Global Competitive Devaluation, Rules, Discretionary Authorities and Slow Productivity Growth, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, Stagnating Real Disposable Income, Financial Repression, World Cyclical Slow Growth and Global Recession Risk: Part V

 

Global Competitive Devaluation, Rules, Discretionary Authorities and Slow Productivity Growth, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, Stagnating Real Disposable Income, Financial Repression, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Twenty Seven Million Unemployed or Underemployed

IA1 Summary of the Employment Situation

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

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

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 most countries for IVQ2014. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 1.1 percent in IQ2012, 4.4 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 1.5 percent, which is much lower than 4.4 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 0.6 percent in IIIQ2012 at the SAAR of minus 2.2 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 0.7 percent and changed 0.0 percent relative to a year earlier. Japan grew 1.4 percent in IQ2013 at the SAAR of 5.7 percent and increased 0.5 percent relative to a year earlier. Japan’s GDP increased 0.8 percent in IIQ2013 at the SAAR of 3.2 percent and increased 1.4 percent relative to a year earlier. Japan’s GDP grew 0.4 percent in IIIQ2013 at the SAAR of 1.5 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 1.4 percent, increasing 2.3 percent relative to a year earlier. Japan’s GDP increased 1.3 percent in IQ2014 at the SAAR of 5.5 percent and increased 2.4 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 0.4 percent relative to a year earlier. Japan’s GDP contracted 0.6 percent in IIIQ2014 at the SAAR of minus 2.3 percent and fell 1.4 percent relative to a year earlier. In IVQ2014, Japan’s GDP grew 0.6 percent, at the SAAR of 2.2 percent, decreasing 0.5 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. The GDP of the euro area increased 0.3 percent in IVQ2014 and increased 0.9 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. Germany’s GDP increased 0.7 percent in IVQ2014 and increased 1.6 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/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html) with weak hiring (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.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 0.5 percent at SAAR of 2.2 percent and increased 2.4 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 0.7 percent and 2.5 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 2.5 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. The GDP of Italy changed 0.0 percent in IVQ20214 and declined 0.3 percent relative to a year earlier
• France. France’s GDP increased 0.2 percent in IQ2012 and increased 0.6 percent relative to a year earlier. France’s GDP decreased 0.3 percent in IIQ2012 and increased 0.4 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.2 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 0.2 percent relative to a year earlier. The GDP of France increased 0.7 percent in IIQ2013 and 0.7 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIIQ2013 and increased 0.3 percent relative to a year earlier. The GDP of France increased 0.3 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. The GDP of France increased 0.1 percent in IVQ2014 and increased 0.2 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: 4.4	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: -1.5	3.5
China	2.1	7.6
Euro Area	-0.3	-0.6
Germany	0.1	0.3 0.8 CA
France	-0.3	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: –0.6 SAAR: –2.2	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: -0.7	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: 1.4 SAAR: 5.7	0.5
China	1.7	7.8
Euro Area	-0.4	-1.2
Germany	-0.4	-1.8
France	0.0	-0.2
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: 0.8 SAAR: 3.2	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: 1.5	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: -1.4	2.3
China	1.8	7.6
Euro Area	0.2	0.4
Germany	0.4	1.0
France	0.3	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: 1.3 SAAR: 5.5	2.4
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	0.7	2.5
	IIQ2014/IQ2014	IIQ2014/IIQ2013
USA	QOQ 1.1 SAAR 4.6	2.6
Japan	QOQ: -1.7 SAAR: -6.7	-0.4
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: -0.6 SAAR: -2.3	-1.4
China	1.9	7.3
Euro Area	0.2	0.8
Germany	0.1	1.2
France	0.3	0.4
Italy	-0.1	-0.4
UK	0.7	2.5
	IVQ2014/IIIQ2014	IVQ2014/IVQ2013
USA	QOQ: 0.5 SAAR: 2.2	2.4
Japan	QOQ: 0.6 SAAR: 2.2	-0.5
China	1.5	7.3
Euro Area	0.3	0.9
Germany	0.7	1.6
France	0.1	0.2
Italy	0.0	-0.3
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/world-financial-turbulence-squeeze-of.html and earlier (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 Jan 2015, Japan’s exports increased 17.0 percent in 12 months while imports decreased 9.0 percent. The second part of Table V-4 shows that net trade deducted 1.4 percentage points from Japan’s growth of GDP in IIQ2012, deducted 1.9 percentage points from GDP growth in IIIQ2012 and deducted 0.4 percentage points from GDP growth in IVQ2012. Net trade added 0.3 percentage points to GDP growth in IQ2012, 1.6 percentage points in IQ2013 and 0.2 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.5 percentage points from GDP growth in Japan. Net trade ducted 2.1 percentage points from GDP growth in Japan in IVQ2013. Net trade deducted 1.2 percentage point from GDP growth of Japan in IQ2014. Net trade added 4.2 percentage points to GDP growth in IIQ2014. Net trade added 0.2 percentage points to GDP growth in IIIQ2014 and added 0.9 percentage points in IVQ2014.

• China. In Jan 2015, China exports decreased 3.3 percent relative to a year earlier and imports decreased 19.9 percent.
• Germany. Germany’s exports increased 3.4 percent in the month of Dec 2014 and increased 10.0 percent in the 12 months ending in Dec 2014. Germany’s imports decreased 0.8 percent in the month of Dec 2014 and increased 4.0 percent in the 12 months ending in Dec. 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 0.0 percentage points to GDP growth in IIQ2014 and added 0.4 percentage points in IIIQ2014. Net trade added 0.2 percentage points to GDP growth in IVQ2014.
• 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 0.2 percentage points to UK value added in IQ2014 and 0.3 percentage points in IIQ2014. Net trade deducted 0.7 percentage points to GDP growth in IIIQ2014 and added 0.6 percentage points in IVQ2014.
• France. France’s exports increased 1.8 percent in Dec 2014 while imports increased 2.6 percent. France’s exports increased 3.7 percent in the 12 months ending in Dec 2014 and imports decreased 1.4 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 0.1 percentage points in IQ2014. Net trade deducted 0.2 percentage points from France’s GDP growth in IIQ2014 and deducted 0.2 percentage points in IIIQ2014. Net trade added 0.1 percentage points to France’s GDP growth in IVQ2014.
• 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. Net trade deducted 1.15 percentage points from GDP growth in IVQ2014. Industrial production increased 0.2 percent in Jan 2015 and decreased 0.3 percent in Dec 2014 after increasing 1.1 percent in Nov 2014. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production increased 0.2 percent in January after decreasing 0.3 percent in December. The rates of change in output for September through December are all slightly lower than previously published; even so, production is estimated to have advanced at an annual rate of 4.3 percent in the fourth quarter of last year. In January, manufacturing output moved up 0.2 percent and was 5.6 percent above its year-earlier level. The index for mining decreased 1.0 percent, with the decline more than accounted for by a substantial drop in the index for oil and gas well drilling and related support activities. The output of utilities increased 2.3 percent. At 106.2 percent of its 2007 average, total industrial production in January was 4.8 percent above its level of a year earlier. Capacity utilization for the industrial sector was unchanged in January at 79.4 percent, a rate that is 0.7 percentage point below its long-run (1972–2014) average.”

In the six months ending in Jan 2015, United States national industrial production accumulated increase of 1.6 percent at the annual equivalent rate of 3.2 percent, which is lower than growth of 4.8 percent in the 12 months ending in Jan 2015. Excluding growth of 1.1 percent in Nov 2014, growth in the remaining five months from Aug 2014 to Jan 2015 accumulated to 0.5 percent or 1.2 percent annual equivalent. Industrial production declined in two of the past six months. Industrial production expanded at annual equivalent 4.1 percent in the most recent quarter from Nov 2014 to Jan 2015 and at 2.4 percent in the prior quarter Aug to Oct 2014. Business equipment accumulated growth of 1.4 percent in the six months from Aug 2014 to Jan 2015 at the annual equivalent rate of 2.8 percent, which is lower than growth of 7.3 percent in the 12 months ending in Jan 2015. 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 was unchanged in January at 79.4 percent, a rate that is 0.7 percentage point below its long-run (1972–2014) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and oscillating growth in past months.

Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 25.2 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 24.2 percent from the trough in Apr 2009 to Jan 2015. Manufacturing output in Jan 2015 is 3.1 percent below the peak in Jun 2007. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,126.4 billion than actual $16,311.6 billion. There are about two trillion dollars of GDP less than at trend, explaining the 28.3 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html). US GDP in IVQ2014 is 11.5 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,311.6 billion in IVQ2014 or 8.8 percent at the average annual equivalent rate of 1.2 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. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 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		Jan 2015 17.0 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		Jan 2015 -9.0 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		2015 -3.3 Jan 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		2015 -19.9 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	8.0 12-M Dec	2.4 Jan-Dec	1.0 12-M Dec	0.1 Jan-Dec
Germany	3.4 Dec CSA	10.0 Dec	-0.8 Dec CSA	4.0 Nov
France Dec	1.8	3.7	2.6	-1.4
Italy Dec	2.6	6.3	-1.6	-1.3
UK	-0.2 Dec	-0.1 Oct-Dec 14 /Oct-Dec 13	-2.2 Dec	-2.2 Oct-Dec 14/Oct-Dec 13
Net Trade % Points GDP Growth	% Points
USA	IVQ2014 -1.15 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	0.3 IQ2012 -1.4 IIQ2012 -1.9 IIIQ2012 -0.4 IVQ2012 1.6 IQ2013 0.2 IIQ2013 -1.5 IIIQ2013 -2.1 IVQ2013 -1.2 IQ2014 4.2 IIQ2014 0.2 IIIQ2014 0.9 IVQ2014
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 0.0 IIIQ2014 0.4 IVQ2014 0.2
France	0.1 IIIQ2012 0.1 IVQ2012 -0.1 IQ2013 0.3 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 -0.1 IQ2014 -0.2 IIQ2014 -0.2 IIIQ2014 0.1 IVQ2014
UK	0.7 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.2 IQ2014 0.3 IIQ2014 -0.7 IIIQ2014 0.6 IVQ2014

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 in Table VB-5 for Jan 2015. The share of Asia in Japan’s trade is close to one-half for 53.9 percent of exports and 48.7 percent of imports. Within Asia, exports to China are 17.0 percent of total exports and imports from China 24.3 percent of total imports. While exports to China increased 20.8 percent in the 12 months ending in Jan 2015, imports from China decreased 6.9 percent. The largest export market for Japan in Jan 2015 is the US with share of 19.4 percent of total exports, which is close to that of China, and share of imports from the US of 8.8 percent in total imports. Japan’s exports to the US increased 16.5 percent in the 12 months ending in Jan 2015 and imports from the US decreased 1.4 percent. Western Europe has share of 10.9 percent in Japan’s exports and of 10.1 percent in imports. Rates of growth of exports of Japan in Jan 2015 are 16.5 percent for exports to the US, 6.6 percent for exports to Brazil and 0.4 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 Jan 2015 are mixed. Imports from Asia decreased 3.0 percent in the 12 months ending in Jan 2015 while imports from China decreased 3.0 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

Jan 2015	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,144,713	17.0	7,322,176	-9.0
Asia	3,314,119 % Total 53.9	22.7	3,562,992 % Total 48.7	-3.0
China	1,041,905 % Total 17.0	20.8	1,778,299 % Total 24.3	-6.9
USA	1,192,663 % Total 19.4	16.5	647,255 % Total 8.8	-1.4
Canada	78,303	20.8	93,241	5.2
Brazil	40,584	6.6	86,272	-14.3
Mexico	87,868	21.2	38,506	7.0
Western Europe	671,916 % Total 10.9	8.2	741,708 % Total 10.1	-3.3
Germany	160,392	0.4	208,587	-8.8
France	48,630	-0.4	98,481	-0.5
UK	115,715	31.7	59,238	10.2
Middle East	216,735	6.1	1,022,772	-38.3
Australia	115,777	5.1	467,520	-1.9

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 53.9 in Feb from 53.0 in Jan, indicating expansion at slightly higher rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/febc72758d7e4f4da8961c17c008d1f9). This index has remained above the contraction territory of 50.0 during 67 consecutive months. The employment index did not change from 51.7 in Jan to 51.7 in Feb with input prices rising at faster rate, new orders increasing at faster rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/febc72758d7e4f4da8961c17c008d1f9). David Hensley, Director of Global Economic Coordination at JP Morgan, finds moderate acceleration of world economic growth in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/febc72758d7e4f4da8961c17c008d1f9). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 52.0 in Feb from 51.7 in Dec (http://www.markiteconomics.com/Survey/PressRelease.mvc/e58af6424edc4dfeb2fe8b62b2a84ca6). New export orders expanded for the nineteenth 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 seasonally adjusted 4.0 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/e58af6424edc4dfeb2fe8b62b2a84ca6). The HSBC Brazil Composite Output Index, compiled by Markit, increased from 49.2 in Jan to 51.3 in Feb, indicating moderate contraction in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/e3331afa76fc4a1bb68dc6331473ddb0). The HSBC Brazil Services Business Activity index, compiled by Markit, increased from 48.4 in Jan to 52.3 in Feb, indicating stronger services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/e3331afa76fc4a1bb68dc6331473ddb0). Pollyana De Lima, Economist at Markit, finds stronger services activity with uncertanties (http://www.markiteconomics.com/Survey/PressRelease.mvc/e3331afa76fc4a1bb68dc6331473ddb0). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) decreased from 50.7 in Jan to 49.6 in Feb, indicating moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/a3de289a55704217948d1da667940e14). Paul Smith, Economist at Markit, finds stagnation 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 increased to 54.3 in Feb from 53.9 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/76d54ef7fac944e6a41abf20258b097f). New export orders softened. Chris Williamson, Chief Economist at Markit, finds that manufacturing provides strong contribution to economic growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/76d54ef7fac944e6a41abf20258b097f). The Markit Flash US Services PMI™ Business Activity Index increased from 54.0 in Jan to 57.0 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/2a607041731a438ab26c3eff9bf6bd5f). The Markit Flash US Composite PMI™ Output Index increased from 54.4 in Jan to 56.8 in Feb. Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with growth of GDP around 3.0 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/2a607041731a438ab26c3eff9bf6bd5f). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased to 57.2 in Feb from 54.4 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/de457cc1d40b4f0182e3e9adca09f723). The Markit US Services PMI™ Business Activity Index increased from 54.2 in Jan to 57.1 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/de457cc1d40b4f0182e3e9adca09f723). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at around 2.2 percent annual in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/de457cc1d40b4f0182e3e9adca09f723). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 55.1 in Feb from 53.9 in Jan, which indicates expansion at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/c79b0b20c18a4644aebaddcf853fe976). New foreign orders expanded at moderate rate. Chris Williamson, Chief Economist at Markit, finds that the index suggests strong manufacturing growing at around annual 4.0 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/c79b0b20c18a4644aebaddcf853fe976). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® decreased 0.6 percentage points from 53.5 in Jan to 52.9 in Feb, which indicates growth at slower rate (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=29038). The index of new orders decreased 0.4 percentage points from 52.9 in Jan to 52.5 in Feb. The index of new export orders decreased 1.0 percentage points from 49.5 in Jan to 48.5 in Feb, contracting at faster rate. The Non-Manufacturing ISM Report on Business^® PMI increased 0.2 percentage points from 56.7 in Jan to 56.9 in Feb, indicating growth of business activity/production during 67 consecutive months, while the index of new orders decreased 2.8 percentage points from 59.5 in Jan to 56.7 in Feb (http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=29043). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	Jan 12 months NSA ∆%: -0.1; ex food and energy ∆%: 1.6 Jan month SA ∆%: -0.7; ex food and energy ∆%: 0.2 Blog 3/1/15
Producer Price Index	Finished Goods Jan 12-month NSA ∆%: -3.1; ex food and energy ∆% 1.5 Jan month SA ∆% = -2.1; ex food and energy ∆%: 0.2 Final Demand Jan 12-month NSA ∆%: 0.0; ex food and energy ∆% 1.6 Jan month SA ∆% = -0.8; ex food and energy ∆%: -0.1 Blog 2/22/15 3/1/15
PCE Inflation	Jan 12-month NSA ∆%: headline 0.2; ex food and energy ∆% 1.3 Blog 3/8/15
Employment Situation	Household Survey: Jan Unemployment Rate SA 5.5% Blog calculation People in Job Stress Feb: 27.2 million NSA, 16.5% of Labor Force Establishment Survey: Feb Nonfarm Jobs +295,000; Private +288,000 jobs created  Jan 12-month Average Hourly Earnings Inflation Adjusted ∆%: 2.3 Blog 3/8/15
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 Dec 2014 3.667 million lower by 0.101 million than 3.768 million in Dec 2006 Blog 2/15/15
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 2.4 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 2.2 Blog 3/1/15
Real Private Fixed Investment	SAAR IVQ2014 4.5 ∆% IVQ2007 to IVQ2014: 3.3% Blog 3/1/15
Corporate Profits	IIIQ2014 SAAR: Corporate Profits 3.1; Undistributed Profits 12.4 Blog 12/28/14
Personal Income and Consumption	Jan month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.9 Real Personal Consumption Expenditures (RPCE): 0.3 12-month Jan NSA ∆%: RDPI: 4.2; RPCE ∆%: 3.4 Blog 3/8/15
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	Jan month SA ∆%: 0.2 Jan 12 months SA ∆%: 4.8 Manufacturing Jan SA 0.2 ∆% Jan 12 months SA ∆% 5.6, NSA 5.5 Capacity Utilization: 79.4 Blog 2/22/15
Productivity and Costs	Nonfarm Business Productivity IVQ2014∆% SAAE -2.2; IVQ2014/IVQ2013 ∆% -0.1; Unit Labor Costs SAAE IVQ2014 ∆% 4.1; IVQ2014/IVQ2013 ∆%: 2.6 Blog 3/8/15
New York Fed Manufacturing Index	General Business Conditions From Jan 9.95 to Feb 7.78 New Orders: From Jan 6.09 to Feb 1.22 Blog 2/22/15
Philadelphia Fed Business Outlook Index	General Index from Jan 6.3 to Feb 5.2 New Orders from Jan 8.5 to Feb 5.4 Blog 2/22/15
Manufacturing Shipments and Orders	New Orders SA Jan ∆% -0.2 Ex Transport -1.8 Jan NSA New Orders ∆% minus 4.9 Ex transport minus 6.1 Blog 3/8/15
Durable Goods	Jan New Orders SA ∆%: minus 2.8; ex transport ∆%: minus 0.3 Jan 15/Jan 14 New Orders NSA ∆%: 1.6; ex transport ∆% 1.5 Blog 3/1/15
Sales of New Motor Vehicles	Feb 2015 2,408,742; Jan 2014 2,206.454. Feb 15 SAAR 16.66 million, Jan 15 SAAR 16.92 million, Feb 2015 SAAR 15.41 million Blog 3/8/15
Sales of Merchant Wholesalers	Jan-Dec 2014/Jan-Dec 2013 NSA ∆%: Total 5.1; Durable Goods: 5.8; Nondurable Goods: 4.5 Blog 2/15/15
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Dec 14 12-M NSA ∆%: Sales Total Business 2.8; Manufacturers 0.1 Retailers 4.3; Merchant Wholesalers 4.3 Blog 2/15/15
Sales for Retail and Food Services	Jan 2015/Jan 2014 ∆%: Retail and Food Services 2.8; Retail ∆% 1.6 Blog 2/15/15
Value of Construction Put in Place	Jan SAAR month SA ∆%: minus 1.1 Jan 12-month NSA:1.2 Blog 3/8/15
Case-Shiller Home Prices	Dec 2014/ Dec 2013 ∆% NSA: 10 Cities 4.3; 20 Cities: 4.5; National: 4.6 ∆% Dec SA: 10 Cities 0.8 ; 20 Cities: 0.9 Blog 3/1/15
FHFA House Price Index Purchases Only	Dec SA ∆% 0.8; 12 month NSA ∆%: 5.5 Blog 3/1/15
New House Sales	Jan 2014 month SAAR ∆%: minus 0.2 Jan 2014/Jan 2013 NSA ∆%: 9.1 Blog 3/1/15
Housing Starts and Permits	Jan Starts month SA ∆% -2.0; Permits ∆%: -0.7 Jan 2015/Jan 2014 NSA ∆% Starts 18.3; Permits  ∆% 4.2 Blog 2/22/15
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	Jan 12-month NSA ∆%: Imports -8.0; Exports -5.4 Blog 2/15/15
Consumer Credit	Dec ∆% annual rate: Total 5.4; Revolving 7.9; Nonrevolving 4.5 Blog 2/15/15
Net Foreign Purchases of Long-term Treasury Securities	Dec Net Foreign Purchases of Long-term US Securities: $35.4 billion Major Holders of Treasury Securities: China $1244 billion; Japan $1231 billion; Total Foreign US Treasury Holdings Jan $6154 billion Blog 2/22/15
Treasury Budget	Fiscal Year 2015/2014 ∆% Jan: Receipts 8.7; Outlays 8.3; Individual Income Taxes 8.2 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 2/15/2015
CBO Budget and Economic Outlook	2012 Deficit $1087 B 6.8% GDP Debt $11,281 B 70.4% GDP 2013 Deficit $680 B, 4.1% GDP Debt $11,983 B 72.3% GDP 2014 Deficit $483 B 2.8% GDP Debt $12,779 B 74.1% GDP 2025 Deficit $1,088B, 4.0% GDP Debt $21,605B 78.7% 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 3/1/15
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:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

