Financial and International Developments Influencing Monetary Policy, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend, Stagnating Real Private Fixed Investment, United States Housing Collapse, Decline of United States Homeownership, World Cyclical Slow Growth and Global Recession Risk: Part V

 

Financial and International Developments Influencing Monetary Policy, Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars Below Trend, Stagnating Real Private Fixed Investment, United States Housing Collapse, Decline of United States Homeownership, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015

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

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

VC China. China estimates an index of nonmanufacturing purchasing managers based on a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The total index increased from 55.7 in Jan 2011 to 58.0 in Mar 2012, decreasing to 53.9 in Aug 2013. The index decreased from 56.0 in Nov 2013 to 54.6 in Dec 2013, easing to 53.4 in Jan 2014. The index moved to 54.1 in Dec 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 50.5 in Dec 2014.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Dec 2014	54.1	50.5	50.1	47.3	59.5
Nov	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 54.1 in Dec 2014.

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 50.1 in Dec 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 50.4 in Dec 2014.

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

	IPM	PI	NOI	INV	EMP	SDEL
2014
Dec	50.1	52.2	50.4	47.5	48.1	49.9
Nov	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 50.1 in Dec 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 IVQ2014 relative to the same period in 2013 was 7.4 percent, as shown in Table VC-GDP. Secondary industry accounts for 42.6 percent of cumulative GDP in IVQ2014. In cumulative IVQ2014, industry accounts for 35.8 percent of GDP and construction for 7.0 percent. Tertiary industry accounts for 48.2 percent of cumulative GDP in IVQ2014 and primary industry for 9.2 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 7.0 percent and to 7.4 percent in IIQ2013, rebounding to 9.5 percent in IIIQ2013. Annual equivalent growth was 7.4 percent in IVQ2013, declining to 6.6 percent in IQ2014 and increasing to 7.8 percent in IIQ2014. Annual equivalent growth slowed to 7.8 percent in IIIQ2014 and 6.1 percent in IVQ2014.

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

Cumulative GDP IVQ2014	Value Current CNY Billion	2014 Year-on-Year Constant Prices ∆%
GDP	63,646.3	7.4
Primary Industry	5833.2	4.1
Farming	6015.1	4.2
Secondary Industry	27,139.2	7.3
Industry	22,799.1	7.0
Construction	4472.5	8.9
Tertiary Industry	30,673.9	8.1
Transport, Storage, Post	2875.0	7.0
Wholesale, Retail Trades	6221.6	9.5
Accommodation and Restaurants	1119.9	6.2
Finance	4695.4	10.2
Real Estate	3816.7	2.3
Other	11631.1	8.8
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2014
IVQ2014	1.5	6.1
IIIQ2014	1.9	7.8
IIQ2014	1.9	7.8
IQ2014	1.6	6.6
2013
IVQ2013	1.8	7.4
IIIQ2013	2.3	9.5
IIQ2013	1.8	7.4
IQ2013	1.7	7.0
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 IVQ2014 relative to the same period in 2013 was 7.3 percent, as shown in Table VC-GDPA. Secondary industry accounts for 42.6 percent of cumulative GDP in IVQ2014. In cumulative IVQ2014, industry accounts for 35.8 percent of GDP and construction for 7.0 percent. Tertiary industry accounts for 48.2 percent of cumulative GDP in IVQ2014 and primary industry for 9.2 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 7.8 percent in IQ2013, 7.5 percent in IIQ2013 and 7.9 percent in IIIQ2013. GDP grew 7.6 percent in IVQ2013 relative to a year earlier and 1.8 percent relative to IIIQ2013, which is equivalent to 7.4 percent per year. GDP grew 7.4 percent in IQ2014 relative to a year earlier and 1.6 percent in IQ2014 that is equivalent to 6.6 percent per year. GP grew 7.5 percent in IIQ2014 relative to a year earlier and 1.9 percent relative to the prior quarter, which is equivalent 7.8 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. GDP grew 1.5 percent in IVQ2014, which is 6.1 percent in annual equivalent and 7.3 percent relative to a year earlier.

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	IVQ 2014
GDP	7.8	7.5	7.9	7.6	7.4	7.5	7.3	7.3
Primary Industry	3.4	3.0	3.4	4.0	3.5	3.9	4.2	4.1
Secondary Industry	7.8	7.6	7.8	7.8	7.3	7.4	7.4	7.3
Tertiary Industry	8.3	8.3	8.4	8.3	7.1	8.0	7.9	8.1
GDP ∆% Relative to a Prior Quarter	1.7	1.8	2.3	1.8	1.6	1.9	1.9	1.5
	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/b2a890cba4664da9ad061ff1a23ec780) is improving. The overall Flash HSBC China Manufacturing PMI^™ increased from 49.6 in Dec to 49.8 in Jan, while the Flash HSBC China Manufacturing Output Index increased from 49.9 in Dec to 50.1 in Dec, indicating moderate growth. 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/b2a890cba4664da9ad061ff1a23ec780). The HSBC China Services PMI^™, compiled by Markit, shows the HSBC Composite Output, combining manufacturing and services, increasing from 51.1 in Nov to 51.4 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/b58def8e8ae94ec4a96c19d54c66e1e6). 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/b58def8e8ae94ec4a96c19d54c66e1e6). The HSBC China Services Business Activity index increased from 53.0 in Nov to 53.4 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/b58def8e8ae94ec4a96c19d54c66e1e6). 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/b58def8e8ae94ec4a96c19d54c66e1e6). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, decreased to 49.6 in Dec from 50.0 in Nov, indicating near neutral manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/870b45541fcd4c39aff1342749abe385). 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/870b45541fcd4c39aff1342749abe385). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Dec 12-month ∆%: minus 3.3 Dec month ∆%: -0.6 Blog 1/18/15
Consumer Price Index	Dec month ∆%: 0.3 Dec 12 months ∆%: 1.5 Blog 1/18/15
Value Added of Industry	Dec month ∆%: 0.75 Jan-Dec 2014/Jan-Dec 2013 ∆%: 8.3 Blog 1/25/15
GDP Growth Rate	Year IVQ2014 ∆%: 7.3 First Four Quarters 2014 ∆%: 7.4 Quarter IIIQ2014 AE ∆%: 6.1 Blog 1/25/15
Investment in Fixed Assets	Total Jan-Dec 2014 ∆%: 15.7 Real estate development: 10.5 Blog 1/25/15
Retail Sales	Dec month ∆%: 1.01 Dec 12 month ∆%: 11.9 Jan-Dec ∆%: 12.0 Blog 1/25/15
Trade Balance	Dec balance $49.6 billion Exports 12M ∆% 9.7 Imports 12M ∆% -2.4 Cumulative Jan-Dec: $382.5 billion Blog 1/18/15

Links to blog comments in Table CNY:

