Job Creation and Monetary Policy, Twenty Eight Million Unemployed or Underemployed, Stagnating Real Wages, Rules, Discretionary Authorities and Slow Productivity Growth, Stagnating Real Disposable Income per Capita, United States International Trade, World Cyclical Slow Growth and Global Recession Risk: Part V

 

Job Creation and Monetary Policy, Twenty Eight Million Unemployed or Underemployed, Stagnating Real Wages, Rules, Discretionary Authorities and Slow Productivity Growth, Stagnating Real Disposable Income per Capita, United States International Trade, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Twenty Eight Million Unemployed or Underemployed

IA1 Summary of the Employment Situation

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

IB Stagnating Real Wages

II Stagnating Real Disposable Income and Consumption Expenditures

IB1 Stagnating Real Disposable Income and Consumption Expenditures

IB2 Financial Repression

IIA Rules, Discretionary Authorities and Slow Productivity Growth

IIB United States International Trade

III World Financial Turbulence

IIIA Financial Risks

IIIE Appendix Euro Zone Survival Risk

IIIF Appendix on Sovereign Bond Valuation

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

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

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IIIGA Monetary Policy with Deficit Financing of Economic Growth

IIIGB Adjustment during the Debt Crisis of the 1980s

V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (http://www.imf.org/external/ns/cs.aspx?id=28) to show GDP in dollars in 2012 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2016. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. The IMF has changed its forecast of the world economy to 3.3 percent in 2013 but accelerating to 3.3 percent in 2014, 3.8 percent in 2015 and 4.0 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,523 billion of world output of $72,688 billion, or 47.5 percent, but are projected to grow at much lower rates than world output, 1.9 percent on average from 2013 to 2016 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.2 percent in the four years from 2013 to 2016, the G7 as a whole would grow 8.5 percent. The difference in dollars of 2012 is rather high: growing by 15.2 percent would add around $11.0 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $5,938 billion but growing by 8.0 percent would add $5.8 trillion of output to the world, or about the output of Japan in 2012. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE) with joint output in 2012 of $27,512 billion, or 37.8 percent of world output. The EMDEs would grow cumulatively 20.7 percent or at the average yearly rate of 4.8 percent, contributing $5.7 trillion from 2013 to 2016 or the equivalent of somewhat less than the GDP of $8,387 billion of China in 2012. The final four countries in Table V-1 often referred as BRIC (Brazil, Russia, India, China), are large, rapidly growing emerging economies. Their combined output in 2012 adds to $14,511 billion, or 19.9 percent of world output, which is equivalent to 42.0 percent of the combined output of the major advanced economies of the G7.

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

	GDP USD 2012	Real GDP ∆% 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016
World	72,688	3.3	3.3	3.8	4.0
G7	34,523	1.5	1.7	2.3	2.3
Canada	1,709	2.0	2.3	2.4	2.4
France	2,688	0.3	0.4	1.0	1.6
DE	3,428	0.5	1.4	1.5	1.8
Italy	2,014	-1.9	-0.2	0.9	1.3
Japan	5,938	1.5	0.9	0.8	0.8
UK	2,471	1.7	3.2	2.7	2.4
US	16,163	2.2	2.2	3.1	3.0
Euro Area	12,220	-0.4	0.8	1.3	1.7
DE	3,428	0.5	1.4	1.5	1.8
France	2,688	0.3	0.4	1.0	1.6
Italy	2,014	-1.9	-0.2	0.9	1.3
POT	212	-1.4	1.0	1.5	1.7
Ireland	211	-0.3	1.7	2.5	2.5
Greece	249	-3.9	0.6	2.9	3.7
Spain	1,323	-1.2	1.3	1.7	1.8
EMDE	27,512	4.7	4.4	5.0	5.2
Brazil	2,248	2.5	0.3	1.4	2.2
Russia	2,017	1.3	0.2	0.5	1.5
India	1,859	5.0	5.6	6.4	6.5
China	8,387	7.7	7.4	7.1	6.8

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

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

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/ns/cs.aspx?id=28). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2012 to 2016 for major countries and regions. In fact, unemployment rates for 2013 in Table I-2 are high for all countries: unusually high for countries with high rates most of the time and unusually high for countries with low rates most of the time. The rates of unemployment are particularly high in 2013 for the countries with sovereign debt difficulties in Europe: 16.2 percent for Portugal (POT), 13.0 percent for Ireland, 27.3 percent for Greece, 26.1 percent for Spain and 12.2 percent for Italy, which is lower but still high. The G7 rate of unemployment is 7.1 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.

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

	% Labor Force 2012	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016
World	NA	NA	NA	NA	NA
G7	7.4	7.1	6.5	6.3	6.1
Canada	7.3	7.1	7.0	6.9	6.8
France	9.8	10.3	10.0	10.0	9.9
DE	5.5	5.3	5.3	5.3	5.3
Italy	10.7	12.2	12.6	12.0	11.3
Japan	4.3	4.0	3.7	3.8	3.8
UK	8.0	7.6	6.3	5.8	5.5
US	8.1	7.4	6.3	5.9	5.8
Euro Area	11.3	11.9	11.6	11.2	10.7
DE	5.5	5.3	5.3	5.3	5.3
France	9.8	10.3	10.0	10.0	9.9
Italy	10.7	12.2	12.6	12.0	11.3
POT	15.5	16.2	14.2	13.5	13.0
Ireland	14.7	13.0	11.2	10.5	10.1
Greece	24.2	27.3	25.8	23.8	20.9
Spain	24.8	26.1	24.6	23.5	22.4
EMDE	NA	NA	NA	NA	NA
Brazil	5.5	5.4	5.5	6.1	5.9
Russia	5.5	5.5	5.6	6.5	6.0
India	NA	NA	NA	NA	NA
China	4.1	4.1	4.1	4.1	4.1

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

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

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IIIQ2014 available now for all countries. There are preliminary estimates for all countries for IIIQ2014. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 1.1 percent in IQ2012, 4.6 percent at SAAR (seasonally adjusted annual rate) and 3.5 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.4 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 1.7 percent, which is much lower than 4.6 percent in IQ2012. Growth of 3.5 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.5 percent in IIIQ2012 at the SAAR of minus 2.0 percent and increased 0.2 percent relative to a year earlier. Japan’s GDP decreased 0.2 percent in IVQ2012 at the SAAR of minus 0.9 percent and changed 0.0 percent relative to a year earlier. Japan grew 1.5 percent in IQ2013 at the SAAR of 6.0 percent and increased 0.5 percent relative to a year earlier. Japan’s GDP increased 0.7 percent in IIQ2013 at the SAAR of 3.0 percent and increased 1.4 percent relative to a year earlier. Japan’s GDP grew 0.4 percent in IIIQ2013 at the SAAR of 1.6 percent and increased 2.2 percent relative to a year earlier. In IVQ2013, Japan’s GDP decreased 0.4 percent at the SAAR of minus 1.5 percent, increasing 2.3 percent relative to a year earlier. Japan’s GDP increased 1.4 percent in IQ2014 at the SAAR of 5.8 percent and increased 2.5 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 1.7 percent at the SAAR of minus 6.7 percent and fell 0.3 percent relative to a year earlier. Japan’s GDP contracted 0.5 percent in IIIQ2014 at the SAAR of minus 1.9 percent and fell 1.3 percent relative to a year earlier.
• China. China’s GDP grew 1.4 percent in IQ2012, annualizing to 5.7 percent, and 8.1 percent relative to a year earlier. The GDP of China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent and 7.6 percent relative to a year earlier. China grew at 2.0 percent in IIIQ2012, which annualizes at 8.2 percent and 7.4 percent relative to a year earlier. In IVQ2012, China grew at 1.9 percent, which annualizes at 7.8 percent, and 7.9 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.7 percent, which annualizes at 7.0 percent and 7.8 percent relative to a year earlier. In IIQ2013, China grew at 1.8 percent, which annualizes at 7.4 percent and 7.5 percent relative to a year earlier. China grew at 2.3 percent in IIIQ2013, which annualizes at 9.5 percent and 7.9 percent relative to a year earlier. China grew at 1.8 percent in IVQ2013, which annualized to 7.4 percent and 7.6 percent relative to a year earlier. China’s GDP grew 1.6 percent in IQ2014, which annualizes to 6.6 percent, and 7.4 percent relative to a year earlier. China’s GDP grew 1.9 percent in IIQ2014, which annualizes at 7.8 percent, and 7.5 percent relative to a year earlier. China’s GDP grew 1.9 percent in IIIQ2014, which is equivalent to 7.8 percent in a year, and 7.3 percent relative to a year earlier. The GDP of China grew 1.5 percent in IVQ2014, which annualizes at 6.1 percent, and 7.3 percent relative to a year earlier. There is decennial change in leadership in China (http://www.xinhuanet.com/english/special/18cpcnc/index.htm). Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2014.
• Euro Area. GDP fell 0.1 percent in the euro area in IQ2012 and decreased 0.3 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.3 percent IIQ2012 and fell 0.6 percent relative to a year earlier. In IIIQ2012, euro area GDP fell 0.1 percent and declined 0.8 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.4 percent relative to the prior quarter and fell 0.9 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.4 percent and decreased 1.2 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IIQ2013 and fell 0.6 percent relative to a year earlier. In IIIQ2013, euro area GDP increased 0.2 percent and fell 0.3 percent relative to a year earlier. The GDP of the euro area increased 0.2 percent in IVQ2013 and increased 0.4 percent relative to a year earlier. In IQ2014, the GDP of the euro area increased 0.3 percent and 1.1 percent relative to a year earlier. The GDP of the euro area increased 0.1 percent in IIQ2014 and increased 0.8 percent relative to a year earlier. The euro area’s GDP increased 0.2 percent in IIIQ2014 and increased 0.8 percent relative to a year earlier.
• Germany. The GDP of Germany increased 0.3 percent in IQ2012 and 1.5 percent relative to a year earlier. In IIQ2012, Germany’s GDP increased 0.1 percent and increased 0.3 percent relative to a year earlier but 0.8 percent relative to a year earlier when adjusted for calendar (CA) effects. In IIIQ2012, Germany’s GDP increased 0.1 percent and 0.1 percent relative to a year earlier. Germany’s GDP contracted 0.4 percent in IVQ2012 and decreased 0.3 percent relative to a year earlier. In IQ2013, Germany’s GDP decreased 0.4 percent and fell 1.8 percent relative to a year earlier. In IIQ2013, Germany’s GDP increased 0.8 percent and 0.5 percent relative to a year earlier. The GDP of Germany increased 0.3 percent in IIIQ2013 and 0.8 percent relative to a year earlier. In IVQ2013, Germany’s GDP increased 0.4 percent and 1.0 percent relative to a year earlier. The GDP of Germany increased 0.8 percent in IQ2014 and 2.6 percent relative to a year earlier. In IIQ2014, Germany’s GDP contracted 0.1 percent and increased 1.0 percent relative to a year earlier. The GDP of Germany increased 0.1 percent in IIIQ2014 and increased 1.2 percent relative to a year earlier.
• United States. Growth of US GDP in IQ2012 was 0.6 percent, at SAAR of 2.3 percent and higher by 2.6 percent relative to IQ2011. US GDP increased 0.4 percent in IIQ2012, 1.6 percent at SAAR and 2.3 percent relative to a year earlier. In IIIQ2012, US GDP grew 0.6 percent, 2.5 percent at SAAR and 2.7 percent relative to IIIQ2011. In IVQ2012, US GDP grew 0.0 percent, 0.1 percent at SAAR and 1.6 percent relative to IVQ2011. In IQ2013, US GDP grew at 2.7 percent SAAR, 0.7 percent relative to the prior quarter and 1.7 percent relative to the same quarter in 2013. In IIQ2013, US GDP grew at 1.8 percent in SAAR, 0.4 percent relative to the prior quarter and 1.8 percent relative to IIQ2012. US GDP grew at 4.5 percent in SAAR in IIIQ2013, 1.1 percent relative to the prior quarter and 2.3 percent relative to the same quarter a year earlier (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2014/12/global-financial-and-economic-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/fluctuating-financial-variables.html). In IVQ2013, US GDP grew 0.9 percent at 3.5 percent SAAR and 3.1 percent relative to a year earlier. In IQ2014, US GDP decreased 0.5 percent, increased 1.9 percent relative to a year earlier and fell 2.1 percent at SAAR. In IIQ2014, US GDP increased 1.1 percent at 4.6 percent SAAR and increased 2.6 percent relative to a year earlier. US GDP increased 1.2 percent in IIIQ2014 at 5.0 percent SAAR and increased 2.7 percent relative to a year earlier. In IVQ2014, US GDP increased 0.7 percent at SAAR of 2.6 percent and increased 2.5 percent relative to a year earlier.
• United Kingdom. In IQ2012, UK GDP increased 0.1 percent, increasing 1.0 percent relative to a year earlier. UK GDP fell 0.2 percent in IIQ2012 and increased 0.6 percent relative to a year earlier. UK GDP increased 0.8 percent in IIIQ2012 and increased 0.7 percent relative to a year earlier. UK GDP fell 0.3 percent in IVQ2012 relative to IIIQ2012 and increased 0.4 percent relative to a year earlier. UK GDP increased 0.6 percent in IQ2013 and 0.9 percent relative to a year earlier. UK GDP increased 0.6 percent in IIQ2013 and 1.7 percent relative to a year earlier. In IIIQ2013, UK GDP increased 0.7 percent and 1.6 percent relative to a year earlier. UK GDP increased 0.4 percent in IVQ2013 and 2.4 percent relative to a year earlier. In IQ2014, UK GDP increased 0.6 percent and 2.4 percent relative to a year earlier. UK GDP increased 0.8 percent in IIQ2014 and 2.6 percent relative to a year earlier. In IIIQ2014, UK GDP increased 0.7 percent and increased 2.6 percent relative to a year earlier. UK GDP increased 0.5 percent in IVQ2014 and increased 2.7 percent relative to a year earlier.
• Italy. Italy has experienced decline of GDP in nine consecutive quarters from IIIQ2011 to IIIQ2013 and in IIQ2014 and IIIQ2014. Italy’s GDP fell 0.9 percent in IQ2012 and declined 1.9 percent relative to IQ2011. Italy’s GDP fell 0.4 percent in IIQ2012 and declined 2.4 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.4 percent and declined 2.5 percent relative to a year earlier. The GDP of Italy contracted 0.8 percent in IVQ2012 and fell 2.5 percent relative to a year earlier. In IQ2013, Italy’s GDP contracted 0.9 percent and fell 2.5 percent relative to a year earlier. Italy’s GDP fell 0.2 percent in IIQ2013 and 2.2 percent relative to a year earlier. The GDP of Italy changed 0.0 percent in IIIQ2013 and declined 1.8 percent relative to a year earlier. Italy’s GDP decreased 0.1 percent in IVQ2013 and decreased 1.2 percent relative to a year earlier. In IQ2014, Italy’s GDP changed 0.0 percent and fell 0.3 percent relative to a year earlier. The GDP of Italy fell 0.2 percent in IIQ2014 and declined 0.4 percent relative to a year earlier. In IIIQ2014, Italy’s GDP contracted 0.1 percent and fell 0.5 percent relative to a year earlier.
• France. France’s GDP increased 0.2 percent in IQ2012 and increased 0.6 percent relative to a year earlier. France’s GDP decreased 0.2 percent in IIQ2012 and increased 0.4 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.2 percent and increased 0.4 percent relative to a year earlier. France’s GDP fell 0.2 percent in IVQ2012 and changed 0.0 percent relative to a year earlier. In IQ2013, France’s GDP changed 0.0 percent and declined 0.3 percent relative to a year earlier. The GDP of France increased 0.7 percent in IIQ2013 and 0.7 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIIQ2013 and increased 0.3 percent relative to a year earlier. The GDP of France increased 0.2 percent in IVQ2013 and 0.8 percent relative to a year earlier. In IQ2014, France’s GDP changed 0.0 percent and increased 0.8 percent relative to a year earlier. In IIQ2014, France’s GDP contracted 0.1 percent and changed 0.0 percent relative to a year earlier. France’s GDP increased 0.3 percent in IIIQ2014 and increased 0.4 percent relative to a year earlier.

