.2 percent in Jul relative to Jun and decreased 4.8 percent relative to a year earlier. Inventories of petroleum products decreased 3.0 percent in Jul and decreased 6.9 percent relative to a year earlier.

Table VA-3, US, Sales and Inventories of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, Month ∆%

2014	Sales $ Billions Jan-Jul 2014 NSA	Sales Jul ∆% SA	Sales∆% Jan-Jul 2014 from Jan-Jul 2013  NSA	INV $ Billions Jul 2014 NSA	INV Jul ∆% SA	INV  ∆% Jul 2014 from Jul 2013 NSA
US Total	3119.9	0.7	6.0	529.4	0.1	7.9
Durable	1419.4	0.4	4.9	332.9	0.3	8.4
Automotive	235.8	-0.2	4.5	54.6	1.0	11.0
Prof. Equip.	266.5	-0.6	4.7	41.2	-0.8	6.2
Computer Equipment	150.9	0.9	4.7	18.0	-4.0	4.7
Electrical	244.5	0.0	4.1	37.9	0.3	6.9
Machinery	269.9	0.2	12.0	97.4	0.5	11.3
Not Durable	1700.5	1.0	6.5	196.4	0.0	7.1
Drugs	277.7	0.1	10.9	45.5	3.2	24.3
Apparel	84.9	-0.6	7.2	26.7	1.9	10.0
Groceries	362.8	2.9	7.0	33.2	1.3	3.8
Farm Products	145.1	-0.5	-0.6	12.7	-8.2	-4.8
Petroleum	470.7	2.6	10.1	21.0	-3.0	-6.9

Note: INV: inventories

Source: US Census Bureau

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

Chart VA-6 of the US Census Bureau provides sales of wholesale trade NSA from Jan 1992 to Jul 2014. The jagged curve of wholesale trade sales without adjustment shows strong seasonal variations. There is a strong long-term trend interrupted by sharp drop during the global recession. Growth resumed along a stronger upward trend and the level surpasses the peak before the global recession with stability in the final segment.

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

Source: US Census Bureau

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

Chart VA-7 of the US Census Bureau provides US wholesale trade sales with seasonal adjustment from Jan 1992 to Jul 2014. The elimination of seasonality permits enhanced comparison of adjacent sales. The final segment identifies another drop followed by increase to a higher level with stability.

Chart VA-7, US, Wholesale Trade Sales, Monthly, SA, Jan 1992-Jul 2014, Millions of Dollars

Source: US Census Bureau

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

Inventory/sales ratios of merchant wholesalers except manufacturers’ sales branches and offices are shown in Table VA-3. The total for the US has remained almost without change at 1.16 in Jul 2014, 1.17 in Jun 2014 and 1.16 in Jul 2013. Inventory/sales ratios are higher in durable goods industries but remain relatively stable with 1.57 in Jul 2014, 1.57 in Jun 2014 and 1.56 in Jul 2013. Computer equipment operates with low inventory/sales ratios of 0.77 in Jul 2014, 0.81 in Jun 2014 and 0.77 in Jul 2013 because of the capacity to fill orders on demand. As expected because of perishable nature, nondurable inventory/sales ratios are quite low with 0.82 in Jul 2014 and 0.83 in Jun 2014, which are close to 0.83 in Jul 2013. There are exceptions such as 2.02 in Jul 2014 in apparel that is close to 1.97 in Jun 2014 and close to 1.97 in Jul 2013.

Table VA-3, Inventory/Sales Ratios of Merchant Wholesalers except Manufacturers’ Sales Branches and Offices, % SA

	Jul 2014	Jun 2014	Jul 2013
US Total	1.16	1.17	1.16
Durable	1.57	1.57	1.56
Automotive	1.55	1.54	1.53
Prof. Equip.	1.02	1.02	1.02
Comp. Equip.	0.77	0.81	0.77
Electrical	1.03	1.02	1.00
Machinery	2.44	2.43	2.49
Not Durable	0.82	0.83	0.82
Drugs	1.10	1.07	0.99
Apparel	2.02	1.97	1.97
Groceries	0.63	0.64	0.67
Farm Products	0.90	0.97	0.90
Petroleum	0.30	0.32	0.35

Source: US Census Bureau

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

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

Chart VA-8, US, Inventories of Merchant Wholesalers, Millions of Dollars, NSA, Jan 1992-Jul 2014

Source: US Census Bureau

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

Inventories of merchant wholesalers except manufacturers’ sales branches in millions of dollars SA are provided in Chart VA-9 of the US Census Bureau. There is evident acceleration in inventory building in the final segment at a sharper slope than before the global recession with recent downward turn followed by increase.

Chart VA-9, US, Inventories of Merchant Wholesalers, Millions of Dollars, SA, Jan 1992-Jul 2014

Source: US Census Bureau

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

Chart VA-10 provides the chart of the US Census Bureau with inventories/sales ratios of merchant wholesalers from 2004 to 2014 seasonally adjusted. Inventory/sales ratios rise during contractions as merchants are caught with increasing inventories because of weak sales and fall during expansions as merchants attempt to fill sales with existing stocks. There is an increase in the inventory/sales ratio in 2012 but not yet significantly higher with declining trend in the final segment followed by an increase and new decline/stability.

Chart VA-10, US, Monthly Inventories/Sales Ratios of Merchant Wholesalers, SA, 2005-2014

Source: US Census Bureau

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

Sales of retail and food services increased 0.6 percent in Aug 2014 after increasing 0.3 percent in Jul 2014 seasonally adjusted (SA), growing 3.7 percent in Jan-Aug 2014 relative to Jan-Aug 2013 not seasonally adjusted (NSA), as shown in Table VA-5. Excluding motor vehicles and parts, retail sales increased 0.3 percent in Aug 2014, increasing 0.3 percent in Jul 2014 SA and increasing 2.8 percent NSA in Jan-Aug 2014 relative to a year earlier. Sales of motor vehicles and parts increased 1.5 percent in Aug 2014 after increasing 0.6 percent in Jul 2014 SA and increasing 7.5 percent NSA in Jan-Aug 2014 relative to a year earlier. Gasoline station sales decreased 0.8 percent SA in Aug 2014 after changing 0.0 percent in Jul 2014 in oscillating prices of gasoline that are moderating, decreasing 1.2 percent in Jan-Aug 2014 relative to a year earlier.

Table VA-5, US, Percentage Change in Monthly Sales for Retail and Food Services, ∆%

	Aug/Jul ∆% SA	Jul/Jun ∆% SA	Jan-Aug 2014 Million Dollars NSA	Jan-Aug 2014 from Jan-Aug 2013 ∆% NSA
Retail and Food Services	0.6	0.3	3,456,295	3.7
Excluding Motor Vehicles and Parts	0.3	0.3	2,744,603	2.8
Motor Vehicles & Parts Dealers	1.5	0.6	711,692	7.5
Retail	0.6	0.3	3,078,753	3.6
Building Materials	1.4	-0.5	221,577	4.4
Food and Beverage	0.3	0.2	440,662	2.8
Grocery	0.4	0.3	393,497	2.4
Health & Personal Care Stores	0.6	0.6	195,367	5.9
Clothing & Clothing Accessories Stores	0.3	0.9	157,189	1.4
Gasoline Stations	-0.8	0.0	368,405	-1.2
General Merchandise Stores	-0.1	0.4	421,630	1.4
Food Services & Drinking Places	0.6	0.4	377,542	4.9

Source: US Census Bureau http://www.census.gov/retail/

Chart VA-11 provides monthly percentage changes of sales of retail and food services. There is significant monthly volatility that prevents identification of clear trends.

Chart VA-11, US, Monthly Percentage Change of Retail and Food Services Sales, Jan 1992-Aug 2014

Source: US Census Bureau

http://www.census.gov/retail/

Chart VA-12 of the US Census Bureau provides total sales of retail trade and food services seasonally adjusted (SA) from Jan 1992 to Aug 2014 in millions of dollars. The impact on sales of the shallow recession of 2001 was much milder than the sharp contraction in the global recession from IVQ2007 to IIQ2009. There is flattening in the final segment of the series followed by another increase. Data are not adjusted for price changes.

Chart VA-12, US, Total Sales of Retail Trade and Food Services, SA, Jan 1992-Aug 2014, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/retail/

Chart VA-13 of the US Census Bureau provides total sales of retail trade and food services not seasonally adjusted (NSA) in millions of dollars from Jan 1992 to Aug 2014. Data are not adjusted for seasonality, which explains sharp jagged behavior, or price changes. There was contraction during the global recession from IVQ2007 to IIQ2009 with strong rebound to a higher level and stability followed by strong increase in the final segment.

Chart VA-13, US, Total Sales of Retail Trade and Food Services, NSA, Jan 1992-Aug 2014, Millions of Dollars

Source: US Census Bureau

http://www.census.gov/retail/

The report of consumer credit outstanding of the Board of Governors of the Federal Reserve System is provided in Table VA-6. The data are in seasonally adjusted annual rates both percentage changes and billions of dollars. The estimate of consumer credit “covers most short- and intermediate-term credit extended to individuals, excluding loans secured by real estate (http://www.federalreserve.gov/releases/g19/current/default.htm). Consumer credit is divided into two categories. (1) Revolving consumer credit (REV in Table VA-6) consists mainly of unsecured credit cards. (2) Non-revolving consumer credit (NREV in Table VA-6) “includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers or vacations” (http://www.federalreserve.gov/releases/g19/current/default.htm). In Jul 2014, revolving credit was $881 billion, or 27.2 percent of total consumer credit of $3238 billion, and non-revolving credit was $2357 billion, or 72.8 percent of total consumer credit outstanding. Consumer credit grew at relatively high rates before the recession beginning in IVQ2007 (Dec) and extending to IIQ2009 (Jun) as dated by the National Bureau of Economic Research or NBER (http://www.nber.org/cycles/cyclesmain.html). Percentage changes of consumer credit outstanding fell already in 2009. Rates were still negative in 2010 with decline of 1.0 percent in annual data and sharp decline of 7.6 percent in revolving credit. In IVQ 2013, total consumer credit grew at 5.4 percent with increase of revolving credit at 2.0 percent and increase of non-revolving credit at 6.7 percent. Growth continued in Jul 2014 with total credit at 9.7 percent, revolving at 7.4 percent and non-revolving at 10.6 percent.

Table VA-6, US, Consumer Credit Outstanding, SA, Annual Rate and Billions of Dollars

	Total ∆%	REV ∆%	NRV ∆%	Total $B	REV $B	NREV $B
2014
Jul	9.7	7.4	10.6	3238	881	2357
Jun	7.1	2.5	8.8	3212	875	2337
May	7.3	3.3	8.8	3193	873	2320
IIQ	8.1	6.3	8.7	3212	875	2337
IQ	6.5	1.8	8.3	3148	861	2287
2013
IVQ	5.4	2.0	6.7	3097	857	2240
IIIQ	6.3	0.9	8.5	3056	853	2203
IIQ	5.5	1.0	7.3	3009	851	2158
2013	6.0	1.3	7.9	3097	857	2240
2012	6.2	0.6	8.6	2924	847	2077
2011	4.1	0.2	5.9	2756	842	1914
2010	-1.0	-7.6	2.7	2647	840	1807
2009	-3.9	-8.8	-1.0	2553	917	1636
2008	1.3	0.2	2.0	2651	1005	1646
2007	5.9	8.5	4.3	2529	1008	1521

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

Source: Board of Governors of the Federal Reserve System

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

Chart VA-14 of the Board of Governors of the Federal Reserve System total consumer credit outstanding in millions of dollars measured in the right axis and the finance rate on 24-month personal loans at commercial banks, not seasonally adjusted, measured on the left axis. There was sharp decline of total consumer loans outstanding during the global recession followed by strong recovery. There is long-term decline of the financing rate.