2/8/15 http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html

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

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 Feb 2015, light vehicle sales accumulated to 2,408,742 which is higher by 9.2 percent relative to 2,206,454 a year earlier (http://motorintelligence.com/m_frameset.html). The seasonally adjusted annual rate of light vehicle sales in the US reached 16.23 million in Feb 2015, lower than 16.66 million in Jan 2015 and higher than 15.41 million in Feb 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 2015. Output virtually stagnated since the late 1990s.

Chart VA-1, US, Motor Vehicles and Parts Output, 1972-2015

Source: Board of Governors of the Federal Reserve System

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

Manufacturers’ shipments decreased 2.0 percent in Jan 2015 and decreased 0.9 percent in Dec 2014 after decreasing 1.0 percent in Nov 2014. New orders decreased 0.2 percent in Jan 2015, after decreasing 3.5 percent in Dec 2014 and decreasing 1.7 percent in Nov 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 1.8 percent in Jan 2015 after decreasing 2.3 percent in Dec 2014 and decreasing 1.3 percent in Nov 2014. Capital goods new orders, indicating investment, increased 8.1 percent in Jan 2015 after decreasing 10.3 percent in Dec 2014 and decreasing 2.7 percent in Nov 2014. New orders of nondefense capital goods increased 9.4 percent in Jan 2015 after decreasing 10.1 percent in Dec 2014 and decreasing 1.5 percent in Nov 2014. Excluding more volatile aircraft, capital goods orders increased 0.5 percent in Jan 2015 after decreasing 0.5 percent in Dec 2014 and decreasing 0.5 percent in Nov 2014.

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

	Jan 2015  ∆%	Dec 2014 ∆%	Nov 2014  ∆%
Total
S	-2.0	-0.9	-1.0
NO	-0.2	-3.5	-1.7
Excluding Transport
S	-2.2	-1.8	-1.0
NO	-1.8	-2.3	-1.3
Excluding Defense
S	-1.8	-1.1	-1.0
NO	-0.2	-3.3	-1.3
Durable Goods
S	-1.0	1.5	-0.7
NO	2.8	-3.7	-2.2
Machinery
S	-1.5	-0.9	-0.8
NO	1.4	-3.3	-0.8
Computers & Electronic Products
S	-0.6	-0.2	-0.3
NO	1.7	-1.5	-0.6
Computers
S	-2.1	-2.4	-0.9
NO	23.6	-31.1	1.2
Transport Equipment
S	-1.1	4.0	-1.0
NO	9.7	-10.0	-4.0
Automobiles
S	-9.5	3.5	-0.9
Motor Vehicles
S	-0.3	2.9	0.1
NO	0.0	1.5	1.1
Nondefense Aircraft
S	9.7	3.4	-4.6
NO	128.7	-58.1	-11.0
Capital Goods
S	-0.3	1.2	-0.9
NO	8.1	-10.3	-2.7
Nondefense Capital Goods
S	1.3	0.8	-1.2
NO	9.4	-10.1	-1.5
Capital Goods ex Aircraft
S	0.1	0.4	-0.5
NO	0.5	-0.5	-0.5
Nondurable Goods
S	-3.1	-3.3	-1.2
NO	-3.1	-3.3	-1.2

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

Source: US Census Bureau

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

Chart VA-2 of the US Census Bureau provides new orders of manufacturers from Feb 2014 to Jan 2015. 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 2014-2015 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 2015. 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, 1992-2015

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 2015 not seasonally adjusted (NSA). Shipments of all manufacturing industries in Jan 2015 total $437.6 billion and new orders total $429.8 billion, growing respectively by minus 4.1 percent and minus 4.9 percent relative to the same period in 2014. Excluding transportation equipment, shipments fell 5.7 percent and new orders decreased 6.1 percent. Excluding defense, shipments fell 4.1 percent and new orders fell 5.2 percent. Durable goods shipments reached $217.7 billion in Jan 2015, or 49.8 percent of the total, growing by 1.7 percent, and new orders $210.0 billion, or 48.9 percent of the total, growing by 1.7 percent. Important information in Table VA-3 is the large share of nondurable goods with shipments of $219.9 billion or 50.2 percent of the total, decreasing by 10.5 percent. Capital goods have relatively high value of $75.3 billion for shipments, growing 4.5 percent, and new orders $72.7 billion, decreasing 1.8 percent, which could be an indicator of future investment. Excluding aircraft, capital goods shipments reached $61.3 billion, growing 4.1 percent, and new orders $64.1 billion, increasing 0.4 percent. There is no suggestion in these data that the US economy is close to recession but manufacturing accounts for 11.2 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 2015	Shipments	∆% 2015/ 2014	New Orders	∆% 2015/ 2014
Total	437,582	-4.1	429,826	-4.9
Excluding Transport	374,375	-5.7	370,789	-6.1
Excluding Defense	428,447	-4.1	421,969	-5.2
Durable Goods	217,731	3.3	209,975	1.7
Machinery	30,805	0.7	32,416	-7.1
Computers & Electronic Products	25,871	-3.3	18,871	5.3
Computers	262	-28.0	305	71.3
Transport Equipment	62,847	6.7	59,037	3.1
Automobiles	8,205	-5.5
Motor Vehicles	20,515	9.7	20,760	9.7
Nondefense Aircraft	10,315	15.5	7,038	-19.0
Capital Goods	75,308	4.5	72,671	-1.8
Nondefense Capital Goods	67,894	5.7	67,014	-2.1
Capital Goods ex Aircraft	61,309	4.1	64,133	0.4
Nondurable Goods	219,851	-10.5	219,851	-10.5
Food Products	64,621	3.6
Petroleum Refineries	40,404	-38.9
Chemical Products	57,692	-4.5

Note: Transport: transportation Source: US Census Bureau

Source: US Census Bureau

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

Chart VA-4 of the US Census Bureau provides value of manufacturer’s new orders not seasonally adjusted from Jan 1992 to Jan 2015. 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, 1992-2015

Source: US Census Bureau

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

Construction spending at seasonally adjusted annualized rate (SAAR) reached $971.4 billion in Jan 2015, which was lower by 1.1 percent than in the prior month of Dec 2014, as shown in Table VA-4. Residential construction, with $357.2 billion accounting for 36.8 percent of total value of construction, increased 0.6 percent in Jan and nonresidential construction, with $614.1 billion accounting for 63.2 percent of the total, decreased 2.0 percent. Public construction decreased 12.6 percent while private construction decreased 0.5 percent. Data in Table VA-4 show that nonresidential construction at $614.1 billion is much higher in value than residential construction at $357.2 billion while total private construction at $697.6 billion is much higher than public construction at $273.8 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 0.78 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 0.61 percentage points to GDP growth and residential construction added 0.11 percentage points (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html).