1/25/15 http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.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://ec.europa.eu/eurostat

http://ec.europa.eu/eurostat/data/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://ec.europa.eu/eurostat

http://ec.europa.eu/eurostat/data/database

The Flash Eurozone PMI Composite Output Index of the Markit Flash Eurozone PMI^®, combining activity in manufacturing and services, increased from 51.4 in Dec to 52.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/d69ce69ee5104958871505c2fa8a688c). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP growth at around 0.2 percent in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/d69ce69ee5104958871505c2fa8a688c). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP increased from 51.1 in Nov to 51.4 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/7af39047a865414bab33228b63be59ff). 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/7af39047a865414bab33228b63be59ff). The Markit Eurozone Services Business Activity Index increased from 51.1 in Nov to 51.6 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/7af39047a865414bab33228b63be59ff). The Markit Eurozone Manufacturing PMI^® increased to 50.6 in Dec from 50.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/718a95fe800e414d89e4fe0726e66070). New export orders increased at faster pace. Chris Williamson, Chief Economist at Markit, finds near stagnation of industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/718a95fe800e414d89e4fe0726e66070). 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	Dec 2014: 11.4 % unemployment rate; Dec 2014: 18.129 million unemployed Blog 2/1/15
HICP	Dec month ∆%: -0.1 12 months Dec ∆%: -0.2 Blog 1/18/15
Producer Prices	Euro Zone industrial producer prices Nov ∆%: -0.3 Nov 12-month ∆%: -1.6 Blog 1/11/14
Industrial Production	Nov month ∆%: 0.2; Nov 12 months ∆%: -0.4 Blog 1/18/15
Retail Sales	Nov month ∆%: 0.6 Nov 12 months ∆%: 1.5 Blog 1/11/15
Confidence and Economic Sentiment Indicator	Sentiment 101.2 Jan 2015 Consumer minus 8.5 Jan 2015 Blog 2/1/15
Trade	Jan-Nov 2014/Jan-Nov 2013 Exports ∆%: 1.8 Imports ∆%: 0.0 Nov 2014 12-month Exports ∆% 0.6 Imports ∆% -1.8 Blog 1/18/15

Links to blog comments in Table EUR:

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html

1/11/15 http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html

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

EUROSTAT estimates the rate of unemployment in the euro area at 11.4 percent in

Dec 2014, as shown in Table VD-1. The number of unemployed in Dec 2014 was 18.129 million, which was 0.693 million lower than 18.822 million in Dec 2013. The rate of unemployment stabilized from 11.8 percent in Dec 2013 to 11.4 percent in Dec 2014

Table VD-1, Euro Area, Unemployment Rate and Number of Unemployed, % and Millions, SA 

	Unemployment Rate %	Number Unemployed Millions
Dec 2014	11.4	18.129
Nov	11.5	18.286
Oct	11.5	18.325
Sep	11.5	18.302
Aug	11.5	18.309
Jul	11.6	18.404
Jun	11.5	18.351
May	11.6	18.435
Apr	11.6	18.471
Mar	11.7	18.591
Feb	11.8	18.675
Jan	11.8	18.764
Dec 2013	11.8	18.822
Nov	11.9	18.920
Oct	11.9	18.916
Sep	12.0	19.074
Aug	12.0	19.082
Jul	12.0	19.055
Jun	12.0	19.114
May	12.0	19.138
Apr	12.0	19.125
Mar	12.0	19.057
Feb	12.0	19.040
Jan	12.0	19.007
Dec 2012	11.8	18.841
Nov	11.8	18.713
Oct	11.7	18.633
Sep	11.5	18.338
Aug	11.4	18.166
Jul	11.4	18.133
Jun	11.4	18.072
May	11.2	17.847
Apr	11.1	17.707
Mar	11.0	17.452
Feb	10.9	17.220
Jan	10.7	16.918
Dec 2011	10.6	16.822
Nov	10.6	16.708
Oct	10.4	16.431
Sep	10.3	16.262
Aug	10.2	16.028
Jul	10.0	15.845
Jun	9.9	15.638
May	9.9	15.572
Apr	9.8	15.455
Mar	9.9	15.521
Feb	9.9	15.539
Jan	10.0	15.657
Dec 2010	10.0	15.748

Source: EUROSTAT

http://ec.europa.eu/eurostat

Table VD-2 shows the disparity in rates of unemployment in the euro area with 11.4 percent for the region as a whole and 18.129 million unemployed but 4.8 percent in Germany and 2.014 million unemployed. At the other extreme is Spain with rate of unemployment of 23.7 percent and 5.460 million unemployed. The rate of unemployment of the European Union in Dec 2014 is 9.9 percent with 24.056 million unemployed.

Table VD-2, Unemployed and Unemployment Rate in Countries and Regions, Millions and %

Dec 2014	Unemployment Rate %	Unemployed Millions
Euro Zone	11.4	18.129
Germany	4.8	2.014
France	10.3	3.020
Netherlands	6.7	0.595
Finland	8.9	0.240
Portugal	13.4	0.690
Ireland	10.5	0.226
Italy	12.9	3.322
Greece	25.8*	1.245*
Spain	23.7	5.460
Belgium	8.4	0.416
European Union	9.9	24.056

*Oct 2014

Source: EUROSTAT

http://ec.europa.eu/eurostat

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

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

Source: EUROSTAT

http://ec.europa.eu/eurostat

The Economic Sentiment Indicator of the European Economic Commission, Economic and Financial Affairs, provides correlation with the economic cycle since 1990, capturing all three recessions in the period and even the threat of recession from 1994 to 1995. The latest chart of this index accessible in the link in parenthesis shows trend of decline in 2011 and 2012 that has punctured the historical average of 100 and resumed downward trend in 2012 followed by recovery moving closer to the average (http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm). Table VD-3 provides the index increasing from 101.1 in Feb 2014 to 101.2 in Jan 2015. The index is above the minimum value of 69.4 reached in Mar 2009, close to the average of 100.

Table VD-3, Euro Area, Indicators of Confidence and Economic Sentiment SA

	ESI	IND	SERV	CON	RET	CONS
Historical Average	100.0	-6.9	8.9	-13.1	-9.0	-18.4
Maximum	118.9 05-00	7.9 04-07	35.4     08-98	2.4 05-00	5.2 06-90	6.0 02-90
Minimum	69.4 03-09	-38.1 03-09	-26.1 03-09	-34.4 03-09	-24.8 01-93	-46.0 09-93
Jan 2015	101.2	-5.0	4.8	-8.5	-3.6	-26.5
Dec 2014	100.6	-5.2	5.6	-10.9	-5.2	-25.2
Nov	100.7	-4.3	4.4	-11.6	-5.9	-26.1
Oct	100.7	-5.0	4.4	-11.1	-6.3	-24.4
Sep	99.9	-5.5	3.2	-11.4	-7.2	-27.4
Aug	100.5	-5.2	3.1	-10.1	-4.5	-28.1
Jul	102.1	-3.8	3.6	-8.3	-2.2	-27.9
Jun	102.1	-4.3	4.4	-7.5	-1.8	-31.3
May	102.6	-3.1	3.8	-7.1	-2.4	-29.7
Apr	102.0	-3.4	3.5	-8.6	-2.5	-29.9
Mar	102.5	-3.3	4.4	-9.3	-2.6	-28.3
Feb	101.1	-3.4	3.3	-12.7	-3.0	-28.1

ESI: Economic Sentiment Index; IND: Industry; SERV: Services; CON: Consumer; RET: Retail Trade; CONS: Construction