Chart VA-14, US, Total Consumer Credit Owned and Securitized NSA and Financing Rate on 24-month Personal Loans at Commercial Banks NSA, Millions of Dollars and Percent, Feb 1972-Jul 2014

Source: Board of Governors of the Federal Reserve System

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

Chart VA-15 of the Board of Governors of the Federal Reserve System provides percentage changes of total consumer credit outstanding in the US and the financing rate on 24-month personal consumer loans at commercial banks, since 1972. The shaded bars are the cyclical contraction dates of the National Bureau of Economic Research (http://www.nber.org/cycles/cyclesmain.html). Consumer credit is cyclical, declining during contractions as shown by negative percentage changes during economic contractions. There is clear upward trend in 2012-2013 but with significant fluctuations and vacillation in the final segment.

Chart VA-15, US, Percent Change of Total Consumer Credit, Seasonally Adjusted at an Annual Rate and Finance Rate on 24-month Personal Loans at Commercial Banks NSA, Feb 1972-Jul 2014

Source: Board of Governors of the Federal Reserve System

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

Table VA-7 provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2014 fiscal year beginning on Oct 1, 2013 and ending on Sep 30, 2014; federal fiscal data for the years from 2009 to 2013; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2013. Receipts increased 7.7 percent in the cumulative fiscal year 2014 ending in Aug 2014 relative to the cumulative in fiscal year 2013. Individual income taxes increased 4.9 percent relative to the same fiscal period a year earlier. Outlays increased 0.8 percent relative to a year earlier. There are also receipts, outlays, deficit and debt for fiscal year 2013. Total revenues of the US from 2009 to 2012 accumulate to $9021 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,109 billion, or $14.1 trillion, with the deficit accumulating to $5090 billion, or $5.1 trillion. Revenues decreased 6.5 percent from $9653 billion in the four years from 2005 to 2008 to $9021 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and also by growth of only 2.2 percent on average in the cyclical expansion from IIIQ2009 to IIQ2014. In contrast, the expansion from IQ1983 to IIIQ1987 was at the average annual growth rate of 4.9 percent and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html). Because of mediocre GDP growth, there are 26.9 million unemployed or underemployed in the United States for an effective unemployment rate of 16.4 percent (http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html). Weakness of growth and employment creation is analyzed in II Collapse of United States Dynamism of Income Growth and Employment Creation (http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html). In contrast with the decline of revenue, outlays or expenditures increased 30.2 percent from $10,839 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,109 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.2 percent while revenue declined by 6.5 percent caused the increase in the federal deficit from $1186 billion in 2005-2008 to $5090 billion in 2009-2012. Federal revenue was 14.9 percent of GDP on average in the years from 2009 to 2012, which is well below 17.4 percent of GDP on average from 1973 to 2012. Federal outlays were 23.3 percent of GDP on average from 2009 to 2012, which is well above 20.4 percent of GDP on average from 1973 to 2012. The lower part of Table VA-7 shows that debt held by the public swelled from $5803 billion in 2008 to $11,982 billion in 2013, by $5478 billion or 106.5 percent. Debt held by the public as percent of GDP or economic activity jumped from 39.3 percent in 2008 to 72.1 percent in 2013, which is well above the average of 38.0 percent from 1973 to 2012. The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures.

Table VA-7, US, Treasury Budget in Fiscal Year to Date Million Dollars

Aug 2014	Fiscal Year 2014	Fiscal Year 2013	∆%
Receipts	2,663,426	2,472,542	7.7
Outlays	3,252,611	3,227,877	0.8
Deficit	-589,185	-755,334
Individual Income Tax	1,233,274	1,175,536	4.9
Corporation Income Tax	247,200	216,360	14.3
Social Insurance	674,338	614,010	9.8
	Receipts	Outlays	Deficit (-), Surplus (+)
$ Billions
Fiscal Year 2013	2,775	3,455	-680
% GDP	16.7	20.8	-4.1
Fiscal Year 2012	2,450	3,537	-1,087
% GDP	15.2	22.0	-6.8
Fiscal Year 2011	2,304	3,603	-1,300
% GDP	15.0	23.4	-8.4
Fiscal Year 2010	2,163	3,457	-1,294
% GDP	14.6	23.4	-8.8
Fiscal Year 2009	2,105	3,518	-1,413
% GDP	14.6	24.4	-9.8
Total 2009-2012	9,021	14,109	-5,090
Average % GDP 2009-2012	14.9	23.3	-8.4
Fiscal Year 2008	2,524	2,983	-459
% GDP	17.1	20.2	-3.1
Fiscal Year 2007	2,568	2,729	-161
% GDP	17.9	19.0	-1.1
Fiscal Year 2006	2,407	2,655	-248
% GDP	17.6	19.4	-1.8
Fiscal Year 2005	2,154	2,472	-318
% GDP	16.7	19.2	-2.5
Total 2005-2008	9,653	10,839	-1,186
Average % GDP 2005-2008	17.3	19.5	-2.1
Debt Held by the Public	Billions of Dollars	Percent of GDP
2005	4,592	35.6
2006	4,829	35.3
2007	5,035	35.1
2008	5,803	39.3
2009	7,545	52.3
2010	9,019	61.0
2011	10,128	65.8
2012	11,281	70.1
2013	11,982	72.0

Source: http://www.fms.treas.gov/mts/index.html CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO (2013Aug12). 2013AugHBD. Historical budget data—August 2013. Washington, DC, Congressional Budget Office, Aug. CBO, Historical Budget Data—February 2014, Washington, DC, Congressional Budget Office, Feb. CBO, Historical budget data—April 2014 release. Washington, DC, Congressional Budget Office, Apr. Congressional Budget Office, August 2014 baseline: an update to the budget and economic outlook: 2014 to 2024. Washington, DC, CBO, Aug 27, 2014.

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	Aug ∆% -0.2 12 months ∆% 3.9 Blog 9/14/14
Consumer Price Index	Jul NSA ∆% 0.0; Jul 12 months NSA ∆% 3.4 Blog 8/31/14
Real GDP Growth	IIQ2014 ∆%: -1.8 on IQ2014;  IIQ2014 SAAR -7.1; ∆% 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 9/14/14
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 Jul ∆% -13.5 Private ∆%: 16.4 Jul ∆% Excluding Volatile Orders 3.5 Blog 9/14/14
Tertiary Index	Jul month SA ∆% 0.0 Jul 12 months NSA ∆% minus 1.9 Blog 9/14/14
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

Japan’s economy grew 1.5 percent in IQ2014, seasonally adjusted, partly because of anticipation of purchases to avoid the increase in the tax on value added of consumption in Apr 2014, contracting 1.8 percent in IIQ2014, as shown in Table VB-1, incorporating the latest estimates and revisions. The economy of Japan contracted 0.1 percent in IVQ2013 after growing 0.4 percent in IIIQ2013, 0.8 percent in IIQ2013 and 1.2 percent in IQ2013. Japan’s GDP decreased 0.1 percent in IVQ2012 relative to IIIQ2012. IQ2012 GDP growth was revised to 1.0 percent; IIQGDP growth was revised to -0.5 percent; and IIIQ2012 growth was revised to -0.7 percent. The economy of Japan had already weakened in IVQ2010 when GDP fell revised 0.5 percent. As in other advanced economies, Japan’s recovery from the global recession has not been robust. GDP fell 1.8 percent in IQ2011 and fell again 0.7 percent in IIQ2011 because of the disruption of the tragic Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Recovery was robust in the first two quarters of 2010 but GDP grew at 1.4 percent in IIIQ2010 and fell 0.5 percent in IVQ2010. The deepest quarterly contractions in the recession were 3.3 percent in IVQ2008 and 4.0 percent in IQ2009.

Table VB-1, Japan, Real GDP ∆% Changes from the Previous Quarter Seasonally Adjusted ∆%

	IQ	IIQ	IIIQ	IVQ
2014	1.5	-1.8
2013	1.2	0.8	0.4	-0.1
2012	1.0	-0.5	-0.7	-0.1
2011	-1.8	-0.7	2.6	0.2
2010	1.5	1.1	1.4	-0.5
2009	-4.0	1.7	0.1	1.7
2008	0.7	-1.2	-1.1	-3.3
2007	1.0	0.1	-0.4	0.9
2006	0.4	0.4	-0.1	1.3
2005	0.2	1.3	0.4	0.2
2004	0.9	0.1	0.1	-0.3
2003	-0.6	1.3	0.4	1.0
2002	-0.2	1.0	0.6	0.4
2001	0.6	-0.2	-1.1	-0.1
2000	1.6	0.2	-0.3	0.7
1999	-0.9	0.4	-0.2	0.5
1998	-1.9	-0.5	0.3	0.5
1997	0.7	-0.9	0.4	-0.1

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-2 provides contributions to real GDP at seasonally adjusted annual rates (SAAR). Japan contracted at 7.1 percent in IIQ2014 with deduction of 12.6 percentage points of personal consumption expenditures and deduction of 4.5 percentage points of gross fixed capital formation. Trade added 4.3 percentage to GDP growth in IIQ2014; private inventory investment added 5.5 percentage points; and government expenditures added 0.1 percentage points. The GDP of Japan expanded at 6.0 percent in IQ2014 with contributions of 5.1 percent by personal consumption and 4.0 percent of gross fixed capital formation. There were deductions of 0.8 percent by trade, 2.1 percent by inventory divestment and 0.1 percent by government expenditures. The GDP of Japan contracted at 0.5 percent annual equivalent in IVQ2013 with growth of personal consumption expenditures of 0.9 percent and GFCF at 1.1 percent. Trade deducted 2.4 percentage points. Japan grew at 1.8 percent in IIIQ 2013 with contribution of 0.5 percentage points by personal consumption and 2.2 percentage points by GFCF. Trade deducted 1.6 percentage points. Japan grew at 3.4 percent SAAR in IIQ2013 driven by contributions of 1.8 percent of personal consumption (PC), 0.2 percent of net trade and gross fixed capital formation (GFCF) at 2.2 percent. In IQ2013, Japan’s GDP increased at the SAAR of 5.1 percent in large part because of 2.6 percent in personal consumption and 1.7 percent in trade. The SAAR of GDP in IVQ2012 was minus 0.5 percent: 1.1 percentage points from growth of personal consumption expenditures (PC) less 0.5 percentage points of net trade (exports less imports) less 1.1 percentage points of private inventory investment (PINV) plus 0.5 percentage points of government consumption and minus 0.5 percentage points of gross fixed capital formation (GFCF). The SAAR of GDP in IIIQ2011 was revised to a high 10.8 percent. Net trade deducted from GDP growth in three quarters of 2011 and provided the growth impulse of 3.9 percentage points in IIIQ2011. Growth in 2011 and IQ2012 was driven by personal consumption expenditures that deducted 1.2 percentage points from GDP growth in IIIQ2012 but added 1.1 percentage points to GDP growth in IVQ2012.

