CMP Associates Regulation Blog: Valuations of Risk Financial Assets, Destruction of Household Nonfinancial Wealth with Stagnating Total Real Wealth, Stagnating Real Disposable Income and Consumption Expenditures, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend, Swelling Undistributed Corporate Profits, United States Housing Collapse, World Cyclical Slow Growth and Global Recession Risk: Part V

Valuations of Risk Financial Assets, Destruction of Household Nonfinancial Wealth with Stagnating Total Real Wealth, Stagnating Real Disposable Income and Consumption Expenditures, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend, Swelling Undistributed Corporate Profits, United States Housing Collapse, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

I Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend

IA Mediocre Cyclical United States Economic Growth

IA1 Contracting Real Private Fixed Investment

IA2 Swelling Undistributed Corporate Profits

IB Stagnating Real Disposable Income and Consumption Expenditures

IB1 Stagnating Real Disposable Income and Consumption Expenditures

IB2 Financial Repression

IIA Destruction of Household Nonfinancial Wealth with Stagnating Total Real Wealth

II United States Housing Collapse

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

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

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

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 5.0 percent in 2015 and 5.6 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	3.8	5.0	5.6
Exports Goods & Services	3.2	3.7	5.0	5.5
Imports Goods & Services	2.8	3.9	5.0	5.6
World Trade Value of Exports Goods & Services USD Billion	23,114	23,928	24,948	Average ∆% 2006-2015 20,259
Value of Exports of Goods USD Billion	18,671	19,299	20,107	Average ∆% 2006-2015 16,312
Average Oil Price USD/Barrel	104.07	102.76	99.36	Average ∆% 2006-2015 88.85
Average Annual ∆% Export Unit Value of Manufactures	-1.1	-0.2	-0.5	Average ∆% 2006-2015 -0.6
Exports of Goods & Services	2013	2014	2015	Average ∆% 2016-2019
Euro Area	1.8	3.5	4.3	4.7
EMDE	4.4	3.9	5.8	6.1
G7	1.8	2.9	4.2	4.9
Imports Goods & Services
Euro Area	0.5	3.4	3.9	4.7
EMDE	5.3	4.4	6.1	6.3
G7	1.2	3.6	4.1	4.9
Terms of Trade of Goods & Services
Euro Area	0.8	-0.4	-0.3	-0.1
EMDE	-0.2	-0.02	-0.6	-0.4
G7	0.8	0.7	-0.2	0.0
Terms of Trade of Goods
Euro Area	1.2	0.03	-0.02	-0.2
EMDE	-0.2	0.2	-0.4	-0.3
G7	0.9	0.3	-0.1	-0.1

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 53.2 in Nov from 53.5 in Oct, indicating expansion at slightly slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/3e88d53d5f9343c695bc7ef65fa7e9d0). This index has remained above the contraction territory of 50.0 during 64 consecutive months. The employment index increased from 51.4 in Oct to 51.9 in Nov with input prices rising at slower rate, new orders increasing at slower rate and output increasing at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/3e88d53d5f9343c695bc7ef65fa7e9d0). David Hensley, Director of Global Economic Coordination at JP Morgan, finds moderately slower growth of world economic output (http://www.markiteconomics.com/Survey/PressRelease.mvc/3e88d53d5f9343c695bc7ef65fa7e9d0). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, decreased to 51.8 in Nov from 52.2 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7d1ceba22234f4eafdc53a0c7c7a7e9). New export orders expanded for the sixteenth consecutive month David Hensley, Director of Global Economics Coordination at JP Morgan Chase, finds continuing impulse in global manufacturing at around annual 3.3 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/c7d1ceba22234f4eafdc53a0c7c7a7e9). The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 48.4 in Oct to 48.1 in Nov, indicating moderate contraction in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/20803a784bcd4bdba08993ea343540fe). The HSBC Brazil Services Business Activity index, compiled by Markit, increased from 48.2 in Oct to 48.5 in Nov, indicating marginally contracting services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/20803a784bcd4bdba08993ea343540fe). André Loes, Chief Economist, Brazil, at HSBC, finds lack of impulse of the economy in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2f6044990d2945f98595a949cc75369c). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) decreased marginally from 49.1 in Oct to 48.7 in Nov, indicating moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/2f6044990d2945f98595a949cc75369c). André Loes, Chief Economist, Brazil at HSBC, finds increasing output and input prices perhaps because of exchange rate depreciation (http://www.markiteconomics.com/Survey/PressRelease.mvc/2f6044990d2945f98595a949cc75369c).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 53.7 in Dec from 54.8 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/0539167ca8dd4b0088095675a7a3af71). New export orders increased moderately. Chris Williamson, Chief Economist at Markit, finds that manufacturing is slowing with weakness in foreign orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/0539167ca8dd4b0088095675a7a3af71). The Markit Flash US Services PMI™ Business Activity Index decreased from 57.1 in Oct to 56.3 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/9d1dd1f5f7ac4cf99dfcad0c92b222c0). Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with sustained strong growth of GDP at an annual rate around 2.5 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/9d1dd1f5f7ac4cf99dfcad0c92b222c0). The Markit US Composite PMI™ Output Index of Manufacturing and Services decreased to 56.1 in Nov from 57.4 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/34b835438d714f8e91f99173d2cadcb3). The Markit US Services PMI™ Business Activity Index decreased from 57.1 in Oct to 56.2 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/34b835438d714f8e91f99173d2cadcb3). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at around 2.5 percent annual in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/34b835438d714f8e91f99173d2cadcb3). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) decreased to 54.7 in Nov from 55.9 in Oct, which indicates expansion at marginally slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/6634713cadae418b8e303f5a60729c3c). New foreign orders contracted at the fastest rate since Jun 2013. Chris Williamson, Chief Economist at Markit, finds that the index suggests slowing but strong manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/6634713cadae418b8e303f5a60729c3c). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® decreased 0.3 percentage points from 59.0 in Oct to 58.7 in Nov, which indicates growth at moderately slower rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders increased 0.2 percentage points from 65.8 in Oct to 66.0 in Nov. The index of new export orders increased 3.5 percentage point from 51.5 in Oct to 55.0 in Nov, growing at faster rate. The Non-Manufacturing ISM Report on Business^® PMI increased 2.2 percentage points from 57.1 in Oct to 59.3 in Nov, indicating growth of business activity/production during 64 consecutive months, while the index of new orders increased 2.3 percentage points from 59.1 in Oct to 61.4 in Nov (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	Nov 12 months NSA ∆%: 1.3; ex food and energy ∆%: 1.7 Nov month SA ∆%: -0.3; ex food and energy ∆%: 0.1 Blog 12/21/14
Producer Price Index	Finished Goods Nov 12-month NSA ∆%: 1.1; ex food and energy ∆% 2.0 Nov month SA ∆% = -0.6; ex food and energy ∆%: 0.1 Final Demand Nov 12-month NSA ∆%: 1.54; ex food and energy ∆% 1.8 Nov month SA ∆% = -0.2; ex food and energy ∆%: 0.0 Blog 12/21/14
PCE Inflation	Nov 12-month NSA ∆%: headline 1.2; ex food and energy ∆% 1.4 Blog 12/28/14
Employment Situation	Household Survey: Nov Unemployment Rate SA 5.8% Blog calculation People in Job Stress Nov: 26.0 million NSA, 15.6% of Labor Force Establishment Survey: Nov Nonfarm Jobs +321,000; Private +314,000 jobs created Oct 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.3 Blog 12/7/14
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 Oct 2014 5.349 million lower by 0.182 million than 5.531 million in Oct 2007 Blog 12/14/14
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 2.6 IIIQ2014/IIIQ2013 2.7 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 4.6 IIIQ2014 SAAR 5.0 Blog 12/28/14
Real Private Fixed Investment	SAAR IIIQ2014 7.7 ∆% IVQ2007 to IIIQ2014: 2.2% Blog 12/28/14
Corporate Profits	IIIQ2014 SAAR: Corporate Profits 3.1; Undistributed Profits 12.4 Blog 12/28/14
Personal Income and Consumption	Nov month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.5 Real Personal Consumption Expenditures (RPCE): 0.7 12-month Nov NSA ∆%: RDPI: 2.9; RPCE ∆%: 2.8 Blog 12/28/14
Quarterly Services Report	IIIQ14/IIIQ13 NSA ∆%: Information 6.6 Financial & Insurance 4.8 Blog 12/14/14
Employment Cost Index	Compensation Private IIQ2014 SA ∆%: 0.7 Jun 12 months ∆%: 2.0 Blog 8/3/14
Industrial Production	Nov month SA ∆%: 1.3 Nov 12 months SA ∆%: 5.2 Manufacturing Nov SA 1.1 ∆% Nov 12 months SA ∆% 4.8, NSA 4.7 Capacity Utilization: 80.1 Blog 12/21/14
Productivity and Costs	Nonfarm Business Productivity IIIQ2014∆% SAAE 2.3; IIIQ2014/IIQ2013 ∆% 1.0; Unit Labor Costs SAAE IIIQ2014 ∆% -1.0; IIIQ2014/IIIQ2013 ∆%: 1.2 Blog 12/7/14
New York Fed Manufacturing Index	General Business Conditions From Nov 10.16 to Dec -3.58 New Orders: From Nov 9.14 to Dec -1.97 Blog 12/21/14
Philadelphia Fed Business Outlook Index	General Index from Nov 40.8 to Dec 24.5 New Orders from Nov 35.7 to Dec 15.7 Blog 12/21/14
Manufacturing Shipments and Orders	New Orders SA Oct ∆% -0.7 Ex Transport -1.4 Jan-Oct NSA New Orders ∆% 4.0 Ex transport 2.6 Blog 12/14/14
Durable Goods	Nov New Orders SA ∆%: minus 0.7; ex transport ∆%: minus 0.4 Jan-Nov 14/Jan-Nov 13 New Orders NSA ∆%: 6.7; ex transport ∆% 5.4 Blog 12/28/14
Sales of New Motor Vehicles	Jan-Nov 2014 15,014,620; Jan-Nov 2013 14,239,897. Nov 14 SAAR 17.20 million, Oct 14 SAAR 16.46 million, Nov 2013 SAAR 16.29 million Blog 12/7/14
Sales of Merchant Wholesalers	Jan-Oct 2014/Jan-Oct 2013 NSA ∆%: Total 5.7; Durable Goods: 5.6; Nondurable Goods: 5.8 Blog 12/14/14
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Oct 14 12-M NSA ∆%: Sales Total Business 3.5; Manufacturers 2.2 Retailers 4.4; Merchant Wholesalers 4.2 Blog 12/14/14
Sales for Retail and Food Services	Jan-Nov 2014/Jan-Nov 2013 ∆%: Retail and Food Services 4.0; Retail ∆% 3.8 Blog 12/14/14
Value of Construction Put in Place	Oct SAAR month SA ∆%: 1.1 Oct 12-month NSA: 2.8 Blog 12/7/14
Case-Shiller Home Prices	Sep 2014/Sep 2013 ∆% NSA: 10 Cities 4.8; 20 Cities: 4.9 ∆% Sep SA: 10 Cities 0.3 ; 20 Cities: 0.3 Blog 11/30/14
FHFA House Price Index Purchases Only	Oct SA ∆% 0.6; 12 month NSA ∆%: 4.5 Blog 12/28/14
New House Sales	Nov 2014 month SAAR ∆%: minus 1.6 Jan-Nov 2014/Jan-Nov 2013 NSA ∆%: 1.0 Blog 12/28/14
Housing Starts and Permits	Nov Starts month SA ∆% -1.6; Permits ∆%: -5.2 Jan-Nov 2014/Jan-Nov 2013 NSA ∆% Starts 8.2; Permits ∆% 3.0 Blog 12/21/14
Trade Balance	Balance Oct SA -$43,432 million versus Sep -$43,603 million Exports Oct SA ∆%: 1.2 Imports Oct SA ∆%: 0.9 Goods Exports Jan-Oct 2014/Jan-Oct 2013 NSA ∆%: 3.2 Goods Imports Jan-Oct 2014/Jan-Oct 2012 NSA ∆%: 3.3 Blog 12/14/14
Export and Import Prices	Nov 12-month NSA ∆%: Imports -2.3; Exports -1.9 Blog 12/14/14
Consumer Credit	Oct ∆% annual rate: Total 4.9; Revolving 1.3; Nonrevolving 6.2 Blog 12/14/14
Net Foreign Purchases of Long-term Treasury Securities	Oct Net Foreign Purchases of Long-term US Securities: minus $1.4 billion Major Holders of Treasury Securities: China $1253 billion; Japan $1222 billion; Total Foreign US Treasury Holdings Oct $6059 billion Blog 12/21/14
Treasury Budget	Fiscal Year 2015/2013 ∆% Nov: Receipts 6.0; Outlays minus 4.0; Individual Income Taxes 5.9 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Deficit Fiscal Year 2014 $483 billion Blog 12/14/2014
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	Sep 2014 SAAR ∆%: Securities 9.6 Loans 3.1 Cash Assets 16.8 Deposits 11.5 Blog 10/26/14
Flow of Funds Net Worth of Families and Nonprofits	IIIQ2014 ∆ since 2007 Assets +$14,260.8 BN Nonfinancial $477.8 BN Real estate -$1,215.2 BN Financial +13,783.0 BN Net Worth +$14,595.3 BN Blog 12/28/14
Current Account Balance of Payments	IIIQ2014 -202,280 MM % GDP 2.3 Blog 12/21/14
Collapse of United States Dynamism of Income Growth and Employment Creation	Blog 10/26/14

Links to blog comments in Table USA:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

12/7/14 http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html

11/30/14 http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html

10/26/14 http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html

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

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

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

Manufacturers’ shipments of durable goods decreased 0.4 percent in Nov 2014, decreasing 0.1 percent in Oct 2014 and increasing 0.3 percent in Sep 2014. New orders decreased 0.7 percent in Nov 2014 after increasing 0.3 percent in Oct 2014 and decreasing 0.7 percent in Sep 2014, as shown in Table VA-1. These data are very volatile. Volatility is illustrated by decrease of 12.9 percent in Nov 2012 after increase of orders for nondefense aircraft of 2642.2 percent in Sep 2012 after decrease of 97.2 percent in Aug and increases of 51.1 percent in Jul 2012 and 32.5 percent in Jun 2012. Nondefense aircraft new orders increased 0.6 percent in Nov 2014 after increasing 0.8 percent in Oct 2014 and decreasing 16.0 percent in Sep 2014. New orders excluding transportation equipment decreased 0.4 percent in Nov 2014, decreasing 1.0 percent in Oct 2014 and increasing 0.3 percent in Sep 2014. Capital goods new orders, indicating investment, decreased 0.4 percent in Nov 2014, increasing 1.0 percent in Oct 2014 and decreasing 3.7 percent in Sep 2014. New orders of nondefense capital goods increased 0.5 percent in Nov 2014, after decreasing 0.1 percent in Oct 2014 and decreasing 4.8 percent in Sep 2014. Capital goods orders excluding volatile aircraft changed 0.0 percent in Nov 2014, decreasing 1.9 percent in Oct 2014 and decreasing 1.1 percent in Sep 2014.

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

	Nov 2014 ∆%	Oct 2014 ∆%	Sep 2014 ∆%
Total
S	-0.4	-0.1	0.3
NO	-0.7	0.3	-0.7
Excluding Transport
S	-0.1	-0.3	0.3
NO	-0.4	-1.0	0.3
Excluding Defense
S	-0.4	-0.2	0.4
NO	-0.1	-0.6	-1.0
Machinery
S	0.2	-0.8	0.4
NO	0.9	-2.0	-3.0
Computers & Electronic Products
S	-0.6	0.2	-2.2
NO	1.8	0.1	-2.0
Computers
S	-1.0	-0.7	-5.0
NO	-0.6	-3.3	-1.9
Transport Equipment
S	-1.0	0.6	0.4
NO	-1.2	3.3	-3.1
Motor Vehicles
S	0.0	0.8	0.2
NO	0.2	0.6	-0.2
Nondefense Aircraft
S	-4.4	-2.1	1.7
NO	0.6	0.8	-16.0
Capital Goods
S	-0.4	-1.0	1.0
NO	-0.4	1.0	-3.7
Nondefense Capital Goods
S	-0.6	-1.3	1.3
NO	0.5	-0.1	-4.8
Capital Goods ex Aircraft
S	0.2	-0.9	0.7
NO	0.0	-1.9	-1.1

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

Source: US Census Bureau

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

Chart VA-1 of the US Census Bureau provides new orders of durable goods seasonally adjusted since Jan 1992. New orders fell sharply during the global recession. New orders recovered at faster rates and then flattened together with the rest of the economy after 2012. There are also downward effects of lower inflation because data are nominal without adjustment for inflation.

Chart VA-1, US, Durable Goods New orders, SA

Source: US Census Bureau

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

Chart VA-2 provides monthly changes in durable goods new orders. There is significant volatility in these data, preventing clear identification of trends.