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

	IQ2012/IVQ2011	IQ2012/IQ2011
United States	QOQ: 0.6        SAAR: 2.3	2.6
Japan	QOQ: 1.1 SAAR: 4.6	3.5
China	1.4	8.1
Euro Area	-0.1	-0.3
Germany	0.3	1.5
France	0.2	0.6
Italy	-0.9	-1.9
United Kingdom	0.1	1.0
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.4         SAAR: 1.6	2.3
Japan	QOQ: -0.4 SAAR: -1.7	3.5
China	2.1	7.6
Euro Area	-0.3	-0.6
Germany	0.1	0.3 0.8 CA
France	-0.2	0.4
Italy	-0.4	-2.4
United Kingdom	-0.2	0.6
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.6  SAAR: 2.5	2.7
Japan	QOQ: –0.5 SAAR: –2.0	0.2
China	2.0	7.4
Euro Area	-0.1	-0.8
Germany	0.1	0.1
France	0.2	0.4
Italy	-0.4	-2.5
United Kingdom	0.8	0.7
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	1.6
Japan	QOQ: -0.2 SAAR: -0.9	0.0
China	1.9	7.9
Euro Area	-0.4	-0.9
Germany	-0.4	-0.3
France	-0.2	0.0
Italy	-0.8	-2.5
United Kingdom	-0.3	0.4
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.7 SAAR: 2.7	1.7
Japan	QOQ: 1.5 SAAR: 6.0	0.5
China	1.7	7.8
Euro Area	-0.4	-1.2
Germany	-0.4	-1.8
France	0.0	-0.3
Italy	-0.9	-2.5
UK	0.6	0.9
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.4 SAAR: 1.8	1.8
Japan	QOQ: 0.7 SAAR: 3.0	1.4
China	1.8	7.5
Euro Area	0.3	-0.6
Germany	0.8	0.5
France	0.7	0.7
Italy	-0.2	-2.2
UK	0.6	1.7
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 1.1 SAAR: 4.5	2.3
Japan	QOQ: 0.4 SAAR: 1.6	2.2
China	2.3	7.9
Euro Area	0.2	-0.3
Germany	0.3	0.8
France	-0.1	0.3
Italy	0.0	-1.8
UK	0.7	1.6
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.9 SAAR: 3.5	3.1
Japan	QOQ: -0.4 SAAR: -1.5	2.3
China	1.8	7.6
Euro Area	0.2	0.4
Germany	0.4	1.0
France	0.2	0.8
Italy	-0.1	-1.2
UK	0.4	2.4
	IQ2014/IVQ2013	IQ2014/IQ2013
USA	QOQ -0.5 SAAR -2.1	1.9
Japan	QOQ: 1.4 SAAR: 5.8	2.5
China	1.6	7.4
Euro Area	0.3	1.1
Germany	0.8	2.6
France	0.0	0.8
Italy	0.0	-0.3
UK	0.6	2.4
	IIQ2014/IQ2014	IIQ2014/IIQ2013
USA	QOQ 1.1 SAAR 4.6	2.6
Japan	QOQ: -1.7 SAAR: -6.7	-0.3
China	1.9	7.5
Euro Area	0.1	0.8
Germany	-0.1	1.0
France	-0.1	0.0
Italy	-0.2	-0.4
UK	0.8	2.6
	IIIQ2014/IIQ2014	IIIQ2014/IIIQ2013
USA	QOQ: 1.2 SAAR: 5.0	2.7
Japan	QOQ: -0.5 SAAR: -1.9	-1.3
China	1.9	7.3
Euro Area	0.2	0.8
Germany	0.1	1.2
France	0.3	0.4
Italy	-0.1	-0.5
UK	0.7	2.6
	IVQ2014/IIIQ2014	IVQ2014/IVQ2013
USA	QOQ: 0.7 SAAR: 2.6	2.5
China	1.5	7.3
UK	0.5	2.7

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

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

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

• Japan. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations_8763.html http://cmpass ocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html and earlier http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and_4699.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html and earlier http://cmpassocreulationblog.blogspot.com/2013/02/recovery-without-hiring-united-states.html). In Dec 2014, Japan’s exports increased 12.9 percent in 12 months while imports increased 1.9 percent. The second part of Table V-4 shows that net trade deducted 1.5 percentage points from Japan’s growth of GDP in IIQ2012, deducted 1.9 percentage points from GDP growth in IIIQ2012 and deducted 0.5 percentage points from GDP growth in IVQ2012. Net trade added 0.4 percentage points to GDP growth in IQ2012, 1.7 percentage points in IQ2013 and 0.2 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.6 percentage points from GDP growth in Japan. Net trade ducted 2.4 percentage points from GDP growth in Japan in IVQ2013. Net trade deducted 0.8 percentage point from GDP growth of Japan in IQ2014. Net trade added 4.2 percentage points to GDP growth in IIQ2014. Net trade added 0.3 percentage points to GDP growth in IIIQ2014.

• China. In Dec 2014, China exports increased 9.7 percent relative to a year earlier and imports decreased 2.4 percent.
• Germany. Germany’s exports decreased 0.5 percent in the month of Oct 2014 and increased 4.9 percent in the 12 months ending in Oct 2014. Germany’s imports decreased 3.1 percent in the month of Oct 2014 and increased 0.9 percent in the 12 months ending in Aug. Net trade contributed 0.8 percentage points to growth of GDP in IQ2012, contributed 0.4 percentage points in IIQ2012, contributed 0.3 percentage points in IIIQ2012, deducted 0.5 percentage points in IVQ2012, deducted 0.3 percentage points in IQ2013 and added 0.1 percentage points in IIQ2013. Net traded deducted 0.5 percentage points from Germany’s GDP growth in IIIQ2013 and added 0.5 percentage points to GDP growth in IVQ2013. Net trade deducted 0.1 percentage points from GDP growth in IQ2014. Net trade added 0.1 percentage points to GDP growth in IIQ2014 and added 0.2 percentage points in IIIQ2014.
• United Kingdom. Net trade contributed 0.7 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.7 percentage points from UK growth. Net trade contributed 0.1 percentage points to UK value added in IVQ2013. Net trade contributed 0.6 percentage points to UK value added in IQ2014 and 0.3 percentage points in IIQ2014. Net trade deducted 0.2 percentage points to GDP growth in IIIQ2014.
• France. France’s exports increased 0.6 percent in Nov 2014 while imports decreased 1.9 percent. France’s exports increased 4.4 percent in the 12 months ending in Nov 2014 and imports decreased 2.4 percent relative to a year earlier. Net traded added 0.1 percentage points to France’s GDP in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and added 0.3 percentage points in IIQ2013, deducting 1.7 percentage points in IIIQ2013. Net trade added 0.1 percentage points to France’s GDP in IVQ2013 and deducted 0.0 percentage points in IQ2014. Net trade added 0.3 percentage points from France’s GDP growth in IIQ2014 and deducted 0.2 percentage points in IIIQ2014.
• United States. US exports increased 0.8 percent in Dec 2014 and goods exports increased 2.8 percent in Jan-Dec 2014 relative to a year earlier. Imports increased 2.2 percent in Dec 2014 and goods imports increased 3.04 percent in Jan-Dec 2014 relative to a year earlier. Net trade deducted 0.04 percentage points from GDP growth in IIQ2012 and added 0.39 percentage points in IIIQ2012 and 0.79 percentage points in IVQ2012. Net trade deducted 0.08 percentage points from US GDP growth in IQ2013 and deducted 0.54 percentage points in IIQ2013. Net traded added 0.59 percentage points to US GDP growth in IIIQ2013. Net trade added 1.08 percentage points to US GDP growth in IVQ2013. Net trade deducted 1.66 percentage points from US GDP growth in IQ2014 and deducted 0.34 percentage points in IIQ2014. Net trade added 0.78 percentage points to IIIQ2014. Industrial production decreased 0.1 percent in Dec 2014 and increased 1.3 percent in Nov 2014 after changing 0.0 percent in Oct 2014, 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 decreased 0.1 percent in December after rising 1.3 percent in November. The decrease in December reflected a sharp drop in the output of utilities, as warmer-than-usual temperatures reduced demand for heating; excluding utilities, industrial production rose 0.7 percent. Manufacturing posted a gain of 0.3 percent for its fourth consecutive monthly increase. The index for mining increased 2.2 percent after falling in the previous two months. At 106.5 percent of its 2007 average, total industrial production in December was 4.9 percent above its level of a year earlier. For the fourth quarter of 2014 as a whole, industrial production advanced at an annual rate of 5.6 percent, with widespread gains among the major market and industry groups. Capacity utilization for the industrial sector decreased 0.3 percentage point in December to 79.7 percent, a rate that is 0.4 percentage point below its long-run (1972–2013) average.”

