Interest Rate Policy and Dollar Revaluation, World Inflation Waves, Collapse of United States Dynamism of Income Growth and Employment Creation, United States Commercial Banks Assets and Liabilities, World Cyclical Slow Growth and Global Recession Risk: Part VII

 

Interest Rate Policy and Dollar Revaluation, World Inflation Waves, Collapse of United States Dynamism of Income Growth and Employment Creation, United States Commercial Banks Assets and Liabilities, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I World Inflation Waves

IA Appendix: Transmission of Unconventional Monetary Policy

IB1 Theory

IB2 Policy

IB3 Evidence

IB4 Unwinding Strategy

IC United States Inflation

IC Long-term US Inflation

ID Current US Inflation

IE Theory and Reality of Economic History, Cyclical Slow Growth Not Secular

IB Collapse of United States Dynamism of Income Growth and Employment Creation

II United States Commercial Banks Assets and Liabilities

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=29) to show GDP in dollars in 2013 and the growth rate of real GDP of the world and selected regional countries from 2013 to 2017. 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 3.4 percent in 2014 but accelerating to 3.5 percent in 2015, 3.8 percent in 2016 and 3.8 percent in 2016. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $34,883 billion of world output of $75,471 billion, or 46.2 percent, but are projected to grow at much lower rates than world output, 2.1 percent on average from 2014 to 2017 in contrast with 3.6 percent for the world as a whole. While the world would grow 15.3 percent in the four years from 2014 to 2017, the G7 as a whole would grow 8.6 percent. The difference in dollars of 2013 is high: growing by 15.2 percent would add around $11.5 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $4,920 billion but growing by 8.6 percent would add $6.5 trillion of output to the world, or about the output of Japan in 2013. 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 2013 of $29,358 billion, or 38.9 percent of world output. The EMDEs would grow cumulatively 19.9 percent or at the average yearly rate of 4.7 percent, contributing $5.8 trillion from 2014 to 2017 or the equivalent of somewhat less than the GDP of $9,469 billion of China in 2013. 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 2013 adds to $15,814 billion, or 21.0 percent of world output, which is equivalent to 45.3 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 2013	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016	Real GDP ∆% 2017
World	75,471	3.4	3.5	3.8	3.8
G7	34,883	1.7	2.3	2.3	2.0
Canada	1,839	2.5	2.2	2.0	2.0
France	2,807	0.4	1.2	1.5	1.7
DE	3,731	1.6	1.6	1.7	1.5
Italy	2,138	-0.4	0.5	1.1	1.1
Japan	4,920	-0.1	1.0	1.2	0.4
UK	2,680	2.6	2.7	2.3	2.2
US	16,768	2.4	3.1	3.1	2.7
Euro Area	13,143	0.9	1.5	1.7	1.6
DE	3,731	1.6	1.6	1.7	1.5
France	2,807	0.4	1.2	1.5	1.7
Italy	2,138	-0.4	0.5	1.1	1.1
POT	225	0.9	1.6	1.5	1.4
Ireland	232	4.8	3.9	3.3	2.8
Greece	242	0.7	2.5	3.7	3.2
Spain	1,393	1.4	2.5	2.0	1.8
EMDE	29,358	4.6	4.3	4.7	5.0
Brazil	2,391	0.1	-1.0	1.0	2.3
Russia	2,079	0.6	-3.8	-1.1	1.0
India	1,875	7.2	7.5	7.5	7.6
China	9,469	7.4	6.8	6.3	6.0

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

Source: IMF World Economic Outlook databank

http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/index.aspx

Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/index.aspx ). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2013 to 2017 for major countries and regions. In fact, unemployment rates for 2014 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 2014 for the countries with sovereign debt difficulties in Europe: 13.9 percent for Portugal (POT), 11.3 percent for Ireland, 26.5 percent for Greece, 24.5 percent for Spain and 12.8 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 I-2, IMF World Economic Outlook Database Projections of Unemployment Rate as Percent of Labor Force

	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016	% Labor Force 2017
World	NA	NA	NA	NA	NA
G7	7.1	6.4	6.0	5.8	5.8
Canada	7.1	6.9	7.0	6.9	6.8
France	10.3	10.2	10.1	9.9	9.7
DE	5.2	5.0	4.9	4.8	4.8
Italy	12.2	12.8	12.6	12.3	12.0
Japan	4.0	3.6	3.7	3.7	3.8
UK	7.6	6.2	5.4	5.4	5.4
US	7.4	6.2	5.5	5.2	5.0
Euro Area	12.0	11.6	11.1	10.6	10.3
DE	5.2	5.0	4.9	4.8	4.8
France	10.3	10.2	10.1	9.9	9.7
Italy	12.2	12.8	12.6	12.3	12.0
POT	16.2	13.9	13.1	12.6	12.1
Ireland	13.0	11.3	9.8	8.8	8.3
Greece	27.5	26.5	24.8	22.1	20.0
Spain	26.1	24.5	22.6	21.1	19.9
EMDE	NA	NA	NA	NA	NA
Brazil	5.4	4.8	5.9	6.3	5.9
Russia	5.5	5.1	6.5	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