Source: European Commission Services

http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

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, increased from 52.0 in Dec to 52.6 in Jan. The index of manufacturing output reached 52.3 in Jan, increasing from 51.8 in Dec, while the index of services increased to 52.7 in Dec from 52.1 in Dec. The overall Flash Germany Manufacturing PMI^® decreased from 51.2 in Dec to 51.0 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/b36bd29c628047739c3e404c195963a5). New orders in manufacturing contracted. Oliver Kolodseike, Economist at Markit, finds improving GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/b36bd29c628047739c3e404c195963a5). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, increased from 51.7 in Nov to 52.0 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/4f337543002f446a8ab8ee397aff2b2d). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds slow growth in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/4f337543002f446a8ab8ee397aff2b2d). The Germany Services Business Activity Index decreased from 54.4 in Oct to 52.1 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/4f337543002f446a8ab8ee397aff2b2d). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 49.5 in Nov to 51.2 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ef269fb4b7c4e8ba3629311b36b17cb). New export orders increased. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improvement of manufacturing but without definitive signs of whether it is temporary (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ef269fb4b7c4e8ba3629311b36b17cb).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	Dec month NSA ∆%: 0.0 Dec 12-month NSA ∆%: 0.2 Blog 1/18/15
Producer Price Index	Dec month ∆%: -0.7 NSA, minus 0.5 CSA 12-month NSA ∆%: -1.7 Blog 1/25/15
Industrial Production	MFG Nov month CSA ∆%: 0.2 12-month NSA: -1.4 Blog 1/11/15
Machine Orders	MFG Nov month ∆%: -2.4 Nov 12-month ∆%: -1.4 Blog 1/11/15
Retail Sales	Dec Month ∆% 0.2 12-Month ∆% 4.0 Blog 2/1/15
Employment Report	Unemployment Rate SA Dec 4.8% Blog 2/1/15
Trade Balance	Exports Nov 12-month NSA ∆%: 1.4 Imports Nov 12 months NSA ∆%: 1.7 Exports Nov month CSA ∆%: -2.1; Imports Nov month CSA minus 1.5 Blog 1/11/15

Links to blog comments in Table DE:

1/25/15 http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html

1/11/15 http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-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

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-1. The number unemployed, not seasonally adjusted, decreased from 2.04 million in Dec 2013 to 1.91 million in Dec 2014, or 6.4 percent, while the unemployment rate decreased from 4.9 percent in Dec 2013 to 4.5 percent in Dec 2014. The number of persons in employment, not seasonally adjusted, increased from 39.57 million in Dec 2013 to 40.43 million in Dec 2014, or 2.2 percent, while the employment rate increased from 64.4 percent in Dec 2013 to 65.8 percent in Dec 2014. The number unemployed, seasonally adjusted, decreased from 2.04 million in Nov 2014 to 2.01 million in Dec 2014, while the unemployment rate fell from 4.9 percent in Nov 2014 relative to 4.8 percent in Dec 2014. The number of persons in employment, seasonally adjusted, increased from 39.99 million in Nov 2014 to 40.05 million in Dec 2014, or change of 1.3 percent. The employment rate seasonally adjusted remained unchanged from 65.2 in Nov 2014 to 65.2 in Dec 2014.

Table VE-1, Germany, Unemployment Labor Force Survey

	Dec 2014	Nov 2014	Dec 2013
NSA
Number Unemployed Millions	1.91 ∆% Dec 2014 /Nov 2014: -9.0 ∆% Dec 2014/Dec 2013: -6.4	2.10	2.04
% Rate Unemployed	4.5	5.0	4.9
Persons in Employment Millions	40.43 ∆% Dec 2014/Nov 2014: 0.9 ∆% Dec 2014/Dec 2013: 2.2	40.06	39.57
Employment Rate	65.8	65.3	64.4
SA
Number Unemployed Millions	2.01 ∆% Dec 2014/Nov  2014: -1.5 ∆% Dec 2014/Dec 2013: –5.6	2.04	2.13
% Rate Unemployed	4.8	4.9	5.1
Persons in Employment Millions	40.05 ∆% Dec 2014/Nov 2014: 0.2 ∆% Dec 2014/Dec 2013: 1.3	39.99	39.55
Employment Rate	65.2	65.2	64.4

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2015/01/PE15_029_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-2 stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Mar 2013 and 7.1 percent in Apr 2013. The unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 2013 and rose to 6.8 percent in Jul-Aug 2013. The rate fell to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013 and Nov 2013. The unemployment rate increased to 6.7 percent in Dec 2013 and 7.3 percent in Jan 2013. The unemployment rate reached 7.3 percent in Feb 2014 and 7.1 percent in Mar 2014. The unemployment rate fell to 6.8 percent in Apr 2014 and 6.6 percent in May 2014. The unemployment rate fell to 6.5 percent in Jun 2014, increasing to 6.6 percent in Jun 2014 and 6.7 percent in Aug 2014. The unemployment rate fell to 6.5 percent in Sep 2014 and 6.3 percent in Oct 2014 and Nov 2014. The unemployment rate increase to 6.4 percent in Dec 2014 and 7.0 percent in Jan 2015. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

Table VE-2, Germany, Unemployment Rate in Percent of Labor Force

Jan 2015	7.0
Dec 2014	6.4
Nov	6.3
Oct	6.3
Sep	6.5
Aug	6.7
Jul	6.6
Jun	6.5
May	6.6
Apr	6.8
Mar	7.1
Feb	7.3
Jan	7.3
Dec 2013	6.7
Nov	6.5
Oct	6.5
Sep	6.6
Aug	6.8
Jul	6.8
Jun	6.6
May	6.8
Apr	7.1
Mar	7.3
Feb	7.4
Jan	7.4
Dec 2012	6.7
Nov	6.5
Oct	6.5
Sep	6.5
Aug	6.8
Jul	6.8
Jun	6.6
May	6.7
Apr	7.0
Mar	7.2
Feb	7.4
Jan	7.3
Dec 2011	6.6
Nov	6.4
Oct	6.5
Sep	6.6
Aug	7.0
Jul	7.0
Jun	6.9
May	7.0
Apr	7.3
Mar	7.6
Feb	7.9
Jan	7.9
Dec 2010	7.1
Dec 2009	7.8
Dec 2008	7.4
Dec 2007	8.1
Dec 2006	9.6
Dec 2005	11.1

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, increasing to 6.7 percent in Dec 2012, 6.8 percent in Apr 2013 and 6.6 percent in May 2013. The unemployment rate rose slightly to 6.8 percent in Aug 2013, falling to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013. The rate remained at 6.5 percent in Nov 2013, increasing to 6.7 percent in Dec 2013 and 7.3 in Jan 2014. The rate remained at 7.3 percent in Feb 2014, declining to 7.1 percent in Mar 2014. The rate fell to 6.8 percent in Apr 2014, 6.6 percent in May 2014 and 6.5 percent in Jun 2014. The rate increased to 6.6 percent in Jul 2014 and 6.7 percent in Aug 2014, falling to 6.5 percent in Sep 2014. The rate fell to 6.3 percent in Oct 2014 and 6.3 percent in Nov 2014, increasing to 6.4 percent in Dec 2014. The rate increased to 7.0 percent in Jan 2015.

Chart VE-1, Germany, Unemployment Rate, Unadjusted, Percent

Source: Statistisches Bundesamt Deutschland

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

Retail sales in Germany adjusted for inflation are provided in Table VE-3. There have been sharp fluctuations in monthly and 12-month percentage changes. In Dec 2014, retail sales increased 0.2 percent and increased 4.0 percent in 12 months. Retail sales increased 0.9 percent in Nov 2014 and decreased 0.8 percent in 12 months.