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

Jan 2015	Jan 2014 SAAR  $ Millions	Month ∆%	12-Month ∆%
Total	971,384	-1.1	1.8
Residential	357,247	0.6	-3.2
Nonresidential	614,137	-2.0	4.8
Total Private	697,597	-0.5	0.5
Private Residential	351,722	0.6	-3.4
New Single Family	204,885	0.6	9.7
New Multi-Family	48,753	1.9	29.8
Private Nonresidential	345,875	-1.6	4.8
Total Public	273,787	-2.6	5.1
Public Residential	5,525	-1.7	14.5
Public Nonresidential	268,262	-2.6	4.9

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 nine declines in the monthly rate from Dec 2011 to Jan 2015, with four in 2014. Growth in 12 months NSA fell from 8.2 percent in Dec 2012 to 1.2 percent in Jan 2015.

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*
Jan 2015	67,298	1.2	971,384	-1.1
Dec 2014	75,988	2.8	982,023	0.8
Nov	82,054	2.1	974,301	-0.6
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 2015, not seasonally adjusted, reached $67.3 billion, which is higher by 1.2 percent than $66.5 billion in the same period in 2014. The depth of the contraction is shown by the decline of construction spending from $81.1 billion in Jan 2006 to $67.3 billion in the same period in 2015, or decline by minus 17.0 percent. The decline in inflation-adjusted terms is much higher. The all-items not seasonally adjusted CPI (consumer price index) increased from 198.3 in Jan 2006 to 233.707 in Jan 2015 (http://www.bls.gov/cpi/data.htm) or by 17.9 percent. The comparable decline from Jan 2005 to Jan 2015 is minus 5.8 percent. Construction spending in Jan 2015 increased by 12.4 percent relative to the same period in 2003. Construction spending is higher by 0.3 percent in Jan 2015 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 2015 $ MM	67,298
Jan 2014	66,486
∆% to 2015	1.2
Jan 2013	59,636
∆% to 2015	12.8
Jan 2012 $ MM	56,578
∆% to 2015	18.9
Jan 2011 $ MM	51,012
∆% to 2015	31.9
Jan 2010 $MM	55,674
∆% to 2015	20.9
Jan 2009	67,127
∆% to 2015	0.3
Jan 2006 $ MM	81,058
∆% to 2015	-17.0
Jan 2005 $ MM	71,474
∆% to 2015	-5.8
Jan 2003 $ MM	59,877
∆% to 2015	12.4

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 2015. 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, 2002-2015

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 2015. Construction in Jan 2015 of $67.3 billion increased by 1.2 percent relative to $66.5 billion in Jan 2014 and increased by 31.9 percent relative to $51.0 billion in Jan 2010. Construction in Jan 2015 of $67.3 billion is lower by 17.0 percent relative to $81.1 billion in Jan 2005.

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

Year	Jan	Jul	Aug	Sep	Oct	Nov	Dec
2002	59,516	78,863	79,460	76,542	75,710	71,362	63,984
2003	59,877	82,971	85,191	83,841	83,133	77,915	71,050
2004	64,934	93,614	96,164	92,538	90,582	86,394	77,733
2005	71,474	103,158	106,706	103,269	102,339	97,549	88,172
2006	81,058	108,423	110,434	104,191	101,582	95,339	86,436
2007	79,406	107,090	110,430	105,150	103,847	94,822	84,218
2008	77,365	98,563	99,877	96,858	95,722	86,176	76,763
2009	67,127	83,528	84,510	81,344	80,071	72,013	64,178
2010	55,674	73,233	75,977	74,892	73,607	68,100	60,246
2011	51,012	72,112	77,106	75,388	74,246	68,845	62,319
2012	56,578	78,457	82,183	80,890	82,353	74,754	67,431
2013	59,636	83,299	86,909	86,101	87,163	80,373	73,893
2014	66,486	86,888	88,992	89,530	90,522	82,054	75,988
2015	67,298	NA	NA	NA	NA	NA	NA

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 1993-2015

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 2015. There is a peak in 2005 to 2007 with subsequent collapse of SAARs and rebound in 2012-2015.

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

Year	Jan	Sep	Oct	Nov	Dec
2002	858,654	832,134	839,690	844,697	855,921
2003	863,855	911,589	925,732	925,985	948,491
2004	938,826	1,012,290	1,015,562	1,023,210	1,037,684
2005	1,036,187	1,131,739	1,145,663	1,156,977	1,178,305
2006	1,183,861	1,151,104	1,139,292	1,137,488	1,153,491
2007	1,149,899	1,165,162	1,152,511	1,127,558	1,108,958
2008	1,106,498	1,056,892	1,051,176	1,031,004	994,216
2009	965,270	881,340	870,697	852,896	832,484
2010	818,468	800,329	802,013	799,636	779,919
2011	757,900	805,565	806,849	809,833	817,198
2012	823,583	876,091	883,853	879,539	882,637
2013	869,232	924,153	939,933	952,531	961,158
2014	954,642	966,432	980,422	974,301	982,023
2015	971,384	NA	NA	NA	NA

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 2015. 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 2014-2015.

Chart VA-7, US, Construction Expenditures SAAR 2002-2015

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 2015. 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, 2002-2015

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, 2002-2015

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 97.8 percent between 1993 and 2014 but most of the growth, 65.3 percent, was concentrated in 1993 to 2000 with increase of 19.6 percent between 2000 and 2014. Total value of construction increased 13.2 percent between 2002 and 2014 with value of nonresidential construction increasing 35.9 percent while value of residential construction fell 11.9 percent. Value of total construction fell 13.0 percent between 2005 and 2014, with value of residential construction declining 42.7 percent while value of nonresidential construction rose 24.6 percent. Value of total construction fell 17.7 percent between 2006 and 2014, with value of nonresidential construction increasing 10.7 percent while value of residential construction fell 42.9 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	960,200	606,105	354,095
∆% 1993-2014	97.8
∆% 1993-2000	65.3
∆% 2000-2014	19.6
∆% 2002-2014	13.2	35.9	-11.9
∆% 2005-2014	-13.0	24.6	-42.7
∆% 2006-2014	-17.7	10.7	-42.9

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 2014. Growth weakened from 1.9 per cent in 1995 and 2.6 percent in 1996 to contractions of 2.0 percent in 1998 and 0.2 percent in 1999. Growth rates were below 2 percent with exception of 2.3 percent in 2000, 2.4 percent in 2004 and 2.2 percent in 2007. Japan’s GDP contracted sharply by 1.0 percent in 2008 and 5.5 percent in 2009. As in most advanced economies, growth was robust at 4.7 percent in 2010 but mediocre at minus 0.5 percent in 2011 because of the tsunami and 1.8 percent in 2012. Japan’s GDP grew 1.6 percent in 2013 and stagnated in 2014. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). Japan’s real GDP in calendar year 2014 is 0.7 percent higher than in calendar year 2007 (http://www.esri.cao.go.jp/index-e.html).

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

Calendar Year	∆%
1995	1.9
1996	2.6
1997	1.6
1998	-2.0
1999	-0.2
2000	2.3
2001	0.4
2002	0.3
2003	1.7
2004	2.4
2005	1.3
2006	1.7
2007	2.2
2008	-1.0
2009	-5.5
2010	4.7
2011	-0.5
2012	1.8
2013	1.6
2014	0.0

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/announcements/release_2015/k150121a.pdf) with changes on Jul 21, 2015 (https://www.boj.or.jp/en/announcements/release_2015/k150121a.pdf). For fiscal 2014, the forecast is of growth of GDP between minus 0.7 to minus 0.3 percent, with the all items CPI less fresh food 2.9 to 3.3 percent (https://www.boj.or.jp/en/announcements/release_2015/k150121a.pdf). The critical difference is forecast of the CPI excluding fresh food of 0.3 to 1.4 percent in 2015 and 0.9 to 2.3 percent in 2016 (https://www.boj.or.jp/en/announcements/release_2015/k150121a.pdf). Consumer price inflation in Japan excluding fresh food was minus 0.2 percent in Dec 2014 and 2.5 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
Jan 2015	-0.6 to -0.4 [-0.5]	+2.9 to +3.2 [+2.9]	+0.9 to +1.2 [+0.9]
Oct 2014	+0.2 to +0.7 [+0.5]	+3.1 to +3.4 [+3.2]	+1.1 to +1.4 [+1.2]
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
Jan 2015	+1.8 to +2.3 [+2.1]	+0.4 to +1.3 [+1.0]	+0.4 to +1.3 [+1.0]
Oct 2014	+1.2 to +1.7 [+1.5]	+1.8 to 2.6 [+2.4]	+1.1 to +1.9 [+1.7]
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
Jan 2015	+1.5 to +1.7 [+1.6]	+1.5 to +2.3 [+2.2]	+1.5 to +2.3 [+2.2]
Oct 2014	+1.0 to +1.4 [+1.2]	+1.9 to 3.0 [+2.8]	+1.2 to 2.3 [+2.1]
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_2015/k150121a.pdf