Chart VA-2, US, Manufacturers’ Durable Goods New Orders 2013-2014

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr021.html

Additional perspective on manufacturers’ shipments and new orders of durable goods is in Table VA-2. Values are cumulative millions of dollars in Jan-Nov 2014 not seasonally adjusted (NSA) and without adjustment for inflation. Shipments of durable goods of all manufacturing industries in Jan-Nov 2014 total $2,657.3 billion and new orders total $2,673.9 billion, growing respectively by 4.9 percent and 6.7 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 5.4 percent and new orders increased 5.4 percent. Excluding defense, shipments grew 5.3 percent and new orders grew 6.6 percent. Important information not in Table VA-2 is the large share of nondurable goods. Capital goods have relatively high value of $953.5 billion for shipments, growing 4.8 percent, and new orders $1034.0 billion, increasing 8.3 percent. Excluding aircraft, capital goods shipments reached $755.0 billion, growing by 5.1 percent, and new orders $766.1 billion, increasing 5.0 percent. Data weakened in 2013 with effects of lower inflation on nominal values with recovery later in the year.

Table VA-2, US, Value of Manufacturers’ Shipments and New Orders of Durable Goods, NSA, Millions of Dollars

Jan-Nov 2014	Shipments	∆% 2014/ 2013	New Orders	∆% 2014/ 2013
Total	2,657,282	4.9	2,673,887	6.7
Excluding Transport	1,874,827	5.4	1,817,368	5.4
Excluding Defense	2,528,661	5.3	2,550,836	6.6
Machinery	397,611	5.9	407,633	7.0
Computers & Electronic Products	315,354	4.6	239,220	3.8
Computers & Related Products	22,683	-6.1	23,522	-3.3
Transport Equipment	782,455	3.7	856,509	9.8
Motor Vehicles	519,591	3.6	520,266	3.9
Nondefense Aircraft	133,296	10.6	209,520	26.0
Capital Goods	953,490	4.8	1,034,032	8.3
Nondefense Capital Goods	848,317	5.8	935,347	8.2
Capital Goods ex Aircraft	755,009	5.1	766,109	5.0

Note: Transport: transportation

Source: US Census Bureau

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

Chart VA-3 of the US Census Bureau provides new orders of durable goods not seasonally adjusted since Jan 1992. New orders are oscillating around the highest value before the global recession, which could be lower in real terms because of continuing inflation.

Chart VA-3, US, Durable Goods New orders, NSA

Source: US Census Bureau

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

Chart VA-4 of the Board of Governors of the Federal Reserve System shows that output of durable manufacturing accelerated in the 1980s and 1990s with slower growth in the 2000s perhaps because processes matured. Growth was robust after the major drop during the global recession but appears to vacillate in the final segment.

Chart VA-4, US, Output of Durable Manufacturing, 1972-2014

Source: Board of Governors of the Federal Reserve System

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

Manufacturing jobs not seasonally adjusted increased 186,000 from Nov 2013 to
Nov 2014 or at the average monthly rate of 15,500. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. Industrial production increased 1.3 percent in Nov 2014 and increased 0.1 percent in Oct 2014 after increasing 0.9 percent in Sep 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 1.3 percent in November after edging up in October; output is now reported to have risen at a faster pace over the period from June through October than previously published. In November, manufacturing output increased 1.1 percent, with widespread gains among industries. The rise in factory output was well above its average monthly pace of 0.3 percent over the previous five months and was its largest gain since February. In November, the output of utilities jumped 5.1 percent, as weather that was colder than usual for the month boosted demand for heating. The index for mining decreased 0.1 percent. At 106.7 percent of its 2007 average, total industrial production in November was 5.2 percent above its year-earlier level. Capacity utilization for the industrial sector increased 0.8 percentage point in November to 80.1 percent, a rate equal to its long-run (1972–2013) average.”

In the six months ending in Nov 2014, United States national industrial production accumulated increase of 2.9 percent at the annual equivalent rate of 5.9 percent, which is higher than growth of 5.2 percent in the 12 months ending in Nov 2014. Excluding growth of 1.3 percent in Nov 2014, growth in the remaining five months from Jun to Nov 2014 accumulated to 1.6 percent or 3.9 percent annual equivalent. Industrial production declined in one of the past six months. Industrial production expanded at annual equivalent 9.6 percent in the most recent quarter from Sep to Nov 2014 and at 2.4 percent in the prior quarter Jun to Aug 2014. Business equipment accumulated growth of 2.5 percent in the six months from Jun to Nov 2014 at the annual equivalent rate of 5.1 percent, which is lower than growth of 6.5 percent in the 12 months ending in Nov 2014. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector increased 0.8 percentage point in November to 80.1 percent, a rate equal to its long-run (1972–2013) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and stronger growth in past months.

Manufacturing decreased 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased 19.9 percent from the trough in Apr 2009 to Dec 2013. Manufacturing grew 26.5 percent from the trough in Apr 2009 to Nov 2014. Manufacturing output in Nov 2014 is 1.2 percent below the peak in Jun 2007. Growth at trend in the entire cycle from IVQ2007 to IIIQ2014 would have accumulated to 23.0 percent. GDP in IIIQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,232.4 billion than actual $16,205.6 billion. There are about two trillion dollars of GDP less than at trend, explaining the 26.0 million unemployed or underemployed equivalent to actual unemployment of 15.8 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html

and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/rules-discretionary-authorities-and.html). US GDP in IIIQ2014 is 12.1 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,205.1 billion in IIIQ2014 or 8.1 percent at the average annual equivalent rate of 1.1 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 Nov 2014. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.2256 in Nov 2014. The actual index NSA in Nov 2014 is 101.7487, which is 18.1 percent below trend. Manufacturing output grew at average 2.3 percent between Dec 1986 and Dec 2013, raising the index at trend to 116.1422 in Nov 2014. The output of manufacturing at 101.7487 in Nov 2014 is 12.4 percent below trend under this alternative calculation.

Table I-13 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 87.4 percent in IIIQ2014. Most of US national income is in the form of services. In Nov 2014, there were 141.301 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 118.868 million NSA in Nov 2014 accounted for 84.1 percent of total nonfarm jobs of 141.301 million, of which 12.237 million, or 10.3 percent of total private jobs and 8.7 percent of total nonfarm jobs, were in manufacturing. Private service-providing jobs were 99.475 million NSA in Nov 2014, or 70.4 percent of total nonfarm jobs and 83.7 percent of total private-sector jobs. Manufacturing has share of 11.3 percent in US national income in IIIQ2014 and durable goods 6.5 percent, as shown in Table I-13. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.

Table I-13, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total

	SAAR IIQ2014	% Total	SAAR IIIQ2014	% Total
National Income WCCA	15,222.0	100.0	15,472.0	100.0
Domestic Industries	15,008.6	98.6	15,242.2	98.5
Private Industries	13,287.8	87.3	13,516.5	87.4
Agriculture	179.0	1.2	167.3	1.1
Mining	261.4	1.7	274.4	1.8
Utilities	215.6	1.4	221.7	1.4
Construction	670.3	4.4	680.4	4.4
Manufacturing	1712.8	11.3	1741.7	11.3
Durable Goods	975.4	6.4	1,000.7	6.5
Nondurable Goods	737.4	4.8	740.9	4.8
Wholesale Trade	917.7	6.0	936.9	6.1
Retail Trade	1048.0	6.9	1054.2	6.8
Transportation & WH	478.1	3.1	480.3	3.1
Information	580.3	3.8	576.5	3.7
Finance, Insurance, RE	2642.8	17.4	2787.2	18.0
Professional & Business Services	2064.5	13.6	2060.0	13.3
Education, Health Care	1484.3	9.8	1494.1	9.7
Arts, Entertainment	605.0	4.0	610.6	3.9
Other Services	428.0	2.8	431.3	2.8
Government	1720.8	11.3	1725.6	11.2
Rest of the World	213.5	1.4	229.9	1.5

Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services

Source: US Bureau of Economic Analysis

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

VB Japan. 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:

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

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

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
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™ with the Flash Japan Manufacturing PMI™ decreased from 52.0 in Nov to 52.1 in Dec and the Flash Japan Manufacturing Output Index™ increased from 52.7 in Nov to 53.3 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/81cd7459dab241dbbdde5e87c3dd1ae6). New export orders increased at a slower pace. Amy Brownbill, Economist at Markit, finds improving Japan’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/81cd7459dab241dbbdde5e87c3dd1ae6). Private-sector activity in Japan improved marginally with the Markit Composite Output PMI Index increasing from 49.5 in Oct to 51.2 in Nov, indicating modest improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d4d9e4343014b418f3d900d3445d46a). The Markit Business Activity Index of Services increased to 50.6 in Nov from 48.7 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d4d9e4343014b418f3d900d3445d46a). Amy Brownbill, Ecoomist at Markit and author of the report, finds the reading consistent with growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d4d9e4343014b418f3d900d3445d46a). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 52.4 in Oct to 52.0 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/8d624f6683ba4e119b6a525e6e8b56fb). New orders, output and foreign orders increased. Philip Leake, Economist at Markit, finds higher manufacturing improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/8d624f6683ba4e119b6a525e6e8b56fb).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	Nov ∆% -0.2 12 months ∆% 2.7 Blog 12/14/14
Consumer Price Index	Nov NSA ∆% -0.4; Nov 12 months NSA ∆% 2.4 Blog 12/28/14
Real GDP Growth	IIIQ2014 ∆%: -0.5 on IIQ2014; IIIQ2014 SAAR -1.9; ∆% from quarter a year earlier: -1.3 % 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 11/23/14 12/14/14
Employment Report	Nov Unemployed 2.19 million Change in unemployed since last year: minus 300 thousand Unemployment rate: 3.5 % Blog 12/28/14
All Industry Indices	Oct month SA ∆% -0.1 12-month NSA ∆% -1.0 Blog 12/28/14
Industrial Production	Nov SA month ∆%: -0.6 12-month NSA ∆% -3.8 Blog 12/28/14
Machine Orders	Total Oct ∆% -2.9 Private ∆%: -7.9 Oct ∆% Excluding Volatile Orders minus 6.4 Blog 12/14/14
Tertiary Index	Oct month SA ∆% -0.2 Oct 12 months NSA ∆% minus 0.9 Blog 12/14/14
Wholesale and Retail Sales	Nov 12 months: Total ∆%: -2.7 Wholesale ∆%: -4.0 Retail ∆%: 0.4 Blog 12/28/14
Family Income and Expenditure Survey	Nov 12-month ∆% total nominal consumption 0.3, real -2.5 Blog 12/28/14
Trade Balance	Exports Nov 12 months ∆%: 4.9 Imports Nov 12 months ∆% -1.7 Blog 12/21/14

Links to blog comments in Table JPY:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

11/23/14 http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.htm

9/14/14 http://cmpassocregulationblog.blogspot.com/2014/09/geopolitics-monetary-policy-and.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

The employment report for Japan in Nov 2014 is in Table VB-1. The number unemployed reached 2.19 million in Nov 2014, declining 300 thousand from a year earlier or 12.-0 percent. The rate of unemployment not seasonally adjusted reached 3.3 percent, decreasing 0.5 percentage points from a year earlier. Population changed 0.0 percent from a year earlier. The labor force decreased 0.5 percentage points from a year earlier and the labor participation rate stood at 59.4, decreasing 0.3 percentage points from a year earlier. The employment rate moved to 57.4 percent, which is unchanged by 0.0 percentage points relative to a year earlier.

Table VB-1, Japan, Employment Report Oct 2014

Nov 2014 Unemployed	2.19 million
Change since last year	-300 thousand; ∆% –12.0
Unemployment rate	SA 3.5%, 0.0 from earlier month; NSA 3.3%, -0.5 from earlier year
Population ≥ 15 years	110.85 million
Change since last year	∆% 0.0
Labor Force	65.90 million
Change since last year	∆% -0.5
Employed	63.71 million
Change since last year	∆% 0.0
Labor force participation rate	59.4
Change since last year	-0.3
Employment rate	57.5%
Change since last year	0.0

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

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

Table VB-2 provides the rate of unemployment of Japan seasonally adjusted that decreased to 3.5 percent in Nov 2014 from 4.4 percent in May 2012. The rate of unemployment SA fell 0.4 percentage points from 3.9 percent in Nov 2013 to 3.5 percent in Nov 2014.

Table VB-2, Japan, Unemployment Rate, SA

	Unemployment Rate SA
Nov 2014	3.5
Oct	3.5
Sep	3.6
Aug	3.5
Jul	3.8
Jun	3.7
May	3.5
Apr	3.6
Mar	3.6
Feb	3.6
Jan	3.7
Dec 2013	3.7
Nov	3.9
Oct	4.0
Sep	4.0
Aug	4.1
Jul	3.9
Jun	3.9
May	4.1
Apr	4.1
Mar	4.1
Feb	4.3
Jan	4.2
Dec 2012	4.3
Nov	4.1
Oct	4.1
Sep	4.3
Aug	4.2
Jul	4.4
Jun	4.3
May	4.4

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

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

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2011 to 2014. There is clear trend of decline with multiple oscillations and increase in Jun-Jul 2014. The rate increased in Sep 2014 and fell in Oct 2014, stabilizing in Nov 2014.

Chart VB-1, Japan, Unemployment Rate, Seasonally Adjusted

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

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

During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid-1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for selected years from 1953 to 1985 and yearly from 1990 to 2013. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.6 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011, 4.3 percent in 2012 and 4.0 percent in 2013. The participation rate fell from 60.4 percent in 2007 to 59.6 percent in 2010, falling to 59.3 percent in 2011 and 59.1 in 2012 and increasing to 59.3 percent in 2013. The employment rate fell from 58.1 in percent in 2007 to 56.6 percent in 2010 and 56.5 percent in 2011 and 2012, increasing to 56.9 percent in 2013. The global recession adversely affected labor markets in advanced economies.

Table VB-3, Japan, Rates of Unemployment, Participation in Labor Force and Employment, %

	Participation Rate	Employment Rate	Unemployment Rate
1953	70.0	68.6	1.9
1960	69.2	68.0	1.7
1965	65.7	64.9	1.2
1970	65.4	64.6	1.1
1975	63.0	61.9	1.9
1980	63.3	62.0	2.0
1985	63.0	61.4	2.6
1990	63.3	61.9	2.1
1991	63.8	62.4	2.1
1992	64.0	62.6	2.2
1993	63.8	62.2	2.5
1994	63.6	61.8	2.9
1995	63.4	61.4	3.2
1996	63.5	61.4	3.4
1997	63.7	61.5	3.4
1998	63.3	60.7	4.1
1999	62.9	59.9	4.7
2000	62.4	59.5	4.7
2001	62.0	58.9	5.0
2002	61.2	57.9	5.4
2003	60.8	57.6	5.3
2004	60.4	57.6	4.7
2005	60.4	57.7	4.4
2006	60.4	57.9	4.1
2007	60.4	58.1	3.9
2008	60.2	57.8	4.0
2009	59.9	56.9	5.1
2010	59.6	56.6	5.1
2011	59.3	56.5	4.6
2012	59.1	56.5	4.3
2013	59.3	56.9	4.0

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

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

The indices of all industry activity of Japan, which approximates GDP or economic activity, fell to levels close to the worst point of the recession, showing the brutal impact of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Table VB-4 with the latest revisions shows the quarterly index, which permits comparison with the movement of real GDP. The first row provides weights of the various components of the index: AG (agriculture) 1.4 percent (not shown), CON (construction) 5.7 percent, IND (industrial production) 18.3 percent, TERT (services) 63.2 percent, and GOVT (government) 11.4 percent. GDP decreased 0.5 percent in IIIQ2014 (Table VB-1 at http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk_32.html), industry decreased 1.9 percent, the tertiary sector increased 0.4 percent, government decreased 0.1 percent and construction increased 0.7 percent. The report shows that the all industry index changed 0.0 percent in IIIQ2014. Industry deducted 0.35 percentage points to growth of the all industry index and the tertiary index added 0.27 percentage points. Anticipation of purchases to avoid the increase in the sales tax in Apr 2014 explains unusually high activity in the economy of Japan in IQ2014 and subsequent decline in IIQ2014. Japan had already experienced a very weak quarter in IVQ2010, with decline of GDP of 0.6 percent (Table VB-1 at http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk_32.html) when it was unexpectedly hit by the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. GDP fell 1.8 percent in IQ2011 and 0.6 percent in IIQ2011. GDP changed 0.0 percent in IQ2011 relative to a year earlier and fell 1.5 percent in IIQ2011 relative to a year earlier (Table VB-1 and Table VB-4 at http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk_32.html). The all industry activity index fell in all quarters of 2012 with exception of growth of 0.1 percent in IQ2012. Weakness in industry was the driver of decline.