Table VB-2, Japan, Contributions to Changes in Real GDP, Seasonally Adjusted Annual Rates (SAAR), %

	GDP	PC	GFCF	Trade	PINV	GOVC
2014
I	6.0	5.1	4.0	-0.8	-2.1	-0.1
II	-7.1	-12.6	-4.5	4.3	5.5	0.1
2013
I	5.1	2.6	-0.2	1.7	0.4	0.7
II	3.4	1.8	2.2	0.2	-1.5	0.5
III	1.8	0.5	2.2	-1.6	0.6	0.1
IV	-0.5	0.9	1.1	-2.4	-0.3	0.2
2012
I	4.1	0.9	-0.1	0.4	1.6	1.2
II	-2.2	1.0	0.4	-1.4	-1.7	-0.5
III	-2.7	-1.2	-0.9	-1.9	1.0	0.3
IV	-0.5	1.1	-0.5	-0.5	-1.0	0.5
2011
I	-6.9	-4.1	0.0	-1.2	-1.6	0.0
II	-2.7	2.3	0.1	-4.5	-1.1	0.3
III	10.8	4.0	1.4	3.9	1.4	0.1
IV	0.6	1.4	3.0	-3.0	-1.0	0.2
2010
I	6.1	1.7	0.3	2.2	2.4	-0.5
II	4.4	-0.1	1.1	0.0	2.2	1.2
III	5.8	3.2	0.9	0.5	1.0	0.3
IV	-2.2	-0.8	-1.3	-0.3	-0.1	0.3
2009
I	-15.0	-1.9	-1.9	-4.4	-7.5	0.8
II	7.1	4.0	-3.1	7.3	-1.9	0.7
III	0.2	0.0	-1.4	2.2	-1.6	1.0
IV	7.1	3.5	-0.1	2.8	0.5	0.3
2008
I	2.7	1.5	0.4	1.2	-0.4	0.0
II	-4.7	-3.2	-2.3	0.4	1.2	-0.8
III	-4.1	-0.5	-0.9	0.0	-2.7	0.0
IV	-12.5	-2.8	-4.6	-11.4	5.7	0.3
2007
I	4.1	0.9	0.5	1.2	1.3	0.4
II	0.5	0.6	-1.5	0.7	0.0	0.5
III	-1.5	-1.0	-1.7	2.0	-0.6	-0.2
IV	3.5	0.3	0.2	1.4	0.9	0.6

Note: PC: Private Consumption; GFCF: Gross Fixed Capital Formation; PINV: Private Inventory; Trade: Net Exports; GOVC: Government Consumption

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

Long-term economic growth in Japan significantly improved by increasing competitiveness in world markets. Net trade of exports and imports is an important component of the GDP accounts of Japan. Table VB-3 provides quarterly data for net trade, exports and imports of Japan. Net trade had strong positive contributions to GDP growth in Japan in all quarters from IQ2007 to IIQ2009 with exception of IVQ2008 and IQ2009. The US recession is dated by the National Bureau of Economic Research (NBER) as beginning in IVQ2007 (Dec) and ending in IIQ2009 (Jun) (http://www.nber.org/cycles/cyclesmain.html). Net trade contributions helped to cushion the economy of Japan from the global recession. Net trade deducted from GDP growth in seven of the nine quarters from IVQ2010 IQ2012. The only strong contribution of net trade was 3.9 percent in IIIQ2011. Net trade added 1.7 percentage points to GDP growth in IQ2013 and 0.2 percentage points in IIQ2013 but deducted 1.6 percentage points in IIIQ2013 and deducted 2.4 percentage points in IVQ2013. Net trade deducted 0.8 percentage points from GDP growth in IQ2014. Net trade added 4.3 percentage points to GDP growth in IIQ2014. Private consumption assumed the role of driver of Japan’s economic growth but should moderate as in most mature economies.

Table VB-3, Japan, Contributions to Changes in Real GDP, Seasonally Adjusted Annual Rates (SAAR), %

	Net Trade	Exports	Imports
2014
I	-0.8	4.2	-5.0
II	4.3	-0.3	4.7
2013
I	1.7	2.4	-0.8
II	0.2	1.8	-1.5
III	-1.6	-0.4	-1.2
IV	-2.4	0.2	-2.5
2012
I	0.4	1.7	-1.3
II	-1.4	-0.3	-1.2
III	-1.9	-2.5	0.5
IV	-0.5	-1.9	1.3
2011
I	-1.2	-0.4	-0.7
II	-4.5	-4.6	0.2
III	3.9	5.7	-1.9
IV	-3.0	-1.9	-1.0
2010
I	2.2	3.5	-1.3
II	0.0	2.6	-2.7
III	0.5	1.4	-0.9
IV	-0.3	0.1	-0.4
2009
I	-4.4	-16.4	12.0
II	7.3	4.7	2.7
III	2.2	5.3	-3.1
IV	2.8	4.1	-1.3
2008
I	1.2	2.1	-0.9
II	0.4	-1.6	2.0
III	0.0	0.2	-0.2
IV	-11.4	-10.2	-1.2
2007
I	1.2	1.7	-0.5
II	0.7	1.6	-0.9
III	2.0	1.5	0.6
IV	1.4	2.1	-0.6

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

Japan’s percentage growth of GDP not seasonally adjusted in a quarter relative to the same quarter a year earlier is shown in Table VB-4. Contraction of GDP in a quarter relative to the same quarter a year earlier extended over seven quarters from IIQ2008 through IVQ2009. Contraction was sharpest in IQ2009 with output declining 9.4 percent relative to a year earlier. Yearly quarterly rates of growth of Japan were relatively high for a mature economy through the decade with the exception of the contractions from IVQ2001 to IIQ2002 and after 2007. The Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 caused flat GDP in IQ2011 at 0.0 percent relative to the same quarter a year earlier and decline of 1.5 percent in IIQ2011. GDP fell 0.5 percent in IIIQ2011 relative to a year earlier and increased 0.1 percent in IVQ2011 relative to a year earlier. Growth resumed with 3.3 percent in IQ2012 relative to a year earlier. Growth of 3.2 percent in IIQ2012 is largely caused by the low level in IIQ2011 resulting from the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. GDP decreased 0.2 percent in IIIQ2012 relative to a year earlier and 0.3 percent in IVQ2012 relative to a year earlier. GDP increased 0.1 percent in IQ2013 relative to a year earlier and 1.2 percent in IIQ2013. Growth of 2.3 percent in IIIQ2013 relative to a year earlier is partly due to the decline of 0.7 percent in GDP in IIIQ2012. GDP increased 2.5 percent in IVQ2013 relative to a year earlier. The GDP of Japan increased 3.0 percent in IQ2014 relative to a year earlier. Japan’s GDP contracted 0.1 percent in IIQ2014 relative to a year earlier. Japan faces the challenge of recovery from the devastation of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 in an environment of declining world trade and bouts of risk aversion that cause appreciation of the Japanese yen, eroding the country’s competitiveness in world markets.

Table VB-4, Japan, Real GDP ∆% Changes from Same Quarter Year Earlier, NSA ∆%

	IQ	IIQ	IIIQ	IVQ
2014	3.0	-0.1
2013	0.1	1.2	2.3	2.5
2012	3.3	3.2	-0.2	-0.3
2011	0.0	-1.5	-0.5	0.1
2010	4.9	4.4	6.0	3.3
2009	-9.4	-6.6	-5.6	-0.5
2008	1.4	-0.1	-0.6	-4.7
2007	2.8	2.3	2.0	1.6
2006	2.6	1.3	0.9	2.0
2005	0.4	1.4	1.5	1.9
2004	4.0	2.6	2.2	0.7
2003	1.7	1.8	1.5	1.8
2002	-1.6	-0.2	1.4	1.6
2001	1.6	0.9	0.0	-1.0
2000	2.7	2.4	2.2	1.8
1999	-0.3	0.1	-0.1	-0.5
1998	-2.4	-1.8	-2.3	-1.5
1997	3.5	1.5	1.7	-0.2

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

Japan’s total machinery orders seasonally adjusted in Table VB-5 decreased 13.5 percent seasonally adjusted in Jul 2014. Private sector orders increased 16.4 percent and increased 3.5 percent excluding volatile orders. Orders from overseas decreased 42.6 percent and manufacturing orders increased 20.3 percent. Government orders increased 9.3 percent.

Table VB-5, Japan, Machinery Orders, Month ∆%, SA 

2014	Jul 14	Jun 14	May 14	Apr 14
Total	-13.5	-17.1	-30.5	34.8
Private Sector	16.4	0.5	-19.6	-2.1
Excluding Volatile Orders	3.5	8.8	-19.5	-9.1
Manufacturing	20.3	6.7	-18.6	-9.4
Non-Manufacturing ex Volatile	4.3	4.0	-17.8	0.9
Government	9.3	-24.0	22.4	40.5
From Overseas	-42.6	62.8	-45.9	71.3
Through Agencies	2.3	3.1	2.2	27.3

Note: Mfg: manufacturing

Source: Japan Economic and Social Research Institute, Cabinet Office

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

Total orders for machinery and total private-sector orders excluding volatile orders for Japan are shown in Chart VB-1 of Japan’s Economic and Social Research Institute at the Cabinet Office. The trend of private-sector orders excluding volatile orders was showing recovery from the drop after Mar 2011 because of the earthquake/tsunami. There was reversal of the trend of increase in total orders with recent decreases and an upward movement in the final data point. Fluctuations still prevent detecting longer-term trends but recovery is still evident from the global recession. There was a major setback by the declines in May 2012 shown in the final segment of Chart VB-1 with partial recovery in Jun 2012, decline again in Jul and Aug 2012 and rebound in total orders in Nov reversed in Dec but decline in orders excluding volatile segments with increase in Nov-Dec 2012. The final segment shows growth in Feb-Mar 2013 interrupted by decline in Apr 2013 followed by increase in May 2013. Orders fell again in Jun 2013, rebounding in Jul-Sep 2013 followed by another fall in Oct 2013. Orders recovered in Nov 2013 but declined in Dec 2013. Orders increased in Jan 2014 and decreased in Feb 2014. Orders increased in Mar-Apr 2014, with decreasing trend in May-Jul 2014.

Chart VB-1, Japan, Machinery Orders

Source: Japan Economic and Social Research Institute, Cabinet Office

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

Table VB-6 provides values and percentage changes from a year earlier of Japan’s machinery orders without seasonal adjustment. Total orders of JPY 1,899,751 million in Jul 2014 are divided between JPY 733,660 million overseas orders, or 38.6 percent of the total, and domestic orders of JPY 1,057,826 million, or 55.3 percent of the total, with orders through agencies of JPY 108,265 million, or 5.7 percent of the total. Orders through agencies are not in Table VB-2 because of the minor value and appear only in the note to the table. Twelve-month percentages changes in Jul 2014 were mixed with increases of 6.8 percent for domestic orders and 1.1 percent for private excluding volatile components with increase of 6.1 percent for total orders. Overseas orders increased 4.4 percent in 12 months.

Table VB-6, Japan, Machinery Orders, 12 Months ∆% and Million Yen, Original Series  

	Total	Overseas	Domestic	Private ex Volatile
Value Jul  2014	1,899,751	733,660	1,057,826	721,645
% Total	100.0	38.6	55.7	38.0
Value Jul 2013	1,790,273	702,677	990,302	713,619
% Total	100.0	39.3	55.3	39.9
12-month ∆%	6.1	4.4	6.8	1.1
Jul 2014	6.1	4.4	6.8	1.1
Jun 2014	30.3	87.5	-2.9	-3.0
May 2014	-2.6	-0.2	-5.5	-14.3
Apr 2014	53.6	101.7	21.5	17.6
Mar 2014	-0.3	-4.3	4.1	16.1
Feb 2014	20.0	31.9	12.4	10.8
Jan 2014	28.8	29.8	29.0	23.6
Dec 2013	15.1	25.0	8.3	6.7
Nov 2013	8.9	1.3	14.4	16.6
Oct 2013	24.6	29.7	21.4	17.8
Sep 2013	30.3	57.4	18.4	11.4
Aug 2013	25.9	41.8	17.1	10.3
Jul 2013	5.3	4.4	6.9	6.5
Jun 2013	2.7	0.1	4.1	4.9
May 2013	18.1	17.1	20.8	16.5
Apr 2013	-4.3	6.7	-9.9	-1.1
Mar 2013	11.5	27.5	3.3	2.4
Feb 2013	-14.8	-21.0	-10.7	-11.3
Jan 2013	-24.8	-36.7	-11.8	-9.7
Dec 2012	-12.5	-24.1	-3.3	-3.4
Nov 2012	-8.6	-9.6	-8.5	0.3
Oct 2012	-6.9	-12.8	-2.6	1.2
Sep 2012	-7.8	-18.4	-1.8	-7.8
Aug 2012	-18.6	-31.1	-10.2	-6.1
Jul 2012	2.6	-1.9	3.2	1.7
Jun 2012	-10.9	-11.3	-12.4	-9.9
May 2012	-6.8	-7.0	-8.6	1.0
Apr 2012	7.5	-9.6	23.0	6.6
Mar 2012	8.1	-10.0	19.0	-1.1
Feb 2012	-9.3	-8.9	-11.2	8.9
Jan 2012	9.8	18.3	0.5	5.7
Dec 2011	0.8	12.6	-8.5	6.3
Nov 2011	11.0	8.0	13.5	12.5
Oct 2011	-6.8	-15.6	-1.0	1.5
Dec 2010	9.4	3.5	14.1	-0.6
Dec 2009	1.8	0.4	3.6	-1.9
Dec 2008	-23.3	-29.4	-17.4	-24.7
Dec 2007	1.3	9.8	-4.3	-6.4
Dec 2006	0.8	0.9	-0.1	0.1

Note: Total machinery orders = overseas + domestic demand + orders through agencies. Orders through agencies in Jul 2014 were JPY 108,265 million or 5.7 percent of the total and JPY 97,294 or 4.9 percent of the total in Jul 2013, and are not shown in the table. The data are the original numbers without any adjustments and differ from the seasonally adjusted data.