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

The Markit/JMMA Flash Japan Manufacturing PMI Index™ with the Flash Japan Manufacturing PMI™ decreased from 52.2 in Jan to 51.5 in Feb and the Flash Japan Manufacturing Output Index™ did not change from 52.7 in Jan to 52.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/ca6a231ce52548dfbbc034868f886d7a). 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/ca6a231ce52548dfbbc034868f886d7a). The Markit Composite Output PMI Index stabilized from 51.7 in Jan to 50.0 in Feb, indicating neutral business activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/c6f5af0722b34d22816279e47f90c51b). The Markit Business Activity Index of Services decreased to 48.5 in Feb from 51.3 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/c6f5af0722b34d22816279e47f90c51b). Amy Brownbill, Ecoomist at Markit and author of the report, finds positive business expecations (http://www.markiteconomics.com/Survey/PressRelease.mvc/c6f5af0722b34d22816279e47f90c51b). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased marginally from 52.2 in Jan to 51.6 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/83eeef8035ec47408f22d0c32d17f783). 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	Jan ∆% -1.3 12 months ∆% 0.3 Blog 2/15/15
Consumer Price Index	Jan NSA ∆% -0.2; Jan 12 months NSA ∆% 2.4 Blog 3/1/15
Real GDP Growth	IVQ2014 ∆%: 0.6 on IIIQ2014;  IVQ2014 SAAR 2.2; ∆% from quarter a year earlier: -0.5 % 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 2/22/15
Employment Report	Jan Unemployed 2.31 million Change in unemployed since last year: minus 70 thousand Unemployment rate: 3.6 % Blog 3/1/15
All Industry Indices	Dec month SA ∆% -0.3 12-month NSA ∆% -0.9 Blog 2/22/15
Industrial Production	Jan SA month ∆%: 4.0 12-month NSA ∆% -2.6 Blog 3/1/15
Machine Orders	Total Dec ∆% 8.6 Private ∆%: 17.5 Dec ∆% Excluding Volatile Orders 8.3 Blog 2/15/15
Tertiary Index	Dec month SA ∆% -0.3 Dec 12 months NSA ∆% minus -0.8 Blog 2/15/15
Wholesale and Retail Sales	Jan 12 months: Total ∆%: -2.9 Wholesale ∆%: -3.4 Retail ∆%: -2.0 Blog 3/1/15
Family Income and Expenditure Survey	Jan 12-month ∆% total nominal consumption -2.4, real -5.1 Blog 3/1/15
Trade Balance	Exports Jan 12 months ∆%: 17.0 Imports Jan 12 months ∆% -9.0 Blog 2/22/15

Links to blog comments in Table JPY:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

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

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

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

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

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

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

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

2/23/14 http://cmpassocregulationblog.blogspot.com/2014/02/squeeze-of-economic-activity-by-carry.html

12/15/13 http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.html

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

9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html

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

VC China. China estimates an index of nonmanufacturing purchasing managers based on a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The total index increased from 55.7 in Jan 2011 to 58.0 in Mar 2012, decreasing to 53.9 in Aug 2013. The index decreased from 56.0 in Nov 2013 to 54.6 in Dec 2013, easing to 53.4 in Jan 2014. The index moved to 53.9 in Feb 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 51.2 in Feb 2015.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Feb 2015	53.9	51.2	52.5	51.2	58.7
Jan	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 53.9 in Feb 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 49.9 in Feb 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 50.4 in Feb 2015.

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

	IPM	PI	NOI	INV	EMP	SDEL
2015
Feb	49.9	51.4	50.4	48.2	47.8	49.9
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 49.9 in Feb 2015.

Chart CIPMMFG, China, Manufacturing Index of Purchasing Managers, Seasonally Adjusted

Source: National Bureau of Statistics of China

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

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

	Unemployment Rate %	Number Unemployed Millions
Jan 2015	11.2	18.059
Dec 2014	11.3	18.199
Nov	11.4	18.408
Oct	11.5	18.419
Sep	11.5	18.455
Aug	11.5	18.468
Jul	11.6	18.603
Jun	11.5	18.526
May	11.6	18.625
Apr	11.6	18.631
Mar	11.7	18.764
Feb	11.8	18.814
Jan	11.8	18.954
Dec 2013	11.9	18.980
Nov	11.9	19.075
Oct	11.9	19.128
Sep	12.0	19.246
Aug	12.0	19.228
Jul	12.0	19.220
Jun	12.0	19.283
May	12.1	19.305
Apr	12.0	19.296
Mar	12.0	19.243
Feb	12.0	19.255
Jan	12.0	19.208
Dec 2012	11.9	18.986
Nov	11.8	18.885
Oct	11.7	18.784
Sep	11.5	18.510
Aug	11.5	18.369
Jul	11.4	18.339
Jun	11.4	18.267
May	11.3	18.049
Apr	11.2	17.876
Mar	11.0	17.608
Feb	10.9	17.334
Jan	10.7	17.114
Dec 2011	10.7	17.058
Nov	10.6	16.926
Oct	10.4	16.613
Sep	10.4	16.482
Aug	10.2	16.250
Jul	10.1	16.089
Jun	10.0	15.875
May	10.0	15.828
Apr	9.9	15.688
Mar	10.0	15.773
Feb	10.0	15.800
Jan	10.1	15.912
Dec 2010	10.1	15.999

Source: EUROSTAT

http://ec.europa.eu/eurostat

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/a7d8d6168eec42029dd64eb08292a5ee) is improving. The overall Flash HSBC China Manufacturing PMI^™ increased from 49.7 in Jan to 50.1 in Feb, while the Flash HSBC China Manufacturing Output Index increased from 50.3 in Jan to 50.8 in Feb, indicating moderate growth. Exports orders indicate contraction. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds need for monetary/fiscal stimulus supporting growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/a7d8d6168eec42029dd64eb08292a5ee). The HSBC China Services PMI^™, compiled by Markit, shows the HSBC Composite Output, combining manufacturing and services, increasing from 51.0 in Jan to 51.8 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/bec13309543745349f9bb6a462d26c14). Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds that increase of new orders suggests future growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/bec13309543745349f9bb6a462d26c14). The HSBC China Services Business Activity index increased from 51.8 in Jan to 52.0 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/bec13309543745349f9bb6a462d26c14). Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, finds that the services PMI shows sustained activity at modest pace (http://www.markiteconomics.com/Survey/PressRelease.mvc/bec13309543745349f9bb6a462d26c14). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, increased to 50.7 in Feb from 49.7 in Jan, indicating moderate improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/bc53a64bf226406d94fcc16284db2bbe). New export orders declined modestly. Hongbin Qu, Chief Economist, China and Co-Head of Asian Economic Research at HSBC, finds improvement in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/bc53a64bf226406d94fcc16284db2bbe). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Jan 12-month ∆%: minus 4.3 Jan month ∆%: -1.1 Blog 2/15/15
Consumer Price Index	Jan month ∆%: 0.3 Jan 12 months ∆%: 0.8 Blog 2/15/15
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	Jan balance $60.0 billion Exports 12M ∆% -3.3 Imports 12M ∆% -19.9 Cumulative Jan 2015: $60.0 billion Blog 2/15/15

Links to blog comments in Table CNY:

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

1/25/15 http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.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 52.6 in Jan to 53.5 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/be007dfe9a364164b10392d0572ffcf2). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP growth at around 0.3 percent in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/be007dfe9a364164b10392d0572ffcf2). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP increased from 52.6 in Jan to 53.3 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/e1972f0591de4394aa4e977fcad4d0a1). 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/e1972f0591de4394aa4e977fcad4d0a1). The Markit Eurozone Services Business Activity Index increased from 52.7 in Jan to 53.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/e1972f0591de4394aa4e977fcad4d0a1). The Markit Eurozone Manufacturing PMI^® did not change from 51.0 in Jan to 51.0 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/88acf5800873414f90a017221726b9be). New export orders increased. Chris Williamson, Chief Economist at Markit, finds modest improvement of industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/88acf5800873414f90a017221726b9be). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IVQ2014 ∆% 0.3; IVQ2014/IVQ2013 ∆% 0.9 Blog 2/15/15
Unemployment	Jan 2015: 11.4 % unemployment rate; Jan 2015: 18.059 million unemployed Blog 3/8/15
HICP	Jan month ∆%: -1.6 12 months Jan ∆%: -0.6 Blog 3/1/15
Producer Prices	Euro Zone industrial producer prices Jan ∆%: -0.9 Jan 12-month ∆%: -3.4 Blog 3/8/15
Industrial Production	Dec month ∆%: 0.0; Dec 12 months ∆%: -0.2 Blog 2/15/15
Retail Sales	Dec month ∆%: 0.3 Dec 12 months ∆%: 2.8 Blog 2/8/15
Confidence and Economic Sentiment Indicator	Sentiment 102.1 Feb 2015 Consumer minus 6.7 Feb 2015 Blog 3/1/15
Trade	Jan-Dec 2014/Jan-Dec 2013 Exports ∆%: 2.4 Imports ∆%: 0.1 Dec 2014 12-month Exports ∆% 8.0 Imports ∆% 1.0 Blog 2/22/15

Links to blog comments in Table EUR:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

2/8/15 http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html

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

EUROSTAT estimates the rate of unemployment in the euro area at 11.2 percent in

Jan 2015, as shown in Table VD-1. The number of unemployed in Jan 2015 was 18.059 million, which was 0.895 million lower than 18.954 million in Jan 2014. The rate of unemployment fell from 11.8 percent in Jan 2014 to 11.2 percent in Jan 2015.