Table VB-4, Japan, Indices of All Industry Activity Percentage Change from Prior Quarter SA ∆%

	CON	IND	TERT	GOVT	ALL IND	REAL GDP
Weight %	5.7	18.3	63.2	11.4	100.0
2014
IIIQ2014	0.7	-1.9	0.4	-0.1	0.0	-0.5
Cont to IIIQ % Change	0.04	-0.35	0.27	-0.01
IIQ2014	-4.6	-3.8	-3.8	0.5	-3.4	-1.7
IQ	-2.7	3.0	1.8	-0.5	1.6	1.4
2013
IVQ	2.8	1.8	-0.2	0.4	0.3	-0.4
IIIQ	4.3	1.8	0.1	-0.2	0.5	0.4
IIQ	3.6	1.6	0.3	0.0	0.6	0.7
IQ	0.9	0.4	0.5	-0.3	0.4	1.5
2012
IVQ2012	3.0	-1.8	0.3	0.1	-0.1	-0.2
IIIQ	1.6	-3.3	0.0	0.0	-0.4	-0.5
IIQ	1.3	-2.1	0.0	0.0	-0.2	-0.4
IQ	2.0	1.6	0.0	0.2	0.1	1.1

AG: indices of agriculture, forestry and fisheries has weight of 1.4% and is not included in official report or in this table; CON: indices of construction industry activity; IND: indices of industrial production; TERT: indices of tertiary industry activity; GOVT: indices of government services, etc.; ALL IND: indices of all industry activity

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

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

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

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

There are more details in Table VB-5. In Oct 2014, the all industry activity index decreased 0.1 percent with industry increasing 0.4 percent and services decreasing 0.2 percent while construction increased 1.1 percent and government increased 0.7 percent. Industry added 0.08 percentage points and services subtracted 0.13 percentage points while construction added 0.05 percentage points and government contributed 0.08 percentage points. The all industry activity index is stronger in 2013 with growth of 0.5 percent in Dec 2012, 0.4 percent in Feb 2013, 0.1 percent in Mar 2013, 0.1 percent in Apr 2013 and 0.6 percent in May 2013. After decline of 0.3 percent in Jun 2013, the all industry index rose 0.3 percent in Jul 2013, 0.2 percent in Aug 2013 and 0.3 percent in Sep 2013. The index fell 0.1 percent in Oct 2013 but increased 0.2 percent in Nov 2013. The index changed 0.0 percent in Dec 2013 and increased 1.7 percent in Jan 2014, decreasing 1.1 percent in Feb 2014. The index increased 1.7 percent in Mar 2014 in the rush of expenditures in anticipation of the sales tax increase in Apr 2014 and fell 4.4 percent in Apr 2014 because of the impact of the sales tax. The all industry index rebounded 0.5 percent in May 2014 and fell 0.3 percent in Jun 2014, decreasing 0.4 percent in Jul 2014. The index fell 0.1 percent in Aug 2014 and rebounded 1.4 percent in Sep 2014. Industry is recovering with growth of 1.4 percent in Dec 2012, 0.9 percent in Feb 2013, 0.3 percent in Mar 2013, 0.6 percent in Apr 2013 and 2.1 percent in May 2013. After decline of 2.7 percent in Jun 2003, industry grew 2.7 percent in Jul 2013 and declined 0.4 percent in Aug 2013. Industry rebounded with 1.5 percent in Sep 2013 and 0.5 percent in Oct 2013. Industry rose 0.3 percent in Nov 2013 and increased 0.5 percent in Dec 2013. Industry grew 3.9 percent in Jan 2014 and fell 2.3 percent in Feb 2014. Industry increased 0.7 percent in Mar 2014 and fell 2.9 percent in Apr 2014. Industry increased 0.7 percent in May 2014 and decreased 3.4 percent in Jun 2014. Industry increased 0.4 percent in Jul 2014, fell 1.9 percent in Aug 2014 and increased 2.9 percent in Sep 2014. The highest risk to Japan is if weakening world growth would affect Japanese exports.

Table VB-5, Japan, Indices of All Industry Activity Percentage Change from Prior Month SA ∆%

	CON	IND	TERT	GOVT	ALL IND
Oct 2014	1.1	0.4	-0.2	0.7	-0.1
Cont to Oct % Change	0.05	0.08	-0.13	0.08
Sep	0.0	2.9	1.3	-0.3	1.4
Aug	2.9	-1.9	-0.1	-0.2	-0.1
Jul	-1.2	0.4	-0.3	0.3	-0.4
Jun	0.1	-3.4	0.0	0.0	-0.3
May	-0.2	0.7	0.9	-0.6	0.5
Apr	-3.2	-2.9	-5.7	1.2	-4.4
Mar	-1.5	0.7	2.6	-0.7	1.7
Feb	-1.3	-2.3	-0.9	0.5	-1.1
Jan	-1.7	3.9	1.5	-0.5	1.7
Dec 2013	-0.2	0.5	-0.1	0.1	0.0
Nov	1.5	0.3	0.3	-0.6	0.2
Oct	1.0	0.5	-0.5	0.8	-0.1
Sep	1.0	1.5	0.1	-0.1	0.3
Aug	0.3	-0.4	0.2	0.1	0.2
Jul	1.1	2.7	-0.1	-0.3	0.3
Jun	2.5	-2.7	-0.3	0.1	-0.3
May	3.0	2.1	0.5	0.2	0.6
Apr	0.8	0.6	-0.1	0.0	0.1
Mar	0.0	0.3	0.1	-0.3	0.1
Feb	0.1	0.9	0.5	-0.1	0.4
Jan	-0.7	-0.8	0.0	0.0	-0.2
Dec 2012	0.9	1.4	0.2	-0.3	0.5
Nov	3.0	-0.9	-0.1	0.3	-0.2
Oct	-0.1	0.3	0.2	0.2	0.2
Sep	1.2	-2.2	0.0	-0.3	-0.4
Aug	0.1	-1.4	0.2	0.1	0.0
Jul	-1.0	-0.5	-0.3	-0.1	-0.3
Jun	1.7	-0.9	0.0	0.1	0.1
May	3.0	-1.8	0.5	0.0	-0.1
Apr	-1.1	-0.4	-0.2	0.0	-0.1
Mar	-0.5	-0.2	-0.3	0.1	-0.2
Feb	0.7	-0.2	0.2	-0.2	0.1
Jan	2.6	0.8	-0.8	0.4	-0.7

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

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

Percentage changes from a year earlier in calendar years and relative to the same quarter a year earlier of the all industry activity indices are provided in Table VB-6. The first row shows that services contribute 63.2 percent of the total index and industry contributes 18.3 percent for joint contribution of 81.5 percent. The all industry activity index decreased 1.6 percent in IIIQ2014 relative to a year earlier and GDP decreased 1.3 percent relative to a year earlier (Table VB-4 at http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk_32.html). Industry decreased 1.0 percent relative to a year earlier while the tertiary sector decreased 1.9 percent, deducting combined 1.41 percentage points to growth of the all industry activity index of minus 1.6 percent while construction deducted 0.19 percentage points and government added 0.02 percentage points. The fall of industrial production in 2009 was by a catastrophic 21.9 percent. Japan emerged from the crisis with industrial growth of 16.4 percent in 2010. Quarterly data show that industry is the most dynamic sector of the Japanese economy. The all-industry index increased 0.7 percent in 2013 and real GDP increased 1.6 percent. Industry decreased 0.8 percent, deducting 0.13 percentage points, while the tertiary sector increased 0.7 percent, adding 0.46 percentage points. The Tōhoku or Great East Earthquake and Tsunami of Mar 11, 201, declining world trade and revaluation of the yen in fear of world financial risks interrupted the recovery of the Japanese economy from the global recession.

Table VB-6, Japan, Indices of All Industry Activity Percentage Change from Earlier Calendar Year and Same Quarter Year Earlier NSA ∆%

	CON	IND	TERT	GOVT	ALL IND	REAL GDP
Weight %	5.7	18.3	63.2	11.4	100.0
Calendar Year
2013	10.4	-0.8	0.7	-0.1	0.7	1.6
Cont to 2013 % Change	0.47	-0.13	0.46	-0.01
2012	3.2	0.1	1.4	0.3	1.2	1.8
2011	-2.0	-2.3	0.1	-0.2	-0.5	-0.5
2010	-7.0	16.4	1.3	-0.7	3.1	4.7
2009	-5.6	-21.9	-5.2	0.1	-7.7	-5.5
2008	-7.6	-3.4	-1.0	-1.4	-1.9	-1.0
2014
IIIQ	-3.9	-1.0	-1.9	0.2	-1.6	-1.3
Cont to IIIQ % Change	-0.19	-0.17	-1.24	0.02
IIQ	-0.5	2.6	-2.2	0.2	-0.9	-0.3
IQ	8.1	8.3	2.1	-0.3	3.2	2.5
2013
IVQ	13.4	5.7	0.5	0.0	1.9	2.3
IIIQ	13.0	2.2	1.2	-0.5	1.8	2.2
IIQ	8.8	-3.1	1.3	-0.2	0.6	1.4
IQ2013	5.4	-7.8	-0.1	0.3	-1.2	0.5
2012
IVQ	6.7	-5.9	0.7	-0.1	-0.3	0.0
IIIQ	3.1	-4.2	0.5	0.4	-0.2	0.2
IIQ	4.9	5.5	2.1	0.6	2.6	3.5
IQ	-1.1	6.2	2.4	0.3	2.6	3.5

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

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

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

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

Percentage changes of a month relative to the same month a year earlier for the indices of all industry activity of Japan are shown in Table VB-7. The all industry activity index decreased 1.0 percent in Oct 2014 relative to Oct 2013. Industry decreased 0.8 percent in Oct 2014 relative to a year earlier, deducting 0.15 percentage points to growth of the all industry activity index. The tertiary sector decreased 0.9 percent, subtracting 0.59 percentage points. Construction deducted 0.22 percentage points from the index and government deducted 0.01 percentage points.

Table VB-7, Japan, Indices of All Industry Activity Percentage Change from Same Month Year Earlier NSA ∆%

	CON	IND	TERT	GOVT	ALL IND
Oct	-3.9	-0.8	-0.9	-0.1	-1.0
Cont to Oct % Change	-0.22	-0.15	-0.59	-0.01
Sep	-3.7	0.7	-0.8	-0.6	-0.6
Aug	-2.8	-3.2	-2.7	0.7	-2.5
Jul	-5.2	-0.7	-2.2	0.5	-1.7
Jun	-2.8	3.1	-1.4	-0.6	-0.5
May	-0.7	0.9	-2.5	0.6	-1.5
Apr	2.0	3.8	-2.6	-0.7	-0.9
Mar	6.3	7.3	3.2	-0.4	3.8
Feb	8.2	7.0	0.9	0.0	2.2
Jan	9.9	10.6	2.0	-0.5	3.5
Dec 2013	11.8	7.2	0.8	-0.4	2.2
Nov	14.2	4.8	0.5	-0.2	1.9
Oct	14.4	5.3	0.1	0.6	1.8
Sep	12.8	5.2	1.4	-0.6	2.4
Aug	13.0	-0.7	0.8	0.1	1.0
Jul	13.2	1.9	1.5	-1.0	1.7
Jun	11.2	-4.7	0.6	0.5	0.0
May	8.9	-0.9	1.8	-0.2	1.3
Apr	6.3	-3.2	1.5	-1.1	0.6
Mar	5.4	-6.9	0.7	0.0	-0.6
Feb	4.3	-9.9	-1.5	1.5	-2.4
Jan	6.8	-6.4	0.3	-0.6	-0.7
Dec 2012	8.7	-7.5	-0.1	0.6	-0.9
Nov	7.6	-5.7	1.0	0.3	0.0
Oct	3.5	-4.7	1.3	-1.1	0.1
Sep	2.9	-7.7	0.1	0.7	-1.2
Aug	2.6	-4.4	0.6	0.9	-0.1
Jul	3.8	-0.2	0.8	-0.3	0.6
Jun	6.7	-1.5	0.8	0.9	0.6
May	5.3	6.1	3.1	-0.4	3.3
Apr	2.6	13.6	2.4	1.3	4.1
Mar	3.0	16.2	4.2	0.5	5.8
Feb	-2.5	2.8	2.4	-0.7	1.8
Jan	-3.4	-1.6	0.4	0.4	-0.1

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

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

Industrial production in Japan decreased 0.6 percent in Nov 2014 and decreased 3.8 percent in 12 months, as shown in Table VB-8. Industrial production increased 0.4 percent in Oct 2014 and decreased 0.8 percent relative to a year earlier. Industrial production increased 2.9 percent in Sep 2014 and 0.8 percent in 12 months. Industrial production decreased 1.9 percent in Aug 2014 and fell 3.3 percent in 12 months. Industrial production increased 0.4 percent in Jul 2014 and fell 0.7 percent in 12 months. Japan’s industrial production fell 3.4 percent in Jun 2014 and increased 3.1 percent in 12 months. In May 2014, industrial production in Japan increased 0.7 percent, rebounding from the increase in the sales tax, and increased 1.0 percent in the 12 months ending in May 2014. Industrial production fell 2.8 percent in Apr 2014, mostly because of the increase in the tax on value added of consumption in Apr 2014, and increased 3.8 percent in 12 months. Decline of 2.8 percent in Jun 2013 interrupted four consecutive monthly increases from Feb through May 2013. Another interruption occurred in Aug 2013 with decrease of 0.5 percent and decline of 0.6 percent in 12 months. There was a third interruption with decline of 2.3 percent in Feb 2014 but increase of 7.0 percent in 12 months. Japan’s industrial production is strengthening with growth of 1.4 percent in Dec 2012, 0.9 percent in Feb 2013, 0.3 percent in Mar 2013, 0.6 percent in Apr 2013, 2.1 percent in May 2013, 2.7 percent in Jul 2013, 1.5 percent in Sep 2013, 0.6 percent in Oct 2013 and 0.5 percent in Dec 2013. Improvement continued with 3.9 percent in Jan 2014 and rebound of 0.7 percent in May 2014 from the drop of 2.8 percent in Apr caused by the increases in the sales tax. Growth in 12 months improved from minus 10.0 percent in Feb 2013 to 7.2 percent in Dec 2013, 10.6 percent in Jan 2014, 7.0 percent in Feb 2014 and 7.4 percent in Mar 2014. The increase of the sales tax of Apr 2014 interrupted improvement but growth in 12 months was positive at 1.0 percent in May 2014 and 3.1 percent in Jun 2014. There is deterioration in Nov 2014 with decline of 3.8 percent in 12 months. Industrial production fell 21.9 percent in 2009 after falling 3.4 percent in 2008 but recovered by 15.6 percent in 2010. The annual average in calendar year 2011 fell 2.8 percent largely because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Industrial production increased 0.6 percent in 2012 and fell 0.8 percent in 2013.

Table VB-8, Japan, Industrial Production ∆%

	∆% Month SA	∆% 12 Months NSA
Nov 2014	-0.6	-3.8
Oct	0.4	-0.8
Sep	2.9	0.8
Aug	-1.9	-3.3
Jul	0.4	-0.7
Jun	-3.4	3.1
May	0.7	1.0
Apr	-2.8	3.8
Mar	0.7	7.4
Feb	-2.3	7.0
Jan	3.9	10.6
Dec 2013	0.5	7.2
Nov	0.3	4.8
Oct	0.6	5.4
Sep	1.5	5.3
Aug	-0.5	-0.6
Jul	2.7	1.9
Jun	-2.8	-4.7
May	2.1	-1.0
Apr	0.6	-3.2
Mar	0.3	-7.0
Feb	0.9	-10.0
Jan	-0.7	-6.4
Dec 2012	1.4	-7.6
Nov	-1.0	-5.5
Oct	0.3	-4.7
Sep	-2.2	-7.6
Aug	-1.4	-4.1
Jul	-0.5	0.1
Jun	-0.8	-0.6
May	-1.8	7.6
Apr	-0.5	15.1
Mar	0.2	16.6
Calendar Year
2013		-0.8
2012		0.6
2011		-2.8
2010		15.6

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

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

The survey of household income and consumption of Japan in Table VB-9 is showing noticeable improvement in recent months relative to earlier months with interruption in Apr-May 2014 because of the increase in the tax on value added of consumption. Table VB-4 shows increase of nominal consumption of 0.3 percent in the 12 months ending in Nov 2014 and decrease of 2.5 percent in real terms. There are likely effects of anticipating consumption before the increase in the value added tax on consumption in Apr 2014 with decline of consumption after the actual increase of the tax. There are segments of decreasing real consumption in Nov 2014: furniture and household utensils 1.3 percent in nominal terms and 4.5 percent in real terms. Transportation/communications increased 4.4 percent in nominal terms and 1.8 percent in real terms. Clothing and footwear decreased 0.7 percent in real terms and increased 2.7 percent in nominal terms. Education increased 6.9 percent in real terms and 9.3 percent in nominal terms. Fuel, light and water charges decreased 1.1 percent in nominal terms and decreased 5.7 percent in real terms. Real household income decreased 3.9 percent; real disposable income decreased 3.9 percent; and real consumption expenditures decreased 1.2 percent.