http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/index.aspx

Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IQ2015 available now for all countries. There are preliminary estimates for most countries for IQ2015. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 1.1 percent in IQ2012, 4.3 percent at SAAR (seasonally adjusted annual rate) and 3.4 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.5 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 1.9 percent, which is much lower than 4.3 percent in IQ2012. Growth of 3.5 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.5 percent in IIIQ2012 at the SAAR of minus 1.8 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 5.6 percent and increased 0.5 percent relative to a year earlier. Japan’s GDP increased 0.7 percent in IIQ2013 at the SAAR of 2.7 percent and increased 1.4 percent relative to a year earlier. Japan’s GDP grew 0.5 percent in IIIQ2013 at the SAAR of 1.9 percent and increased 2.2 percent relative to a year earlier. In IVQ2013, Japan’s GDP decreased 0.3 percent at the SAAR of minus 1.0 percent, increasing 2.3 percent relative to a year earlier. Japan’s GDP increased 1.2 percent in IQ2014 at the SAAR of 4.9 percent and increased 2.4 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 1.8 percent at the SAAR of minus 6.9 percent and fell 0.4 percent relative to a year earlier. Japan’s GDP contracted 0.5 percent in IIIQ2014 at the SAAR of minus 2.1 percent and fell 1.4 percent relative to a year earlier. In IVQ2014, Japan’s GDP grew 0.3 percent, at the SAAR of 1.1 percent, decreasing 0.9 percent relative to a year earlier. The GDP of Japan increased 0.6 percent in IQ2015 at the SAAR of 2.4 percent and decreased 1.4 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 2.0 percent in IIQ2014, which annualizes at 8.2 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. The GDP of China grew at 1.3 percent in IQ2015, which annualizes at 5.3 percent, and 7.0 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 2015.
• Euro Area. GDP fell 0.1 percent in the euro area in IQ2012 and decreased 0.4 in IQ2012 relative to a year earlier. Euro area GDP contracted 0.3 percent IIQ2012 and fell 0.8 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 0.4 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 0.3 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. Euro are GDP increased 0.4 percent in IQ2015 and increased 1.0 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. The GDP of Germany increased 0.3 percent in IQ2015 and increased 1.1 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/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.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. GDP increased 0.1 percent in IQ2015 at SAAR of 0.2 percent and grew 3.0 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 0.9 percent and 2.7 percent relative to a year earlier. UK GDP increased 0.8 percent in IIQ2014 and 2.9 percent relative to a year earlier. In IIIQ2014, UK GDP increased 0.6 percent and increased 2.8 percent relative to a year earlier. UK GDP increased 0.6 percent in IVQ2014 and increased 3.0 percent relative to a year earlier. In IQ2015, GDP increased 0.3 percent and 2.4 percent relative to a year earlier.
• Italy. Italy has experienced decline of GDP in seven consecutive quarters from IIIQ2011 to IQ2013 and in IQ2014, IIQ2014 and IIIQ2014. Italy’s GDP fell 1.0 percent in IQ2012 and declined 2.3 percent relative to IQ2011. Italy’s GDP fell 0.6 percent in IIQ2012 and declined 3.1 percent relative to a year earlier. In IIIQ2012, Italy’s GDP fell 0.5 percent and declined 3.1 percent relative to a year earlier. The GDP of Italy contracted 0.6 percent in IVQ2012 and fell 2.7 percent relative to a year earlier. In IQ2013, Italy’s GDP contracted 0.9 percent and fell 2.6 percent relative to a year earlier. Italy’s GDP changed 0.0 percent in IIQ2013 