Source: Japan Economic and Social Research Institute, Cabinet Office

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

The tertiary activity index of Japan changed 0.0 percent SA in Jul 2014 and decreased 1.9 percent NSA in the 12 months ending in Jul 2014, as shown in Table VB-7. There are effects of the increase in the tax on value added of consumption in Apr 2014. The index is showing significant volatility with increases of 0.5 percent in Feb 2013 and 0.5 percent in May 2013 but decreases in multiple months. The indexed increased 2.6 percent in Mar 2014 largely because of anticipation of expenditures to avoid the increase in the tax on consumption in Apr 2014. The index fell 5.7 percent in Apr 2014 because of the increases in the tax on consumption. The tertiary activity index fell 5.2 percent in 2009, growing 1.3 percent in 2010, 0.1 percent in 2011 and 1.4 percent in 2012. The tertiary activity index increased 0.7 percent in 2013.

Table VB-7, Japan, Tertiary Activity Index, ∆%

	Month ∆% SA	12 Months ∆% NSA
Jul 2014	0.0	-1.9
Jun	0.0	-1.4
May	0.9	-2.5
Apr	-5.7	-2.6
Mar	2.6	3.2
Feb	-0.9	0.9
Jan	1.5	2.0
Dec 2013	-0.1	0.8
Nov	0.3	0.5
Oct	-0.5	0.1
Sep	0.1	1.4
Aug	0.2	0.8
Jul	-0.1	1.5
Jun	-0.3	0.6
May	0.5	1.8
Apr	-0.1	1.5
Mar	0.1	0.7
Feb	0.5	-1.5
Jan	0.0	0.3
Dec 2012	0.2	-0.1
Nov	-0.1	1.0
Oct	0.2	1.3
Sep	0.0	0.1
Aug	0.2	0.6
Jul	-0.3	0.8
Jun	0.0	0.8
May	0.5	3.1
Apr	-0.2	2.4
Mar	-0.3	4.2
Feb	0.2	2.4
Jan	-0.8	0.3
Calendar Year
2013		0.7
2012		1.4
2011		0.1
2010		1.3
2009		-5.2
2008		-1.0
2007		1.0
2006		1.8
2005		1.9
2004		1.8

Source: Japan, Ministry of Economy, Trade and Industry http://www.meti.go.jp/english/statistics/index.html

Month and 12-month rates of growth of the tertiary activity index of Japan and components in Jul 2014 are provided in Table VB-8. Electricity, gas, heat supply and water decreased 1.3 percent in Jul 2014 and decreased 2.8 percent in the 12 months ending in Jul 2014. Wholesale and retail trade increased 1.3 percent in Jul 2014, rebounding from decline of 14.4 percent in the month of Apr because of the increase in the tax on value added of consumption. The index of wholesale and retail trade decreased 3.3 percent in 12 months ending in Jul 2014. Information and communications decreased 0.6 percent in Jul and decreased 1.4 percent in 12 months.

Table VB-8, Japan, Tertiary Index and Components, Month and 12-Month Percentage Changes ∆%

Jul 2014	Weight	Month ∆% SA	12 Months ∆% NSA
Tertiary Index	10,000.0	0.0	-1.9
Electricity, Gas, Heat Supply & Water	372.9	-1.3	-2.8
Information & Communications	951.2	-0.6	-1.4
Wholesale & Retail Trade	2,641.2	1.3	-3.3
Finance & Insurance	971.1	-1.0	-2.1
Real Estate & Goods Rental & Leasing	903.4	0.2	-1.7
Scientific Research, Professional & Technical Services	551.3	1.9	3.1
Accommodations, Eating, Drinking	496.0	-1.5	-2.3
Living-Related, Personal, Amusement Services	552.7	-0.8	-3.9
Learning Support	116.9	0.5	-0.5
Medical, Health Care, Welfare	921.1	0.1	1.1
Miscellaneous ex Government	626.7	-1.1	-0.4

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

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

VC China. China estimates an index of nonmanufacturing purchasing managers based on a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The total index increased from 55.7 in 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	Aug 12-month ∆%: minus 1.2 Aug month ∆%: -0.2 Blog 9/14/14
Consumer Price Index	Aug month ∆%: 0.2 Aug 12 months ∆%: 2.0 Blog 9/14/14
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	Aug balance $49.8 billion Exports 12M ∆% 9.4 Imports 12M ∆% -2.4 Cumulative Jan-Aug: $200.0 billion Blog 9/14/14

Links to blog comments in Table CNY:

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

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

Table VC-1 provides China’s exports, imports, trade balance and 12-month percentage changes from Dec 2010 to Aug 2014. China’s trade surplus rose to $49.8 billion in Aug 2014 with 12-month growth of exports of 9.4 percent and decline of 2.4 percent of imports in 12 months. The trade surplus of China jumped to $47.3 billion in Jul 2014 with growth of exports by 14.5 percent and decrease of imports by 1.6 percent. China’s trade surplus decreased to $31.6 billion in Jun 2014 with growth of exports of 7.2 percent and of 5.5 percent of imports. The trade surplus of China increased to $35.92 billion in May 2014 with growth of exports of 7.0 percent relative to a year earlier and decline of imports by 1.6 percent. The trade surplus of China increased to $18.45 billion in Apr 2014 with growth of exports of 0.9 percent relative to a year earlier and of imports of 0.8 percent. China had a trade surplus of $7.71 billion in Mar 2014 with exports declining 6.6 percent in 12 months and imports decreasing 11.3 percent. China had a rare trade deficit of $22.99 billion in Feb 2014 with exports decreasing 18.1 percent in 12 months while imports increased 10.1 percent. Exports increased 10.6 percent in the 12 months ending in Jan 2014 and imports 10.0 percent for trade surplus of $31.87 billion. Exports increased 4.3 percent in the 12 months ending in Dec 2013 while imports increased 8.3 percent for trade surplus of $25.64 billion. Exports surged 12.7 percent in the 12 months ending in Nov 2013 while imports increased 5.3 percent for trade surplus of $33.8 billion. Exports rebounded with growth of 5.6 percent in the 12 months ending in Oct 2013 while imports increased 7.6 percent for trade surplus of $31.11 billion. Exports fell 0.3 percent in the 12 months ending in Sep 2013 while imports increased 7.4 for reduction of the trade surplus to $15.2 billion. Markets reacted positively to China’s trade data in Aug 2013 with exports growing 7.2 percent relative to a year earlier and imports 7.0 percent for increasing trade surplus of $28.52. Exports increased 5.1 in Jul 2013 and imports 10.9 percent for trade surplus of $17.82 billion. Exports fell 3.1 percent in Jun 2013 and imports declined 0.7 percent. The trade surplus reached $27.12 billion. Exports increased 1.0 percent in May 2013 relative to a year earlier while imports fell 0.3 percent with trade surplus of $20.43 billion. Exports increased 14.7 percent in Apr 2013 relative to a year earlier and imports 16.8 percent for trade surplus of $18.16 billion. Exports increased 10.0 percent in Mar 2013 relative to a year earlier and imports increased 14.1 percent for trade deficit of $0.88 billion. Exports increased 21.8 percent in Feb 2013 relative to a year earlier and imports fell 15.2 percent for trade surplus of $15.25 billion. China’s trade growth was stronger in Jan 2013 with growth of exports of 25.0 percent in 12 months and of imports of 28.8 percent for trade surplus of $29.15 billion. China’s trade growth strengthened in Dec 2012 with growth in 12 months of exports of 14.1 percent and of imports of 6.0 percent. China’s trade growth weakened again in Nov 2012 with growth of exports of 2.9 percent and no change in imports. China’s trade growth rebounded with growth of exports in 12 months of 11.6 percent in Oct 2012 and 9.9 percent in Sep 2012 after 2.7 percent in Aug 2012 and 1.0 percent in Jul 2012 while imports grew 2.4 percent in both Sep and Oct 2012, stagnating in Nov 2012. As a result, the monthly trade surplus increased from $25.2 billion in Jul 2012 to $31.9 billion in Oct 2012, declining to $19.6 billion in Nov 2012 but increasing to $31.62 billion in Dec 2012. China’s trade growth rebounded in Oct 2012 with growth of exports of 11.6 percent in 12 months and 2.4 percent for imports and trade surplus of $31.9 billion. The number that caught attention in financial markets was growth of 1.0 percent in exports in the 12 months ending in Jul 2012. Imports were also weak, growing 4.7 percent in 12 months ending in Jul 2012. Exports increased 11.3 percent in Jun 2012 relative to a year earlier while imports grew 6.3 percent. The rate of growth of exports fell to 4.9 percent in Apr 2012 relative to a year earlier and imports increased 0.3 percent but export growth was 15.3 percent in May and imports increased 12.7 percent. China reversed the large trade deficit of USD 31.48 billion in Feb 2012 with a surplus of $5.35 billion in Mar 2012, $18.42 billion in Apr 2012, $18.7 billion in May 2012, $31.7 billion in Jun 2012, $25.2 billion in Jul 2012, $26.7 billion in Aug 2012, $27.7 billion in Sep 2012, $31.9 billion in Oct 2012 and $19.6 billion in Nov 2012. Exports fell 0.5 percent in the 12 months ending in Jan 2012 while imports fell 15.3 percent for a still sizeable trade surplus of $27.3 billion. In Feb 2012, exports increased 18.4 percent while imports jumped 39.6 percent for a sizeable deficit of $31.48 billion. There are distortions from the Lunar New Year holidays.

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

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Aug 2014	208.5	9.4	158.6	-2.4	49.8
Jul	212.9	14.5	165.6	-1.6	47.3
Jun	186.8	7.2	155.2	5.5	31.6
May	195.47	7.0	159.55	-1.6	35.92
Apr	188.54	0.9	170.09	0.8	18.45
Mar	170.11	-6.6	162.40	-11.3	7.71
Feb	114.09	-18.1	137.08	10.1	-22.99
Jan	207.13	10.6	175.26	10.0	31.87
Dec 2013	207.74	4.3	182.10	8.3	25.64
Nov	202.20	12.7	168.40	5.3	33.8
Oct	185.41	5.6	154.30	7.6	31.11
Sep	185.64	-0.3	170.44	7.4	15.21
Aug	190.61	7.2	162.09	7.0	28.52
Jul	185.99	5.1	168.17	10.9	17.82
Jun	174.32	-3.1	147.19	-0.7	27.12
May	182.77	1.0	162.34	-0.3	20.43
Apr	187.06	14.7	168.90	16.8	18.16
Mar	182.19	10.0	183.07	14.1	-0.88
Feb	139.37	21.8	124.12	-15.2	15.25
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	199.23	14.1	167.61	6.0	31.62
Nov	179.38	2.9	159.75	0.0	19.63
Oct	175.57	11.6	143.58	2.4	31.99
Sep	186.35	9.9	158.68	2.4	27.67
Aug	177.97	2.7	151.31	-2.6	26.66
Jul	176.94	1.0	151.79	4.7	25.15
Jun	180.20	11.3	148.48	6.3	31.72
May	181.14	15.3	162.44	12.7	18.70
Apr	163.25	4.9	144.83	0.3	18.42
Mar	165.66	8.9	160.31	5.3	5.35
Feb	114.47	18.4	145.95	39.6	-31.48
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	174.72	13.4	158.20	11.8	16.52
Nov	174.46	13.8	159.94	22.1	14.53
Oct	157.49	15.9	140.46	28.7	17.03
Sep	169.67	17.1	155.16	20.9	14.51
Aug	173.32	24.5	155.56	30.2	17.76
Jul	175.13	20.4	143.64	22.9	31.48
Jun	161.98	17.9	139.71	19.3	22.27
May	157.16	19.4	144.11	28.4	13.05
Apr	155.69	29.9	144.26	21.8	11.42
Mar	152.20	35.8	152.06	27.3	0.14
Feb	96.74	2.4	104.04	19.4	-7.31
Jan	150.73	37.7	144.27	51.0	6.46
Dec 2010	154.15	17.9	141.07	25.6	13.08

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

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

Table VC-2 provides cumulative exports, imports and the trade balance of China together with percentage growth of exports and imports relative to a year earlier. Exports grew 3.8 percent cumulatively in Jan-Aug 2014 relative to a year earlier while imports increased 1.6 percent for cumulative surplus of $200 billion. Exports increased 2.9 percent in the cumulative Jan-July 2014 relative to a year earlier and imports 1.1 percent for cumulative surplus of $150.6 billion. Exports increased 0.9 percent in Jan-Jun 2014 relative to a year earlier and imports increased 1.5 percent for cumulative surplus of $102.7 billion. Exports fell 0.4 percent in Jan-May 2014 relative to a year earlier while imports increased 0.8 percent for cumulative surplus of $71.11 billion. Exports fell 2.3 percent in Jan-Apr 2014 relative to the same period a year earlier and imports increased 1.5 percent for cumulative trade surplus of $35.19 billion.