Table VB-9, Japan, Family Income and Expenditure Survey, 12-month ∆% Relative to a Year Earlier

Nov 2014	Nominal	Real
Households of Two or More Persons
Total Consumption	0.3	-2.5
Excluding Housing, Vehicles & Remittance	2.0	-0.9
Food	3.2	0.3
Housing	-19.2	-20.3
Fuel, Light & Water Charges	-1.1	-5.7
Furniture & Household Utensils	-1.3	-4.5
Clothing & Footwear	2.7	-0.7
Medical Care	3.3	1.8
Transport and Communications	4.4	1.8
Education	9.3	6.9
Culture & Recreation	1.7	-2.0
Other Consumption Expenditures	-1.8	-4.6*
Workers’ Households
Income	-1.1	-3.9
Disposable Income	-1.1	-3.9
Consumption Expenditures	1.7	-1.2

*Real: nominal deflated by CPI excluding imputed rent

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Chart VB-2 of the Ministry of Internal Affairs and Communication provides year-on-year change of real consumption expenditures. There is improvement followed by deterioration in the final segment with wide oscillations. There was deterioration in Nov 2011, renewed strength in Dec 2011, another decline in Jan 2012 and increase in Feb and Mar 2012 with stabilization in Apr and May 2012 but sharp decline into Jun 2012. Recovery in Jul and Aug 2012 was interrupted in Sep-Oct 2012 and new increases in Nov 2012, Jan 2013, Feb 2013, Mar 2013 and Apr 2013 (http://www.stat.go.jp/english/data/kakei/156.htm). Total consumption decreased 1.6 percent in real terms in May 2013 and decreased 1.9 percent in nominal terms relative to a year earlier. Real consumption fell 0.4 percent in Jun 2013 and nominal consumption declined 0.1 percent. Consumption rebounded in Jul 2013 with increase of real consumption by 0.1 percent and nominal consumption by 1.0 percent. In Aug 2013, real consumption fell 1.6 percent relative to a year earlier and 0.5 percent in nominal terms. There was marked improvement in Sep 2013 with growth of nominal consumption of 5.2 percent in 12 months and 3.7 percent in real consumption. Nominal consumption increased 2.1 in Nov 2013 and real consumption increased 0.2 percent. Nominal consumption increased 2.7 percent in Dec 2013 and real consumption increased 0.7 percent. In Jan 2014, nominal consumption increased 2.8 percent and real consumption 1.1 percent. Nominal consumption decreased 0.6 percent in Feb 2014 and real consumption decreased 2.5 percent. Nominal consumption increased 9.3 percent in Mar 2014 and real consumption 7.2 percent. The final segment of Chart VB-2 shows contraction of nominal consumption expenditures of 0.7 percent in Apr 2014 and decline of real consumption of 4.6 percent largely because of the increase in the tax on value added of consumption. Contraction deepened with decline of nominal consumption expenditures by 3.9 percent in May 2014 and decline of real consumption expenditures by 8.0 percent. Recovery occurred in Jun 2014 with increase of nominal consumption by 1.3 percent and milder decline of real consumption by 3.0 percent. There is new deterioration in Jul 2013 with decline of 2.0 percent in nominal terms and 5.9 percent in real terms. Nominal consumption fell 0.9 percent in the 12 months ending in Aug 2014 and real consumption fell 4.7 percent. Real consumption expenditures fell 5.6 percent in the 12 months ending in Sep 2014 and nominal consumption expenditures decreased 1.9 percent. Real consumption expenditures fell 4.0 percent in the 12 months ending in Oct 2014 and nominal consumption expenditures fell 0.7 percent. Real consumption expenditures decreased 2.5 percent in the 12 months ending in Nov 2014 and nominal consumption increased 0.3 percent.

Chart VB-2, Japan, Real Percentage Change of Consumption Year-on-Year

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Percentage changes in 12 months of nominal and real consumption expenditures in Japan are provided in Table VB-10. Real consumption fell 2.5 percent in the 12 months ending in Nov 2014 and nominal consumption increased 0.3 percent. In Oct 2014, real consumption fell 4.0 percent in 12 months and nominal consumption fell 0.7 percent. Real consumption fell 5.6 percent in the 12 months ending in Sep 2014 while nominal consumption fell 1.9 percent. In Real consumption fell 4.7 percent in Aug 2014 while nominal consumption fell 0.9 percent. In Jul 2014, real consumption declined 5.9 percent and nominal consumption fell 2.0 percent. Real consumption fell 3.0 percent in Jun 2014 while nominal consumption increased 1.3 percent. Real consumption fell 8.0 percent in the 12 months ending in May 2014 and nominal consumption fell 3.9 percent largely because of the increase in the sales tax in Apr 2014. Real consumption fell 4.6 percent in the 12 months ending in Apr 2014 and nominal consumption fell 0.7 percent because of the increase in the sales tax in Apr 2014. Real consumption increased 7.2 percent in the 12 months ending in Mar 2013 while nominal consumption increased 9.3 percent, partly in anticipation of the increase in the value added tax in Apr 2014. Real consumption fell 2.5 percent in the 12 months ending in Feb 2014 and nominal consumption fell 0.6 percent. Real consumption expenditures increased 1.1 percent in the 12 months ending in Jan 2014 and nominal consumption expenditures 2.8 percent. Real consumption expenditures increased 0.7 percent in the 12 months ending in Dec 2013 and nominal consumption expenditures increased 2.7 percent. Real consumption expenditures increased 0.2 percent in the 12 months ending in Nov 2013 and nominal consumption expenditures increased 2.1 percent. Real consumption expenditures increased 0.9 percent in the 12 months ending in Oct 2013 and nominal consumption expenditures increased 2.3 percent. Real consumption expenditures increased 3.7 percent in the 12 months ending in Sep 2013 and nominal consumption expenditures 5.2 percent. Real consumption expenditures fell 1.6 percent in Aug 2013 relative to a year earlier and nominal consumption expenditures fell 0.5 percent. There is recovery in Jul 2013 with real consumption expenditures increasing 0.1 percent and nominal consumption expenditures increasing 1.0 percent. Real consumption expenditures decreased 0.4 percent in the 12 months ending in Jun 2013 and 0.1 percent in nominal terms. Declines in May and Jun 2013 interrupted growth from Jan to Apr 2013. There was sharp decline in nominal consumption of 8.8 percent in Mar 2011 and 8.2 percent in real consumption because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Dec was the first month in 2011 with increases in 12 months in both nominal and real consumption expenditures followed by Feb 2012 through Aug 2012. Nominal and real consumption fell in both Sep and Oct 2012 and increased in Nov 2012. Real consumption fell 0.7 percent in the 12 months ending in Dec 2012 and nominal consumption fell 0.8 percent. Real consumption expenditures increased 2.4 percent in the 12 months ending in Jan 2013 and 2.1 percent in nominal terms. Nominal consumption increased 0.8 percent in Feb 2013 and nominal consumption increased 0.1 percent. Real consumption increased 5.2 percent in the 12 months ending in Mar 2013 and nominal consumption 4.1 percent. Real consumption fell 4.6 percent in the 12 months ending in Apr 2014 and nominal consumption fell 0.7 percent. Consumption was an important driver of GDP growth in Japan in IQ2012. Real GDP grew at the seasonally adjusted annual rate (SAAR) of 4.6 percent in IQ2012 with private consumption contributing 1.4 percentage points for the highest contribution to growth (Table VB-2 at http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk_32.html). There was deceleration in IIQ2012 with growth of GDP at SAAR of minus 1.7 percent and contribution of 1.6 percentage points of personal consumption. In IIIQ2012, Japan’s GDP contracted at the SAAR of 2.0 percent and personal consumption deducted 0.9 percentage points. Japan’s GDP grew at the SAAR of minus 0.9 percent in IVQ2012 with personal consumption contributing 0.3 percentage points. Japan’s GDP growth in IQ2013 was at 6.0 percent SAAR with highest contribution of 3.1 percentage points by personal consumption expenditures. In IIQ2013, Japan’s GDP grew at 3.0 percent SAAR with personal consumption expenditures contributing 1.9 percentage points. Japan’s GDP grew at 1.6 percent SAAR in IIIQ2013 with personal consumption expenditures contributing 0.7 percentage points. In IVQ2013, Japan’s GDP grew at minus 1.5 percent SAAR with personal consumption expenditures deducting 0.0 percentage points. The GDP of Japan grew at 5.8 percent SAAR in IQ2014 with personal consumption expenditures contributing 5.8 percent. Japan’s GDP contracted at SAAR of 6.7 percent in IIQ2014 with personal consumption expenditures deducting 12.4 percent in large part because of the increase of the sales tax in Apr 2014. The GDP of Japan contracted at 1.9 percent SAAR in IIIQ2014 with personal consumption expenditures adding 0.9 percentage points.

Table VB-10, Japan, Family Income and Expenditure Survey 12-months ∆% Relative to a Year Earlier

	Nominal Consumption Expenditures ∆% Relative to a Year Earlier	Real Consumption Expenditures ∆% Relative to a Year Earlier
Nov 2014	0.3	-2.5
Oct	-0.7	-4.0
Sep	-1.9	-5.6
Aug	-0.9	-4.7
Jul	-2.0	-5.9
Jun	1.3	-3.0
May	-3.9	-8.0
Apr	-0.7	-4.6
Mar	9.3	7.2
Feb	-0.6	-2.5
Jan	2.8	1.1
Dec 2013	2.7	0.7
Nov	2.1	0.2
Oct	2.3	0.9
Sep	5.2	3.7
Aug	-0.5	-1.6
Jul	1.0	0.1
Jun	-0.1	-0.4
May	-1.9	-1.6
Apr	0.8	1.5
Mar	4.1	5.2
Feb	0.1	0.8
Jan	2.1	2.4
Dec 2012	-0.8	-0.7
Nov	0.1	0.2
Oct	-0.5	-0.1
Sep	-1.2	-0.9
Aug	1.4	1.8
Jul	1.2	1.7
Jun	1.5	1.6
May	4.3	4.0
Apr	3.2	2.6
Mar	4.1	3.4
Feb	2.7	2.3
Jan	-2.1	-2.3
Dec 2011	0.3	0.5
Nov	-3.8	-3.2
Oct	-0.6	-0.4
Sep	-1.9	-1.9
Aug	-3.9	-4.1
Jul	-1.8	-2.1
Jun	-3.9	-3.5
May	-1.6	-1.2
Apr	-2.5	-2.0
Mar	-8.8	-8.2
Feb	-0.1	0.5
Jan	-0.9	-0.3
Dec 2010	-3.2	-3.3
Dec 2009	0.3	2.1

Source:

Source: Ministry of Internal Affairs and Communications, Statistics Bureau, Director General for Policy Planning and Statistical Research and Training Institute

http://www.stat.go.jp/english/data/kakei/156.htm

Japan is experiencing weak internal demand as in most advanced economies, interrupted by strong growth in IQ2012 but renewed weakening at the end of IIQ2012, beginning of IIIQ2012 and in IVQ2012. There was recovery in IQ2013, IIQ2013 and IIIQ2013. Recovery interrupted in IVQ2013, accelerating in IQ2014. There was weakening again in IIQ2014 and IIIQ2014. Table VB-11 provides Japan’s wholesale and retail sales. There is strong performance in May 2013 with growth of 0.8 percent for retail sales followed by 1.6 percent in Jun 2013. Retail sales fell 0.3 percent in Jul 2013, rebounding 1.1 percent in Aug 2013. Retail sales increased 3.0 percent in the 12 months ending in Sep 2013 and 2.4 percent in the 12 months ending in Oct 2013. Retail sales increased 4.1 percent in the 12 months ending in Nov 2013 and 2.5 percent in the 12 months ending in Dec 2013. Retail sales grew 4.4 percent in the 12 months ending in Jan 2014 and 3.6 percent in the 12 months ending in Feb 2014. Japan’s retail sales increased 11.0 percent in the 12 months ending in Mar 2014 in part anticipating the increase in the tax on the value added of consumption. Retail sales fell 4.3 percent in Apr 2014 after the increase in the sales tax. Retail sales fell 0.4 percent in the 12 months ending in May 2014 and fell 0.6 percent in the 12 months ending in Jun 2014. Retail sales increased 0.6 percent in the 12 months ending in Jul 2014 and 1.2 percent in the 12 months ending in Aug 2014. Retail sales increased 2.3 percent in the 12 months ending in Sep 2014 and 1.4 percent in the 12 months ending in Oct 2014. Retail sales increased 0.4 percent in the 12 months ending in Nov 2014. Retail sales are recovering from deep drops in Mar and Apr 2011 following the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Retail sales have been increasing in 12-month percentage changes from Dec 2011 through May 2012. Retail sales fell again by 1.3 percent in Jul 2012, increasing 1.3 percent in Aug 2012 and 0.4 percent in Sep 2012 but declining 1.2 percent in Oct 2012, rebounding by 0.9 percent in Nov 2012 and only 0.2 percent in Dec 2012 but contracting 1.1 percent in Jan 2013 and 2.2 percent in Feb 2013.

Table VB-11, Japan, Wholesale and Retail Sales 12 Month ∆%

	Total	Wholesale	Retail
Nov 2014	-2.7	-4.0	0.4
Oct	0.3	-0.1	1.4
Sep	1.6	1.3	2.3
Aug	-1.6	-2.8	1.2
Jul	0.1	-0.1	0.6
Jun	-0.6	-0.5	-0.6
May	-1.0	-1.3	-0.4
Apr	-3.4	-3.0	-4.3
Mar	8.5	7.5	11.0
Feb	2.5	2.0	3.6
Jan	4.4	4.4	4.4
Dec 2013	2.8	2.9	2.5
Nov	2.9	2.4	4.1
Oct	2.0	1.8	2.4
Sep	2.8	2.7	3.0
Aug	0.6	0.4	1.1
Jul	1.3	2.0	-0.3
Jun	0.5	0.1	1.6
May	0.6	0.5	0.8
Apr	-0.1	-0.1	-0.2
Mar	-1.3	-1.8	-0.3
Feb	-1.6	-1.3	-2.2
Jan	-0.3	0.1	-1.1
Dec 2012	-1.7	-2.5	0.2
Nov	-0.9	-1.6	0.9
Oct	-1.6	-1.8	-1.2
Sep	-3.6	-5.1	0.4
Aug	-2.7	-4.4	1.3
Jul	-3.1	-4.0	-1.3
Jun	-2.6	-3.6	-0.2
May	2.7	2.6	3.0
Apr	1.8	0.4	5.0
Mar	3.2	0.9	9.3
Feb	-0.1	-1.3	3.1
Jan	-2.1	-3.8	1.6
Dec 2011	-0.8	-2.0	2.5
Nov	-2.3	-2.4	-2.2
Oct	1.1	0.8	1.9
Sep	0.3	0.8	-1.1
Aug	3.1	5.2	-2.6
Jul	2.3	3.0	0.6
Jun	3.1	3.8	1.2
May	1.3	2.3	-1.3
Apr	-2.6	-1.7	-4.8
Mar	-1.3	1.2	-8.3
Feb	5.3	7.2	0.1
Jan	3.3	4.6	0.1
Dec 2010	3.5	5.7	-2.1
Calendar Year
2013	0.9	0.8	1.0
2012	-0.9	-2.0	1.8
2011	1.0	1.9	-1.0
2010	2.4	2.3	2.6
2009	-20.5	-25.6	-2.3
2008	1.2	1.5	0.3

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

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

VC China. China estimates an index of nonmanufacturing purchasing managers based on a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The total index increased from 55.7 in 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 53.9 in Nov 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 moved to 50.1 in Nov 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Nov 2014	53.9	50.1	50.6	47.7	59.7
Oct	53.8	51.0	52.0	48.8	59.9
Sep	54.0	49.5	49.8	47.3	60.9
Aug	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 56.0 in Oct 2013 to 53.9 in Nov 2014.

Chart CIPMNM, China, Nonmanufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

http://www.stats.gov.cn/english/

Table CIPMMFG provides the index of purchasing managers of manufacturing seasonally adjusted of the National Bureau of Statistics of China. The general index (IPM) rose from 50.5 in Jan 2012 to 53.3 in Apr 2012, falling to 49.2 in Aug 2012, rebounding to 50.6 in Dec 2012. The index fell to 50.1 in Jun 2013, barely above the neutral frontier at 50.0, recovering to 51.4 in Nov 2013 but falling to 51.0 in Dec 2013. The index fell to 50.5 in Jan 2014 and 50.3 in Nov 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 moved to 50.9 in Nov 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
Nov 2014	50.3	52.5	50.9	47.7	48.2	50.3
Oct	50.8	53.1	51.6	48.4	48.4	50.1
Sep	51.1	53.6	52.2	48.8	48.2	50.1
Aug	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 50.3 in Nov 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 IIIQ2014 relative to the same period in 2013 was 7.4 percent, as shown in Table VC-GDP. Secondary industry accounts for 44.2 percent of cumulative GDP in IIIQ2014. In cumulative IIIQ2014, industry alone accounts for 37.4 percent of GDP and construction with the remaining 6.8 percent. Tertiary industry accounts for 46.7 percent of cumulative GDP in IIIQ2014 and primary industry for 9.0 percent. China’s growth strategy consisted of rapid increases in productivity in industry to absorb population from agriculture where incomes are lower (Pelaez and Pelaez, The Global Recession Risk (2007), 56-80). The 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 7.3 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. Annual equivalent growth slowed to 7.8 percent in IIIQ2014.