Table VE-3, Retail Sales in Germany Adjusted for Inflation

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Dec 2014	4.0	0.2
Nov	-0.8	0.9
Oct	2.1	2.1
Sep	2.7	-1.9
Aug	-1.0	0.7
Jul	1.2	-0.7
Jun	0.1	1.2
May	2.3	-0.4
Apr	3.7	-0.6
Mar	-0.7	-0.6
Feb	2.4	1.2
Jan	0.9	2.2
Dec 2013	0.3	-2.1
Nov	1.6	1.5
Oct	-0.2	-0.7
Sep	0.2	0.2
Aug	0.4	-0.1
Jul	3.3	0.5
Jun	-2.9	-1.3
May	0.3	0.8
Apr	2.5	0.2
Mar	-2.9	-0.1
Feb	-3.3	-0.1
Jan	2.2	1.8
Dec 2012	-3.1	-1.3
Nov	0.5	0.3
Oct	1.5	-0.7
Sep	-3.1	0.4
Aug	0.0	-0.4
Jul	-1.0	-0.7
Jun	4.6	1.0
May	-0.7	-0.3
Apr	-4.7	-0.6
Mar	4.2	0.9
Feb	2.5	1.6
Jan	2.0	-2.5
Dec 2011	0.8	1.2
Nov	0.9	-1.2
Oct	-0.4	0.5
Sep	1.2	0.3
Aug	3.4	-1.3
Jul	-2.4	1.3
Jun	-2.0	2.6
May	4.5	-2.8
Apr	4.8	1.4
Mar	-2.9	-2.5
Feb	3.0	2.2
Jan	3.3	-0.1
Dec 2010	-0.2	0.5
Dec 2009	-2.2
Dec 2008	3.4
Dec 2007	-6.2
Dec 2006	1.3

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-2 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2010 to 2014. There appear to be fluctuations without trend.

Chart VE-2, Germany, Turnover in Retail Trade at Constant Prices 2010=100

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

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

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

Chart VE-3, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2010=100

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

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

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

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

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 decreased from 49.7 in Dec to 49.5 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/a2da71a5f606408ea3c8486499f1156a). Jack Kennedy, Senior Economist at Markit and author of the report, finds continuing weak performance (http://www.markiteconomics.com/Survey/PressRelease.mvc/a2da71a5f606408ea3c8486499f1156a). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 47.9 in Nov to 49.7 in Dec, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/f9c207bff1f141eab3825a1e08fa8743). 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/f9c207bff1f141eab3825a1e08fa8743). The Markit France Services Activity index increased from 47.9 in Nov to 50.6 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/f9c207bff1f141eab3825a1e08fa8743). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 47.5 in Dec from 48.4 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/944c79ea443643ea93349eeda9c44f4d). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds faster decline of output and employment in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/944c79ea443643ea93349eeda9c44f4d). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Dec month ∆% 0.1 12 months ∆%: 0.1 1/18/15
PPI	Dec month ∆%: -0.8 Dec 12 months ∆%: -2.8 Blog 2/1/15
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	Nov ∆%: Manufacturing -0.6 12-Month ∆%: Manufacturing -1.3 Blog 1/18/15
Consumer Spending	Manufactured Goods Dec ∆%: 1.2 Dec 12-Month Manufactured Goods ∆%: 0.9 Blog 2/1/15
Employment	Unemployment Rate: IIIQ2014 9.9% Blog 12/7/14
Trade Balance	Nov Exports ∆%: month 0.6, 12 months -1.9 Nov Imports ∆%: month 4.4, 12 months -2.4 Blog 1/18/15
Confidence Indicators	Historical average 100 Nov Mfg Business Climate 99.0 Blog 12/28/14

Links to blog comments in Table FR:

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html

12/28/14 http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.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

The monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption increased 1.5 percent in Dec 2014 after increasing 0.2 percent in Nov 2014 and decreasing 0.4 percent in Oct 2014. Consumption of manufactured products increased 1.2 percent in Dec 2014 after decreasing 0.1 percent in Nov 2014 and increasing 0.3 percent in Oct 2014. Total consumption increased 0.5 percent in Dec 2014 relative to Dec 2013 and consumption of manufactured goods increased 0.9 percent in Dec 2014 relative to Dec 2013. Consumption of energy increased 0.1 percent in Dec 2014 and increased 0.4 percent in 12 months. Internal demand is weak throughout most advanced economies.

Table VF-1, France, Household Expenditures in Consumption Goods, Month ∆% Chained Billion Euros Trading-Days SA

	Total	Food	Eng. Goods	Energy	Mfg Goods
Dec 2014	1.5	0.7	0.1	6.9	1.2
Dec 2014/Dec 2013	0.5	0.9	0.4	0.0	0.9
Nov	0.2	-0.1	0.6	-0.2	-0.1
Oct	-0.4	0.0	1.0	-4.5	0.3
Sep	-0.7	0.5	-1.7	-0.6	-0.6
Aug	1.0	0.9	0.9	1.3	1.1
Jul	-0.7	-1.4	-0.1	-0.9	-0.9
Jun	0.9	1.2	0.9	0.2	1.3
May	0.0	-1.2	-0.5	3.8	-0.7
Apr	0.0	1.1	-0.1	-2.2	0.1
Mar	0.5	0.4	-0.2	2.6	0.7
Feb	-0.3	-0.5	0.1	-0.9	-0.3
Jan	-1.4	-0.6	-0.6	-5.0	-1.1
Dec 2013	-0.2	0.1	0.8	-3.2	0.6
Nov	1.4	-0.5	0.5	7.2	0.2
Oct	-0.1	1.5	0.0	-3.4	0.6
Sep	0.3	-0.3	1.1	-0.4	0.2
Aug	-0.6	-0.3	-0.2	-1.9	-0.5
Jul	0.7	0.8	0.3	1.5	1.0
Jun	-1.5	-1.1	0.3	-6.1	-1.1
May	0.8	2.2	0.1	0.0	1.2
Apr	-0.6	-3.0	0.8	1.1	-0.5
Mar	0.7	1.6	-0.9	2.6	0.4
Feb	-0.1	-0.1	-1.1	2.0	-0.6
Jan	0.9	1.0	0.1	2.7	0.3
Dec 2012	-0.7	-0.2	0.5	-4.5	-0.2
Nov	-0.3	-0.5	-1.0	1.6	-0.7
Oct	0.2	-0.5	0.1	1.7	0.1
Sep	0.1	-0.5	0.4	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	0.7	0.2
May	0.1	-0.2	2.0	-3.8	1.2
Apr	0.2	0.0	-3.5	10.2	-1.8
Mar	-3.0	-1.9	1.3	-14.5	-0.7
Feb	2.4	1.3	-0.8	12.8	0.7
Jan	1.0	1.0	0.3	2.9	0.8
Dec 2011	-0.9	-1.1	-0.7	-1.2	-1.1
Nov	-0.2	0.3	0.2	-2.3	0.0
Oct	-0.2	-0.8	0.4	-0.4	-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	0.5	-0.2
Jun	0.6	-0.1	0.3	3.0	0.4
May	0.0	-0.5	-0.5	2.6	-0.7
Apr	-2.3	0.3	-3.1	-5.8	-1.9
Mar	-0.9	-0.4	-1.1	-1.7	-1.1
Feb	0.6	0.7	1.6	-2.0	1.2
Jan	-0.3	-0.7	1.7	-4.6	0.7
Dec 2010	0.6	0.6	-0.6	3.8	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=20150130

Chart VF-1 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 Dec 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-1, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion, Seasonally and Working Day Adjusted, Jan 1980 to Dec 2014

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=19&date=20150130

Chart VF-2 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-Dec 2014.