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

	Unemployment Rate %	Number Unemployed Millions
Jan 2015	11.2	18.059
Dec 2014	11.3	18.199
Nov	11.4	18.408
Oct	11.5	18.419
Sep	11.5	18.455
Aug	11.5	18.468
Jul	11.6	18.603
Jun	11.5	18.526
May	11.6	18.625
Apr	11.6	18.631
Mar	11.7	18.764
Feb	11.8	18.814
Jan	11.8	18.954
Dec 2013	11.9	18.980
Nov	11.9	19.075
Oct	11.9	19.128
Sep	12.0	19.246
Aug	12.0	19.228
Jul	12.0	19.220
Jun	12.0	19.283
May	12.1	19.305
Apr	12.0	19.296
Mar	12.0	19.243
Feb	12.0	19.255
Jan	12.0	19.208
Dec 2012	11.9	18.986
Nov	11.8	18.885
Oct	11.7	18.784
Sep	11.5	18.510
Aug	11.5	18.369
Jul	11.4	18.339
Jun	11.4	18.267
May	11.3	18.049
Apr	11.2	17.876
Mar	11.0	17.608
Feb	10.9	17.334
Jan	10.7	17.114
Dec 2011	10.7	17.058
Nov	10.6	16.926
Oct	10.4	16.613
Sep	10.4	16.482
Aug	10.2	16.250
Jul	10.1	16.089
Jun	10.0	15.875
May	10.0	15.828
Apr	9.9	15.688
Mar	10.0	15.773
Feb	10.0	15.800
Jan	10.1	15.912
Dec 2010	10.1	15.999

Source: EUROSTAT

http://ec.europa.eu/eurostat

Table VD-2 shows the disparity in rates of unemployment in the euro area with 11.2 percent for the region as a whole and 18.059 million unemployed but 4.7 percent in Germany and 1.985 million unemployed. At the other extreme is Spain with rate of unemployment of 23.4 percent and 5.391 million unemployed. The rate of unemployment of the European Union in Jan 2015 is 9.8 percent with 23.815 million unemployed.

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

Jan 2015	Unemployment Rate %	Unemployed Millions
Euro Zone	11.2	18.059
Germany	4.7	1.985
France	10.2	2.989
Netherlands	7.2	0.645
Finland	8.8	0.236
Portugal	13.3	0.683
Ireland	10.0	0.214
Italy	12.6	3.221
Greece	25.8*	1.229*
Spain	23.4	5.391
Belgium	8.5	0.426
European Union	9.8	23.815

*Nov 2014

Source: EUROSTAT

http://ec.europa.eu/eurostat

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

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

Source: EUROSTAT

http://ec.europa.eu/eurostat

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1971 to 2014, 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, increasing to 1.6 percent in 2014.

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-DE, Germany, GDP ∆% on Prior Year

	Price Adjusted Chain-Linked	Price- and Calendar-Adjusted Chain Linked
Average ∆% 1991-2014	1.3
Average ∆% 1991-1999	1.5
Average ∆% 2000-2007	1.4
Average ∆% 2003-2007	2.2
Average ∆% 2007-2014	0.7
Average ∆% 2009-2014	1.9
2014	1.6	1.6
2013	0.1	0.2
2012	0.4	0.6
2011	3.6	3.7
2010	4.1	3.9
2009	-5.6	-5.6
2008	1.1	0.8
2007	3.3	3.4
2006	3.7	3.9
2005	0.7	0.9
2004	1.2	0.7
2003	-0.7	-0.7
2002	0.0	0.0
2001	1.7	1.8
2000	3.0	3.2
1999	2.0	1.9
1998	2.0	1.7
1997	1.8	1.9
1996	0.8	0.8
1995	1.7	1.8
1994	2.5	2.5
1993	-1.0	-1.0
1992	1.9	1.5
1991	5.1	5.2
1990	5.3	5.5
1989	3.9	4.0
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.3
1984	2.8	2.9
1983	1.6	1.5
1982	-0.4	-0.5
1981	0.5	0.6
1980	1.4	1.3
1979	4.2	4.3
1978	3.0	3.1
1977	3.3	3.5
1976	4.9	4.5
1975	-0.9	-0.9
1974	0.9	1.0
1973	4.8	5.0
1972	4.3	4.3
1971	3.1	3.0
1970	NA	NA

Source: Statistisches Bundesamt Deutschland (Destatis)

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

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

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

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

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

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

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

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

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

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

https://www.destatis.de/EN/PressServices/Press/pr/2015/02/PE15_048_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/02/PE15_61_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, increased from 53.5 in Jan to 54.3 in Feb. The index of manufacturing output reached 52.0 in Feb, decreasing from 52.3 in Jan, while the index of services increased to 55.5 in Feb from 54.0 in Jan. The overall Flash Germany Manufacturing PMI^® did not change from 50.9 in Jan to 50.9 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/54a10c0e6ce14dfbb978cdc2ae5b1d92). New orders in manufacturing expanded. Oliver Kolodseike, Economist at Markit, finds improving GDP growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/54a10c0e6ce14dfbb978cdc2ae5b1d92). 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 53.5 in Jan to 53.8 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/2b9e2def63d54291b499323d045c1e8d). Oliver Kolodseike, Senior Economist at Markit and author of the report, finds improvement in 2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2b9e2def63d54291b499323d045c1e8d). The Germany Services Business Activity Index increased from 54.0 in Jan to 54.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/2b9e2def63d54291b499323d045c1e8d). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 50.9 in Jan to 51.1 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/00764b709eef44c1a5905c0f98eac492). New export orders increased. 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/00764b709eef44c1a5905c0f98eac492).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IVQ2014 0.7 ∆%; IV/Q2014/IVQ2013 ∆% 1.6 2014/2013: 1.6% GDP ∆% 1970-2014 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 2/15/15 3/1/15
Consumer Price Index	Jan month NSA ∆%: -1.1 Jan 12-month NSA ∆%: 0.4 Blog 2/15/15
Producer Price Index	Jan month ∆%: -0.6 NSA, minus 0.5 CSA 12-month NSA ∆%: -2.2 Blog 2/22/15
Industrial Production	MFG Dec month CSA ∆%: 0.5 12-month NSA: 2.5 Blog 2/15/15
Machine Orders	MFG Dec month ∆%: 4.2 Dec 12-month ∆%: 5.6 Blog 2/8/15
Retail Sales	Jan Month ∆% 2.9 12-Month ∆% 5.3 Blog 3/8/15
Employment Report	Unemployment Rate SA Jan 4.7% Blog 3/1/15
Trade Balance	Exports Dec 12-month NSA ∆%: 10.0 Imports Dec 12 months NSA ∆%: 4.0 Exports Dec month CSA ∆%: 3.4; Imports Dec month CSA minus 0.8 Blog 2/15/15

Links to blog comments in Table DE:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

2/8/15 http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html

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

Retail sales in Germany adjusted for inflation are provided in Table VE-1. There have been sharp fluctuations in monthly and 12-month percentage changes. In Jan 2015, retail sales increased 2.9 percent and increased 5.3 percent in 12 months. Retail sales increased 0.6 percent in Dec 2014 and increased 4.8 percent in 12 months.

Table VE-1, Retail Sales in Germany Adjusted for Inflation

	12-Month ∆% NSA	Month ∆% SA and Calendar Adjusted
Jan 2015	5.3	2.9
Dec 2014	4.8	0.6
Nov	-1.2	0.5
Oct	2.5	2.0
Sep	2.8	-1.7
Aug	-1.0	0.7
Jul	1.2	-0.7
Jun	0.1	1.3
May	2.3	-0.2
Apr	3.6	-0.6
Mar	-0.7	-0.4
Feb	2.4	1.0
Jan	0.9	2.5
Dec 2013	0.2	-2.5
Nov	1.6	1.6
Oct	-0.2	-0.9
Sep	0.2	0.4
Aug	0.4	-0.3
Jul	3.3	0.6
Jun	-2.9	-1.1
May	0.2	0.8
Apr	2.5	0.2
Mar	-2.9	-0.1
Feb	-3.3	-0.1
Jan	2.2	2.0
Dec 2012	-3.1	-1.6
Nov	0.5	0.1
Oct	1.5	-0.5
Sep	-3.1	0.2
Aug	0.0	-0.2
Jul	-1.0	-0.7
Jun	4.6	1.0
May	-0.7	-0.4
Apr	-4.7	-0.6
Mar	4.2	1.0
Feb	2.5	1.9
Jan	2.0	-2.6
Dec 2011	0.8	1.0
Nov	0.9	-1.3
Oct	-0.4	0.5
Sep	1.2	0.4
Aug	3.4	-1.3
Jul	-2.4	1.3
Jun	-2.0	2.5
May	4.5	-2.7
Apr	4.8	1.4
Mar	-2.9	-2.4
Feb	3.0	2.2
Jan	3.3	-0.1
Dec 2010	-0.2	0.5
Dec 2009	-2.2
Dec 2008	3.4
Dec 2007	-6.2
Dec 2006	1.3

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-3 of the Statistisches Bundesamt Deutschland, Federal Statistical Office of Germany, shows retail sales at constant prices from 2010 to 2015. There appear to be fluctuations without trend.