In the six months ending in Dec 2014, United States national industrial production accumulated increase of 2.3 percent at the annual equivalent rate of 4.7 percent, which is lower than growth of 4.9 percent in the 12 months ending in Dec 2014. Excluding growth of 1.3 percent in Nov 2014, growth in the remaining five months from Jul to Dec 2014 accumulated to 1.0 percent or 2.4 percent annual equivalent. Industrial production declined in two of the past six months. Industrial production expanded at annual equivalent 4.9 percent in the most recent quarter from Oct to Dec 2014 and at 4.5 percent in the prior quarter Jul to Sep 2014. Business equipment accumulated growth of 3.3 percent in the six months from Jul to Dec 2014 at the annual equivalent rate of 6.8 percent, which is lower than growth of 7.5 percent in the 12 months ending in Dec 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 decreased 0.3 percentage point in December to 79.7 percent, a rate that is 0.4 percentage point below 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 fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 25.9 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 25.9 percent from the trough in Apr 2009 to Dec 2014. Manufacturing output in Dec 2014 is 1.7 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 25.9 million unemployed or underemployed equivalent to actual unemployment of 15.7 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.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 Dec 2014. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.5620 in Dec 2014. The actual index NSA in Dec 2014 is 101.2840, which is 18.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.1610 in Dec 2014. The output of manufacturing at 101.2840 in Dec 2014 is 13.6 percent below trend under this alternative calculation.

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

	Exports M ∆%	Exports 12 M ∆%	Imports M ∆%	Imports 12 M ∆%
USA	0.8 Dec	2.8 Jan-Dec	2.2 Nov	3.4 Jan-Dec
Japan		Dec 12.9 Nov 4.9 Oct 9.6 Sep 6.9 Aug -1.3 Jul 3.9 Jun -2.0 May 2014 -2.7 Apr 2014 5.1 Mar 2014 1.8 Feb 2014 9.5 Jan 2014 9.5 Dec 2013 15.3 Nov 2013 18.4 Oct 2013 18.6 Sep 2013 11.5 Aug 2013 14.7 Jul 2013 12.2 Jun 2013 7.4 May 2013 10.1 Apr 2013 3.8 Mar 2013 1.1 Feb 2013 -2.9 Jan 2013 6.4 Dec -5.8 Nov -4.1 Oct -6.5 Sep -10.3 Aug -5.8 Jul -8.1		Dec 1.9 Nov -1.7 Oct 2.7 Sep 6.2 Aug -1.5 Jul 2.3 Jun 8.4 May 2014 -3.6 Apr 2013 3.4 Mar 2014 18.1 Feb 2014 9.0 Jan 2014 25.0 Dec 2013 24.7 Nov 2013 21.1 Oct 2013 26.1 Sep 2013 16.5 Aug 2013 16.0 Jul 2013 19.6 Jun 2013 11.8 May 2013 10.0 Apr 2013 9.4 Mar 2013 5.5 Feb 2013 7.3 Jan 2013 7.3 Dec 1.9 Nov 0.8 Oct -1.6 Sep 4.1 Aug -5.4 Jul 2.1
China		2014 9.7 Dec 4.7 Nov 11.6 Oct 15.3 Sep 9.4 Aug 14.5 Jul 7.2 Jun 7.0 May 0.9 Apr -6.6 Mar -18.1 Feb 10.6 Jan 2013 4.3 Dec 12.7 Nov 5.6 Oct -0.3 Sep 7.2 Aug 5.1 Jul -3.1 Jun 1.0 May 14.7 Apr 10.0 Mar 21.8 Feb 25.0 Jan		2014 -2.4 Dec -6.7 Nov 4.6 Oct 7.0 Sep -2.4 Aug -1.6 Jul 5.5 Jun -1.6 May -0.8 Apr -11.3 Mar 10.1 Feb 10.0 Jan 2013 8.3 Dec 5.3 Nov 7.6 Oct 7.4 Sep 7.0 Aug 10.9 Jul -0.7 Jun -0.3 May 16.8 Apr 14.1 Mar -15.2 Feb 28.8 Jan
Euro Area	0.6 12-M Nov	1.8 Jan-Nov	-1.8 12-M Nov	0.0 Jan-Nov
Germany	-2.1 Nov CSA	1.4 Nov	-1.5 Nov CSA	1.7 Nov
France Nov	0.6	4.4	-1.9	-2.4
Italy Nov	-1.1	1.7	-0.1	0.0
UK	-0.4 Oct	-0.4 Sep-Nov 14 /Sep-Nov 13	-2.3 Oct	-4.7 Sep-Nov 14 /Sep-Nov 13
Net Trade % Points GDP Growth	% Points
USA	IIIQ2014 0.78 IIQ2014 -0.34 IQ2014 -1.66 IVQ2013 1.08 IIIQ2013 0.59 IIQ2013 -0.54 IQ2013 -0.08 IVQ2012 +0.79 IIIQ2012 0.39 IIQ2012 -0.04 IQ2012 -0.11
Japan	0.4 IQ2012 -1.5 IIQ2012 -1.9 IIIQ2012 -0.5 IVQ2012 1.7 IQ2013 0.2 IIQ2013 -1.5 IIIQ2013 -2.3 IVQ2013 -0.8 IQ2014 4.2 IIQ2014 0.3 IIIQ2014
Germany	IQ2012 0.8 IIQ2012 0.4 IIIQ2012 0.3 IVQ2012 -0.5 IQ2013 -0.3 IIQ2013 0.1 IIIQ2013 -0.5 IVQ2013 0.5 IQ2014 -0.1 IIQ2014 0.1 IIIQ2014 0.2
France	0.1 IIIQ2012 0.1 IVQ2012 -0.1 IQ2013 0.3 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.0 IQ2014 0.3 IIQ2014 -0.2 IIIQ2014
UK	0.7 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.6 IQ2014 0.3 IIQ2014 -0.2 IIIQ2014

Sources: Country Statistical Agencies http://www.census.gov/foreign-trade/

The geographical breakdown of exports and imports of Japan with selected regions and countries is provided in Table V-5 for Dec 2014. The share of Asia in Japan’s trade is close to one-half for 54.1 percent of exports and 46.0 percent of imports. Within Asia, exports to China are 18.4 percent of total exports and imports from China 22.6 percent of total imports. While exports to China increased 4.3 percent in the 12 months ending in Dec 2014, imports from China increased 6.8 percent. The largest export market for Japan in Dec 2014 is the US with share of 20.3 percent of total exports, which is close to that of China, and share of imports from the US of 8.7 percent in total imports. Japan’s exports to the US increased 23.7 percent in the 12 months ending in Dec 2014 and imports from the US decreased 22.4 percent. Western Europe has share of 10.5 percent in Japan’s exports and of 9.8 percent in imports. Rates of growth of exports of Japan in Dec 2014 are 23.7 percent for exports to the US, 13.6 percent for exports to Brazil and minus 3.5 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Dec 2014 are mixed. Imports from Asia increased 7.6 percent in the 12 months ending in Dec 2014 while imports from China increased 6.8 percent. Data are in millions of yen, which may have effects of recent depreciation of the yen relative to the United States dollar (USD).

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

Dec 2014	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,896,467	12.9	7,557,180	1.9
Asia	3,727,702 % Total 54.1	11.0	3,476,931 % Total 46.0	7.6
China	1,267,729 % Total 18.4	4.3	1,710,736 % Total 22.6	6.8
USA	1,397,957 % Total 20.3	23.7	659,331 % Total 8.7	22.4
Canada	85,270	22.7	95,371	0.1
Brazil	47,640	13.6	82,948	-9.3
Mexico	116,511	45.1	40,518	16.8
Western Europe	726,827 % Total 10.5	6.8	738,401 % Total 9.8	-4.5
Germany	172,628	-3.5	223,787	-7.9
France	60,967	-2.4	89,727	0.3
UK	127,481	17.2	59,662	7.8
Middle East	306,959	27.1	1,233,711	-18.9
Australia	116,466	-6.5	489,214	8.6