Chart VF-2, 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=20150130

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^®), decreased from 49.0 in Nov to 48.4 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/adfcb225d48e4463913877323a4b6df6). New export orders continued to increase. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds fragile conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/adfcb225d48e4463913877323a4b6df6). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Dec month ∆%: 0.0 Dec 12-month ∆%: 0.0 Blog 1/18/15
Producer Price Index	Dec month ∆%: -0.8 Dec 12-month ∆%: -2.1 Blog 2/1/15
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	Dec 2014 Participation rate 64.2% Employment ratio 55.7% Unemployment rate 12.9% Youth Unemployment 42.0% Blog 2/1/15
Industrial Production	Nov month ∆%: 0.3 12 months CA ∆%: -1.8 Blog 1/18/15
Retail Sales	Nov month ∆%: 0.1 Nov 12-month ∆%: -2.3 Blog 1/25/15
Business Confidence	Mfg Jan 97.1, Sep 95.5 Construction Jan 77.3, Sep 75.3 Blog 2/1/15
Trade Balance	Balance Nov SA €3591 million versus Oct €3934 Exports Nov month SA ∆%: minus 1.1; Imports month ∆%: -0.1 Exports 12 months Nov NSA ∆%: 1.7 Imports 12 months NSA ∆%: 0.0 Blog 1/25/15

Links to blog comments in Table IT:

1/25/15 http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.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

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

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.3 percent in Dec 2006 to 12.9 percent in Dec 2014. The rate of youth unemployment for ages 15 to 24 years increased from 20.7 percent in Dec 2006 to 42.0 percent in Dec 2014. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %	Unemployment Rate 15-24 Years %
Dec 2014	64.2	55.7	12.9	42.0
Nov	64.2	55.5	13.3	43.0
Oct	64.3	55.6	13.3	42.8
Sep	64.2	55.8	13.0	42.4
Aug	64.0	55.7	12.8	43.4
Jul	64.0	55.7	12.8	42.5
Jun	63.8	55.7	12.5	43.3
May	63.7	55.6	12.6	42.2
Apr	63.5	55.4	12.5	43.3
Mar	63.8	55.7	12.6	42.6
Feb	63.7	55.5	12.7	42.3
Jan	63.7	55.5	12.7	42.3
Dec 2013	63.6	55.4	12.6	41.8
Nov	63.6	55.5	12.5	41.5
Oct	63.3	55.4	12.2	41.3
Sep	63.3	55.3	12.4	41.3
Aug	63.6	55.6	12.4	40.7
Jul	63.4	55.6	12.1	40.0
Jun	63.4	55.5	12.3	39.1
May	63.5	55.6	12.3	39.0
Apr	63.6	55.8	12.1	39.5
Mar	63.4	55.8	11.9	39.1
Feb	63.6	56.0	11.8	38.5
Jan	63.6	56.0	11.8	38.3
Dec 2012	63.7	56.3	11.5	37.3
Nov	63.7	56.4	11.3	37.4
Oct	63.9	56.5	11.4	36.6
Sep	63.7	56.6	10.9	36.0
Aug	63.6	56.7	10.7	34.5
Jul	63.8	56.7	10.8	35.4
Jun	63.8	56.8	10.9	34.9
May	63.7	56.9	10.5	35.6
Apr	63.8	57.0	10.7	34.6
Mar	63.6	56.8	10.5	35.2
Feb	63.5	57.0	10.2	34.7
Jan	63.1	57.1	9.5	31.1
Dec 2011	63.0	57.0	9.4	31.7
Nov	62.7	56.8	9.3	32.0
Oct	62.5	56.9	8.8	30.8
Sep	62.4	56.8	8.9	30.3
Aug	62.4	57.0	8.5	29.3
Jul	62.3	57.0	8.3	28.7
Jun	62.1	57.0	8.1	27.8
May	62.1	57.0	8.1	27.8
Apr	61.8	56.9	7.8	27.3
Mar	62.0	57.1	7.8	27.6
Feb	61.7	56.8	7.8	26.8
Jan	61.9	56.8	8.1	29.2
Dec 2010	62.1	57.0	8.2	28.8
Dec 2009	62.4	57.1	8.4	26.6
Dec 2008	62.5	58.1	6.8	23.3
Dec 2007	63.1	58.9	6.6	21.7
Dec 2006	62.6	58.6	6.3	20.7
Dec 2005	62.6	57.8	7.5	23.3
Dec 2004	62.5	57.5	7.9	23.6

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/146961

Table VG-2 provides more detail on the labor report for Italy in Dec 2014. The level of employment decreased 93,000 from Nov 2014 to Dec 2014 and increased 109,000 from Dec 2013 to Dec 2014. Unemployment decreased 109,000 in Dec 2014 and increased 95,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 42.0 percent in Dec 2014 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

Dec 2014	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22,422	93	0.4	109	0.5
UNE	3,322	-109	-3.2	95	2.9
INA   15-64	14,106	28	0.2	-270	-1.9
EMP 15-24	918	-7	-0.7	-34	-3.6
UNE 15-24	664	-33	-4.7	-21	-3.1
INA 15-24	4,382	37	0.9	17	0.4
EMP %	55.7		0.2		0.3
UNE %	12.9		-0.4		0.3
Youth UNE %  15-24	42.0		-1.0		0.1
INA % 15-64	35.8		0.1		-0.6

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

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/146961

Chart VG-1 provides the rate of unemployment in Italy that increased from 12.6 percent in Dec 2013 to 12.9 percent in Dec 2014.

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment increased from 22.313 million in Dec 2013 to 22.422 million in Dec 2014.

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

Source: Istituto Nazionale di Statistica

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

Italy’s index of business confidence in manufacturing and construction is provided in Table VG-3. There has been oscillation of manufacturing confidence below the historical average of 100 from 95.5 in Sep 2014 to 97.3 in Dec 2014 with increase to 97.1 in Jan 2015. Order books improved from minus 26 in Aug 2014 to minus 24 in Nov 2014 with improvement to minus 24 in Jan 2015. There is deterioration in construction with the index moving from 75.3 in Sep 2014 to 72.6 in Dec 2014, improving to 77.3 in Jan 2015.

Table VG-3, Italy, Index of Business Confidence in Manufacturing and Construction 2005=100

	Jan      2015	Dec 2014	Nov     2014	Oct    2014	Sep     2014
Mfg Confidence	97.1	97.3	96.4	96.2	95.5
Order Books	-24	-24	-25	-24	-26
Stocks Finished Products	1	2	2	3	3
Production Expectation	3	4	3	3	2
Construction Confidence	77.3	72.6	74.0	77.4	75.3
Order Books	-53	-53	-49	-50	-49
Employment	-17	-27	-28	-21	-23

Mfg: manufacturing

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/146727

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 and 2.6 percent in 2014. 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 from 2010 to 2014 has been only at 1.7 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2014 higher by 3.7 percent relative to 2007 while it would have been 22.2 higher at trend of 2.9 percent as from 2000 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
2014	2.6
Average Growth Rates ∆% per Year
1948-2014	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
2007-2013*	1.1
2007-2014*	3.7
2000-2014	1.7

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

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/index.html

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 56.2 in Oct to 58.6 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5ca3e98654d444d8c2026c74987e333). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.7 percent in IVQ2014 and 3.0 percent in 2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/c5ca3e98654d444d8c2026c74987e333). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) decreased to 52.5 in Dec from 53.3 in Nov (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d01268bff024ebe82c225f3023f5c87). New export orders stabilized in Dec with restrained global markets and strong UK currency with increases in business from North America and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions are strong but slowing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4d01268bff024ebe82c225f3023f5c87