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

Cumulative GDP IIIQ2014	Value Current CNY Billion	2014 Year-on-Year Constant Prices ∆%
GDP	41,990.8	7.4
Primary Industry	3799.6	4.2
Farming	3799.6	4.2
Secondary Industry	18,578.7	7.4
Industry	15,705.7	7.1
Construction	2873.0	9.0
Tertiary Industry	19,612.5	7.9
Transport, Storage, Post	2337.0	7.0
Wholesale, Retail Trades	3893.0	9.7
Hotel & Catering Services	847.6	6.2
Financial Intermediation	2965.5	9.1
Real Estate	2641.4	2.3
Other	6928.0	9.0
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2014
IIIQ2014	1.9	7.8
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 IIIQ2014 relative to the same period in 2013 was 7.3 percent, as shown in Table VC-GDPA. Secondary industry accounts for 44.2 percent of GDP of which industry alone for 37.4 percent in cumulative IIIQ2014 and construction with the remaining 6.8 percent. Tertiary industry accounts for 46.7 percent of GDP in cumulative IIQ2014 and primary industry for 9.0 percent. China’s growth strategy consisted of rapid increases in productivity in industry to absorb population from agriculture where incomes are lower (Pelaez and Pelaez, The Global Recession Risk (2007), 56-80). The 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. In IIIQ2014, GDP grew 7.3 percent relative to a year earlier and 1.9 percent relative to the prior quarter, which is 7.8 percent in annual equivalent.

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	IIIQ 2014
GDP	7.7	7.5	7.8	7.7	7.4	7.5	7.3
Primary Industry	3.4	3.0	3.4	4.0	3.5	3.9	4.2
Secondary Industry	7.8	7.6	7.8	7.8	7.3	7.4	7.4
Tertiary Industry	8.3	8.3	8.4	8.3	7.1	8.0	7.9
GDP ∆% Relative to a Prior Quarter	1.6	1.8	2.3	1.7	1.5	2.0	1.9
	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/69a0d2d7ecd640b6be58e210bc9f3a84) is weakening. The overall Flash HSBC China Manufacturing PMI^™ decreased from 50.0 in Nov to 49.5 in Dec, while the Flash HSBC China Manufacturing Output Index increased from 49.6 in Nov to 49.7 in Dec, indicating moderate stress. 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/fiscal stimulus (http://www.markiteconomics.com/Survey/PressRelease.mvc/69a0d2d7ecd640b6be58e210bc9f3a84). The HSBC China Services PMI^™, compiled by Markit, shows the HSBC Composite Output, combining manufacturing and services, decreasing from 51.7 in Oct to 51.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/81ccf5b34a7747ab9386ee55a13b09ac). 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/81ccf5b34a7747ab9386ee55a13b09ac). The HSBC China Services Business Activity index increased from 52.9 in Oct to 53.0 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/81ccf5b34a7747ab9386ee55a13b09ac). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that the services PMI shows sustained activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/81ccf5b34a7747ab9386ee55a13b09ac). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, decreased to 50.0 in Nov from 50.4 in Oct, indicating near neutral manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/3858794024174e71a8c0d88ee410a40c). New export orders slowed. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds weakening demand in China with possible need of monetary and fiscal policy enhancement (http://www.markiteconomics.com/Survey/PressRelease.mvc/3858794024174e71a8c0d88ee410a40c). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Nov 12-month ∆%: minus 2.7 Nov month ∆%: -0.5 Blog 12/14/14
Consumer Price Index	Nov month ∆%: -0.2 Nov 12 months ∆%: 1.4 Blog 12/14/14
Value Added of Industry	Nov month ∆%: 0.52 Jan-Nov 2014/Jan-Nov 2013 ∆%: 8.3 Blog 12/21/14
GDP Growth Rate	Year IIIQ2014 ∆%: 7.5 First Three Quarters 2014 ∆%: 7.3 Quarter IIQ2014 AE ∆%: 7.8 Blog 10/26/14
Investment in Fixed Assets	Total Jan-Nov 2014 ∆%: 15.8 Real estate development: 11.9 Blog 12/21/14
Retail Sales	Nov month ∆%: 0.89 Nov 12 month ∆%: 11.7 Jan-Nov ∆%: 12.0 Blog 12/21/14
Trade Balance	Nov balance $54.5 billion Exports 12M ∆% 4.7 Imports 12M ∆% -6.7 Cumulative Jan-Nov: $332.5 billion Blog 12/14/14

Links to blog comments in Table CNY:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

10/26/14 http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html

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

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

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

*EUROSTAT forecast Source: EUROSTAT

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

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

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

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

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

Source: EUROSTAT

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

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

The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI^®, combining activity in manufacturing and services, increased from 51.1 in Nov to 51.7 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/5ae226e01c7044b5b409e82e0c306318). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP growth around 0.1 percent in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/5ae226e01c7044b5b409e82e0c306318). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP decreased from 52.1 in Oct to 51.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/b7b53af9b6f94a8b8c83172ba9c9bc55). Chris Williamson, Chief Economist at Markit, finds slowing growth of GDP at around 0.1 percent in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/b7b53af9b6f94a8b8c83172ba9c9bc55). The Markit Eurozone Services Business Activity Index decreased from 52.3 in Oct to 52.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/01d8b102223d449881e2878c1544c892). The Markit Eurozone Manufacturing PMI^® decreased to 50.1 in Nov from 50.6 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/63f18b46a2ce43ce93fe8798d9790d9e). New export orders moderated. Chris Williamson, Chief Economist at Markit, finds slowing industrial growth in the euro area with contractions in major economies (http://www.markiteconomics.com/Survey/PressRelease.mvc/63f18b46a2ce43ce93fe8798d9790d9e). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IIIQ2014 ∆% 0.2; IIIQ2014/IIIQ2013 ∆% 0.8 Blog 12/7/14
Unemployment	Oct 2014: 11.5 % unemployment rate; Oct 2014: 18.347 million unemployed Blog 11/30/14
HICP	Nov month ∆%: -0.2 12 months Nov ∆%: 0.3 Blog 12/21/14
Producer Prices	Euro Zone industrial producer prices Oct ∆%: -0.4 Sep 12-month ∆%: -1.3 Blog 12/7/14
Industrial Production	Oct month ∆%: 0.1; Oct 12 months ∆%: 0.7 Blog 12/14/14
Retail Sales	Oct month ∆%: 0.4 Oct 12 months ∆%: 1.4 Blog 12/7/14
Confidence and Economic Sentiment Indicator	Sentiment 100.8 Nov 2014 Consumer minus 11.6 Nov 2014 Blog 11/30/14
Trade	Jan-Oct 2014/Jan-Oct 2013 Exports ∆%: 1.9 Imports ∆%: 0.2 Oct 2014 12-month Exports ∆% 3.9 Imports ∆% -0.4 Blog 12/21/14

Links to blog comments in Table EUR:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

12/7/14 http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html

11/30/14 http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/11/PE14_401_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 51.7 in Nov to 51.4 in Dec. The index of manufacturing output reached 51.4 in Dec, increasing from 50.9 in Nov, while the index of services decreased to 51.4 in Nov from 52.1 in Nov. The overall Flash Germany Manufacturing PMI^® increased from 49.5 in Nov to 51.2 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/9bf921c24e49468ebcb1a1c26a9183d5). New orders in manufacturing contracted. Oliver Kolodseike, Economist at Markit, finds continuing weakness in GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/9bf921c24e49468ebcb1a1c26a9183d5). 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 53.9 in Oct to 51.7 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/c40864faad5c4d9ebad95744770e6389). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds slow growth with risks of contraction in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c40864faad5c4d9ebad95744770e6389). The Germany Services Business Activity Index decreased from 54.4 in Oct to 52.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/c40864faad5c4d9ebad95744770e6389). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 51.4 in Oct to 49.5 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/66c553dd5eeb4d8bae3c46441999bede). New export orders decreased for the first month since Jul 2013 with weakness in demand from China, the US and Europe. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds weakness in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/66c553dd5eeb4d8bae3c46441999bede).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IIIQ2014 0.1 ∆%; III/Q2014/IIIQ2013 ∆% 1.2 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 11/16/14 11/30/14
Consumer Price Index	Nov month NSA ∆%: 0.0 Nov 12-month NSA ∆%: 0.6 Blog 12/14/14
Producer Price Index	Nov month ∆%: 0.0 NSA, minus 0.0 CSA 12-month NSA ∆%: -0.9 Blog 12/21/14
Industrial Production	MFG Oct month CSA ∆%: 0.2 12-month NSA: 1.2 Blog 12/14/14
Machine Orders	MFG Oct month ∆%: 2.5 Oct 12-month ∆%: 2.4 Blog 12/14/14
Retail Sales	Oct Month ∆% 1.9 12-Month ∆% 1.7 Blog 11/30/14
Employment Report	Unemployment Rate SA Oct 4.9% Blog 11/30/14
Trade Balance	Exports Oct 12-month NSA ∆%: 4.9 Imports Oct 12 months NSA ∆%: 0.9 Exports Oct month CSA ∆%: -0.5; Imports Oct month CSA minus -3.1 Blog 12/14/14

Links to blog comments in Table DE:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

11/30/14 http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html

11/16/14 http://cmpassocregulationblog.blogspot.com/2014/11/fluctuating-financial-variables.html

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

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=28&date=20141223

The Markit Flash France Composite Output Index increased from 47.9 in Nov to 49.1 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/164a06d3e29043298b950633fdf8797c). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing weak performance (http://www.markiteconomics.com/Survey/PressRelease.mvc/164a06d3e29043298b950633fdf8797c). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 48.2 in Oct to 47.9 in Nov, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/d48dedfcd0b54811bad95681303aa778). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds restraint of growth by the private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/d48dedfcd0b54811bad95681303aa778). The Markit France Services Activity index decreased from 48.3 in Oct to 47.9 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/d48dedfcd0b54811bad95681303aa778). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 48.4 in Nov from 48.5 in Oct (http://www.markiteconomics.com/Survey/PressRelease.mvc/bf79cddac65143d8b64e26fa128e675d). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds deteriorating conditions because of weakness in internal markets (http://www.markiteconomics.com/Survey/PressRelease.mvc/bf79cddac65143d8b64e26fa128e675d). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Nov month ∆% -0.2 12 months ∆%: 0.3 12/14/14
PPI	Nov month ∆%: -0.2 Nov 12 months ∆%: -2.0 Blog 12/28/14
GDP Growth	IIIQ2014/IIQ2014 ∆%:0.3 IIIQ2014/IIIQ2013 ∆%: 0.4 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 9/28/14 11/16/14 12/28/14
Industrial Production	Oct ∆%: Manufacturing -0.2 12-Month ∆%: Manufacturing -0.6 Blog 12/14/14
Consumer Spending	Manufactured Goods Nov ∆%: 0.4 Nov 12-Month Manufactured Goods ∆%: -1.1 Blog 12/28/14
Employment	Unemployment Rate: IIIQ2014 9.9% Blog 12/7/14
Trade Balance	Oct Exports ∆%: month 0.5, 12 months 1.8 Oct Imports ∆%: month 0.1, 12 months 0.6 Blog 12/14/14
Confidence Indicators	Historical average 100 Nov Mfg Business Climate 99.0 Blog 12/28/14

Links to blog comments in Table FR:

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

12/7/14 http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html

11/16/14 http://cmpassocregulationblog.blogspot.com/2014/11/fluctuating-financial-variables.html

9/28/14 http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html

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

Growth of GDP in a quarter relative to the prior quarter is provided for France in Table VF-1. GDP fell 0.2 percent in IVQ2012 and changed 0.0 percent in IQ2013, rebounding with growth of 0.7 percent in IIQ2013. GDP fell 0.1 percent in IIIQ2013. GDP increased 0.2 percent in IVQ2013. GDP changed 0.0 percent in IQ2014. GDP decreased 0.1 percent in IIQ2014. GDP increased 0.3 percent in IIIQ2014. The French economy grew 0.2 percent in IVQ2011, 0.2 percent in IQ2012, contracting 0.2 percent in IIQ2012 and growing 0.2 percent in IIIQ2012. In the four quarters of 2012 and the first quarter of 2013, France’s GDP contracted in two quarters and stagnated in one. Growth in the ten quarters of expansion from IIIQ2009 to IVQ2011 accumulated 4.6 percent at the annual equivalent rate of 1.8 percent. Recovery has been much weaker than the cumulative 2.6 percent in the four quarters of 2006. Weak recoveries in advanced economies have prevented full utilization of labor, capital and productive resources.

Table VF-1, France, Quarterly Real GDP Growth, Quarter on Prior Quarter ∆%

	IQ	IIQ	IIIQ	IVQ
2014	0.0	-0.1	0.3
2013	0.0	0.7	-0.1	0.2
2012	0.2	-0.2	0.2	-0.2
2011	1.1	-0.1	0.2	0.2
2010	0.4	0.7	0.6	0.6
2009	-1.6	-0.1	0.1	0.7
2008	0.5	-0.5	-0.2	-1.6
2007	0.7	0.6	0.4	0.2
2006	0.7	1.1	0.0	0.8
2005	0.1	0.2	0.6	0.8
2004	0.6	0.8	0.4	0.7
2003	0.1	0.0	0.7	0.8
2002	0.6	0.6	0.2	-0.1
2001	0.6	0.1	0.2	-0.2
2000	1.2	0.8	0.6	0.9
1999	0.6	0.8	1.1	1.2

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20141223

Growth rates of France’s real GDP in a quarter relative to the same quarter a year earlier are shown in Table VF-2. France has not recovered the rates of growth in excess of 2 percent prior to the global recession. GDP fell 3.9 percent in IQ2009, 3.5 percent in IIQ2009, 3.1 percent in IIIQ2009 and 0.9 percent in IVQ2009. Growth in IVQ2011 relative to IVQ2010 was 1.5 percent and GDP growth declined to 0.6 percent in IQ2012, 0.4 percent in IIQ2012 relative to the same quarter a year earlier, 0.4 percent in IIIQ2012 relative to a year earlier and 0.0 percent in IVQ2012 relative to a year earlier. Growth in IQ2013 relative to a year earlier was minus 0.3 percent. France’s GDP increased 0.7 percent in IIQ2013 relative to a year earlier and 0.3 percent in IIIQ2013 relative to a year earlier. GDP increased 0.8 percent in IVQ2013 relative to a year earlier. France’s GDP increased 0.8 percent in IQ2014 relative to a year earlier and grew 0.0 percent in IIQ2014 relative to a year earlier. GDP increased 0.4 percent in IIIQ2014 relative to a year earlier.

Table VF-2, France, Real GDP Growth Current Quarter Relative to Same Quarter Year Earlier ∆%

	IQ	IIQ	IIIQ	IVQ
2014	0.8	0.0	0.4
2013	-0.3	0.7	0.3	0.8
2012	0.6	0.4	0.4	0.0
2011	2.9	2.2	1.8	1.5
2010	1.1	1.9	2.3	2.2
2009	-3.9	-3.5	-3.1	-0.9
2008	1.7	0.6	0.0	-1.9
2007	2.6	2.2	2.6	1.9
2006	2.2	3.1	2.5	2.5
2005	2.0	1.4	1.6	1.6
2004	2.1	3.0	2.7	2.5
2003	0.7	0.1	0.7	1.6
2002	0.7	1.2	1.2	1.3
2001	3.0	2.2	1.9	0.7
2000	4.4	4.4	3.8	3.5
1999	3.2	2.9	3.4	3.8

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20141223

Chart VF-1 of the Institut National de la Statistique et des Études Économiques provides France’s quarterly real GDP from IQ1949 to IIIQ2014. France’s economy has grown dynamically over decades. Recovery from the global recession in 2008-2009 has flattened.

Chart VF-1, France, Quarterly Real GDP, Seasonally and Working Day Adjusted, IQ1949-IIIQ2014

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20141223

Percentage changes and contributions of segments of GDP in France are provided in Table VF-3. Internal demand contributed 0.4 percentage points to growth in IVQ2013, subtracting 0.2 percentage points in IQ2014. Internal demand added 0.2 percentage points to GDP growth in IIQ2014 and 0.2 percentage points in IIIQ2014. Net foreign trade added 0.2 percentage points in IVQ2013. Net trade deducted 0.2 percentage points to growth in IQ2014. Net trade deducted 0.2 percentage points in IIQ2014 and deducted 0.2 percentage points in IIIQ2014.