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

World trade projections of the IMF are in Table V-6. There is increasing growth of the volume of world trade of goods and services from 3.0 percent in 2013 to 5.0 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, increased to 52.8 in Jan from 52.4 in Dec, indicating expansion at slightly higher rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa9e75bbcfac4fea8622b22632b5d42c). This index has remained above the contraction territory of 50.0 during 66 consecutive months. The employment index increased from 51.1 in Dec to 51.6 in Jan with input prices rising at slower rate, new orders increasing at slower rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa9e75bbcfac4fea8622b22632b5d42c). David Hensley, Director of Global Economic Coordination at JP Morgan, finds moderate world economic growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa9e75bbcfac4fea8622b22632b5d42c). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 51.7 in Jan from 51.5 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/52b184024a1446779fe747f37d5df0ef). New export orders expanded for the eighteenth consecutive month. David Hensley, Director of Global Economics Coordination at JP Morgan Chase, finds continuing growth in global manufacturing with output increasing at around annual 3.5 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/52b184024a1446779fe747f37d5df0ef). The HSBC Brazil Composite Output Index, compiled by Markit, was unchanged from 49.2 in Dec to 49.2 in Jan, indicating moderate contraction in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/480418ba2f0d48e0a716f5737527d8d8). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 49.1 in Dec to 48.4 in Jan, indicating marginally contracting services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/480418ba2f0d48e0a716f5737527d8d8). André Loes, Chief Economist, Brazil, at HSBC, finds faster pace of contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/480418ba2f0d48e0a716f5737527d8d8). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) increased from 50.2 in Dec to 50.7 in Jan, indicating moderate improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/76ee5ab696c44271ac7eaa6e6da02cea). André Loes, Chief Economist, Brazil at HSBC, finds increasing output and cost-push pressures perhaps because of currency depreciation (http://www.markiteconomics.com/Survey/PressRelease.mvc/76ee5ab696c44271ac7eaa6e6da02cea).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 53.7 in Jan from 53.9 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/80042dee6d574c69b28052f0ba16d999). New export orders increased moderately. Chris Williamson, Chief Economist at Markit, finds that manufacturing is growing with weakness in new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/80042dee6d574c69b28052f0ba16d999). The Markit Flash US Services PMI™ Business Activity Index increased from 53.3 in Dec to 54.0 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/3b941f12d3724e4cb923968e1f814a36). The Markit Flash US Composite PMI™ Output Index in from 53.5 in Dec to 54.2 in Jan. Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with growth of GDP around 2.5 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/3b941f12d3724e4cb923968e1f814a36). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased to 54.4 in Jan from 53.5 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/4df1e15f72dc47a89ba23d0f062c1360). The Markit US Services PMI™ Business Activity Index increased from 53.3 in Dec to 54.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/4df1e15f72dc47a89ba23d0f062c1360). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at around 2.0 percent annual in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/4df1e15f72dc47a89ba23d0f062c1360). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) did not change to 53.9 in Jan from 53.9 in Dec, which indicates expansion at the same rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/dce95357995b45edbcf2bd17561b8f94). New foreign orders expanded at moderate rate. Chris Williamson, Chief Economist at Markit, finds that the index suggests slowing but strong manufacturing with GDP growth possibly lower in IQ2015 than 2.6 percent SAAR in IVQ2014 (http://www.markiteconomics.com/Survey/PressRelease.mvc/dce95357995b45edbcf2bd17561b8f94). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® decreased 1.6 percentage points from 55.1 in Dec to 53.5 in Jan, which indicates growth at slower rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). The index of new orders decreased 4.9 percentage points from 57.8 in Dec to 52.9 in Jan. The index of new export orders decreased 2.5 percentage points from 52.0 in Dec to 49.5 in Jan, contracting at moderate rate. The Non-Manufacturing ISM Report on Business^® PMI increased 0.2 percentage points from 56.5 in Dec to 56.7 in Jan, indicating growth of business activity/production during 66 consecutive months, while the index of new orders increased 0.3 percentage points from 59.2 in Dec to 59.5 in Jan (http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=28744). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	Dec 12 months NSA ∆%: 0.8; ex food and energy ∆%: 1.6 Dec month SA ∆%: -0.4; ex food and energy ∆%: 0.0 Blog 1/25/15
Producer Price Index	Finished Goods Dec 12-month NSA ∆%: -0.5; ex food and energy ∆% 1.8 Dec month SA ∆% = -1.3; ex food and energy ∆%: 0.3 Final Demand Dec 12-month NSA ∆%: 1.1; ex food and energy ∆% 2.1 Dec month SA ∆% = -0.3; ex food and energy ∆%: 0.3 Blog 1/18/15 1/25/15
PCE Inflation	Dec 12-month NSA ∆%: headline 0.7; ex food and energy ∆% 1.3 Blog 2/8/15
Employment Situation	Household Survey: Jan Unemployment Rate SA 5.7% Blog calculation People in Job Stress Jan: 27.9 million NSA, 17.0% of Labor Force Establishment Survey: Jan Nonfarm Jobs +257,000; Private +267,000 jobs created  Dec 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.5 Blog 2/8/15
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 Nov 2014 4.342 million lower by 0.280 million than 4.622 million in Nov 2006 Blog 1/18/15
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 IVQ2014/IVQ2013 2.5 IQ2012 SAAR 2.3 IIQ2012 SAAR 1.6 IIIQ2012 SAAR 2.5 IVQ2012 SAAR 0.1 IQ2013 SAAR 2.7 IIQ2013 SAAR 1.8 IIIQ2013 SAAR 4.5 IVQ2013 SAAR 3.5 IQ2014 SAAR -2.1 IIQ2014 SAAR 4.6 IIIQ2014 SAAR 5.0 IVQ2014 SAAR 2.6 Blog 2/1/15
Real Private Fixed Investment	SAAR IVQ2014 2.3 ∆% IVQ2007 to IVQ2014: 2.8% Blog 2/1/15
Corporate Profits	IIIQ2014 SAAR: Corporate Profits 3.1; Undistributed Profits 12.4 Blog 12/28/14
Personal Income and Consumption	Dec month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.5 Real Personal Consumption Expenditures (RPCE): -0.1 12-month Dec NSA ∆%: RDPI: 3.7; RPCE ∆%: 2.8 Blog 2/8/15
Quarterly Services Report	IIIQ14/IIIQ13 NSA ∆%: Information 6.6 Financial & Insurance 4.8 Blog 12/14/14
Employment Cost Index	Compensation Private IVQ2014 SA ∆%: 0.6 Dec 12 months ∆%: 2.3 Blog 2/1/15
Industrial Production	Dec month SA ∆%: -0.1 Dec 12 months SA ∆%: 4.9 Manufacturing Dec SA 0.3 ∆% Dec 12 months SA ∆% 4.9, NSA 5.0 Capacity Utilization: 79.7 Blog 1/18/15
Productivity and Costs	Nonfarm Business Productivity IVQ2014∆% SAAE -1.8; IVQ2014/IVQ2013 ∆% 0.0; Unit Labor Costs SAAE IVQ2014 ∆% 2.7; IVQ2014/IVQ2013 ∆%: 1.9 Blog 2/8/15
New York Fed Manufacturing Index	General Business Conditions From Dec-1.23 to Jan 9.95 New Orders: From Dec 0.39 to Jan 6.09 Blog 1/18/15
Philadelphia Fed Business Outlook Index	General Index from Dec 24.3 to Jan 6.3 New Orders from Dec 13.6 to Jan 8.5 Blog 1/18/15
Manufacturing Shipments and Orders	New Orders SA Dec ∆% -3.4 Ex Transport -2.3 Jan-Dec NSA New Orders ∆% 2.8 Ex transport 1.9 Blog 2/8/15
Durable Goods	Dec New Orders SA ∆%: minus 3.4; ex transport ∆%: minus 0.8 Jan-Dec 14/Jan-Dec 13 New Orders NSA ∆%: 6.2; ex transport ∆% 5.2 Blog 2/1/15
Sales of New Motor Vehicles	Jan 2015 1,151.123; Jan 2014 1,012,582. Jan 15 SAAR 16.66 million, Dec 14 SAAR 16.92 million, Jan 2014 SAAR 15.29 million Blog 2/8/15
Sales of Merchant Wholesalers	Jan-Nov 2014/Jan-Nov 2013 NSA ∆%: Total 5.1; Durable Goods: 5.4; Nondurable Goods: 5.0 Blog 1/18/15
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Nov 14 12-M NSA ∆%: Sales Total Business 0.2; Manufacturers -1.2 Retailers 2.8; Merchant Wholesalers -0.6 Blog 1/18/15
Sales for Retail and Food Services	Jan-Dec 2014/Jan-Nov 2013 ∆%: Retail and Food Services 4.0; Retail ∆% 3.0 Blog 1/18/15
Value of Construction Put in Place	Dec SAAR month SA ∆%: minus 0.4 Dec 12-month NSA: 3.3 Blog 2/8/15
Case-Shiller Home Prices	Nov 2014/Nov 2013 ∆% NSA: 10 Cities 4.7; 20 Cities: 4.3; National: 4.7 ∆% Nov SA: 10 Cities 0.7 ; 20 Cities: 0.7 Blog 2/1/15
FHFA House Price Index Purchases Only	Nov SA ∆% 0.8; 12 month NSA ∆%: 5.3 Blog 1/25/15
New House Sales	Dec 2014 month SAAR ∆%: minus 11.6 Jan-Dec 2014/Jan-Dec 2013 NSA ∆%: 1.4 Blog 2/1/15
Housing Starts and Permits	Dec Starts month SA ∆% 4.4; Permits ∆%: -1.9 Jan-Dec 2014/Jan-Dec 2013 NSA ∆% Starts 4.2; Permits  ∆% 3.0 Blog 1/25/15
Trade Balance	Balance Dec SA -$46,557 million versus Nov -$39,751 million Exports Dec SA ∆%: 0.8 Imports Dec SA ∆%: 2.2 Goods Exports Jan-Dec 2014/Jan-Dec 2013 NSA ∆%: 2.8 Goods Imports Jan-Dec 2014/Jan-Dec 2012 NSA ∆%: 3.4 Blog 2/8/15
Export and Import Prices	Dec 12-month NSA ∆%: Imports -5.5; Exports -3.2 Blog 1/18/15
Consumer Credit	Nov ∆% annual rate: Total 5.1; Revolving -1.3; Nonrevolving 7.5 Blog 1/11/15
Net Foreign Purchases of Long-term Treasury Securities	Nov Net Foreign Purchases of Long-term US Securities: $33.5 billion Major Holders of Treasury Securities: China $1250 billion; Japan $1242 billion; Total Foreign US Treasury Holdings Nov $6112 billion Blog 1/25/15
Treasury Budget	Fiscal Year 2015/2013 ∆% Dec: Receipts 11.0; Outlays 9.2; Individual Income Taxes 10.2 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 1/18/2015
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	Dec 2014 SAAR ∆%: Securities 24.2 Loans 7.1 Cash Assets -52.4 Deposits 7.6 Blog 1/25/15
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 1/25/15

Links to blog comments in Table USA:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html

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

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

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

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

Motor vehicle sales and production in the US have been in long-term structural change. Table VA-1 provides the data on new motor vehicle sales and domestic car production in the US from 1990 to 2010. New motor vehicle sales grew from 14,137 thousand in 1990 to the peak of 17,806 thousand in 2000 or 29.5 percent. In that same period, domestic car production fell from 6,231 thousand in 1990 to 5,542 thousand in 2000 or -11.1 percent. New motor vehicle sales fell from 17,445 thousand in 2005 to 11,772 in 2010 or 32.5 percent while domestic car production fell from 4,321 thousand in 2005 to 2,840 thousand in 2010 or 34.3 percent. In Jan 2015, light vehicle sales accumulated to 1,151,123 which is higher by 13.7 percent relative to 1,012,582 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 16.66 million in Jan 2015, lower than 16.92 million in Dec 2014 and higher than 15.29 million in Jan 2014 (http://motorintelligence.com/m_frameset.html).

Table VA-1, US, New Motor Vehicle Sales and Car Production, Thousand Units

	New Motor Vehicle Sales	New Car Sales and Leases	New Truck Sales and Leases	Domestic Car Production
1990	14,137	9,300	4,837	6,231
1991	12,725	8,589	4,136	5,454
1992	13,093	8,215	4,878	5,979
1993	14,172	8,518	5,654	5,979
1994	15,397	8,990	6,407	6,614
1995	15,106	8,536	6,470	6,340
1996	15,449	8,527	6,922	6,081
1997	15,490	8,273	7,218	5,934
1998	15,958	8,142	7,816	5,554
1999	17,401	8,697	8,704	5,638
2000	17,806	8,852	8,954	5,542
2001	17,468	8,422	9,046	4,878
2002	17,144	8,109	9,036	5,019
2003	16,968	7,611	9,357	4,510
2004	17,298	7,545	9,753	4,230
2005	17,445	7,720	9,725	4,321
2006	17,049	7,821	9,228	4,367
2007	16,460	7,618	8,683	3,924
2008	13,494	6,814	6.680	3,777
2009	10,601	5,456	5,154	2,247
2010	11,772	5,729	6,044	2,840

Source: US Census Bureau

http://www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.html

Chart VA-1 of the Board of Governors of the Federal Reserve provides output of motor vehicles and parts in the United States from 1972 to 2014. Output virtually stagnated since the late 1990s.

Chart VA-1, US, Motor Vehicles and Parts Output, 1972-2014

Source: Board of Governors of the Federal Reserve System

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

Manufacturers’ shipments decreased 1.1 percent in Dec 2014 and decreased 1.0 percent in Nov 2014 after decreasing 0.9 percent in Oct 2014. New orders decreased 3.4 percent in Dec 2014, after decreasing 1.7 percent in Nov 2014 and decreasing 0.7 percent in Oct 2014, as shown in Table VA-2. These data are very volatile. Volatility is illustrated by increase of 2642.2 percent of new orders of nondefense aircraft in Sep 2012 following decline by 97.2 percent in Aug 2012. New orders excluding transportation equipment decreased 2.3 percent in Dec 2014 after decreasing 1.3 percent in Nov 2014 and decreasing 1.5 percent in Oct 2014. Capital goods new orders, indicating investment, decreased 9.1 percent in Dec 2014 after decreasing 2.7 percent in Nov 2014 and increasing 1.0 percent in Oct 2014. New orders of nondefense capital goods decreased 9.3 percent in Dec 2014 after decreasing 1.5 percent in Nov 2014 and changing 0.0 percent in Oct 2014. Excluding more volatile aircraft, capital goods orders decreased 0.1 percent in Dec 2014 after decreasing 0.5 percent in Nov 2014 and decreasing 1.8 percent in Oct 2014.

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

	Dec 2014 ∆%	Nov 2014  ∆%	Oct 2014  ∆%
Total
S	-1.1	-1.0	-0.9
NO	-3.4	-1.7	-0.7
Excluding Transport
S	-1.9	-1.0	-1.2
NO	-2.3	-1.3	-1.5
Excluding Defense
S	-1.2	-1.0	-1.0
NO	-3.2	-1.3	-1.2
Durable Goods
S	1.3	-0.7	-0.1
NO	-3.3	-2.2	0.3
Machinery
S	1.0	-0.8	-0.9
NO	-3.2	-0.8	-2.1
Computers & Electronic Products
S	-0.1	-0.3	-0.3
NO	-1.6	-0.6	0.0
Computers
S	-2.4	-0.9	-2.0
NO	-31.1	1.2	-12.9
Transport Equipment
S	3.7	-1.0	0.7
NO	-9.1	-4.0	3.5
Automobiles
S	5.2	-0.9	1.4
Motor Vehicles
S	1.9	0.1	0.9
NO	1.1	1.1	0.8
Nondefense Aircraft
S	2.5	-4.6	-2.1
NO	-55.5	-11.0	0.8
Capital Goods
S	0.9	-0.9	-1.0
NO	-9.1	-2.7	1.0
Nondefense Capital Goods
S	0.5	-1.2	-1.3
NO	-9.3	-1.5	0.0
Capital Goods ex Aircraft
S	0.2	-0.5	-0.9
NO	-0.1	-0.5	-1.8
Nondurable Goods
S	-3.4	-1.2	-1.6
NO	-3.4	-1.2	-1.6

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

Source: US Census Bureau

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

Chart VA-2 of the US Census Bureau provides new orders of manufacturers from Jan 2014 to Dec 2014. There is significant volatility that prevents discerning clear trends. New orders fell in all the past five months.