Table UK, UK Economic Indicators

CPI	Dec month ∆%: 0.0 Dec 12-month ∆%: 0.5 Blog 1/18/15
Output/Input Prices	Output Prices: Dec 12-month NSA ∆%: -0.8; excluding food, petroleum ∆%: 0.8 Input Prices: Dec 12-month NSA ∆%: -10.7 Excluding ∆%: -1.9 Blog 1/18/15
GDP Growth	IVQ2014 prior quarter ∆% 0.5; year earlier same quarter ∆%: 2.7 Blog 3/31/13 4/28/13 5/26/13 7/28/13 8/25/13 9/29/13 10/27/13 12/1/13 12/22/13 2/2/14 3/2/14 4/6/14 5/4/14 5/25/14 6/29/14 7/27/14 8/17/14 10/5/14 10/26/14 11/30/14 12/28/14 2/1/15
Industrial Production	Nov 2014/Nov 2013 ∆%: Production Industries 1.1; Manufacturing 2.7 Blog 1/18/15
Retail Sales	Dec month ∆%: 0.4 Dec 12-month ∆%: 4.3 Blog 2/1/15
Labor Market	Sep-Nov Unemployment Rate: 5.8%; Claimant Count 2.6%; Earnings Growth 1.7% Blog 1/25/15 LMGDP 11/16/14
GDP and the Labor Market	IIIQ2014 Weekly Hours 103.4, GDP 103.3, Employment 103.7 IQ2008 =100 GDP IIIQ14 103.3 IQ2008=100 Blog 11/16/14
Trade Balance	Balance SA Aug minus ₤1406 million Exports Nov ∆%: -0.4; Sep-Nov ∆%: -0.5 Imports Nov ∆%: -2.3 Sep-Nov ∆%: -4.7 Blog 1/18/15

Links to blog comments in Table UK:

1/25/15 http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html

1/18/15 http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html

12/28/14 http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.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

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

10/5/14 http://cmpassocregulationblog.blogspot.com/2014/10/world-financial-turbulence-twenty-seven.html

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Table VH-1 provides quarter on quarter chained value measures of GDP since 1998 in the first estimate for IVQ2014 (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/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 0.5 percent in IVQ2014 relative to IIIQ2014. 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 IVQ2014 is higher by 3.4 percent relative to the peak in IQ2008 (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/stb-gdp-preliminary-estimate--q4-2014.html). UK GDP in chained value measures is ₤414,424 million in IQ2008 and ₤428,514 million in IVQ2014 or increase of 3.4 percent. Growth at trend of 2.9 percent per year would bring GDP to ₤502,630 million in 2014. UK GDP in IVQ2014 at ₤428,514 million is lower by ₤74,166 million relative to trend at ₤502,630 million or lower by 14.7 percent compared with trend. The UK Office for National Statistics estimates the contraction of 6.0 percent from peak to trough (http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/stb-gdp-preliminary-estimate--q4-2014.html), which is roughly equal at 6.1 percent to compounding the quarterly rates except for rounding in Table VH-1 from IIQ2008 to IIQ2009. UK GDP is ₤414,424 million in IQ2008 declining 6.0 percent to ₤389,388 million in IIQ2009.

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	0.5
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/gva/gross-domestic-product--preliminary-estimate/q4-2014/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. In IVQ2014, GDP increased 0.5 percent and 2.7 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	2.7
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/gva/gross-domestic-product--preliminary-estimate/q4-2014/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 2014 while manufacturing fell 1.3 percent in 2012 and 0.7 percent in 2013. Manufacturing resumed growth with 2.5 percent in 2014.

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

	TP	MFG	CONS	SERV	GDP Market Prices	GVA EX
2011 Weights	146	101	64	784	1000
2010	3.1	4.7	8.5	1.4	1.9	2.3
2011	-0.8	1.8	2.2	2.1	1.6	2.2
2012	-2.7	-1.3	-7.5	2.0	0.7	1.0
2013	-0.5	-0.7	1.4	1.9	1.7	1.7
2014	1.5	2.5	6.0	3.0	2.6	2.6

TP: Total Production; MFG: Manufacturing; CONS: Construction; SERV: Services; GVA EX: GVA Excluding Oil and Gas

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/index.html

Percentage changes of gross value added and components in a quarter relative to prior quarter are in Table VH-4B. Gross value added increased 0.5 percent in IVQ2014 relative to IIIQ2014. Services increased 0.8 percent in IVQ2014. Production decreased 0.1 percent with manufacturing increasing 0.1 percent.

Table VH-4B, UK, Gross Value Added by Components, ∆% on Previous Quarter

		TP	MFG	CONS	SERV	GDP Market Prices	GVA EX
2011 Weights		146	101	64	784	1000	981
2011	Q2	-1.2	0.2	0.4	0.5	0.2	0.5
	Q3	-0.4	-0.4	-0.3	1.1	0.7	0.8
	Q4	-0.5	-0.4	-1.4	0.2	-	-
2012	Q1	-0.8	0.1	-3.5	0.6	0.1	0.2
	Q2	-0.9	-1.2	-3.5	0.1	-0.2	-0.2
	Q3	0.1	0.5	-1.1	1.0	0.8	0.8
	Q4	-2.0	-1.4	0.3	-0.2	-0.3	-0.3
2013	Q1	0.1	-0.3	-0.7	0.7	0.6	0.6
	Q2	0.7	0.5	2.4	0.5	0.6	0.6
	Q3	0.8	0.5	3.0	0.6	0.7	0.6
	Q4	0.3	0.6	0.3	0.6	0.4	0.4
2014	Q1	0.4	1.1	2.0	0.8	0.6	0.6
	Q2	0.2	0.5	1.7	1.0	0.8	0.8
	Q3	0.2	0.3	1.6	0.8	0.7	0.8
	Q4	-0.1	0.1	-1.8	0.8	0.5	0.5

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q4-2014/index.html

The volume of retail sales in the UK increased 0.4 percent in Dec 2014 and increased 4.3 percent in the 12 months ending in Dec 2014, as shown in Table VH-5. Percentage changes of retail sales in 12 months had been positive in several months since Sep 2011 with exceptions, such as declines of 2.5 percent in Apr 2012 and 1.0 percent in Mar 2013. The quarter ending in Jul 2013 is quite strong with growth of 2.4 percent in May, 0.4 percent in Jun and 0.8 percent in Jul, interrupted by decline of 0.7 percent in Aug 2013 followed by increase of 1.0 percent in Sep 2013. The volume of retail sales fell 1.1 percent in Oct 2013, decreasing 0.2 percent in Nov 2013 and jumping 2.4 percent in Dec 2013. Retail sales decreased 1.8 percent in Jan 2014 and increased 0.8 percent in Apr 2014. Retail sales increased 4.3 percent in the 12 months ending in Dec 2014.