Table VF-3, France, Contributions to GDP Growth, Calendar and Seasonally Adjusted, %

∆% from Prior Period	IVQ 2013	IQ 2014	IIQ 2014	IIIQ 2014	2013	2014 (ovhg)
GDP	0.2	0.0	-0.1	0.3	0.4	0.3
Imports	0.2	1.1	0.6	1.3	1.9	3.3
Household Consump.	0.4	-0.3	0.5	0.3	0.3	0.5
Govt. Consump.	0.5	0.4	0.4	0.6	2.0	1.8
GFCF	0.0	-0.7	-0.8	-0.6	-0.8	-1.6
General Government	-0.1	0.2	-0.7	-1.3	1.1	-0.5
Exports	0.9	0.6	0.0	0.5	2.4	1.9
% Point Contribs.
Internal Demand ex Inventory Changes	0.4	-0.2	0.2	0.2	0.4	0.4
Inventory Changes	-0.3	0.4	-0.1	0.3	-0.2	0.4
Net Foreign Trade	0.2	-0.2	-0.2	-0.2	0.1	-0.5

Notes: Consump.: Consumption; Gvt.: Government; GFCF: Gross Fixed Capital Formation; Contribus.: Contributions; OVHG: “annual growth rate carried over at the mid-year point.

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20141223

Chart VF-2 of France’s Institut National de la Statistique et des Études Économiques provides percentage point contributions to GDP growth. The economy was driven in IQ2013 by consumption with net trade, inventory changes and gross fixed capital formation (GFCF) deducting from growth. Final consumption drove the economy in IIQ2013 together with contribution by net trade and capital formation. Gross fixed capital formation and net trade constrained the economy in IIIQ2013. Inventory changed deducted from growth in IVQ2013 with contributions by consumption and net trade. Inventory change contributed to growth in IQ2014 with deductions by consumption, GFCF and net foreign trade. Consumption contributed to growth in IIQ2014 with deductions by GFCF, inventory change and net trade. Consumption and inventory change drove the economy in IIIQ2014 with deductions by net trade and gross fixed capital formation.

Chart VF-2, France, Percentage Point Contributions to GDP Growth

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20141223

The monthly report of household expenditures in consumption goods for France is in Table VF-4. Total consumption increased 0.4 percent in Nov 2014 after decreasing 0.8 percent in Oct 2014 and decreasing 0.7 percent in Sep 2014. Consumption of manufactured products increased 0.1 percent in Nov 2014 after increasing 0.2 percent in Oct 2014 and decreasing 0.6 percent in Sep 2014. Total consumption increased 0.2 percent in Nov 2014 relative to Nov 2013 and consumption of manufactured goods increased 0.2 percent in Nov 2014 relative to Nov 2013. Consumption of energy increased 0.7 percent in Nov 2014 and increased 1.1 percent in 12 months. Internal demand is weak throughout most advanced economies.

Table VF-4, France, Household Expenditures in Consumption Goods, Month ∆% Chained Billion Euros Trading-Days SA

	Total	Food	Eng. Goods	Energy	Mfg Goods
Nov 2014	0.4	-0.1	0.7	0.8	0.1
Nov 2014/Nov 2013	-1.1	0.2	1.1	-8.9	0.2
Oct	-0.8	-0.1	0.9	-6.0	0.2
Sep	-0.7	0.4	-1.7	-0.6	-0.6
Aug	0.9	0.8	0.9	-1.2	1.1
Jul	-0.7	-1.4	-0.1	-0.8	-0.9
Jun	0.9	1.2	0.9	0.1	1.2
May	0.1	-1.1	-0.5	4.1	-0.7
Apr	0.1	1.2	-0.1	-1.9	0.1
Mar	0.5	0.4	-0.1	2.5	0.7
Feb	-0.4	-0.5	0.0	-1.0	-0.4
Jan	-1.6	-0.8	-0.7	-5.4	-1.3
Dec 2013	0.2	0.2	1.1	-1.9	0.9
Nov	1.4	-0.3	0.5	7.5	0.3
Oct	-0.4	1.4	-0.1	-4.5	0.5
Sep	0.2	-0.4	1.1	-0.4	0.2
Aug	-0.6	-0.4	-0.2	-1.8	-0.5
Jul	0.7	0.8	0.2	1.5	1.0
Jun	-1.5	-1.1	0.4	-6.1	-1.2
May	0.9	2.2	0.1	0.2	1.3
Apr	-0.5	-3.0	0.8	1.4	-0.5
Mar	0.7	1.7	-0.8	2.4	0.5
Feb	-0.2	-0.1	-1.2	2.0	-0.7
Jan	0.7	0.8	0.0	2.4	0.2
Dec 2012	-0.4	-0.1	0.6	-3.8	-0.1
Nov	-0.3	-0.4	-1.1	1.8	-0.6
Oct	0.0	-0.6	0.0	0.9	0.1
Sep	0.1	-0.5	0.5	0.4	0.1
Aug	-0.8	0.3	-1.0	-2.5	-1.0
Jul	0.3	-0.2	0.6	0.5	0.3
Jun	0.2	1.0	-0.6	0.6	0.2
May	0.1	-0.1	2.0	-3.7	1.2
Apr	0.2	0.1	-3.5	10.4	-1.7
Mar	-2.9	-1.8	1.3	-14.6	-0.7
Feb	2.4	1.3	-0.9	12.7	0.6
Jan	1.0	0.9	0.4	2.8	0.8
Dec 2011	-0.9	-1.0	-0.8	-0.9	-1.0
Nov	-0.1	0.4	0.2	-2.1	0.0
Oct	-0.3	-0.9	0.4	-0.7	-0.1
Sep	-0.3	0.6	-0.1	-2.9	-0.3
Aug	0.7	0.1	0.5	2.6	0.8
Jul	-0.2	0.2	-0.7	0.4	-0.2
Jun	0.6	-0.1	0.3	3.0	0.4
May	0.0	-0.5	-0.5	2.7	-0.7
Apr	-2.3	0.3	-3.1	-5.7	-1.8
Mar	-0.9	-0.4	-1.1	-1.8	-1.0
Feb	0.6	0.7	1.5	-2.0	1.2
Jan	-0.3	-0.7	1.7	-4.6	0.7
Dec 2010	0.6	0.6	-0.6	3.9	0.0

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20141223

Chart VF-3 of the Institut National de la Statistique et des Études Économiques of France provides consumption of manufactured goods in France in volumes of chained 2005 billion euro from Jan 1980 to Nov 2014. Consumption of manufactured goods increased above the level before the global recession but shows declining trend in recent months with possible stabilization.

Chart VF-3, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion, Seasonally and Working Day Adjusted, Jan 1980 to Oct 2014

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20141223

Chart VF-4 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. There is downward trend of monthly consumption with fluctuations and stability in the final segment followed by another drop in Jan-Feb 2013 and increase in Mar 2013 but renewed decrease in Apr 2013. Consumption rose again in May 2013 and fell in Jun 2013. Consumption increased in Jul 2013 and fell in Aug-Oct 2013. Consumption rose in Nov 2013 driven by electricity and fell marginally in Dec 2013. Consumption fell in Jan-Feb 2014 and rebounded in Mar 2014 with decline in Apr 2014. Consumption grew in May-Jun 2014, falling in Jul 2014 and rebounding in Aug 2014. Consumption decreased in Sep-Oct 2014 and rebounded in Nov 2014.

Chart VF-4, France, Total Consumption of Goods, Billions of Euros Trading and Seasonally Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20141223

Table VF-5 shows the INSEE business climate indicator for manufacturing. The headline composite indicator improved from 96 in Sep 2014 to 98 in Oct 2014 and 99 in Nov-Dec 2014 close to the average 100. General production expectations deteriorated to minus 22 in Oct 2014. Deterioration continued to minus 20 in Nov 2014, improving to minus 16 in Dec 2014.

Table VF-5, France, Manufacturing Business Climate Indicators of INSEE

Mfg 2014	Average since 1976	Dec 14	Nov 14	Oct 14	Sep 14
Composite Indicator	100	99	99	98	96
Past Activity	4	4	1	-1	-5
Finished- Goods Inventory Level	13	14	12	12	11
Global Order Books	-18	-21	-20	-23	-24
Export Order Books	-14	-16	-20	-22	-20
Personal Production Expectations	5	4	7	8	2
General Production Expectations	-9	-16	-16	-22	-18

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20141219

Chart VF-5 of the Institut National de la Statistique et des Études Économiques (INSEE) provides the history of the manufacturing business climate indicator of INSEE since 1992. The index fell during the contractions of 1991, 2001 and 2008. After rapid recovery beginning in 2009 the synthetic index shows declining trend in 2011 with upward reversal in 2012 interrupted in Apr through Jul 2012 and a marginal upward move in Aug-Sep 2012 but new decline in Oct 2012. The manufacturing composite indicator marginally reversed in Nov 2012 with stability in Dec 2012 and decline in Jan 2013 but improvement in Feb 2013 and stability in Mar 2013, deteriorating in Apr 2013 and recovering in May-Aug 2013. The composite indicator of manufacturing eased slightly in Sep 2013 and improved marginally in Oct-Dec 2013, close to the long-term average of 100. The index reached 100 in Dec 2013 and oscillated around the average. The index fell in the recent segment in 2014 followed by recovery.

Chart VF-5, France, INSEE Industrial Business Climate Composite Indicator

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20141219

Chart VF-6 of the Institut National de la Statistique et des Études Économiques (INSEE) shows strong drops of the turning point indicator in the recessions of 1991, 2001 and 2008. There have been other drops of this index. The turning point indicator has fallen to levels in the direction of past contractions and after rebounding in Oct and Nov 2011 is showing declining trend in Jan 2012 with slight reversal in Feb followed by significant improvement in Mar and deterioration in Apr through Jul 2012. There is new improvement in Aug 2012 followed by decline in Sep-Oct 2012 followed by rebound in Nov 2012 and stability in Dec 2012 to Jan-Mar 2013, deteriorating in Apr-May 2013. The index improved in Jun-Sep 2013 and stabilized in Oct 2013, declining in Nov 2013. The index increased in Dec 2013 and in Jan 2014, declining in Feb 2014 and stabilizing in Mar 2014. The index stabilized in Apr-May 2014 and fell in Jun 2014 with partial recovery in Jul-Aug 2014. The index stabilized in Sep-Oct 2014 and improved in Nov 2014, deteriorating marginally in Dec 2014.

Chart VF-6, INSEE Business Climate Manufacturing Turning Point Indicator

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=11&date=20141219

Chart VF-7 of the Institut National de la Statistique et des Études Économiques (INSEE) of France provides the composite climate indicator for French business. There is recovery in Jul-Sep 2013 and stability in Oct-Nov 2013. The index fell marginally in Dec 2013 and in Jan-Feb 2014. The index increased marginally in Mar 2014, stabilizing in Apr-May 2014. The index fell in Aug-Oct 2014, recovering in Nov 2014 and stabilizing in Dec 2014.

Chart VF-7, France, Composite Indicator of Business Climate of INSEE

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=105&date=20141219

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 0.7 percent in IVQ2011 to minus 2.5 percent in IVQ2012, minus 2.5 percent in IQ2013, minus 2.2 percent in IIQ2013 and minus 1.8 percent in IIIQ2013. GDP fell 1.2 percent in IVQ2013 relative to a year earlier. GDP fell 0.3 percent in IQ2014 relative to a year earlier and decreased 0.4 percent in IIQ2014 relative to a year earlier. GDP fell 0.5 percent in IIIQ2014 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 1.4 percent. In IIQ2014, consumption increased 0.2 percent relative to a year earlier and GFCF fell 2.2 percent. GDP fell 0.5 percent in IIIQ2014 relative to a year earlier while consumption increased 0.4 percent and GFCF fell 3.1 percent.

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

	GDP	Imports	Consumption	GFCF	Exports
2014
IIIQ	-0.5	-0.7	0.4	-3.1	1.3
IIQ	-0.4	1.8	0.2	-2.2	2.5
IQ	-0.3	-0.1	-0.3	-1.4	1.5
2013
IVQ	-1.2	0.5	-1.1	-3.4	1.4
IIIQ	-1.8	-1.7	-2.2	-4.3	0.4
IIQ	-2.2	-4.1	-2.7	-6.2	0.4
IQ	-2.5	-5.0	-2.9	-7.6	1.3
2012
IVQ	-2.5	-7.6	-3.5	-7.8	1.3
IIIQ	-2.5	-8.0	-3.7	-8.1	2.5
IIQ	-2.4	-8.6	-3.6	-7.6	1.2
IQ	-1.9	-8.5	-3.0	-6.5	1.6
2011
IVQ	-0.7	-7.0	-2.1	-4.0	2.4
IIIQ	0.5	0.4	-0.8	-2.4	4.6
IIQ	1.3	3.7	0.4	-0.9	7.7
IQ	1.9	8.4	0.7	0.6	10.3
2010
IVQ	2.3	14.6	1.3	0.9	13.0
IIIQ	1.8	12.9	1.1	0.6	12.4
IIQ	1.9	14.2	1.0	-0.4	13.2
IQ	0.7	6.7	0.9	-3.3	6.8
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/140552

The Markit/ADACI Business Activity Index increased from 50.8 in Oct to 51.8 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5d7ad3821eb4839a5d9e2736c52ae01). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds weakening demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/e5d7ad3821eb4839a5d9e2736c52ae01). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), did not change from 49.0 in Oct to 49.0 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/12bf0ee413cf4936b2706ca749234519). Growth of new export orders decelerated. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds fragile conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/12bf0ee413cf4936b2706ca749234519). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Nov month ∆%: -0.2 Nov 12-month ∆%: 0.2 Blog 12/14/14
Producer Price Index	Oct month ∆%: -0.6 Oct 12-month ∆%: -1.6 Blog 11/30/14
GDP Growth	IIIQ2014/IIQ2014 SA ∆%: minus 0.1 IIIQ2014/IIQ2013 NSA ∆%: minus 0.5 Blog 3/17/13 6/16/13 8/11/13 9/15/13 11/17/13 12/15/13 2/16/14 3/16/14 5/18/14 6/15/14 8/10/14 8/31/14 10/19/14 11/16/14 12/7/14
Labor Report	Oct 2014 Participation rate 64.3% Employment ratio 55.6% Unemployment rate 13.2% Youth Unemployment 43.3% Blog 11/30/14
Industrial Production	Oct month ∆%: -0.1 12 months CA ∆%: -3.0 Blog 12/14/14
Retail Sales	Oct month ∆%: 0.0 Oct 12-month ∆%: -0.8 Blog 12/28/14
Business Confidence	Mfg Nov 96.3, Jul 99.1 Construction Nov 74.0, Jul 82.8 Blog 11/30/14
Trade Balance	Balance Oct SA €3922 million versus Sep €3531 Exports Oct month SA ∆%: 0.4; Imports 12 month ∆%: -0.9 Exports 12 months Oct NSA ∆%: 2.9 Imports 12 months NSA ∆%: -1.6 Blog 12/21/14

Links to blog comments in Table IT:

12/21/14 http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html

12/14/14 http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html

12/7/14 http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html

11/30/14 http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html

11/16/14 http://cmpassocregulationblog.blogspot.com/2014/11/fluctuating-financial-variables.html

10/19/14 http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html

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

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 is competitive in various economic activities. Current restraints consist of low economic growth with high debt/GDP ratio and need for structural changes. Table VG-1 provides growth of retail sales for Italy. Retail sales changed 0.0 percent in Oct 2014 relative to Sep 2014, decreased 0.3 percent in Aug-Oct 2014 relative to May-Jul 2014, decreased 0.8 percent in Oct 2014 relative to Oct 2013 and decreased 1.3 percent cumulatively in Jan-Oct 2014 relative to Jan-Oct 2013.

Table VG-1, Italy, Retail Sales ∆%

	Oct 2014/ Sep 2014 SA	Aug-Oct 14/ May-Jul SA	Oct 2014/ Oct 2013 NSA	Jan-Oct 2014/ Jan-Oct 2013
Food	0.0	-0.3	-0.5	-1.1
Non-food	0.0	-0.3	-1.0	-1.2
Total	0.0	-0.3	-0.8	-1.3

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/143866

Chart VG-1 provides 12-month percentage changes of retail sales at current prices. There is improvement in the final segment from Feb to May 2013 with sharper decline in Jun 2013 and recovery in Jul-Aug 2013. Sales declined again in Sep 2013, increasing in Oct-Nov 2013. Sales fell in Dec 2013 and improved in Jan 2014. Sales stabilized in Feb 2014 and deteriorated in Mar 2014. Sales improved in Apr 2014 and deteriorated in May-Jun 2014. There is marginal improvement in Jul 2014 followed by deterioration in Aug-Sep 2014 with stability in Oct 2014.