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

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

	Exports USD Billion	∆% Relative Year Earlier	Imports USD Billion	∆% Relative Year Earlier	Balance USD Billion
Aug 2014	1483.5	3.8	1283.6	0.6	200.0
Jul	1275.0	2.9	1125.0	1.1	150.6
Jun	1062.1	0.9	959.4	1.5	102.7
May	875.32	-0.4	804.21	0.8	71.11
Apr	679.85	-2.3	644.66	1.5	35.19
Mar	491.31	-3.4	474.57	1.6	16.74
Feb	321.23	-1.6	312.35	10.0	8.88
Jan	207.13	10.6	175.26	10.0	31.87
Dec 2013	2210.04	7.9	1950.29	7.3	259.75
Nov	2002.32	8.3	1768.17	7.1	234.15
Oct	1800.21	7.8	1599.75	7.3	200.46
Sep	1614.86	8.0	1445.50	7.3	169.36
Aug	1429.26	9.2	1275.05	7.3	154.21
Jul	1238.73	9.5	1113.02	7.3	125.71
Jun	1052.82	10.4	944.87	6.7	107.95
May	878.56	13.5	797.69	8.2	80.87
Apr	695.87	17.4	634.88	10.6	60.98
Mar	508.87	18.4	465.80	8.4	43.07
Feb	326.73	23.6	282.58	5.0	44.15
Jan	187.37	25.0	158.22	28.8	29.15
Dec 2012	2048.93	7.9	1817.83	4.3	231.11
Nov	1849.91	7.3	1650.37	4.1	199.54
Oct	1670.90	7.8	1490.67	4.6	180.24
Sep	1495.39	7.4	1347.08	4.8	148.31
Aug	1309.11	7.1	1188.51	5.1	120.61
Jul	1131.24	7.8	1037.14	6.4	94.10
Jun	954.38	9.2	885.46	6.7	68.91
May	774.40	8.7	736.49	6.7	37.92
Apr	593.24	6.9	573.94	5.1	19.3
Mar	430.02	7.6	429.36	6.6	0.66
Feb	264.40	6.9	268.64	7.7	-4.24
Jan	149.94	-0.5	122.66	-15.3	27.28
Dec 2011	1,898.60	20.3	1,743.46	24.9	155.14
Nov	1,724.01	21.1	1585.61	26.4	138.40
Oct	1,549.71	22.0	1,425.68	26.9	124.03
Sep	1,392.27	22.7	1,285.17	26.7	107.10
Aug	1,222.63	23.6	1,129.90	27.5	92.73
Jul	1,049.38	23.4	973.17	26.9	76.21
Jun	874.3	24.0	829.37	27.6	44.93
May	712.37	25.5	689.41	29.4	22.96
Apr	555.30	27.4	545.02	29.6	10.28
Mar	399.64	26.5	400.66	32.6	-1.02
Feb	247.47	21.3	248.36	36.0	-0.89
Jan	150.7	37.7	144.27	51.0	6.46
Dec 2010	1577.93	31.3	1394.83	38.7	183.10

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

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

Table VD-5, Euro Zone, Industrial Production Month ∆%

	Total	INT	ENE	CG	DUR	NDUR
Jul 2014	1.0	0.5	-1.3	2.6	-1.2	1.2
Jun	-0.3	0.2	-1.1	0.2	2.5	-2.3
May	-1.1	-2.0	3.0	-1.0	-2.5	-1.6
Apr	1.1	0.6	1.4	0.3	-0.3	3.5
Mar	-0.4	-0.7	0.5	-0.7	0.0	-0.7
Feb	0.0	0.2	-2.5	-0.1	1.3	1.4

Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods

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

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	Jul month ∆%: 1.0; Jul 12 months ∆%: 2.2 Blog 9/14/14
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:

9/7/14 http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html

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 monthly industrial production percentage changes for total production and major segments in the euro area. Total production increased 1.0 percent in Jul 2014 with decrease of 1.2 percent in durable goods and decrease of 1.3 percent in energy. Capital goods increase 2.6 percent. Nondurable goods increased 1.2 percent and intermediate goods increased 0.5 percent. Industrial production increased in all months from Dec 2012 to Jun 2013 with exception of declines of 0.5 percent in May 2013 and 0.4 percent in Jan 2013. Industrial production changed 0.0 percent in Feb 2014, increasing 1.1 percent in Apr 2014.

Table VD-1, Euro Zone, Industrial Production Month ∆%

	Total	INT	ENE	CG	DUR	NDUR
Jul 2014	1.0	0.5	-1.3	2.6	-1.2	1.2
Jun	-0.3	0.2	-1.1	0.2	2.5	-2.3
May	-1.1	-2.0	3.0	-1.0	-2.5	-1.6
Apr	1.1	0.6	1.4	0.3	-0.3	3.5
Mar	-0.4	-0.7	0.5	-0.7	0.0	-0.7
Feb	0.0	0.2	-2.5	-0.1	1.3	1.4

Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods

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 monthly and 12-month percentage changes of industrial production and major industrial categories in the euro zone. Several 12-month percentage changes in Table VD-6 are negative in the 12 months ending in Jul 2014 with exception of increases of 4.0 percent in nondurable consumer goods, 4.6 percent of capital goods and 1.6 percent in intermediate goods. Industrial production increased 1.0 percent in the month of Jul 2014 and increased 2.2 percent in the 12 months ending in Jul 2014.

Table VD-2, Euro Zone, Industrial Production, Month and 12-Month ∆%

2014	Jul Month ∆%	Jul 12-Month ∆%
Total	1.0	2.2
Intermediate Goods	0.5	1.6
Energy	-1.3	-4.4
Capital Goods	2.6	4.6
Durable Consumer Goods	-1.2	-0.2
Nondurable Consumer Goods	1.2	4.0

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

There has been significant decline in percentage changes of industrial production and major categories in 12-month rates into 2012 and 2013 with recovery in 2014, as shown in Table VD-3. Negative percentage changes moderated from the high rates in Oct-Nov 2012 with return to growth. All 12-month percentage changes are negative for the various segments of euro area industrial production from May to Aug 2013 with exception of capital goods in Jun but there is improvement in Sep to Dec 2013 and Jan 2014 with positive 12-month percentage changes for total industry. There is significant improvement in 2014 with growth of 1.9 percent in the 12 months ending in Feb with deterioration to 0.3 percent in Mar 2014 and rebound of 1.8 percent in Apr 2014. The growth rate of industrial production in 12 months slowed to 0.6 percent in May 2014 and 0.2 percent in Jun 2014. Industrial production increased 2.2 percent in the 12 months ending in Jul 2014. Output of capital goods increased 2.7 percent in the 12 months ending in Mar 2014 but only 1.0 percent in the 12 months ending in Apr 2014, increasing to 1.2 percent in the 12 months ending in May 2014. Output of capital goods grew 0.2 percent in the 12 months ending in Jun 2014 and increased 4.6 percent in the 12 months ending in Jul 2014. Output of intermediate goods increased 3.3 percent in the 12 months ending in Apr 2014, 0.1 percent in the 12 months ending in Jun 2014 and 1.6 percent in the 12 months ending in Jul 2014.

Table VD-3, Euro Zone, Industrial Production 12-Month ∆%

	Total	INT	ENE	CG	DUR	NDUR
Jul 2014	2.2	1.6	-4.4	4.6	-0.2	4.0
Jun	0.2	0.1	-3.4	0.2	-1.4	2.5
May	0.6	0.1	-3.3	1.2	-1.2	3.3
Apr	1.8	3.3	-7.8	1.0	0.1	7.1
Mar	0.3	2.6	-12.2	2.7	-1.0	2.8
Feb	1.9	3.7	-9.7	4.3	0.3	4.7

Notes: INT: Intermediate; ENE: Energy; CG: Capital Goods; DUR: Durable Consumer Goods; NDUR: Nondurable Consumer Goods

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	Aug month NSA ∆%: 0.0 Aug 12-month NSA ∆%: 0.8 Blog 9/14/14
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 Jul 12-month NSA ∆%: 8.5 Imports Jul 12 months NSA ∆%: 1.0 Exports Jul month CSA ∆%: 4.7; Imports Jul month CSA minus -1.8 Blog 9/14/14

Links to blog comments in Table DE:

9/7/14 http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html

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

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

Twelve-month rates of growth Germany’s exports and imports are shown in Table VE-1. There was sharp decline in the rates in Jun and Jul 2011 to single-digit levels especially for exports. Exports increased 8.5 percent in the 12 months ending in Jul 2014 while imports increased 1.0 percent. In the 12 months ending in Aug 2011, exports rose 14.6 percent and imports 13.2 percent. In Sep 2011, exports grew 10.4 percent relative to a year earlier and imports grew 11.7 percent. Growth rates in 12 months ending in Oct 2011 fell significantly to 3.5 percent for exports and 9.2 percent for imports. Lower prices may explain part of the decline in nominal values. Exports fell 3.8 percent in 12 months ending in Sep 2012, rebounding to growth of 10.5 percent in Oct 2012 and minus 0.5 percent in Nov 2012 but sharp decline of 7.3 percent in Dec 2012 followed by rebound of 2.4 percent in Jan 2013. Exports fell 3.2 percent in the 12 months ending in Feb 2013 and declined 4.6 percent in the 12 months ending in Mar 2013. In Apr 2013, exports increased 7.7 percent relative to a year earlier. Exports fell 4.8 percent in the 12 months ending in May 2013. Exports fell 5.7 percent in the 12 months ending in Aug 2013 and imports fell 2.3 percent. In the 12 months ending in Sep 2013, exports increased 3.5 percent and imports fell 0.3 percent. Exports increased 0.7 percent in the 12 months ending in Oct 2013 while imports fell 1.5 percent. Exports increased 1.1 percent in the 12 months ending in Nov 2013 and imports fell 0.4 percent. Exports increased 4.5 percent in the 12 months ending in Dec 2013 while imports increased 2.4 percent. Exports increased 2.9 percent in the 12 months ending in Jan 2014 while imports increased 1.5 percent. Exports increased 4.6 percent in the 12 months ending in Feb 2014 and imports increased 6.5 percent. Exports increased 1.9 percent in the 12 months ending in Mar 2014 and imports 5.3 percent. Exports fell 0.3 percent in the 12 months ending in Apr 2014 while imports increased 0.7 percent. In May 2014, exports increased 4.3 percent in 12 months. Exports increased 1.2 percent in the 12 months ending in Jun 2014 and 8.5 percent in the 12 months ending in Jul 2014. Imports decreased 4.1 percent in the 12 months ending in Sep 2012, rebounding to growth of 5.7 percent in Oct 2012, decreasing 1.5 percent in Nov 2012 and 7.8 percent in Dec 2012 and rebounding 2.7 percent in Jan 2013. Imports fell 5.7 percent in the 12 months ending in Feb 2013 and declined 7.5 percent in Mar 2013. In Apr 2013, imports increased 4.3 percent relative to a year earlier. In May 2013, imports fell 3.1 percent relative to a year earlier. Imports fell 1.2 percent in the 12 months ending in Jun 2013. In Jul 2013, imports increased 0.9 percent relative to a year earlier. Imports fell 2.3 percent in the 12 months ending in Aug 2013. In the 12 months ending in Sep 2013, imports declined 0.3 percent. Imports fell 1.5 percent in the 12 months ending in Oct 2013. Imports fell 0.4 percent in the 12 months ending in Nov 2013 and increased 2.4 percent in the 12 months ending in Dec 2013. Imports increased 1.5 percent in the 12 months ending in Jan 2014 and 6.5 percent in the 12 months ending in Feb 2014. Imports increased 5.3 percent in the 12 months ending in Mar 2014 and 0.7 percent in the 12 months ending in Apr 2014. Imports fell 0.4 percent in the 12 months ending in May 2014 and increased 2.1 percent in the 12 months ending in Jun 2014. Imports increased 1.0 percent in the 12 months ending in Jul 2014 Growth was much stronger in the recovery during 2010 and 2011 from the fall from 2007 to 2009. Germany’s trade grew at high rates in 2006 and 2005.