Chart VE-1, Germany, Turnover in Retail Trade at Constant Prices 2010=100

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

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

Chart VE-2 of the Federal Statistical Office of Germany provides retail sales at current prices. The final segment suggests a trend of increase.

Chart VE-2, Germany, Turnover in Retail Sales at Current Prices, Original Values, 2010=100

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

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

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IVQ2014 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 2014, using fourth quarter data, is 1.0 percent because of the sharp impact of the global recession from IVQ2007 to IIQ2009. 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, 1949-2014

Period	Average ∆%
1949-2014	3.2
2007-2014	0.3
2000-2014	1.0
2000-2013	1.1
2000-2007	1.8
1990-1999	2.0
1980-1989	2.6
1970-1979	3.7
1960-1969	5.7
1950-1959	4.2

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=26&date=20150213

The Markit Flash France Composite Output Index increased from 49.3 in Jan to 52.2 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/b6bc1f701e814e5fab60f5e56429f5e4). Jack Kennedy, Senior Economist at Markit and author of the report, finds possible improvement in IQ2015 GDP (http://www.markiteconomics.com/Survey/PressRelease.mvc/b6bc1f701e814e5fab60f5e56429f5e4). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 49.3 in Jan to 52.2 in Feb, indicating strong improvement (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa544adb5bb042b6999fbd0d92bf7a2f). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds strengthening growth of services (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa544adb5bb042b6999fbd0d92bf7a2f). The Markit France Services Activity index increased from 49.4 in Jan to 53.4 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/aa544adb5bb042b6999fbd0d92bf7a2f). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 47.6 in Feb from 49.2 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/e784d5703ea041639d874f4aa5610ac1). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/e784d5703ea041639d874f4aa5610ac1). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Jan month ∆% -1.0 12 months ∆%: -0.4 2/22/15
PPI	Jan month ∆%: -0.9 Jan 12 months ∆%: -3.3 Blog 3/1/15
GDP Growth	IVQ2014/IIIQ2014 ∆%:0.1 IVQ2014/IVQ2013 ∆%: 0.2 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 2/15/15
Industrial Production	Dec ∆%: Manufacturing 1.2 12-Month ∆%: Manufacturing 0.3 Blog 2/15/15
Consumer Spending	Manufactured Goods Jan ∆%: 0.2 Jan 12-Month Manufactured Goods ∆%: 1.3 Blog 3/8/15
Employment	Unemployment Rate: IIIQ2014 9.9% Blog 12/7/14
Trade Balance	Dec Exports ∆%: month 1.8, 12 months 3.7 Dec Imports ∆%: month 2.6, 12 months -1.4 Blog 2/15/15
Confidence Indicators	Historical average 100 Feb Mfg Business Climate 99.0 Blog 3/1/15

Links to blog comments in Table FR:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The monthly report of household expenditures in consumption goods for France is in Table VF-1. Total consumption increased 0.6 percent in Jan 2015 after increasing 1.6 percent in Dec 2014 and increasing 0.2 percent in Nov 2014. Consumption of manufactured products increased 0.2 percent in Jan 2015 after increasing 1.3 percent in Dec 2014 and changing 0.0 percent in Nov 2014. Total consumption increased 2.6 percent in Jan 2015 relative to Jan 2014 and consumption of manufactured goods increased 2.1 percent in Jan 2015 relative to Jan 2014. Consumption of energy increased 1.3 percent in Jan 2015 and increased 2.2 percent in 12 months. Internal demand is weak throughout most advanced economies.

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

	Total	Food	Eng. Goods	Energy	Mfg Goods
Jan 2015	0.6	-0.1	1.3	0.6	0.2
Jan 2015/Jan 2014	2.6	1.4	2.2	5.8	2.1
Dec 2014	1.6	0.7	0.2	6.9	1.3
Nov	0.2	-0.1	0.6	0.0	0.0
Oct	-0.4	-0.1	1.0	-4.5	0.2
Sep	-0.5	0.6	-1.4	-0.6	-0.5
Aug	0.9	0.9	0.7	1.3	1.0
Jul	-0.7	-1.5	-0.1	-0.9	-0.9
Jun	0.9	1.2	0.9	0.2	1.3
May	0.0	-1.2	-0.4	3.8	-0.7
Apr	-0.2	1.1	-0.4	-2.2	0.1
Mar	0.5	0.4	-0.3	2.6	0.6
Feb	-0.3	-0.5	0.2	-1.1	-0.3
Jan	-1.3	-0.6	-0.4	-4.8	-0.9
Dec 2013	-0.2	0.1	0.8	-3.3	0.6
Nov	1.4	-0.5	0.5	7.3	0.2
Oct	-0.1	1.6	0.0	-3.4	0.6
Sep	0.3	-0.4	1.1	-0.4	0.2
Aug	-0.6	-0.3	-0.2	-1.9	-0.6
Jul	0.7	0.8	0.3	1.5	1.0
Jun	-1.4	-1.1	0.4	-6.1	-1.1
May	0.8	2.2	0.0	0.0	1.2
Apr	-0.6	-3.0	0.8	1.2	-0.5
Mar	0.7	1.6	-0.8	2.6	0.4
Feb	-0.2	-0.1	-1.1	1.9	-0.6
Jan	0.8	0.9	0.0	2.8	0.3
Dec 2012	-0.7	-0.1	0.6	-4.6	-0.2
Nov	-0.4	-0.5	-1.1	1.7	-0.7
Oct	0.2	-0.5	0.1	1.7	0.2
Sep	0.1	-0.5	0.5	0.4	0.1
Aug	-0.8	0.3	-1.1	-2.6	-1.0
Jul	0.3	-0.2	0.6	0.5	0.3
Jun	0.2	1.0	-0.6	0.7	0.2
May	0.1	-0.2	2.0	-3.8	1.2
Apr	0.2	0.1	-3.5	10.2	-1.7
Mar	-2.9	-1.9	1.3	-14.5	-0.7
Feb	2.4	1.4	-0.9	12.7	0.6
Jan	1.0	1.0	0.3	3.1	0.8
Dec 2011	-0.9	-1.0	-0.7	-1.3	-1.1
Nov	-0.2	0.3	0.2	-2.2	0.0
Oct	-0.2	-0.8	0.4	-0.4	-0.1
Sep	-0.3	0.6	-0.1	-2.9	-0.3
Aug	0.7	0.1	0.5	2.6	0.8
Jul	-0.2	0.2	-0.7	0.4	-0.2
Jun	0.6	-0.2	0.3	3.0	0.4
May	0.0	-0.5	-0.5	2.6	-0.7
Apr	-2.3	0.3	-3.1	-5.8	-1.8
Mar	-0.9	-0.4	-1.1	-1.7	-1.1
Feb	0.6	0.7	1.5	-2.1	1.2
Jan	-0.3	-0.7	1.7	-4.5	0.7
Dec 2010	0.6	0.6	-0.6	3.8	0.0

Eng. Goods: Engineered Goods

Source: Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=19&date=20150227

Chart VF-1 of the Institut National de la Statistique et des Études Économiques of France provides consumption of manufactured goods in France in volumes of chained 2005 billion euro from Jan 1980 to Jan 2015. Consumption of manufactured goods increased above the level before the global recession but shows declining trend in recent months with possible stabilization. There is new trend of increase in the final segment.

Chart VF-1, France, Consumption of Manufactured Goods, Volume Chained 2005 Billion, Seasonally and Working Day Adjusted, Jan 1980 to Jan 2015

Source: Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=19&date=20150227

Chart VF-2 of Institut National de la Statistique et des Études Économiques of France provides growth of total consumption in France. There is downward trend of monthly consumption with fluctuations and stability in the final segment followed by another drop in Jan-Feb 2013 and increase in Mar 2013 but renewed decrease in Apr 2013. Consumption rose again in May 2013 and fell in Jun 2013. Consumption increased in Jul 2013 and fell in Aug-Oct 2013. Consumption rose in Nov 2013 driven by electricity and fell marginally in Dec 2013. Consumption fell in Jan-Feb 2014 and rebounded in Mar 2014 with decline in Apr 2014. Consumption grew in May-Jun 2014, falling in Jul 2014 and rebounding in Aug 2014. Consumption decreased in Sep-Oct 2014 and rebounded in Nov-Dec 2014 and into Jan 2015.