Chart VA-2, US, Manufacturers’ New Orders 2013-2014 Seasonally Adjusted, Month ∆%

Source: US Census Bureau

http://www.census.gov/briefrm/esbr/www/esbr022.html

Chart VA-3 of the US Census Bureau provides total value of manufacturers’ new orders, seasonally adjusted, from 1992 to 2014. Seasonal adjustment reduces sharp oscillations. The series dropped nearly vertically during the global recession but rose along a path even steeper than in the high-growth period before the recession. The final segment suggests deceleration but similar segments occurred in earlier periods followed with continuing growth and stability currently.

Chart VA-3, US, Value of Total Manufacturers’ New Orders, Seasonally Adjusted, 1992-2014

Source: US Census Bureau

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

Additional perspective on manufacturers’ shipments and new orders is provided by Table VA-3. Values are cumulative millions of dollars in Jan-Dec 2014 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan-Dec 2014 total $5969.9 billion and new orders total $5986.6 billion, growing respectively by 2.3 percent and 2.8 percent relative to the same period in 2013. Excluding transportation equipment, shipments grew 2.0 percent and new orders increased 1.9 percent. Excluding defense, shipments grew 2.4 percent and new orders grew 2.7 percent. Durable goods shipments reached $2902.8 billion in Jan-Dec 2014, or 48.6 percent of the total, growing by 5.1 percent, and new orders $2919.5 billion, or 48.8 percent of the total, growing by 6.2 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $3067.1 billion or 51.4 percent of the total, decreasing by 0.2 percent. Capital goods have relatively high value of $1053.7 billion for shipments, growing 4.9 percent, and new orders $1140.4 billion, increasing 6.8 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $830.3 billion, growing 5.1 percent, and new orders $850.1 billion, increasing 4.9 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.3 percent of US national income in IIIQ2014. These data are not adjusted for inflation.

Table VA-3, US, Value of Manufacturers’ Shipments and New Orders, NSA, Millions of Dollars 

Jan-Dec 2014	Shipments	∆% 2014/ 2013	New Orders	∆% 2014/ 2013
Total	5,969,888	2.3	5,986,557	2.8
Excluding Transport	5,110,448	2.0	5,044,982	1.9
Excluding Defense	5,827,259	2.4	5,848,455	2.7
Durable Goods	2,902,795	5.1	2,919,464	6.2
Machinery	434,668	5.6	442,675	6.0
Computers & Electronic Products	347,262	4.3	265,892	3.9
Computers	4,887	-21.1	5,692	-10.4
Transport Equipment	859,440	4.5	941,575	8.3
Automobiles	115,044	-8.8
Motor Vehicles	255,008	9.0	256,688	9.9
Nondefense Aircraft	151,007	10.7	233,119	16.1
Capital Goods	1,053,735	4.9	1,140,410	6.8
Nondefense Capital Goods	937,245	5.8	1,030,108	6.6
Capital Goods ex Aircraft	830,296	5.1	850,988	4.9
Nondurable Goods	3,067,093	-0.2	3,067,093	-0.2
Food Products	792,487	6.1
Petroleum Refineries	778,534	-5.8
Chemical Products	752,701	-1.7

Note: Transport: transportation Source: US Census Bureau

Source: US Census Bureau

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

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

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

Source: US Census Bureau

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

Construction spending at seasonally adjusted annualized rate (SAAR) reached $982.1 billion in Dec 2014, which was higher by 0.4 percent than in the prior month of Nov 2014, as shown in Table VA-4. Residential construction, with $354.0 billion accounting for 36.1 percent of total value of construction, increased 0.4 percent in Dec and nonresidential construction, with $627.1 billion accounting for 63.9 percent of the total, increased 0.4 percent. Public construction increased 1.1 percent while private construction increased 0.1 percent. Data in Table VA-4 show that nonresidential construction at $627.1 billion is much higher in value than residential construction at $355.0 billion while total private construction at $698.8 billion is much higher than public construction at $283.5 billion, all in SAAR. Residential and nonresidential construction contributed positively to growth of GDP in the US in all quarters in 2012. Nonresidential investment added 0.20 percentage points to GDP growth in IQ2013 while residential construction added 0.22 percentage points. Nonresidential construction added 0.21 percentage points to GDP growth in IIQ2013 with residential construction adding 0.53 percentage points. Nonresidential construction added 0.67 percentage points to GDP growth in IIIQ2013 while residential construction added 0.34 percentage points. Nonresidential construction added 1.23 percentage points to GDP growth in IVQ2013 while residential construction deducted 0.28 percentage points. In 2012, residential construction added 0.33 percentage points to GDP growth and added 0.01 percentage points in 2011. Residential construction added 0.33 percentage points to GDP growth in 2013. Nonresidential construction added 0.84 percentage points to GDP growth in 2012 and 0.85 percentage points in 2011. Nonresidential construction added 0.37 percentage points to GDP growth in 2013. Residential construction added 0.05 percentage points to GDP growth in 2014 and nonresidential contruction added 0.75 percentage points. In IQ2014, residential construction deducted 0.17 percentage points from GDP growth and nonresidential construction added 0.20 percentage points. Nonresidential construction added 1.18 percentage points to GDP growth in IIQ2014 and residential construction added 0.27 percentage points. Nonresidential construction added 1.10 percentage points to GDP growth in IIIQ2014 while residential construction added 0.10 percentage points. In IVQ2014, nonresidential construction added 0.24 percentage points to GDP growth and residential construction added 0.13 percentage points (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html).

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

Dec 2014	Dec 2014 SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	982,089	0.4	2.2
Residential	355,014	0.4	-3.9
Nonresidential	627,075	0.4	5.9
Total Private	698,551	0.1	0.4
Private Residential	349,564	0.3	-4.0
New Single Family	202,466	1.2	11.0
New Multi-Family	46,564	0.3	26.8
Private Nonresidential	348,987	-0.2	5.3
Total Public	283,538	1.1	6.7
Public Residential	5,450	2.3	3.2
Public Nonresidential	278,088	1.1	6.8

SAAR: seasonally adjusted annual rate; B: billions

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

Further information on construction spending is provided in Table VA-5. The original monthly estimates not-seasonally adjusted (NSA) and their 12-month rates of change are provided in the first two columns while the SAARs and their monthly changes are provided in the final two columns. There has been improvement in construction in the US. There are only eight declines in the monthly rate from Dec 2011 to Dec 2014, with four in 2014. Growth in 12 months NSA fell from 8.2 percent in Dec 2012 to 3.3 percent in Dec 2014.

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

	Value NSA Month $ Millions	12-Month ∆% NSA	Value SAAR $ Millions	Month ∆% SA*
Dec 2014	76,366	3.3	982,089	0.4
Nov	82,878	3.1	978,579	-0.2
Oct	90,522	3.9	980,422	1.4
Sep	89,530	4.0	966,432	0.6
Aug	89,992	2.4	961,066	0.1
Jul	86,888	4.3	960,043	0.3
Jun	86,141	5.1	957,120	-1.6
May	82,778	7.6	972,844	1.3
Apr	76,940	8.5	960,349	1.4
Mar	70,064	8.8	947,303	0.0
Feb	63,817	7.8	947,088	-0.8
Jan	66,486	11.5	954,642	-0.7
Dec 2013	73,893	9.6	961,158	0.9
Nov	80,373	7.5	952,531	1.3
Oct	87,163	5.8	939,933	1.7
Sep	86,101	6.4	924,153	1.0
Aug	86,909	5.8	915,286	1.0
Jul	83,299	6.2	906,644	0.7
Jun	81,961	3.4	900,334	0.4
May	76,938	4.6	896,603	1.3
Apr	70,900	5.5	884,966	1.5
Mar	64,404	4.3	871,888	-0.9
Feb	59,188	4.3	879,609	1.2
Jan	59,636	5.4	869,232	-1.5
Dec 2012	67,431	8.2	882,637	0.4
Nov	74,754	8.6	879,539	-0.5
Oct	82,353	10.9	883,853	0.9
Sep	80,890	7.3	876,091	0.9
Aug	82,183	6.6	868,246	0.4
Jul	78,457	8.8	864,687	-1.0
Jun	79,262	8.8	873,069	1.3
May	73,571	11.8	861,913	2.3
Apr	67,234	9.4	842,898	1.0
Mar	61,772	9.2	834,810	1.1
Feb	56,761	12.2	825,774	0.3
Jan	56,578	10.9	823,583	0.8
Dec 2011	62,319	3.4	817,198	0.9

SAAR: Seasonally Adjusted Annual Rate

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

The sharp contraction of the value of construction in the US is revealed by Table VA-6. Construction spending in Jan-Dec 2014, not seasonally adjusted, reached $961.4 billion, which is higher by 5.6 percent than $910.8 billion in the same period in 2013. The depth of the contraction is shown by the decline of construction spending from $1167.7 billion in Jan-Dec 2006 to $961.4 billion in the same period in 2014, or decline by minus 17.6 percent. The decline in inflation-adjusted terms is much higher. The all-items not seasonally adjusted CPI (consumer price index) increased from 201.8 in Dec 2006 to 234.812 in Dec 2014 (http://www.bls.gov/cpi/data.htm) or by 16.4 percent. The comparable decline from Jan-Dec 2005 to Jan-Dec 2014 is minus 12.9 percent. Construction spending in Jan-Dec 2014 increased by 7.8 percent relative to the same period in 2003. Construction spending is higher by 6.2 percent in Jan-Dec 2014 relative to the same period in 2009. Construction has been weaker than the economy as a whole.

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

Jan-Dec 2014 $ MM	961,402
Jan-Dec 2013	910,765
∆% to 2014	5.6
Jan-Dec 2012 $ MM	861,246
∆% to 2014	11.6
Jan-Dec 2011 $ MM	788,342
∆% to 2014	22.0
Jan-Dec 2010 $MM	806,038
∆% to 2014	19.3
Jan-Dec 2009	904,930
∆% to 2014	6.2
Jan-Dec 2006 $ MM	1,167,722
∆% to 2014	-17.6
Jan-Dec 2005 $ MM	1,104,136
∆% to 2014	-12.9
Jan-Dec 2003 $ MM	891,498
∆% to 2014	7.8

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

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

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

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

Table VA-7 provides the value of construction in the US not seasonally adjusted in selected months from 2002 to 2014. Construction in Dec 2014 of $76.4 billion increased by 3.3 percent relative to $73.9 billion in Dec 2013 and increased by 26.8 percent relative to $60.2 billion in Dec 2010. Construction in Dec 2014 of $76.4billion is lower by 13.4 percent relative to $88.2 billion in Dec 2005.

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

Year	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2002	77,182	78,863	79,460	76,542	75,710	71,362	63,984
2003	80,377	82,971	85,191	83,841	83,133	77,915	71,050
2004	89,932	93,614	96,164	92,538	90,582	86,394	77,733
2005	99,632	103,158	106,706	103,269	102,339	97,549	88,172
2006	107,607	108,423	110,434	104,191	101,582	95,339	86,436
2007	105,399	107,090	110,430	105,150	103,847	94,822	84,218
2008	96,411	98,563	99,877	96,858	95,722	86,176	76,763
2009	81,573	83,528	84,510	81,344	80,071	72,013	64,178
2010	74,200	73,233	75,977	74,892	73,607	68,100	60,246
2011	72,850	72,112	77,106	75,388	74,246	68,845	62,319
2012	79,262	78,457	82,183	80,890	82,353	74,754	67,431
2013	81,961	83,299	86,909	86,101	87,163	80,373	73,893
2014	86,141	86,888	88,992	89,530	90,522	82,878	76,366

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

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

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

Source: US Census Bureau

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

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

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

Year	Aug	Sep	Oct	Nov	Dec
2002	839,008	832,134	839,690	844,697	855,921
2003	901,839	911,589	925,732	925,985	948,491
2004	1,013,724	1,012,290	1,015,562	1,023,210	1,037,684
2005	1,119,782	1,131,739	1,145,663	1,156,977	1,178,305
2006	1,158,193	1,151,104	1,139,292	1,137,488	1,153,491
2007	1,160,593	1,165,162	1,152,511	1,127,558	1,108,958
2008	1,058,675	1,056,892	1,051,176	1,031,004	994,216
2009	891,278	881,340	870,697	852,896	832,484
2010	793,090	800,329	802,013	799,636	779,919
2011	801,183	805,565	806,849	809,833	817,198
2012	868,246	876,091	883,853	879,539	882,637
2013	915,286	924,153	939,933	952,531	961,158
2014	961,066	966,432	980,422	978,579	982,089

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

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

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

Source: US Census Bureau

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

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

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

Source: US Census Bureau

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

Chart VA-5 of the US Census Bureau provides monthly nonresidential construction in the US not seasonally adjusted. There is similar acceleration until 2006 followed by milder contraction than for residential construction. The final segment appears stationary.