Table VE-1, Germany, Exports and Imports NSA Euro Billions and 12-Month ∆%

	Exports EURO Billions	12- Month ∆%	Imports EURO Billions	12-Month ∆%
Jul 2014	101.0	8.5	77.6	1.0
Jun	93.5	1.2	76.9	2.1
May	92.1	4.3	74.3	-0.4
Apr	93.7	-0.3	76.5	0.7
Mar	96.0	1.9	79.4	5.3
Feb	92.4	4.6	76.2	6.5
Jan	90.7	2.9	75.7	1.5
Dec 2013	82.1	4.5	68.2	2.4
Nov	94.7	1.1	76.5	-0.4
Oct	99.1	0.7	81.3	-1.5
Sep	94.6	3.5	74.3	-0.3
Aug	85.0	-5.7	71.7	-2.3
Jul	93.1	-0.3	76.8	0.9
Jun	92.4	-2.0	75.4	-1.2
May	88.2	-4.8	74.6	-3.1
Apr	94.0	7.7	76.0	4.3
Mar	94.2	-4.6	75.4	-7.5
Feb	88.3	-3.2	71.5	-5.7
Jan	88.2	2.4	74.6	2.7
Dec 2012	78.6	-7.3	66.6	-7.8
Nov	93.7	-0.5	76.8	-1.5
Oct	98.4	10.5	82.5	5.7
Sep	91.4	-3.8	74.5	-4.1
Aug	90.2	5.7	73.4	-0.1
Jul	93.3	9.1	76.2	1.5
Jun	94.3	7.0	76.3	1.4
May	92.7	0.3	77.0	-0.7
Apr	87.2	3.2	72.9	-1.1
Mar	98.7	0.1	81.5	2.1
Feb	91.2	7.9	75.8	4.6
Jan	86.1	8.6	72.6	4.6
Dec 2011	84.8	4.7	72.3	5.6
Nov	94.1	7.4	78.0	5.8
Oct	89.1	3.5	78.1	9.2
Sep	95.0	10.4	77.7	11.7
Aug	85.3	14.6	73.5	13.2
Jul	85.6	5.2	75.0	9.7
Jun	88.1	3.3	75.2	5.6
May	92.4	21.2	77.5	17.4
Apr	84.5	12.4	73.7	18.5
Mar	98.7	15.3	79.8	15.1
Feb	84.5	20.8	72.5	27.6
Jan	79.3	25.2	69.4	26.0
Dec 2010	81.0	20.0	68.4	24.4
Nov	87.6	21.2	73.7	30.9
Oct	86.0	18.7	71.5	19.2
Sep	86.0	21.2	69.5	17.0
Aug	74.4	23.8	64.9	27.1
Jul	81.4	15.3	68.4	24.4
Jun	85.3	27.5	71.2	33.9
May	76.2	25.6	66.1	31.3
Apr	75.2	16.8	62.2	14.4
Mar	85.6	22.0	69.3	18.0
Feb	70.0	9.7	56.8	3.2
Jan	63.4	-0.3	55.1	-1.9
Dec 2009	67.5	1.2	55.0	-7.3
Dec 2008	66.7	-8.6	59.4	-5.1
Dec 2007	73.0	-0.6	62.5	-0.1
Dec 2006	73.4	10.2	62.6	8.5
Dec 2005	66.6	11.5	57.7	18.1
Dec 2004	59.7	9.2	48.9	10.8
Dec 2003	54.7	7.6	44.1	3.9
Dec 2002	50.8	5.5	42.5	6.4
Dec 2001	48.2	-3.7	39.9	-17.5
Dec 2000	50.0		48.4

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of the Statistisches Bundesamt Deutschland shows exports and trend of German exports. Growth has been with fluctuations around a strong upward trend that is milder than earlier in the recovery but could be moving upwardly after flattening.

Chart VE-1, Germany, Exports Original Value and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Imports in Chart VE-2 also fell sharply and have been recovering with fluctuations around a strong upward trend that could be flattening. There could be new upward trend.

Chart VE-2, Germany, Imports Original Value and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Chart VE-3 of the Statistisches Bundesamt Deutschland shows the trade balance of Germany since 2010. There was sharp decline during the global recession and fluctuations around a mild upward trend during the recovery with stabilization followed by stronger trend in recent months and flattening/declining recently. The final segment could be an upward movement again.

Chart VE-3, Germany, Trade Balance Original and Trend 2010-2014

Source: Statistisches Bundesamt Deutschland

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

Table VE-2 provides monthly rates of growth of exports and imports of Germany. Exports increased 4.7 percent calendar and seasonally adjusted (CSA) in Jul 2014 while imports decreased 1.8 percent. Export growth had been relatively strong from Dec 2012 to Apr 2013 with only one monthly decline of 1.0 percent in Feb 2013. Exports fell 1.1 percent in May 2013 and 0.8 percent in Jul 2013. Exports grew in four consecutive months from Aug to Nov 2013. Exports fell in Dec 2013, Feb-Mar 2014 and May 2014, increasing in Jan, Apr, Jun and Jul 2014. Export growth and import growth were vigorous in Jan-Mar 2011 when Germany’s economy outperformed most advanced economies but less dynamic and consistent in following months as world trade weakens.

Table VE-2, Germany, Exports and Imports Month ∆% Calendar and Seasonally Adjusted 

	Exports	Imports
Jul 2014	4.7	-1.8
Jun	0.9	4.5
May	-1.1	-3.4
Apr	2.6	0.2
Mar	-1.8	-1.1
Feb	-1.3	0.4
Jan	2.3	3.2
Dec 2013	-1.0	-1.0
Nov	0.6	-0.6
Oct	0.2	2.3
Sep	1.4	-1.5
Aug	1.0	0.2
Jul	-0.8	0.2
Jun	0.4	-0.6
May	-1.1	0.9
Apr	0.4	1.7
Mar	1.4	0.4
Feb	-1.0	-2.8
Jan	0.8	2.0
Dec 2012	0.5	-0.9
Nov	-2.4	-3.4
Oct	0.3	2.0
Sep	-2.7	-0.1
Aug	1.7	-0.1
Jul	0.6	0.3
Jun	-1.5	-2.1
May	4.8	4.2
Apr	-1.9	-4.0
Mar	0.2	1.1
Feb	1.4	3.3
Jan	2.1	-0.8
Dec 2011	-2.7	-1.4
Nov	3.0	0.1
Oct	-3.5	-0.9
Sep	1.4	0.4
Aug	2.6	-0.1
Jul	-1.2	0.3
Jun	-0.5	0.5
May	2.9	0.8
Apr	-3.9	-0.3
Mar	4.9	1.8
Feb	1.6	2.5
Jan	0.4	2.6
Dec 2010	0.1	-1.7

Source: Statistisches Bundesamt Deutschland

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

There is extremely important information in Table VE-3 for the current sovereign risk crisis in the euro zone. Table VE-3 provides the structure of regional and country relations of Germany’s exports and imports with newly available data for Jul 2014. German exports to other European Union (EU) members are 56.3 percent of total exports in Jul 2014 and 58.3 percent in cumulative Jan-Jul 2014. Exports to the euro area are 35.1 percent of the total in Jul and 37.0 percent cumulative in Jan-Jul. Exports to third countries are 43.7 percent of the total in Jul and 41.7 percent cumulative in Jan-Jul. There is similar distribution for imports. Exports to non-euro countries are increasing 15.9 percent in the 12 months ending in Jul 2014, increasing 10.3 percent cumulative in Jan-Jul 2014 while exports to the euro area are increasing 6.2 percent in the 12 months ending in Jul 2014 and increasing 2.8 percent cumulative in Jan-Jul 2014. Exports to third countries, accounting for 43.7 percent of the total in Jul 2014, are increasing 7.2 percent in the 12 months ending in Jul 2014 and increasing 0.5 percent cumulative in Jan-Jul 2014, accounting for 41.7 percent of the cumulative total in Jan-Jul 2014. Price competitiveness through devaluation could improve export performance and growth. Economic performance in Germany is closely related to Germany’s high competitiveness in world markets. Weakness in the euro zone and the European Union in general could affect the German economy. This may be the major reason for choosing the “fiscal abuse” of the European Central Bank considered by Buiter (2011Oct31) over the breakdown of the euro zone. There is a tough analytical, empirical and forecasting doubt of growth and trade in the euro zone and the world with or without maintenance of the European Monetary Union (EMU) or euro zone. Germany could benefit from depreciation of the euro because of high share in its exports to countries not in the euro zone but breakdown of the euro zone raises doubts on the region’s economic growth that could affect German exports to other member states.

Table VE-3, Germany, Structure of Exports and Imports by Region, € Billions and ∆%

	Jul 2014  € Billions	Jul 12-Month ∆%	Cumulative Jan-Jul 2014 € Billions	Cumulative Jan-Jul 2014/ Jan-Jul 2013 ∆%
Total Exports	101.0	8.5	659.4	3.3
A. EU Members	56.9 % 56.3	9.6	384.2 % 58.3	5.4
Euro Area	35.5 % 35.1	6.2	244.0 % 37.0	2.8
Non-euro Area	21.4 % 21.2	15.9	140.2 % 21.3	10.3
B. Third Countries	44.1 % 43.7	7.2	275.2 % 41.7	0.5
Total Imports	77.6	1.0	536.6	2.4
C EU Members	50.4 % 64.9	2.6	351.5 % 65.5	4.0
Euro Area	34.7 % 44.7	-0.5	241.9 % 45.1	2.1
Non-euro Area	15.7 % 20.2	10.3	109.6 % 20.4	8.4
D Third Countries	27.2 % 35.1	-1.8	185.1 % 34.5	-0.5

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

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2014/09/PE14_317_51.html

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2012 is quite high at 3.2 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.0 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 2.0 percent in the 1990s and 1.8 percent from 2000 to 2007. The average growth rate from 2000 to 2012, using fourth quarter data, is 1.1 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. The growth rate from 2000 to 2012 is 1.1 percent. Cobet and Wilson (2002) provide estimates of output per hour and unit labor costs in national currency and US dollars for the US, Japan and Germany from 1950 to 2000 (see Pelaez and Pelaez, The Global Recession Risk (2007), 137-44). The average yearly rate of productivity change from 1950 to 2000 was 2.9 percent in the US, 6.3 percent for Japan and 4.7 percent for Germany while unit labor costs in USD increased at 2.6 percent in the US, 4.7 percent in Japan and 4.3 percent in Germany. From 1995 to 2000, output per hour increased at the average yearly rate of 4.6 percent in the US, 3.9 percent in Japan and 2.6 percent in Germany while unit labor costs in US fell at minus 0.7 percent in the US, 4.3 percent in Japan and 7.5 percent in Germany. There was increase in productivity growth in the G7 in Japan and France in the second half of the 1990s but significantly lower than the acceleration of 1.3 percentage points per year in the US. Lucas (2011May) compares growth of the G7 economies (US, UK, Japan, Germany, France, Italy and Canada) and Spain, finding that catch-up growth with earlier rates for the US and UK stalled in the 1970s.