Table VH-5, UK, Volume of Retail Sales ∆%

2012	Feb	-1.1	0.2
	Mar	1.9	2.4
	Apr	-2.5	-2.2
	May	1.3	1.3
	Jun	0.3	1.6
	Jul	0.2	1.4
	Aug	0.1	1.9
	Sep	0.3	1.8
	Oct	-0.7	0.1
	Nov	-0.2	0.1
	Dec	-0.7	-0.3
2013	Jan	-0.2	-1.3
	Feb	1.9	1.7
	Mar	-1.0	-1.2
	Apr	-0.8	0.5
	May	2.4	1.5
	Jun	0.4	1.6
	Jul	0.8	2.3
	Aug	-0.7	1.4
	Sep	1.0	2.1
	Oct	-1.1	1.7
	Nov	-0.2	1.8
	Dec	2.4	4.9
2014	Jan	-1.8	3.3
	Feb	1.5	2.8
	Mar	0.4	4.3
	Apr	0.8	6.0
	May	-	3.5
	Jun	0.2	3.3
	Jul	-	2.5
	Aug	0.4	3.7
	Sep	-0.3	2.3
	Oct	1.1	4.5
	Nov	1.6	6.4
	Dec	0.4	4.3

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/december-2014/index.html

Retail sales in the UK struggle with oscillating and relatively high inflation, declining recently. Table VH-6 provides 12-month percentage changes of the implied deflator of UK retail sales. The implied deflator of all retail sales declined 2.2 percent in the 12 months ending in Dec 2014 while that of sales excluding auto fuel decreased 1.5 percent. The 12-month increase of the implied deflator of auto fuel in Dec 2014 was minus 9.7 percent. The 12-month increase of the implied deflator of auto fuel sales rose to 17.1 percent in Sep 2011, which is the highest 12-month increase in 2011, but then declined to 0.3 percent in Dec 2012 and minus 0.2 percent in Jan 2013. The 12-month implied deflator of auto fuel sales decreased 2.3 percent in May 2013, increasing 1.3 percent in Jun 2013 and 2.6 percent in Jul 2013. The percentage change of the implied deflator of sales of food stores at 2.3 percent in Dec 2013 is higher than for total retail sales of 0.7 percent. Increases in fuel prices at the retail level have occurred throughout most years since 2005 with exception of the decline of 9.7 percent in Dec 2008 when commodity carry trades were reversed in the panic of the financial crisis. UK inflation is particularly sensitive to changes in commodity prices.

Table VH-6, UK, Implied Deflator of Retail Sales, 12-Month Percentage Changes

		All Retail	All Retail ex Auto Fuel	Mostly Food Stores	Mostly Nonfood Stores	Mostly Automotive Fuel Stores
2009	Jan	-0.1	1.7	7.3	-2.8	-13.5
	Feb	1.1	2.7	8.4	-2.0	-11.1
	Mar	0.7	2.5	7.9	-1.9	-12.5
	Apr	0.2	1.8	6.2	-1.8	-11.2
	May	-	1.6	5.7	-1.8	-12.5
	Jun	-1.0	0.7	4.3	-2.3	-13.3
	Jul	-1.4	0.4	3.5	-2.3	-13.7
	Aug	-0.9	0.2	2.3	-1.7	-9.0
	Sep	-0.7	0.1	1.9	-1.4	-5.9
	Oct	0.3	0.6	2.5	-1.1	-0.8
	Nov	1.5	0.6	1.8	-0.7	10.1
	Dec	3.8	2.5	2.2	2.0	17.0
2010	Jan	4.2	2.1	2.7	1.4	23.4
	Feb	3.1	1.1	1.6	0.9	20.6
	Mar	3.7	1.6	2.3	1.0	22.8
	Apr	4.2	2.1	3.0	1.5	23.4
	May	3.5	1.6	2.1	1.3	21.0
	Jun	2.7	1.4	2.2	0.9	14.8
	Jul	2.8	1.7	3.0	0.6	13.5
	Aug	2.7	1.8	3.5	0.5	11.4
	Sep	3.2	2.7	4.4	1.4	8.4
	Oct	3.4	2.6	4.2	1.2	10.8
	Nov	3.7	3.1	5.0	1.5	9.8
	Dec	3.7	3.3	5.3	1.5	12.5
2011	Jan	4.3	3.3	5.5	1.5	14.5
	Feb	4.9	3.9	5.6	2.3	15.1
	Mar	4.3	3.1	4.4	2.0	15.0
	Apr	4.2	3.4	4.9	2.0	12.3
	May	4.7	3.6	5.7	1.9	13.2
	Jun	4.8	3.6	6.3	1.4	14.6
	Jul	5.3	4.1	6.1	2.4	14.6
	Aug	5.6	4.2	6.1	2.7	16.3
	Sep	5.4	3.9	6.3	2.0	17.1
	Oct	5.1	3.8	5.2	2.7	14.8
	Nov	4.4	3.3	4.8	2.1	12.7
	Dec	3.7	2.7	4.4	1.4	9.1
2012	Jan	3.0	2.6	3.6	1.7	5.3
	Feb	3.0	2.6	4.1	1.3	5.4
	Mar	3.1	2.9	4.6	1.4	4.9
	Apr	2.6	2.2	3.8	0.8	5.2
	May	1.6	1.7	3.2	0.5	1.2
	Jun	0.7	1.0	2.3	-	-1.2
	Jul	0.6	0.9	2.1	-	-1.4
	Aug	0.6	0.7	2.2	-0.5	0.3
	Sep	1.0	0.9	2.1	-0.1	2.9
	Oct	1.3	1.2	2.9	-0.2	2.6
	Nov	1.1	1.1	3.2	-0.6	1.3
	Dec	1.5	1.4	3.1	0.1	0.3
2013	Jan	1.3	1.5	3.8	-0.6	-0.2
	Feb	1.2	1.2	3.3	-0.6	1.1
	Mar	1.1	1.3	3.1	-0.5	0.5
	Apr	0.7	1.2	3.5	-0.7	-3.0
	May	1.1	1.6	3.6	-0.2	-2.3
	Jun	1.8	1.8	3.4	0.6	1.3
	Jul	1.9	1.8	3.5	0.3	2.6
	Aug	1.7	1.7	3.5	0.3	1.5
	Sep	1.1	1.4	3.4	-0.2	-1.2
	Oct	0.8	1.4	3.4	-0.2	-3.5
	Nov	0.7	1.1	2.7	-0.1	-3.0
	Dec	0.7	0.8	2.3	-0.1	-1.0
2014	Jan	0.4	0.6	1.8	-0.3	-1.4
	Feb	-	0.6	1.7	-0.3	-4.5
	Mar	-0.3	0.4	1.9	-0.5	-5.9
	Apr	-0.3	0.2	1.0	-0.4	-4.4
	May	-0.4	-0.2	0.4	-0.6	-2.2
	Jun	0.1	0.5	0.9	0.3	-2.5
	Jul	-0.7	-0.4	0.2	-0.6	-2.5
	Aug	-1.0	-0.4	-	-0.5	-5.1
	Sep	-1.4	-0.9	-0.3	-1.2	-5.4
	Oct	-1.5	-1.2	-0.4	-1.7	-4.3
	Nov	-2.0	-1.7	-1.0	-1.8	-5.3
	Dec	-2.2	-1.5	-0.9	-1.6	-9.7

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/december-2014/index.html

UK monthly retail volume of sales is quite volatile, as shown in Table VH-7. Total volume of sales decreased 0.8 percent in Apr 2013 and increased 2.4 percent in May 2013, 0.4 percent in Jun 2013 and 0.8 percent in Jul 2013 but declined 0.7 percent in Aug 2013. Retail sales increased 1.0 percent in Sep 2013 and fell 1.1 percent in Oct 2013. Retail sales decreased 0.2 percent in Nov 2013 and increased 2.4 percent in Dec 2013. Total volume of retail sales fell 1.8 percent in Jan 2014 and increased 1.5 percent in Feb 2014. Total volume of retail sales increased 0.4 percent in Mar 2014 and 0.8 percent in Apr 2014. Retail sales changed 0.0 percent in May 2014. Retail sales increased 0.2 percent in Jun 2014 and changed 0.0 percent in Jul 2014. Retail sales increased 0.4 percent in Aug 2014. There was increase of 0.2 percent in retail sales excluding auto fuels in Dec 2014 and increase of 1.3 percent in food stores, decrease of 0.6 percent in nonfood stores and increase of 2.4 percent in auto fuel stores. Multiple positive and negative variations and changes in magnitudes confirm high volatility.