Chart VF-2, France, Total Consumption of Goods, Billions of Euros Trading and Seasonally Adjusted and Quarterly ∆%

Source: Institut National de la Statistique et des Études Économiques

http://insee.fr/en/themes/info-rapide.asp?id=19&date=20150227

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 0.4 percent in IIIQ2014 relative to a year earlier. GDP fell 0.3 percent in IVQ2014 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
IVQ	-0.3
IIIQ	-0.4	-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 decreased from 51.2 in Jan to 50.0 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/b9a27bc11e08444fbd9ee7806f41ef6a). 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/b9a27bc11e08444fbd9ee7806f41ef6a). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 49.9 in Jan to 51.9 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ad026cef63847b2873d36705141c799). New export orders continued to increase. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds strengthening conditions in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4ad026cef63847b2873d36705141c799). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Feb month ∆%: 0.3 Feb 12-month ∆%: -0.2 Blog 3/1/15
Producer Price Index	Jan month ∆%: -1.6 Jan 12-month ∆%: -3.7 Blog 3/8/15
GDP Growth	IVQ2014/IIIQ2014 SA ∆%: 0.0 IVQ2014/IVQ2013 NSA ∆%: minus 0.3 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 2/15/15
Labor Report	Jan 2015 Participation rate 64.0% Employment ratio 55.8% Unemployment rate 12.6% Youth Unemployment 41.2% Blog 3/8/15
Industrial Production	Dec month ∆%: 0.4 12 months CA ∆%: 0.1 Blog 2/15/15
Retail Sales	Dec month ∆%: -0.2 Dec 12-month ∆%: 0.1 Blog 3/1/15
Business Confidence	Mfg Feb 99.1, Oct 96.3 Construction Feb 76.6, Oct 77.4 Blog 3/1/15
Trade Balance	Balance Dec SA €5153 million versus Nov €3816 Exports Dec month SA ∆%: 2.6; Imports month ∆%: -1.6 Exports 12 months Dec NSA ∆%: 6.3 Imports 12 months NSA ∆%: -1.3 Blog 2/22/15

Links to blog comments in Table IT:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

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

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

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

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

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

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

6/15/2014 http://cmpassocregulationblog.blogspot.com/2014/06/financialgeopolitical-risks-recovery.html

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

3/16/2014 http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html

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

12/15/13 http://cmpassocregulationblog.blogspot.com/2013/12/theory-and-reality-of-secular.html

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

9/15/13 http://cmpassocregulationblog.blogspot.com/2013/09/recovery-without-hiring-ten-million.html

8/11/13 http://cmpassocregulationblog.blogspot.com/2013/08/recovery-without-hiring-loss-of-full.html

6/16/13 http://cmpassocregulationblog.blogspot.com/2013/06/recovery-without-hiring-seven-million.html

3/17/13 http://cmpassocregulationblog.blogspot.com/2013/03/recovery-without-hiring-ten-million.html

Data on Italy’s labor market since 2004 are provided in Table VG-1. The unemployment rate has risen from 6.2 percent in Dec 2006 to 12.6 percent in Jan 2015. The rate of youth unemployment for ages 15 to 24 years increased from 21.0 percent in Dec 2006 to 41.2 percent in Jan 2015. As in other advanced economies, unemployment has reached high levels.

Table VG-1, Italy, Labor Report

	Participation Rate %	Employment Ratio %	Unemployment Rate %	Unemployment Rate 15-24 Years %
Jan 2015	64.0	55.8	12.6	41.2
Dec 2014	64.0	55.7	12.7	41.4
Nov	64.3	55.6	13.2	42.9
Oct	64.3	55.8	13.0	42.6
Sep	64.3	55.9	12.9	41.7
Aug	63.9	55.6	12.7	43.5
Jul	64.0	55.7	12.8	43.0
Jun	63.8	55.8	12.4	42.6
May	63.8	55.6	12.5	42.4
Apr	63.5	55.5	12.4	42.8
Mar	63.7	55.6	12.5	43.6
Feb	63.5	55.5	12.5	42.6
Jan	63.6	55.5	12.7	43.2
Dec 2013	63.6	55.5	12.5	42.5
Nov	63.5	55.5	12.4	42.0
Oct	63.3	55.4	12.3	42.1
Sep	63.3	55.3	12.4	41.5
Aug	63.5	55.6	12.3	40.8
Jul	63.2	55.5	12.0	39.7
Jun	63.3	55.5	12.2	38.5
May	63.5	55.6	12.2	37.8
Apr	63.4	55.7	12.0	38.9
Mar	63.3	55.6	11.9	39.1
Feb	63.5	55.8	11.9	38.9
Jan	63.5	55.9	11.8	38.7
Dec 2012	63.5	56.2	11.4	38.2
Nov	63.5	56.3	11.2	38.6
Oct	63.7	56.4	11.2	36.4
Sep	63.5	56.5	10.8	35.7
Aug	63.4	56.5	10.6	34.4
Jul	63.6	56.6	10.8	35.9
Jun	63.7	56.7	10.8	34.6
May	63.6	56.9	10.4	35.9
Apr	63.6	56.8	10.6	34.7
Mar	63.4	56.7	10.4	35.7
Feb	63.1	56.8	9.9	33.7
Jan	62.9	56.8	9.4	31.5
Dec 2011	62.8	56.7	9.6	31.4
Nov	62.5	56.6	9.4	31.6
Oct	62.3	56.8	8.7	29.0
Sep	62.1	56.5	8.9	30.1
Aug	62.2	56.9	8.5	29.0
Jul	62.0	56.8	8.3	29.3
Jun	61.8	56.8	8.0	28.8
May	61.9	56.8	8.1	28.8
Apr	61.6	56.8	7.7	27.7
Mar	62.0	57.1	7.8	27.3
Feb	61.7	56.8	7.8	26.5
Jan	61.7	56.6	8.0	28.8
Dec 2010	61.0	58.8	8.1	28.4
Dec 2009	62.2	56.9	8.4	26.6
Dec 2008	62.4	58.1	6.8	23.2
Dec 2007	63.0	58.8	6.5	22.3
Dec 2006	62.4	58.5	6.2	21.0
Dec 2005	62.6	57.8	7.6	23.2
Dec 2004	62.5	57.5	7.8	23.8

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/151146

Table VG-2 provides more detail on the labor report for Italy in Jan 2015. The level of employment changed 0.0 from Dec 2014 to Jan 2015 and increased 131,000 from Jan 2014 to Jan 2015. Unemployment decreased 21,000 in Jan 2015 and increased 7,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 41.2 percent in Jan 2015 for ages 15 to 24 years.

Table VG-2, Italy, Labor Report, NSA

Jan 2015	1000s	Change from Prior Month 1000s	∆% from Prior Month	Change from Prior Year 1000s	∆% from Prior Year
EMP	22,320	11	0.0	131	0.6
UNE	3,221	-21	-0.6	7	0.2
INA   15-64	14,062	-8	-0.1	-184	-1.3
EMP 15-24	906	-5	-0.6	-13	-1.4
UNE 15-24	636	-7	-1.0	-64	-9.1
INA 15-24	4,415	7	0.2	47	1.1
EMP %	55.8		0.1		0.3
UNE %	12.6		-0.1		0.0
Youth UNE %  15-24	41.2		-0.1		-2.0
INA % 15-64	36.0		0.0		-0.4

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

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/151146

Chart VG-1 provides the rate of unemployment in Italy that decreased from 12.7 percent in Jan 2014 to 12.6 percent in Jan 2015.

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2 of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment increased from 22.189 million in Jan 2014 to 22.320 million in Jan 2015.

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

Source: Istituto Nazionale di Statistica

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

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 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/naa2/second-estimate-of-gdp/q4-2014/index.html

The Business Activity Index of the Markit/CIPS UK Services PMI^® decreased from 57.2 in Jan to 56.7 in Feb (http://www.markiteconomics.com/Survey/PressRelease.mvc/55c2dfd969034d85b23cd35747e754c6). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.6 percent in IQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/55c2dfd969034d85b23cd35747e754c6). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased to 54.1 in Feb from 53.1 in Jan (http://www.markiteconomics.com/Survey/PressRelease.mvc/194fc399a4b94c9a8f8b659e4a221dcd). New export orders weakened. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds that manufacturing conditions suggest growth at a quarterly rate of 0.5 percent (http://www.markiteconomics.com/Survey/PressRelease.mvc/194fc399a4b94c9a8f8b659e4a221dcd). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Jan month ∆%: -0.9 Dec 12-month ∆%: 0.3 Blog 2/22/15
Output/Input Prices	Output Prices: Jan 12-month NSA ∆%: -1.8; excluding food, petroleum ∆%: 0.5 Input Prices: Dec 12-month NSA ∆%: -14.2 Excluding ∆%: -2.9 Blog 2/22/15
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 3/1/15
Industrial Production	Dec 2014/Dec 2013 ∆%: Production Industries 0.5; Manufacturing 2.4 Blog 2/15/15
Retail Sales	Jan month ∆%: -0.3 Jan 12-month ∆%: 5.4 Blog 2/22/15
Labor Market	Oct-Dec Unemployment Rate: 5.7%; Claimant Count 2.5%; Earnings Growth 2.1% Blog 2/22/15 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 ₤2895 million Exports Dec ∆%: -0.2; Oct-Dec ∆%: -0.1 Imports Dec ∆%: -2.2 Oct-Dec ∆%: -2.2 Blog 2/15/15

Links to blog comments in Table UK:

3/1/15 http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html

2/22/15 http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html

2/15/15 http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html

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