Table VF-FR, France, Average Growth Rates of GDP Fourth Quarter, 1949-2013

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	Aug month ∆% 0.4 12 months ∆%: 0.4 9/14/14
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	Jul ∆%: Manufacturing -0.3 12-Month ∆%: Manufacturing 0.2 Blog 9/14/14
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	Jul Exports ∆%: month -1.5, 12 months -1.3 Jul Imports ∆%: month -1.3, 12 months 0.0 Blog 9/14/14
Confidence Indicators	Historical average 100 Aug Mfg Business Climate 96.0 Blog 8/31/14

Links to blog comments in Table FR:

9/7/14 http://cmpassocregulationblog.blogspot.com/2014/09/competitive-monetary-policy-and.html

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

8/3/14 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

Table VF-1 provides longer historical perspective of manufacturing in France. Output of manufacturing decreased 0.3 percent in Jul 2014 and increased 0.2 percent in the 12 months ending in Jul 2014. Manufacturing in France fell 13.9 percent in the 12 months ending in Dec 2008 and 4.2 percent in Dec 2009. Manufacturing recovered with growth of 6.0 percent in the 12 months ending in Dec 2010. Manufacturing fell 0.5 percent in the 12 months ending in Dec 2011 and 3.3 percent in the 12 months ending in Dec 2012. Manufacturing increased 0.4 percent in the 12 months ending in Dec 2013.

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

	Month ∆%	12-Month ∆%
Jul 2014	-0.3	0.2
Jun	1.6	-0.1
May	-2.3	-2.9
Apr	-0.1	-0.6
Mar	-0.4	1.7
Feb	0.4	1.5
Jan	0.3	1.9
Dec 2013	0.1	0.4
Nov	0.0	1.2
Oct	0.5	0.4
Sep	-0.6	-1.4
Aug	1.0	-3.2
Jul	-0.6	-2.2
Jun	-1.2	-0.5
May	0.0	0.0
Apr	2.2	0.1
Mar	-0.8	-3.8
Feb	0.8	-1.5
Jan	-1.2	-4.3
Dec 2012	0.9	-3.2
Nov	-0.8	-6.0
Oct	-1.3	-3.3
Sep	-2.4	-2.3
Aug	2.1	-0.8
Jul	1.1	-2.8
Jun	-0.7	-3.4
May	0.1	-5.1
Apr	-1.8	-3.3
Mar	1.8	-2.4
Feb	-2.1	-5.3
Jan	-0.1	-2.8
Dec 2011	-2.0	-0.5
Nov	2.1	2.0
Oct	-0.3	2.1
Sep	-0.9	1.4
Aug	0.0	3.8
Jul	0.5	3.5
Jun	-2.5	3.3
May	2.0	5.2
Apr	-0.9	4.1
Mar	-1.2	5.5
Feb	0.6	9.1
Jan	2.2	8.4
Dec 2013		0.4
Dec 2012		-3.3
Dec 2011		-0.5
Dec 2010		6.0
Dec 2009		-4.2
Dec 2008		-13.9
Dec 2007		-0.7
Dec 2006		2.8
Dec 2005		0.9
Dec 2004		1.1
Dec 2003		0.5
Dec 2002		-1.0
Dec 2001		-5.3
Dec 2000		4.8

Source:

Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140910

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

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

Source:

Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140910

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

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

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=10&date=20140910

France has been running a trade deficit fluctuating around €5,000 million as shown in Table VF-2. Exports decreased 1.5 percent in Jul 2014 while imports decreased 1.3 percent. The trade deficit decreased from revised €5576 million in Jun 2014 to €5539 million in Jul 2014.

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

	Exports	Imports	Trade Balance
Jul 2014	36,156	41,965	-5,539
Jun	36,688	42,624	-5,576
May	36,023	41,165	-5,142
Apr	36,026	39,964	-3,938
Mar	36,300	41,272	-4,972
Feb	36,315	40,139	-3,824
Jan	36,075	41,876	-5,801
Dec 2013	36,692	42,152	-5,460
Nov	35,679	41,105	-5,426
Oct	36,377	41,142	-4,765
Sep	36,555	42,331	-5,776
Aug	35,062	41,014	-4,952
Jul	36,641	41,712	-5,071
Jun	35,967	40,925	-4,958
May	35,996	41,837	-5,841
Apr	38,489	42,384	-3,895
Mar	36,187	40,971	-4,784
Feb	35,492	41,753	-6,261
Jan	36,594	41,724	-5,130
Dec 2012	37,013	42,488	-5,475
Dec 2011	35,742	41,170	-5,428
Dec 2010	33,765	39,364	-5,599

Source: France, Direction générale des douanes et droits indirects

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

Table VF-3 provides month and 12-month percentage changes of France’s exports and imports. Exports decreased 1.5 percent in Jul 2014 and decreased 1.3 percent in the 12 months ending in Jul 2014. Imports decreased 1.3 percent in Jul 2014 and changed 0.0 percent in 12 months. Growth of exports and imports has fluctuated in 2011, 2012 and 2013-2014 because of price surges of commodities and raw materials. Weak economic conditions worldwide also influence trade performance.

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

	Exports Month ∆%	Exports 12-Month ∆%	Imports Month ∆%	Imports 12-Month ∆%
Jul 2014	-1.5	-1.3	-1.3	0.0
Jan 2014	-1.7	-1.4	-0.7	0.4
Dec 2013	2.8	-0.9	2.5	-0.8
Dec 2012		3.6		3.2
Dec 2011		5.9		4.6
Dec 2010		13.0		14.5
Dec 2009		-9.6		-2.1
Dec 2008		-4.0		-11.0
Dec 2007		5.7		8.0
Dec 2006		6.6		6.6
Dec 2005		11.8		15.6
Dec 2004		-3.7		5.8
Dec 2003		7.1		1.6

Source: France, Direction générale des douanes et droits indirects

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

Annual data for France’s exports, imports and trade balance are provided in Table VF-4. France’s trade balance deteriorated sharply from 2007 to 2011 with the deficit increasing from €42,494 million in 2007 to €74,475 million in 2011. Annual growth rates of exports have not been sufficiently high to compensate for growth of imports driven in part by commodity price increases. In 2012, the trade deficit declined to €67,428 million with growth of exports of 3.1 percent and of imports of 1.2 percent. The trade deficit declined to €61,356 million in 2013 with declines of exports of 1.3 percent and of 2.3 percent for imports.

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

	Exports € Millions	∆%	Imports € Millions	∆%	Balance € Millions
Jul 2014 12 Months	432,817		493,529		-60,712
Year
2013	436,053	-1.3	497,409	-2.3	-61,356
2012	441,702	3.1	509,130	1.2	-67,428
2011	428,516	8.5	502,991	12.4	-74,475
2010	395,039	14.0	447,483	14.2	-52,444
2009	346,481	-17.0	391,872	-17.3	-45,391
2008	417,636	2.7	473,853	5.5	-56,217
2007	406,487	3.0	448,981	5.8	-42,494
2006	394,621	9.5	424,549	10.4	-29,928
2005	360,376	4.4	384,588	9.6	-24,212
2004	345,256	5.4	350,996	7.0	-5,740
2003	327,653		327,884		-231

Source: France, Direction générale des douanes et droits indirects

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

VG Italy. Table VG-IT provides percentage changes in a quarter relative to the same quarter a year earlier of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 0.6 percent in IVQ2011 to minus 2.9 percent in IVQ2012, minus 2.4 percent in IQ2013, minus 2.2 percent in IIQ2013 and minus 1.9 percent in IIIQ2013. GDP fell 0.9 percent in IVQ2013 relative to a year earlier. GDP fell 0.4 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 9/14/14
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	Jul month ∆%: -1.0 12 months CA ∆%: -1.8 Blog 9/14/14
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

Italy’s industrial production decreased 1.0 percent in Jul 2014 seasonally adjusted and decreased 1.8 percent in 12 months calendar adjusted, as shown in Table VG-1. Industrial production increased 0.8 percent in Jun 2014 and grew 0.3 percent in 12 months. Industrial production decreased 1.2 percent in May 2014 and fell 1.7 percent in 12 months. Industrial production increased 0.5 percent in Apr 2014 and 1.5 percent in 12 months. Industrial production decreased 0.4 percent in Mar 2014 and 0.1 percent in 12 months. Industrial production fell 0.5 percent in Feb 2014 but increased 0.4 percent in 12 months. Industrial production increased 1.0 percent in Jan 2014 and grew 1.3 percent in 12 months. Industrial production fell 0.9 percent in Dec 2013 and 1.2 percent in 12 months. Industrial production increased 0.1 percent in Nov 2013 and 0.9 percent CA relative to a year earlier. Industrial production increased 0.7 percent in Oct 2013 and fell 0.4 percent in 12 months. Industrial production increased 0.3 percent in Sep 2013 and fell 2.9 percent in 12 months. In Aug 2013, industrial production decreased 0.5 percent and fell 4.6 percent in 12 months. Industrial production increased 0.1 percent in Jul 2013 and fell 3.8 percent in the 12 months ending in Jul 2013. In the quarter Sep-Nov 2012, industrial production fell cumulatively 4.1 percent, at the annual equivalent rate of 15.6 percent. Industrial production fell 7.7 percent in the 12 months ending in Nov 2012. There have been negative changes with oscillations in monthly industrial production. Industrial production fell 18.8 percent in 2009 after falling 3.2 percent in 2008. Industrial production fell 6.4 percent in 2012 and decreased 3.2 percent in 2013.

Table VG-1, Italy, Industrial Production ∆%

			Index CA	∆% CA	Index	∆%
2012	-	-	94.7	-6.4	94.3	-6.1
2013	-	-	91.7	-3.2	91.4	-3.1
2013	Index SA	Quarter ∆%	Index CA	4Q ∆%	Index	∆%
IIIQ	91.5	0.0	87.2	-3.6	87.0	-2.0
IVQ	91.9	0.4	92.5	-0.2	92.3	-0.3
2014
IQ	91.8	-0.1	92.7	0.4	91.5	-0.1
IIQ	91.4	-0.4	94.9	0.0	93.1	-1.6
2012
Jul	94.8	0.7	108.6	-5.6	107.6	-2.6
Aug	95.5	0.7	61.4	-4.8	62.2	-4.7
Sep	94.1	-1.5	101.4	-4.7	96.5	-10.5
Oct	92.8	-1.4	101.2	-5.7	103.4	0.4
Nov	91.6	-1.3	95.6	-7.7	96.0	-7.7
Dec	92.3	0.8	81.3	-7.1	78.4	-10.0
2013
Jan	92.3	0.0	85.9	-3.4	89.0	-0.2
Feb	91.8	-0.5	92.1	-4.5	90.9	-8.2
Mar	91.4	-0.4	98.8	-5.8	94.8	-10.0
Apr	90.9	-0.5	88.6	-4.9	89.0	-0.4
May	91.9	1.1	99.3	-4.6	100.6	-4.6
Jun	91.6	-0.3	96.8	-2.3	94.2	-5.3
Jul	91.7	0.1	104.5	-3.8	106.8	-0.7
Aug	91.2	-0.5	58.6	-4.6	57.5	-7.6
Sep	91.5	0.3	98.5	-2.9	96.7	0.2
Oct	92.1	0.7	100.8	-0.4	103.0	-0.4
Nov	92.2	0.1	96.5	0.9	93.9	-2.2
Dec	91.4	-0.9	80.3	-1.2	79.9	1.9
2014
Jan	92.3	1.0	87.0	1.3	87.3	-1.9
Feb	91.8	-0.5	92.5	0.4	91.3	0.4
Mar	91.4	-0.4	98.7	-0.1	96.0	1.3
Apr	91.9	0.5	89.9	1.5	89.0	0.0
May	90.8	-1.2	97.6	-1.7	95.8	-4.8
Jun	91.5	0.8	97.1	0.3	94.5	0.3
Jul	90.6	-1.0	102.6	-1.8	104.8	-1.9

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/131191

Chart VG-2 provides 12-month percentage changes of Italy’s index of industrial production. Industrial production improved from decline of 3.8 percent the 12 months ending in Jul 2013 to increase of 0.3 percent in the 12 months ending in Jun 2014 and decrease of 1.8 percent in the 12 months ending in Jul 2014.