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

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

Annual available data for the value of construction put in place in the US between 1993 and 2014 are provided in Table VA-9. Data from 1993 to 2001 are available for public and private construction with breakdown in residential and nonresidential only for private construction. Data beginning in 2002 provide aggregate residential and nonresidential values. Total construction value put in place in the US increased 98.0 percent between 1993 and 2014 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 19.8 percent between 2000 and 2014. Total value of construction increased 13.4 percent between 2002 and 2014 with value of nonresidential construction increasing 35.9 percent while value of residential construction fell 11.6 percent. Value of total construction fell 12.9 percent between 2005 and 2014, with value of residential construction declining 42.5 percent while value of nonresidential construction rose 24.6 percent. Value of total construction fell 17.6 percent between 2006 and 2014, with value of nonresidential construction increasing 10.7 percent while value of residential construction fell 42.7 percent. In 2002, nonresidential construction had share of 52.6 percent in total construction while the share of residential construction was 47.4 percent. In 2014, the share of nonresidential construction in total value rose to 63.1 percent while that of residential construction fell to 36.9 percent.

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

	Total	Private Nonresidential	Private Residential
1993	485,548	150,006	208,180
1994	531,892	160,438	241,033
1995	548,666	180,534	228,121
1996	599,693	195,523	257,495
1997	631,853	213,720	264,696
1998	688,515	237,394	296,343
1999	744,551	249,167	326,302
2000	802,756	275,293	346,138
2001	840,249	273,922	364,414
	Total	Total Nonresidential	Total Residential
2002	847,874	445,914	401,960
2003	891,497	440,246	451,251
2004	991,356	452,948	538,408
2005	1,104,136	486,629	617,507
2006	1,167,222	547,408	619,814
2007	1,152,351	651,883	500,468
2008	1,068,436	710,690	357,746
2009	904,929	651,001	253,928
2010	806,040	556,928	249,112
2011	788,343	535,686	252,657
2012	861,245	574,399	286,847
2013	910,764	568,561	342,203
2014	961,402	606,211	355,191
∆% 1993-2014	98.0
∆% 1993-2000	65.3
∆% 2000-2014	19.8
∆% 2002-2014	13.4	35.9	-11.6
∆% 2005-2014	-12.9	24.6	-42.5
∆% 2006-2014	-17.6	10.7	-42.7

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

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

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

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

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

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

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

Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf) with changes on Jul 14, 2014 (https://www.boj.or.jp/en/announcements/release_2014/k140715a.pdf). For fiscal 2013, the forecast is of growth of GDP between 2.2 and 2.3 percent, with the all items CPI less fresh food of 0.8 percent (https://www.boj.or.jp/en/mopo/outlook/gor1404b.pdf). The critical difference is forecast of the CPI excluding fresh food of 3.2 to 3.5 percent in 2014, 1.9 to 2.8 percent in 2015 and 2.0 to 3.0 in 2016 (https://www.boj.or.jp/en/announcements/release_2014/k140715a.pdf). Consumer price inflation in Japan excluding fresh food was 0.4 percent in Apr 2014 and 3.4 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm), significantly because of the increase of the tax on value added of consumption in Apr 2014. The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

“The Bank of Japan conducts monetary policy based on the principle that the policy shall be aimed at achieving price stability, thereby contributing to the sound development of the national economy, and is responsible for maintaining financial system stability. The Bank aims to achieve price stability on a sustainable basis, given that there are various factors that affect prices in the short run.

The Bank recognizes that the inflation rate consistent with price stability on a sustainable basis will rise as efforts by a wide range of entities toward strengthening competitiveness and growth potential of Japan's economy make progress. Based on this recognition, the Bank sets the price stability target at 2 percent in terms of the year-on-year rate of change in the consumer price index.

Under the price stability target specified above, the Bank will pursue monetary easing and aim to achieve this target at the earliest possible time. Taking into consideration that it will take considerable time before the effects of monetary policy permeate the economy, the Bank will ascertain whether there is any significant risk to the sustainability of economic growth, including from the accumulation of financial imbalances.”

The Bank of Japan also provided explicit analysis of its view on price stability in a “Background note regarding the Bank’s thinking on price stability” (http://www.boj.or.jp/en/announcements/release_2013/data/rel130123a1.pdf http://www.boj.or.jp/en/announcements/release_2013/rel130123a.htm/). The Bank of Japan also amended “Principal terms and conditions for the Asset Purchase Program” (http://www.boj.or.jp/en/announcements/release_2013/rel130122a.pdf): “Asset purchases and loan provision shall be conducted up to the maximum outstanding amounts by the end of 2013. From January 2014, the Bank shall purchase financial assets and provide loans every month, the amount of which shall be determined pursuant to the relevant rules of the Bank.”

Financial markets in Japan and worldwide were shocked by new bold measures of “quantitative and qualitative monetary easing” by the Bank of Japan (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The objective of policy is to “achieve the price stability target of 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) at the earliest possible time, with a time horizon of about two years” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf). The main elements of the new policy are as follows:

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

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

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
Apr 2014	+2.2 to +2.3 [+2.2]	+0.8
Jan 2014	+2.5 to +2.9 [+2.7]	+0.7 to +0.9 [+0.7]
Oct 2013	+2.6 to +3.0 [+2.7]	+0.6 to +1.0 [+0.7]
Jul 2013	+2.5 to +3.0 [+2.8]	+0.5 to +0.8 [+0.6]
2014
Jul 2014	+0.6 to +1.3 [+1.0]	+3.2 to +3.5 [+3.3]	+1.2 to +1.5 [+1.3]
Apr 2014	+0.8 to +1.3 [+1.1]	+3.0 to +3.5 [+3.3]	+1.0 to +1.5 [+1.3]
Jan 2014	+0.9 to 1.5 [+1.4]	+2.9 to +3.6 [+3.3]	+0.9 to +1.6 [+1.3]
Oct 2013	+0.9 to +1.5 [+1.5]	+2.8 to +3.6 [+3.3]	+0.8 to +1.6 [+1.3]
Jul 2013	+0.8 to +1.5 [+1.3]	+2.7 to +3.6 [+3.3]	+0.7 to +1.6 [+1.3]
2015
Jul 2014	+1.2 to +1.6 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
Apr 2014	+1.2 to +1.5 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
Jan 2014	+1.2 to +1.8 [+1.5]	+1.7 to +2.9 [+2.6]	+1.0 to +2.2 [+1.9]
Oct 2013	+1.3 to +1.8 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
Jul 2013	+1.3 to +1.9 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
2016
Jul 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]
Apr 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]

Figures in brackets are the median of forecasts of Policy Board members

Source: Policy Board, Bank of Japan

https://www.boj.or.jp/en/announcements/release_2014/k140715a.pdf

The Markit/JMMA Flash Japan Manufacturing PMI Index™ with the Flash Japan Manufacturing PMI™ increased from 52.0 in Dec to 52.1 in Jan and the Flash Japan Manufacturing Output Index™ decreased from 52.5 in Dec to 53.3 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1eee3ad3cbf4ce5a4d7e8d578b33118). New export orders increased at a faster pace. Amy Brownbill, Economist at Markit, finds improving Japan’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1eee3ad3cbf4ce5a4d7e8d578b33118). Private-sector activity in Japan stabilized with the Markit Composite Output PMI Index decreasing from 51.9 in Dec to 51.7 in Jan, indicating modest improvement in business activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/117f9bf5e5ec451ea6dc46bd00bad841). The Markit Business Activity Index of Services decreased to 51.3 in Jan from 51.7 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/117f9bf5e5ec451ea6dc46bd00bad841). Amy Brownbill, Ecoomist at Markit and author of the report, finds the reading consistent with growth in the beginning of 2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/117f9bf5e5ec451ea6dc46bd00bad841). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, increased marginally from 52.0 in Dec to 52.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/618efac17046436b879e5b824f41cfbf). New orders, output and foreign orders increased. Amy Brownbill, Economist at Markit, finds manufacturing improvement with prices of inputs driven by devaluation (http://www.markiteconomics.com/Survey/PressRelease.mvc/618efac17046436b879e5b824f41cfbf).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	Dec ∆% -0.4 12 months ∆% 1.9 Blog 1/18/15
Consumer Price Index	Dec NSA ∆% 0.1; Dec 12 months NSA ∆% 2.4 Blog 2/1/15
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	Dec Unemployed 2.10 million Change in unemployed since last year: minus 150 thousand Unemployment rate: 3.4 % Blog 2/1/15
All Industry Indices	Nov month SA ∆% 0.1 12-month NSA ∆% -1.9 Blog 1/25/15
Industrial Production	Dec SA month ∆%: 1.0 12-month NSA ∆% 0.3 Blog 2/1/15
Machine Orders	Total Nov ∆% -10.4 Private ∆%: -10.6 Nov ∆% Excluding Volatile Orders 1.3 Blog 1/18/15
Tertiary Index	Nov month SA ∆% 0.2 Nov 12 months NSA ∆% minus 1.7 Blog 1/18/15
Wholesale and Retail Sales	Dec 12 months: Total ∆%: -1.3 Wholesale ∆%: -2.1 Retail ∆%: 0.2 Blog 2/1/15
Family Income and Expenditure Survey	Dec 12-month ∆% total nominal consumption -0.6, real -3.4 Blog 2/1/15
Trade Balance	Exports Dec 12 months ∆%: 12.9 Imports Dec 12 months ∆% 1.9 Blog 2/1/15

Links to blog comments in Table JPY:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html

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

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

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 53.7 in Jan 2015. 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 50.2 in Jan 2015.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Jan 2015	53.7	50.2	47.6	46.9	59.6
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 53.7 in Jan 2015.

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, 50.1 in Dec 2014 and 49.8 in Jan 2015. 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. The index moved to 50.2 in Jan 2015.

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

	IPM	PI	NOI	INV	EMP	SDEL
2015
Jan	49.8	51.7	50.2	47.3	47.9	50.2
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 49.8 in Jan 2015.

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, decreasing from 51.4 in Dec to 51.0 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/7b9ad608264c4ac4b19ccf5aa289da44). 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/7b9ad608264c4ac4b19ccf5aa289da44). The HSBC China Services Business Activity index decreased from 53.4 in Dec to 51.8 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/7b9ad608264c4ac4b19ccf5aa289da44). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that the services PMI shows sustained activity at slower pace (http://www.markiteconomics.com/Survey/PressRelease.mvc/7b9ad608264c4ac4b19ccf5aa289da44). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 49.7 in Jan from 49.6 in Dec, indicating near neutral manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/957ace7aa01b4f878c48ea65443be5ea). 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/957ace7aa01b4f878c48ea65443be5ea). 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 51.4 in Dec to 52.6 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/9ca7fcbe048340c7ae60a02626922ff1). Chris Williamson, Chief Economist at Markit, finds slowing growth of GDP at around 0.3 percent in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/9ca7fcbe048340c7ae60a02626922ff1). The Markit Eurozone Services Business Activity Index increased from 51.6 in Dec to 52.7 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/9ca7fcbe048340c7ae60a02626922ff1). The Markit Eurozone Manufacturing PMI^® increased to 51.0 in Jan from 50.6 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/3300af07e7f240a492f4b407a4715d61). New export orders are weak. Chris Williamson, Chief Economist at Markit, finds modest improvement of industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/3300af07e7f240a492f4b407a4715d61). 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 Dec ∆%: -1.0 Dec 12-month ∆%: -2.7 Blog 2/8/15
Industrial Production	Nov month ∆%: 0.2; Nov 12 months ∆%: -0.4 Blog 1/18/15
Retail Sales	Dec month ∆%: 0.3 Dec 12 months ∆%: 2.8 Blog 2/8/15
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:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.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

Retail sales in the euro zone increased 0.3 percent in Dec 2014 and increased 2.8 percent in 12 months, as shown in Table VD-1. The 12-month rates of growth became negative between Mar 2011 and Dec 2013 with exception of 0.6 percent in Apr 2011, 0.0 percent in Mar 2012 and 1.5 percent in Nov 2013. The lower part of Table VD-3 provides annual percentage changes of inflation-adjusted retail sales in the euro zone since 2001. Retail sales fell 0.6 percent in 2010 after falling 0.4 percent in 2009 and 1.8 percent in 2008 and fell again by 1.8 percent in 2011 and 2.6 percent in 2012. Retail sales changed 0.0 percent in 2013 and increased 2.8 percent in 2014.