Chart VG-1, Italy, Percentage Changes of Retail Sales in 12 Months

Source: Istituto Nazionale di Statistica

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

A longer perspective of retail sales in Italy is provided by monthly and 12-month percentage changes in 2011, Jan-Dec 2012, Jan-Dec 2013, Jan-Oct 2014 and annual rates for 2011, 2012 and 2013 in Table VG-2. Retail sales did not decline very sharply during the global recession but fell 0.8 percent in 2011, 1.7 percent in 2012 and 2.1 percent in 2013. There is an evident declining trend in 2011 with few monthly increases and similar weakness in 2012 with multiple monthly declines. Negative percentage changes in 12 months increased to more than 3 percent with decrease of 3.2 percent in the 12 months ending in Mar 2013 and decrease of 3.0 percent in the 12 months ending in Jun 2013. Retail sales changed 0.0 percent in Oct 2014 and decreased 0.8 percent in 12 months.

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

	Month ∆% SA	12-Month ∆% NSA
Oct 2014	0.0	-0.8
Sep	-0.0	-0.6
Aug	-0.2	-3.0
Jul	-0.2	-1.7
Jun	0.0	-2.7
May	-0.7	-0.4
Apr	0.3	2.7
Mar	-0.1	-3.5
Feb	0.0	-1.0
Jan	-0.1	-0.9
Dec 2013	-0.3	-2.6
Nov	0.1	0.2
Oct	-0.3	-1.6
Sep	-0.2	-2.8
Aug	0.1	0.2
Jul	-0.2	-0.8
Jun	-0.1	-3.0
May	0.6	-1.2
Apr	-0.3	-2.9
Mar	-0.3	-3.2
Feb	-0.1	-4.8
Jan	-0.4	-2.8
Dec 2012	0.1	-3.4
Nov	-0.1	-2.4
Oct	-0.8	-3.4
Sep	-0.1	-1.0
Aug	-0.1	-0.4
Jul	-0.1	-3.1
Jun	-0.1	0.2
May	0.0	-1.1
Apr	-1.4	-6.3
Mar	0.4	2.3
Feb	-0.5	0.7
Jan	1.1	-0.9
Dec 2011	-0.9	-3.2
Nov	-0.5	-1.5
Oct	0.7	-0.9
Sep	-0.3	-1.1
Aug	-0.4	0.1
July	0.0	-1.7
Jun	-0.4	-0.6
May	-0.5	-0.3
Apr	0.9	3.3
Mar	-0.2	-1.9
Feb	-0.3	0.1
Jan	-0.2	-0.5
Dec 2010	0.5	0.6
2013		-2.1
2012		-1.7
2011		-0.8

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/143866

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 4.3 percent in 2009 after dropping 0.3 percent in 2008. Recovery of 1.9 percent in 2010 is relatively low in comparison with annual growth rates in 2007 and earlier years. Growth was only 1.6 percent in 2011 and 0.7 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 2.9 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 higher by 1.1 percent relative to 2007.

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

	∆% on Prior Year
1998	3.5
1999	3.2
2000	3.8
2001	2.7
2002	2.5
2003	4.3
2004	2.5
2005	2.8
2006	3.0
2007	2.6
2008	-0.3
2009	-4.3
2010	1.9
2011	1.6
2012	0.7
2013	1.7
Average Growth Rates ∆% per Year
1948-2013	2.6
1950-1959	3.1
1960-1969	3.1
1970-1979	2.6
1980-1989	3.1
1990-1999	2.2
2000-2007	2.9
2007-2012*	-0.6
2007-2013*	1.1
2000-2013	1.6

*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/q3-2014/index.html

Table VH-1 provides quarter on quarter chained value measures of GDP since 1998 in the second estimate for IIIQ2014 (http://www.ons.gov.uk/ons/rel/naa2/second-estimate-of-gdp/q3-2014/index.html). The UK Office for National Statistics provides revision of the national accounts in accordance with the European System of Accounts 2010 (ESA 2010) (http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q2-2014/index.html). GDP grew 0.7 percent in IIIQ2014 relative to IIQ2014. Growth of 0.8 percent in IIIQ2012 interrupted three consecutive quarters of weakness in GDP growth. Most advanced economies are underperforming relative to the period before the global recession. The UK Office for National Statistics analyzes that the decline in the impulse of growth in the UK originated in weakness in markets in the UK and worldwide. The UK Office for National Statistics estimates that GDP in IIIQ2014 is higher by 2.9 percent relative to the peak before the contraction in IQ2008 (http://www.ons.gov.uk/ons/dcp171778_387829.pdf). The UK Office for National Statistics estimates the contraction of 6.0 percent from peak to trough (http://www.ons.gov.uk/ons/dcp171778_387829.pdf), which is roughly equal at 6.1 percent to compounding the quarterly rates in Table VH-1 from IIQ2008 to IIQ2009. Earlier contractions were milder with decline of 2.2 percent from the peak in IIQ1990 to the trough in IIIQ1991 and decline of 5.6 percent from the peak in IIQ1979 to the trough in IQ1981 (http://www.ons.gov.uk/ons/dcp171778_387829.pdf).

Table VH-1, UK, Percentage Change of GDP from Prior Quarter, Chained Value Measures ∆%

	IQ	IIQ	IIIQ	IV
2014	0.6	0.8	0.7
2013	0.6	0.6	0.7	0.4
2012	0.1	-0.2	0.8	-0.3
2011	0.5	0.2	0.7	0.0
2010	0.5	1.0	0.6	0.0
2009	-1.8	-0.3	0.2	0.4
2008	0.3	-0.2	-1.7	-2.2
2007	0.8	0.6	0.8	0.5
2006	0.6	0.5	0.2	0.8
2005	0.7	1.0	1.0	1.3
2004	0.3	0.3	0.1	0.4
2003	1.0	1.4	1.3	1.0
2002	0.5	0.8	0.9	0.9
2001	1.1	0.8	0.5	0.3
2000	1.0	0.7	0.4	0.3
1999	0.5	0.2	1.6	1.3
1998	0.6	0.8	0.7	1.0

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

There are four periods in growth of GDP in a quarter relative to the same quarter a year earlier in the UK in the years from 2000 to the present as shown in Table VH-2. (1) Growth rates were quite high from 2000 to 2007. (2) There were six consecutive quarters of contraction of GDP from IIIQ2008 to IVQ2009. Contractions relative to the quarter a year earlier were quite sharp with the highest of 3.8 percent in IVQ2008, 5.8 percent in IQ2009, 5.8 percent in IIQ2009 and 4.0 percent in IIIQ2009. (3) The economy bounced strongly with 2.1 percent in IIQ2010, 2.5 percent in IIIQ2010 and 2.2 percent in IVQ2010. (4) Recovery in 2011 did not continue at rates comparable to those in 2000 to 2007 and even relative to those in the final three quarters of 2010. Growth relative to the same quarter a year earlier fell from 2.2 percent in IVQ2010 to 1.4 percent in IIQ2011, 1.5 percent in IIIQ2011, 1.5 percent in IVQ2011 but only 1.0 percent in IQ2012, increase of 0.6 percent in IIQ2012 relative to IIQ2011, increase of 0.7 percent in IIIQ2012 and 0.4 percent in IVQ2012. In IQ2012, GDP increased 0.1 percent and increased 1.0 percent relative to a year earlier. In IIQ2012, GDP fell 0.2 percent relative to IQ2012 and increased 0.6 percent relative to a year earlier. In IIIQ2012, GDP increased 0.8 percent and increased 0.7 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.3 percent and increased 0.4 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. Growth increased to 0.9 percent in IQ2013 relative to a year earlier and 0.6 percent in IQ2013 relative to IVQ2012. In IIQ2013, GDP increased 0.6 percent and 1.7 percent relative to a year earlier. GDP increased 0.7 percent in IIIQ2013 and 1.6 percent relative to a year earlier. GDP increased 0.4 percent in IVQ2013 and 2.4 percent relative to a year earlier. In IQ2014, GDP increased 0.6 percent and 2.4 percent relative to a year earlier. GDP increased 0.8 percent in IQ2014 and 2.6 percent relative to a year earlier. GDP increased 0.7 percent in IIIQ2013 and 2.6 percent relative to a year earlier.

Table VH-2, UK, Percentage Change of GDP from Same Quarter a Year Earlier, Chained Value Measures ∆%

	IQ	IIQ	IIIQ	IV
2014	2.4	2.6	2.6
2013	0.9	1.7	1.6	2.4
2012	1.0	0.6	0.7	0.4
2011	2.2	1.4	1.5	1.5
2010	0.8	2.1	2.5	2.2
2009	-5.8	-5.8	-4.0	-1.5
2008	2.2	1.4	-1.1	-3.8
2007	2.2	2.3	3.0	2.7
2006	4.0	3.5	2.6	2.0
2005	1.6	2.3	3.2	4.2
2004	4.0	2.9	1.8	1.2
2003	3.6	4.2	4.6	4.7
2002	2.1	2.1	2.5	3.1
2001	2.5	2.6	2.8	2.8
2000	4.3	4.8	3.5	2.5
1999	3.0	2.5	3.4	3.7
1998	3.9	3.5	3.5	3.2

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-3 provides annual percentage changes of gross value added and key components. Production fell 8.8 percent in 2009 and its most important component manufacturing fell 9.4 percent. Services fell 2.9 percent in 2009. Services grew in all years from 2010 to 2013 while manufacturing fell 1.3 percent in 2012 and 0.7 percent in 2013.

Table VH-3, UK, Gross Value Added by Components, ∆% on Prior Year

	TP	MFG	CONS	SERV	GVA BP	GVA EX
2011 Weights	146	101	64	784	1000	981
1998	1.1	0.4	1.5	4.8	3.7	3.7
1999	1.1	0.5	1.3	4.1	3.3	3.1
2000	1.9	2.3	0.9	4.7	3.8	4.3
2001	-1.6	-1.6	1.8	3.7	2.4	2.9
2002	-1.7	-2.6	5.7	2.8	2.2	2.3
2003	-0.7	-0.6	4.8	5.8	4.5	5.0
2004	0.8	1.9	5.3	2.3	2.2	2.7
2005	-0.7	-0.1	-2.4	4.3	3.1	3.6
2006	0.7	2.2	0.8	3.8	3.0	3.5
2007	0.3	0.7	2.2	3.1	2.5	2.7
2008	-2.7	-2.9	-2.6	0.6	-0.1	-
2009	-8.8	-9.4	-13.2	-2.9	-4.5	-4.4
2010	3.1	4.7	8.5	1.4	2.1	2.3
2011	-0.8	1.8	2.2	2.1	1.7	2.2
2012	-2.7	-1.3	-7.5	2.0	0.7	1.0
2013	-0.5	-0.7	1.4	1.9	1.5	1.7

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Percentage changes of gross value added and components in a quarter relative to the same quarter a year earlier are in Table VH-4A. Gross value added increased 2.6 percent in IIIQ2014 relative to a year earlier while services increased 3.2 percent. Manufacturing increased 2.5 percent in IIIQ2014 relative to a year earlier.

Table VH-4A, UK, Gross Value Added by Components, ∆% on Same Quarter of Previous Year

	TP	MFG	CONS	SERV	GVA BP	GVA EX
2011 Weights	146	101	64	784	1000	981
1998 Q1	1.4	1.1	4.8	4.6	3.8	4.1
1998 Q2	2.0	1.2	0.1	4.7	3.8	3.6
1998 Q3	0.9	0.3	1.2	4.9	3.7	3.8
1998 Q4	0.2	-1.1	-	4.9	3.5	3.4
1999 Q1	-0.5	-1.5	-1.5	4.7	3.2	3.0
1999 Q2	-0.4	-1.0	1.3	3.7	2.7	2.6
1999 Q3	2.3	1.7	3.2	3.9	3.6	3.3
1999 Q4	3.0	2.9	2.1	4.0	3.7	3.7
2000 Q1	2.9	3.1	3.3	4.7	4.2	4.3
2000 Q2	3.2	3.4	2.1	5.4	4.7	5.1
2000 Q3	0.8	1.1	-1.9	4.9	3.6	4.3
2000 Q4	0.7	1.7	-	3.6	2.7	3.5
2001 Q1	-	0.7	-1.9	4.0	2.7	3.7
2001 Q2	-1.6	-1.5	1.6	3.9	2.5	3.1
2001 Q3	-1.5	-1.5	3.8	3.4	2.3	2.7
2001 Q4	-3.2	-4.1	3.7	3.5	2.0	2.2
2002 Q1	-2.6	-3.5	5.2	2.3	1.6	1.7
2002 Q2	-1.8	-3.0	3.5	2.3	1.6	1.6
2002 Q3	-1.7	-2.0	7.2	2.8	2.3	2.7
2002 Q4	-0.8	-1.8	7.0	3.7	3.1	3.3
2003 Q1	-1.5	-2.2	3.5	4.9	3.5	3.7
2003 Q2	-1.3	-0.7	5.4	5.9	4.5	5.3
2003 Q3	-0.5	-1.0	4.6	6.3	4.9	5.3
2003 Q4	0.5	1.4	5.7	6.0	5.0	5.8
2004 Q1	1.4	2.8	11.6	4.3	4.2	5.0
2004 Q2	2.2	3.0	6.9	2.5	2.7	3.0
2004 Q3	-0.3	0.8	3.4	1.6	1.3	1.8
2004 Q4	-0.1	1.2	-0.3	1.0	0.7	1.2
2005 Q1	-1.2	-0.7	-2.7	2.3	1.4	1.9
2005 Q2	-0.7	-0.1	-1.8	3.6	2.6	3.1
2005 Q3	-0.4	0.8	-2.9	5.0	3.6	4.3
2005 Q4	-0.7	-0.3	-2.2	6.4	4.7	5.3
2006 Q1	1.0	1.6	-2.0	5.6	4.3	4.7
2006 Q2	-0.3	1.6	-0.5	4.6	3.4	4.1
2006 Q3	1.2	2.7	1.8	3.0	2.6	2.9
2006 Q4	0.9	3.1	3.9	2.0	1.9	2.2
2007 Q1	0.2	1.9	4.1	2.3	2.0	2.4
2007 Q2	0.7	1.0	3.0	2.7	2.3	2.5
2007 Q3	-	0.1	1.0	3.8	3.0	3.1
2007 Q4	0.3	-0.3	0.5	3.5	2.8	2.8
2008 Q1	-0.3	0.1	0.3	3.1	2.4	2.6
2008 Q2	-1.2	-1.5	-0.4	2.1	1.5	1.7
2008 Q3	-2.3	-2.7	-1.7	-0.5	-0.8	-0.7
2008 Q4	-6.9	-7.3	-8.6	-2.4	-3.4	-3.3
2009 Q1	-10.9	-12.6	-16.1	-3.7	-5.7	-5.7
2009 Q2	-10.0	-10.9	-16.2	-4.0	-5.8	-5.8
2009 Q3	-9.5	-9.7	-12.2	-2.7	-4.4	-4.2
2009 Q4	-4.4	-3.9	-7.8	-1.0	-2.0	-1.8
2010 Q1	1.9	3.0	3.7	0.3	0.7	1.0
2010 Q2	2.6	4.5	10.1	1.4	2.1	2.4
2010 Q3	3.9	6.0	11.0	2.1	2.9	3.0
2010 Q4	3.9	5.3	9.3	1.8	2.6	2.8
2011 Q1	1.5	4.3	6.8	2.0	2.3	2.7
2011 Q2	-0.7	2.6	2.2	1.8	1.5	2.1
2011 Q3	-1.3	0.9	-0.7	2.1	1.5	2.0
2011 Q4	-2.8	-0.4	0.7	2.4	1.5	2.0
2012 Q1	-2.8	-0.5	-4.7	2.5	1.2	1.5
2012 Q2	-2.5	-1.8	-8.5	2.1	0.7	0.9
2012 Q3	-2.0	-0.9	-9.2	2.0	0.7	0.9
2012 Q4	-3.5	-2.0	-7.7	1.6	0.2	0.6
2013 Q1	-2.6	-2.4	-5.0	1.6	0.7	1.0
2013 Q2	-1.0	-0.8	0.9	2.0	1.6	1.8
2013 Q3	-0.4	-0.8	5.0	1.6	1.5	1.6
2013 Q4	1.9	1.3	5.1	2.4	2.3	2.3
2014 Q1	2.3	2.7	7.9	2.5	2.3	2.3
2014 Q2	1.8	2.8	7.1	3.0	2.5	2.6
2014 Q3	1.2	2.5	5.7	3.2	2.6	2.7

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Growth rates of gross value added (GVA) and output components of gross value added in a quarter from the preceding quarter are in Table VH-4. Growth of GVA in IIIQ2014 originated in growth of services of 0.8 percent and total production of 0.2 percent while manufacturing grew 0.3 percent and construction increased 1.6 percent.