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

Source: Istituto Nazionale di Statistica

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

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 5.2 percent in 2009 after dropping 0.8 percent in 2008. Recovery of 1.7 percent in 2010 is relatively low in comparison with annual growth rates in 2007 and earlier years. Growth was only 1.1 percent in 2011 and 0.3 percent in 2012. Growth increased to 1.7 percent in 2013. The bottom part of Table VH-UK provides average growth rates of UK GDP since 1948. The UK economy grew at 2.6 percent per year on average between 1948 and 2013, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 3.0 percent. Growth in the current cyclical expansion has been only at 1.2 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2013 was lower by 1.4 percent relative to 2007.

Table VH-UK, UK, Gross Domestic Product, ∆%

	∆% on Prior Year
1998	3.6
1999	2.9
2000	4.4
2001	2.2
2002	2.3
2003	3.9
2004	3.2
2005	3.2
2006	2.8
2007	3.4
2008	-0.8
2009	-5.2
2010	1.7
2011	1.1
2012	0.3
2013	1.7
Average Growth Rates ∆% per Year
1948-2013	2.6
1950-1959	2.7
1960-1969	3.3
1970-1979	2.5
1980-1989	3.2
1990-1999	2.9
2000-2007	3.0
2007-2012*	-3.0
2007-2013*	-1.3
2000-2013	1.5

*Absolute change from 2007 to 2012 an from 2007 to 2013

Source: UK Office for National Statistics

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

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 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	Jul 2014/Jul 2013 ∆%: Production Industries 1.7; Manufacturing 2.2 Blog 9/14/14
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 Jul minus ₤3348 million Exports Jul ∆%: 1.2; May-Jul ∆%: -4.9 Imports Jul ∆%: 3.2 May-Jul ∆%: -3.0 Blog 9/14/14

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

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

The UK Office for National Statistics provides the output of production industries with revisions. Table VH-1 incorporates the revisions released in Dec 2011 (http://www.ons.gov.uk/ons/rel/iop/index-of-production/november-2012/index.html) and the latest available data for Jul 2014. Manufacturing accounts for 68.4 percent of the production industries of the UK and increased 2.2 percent in the 12 months ending in Jul 2014. Capital goods industries increased 0.8 percent in the 12 months ending in Jul 2014 after increasing 3.0 percent in the 12 months ending in Jun 2014, 4.6 percent in the 12 months ending in May 2014 and 4.1 percent in the 12 months ending in Apr 2014. Output of capital goods industries decreased 1.8 percent in the 12 months ending in Dec 2013, increasing 1.4 percent in the 12 months ending in Nov 2013. Capital goods industries fell 2.3 percent in the 12 months ending in May 2013, grew 2.5 percent in the 12 months ending in Apr 2013 and had been growing at very high rates during the current cyclical recovery but falling from the unsustainable high of 12.0 percent in the 12 months ending in Feb 2011. Mining and quarrying increased 11.1 percent in the 12 months ending in Oct 2013 and 3.6 percent in the 12 months ending in Dec 2013, decreasing 1.9 percent in the 12 months ending in Jan 2014. Mining and quarrying increased 2.0 percent in the 12 months ending in Apr 2014. The 12-month rates of growth of the entire index of production industries registered declines for all 12 months from Mar 2011 to Aug 2013 with exception of 1.3 percent in the 12 months ending in Jun 2013. With exception of most months for capital goods and Sep to Dec 2012 for consumer durables, 12-month percentage changes of all segments are mostly negative from Jan to Dec 2012. Energy and mining have been drivers of decline. The upper part of Table VH-1 provides rates of change of yearly output. Manufacturing output fell 10.2 percent in 2009 after falling 2.8 percent in 2008 but grew at 4.2 percent in the initial phase of the recovery in 2010 and 1.8 percent in 2011 but fell 1.7 percent in 2012.

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

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

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

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

Source: UK Office for National Statistics

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

Percentage changes in the production industries and major components in a month relative to the prior month are shown in Table VH-2. The UK index of production increased 0.5 percent in Jul 2014 with manufacturing increasing 0.3 percent, capital goods decreasing 0.7 percent and energy increasing 1.6 percent. The UK index of production increased 0.3 percent in Jun 2014 with increase of manufacturing of 0.3 percent and increase of capital goods of 1.7 percent. Energy decreased 0.5 percent. The UK index of production decreased 0.6 percent in May 2014 with contraction of manufacturing of 1.3 percent and decrease of capital goods of 2.1 percent. Energy increased 1.9 percent and mining and quarrying increased 1.7 percent. The production index increased 0.3 percent in Apr 2014 with growth of manufacturing of 0.3 percent and capital goods of 1.3 percent. The index of production increased 0.1 percent in Mar 2014 with growth of manufacturing of 0.5 percent and of capital goods of 0.2 percent. The index of production increased 0.9 percent in Feb 2014 with manufacturing increasing 1.1 percent and capital goods 1.0 percent. The index of production decreased 0.2 percent in Jan 2014 with manufacturing increasing 0.3 percent. Mining and quarrying decreased 3.6 percent in Jan 2014 and capital goods increased 2.0 percent. Energy decreased 3.8 percent. The index of production increased 0.3 percent in Dec 2013 with manufacturing increasing 0.6 percent while capital goods fell 0.9 percent. There is significant fluctuation in monthly percentage changes. Many segments fell in May and Apr 2013. Capital goods industries fell 2.4 percent in Jan 2013 and increased 1.4 percent in Mar and 3.3 percent in Jun while manufacturing fell 1.5 percent in Jan 2013 but increased 1.1 percent in Mar and 2.1 percent in Jun. Performance was strong in Dec 2012 with growth of manufacturing of 1.1 percent and capital goods of 2.3 percent. Fluctuations of monthly production are quite wide.

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

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

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

Source: UK Office for National Statistics

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

Weights of components of the production index and contributions by components to the monthly and 12-month percentage changes of volume are provided by the UK Office for National Statistics and shown in Table VH-3. The 12-month rate of output of the production industries of 1.7 percent was driven by positive contribution of 1.55 percentage points by manufacturing and 0.27 percentage points by electricity. The contribution of manufacturing is strong because of its share of 68.4 percent in the production index with growth of 2.2 percent in 12 months. The contributions do not add exactly because of rounding. Mining and quarrying contributed 0.00 percentage points to the output of the production industries in the 12 months ending in Jul 2014. Manufacturing increased 0.3 percent in Jul 2014, adding 0.23 percentage points. Mining increased 0.4 percent in Jul 2014, adding 0.05 percentage points. Electricity increased 3.6 percent in Jul, adding 0.28 percentage points.

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

	Weight %	Volume 12-Month ∆% Ending in Jul 2014	% Point Contrib.	Volume Month ∆% Jul 2014	% Point Contrib.
PROD IND	100.0	1.7	1.7	0.5	0.5
MNG	15.1	0.0	0.00	0.4	0.05
Division 06	12.4	-1.1	-0.09	0.5	0.04
MFG	68.4	2.2	1.55	0.3	0.23
ELEC	8.6	3.4	0.27	3.6	0.28
WATER & SEW	7.9	-1.7	-0.16	-0.3	-0.03

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

Source: UK Office for National Statistics

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

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

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

Sector	Summary Description	% of production	Month on same month a year ago growth (%)
IoP	Index of Production	100.0	1.7
B	Total Mining & Quarrying	15.1	0.0
5	Coal & Lignite	0.2	-18.9
6	Crude petroleum & Natural gas	12.4	-1.1
786	Other mining & Quarrying	2.5	3.1
C	Total Manufacturing	68.4	2.2
CA	Food, beverages and tobacco	10.9	2.6
CB	Textiles and leather products	2.1	-6.3
CC	Wood, paper and printing	5.5	0.2
CD	Coke and petroleum	1.7	-14.6
CE	Chemical Products	4.2	5.7
CF	Pharmaceutical Products	6.4	0.4
CG	Rubber and plastic products	5.7	10.6
CH	Metal products	7.7	4.1
CI	Computer, electronic & optical	4.3	-1.6
CJ	Electrical equipment	2.1	-4.1
CK	Machinery and equipment	5.0	2.6
CL	Transport equipment	7.7	3.5
CM	Other manufacturing & repair	5.4	1.6
D	Total Electricity & Gas	8.6	3.4
35.1	Electric power generation, transmission & distribution	6.0	0.8
35.2-3	Manufacture of gas; distribution of gaseous fuels through mains; steam & aircon supply	2.6	11.7
E	Total Water	7.9	-1.7
36	Water collection, Treatment & Supply	2.1	-4.9
37	Sewerage	2.2	-5.4
38	Waste Collection, Treatment & Disposal Activities; Materials Recovery	3.6	2.4
39	Remediation Activities & Other Waste Management Services	0.1	2.2

Sector	Summary Description	% of production	Month on previous month growth (%)
IoP	Index of Production	100.0	0.5
B	Total Mining & Quarrying	15.1	0.4
5	Coal & Lignite	0.2	-10.9
6	Crude petroleum & Natural gas	12.4	0.5
786	Other mining & Quarrying	2.5	0.6
C	Total Manufacturing	68.4	0.3
CA	Food, beverages and tobacco	10.9	1.0
CB	Textiles and leather products	2.1	-3.9
CC	Wood, paper and printing	5.5	0.5
CD	Coke and petroleum	1.7	1.2
CE	Chemical Products	4.2	1.2
CF	Pharmaceutical Products	6.4	4.0
CG	Rubber and plastic products	5.7	0.5
CH	Metal products	7.7	-1.1
CI	Computer, electronic & optical	4.3	2.2
CJ	Electrical equipment	2.1	-2.0
CK	Machinery and equipment	5.0	1.0
CL	Transport equipment	7.7	-1.3
CM	Other manufacturing & repair	5.4	0.0
D	Total Electricity & Gas	8.6	3.6
35.1	Electric power generation, transmission & distribution	6.0	2.3
35.2-3	Manufacture of gas; distribution of gaseous fuels through mains; steam & aircon supply	2.6	7.4
E	Total Water	7.9	-0.3
36	Water collection, Treatment & Supply	2.1	-0.1
37	Sewerage	2.2	-2.8
38	Waste Collection, Treatment & Disposal Activities; Materials Recovery	3.6	1.1
39	Remediation Activities & Other Waste Management Services	0.1	-1.0

Source: UK Office for National Statistics

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

The UK’s trade account is in Table VH-5. In Jul 2014, the UK ran a deficit in trade of goods and services (total trade) of ₤3348 million. The deficits in trade of goods was ₤10,186 million and ₤9124 million in goods excluding oil. A surplus in services of ₤6838 million contributed to reducing the overall deficit in goods and services (-₤10,186 million plus ₤6838 million equal to ₤3348 million). Services have contributed to lower deficits and have softened the impact of the global recession on the UK economy. Exports of goods and services increased 1.2 percent in Jul 2014 and decreased 4.9 percent in the quarter May 2014-Jul 2014 relative to the same quarter a year earlier with imports increasing 3.2 percent in Jul and decreasing 3.0 percent in May 2014-Jul 2014 relative to the same quarter a year earlier. Excluding oil, UK exports of goods increased 0.7 percent in Jul and fell 6.3 percent in May 2014-Jul 2014 relative to the same quarter a year earlier. Imports of goods excluding oil increased 2.4 percent in Jul and fell 2.5 percent in May 2014-Jul 2014 relative to the same quarter a year earlier. Services exports changed 0.0 percent in Jul and increased 0.4 percent in May 2014-Jul 2014 relative to the same quarter a year earlier while services imports increased 1.2 percent in Jul and increased 1.4 percent in May 2014-Jul 2014 relative to the same quarter a year earlier.

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

	₤ Million SA Jul 2014		Month ∆%    Jul 2014	May 2014-Jul 2014 ∆% May 2013-Jul 2013
Total Trade
Exports	40,827		1.2	-4.9
Imports	44,175		3.2	-3.0
Balance	-3,348
Trade in Goods
Exports	23,999		2.1	-8.3
Imports	34,185		3.9	-4.3
Balance	-10,186
Trade in Goods Excluding Oil
Exports	21,200		0.7	-6.3
Imports	30,324		2.4	-2.5
Balance	-9,124
Trade in Services
Exports	16,828		0.0	0.4
Imports	9,990		1.2	1.4
Balance	6,838

Source: UK Office for National Statistics

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

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