Table VH-7, UK, Growth of Retail Sales Volume by Component Groups Month SA ∆%

		All Retail	All Retail ex Auto Fuel	Mostly Food Stores	Mostly Nonfood Stores	Mostly Automotive Fuel Stores
2012	Feb	-1.1	-0.9	-0.5	-1.1	-2.9
	Mar	1.9	1.4	-0.5	3.2	5.6
	Apr	-2.5	-1.1	-0.5	-2.1	-12.4
	May	1.3	0.9	0.8	0.9	5.3
	Jun	0.3	0.7	0.1	1.5	-3.0
	Jul	0.2	-0.1	-0.1	-0.8	2.6
	Aug	0.1	0.1	0.6	0.6	0.5
	Sep	0.3	0.1	-0.2	-0.3	1.8
	Oct	-0.7	-0.4	-0.8	-0.4	-3.0
	Nov	-0.2	-0.1	-0.3	0.2	-1.6
	Dec	-0.7	-0.9	-0.4	-1.7	0.8
2013	Jan	-0.2	-	-0.2	-0.4	-1.8
	Feb	1.9	1.9	0.3	3.7	1.9
	Mar	-1.0	-1.1	1.8	-4.7	-0.5
	Apr	-0.8	-1.0	-5.0	3.8	0.3
	May	2.4	2.5	4.2	0.6	1.5
	Jun	0.4	0.5	0.1	0.8	-0.6
	Jul	0.8	0.7	2.5	-1.2	1.4
	Aug	-0.7	-0.7	-2.2	-	-0.9
	Sep	1.0	1.2	-0.3	3.5	-0.3
	Oct	-1.1	-0.9	-0.2	-2.0	-2.6
	Nov	-0.2	-0.2	0.1	-0.4	-
	Dec	2.4	2.7	2.0	3.0	-0.2
2014	Jan	-1.8	-1.9	-3.0	-0.1	-1.0
	Feb	1.5	1.5	1.8	-0.1	1.5
	Mar	0.4	-0.2	-1.5	1.4	5.4
	Apr	0.8	1.5	2.6	-0.2	-4.7
	May	-	0.1	-1.1	1.0	-0.8
	Jun	0.2	-0.2	0.1	-0.2	3.9
	Jul	-	0.4	0.1	1.0	-3.0
	Aug	0.4	0.4	-0.6	1.6	0.7
	Sep	-0.3	-0.3	0.4	-1.7	-0.6
	Oct	1.1	1.1	0.5	2.0	1.0
	Nov	1.6	1.7	0.4	2.5	0.7
	Dec	0.4	0.2	1.3	-0.6	2.4

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/december-2014/index.html

Percentage growth in 12 months of retail sales volume by component groups in the UK is provided in Table VH-8. Total retail sales increased 4.3 percent in the 12 months ending in Dec 2014 with increase of 4.2 percent in sales excluding auto fuel. Sales of food stores increased 0.8 percent in the 12 months ending in Dec 2014 while sales of nonfood stores increased 6.7 percent. Sales of auto fuel stores increased 5.2 percent in Dec 2014 relative to a year earlier.

Table VH-8, UK, Growth of Retail Sales Volume by Component Groups 12-Month ∆%

		All Retail	All Retail ex Auto Fuel	Mostly Food Stores	Mostly Nonfood Stores	Mostly Automotive Fuel Stores
2012	Feb	0.2	0.1	0.9	-1.6	0.9
	Mar	2.4	1.8	-0.3	2.6	7.5
	Apr	-2.2	-1.5	-3.7	-1.0	-7.5
	May	1.3	1.8	0.9	1.4	-2.3
	Jun	1.6	2.5	1.3	3.1	-5.2
	Jul	1.4	2.0	0.4	2.1	-2.5
	Aug	1.9	2.3	0.8	3.7	-1.6
	Sep	1.8	2.2	0.6	2.9	-0.7
	Oct	0.1	0.7	-1.1	1.2	-4.8
	Nov	0.1	1.4	-0.9	2.8	-9.2
	Dec	-0.3	0.5	-1.0	0.5	-6.5
2013	Jan	-1.3	-0.3	-2.0	-0.5	-9.1
	Feb	1.7	2.6	-1.3	4.4	-4.6
	Mar	-1.2	-	1.0	-3.6	-10.1
	Apr	0.5	0.2	-3.6	2.2	3.0
	May	1.5	1.8	-0.4	1.9	-0.7
	Jun	1.6	1.6	-0.4	1.2	1.8
	Jul	2.3	2.5	2.2	0.8	0.6
	Aug	1.4	1.7	-0.6	0.3	-0.8
	Sep	2.1	2.7	-0.7	4.1	-2.9
	Oct	1.7	2.2	-0.1	2.4	-2.4
	Nov	1.8	2.1	0.3	1.8	-0.8
	Dec	4.9	5.8	2.7	6.6	-1.8
2014	Jan	3.3	3.8	-0.1	7.0	-0.9
	Feb	2.8	3.3	1.4	3.0	-1.3
	Mar	4.3	4.2	-1.9	9.6	4.5
	Apr	6.0	6.8	6.0	5.3	-0.7
	May	3.5	4.3	0.6	5.8	-3.0
	Jun	3.3	3.5	0.6	4.7	1.3
	Jul	2.5	3.2	-1.8	7.0	-3.1
	Aug	3.7	4.3	-0.2	8.7	-1.6
	Sep	2.3	2.8	0.5	3.3	-1.8
	Oct	4.5	4.8	1.1	7.4	1.9
	Nov	6.4	6.8	1.5	10.6	2.6
	Dec	4.3	4.2	0.8	6.7	5.2

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/december-2014/index.html

Table VH-9 provides the analysis of the UK Office for National Statistics of contributions to 12-month percentage changes of value and volume of retail sales in the UK. The volume of retail sales seasonally adjusted increased 4.3 percent in the 12 months ending in Dec 2014. Sales of predominantly food stores with weight of 41.6 percent increased 0.8 percent in the 12 months ending in Dec 2014, adding 0.3 percentage points. Mostly nonfood stores with weight of 41.0 percent increased 6.7percent with contribution of 2.8 percentage points. Positive contribution to 12-month percentage changes of volume was made by non-store retailing with weight of 6.5 percent, growth of 8.2 percent and positive contribution of 0.6 percentage points. Automotive fuel with weight of 10.9 percent and growth of 5.2 percent added 0.6 percentage points. The value of retail sales increased 1.9 percent in the 12 months ending in Dec 2014. There were positive contributions: 2.2 percentage points for predominantly nonfood stores and 0.4 percentage points for non-store retailing. Automotive fuel stores deducted 0.5 percentage points while food stores subtracted 0.2 percentage points.

Table VH-9, UK, Volume and Value of Retail Sales 12-month ∆% and Percentage Points Contributions by Sectors

Dec 2014	Weight % of All Retailing	Volume SA 12- Month ∆%	PP Cont. % points	Value SA 12- Month ∆%	PP Cont. % points
All Retailing	100.0	4.3		1.9
Mostly Food Stores	41.6	0.8	0.3	-0.6	-0.2
Mostly Nonfood Stores	41.0	6.7	2.8	5.2	2.2
Non-store Retailing	6.5	8.2	0.6	6.6	0.4
Automotive Fuel	10.9	5.2	0.6	-4.8	-0.5

Cont.: Contribution

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/rsi/retail-sales/november-2014/index.html

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015.