Table VH-4, UK, Quarter on Quarter Growth of Value Added by Output Components, ∆% on Prior Quarter

Component	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2	2014 Q3
GVA	0.6	0.6	0.7	0.4	0.6	0.8	0.8
Agriculture	-4.5	1.0	0.7	0.7	0.5	-0.2	0.5
Total Production	0.1	0.7	0.8	0.3	0.4	0.2	0.2
Extraction	1.7	2.3	3.4	-1.3	-0.1	0.1	-1.6
Manufacturing	-0.3	0.5	0.5	0.6	1.1	0.5	0.3
Electricity, gas and air	2.7	-2.3	-5.8	1.7	-4.1	0.9	2.8
Water and Sewerage	-1.0	2.7	4.4	0.1	-0.4	-2.6	-0.3
Construction	-0.7	2.4	3.0	0.3	2.0	1.7	1.6
Total Services	0.7	0.5	0.6	0.6	0.8	1.0	0.8
Distn, hotels and catering	1.1	1.6	1.1	0.5	1.6	1.0	0.7
Transport, storage and comms	1.8	-0.4	0.0	0.1	0.6	1.5	1.2
Business services and Finance	0.4	0.7	0.9	1.0	0.8	1.3	1.0
Government and other	0.2	-0.1	0.3	0.4	0.3	0.4	0.2

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Services contributed 0.4 percentage points to growth of GVA in IIQ2013, 0.5 percentage points in IIQ2013, 0.5 percentage points in IVQ2013, 0.6 percentage points in IQ2014, 0.8 percentage points in IIQ2014 and 0.6 percentage points in IIIQ2014, as shown in Table VH-5. Business services and finance contributed 0.3 percentage points in IIIQ2013, 0.3 percentage points in IVQ2013, 0.2 percentage points in IQ2014, 0.4 percentage points in IIQ2014 and 0.3 percentage points in IIIQ2014. Manufacturing did not contribute to growth in IQ2013 and manufacturing 0.0 and production contributed 0.1 percentage points in IIQ2013. Manufacturing an production contributed 0.1 percentage points in IIIQ2013 and manufacturing contributed 0.1 percentage points in IVQ2013. Manufacturing contributed 0.1 percentage points in IQ2014 and total production 0.1 percentage points. Manufacturing and total production did not contribute in IIQ2014 and in IIIQ2014 with exception of 0.1 percentage points by manufacturing in IIQ2014.

Table VH-5, UK, Contribution to Quarter on Prior Quarter of Growth of Value Added by Output Components, %

Component	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2	2014 Q3
Agriculture	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total Production	0.0	0.1	0.1	0.0	0.1	0.0	0.0
Extraction	0.0	0.0	0.1	0.0	0.0	0.0	0.0
Manufacturing	0.0	0.0	0.1	0.1	0.1	0.1	0.0
Electricity, gas and air	0.0	0.0	-0.1	0.0	0.0	0.0	0.0
Water and Sewerage	0.0	0.0	0.1	0.0	0.0	0.0	0.0
Construction	0.0	0.1	0.2	0.0	0.1	0.1	0.1
Total Services	0.5	0.4	0.5	0.5	0.6	0.8	0.6
Distn, hotels and catering	0.2	0.2	0.2	0.1	0.2	0.1	0.1
Transport, storage and comms	0.2	0.0	0.0	0.0	0.1	0.2	0.1
Business services and Finance	0.1	0.2	0.3	0.3	0.2	0.4	0.3
Government and other	0.0	0.0	0.1	0.1	0.1	0.1	0.1

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-6 provides UK growth of value added by output components in a quarter relative to the same quarter a year earlier for 2013 and 2014. Total production and manufacturing fell in all four quarters of 2012 and in the first three quarters of 2013 relative to the same quarter a year earlier. Total production increased 1.9 percent in IVQ2013 relative to a year earlier and 2.3 percent in IQ2014 while manufacturing increased 1.3 percent in IVQ2013 relative to a year earlier, 2.7 percent in IQ2014, 2.8 percent in IIQ2014 and 2.5 percent in IIIQ2014. Total services supported the economy with growth in all quarters relative to a year earlier from IQ2012 to IIIQ2014. Construction fell sharply in all four quarters of 2012 and in the first quarter of 2013 relative to a year earlier with growth of 0.9 percent in IIQ2013, 5.0 percent in IIIQ2013, 5.1 percent in IVQ2013, 7.9 percent in IQ2014, 7.1 percent in IIQ2014 and 5.7 percent in IIIQ2014.

Table VH-6, UK, Growth of Value Added by Output Components, ∆% on Same Quarter of Prior Year

Component	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2	2014 Q3
GVA Output	0.7	1.6	1.5	2.3	2.3	2.5	2.6
Agriculture	-6.5	-3.7	-3.0	-2.2	3.0	1.7	1.5
Total Production	-2.6	-1.0	-0.4	1.9	2.3	1.8	1.2
Extraction	-9.7	-4.3	-1.1	6.1	4.3	2.0	-2.9
Manufacturing	-2.4	-0.8	-0.8	1.3	2.7	2.8	2.5
Electricity, gas and air	8.8	-0.5	-3.0	-3.8	-10.2	-7.2	1.2
Water and Sewerage	-1.2	2.0	6.6	6.3	7.0	1.4	-3.1
Construction	-5.0	0.9	5.0	5.1	7.9	7.1	5.7
Total Services	1.6	2.0	1.6	2.4	2.5	3.0	3.2
Distn, hotels and catering	2.5	4.0	3.3	4.4	4.9	4.3	3.9
Transport, storage and comms	0.9	1.6	1.6	1.4	0.3	2.2	3.5
Business services and Finance	2.1	2.3	2.4	3.1	3.4	4.0	4.1
Government and other	0.7	0.4	-0.6	0.8	0.9	1.3	1.3

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Total production subtracted from growth of value added in all quarters of 2012 and the first three quarters of 2013 relative to a year earlier, contributing 0.3 percentage points in IVQ2013, 0.3 percentage points in IQ2014, 0.2 percentage points in IIQ2014 and 0.2 percentage points in IIIQ2014, as shown in Table VH-7. Total services added to growth of value added in all four quarters of 2012 and all four quarters of 2013 relative to a year earlier. Total services contributed 2.4 percentage points to growth of value added in IIQ2014 and contributed 2.5 percentage points in IIIQ2014. Construction also deducted in all four quarters of 2012 and the first quarter of 2013 relative to a year earlier with contribution of 0.1 percentage points in IIQ2013, adding 0.3 percentage points in IIIQ2013 and 0.3 percentage points IVQ2013. Construction added 0.5 percentage points in IQ2014, 0.4 percentage points in IVQ2014 and 0.3 percentage points in IIIQ2014.

Table VH-7, UK, Contribution to Growth on Same Quarter of Prior Year of Value Added by Output Components, %

Component	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2	2014 Q3
Agriculture	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total Production	-0.4	-0.1	-0.1	0.3	0.3	0.2	0.2
Extraction	-0.2	-0.1	0.0	0.1	0.1	0.0	-0.1
Manufacturing	-0.2	-0.1	-0.1	0.1	0.3	0.3	0.2
Electricity, gas and air	0.1	0.0	0.0	0.0	-0.1	-0.1	0.0
Water and Sewerage	0.0	0.0	0.1	0.1	0.1	0.0	0.0
Construction	-0.3	0.1	0.3	0.3	0.5	0.4	0.3
Total Services	1.3	1.6	1.3	1.9	2.0	2.4	2.5
Distn, hotels and catering	0.3	0.6	0.5	0.6	0.7	0.6	0.6
Transport, storage and comms	0.1	0.2	0.2	0.1	0.0	0.2	0.4
Business services and Finance	0.7	0.7	0.8	1.0	1.1	1.3	1.3
Government and other	0.2	0.1	-0.1	0.2	0.2	0.3	0.3

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Quarter-on-quarter growth of value added by expenditure components is in Table VH-8. Household final consumption expenditure grew 0.6 percent in IIIQ2013 relative to IIQ2013, 0.4 percent in IVQ2013, 0.6 percent in IQ2014 and 0.5 percent in IIQ2014. Household final consumption expenditures grew 0.9 percent in IIIQ2014. General government consumption increased 0.5 percent in IIIQ2013 and decreased 0.1 percent in IVQ201, growing 0.2 percent in IQ2014, 1.4 percent in IIQ2014 and 0.3 percent in IIIQ2014. Gross capital formation increased 12.3 percent in IIIQ2013 and gross fixed capital formation (GFCF) increased 2.7 percent. Gross capital formation decreased 0.2 percent in IVQ2013 and GFCF increased 2.4 percent. Gross capital formation increased 0.8 percent in IQ2014 and GFCF increased 2.2 percent. Gross capital formation decreased 0.8 percent in IIQ2014 and GFCF increased 1.6 percent. Gross capital formation increased 2.1 percent in IIIQ2014 and GFCF 0.1 percent. Exports grew fell 3.4 percent in IIIQ2013 while imports increased 1.9 percent in IIIQ2013. In IVQ2013, exports decreased 1.3 percent and imports decreased 1.4 percent. In IQ2014, exports increased 0.6 percent and imports increased 0.4 percent. In IIQ2014, exports fell 0.8 percent and imports fell 1.7 percent. Exports increased 0.6 percent in IIIQ2014 while imports increased 1.3 percent.

VH-8, UK, Quarter on Quarter Growth of Value Added by Expenditure Components, ∆% on Prior Quarter

	IIIQ2013	IVQ2013	IQ2014	IIQ2014	IIIQ2014
HFC	0.6	0.4	0.6	0.5	0.9
NPISH	0.1	-1.0	0.4	1.6	1.1
GOVT	0.5	-0.1	0.2	1.4	0.3
GCF	12.3	0.8	0.8	-0.8	2.1
GFCF	2.7	2.3	2.2	1.6	0.1
BI	3.8	2.7	0.7	3.2	-1.4
Exports	-3.4	-1.3	0.6	-0.8	0.6
Less Imports	1.9	-1.4	0.4	-1.7	1.3

HFC: Household Final Consumption; NPISH: NPISH Final Consumption; GOVT: General Government; GCF: Gross Capital Formation; GFCF: Gross Fixed Capital Formation; BINV: Business Investment; EXP: Exports; IMP: Less Imports

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-9 provides contributions to value added by expenditure components in a quarter relative to the prior quarter. In IIIQ2013, household final consumption expenditure contributed 0.3 percentage points to growth, 0.2 percentage points in IVQ2013, 0.4 percentage points in IQ2013 and 0.3 percentage points in IIQ2014. Household final consumption contributed 0.6 percentage points in IIIQ2014. Net trade deducted 1.7 percentage points in IIIQ2013 and added 0.1 percentage points in IVQ2013. In IQ2014, net trade contributed 0.0 percentage points, contributing 0.3 percentage points in IIQ2014 and deducting 0.2 percentage points in IIIQ2014. Gross fixed capital formation (GFCF) added 0.4 percentage points in IIIQ2012, adding 0.4 percentage points in IVQ2013, 0.4 percentage points in IQ2014, 0.3 percentage points in IIQ2014 and 0.0 percentage points in IIIQ2014.

Table VH-9, UK, Contribution to Quarter on Prior Quarter of Growth of Value Added by Expenditure Components, %

	IIIQ2013	IVQ2013	IQ2014	IIQ2014	IIIQ2014
HFC	0.3	0.2	0.4	0.3	0.6
NPISH	0.0	0.0	0.0	0.0	0.0
GOVT	0.1	0.0	0.0	0.3	0.1
GCF	2.0	0.1	0.1	-0.1	0.4
GFCF	0.4	0.4	0.4	0.3	0.0
BI	0.4	0.3	0.1	0.3	-0.1
Exports	-1.1	-0.4	0.2	–0.2	0.2
Less Imports	0.6	-0.5	0.1	–0.6	0.4
Net Trade	-1.7	0.1	0.0	0.3	-0.2

Components may not add because of rounding

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-10 provides UK growth of value added by expenditure components in a quarter relative to the same quarter a year earlier. Household final consumption expenditure grew 2.0 percent in IIIQ2013, 1.7 percent in IVQ2013 and 1.9 percent in IQ2014. Household final consumption grew 2.1 percent in IIQ2014 relative to a year earlier and 2.5 percent in IIIQ2014 relative to a year earlier. General government final consumption expenditure increased 0.2 percent in IIIQ2013 and 0.0 percent in IVQ2013. General government consumption expenditure increased 0.0 percent in IQ2014 relative to a year earlier, 2.1 percent in IIQ2014 relative to a year earlier and 1.9 percent in IIIQ2014. Gross fixed capital formation (GFCF) increased 5.5 percent in IIIQ2013, increasing 6.8 percent in IVQ2013 and 7.9 percent in IQ2014. GFCF increased 9.1 percent in IIQ2014 relative to a year earlier and 6.4 percent in IIIQ2014 relative to a year earlier. Exports changed 0.0 percent in IIIQ2013 and imports grew 2.6 percent. In IVQ2013, exports increased 0.3 percent and imports increased 2.0 percent. Exports increased 0.3 percent in IQ2014 relative to a year earlier and imports 4.7 percent. Exports decreased 4.9 percent in IIQ2014 relative to a year earlier while imports fell 0.9 percent. Exports fell 0.9 percent in IIIQ2014 relative to a year earlier while imports fell 1.4 percent.

Table VH-10, UK, Growth of Value Added by Expenditure Components, ∆% on Same Quarter of Prior Year

	IIIQ2013	IVQ2013	IQ2014	IIQ2014	IIIQ2014
HFC	2.0	1.7	1.9	2.1	2.5
NPISH	1.2	4.1	1.7	1.1	2.0
GOVT	0.2	0.0	0.0	2.1	1.9
GCF	8.0	11.5	16.8	13.2	3.0
GFCF	5.5	6.8	7.9	9.1	6.4
BI	5.3	7.1	6.8	10.7	5.2
Exports	0.0	0.3	0.3	-4.9	-0.9
Less Imports	2.6	2.0	4.7	–0.9	-1.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-11 provides contribution of value added by expenditure components in a quarter relative to the same quarter a year earlier. In IIIQ2013, household final consumption added 1.2 percentage points, 1.1 percentage points in IVQ2013 and 1.2 percentage points in IQ2014. Household final consumption added 1.3 percentage points in IIQ2014 and 1.5 percentage points in IIIQ2014. General government final consumption expenditure added 0.0 percentage points in IIIQ2013, 0.0 percentage points in IVQ2013 and 0.0 percentage points in IQ2014. General government final consumption added 0.4 percentage points in IIQ2014 and 0.4 percentage points in IIIQ2014. Net trade deducted 0.9 percentage points in IIIQ2013. In IVQ2013, net trade deducted 0.6 percentage points and deducted 1.4 percentage points in IQ2014. Net trade deducted 1.3 percentage points in growth of IIQ2014 relative to a year earlier. Net trade added 0.2 percentage points to growth in IIIQ2014 relative to a year earlier.

VH-11, UK, Contribution to Growth on Same Quarter of Prior Year of Value Added by Expenditure Components, %

	IIIQ2013	IVQ2013	IQ2014	IIQ2014	IIIQ2014
HFC	1.2	1.1	1.2	1.3	1.5
NPISH	0.0	0.1	0.1	0.0	0.1
GOVT	0.0	0.0	0.0	0.4	0.4
GCF	1.4	1.9	2.7	2.1	0.5
GFCF	0.9	1.1	1.3	1.5	1.0
BI	0.5	0.7	0.7	1.1	0.5
Exports	0.0	0.1	0.1	-1.6	-0.3
Less Imports	0.9	0.7	1.5	–0.3	-0.5
Net Trade	-0.9	-0.6	-1.4	-1.3	0.2

Components may not add because of rounding

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Table VH-12 provides growth of value added by expenditure components in a year relative to the prior year. Household final consumption expenditure grew 1.7 percent in 2013. General government final consumption expenditure grew 0.7 percent in 2013. Gross capital formation increased 4.7 percent in 2013. GFCF increased 3.4 percent in 2013. Exports grew 1.5 percent in 2013.

Table VH-12, UK, Growth of Value Added by Expenditure Components, ∆% on Prior Year

	2013
HFC	1.7
NPISH	0.7
GOVT	-0.3
GCF	4.7
GFCF	3.4
BI	5.3
Exports	1.5
Less Imports	1.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

Contributions of value added by expenditure components in a year relative to the prior year are in Table VH-13. Household final consumption added 1.1 percentage points in 2013. Gross capital formation contributed 0.8 percentage points in 2013 and GFCF added 0.5 percentage points.

VH-13, UK, Contribution to Growth on Prior Year of Value Added by Expenditure Components, %

	2013
HFC	1.1
NPISH	0.0
GOVT	-0.1
GCF	0.8
GFCF	0.5
BINV	0.5
Exports	0.5
Less Imports	0.5
Net Trade	0.0

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q3-2014/index.html

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