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

	Month ∆%	12-Month CA ∆%
Dec 2014	0.3	2.8
Nov	0.7	1.6
Oct	0.7	1.6
Sep	-1.0	0.3
Aug	0.7	1.5
Jul	-0.3	0.6
Jun	0.4	2.0
May	0.1	0.5
Apr	0.0	1.7
Mar	0.0	1.0
Feb	0.3	1.1
Jan	1.0	0.8
Dec 2013	-1.2	0.0
Nov	1.0	1.5
Oct	-0.4	-0.4
Sep	-0.2	-0.2
Aug	-0.1	-0.3
Jul	1.0	-0.9
Jun	-1.0	-1.7
May	1.1	-0.2
Apr	-0.2	-1.3
Mar	-0.1	-2.4
Feb	-0.2	-2.2
Jan	0.5	-2.2
Dec 2012	-0.3	-2.6
Nov	-0.2	-1.8
Oct	-0.3	-3.1
Sep	-1.0	-1.9
Aug	-0.2	-0.7
Jul	0.1	-1.4
Jun	0.4	-0.9
May	0.3	-0.6
Apr	-1.4	-3.5
Mar	0.2	0.0
Feb	0.1	-2.1
Jan	-0.2	-0.9
Dec 2011	0.2	-1.9
Nov	-0.7	-1.5
Oct	0.3	-0.8
Sep	-0.1	-1.3
Aug	-0.3	-0.2
Jul	0.2	-0.6
Jun	0.9	-1.0
May	-1.9	-1.8
Apr	1.2	0.6
Mar	-1.5	-1.6
Feb	0.9	1.2
Jan	-0.4	0.6
Dec ∆%
2014		2.8
2013		0.0
2012		-2.6
2011		-1.8
2010		-0.6
2009		-0.4
2008		-1.8
2007		-0.9
2006		2.3
2005		1.0
2004		2.3
2003		0.7
2002		-0.3
2001		1.9

Source: EUROSTAT

http://ec.europa.eu/eurostat

Growth rates of retail sales of the euro zone by major segments are in Table VD-2. Total sales increased 0.3 percent in Dec 2014 and increased 2.8 percent in the 12 months ending in Dec 2014. Food sales increased 0.3 percent in Dec 2014 and increased 1.6 percent in 12 months and sales of nonfood products increased 0.3 percent in Dec and increased 3.5 percent in 12 months. Sales of automotive fuel stores increased 0.4 percent in Dec and increased 2.3 percent in 12 months.

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

Dec 2014	Month ∆%	12-Month ∆%
Total	0.3	2.8
Food, Drinks, Tobacco	0.3	1.6
Nonfood Products ex Automotive Fuel	0.3	3.5
Automotive Fuel in Specialized Stores	0.4	2.3

Source: EUROSTAT

http://ec.europa.eu/eurostat

Month and 12-month percentage rates of change of retail sales by member countries of the euro zone are shown in Table VD-3 for Dec 2014. Retail sales are mixed throughout the euro zone. The 12-month percentage changes are positive for several members in Table VD-3 such as 1.5 percent for France, 5.4 percent Ireland, 4.0 percent Germany and 0.9 percent for Portugal. The 12-month percentage change for the UK, which is not a member of the euro zone, was 4.9 percent. The European Union’s 12-month percentage change was 3.2 percent.

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

Dec 2014	Month ∆%	12-Month ∆%
Euro Zone	0.3	2.8
Germany	0.2	4.0
France	0.5	1.5
Netherlands	0.7*	2.8*
Finland	-0.8	-2.6
Belgium	0.8	3.3
Portugal	-3.8	0.9
Ireland	1.8	5.4
Italy	0.2*	1.5*
Greece	-1.1*	-1.5*
Spain	1.1	6.6
UK	1.0	4.9
European Union	0.3	3.2

*Nov 2014

Source: EUROSTAT

http://ec.europa.eu/eurostat

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1971 to 2013, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.6 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.1 percent in 2010, 3.6 percent in 2011 and 0.4 percent in 2012. Growth decelerated to 0.1 percent in 2013.

The Federal Statistical Agency of Germany analyzes the fall and recovery of the German economy (http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Content/Statistics/VolkswirtschaftlicheGesamtrechnungen/Inlandsprodukt/Aktuell,templateId=renderPrint.psml):

“The German economy again grew strongly in 2011. The price-adjusted gross domestic product (GDP) increased by 3.0% compared with the previous year. Accordingly, the catching-up process of the German economy continued during the second year after the economic crisis. In the course of 2011, the price-adjusted GDP again exceeded its pre-crisis level. The economic recovery occurred mainly in the first half of 2011. In 2009, Germany experienced the most serious post-war recession, when GDP suffered a historic decline of 5.1%. The year 2010 was characterised by a rapid economic recovery (+3.7%).”

Table VE-4 provides annual growth rates of the German economy from 1970 to 2013, price adjusted chain-linked and price and calendar-adjusted chain-linked. Germany’s GDP fell 5.6 percent in 2009 after growing below trend at 1.1 percent in 2008. Recovery has been robust in contrast with other advanced economies. The German economy grew at 4.1 percent in 2010, 3.6 percent in 2011 and 0.4 percent in 2012. Growth in 2013 was 0.1 percent.

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

	Price Adjusted Chain-Linked	Price- and Calendar-Adjusted Chain Linked
Average ∆% 1991-2013	1.3
Average ∆% 1991-1999	1.5
Average ∆% 2000-2007	1.4
Average ∆% 2003-2007	2.2
Average ∆% 2007-2013	0.5
Average ∆% 2009-2013	2.0
2013	0.1	0.2
2012	0.4	0.6
2011	3.6	3.7
2010	4.1	3.9
2009	-5.6	-5.6
2008	1.1	0.8
2007	3.3	3.4
2006	3.7	3.9
2005	0.7	0.9
2004	1.2	0.7
2003	-0.7	-0.7
2002	0.0	0.0
2001	1.7	1.8
2000	3.0	3.2
1999	2.0	1.9
1998	2.0	1.7
1997	1.8	1.9
1996	0.8	0.8
1995	1.7	1.8
1994	2.5	2.5
1993	-1.0	-1.0
1992	1.9	1.5
1991	5.1	5.2
1990	5.3	5.5
1989	3.9	4.0
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.3
1984	2.8	2.9
1983	1.6	1.5
1982	-0.4	-0.5
1981	0.5	0.6
1980	1.4	1.3
1979	4.2	4.3
1978	3.0	3.1
1977	3.3	3.5
1976	4.9	4.5
1975	-0.9	-0.9
1974	0.9	1.0
1973	4.8	5.0
1972	4.3	4.3
1971	3.1	3.0
1970	NA	NA

Source: Statistisches Bundesamt Deutschland (Destatis)

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

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

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

https://www.destatis.de/EN/PressServices/Press/pr/2014/02/PE14_048_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2013/08/PE13_278_811.html https://www.destatis.de/EN/PressServices/Press/pr/2013/11/PE13_381_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2014/01/PE14_016_811.html

https://www.destatis.de/DE/PresseService/Presse/Pressekonferenzen/2014/BIP2013/Pressebroschuere_BIP2013.html

https://www.destatis.de/EN/PressServices/Press/pr/2014/05/PE14_167_811.html

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

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, 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 52.0 in Dec to 53.5 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/4439591371004e5b81a173ab5a27e9dd). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improvement in 2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/4439591371004e5b81a173ab5a27e9dd). The Germany Services Business Activity Index increased from 52.1 in Dec to 53.5 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/4439591371004e5b81a173ab5a27e9dd). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, decreased from 51.2 in Dec to 50.9 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/d01543f85bbb4426968a22857f762717). New export orders decreased. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improvement of manufacturing still at a low level (http://www.markiteconomics.com/Survey/PressRelease.mvc/d01543f85bbb4426968a22857f762717). 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 Dec month ∆%: 4.2 Dec 12-month ∆%: 5.6 Blog 2/8/15
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:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html

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

Table VE-1 provides month and 12-month rates of growth of new orders of manufacturing in Germany from Jan 2010 to Dec 2014. There are fluctuations in both monthly rates and in the past 12 months. Table VE-1 reveals strong fluctuations in an evident deceleration of total orders for industry of Germany with recent oscillating improvement. Total orders for manufacturing increased 4.2 percent in Dec 2014 and increased 5.6 percent in 12 months. There is the same behavior for total, foreign and domestic orders with decline in 12-month rates from two-digit levels to single digits and negative changes. An important aspect of Germany is that the bulk of orders is domestic or from other European countries while foreign orders have been growing rapidly. There is weakening world trade affecting export economies. As in other countries, data on orders for manufacturing are highly volatile. Most 12-month percentage changes from Jan 2012 to Sep 2012 in Table VE-1 are negative largely because of the unusual strength of the Germany economy in the beginning of 2011 but more recently because of slowing world economy in 2012-2014.

Table VE-1, Germany, Volume of Orders Received in Manufacturing, Total, Domestic and Foreign, ∆%  

	Total 12 M	Total M	Foreign 12 M	Foreign M	Home 12 M	Home M
2014
Dec	5.6	4.2	6.2	4.8	4.6	3.4
Nov	-1.4	-2.4	1.0	-0.9	-4.5	-4.5
Oct	2.6	2.9	2.2	0.6	3.1	5.9
Sep	2.1	1.1	4.1	4.0	-0.4	-2.6
Aug	-2.1	-4.2	-0.1	-6.5	-4.5	-1.0
Jul	5.9	4.8	9.3	7.7	1.5	1.1
Jun	-4.0	-2.4	-5.0	-3.2	-2.4	-1.4
May	7.7	-1.1	7.6	-0.4	7.8	-2.0
Apr	3.7	2.6	4.6	4.1	2.5	0.8
Mar	3.2	-2.3	2.5	-3.8	4.2	-0.3
Feb	7.6	0.7	9.3	0.5	5.6	1.1
Jan	5.8	-0.1	8.2	-1.7	2.9	2.2
2013
Dec	8.4	0.3	10.7	2.2	5.0	-2.4
Nov	4.5	0.6	6.0	-0.5	2.5	2.2
Oct	3.7	-0.5	4.1	0.0	3.1	-1.1
Sep	11.2	2.7	13.7	5.1	8.0	-0.4
Aug	0.0	0.6	-0.9	-0.4	1.0	1.8
Jul	5.1	-2.9	5.5	-4.7	4.8	-0.3
Jun	4.8	5.1	7.9	6.1	0.7	3.9
May	-3.6	-0.3	-1.6	0.6	-6.2	-1.5
Apr	5.9	-2.4	7.6	-2.0	3.6	-2.8
Mar	-5.6	2.4	-4.4	2.9	-7.2	1.8
Feb	-2.7	1.6	-1.5	1.9	-4.2	1.1
Jan	0.3	-1.2	1.9	-2.6	-1.7	0.9
2012
Dec	-9.1	1.7	-6.7	2.5	-12.6	0.6
Nov	-0.9	-3.1	2.4	-4.9	-5.1	-0.6
Oct	4.5	4.1	7.0	7.0	1.3	0.3
Sep	-8.9	-2.2	-6.6	-3.7	-11.7	-0.4
Aug	-4.4	-0.5	-2.1	0.4	-7.1	-1.6
Jul	-1.6	0.4	0.6	0.6	-4.2	0.2
Jun	-4.5	-1.9	-6.4	-1.9	-1.7	-2.0
May	-11.0	1.1	-3.7	2.4	-18.8	-0.6
Apr	-3.9	-2.1	-4.4	-3.2	-3.1	-0.5
Mar	-2.2	2.7	-1.2	3.7	-3.3	1.4
Feb	-4.3	0.5	-4.7	1.7	-3.8	-0.9
Jan	-2.6	-2.3	-4.6	-3.8	-0.2	-0.4
2011
Dec	0.0	2.7	-0.3	4.9	0.5	0.0
Nov	-4.8	-3.3	-8.2	-5.4	-0.3	-0.7
Oct	0.1	1.8	2.1	3.5	-2.1	-0.2
Sep	2.2	-3.6	1.9	-4.7	2.6	-2.2
Aug	7.1	-0.6	5.2	0.6	9.4	-2.0
Jul	4.9	-2.3	4.6	-6.2	5.4	2.9
Jun	3.5	-0.3	7.8	9.2	-2.0	-10.6
May	23.1	2.8	16.0	-3.8	31.8	11.3
Apr	6.7	1.7	9.6	2.1	3.0	1.1
Mar	9.8	-2.9	12.3	-2.9	6.9	-3.0
Feb	21.5	0.8	24.1	0.4	18.4	1.6
Jan	22.5	3.8	26.1	3.6	18.2	4.0
2010
Dec	21.8	-2.6	26.8	-3.7	15.4	-1.1
Nov	21.4	5.2	27.1	8.5	15.0	1.2
Oct	14.2	0.6	18.2	0.3	10.0	0.9
Sep	13.9	-1.4	15.6	-3.6	11.9	1.6
Aug	22.2	2.6	29.7	4.7	14.5	0.0
Jul	14.1	-1.0	21.4	-1.0	6.4	-0.9
Jun	27.6	2.7	30.6	3.5	24.2	1.8
May	24.8	0.1	29.6	0.9	19.4	-0.9
Apr	29.9	2.9	34.0	3.0	25.7	3.0
Mar	29.4	5.0	32.9	5.1	25.8	4.9
Feb	24.0	0.0	28.7	0.6	18.6	-0.7
Jan	17.0	3.8	23.8	4.3	9.8	3.1
Dec 2009	9.1	-1.7	10.5	-2.6	7.3	-0.5
Dec 2008	-28.3	-6.7	-31.5	-9.5	-23.7	-2.9
Dec 2007	7.1	-0.9	9.1	-2.0	4.4	0.2
Dec 2006	2.8	0.8	3.4	0.5	2.2	1.1
Dec 2005	5.0	-0.5	10.4	-1.1	-1.4	0.3
Dec 2004	12.7	6.5	13.0	8.5	12.7	4.9
Dec 2003	10.7	2.4	16.4	5.4	5.1	-0.8
Dec 2002	-0.2	-3.4	-0.8	-6.6	0.2	-0.3
Average ∆% 2003-2007	7.6		10.4		4.5
Average ∆% 2003-2012	2.3		3.9		0.3

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally adjusted; 12 M: Non-adjusted Source: Statistisches Bundesamt Deutschland

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

Orders for capital goods of Germany are shown in Table VE-2. Total capital goods orders increased 5.7 percent in Dec 2014 and increased 6.1 percent in 12 months. Domestic orders increased 2.3 percent in Dec 2014 and foreign orders increased 7.6 percent. There has been deceleration from 2010 and early 2011 with growth rates falling from two digit levels to single digits, and multiple negative changes with recent improvement. An important aspect of Germany’s economy shown in Tables VE-1 and VE-2 is the success in increasing the competitiveness of its economic activities as shown by rapid growth of orders for industry after the recession of 2001 in the period before the global recession beginning in late 2007. Germany adopted fiscal and labor market reforms to increase productivity.

Table VE-2, Germany, Volume of Orders Received of Capital Goods Industries, Total, Foreign and Domestic, ∆%

	Total 12 M	Total M	Foreign 12 M	Foreign M	Domestic 12 M	Domestic M
2014
Dec	6.1	5.7	5.6	7.6	6.9	2.3
Nov	-0.9	-2.9	0.9	-0.7	-3.9	-6.7
Oct	4.9	3.4	3.4	-0.1	7.6	9.8
Sep	1.1	1.5	2.4	4.2	-1.2	-3.1
Aug	-2.4	-6.6	-0.3	-9.6	-5.7	-1.0
Jul	8.8	9.2	12.6	12.7	2.3	3.3
Jun	-7.6	-5.1	-9.0	-6.4	-4.7	-3.0
May	10.1	-0.2	10.0	1.2	10.5	-2.4
Apr	5.4	3.7	6.4	5.7	3.6	0.4
Mar	3.2	-2.9	1.2	-5.0	6.5	0.7
Feb	7.4	0.5	9.0	0.1	4.7	1.4
Jan	7.0	-1.3	9.4	-4.0	3.2	3.9
2013
Dec	10.7	1.6	14.8	5.4	3.2	-5.2
Nov	6.8	1.9	7.4	1.0	5.3	3.6
Oct	2.7	-3.0	2.1	-3.3	3.3	-2.5
Sep	14.6	3.7	17.1	6.9	10.3	-1.5
Aug	3.1	1.0	1.5	-0.7	5.7	3.8
Jul	6.3	-5.3	7.3	-7.4	5.0	-1.4
Jun	9.1	9.2	13.5	10.1	1.8	7.5
May	-3.1	-0.4	-0.4	1.4	-7.8	-3.3
Apr	6.0	-2.8	7.3	-3.3	3.7	-2.0
Mar	-5.9	1.5	-4.4	2.6	-8.2	-0.3
Feb	0.1	2.8	2.7	2.8	-4.0	2.6
Jan	3.1	-1.3	5.8	-2.2	-1.4	0.2
2012
Dec	-7.7	2.8	-4.6	3.1	-13.3	2.2
Nov	-0.7	-4.7	3.1	-6.4	-6.5	-1.4
Oct	4.6	5.6	6.3	8.5	2.1	0.8
Sep	-7.5	-1.6	-4.8	-2.9	-11.6	0.5
Aug	-4.6	-1.5	-2.6	-0.4	-7.4	-3.5
Jul	-0.3	0.7	1.2	1.1	-2.7	-0.1
Jun	-7.1	-1.9	-9.9	-2.1	-1.9	-1.3
May	-12.0	1.0	-2.8	1.9	-23.9	-0.4
Apr	-3.3	-3.4	-4.2	-4.6	-1.7	-1.6
Mar	2.2	5.3	3.3	7.8	0.2	1.2
Feb	-5.9	1.7	-7.0	2.2	-4.2	0.9
Jan	-3.7	-4.1	-6.5	-5.0	1.0	-2.8
2011
Dec	1.2	3.0	-0.1	4.2	3.5	1.1
Nov	-6.5	-4.6	-10.5	-7.8	0.7	1.0
Oct	3.1	3.9	6.2	6.7	-2.0	-0.7
Sep	2.9	-4.2	2.2	-5.8	4.0	-1.5
Aug	6.7	0.0	4.5	1.3	10.6	-2.0
Jul	7.2	-6.2	6.4	-10.1	8.8	0.9
Jun	9.1	1.4	13.3	14.3	2.0	-15.8
May	27.5	4.8	17.7	-4.7	43.5	20.9
Apr	11.0	3.7	14.1	4.8	6.3	2.1
Mar	12.0	-5.9	14.4	-5.4	8.5	-6.7
Feb	29.3	2.7	32.5	1.4	24.8	4.8
Jan	26.8	3.6	32.8	3.9	17.7	3.0
2010
Dec	27.4	-5.2	31.2	-7.1	21.1	-1.6
Nov	30.4	8.9	37.0	13.0	20.1	2.0
Oct	20.5	0.4	24.9	-0.3	14.3	1.7
Sep	18.2	-2.7	20.3	-5.4	14.7	2.0
Aug	27.5	5.6	40.0	7.8	11.5	1.9
Jul	14.1	-2.4	28.1	-2.3	-2.5	-2.2
Jun	32.0	3.7	38.7	5.2	22.1	1.0
May	26.2	1.9	36.6	2.0	12.8	1.8
Apr	31.0	3.0	41.4	3.6	18.1	2.0
Mar	25.8	6.4	33.8	7.4	15.7	4.8
Feb	21.2	-0.9	31.3	0.4	8.3	-2.9
Jan	17.0	4.1	29.6	2.4	2.8	7.1
Dec 2009	8.1	-1.2	13.6	-1.5	0.3	-1.0
Dec 2008	-32.2	-7.2	-36.8	-10.0	-24.5	-3.6
Dec 2007	9.4	-0.6	11.6	-2.3	6.1	2.2
Dec 2006	3.5	2.2	3.9	2.9	2.9	1.2
Dec 2005	1.8	-2.1	9.7	-2.5	-8.4	-1.6
Dec 2004	19.5	11.2	18.6	12.2	20.6	9.7
Dec 2003	11.7	2.1	17.2	5.0	5.4	-1.6
Dec 2002	-2.8	-4.3	-3.7	-8.1	-1.8	0.2
Average ∆% 2003-2007	9.0		12.1		4.9
Average ∆% 2003-2012	3.0		4.7		0.5

Notes: AE: Annual Equivalent; M: Month; M: Calendar and seasonally-adjusted; 12 M: Non-adjusted

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1 of the German Statistisches Bundesamt Deutschland shows the sharp upward trend of total orders in manufacturing before the global recession. There is also an obvious upward trend in the recovery from the recession with Germany’s economy being among the most dynamic in the advanced economies until the slowdown beginning in the final months of 2011 and what could be stationary series from late 2011 into 2012 but risk of decline/stability in the final segment.

Chart VE-1, Germany, Volume of Total Orders in Manufacturing, Non-Adjusted, 2010=100

Source:  Statistisches Bundesamt Deutschland

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

Chart VE-5 shows non-adjusted total orders in manufacturing and trend. There was sharp recovery from the global recession with subsequent decline. Trend reversed upwardly and could be flattening/increasing.

Chart VE-2, Germany, Volume of Total Orders in Manufacturing and Trend, Non-Adjusted, 2010=100

Source: Statistisches Bundesamt Deutschland

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

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

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

Period	Average ∆%
1949-2013	3.2
2007-2013	0.3
2000-2013	1.1
2000-2012	1.1
2000-2007	1.8
1990-1999	2.0
1980-1989	2.6
1970-1979	3.7
1960-1969	5.7
1950-1959	4.2

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=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, decreased from 49.7 in Dec to 49.3 in Jan, indicating marginal contraction (http://www.markiteconomics.com/Survey/PressRelease.mvc/6125b8f5670345fc95608961c451a13d). 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/6125b8f5670345fc95608961c451a13d). The Markit France Services Activity index decreased from 50.6 in Dec to 49.4 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/6125b8f5670345fc95608961c451a13d). The Markit France Manufacturing Purchasing Managers’ Index^® increased to 49.2 in Jan from 47.5 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/5c64595cdb86401685388c76f015bc55). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds stabilization in manufacturing with weak demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/5c64595cdb86401685388c76f015bc55). 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:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.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

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

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 49.4 in Dec to 51.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/de602c4f66774a9498effbd5e79d4f8e). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds weak demand in stabilizing economy (http://www.markiteconomics.com/Survey/PressRelease.mvc/de602c4f66774a9498effbd5e79d4f8e). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 48.4 in Dec to 49.9 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/b6c075a50679413aa05172baa1dc30bc). 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/b6c075a50679413aa05172baa1dc30bc). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Jan month ∆%: -0.4 Jan 12-month ∆%: -0.6 Blog 2/8/15
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:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html

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

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 55.8 in Dec to 57.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/7f74a45a346049b090efdde7439da2fa). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.5 percent in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/7f74a45a346049b090efdde7439da2fa). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased to 53.0 in Jan from 52.7 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/8e3dcd3441ab4a48b0e5c1c95742e8fc). New export orders increased moderately in Jan with increases in business from France, German, Japan, Poland, USA and the Middle East. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions suggest growth at a quarterly rate of 0.2 percent in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/8e3dcd3441ab4a48b0e5c1c95742e8fc). Table UK provides the economic indicators for the United Kingdom.

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:

2/1/15 http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html

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

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