and fell 2.0 percent relative to a year earlier. The GDP of Italy increased 0.1 percent in IIIQ2013 and declined 1.4 percent relative to a year earlier. Italy’s GDP changed 0.0 percent in IVQ2013 and decreased 0.9 percent relative to a year earlier. In IQ2014, Italy’s GDP decreased 0.2 percent and fell 0.1 percent relative to a year earlier. The GDP of Italy fell 0.2 percent in IIQ2014 and declined 0.3 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 0.5 percent relative to a year earlier. In IQ2015, Italy’s GDP increased 0.3 percent and changed 0.0 percent relative to a year earlier
• France. France’s GDP changed 0.0 percent in IQ2012 and increased 0.4 percent relative to a year earlier. France’s GDP decreased 0.3 percent in IIQ2012 and increased 0.2 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.3 percent and increased 0.3 percent relative to a year earlier. France’s GDP changed 0.0 percent in IVQ2012 and changed 0.0 percent relative to a year earlier. In IQ2013, France’s GDP increased 0.1 percent and increased 0.1 percent relative to a year earlier. The GDP of France increased 0.8 percent in IIQ2013 and increased 1.1 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IIIQ2013 and increased 0.8 percent relative to a year earlier. The GDP of France increased 0.2 percent in IVQ2013 and increased 1.0 percent relative to a year earlier. In IQ2014, France’s GDP decreased 0.2 percent and increased 0.7 percent relative to a year earlier. In IIQ2014, France’s GDP contracted 0.1 percent and decreased 0.2 percent relative to a year earlier. France’s GDP increased 0.2 percent in IIIQ2014 and increased 0.2 percent relative to a year earlier. The GDP of France changed 0.0 percent in IVQ2014 and changed 0.0 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2015 and increased 0.7 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: 4.3	3.4
China	1.4	8.1
Euro Area	-0.1	-0.4
Germany	0.3	1.5
France	0.0	0.4
Italy	-1.0	-2.3
United Kingdom	0.1	1.0
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.4         SAAR: 1.6	2.3
Japan	QOQ: -0.5 SAAR: -1.9	3.5
China	2.1	7.6
Euro Area	-0.3	-0.8
Germany	0.1	0.3 0.8 CA
France	-0.3	0.2
Italy	-0.6	-3.1
United Kingdom	-0.2	0.6
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.6  SAAR: 2.5	2.7
Japan	QOQ: –0.5 SAAR: –1.8	0.2
China	2.0	7.4
Euro Area	-0.1	-0.8
Germany	0.1	0.1
France	0.3	0.3
Italy	-0.5	-3.1
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	0.0	0.0
Italy	-0.6	-2.7
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: 5.6	0.5
China	1.7	7.8
Euro Area	-0.4	-1.2
Germany	-0.4	-1.8
France	0.1	0.1
Italy	-0.9	-2.6
UK	0.6	0.9
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.4 SAAR: 1.8	1.8
Japan	QOQ: 0.7 SAAR: 2.7	1.4
China	1.8	7.5
Euro Area	0.4	-0.6
Germany	0.8	0.5
France	0.8	1.1
Italy	0.0	-2.0
UK	0.6	1.7
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 1.1 SAAR: 4.5	2.3
Japan	QOQ: 0.5 SAAR: 1.9	2.2
China	2.3	7.9
Euro Area	0.2	-0.3
Germany	0.3	0.8
France	-0.1	0.8
Italy	0.1	-1.4
UK	0.7	1.6
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.9 SAAR: 3.5	3.1
Japan	QOQ: -0.3 SAAR: -1.0	2.3
China	1.8	7.6
Euro Area	0.3	0.4
Germany	0.4	1.0
France	0.2	1.0
Italy	0.0	-0.9
UK	0.4	2.4
	IQ2014/IVQ2013	IQ2014/IQ2013
USA	QOQ -0.5 SAAR -2.1	1.9
Japan	QOQ: 1.2 SAAR: 4.9	2.4
China	1.6	7.4
Euro Area	0.3	1.1
Germany	0.8	2.6
France	-0.2	0.7
Italy	-0.2	-0.1
UK	0.9	2.7
	IIQ2014/IQ2014	IIQ2014/IIQ2013
USA	QOQ 1.1 SAAR 4.6	2.6
Japan	QOQ: -1.8 SAAR: -6.9	-0.4
China	2.0	7.5
Euro Area	0.1	0.8
Germany	-0.1	1.0
France	-0.1	-0.2
Italy	-0.2	-0.3
UK	0.8	2.9
	IIIQ2014/IIQ2014	IIIQ2014/IIIQ2013
USA	QOQ: 1.2 SAAR: 5.0	2.7
Japan	QOQ: -0.5 SAAR: -2.1	-1.4
China	1.9	7.3
Euro Area	0.2	0.8
Germany	0.1	1.2
France	0.2	0.2
Italy	-0.1	-0.5
UK	0.6	2.8
	IVQ2014/IIIQ2014	IVQ2014/IVQ2013
USA	QOQ: 0.5 SAAR: 2.2	2.4
Japan	QOQ: 0.3 SAAR: 1.1	-0.9
China	1.5	7.3
Euro Area	0.3	0.9
Germany	0.7	1.6
France	0.0	0.0
Italy	0.0	-0.5
UK	0.6	3.0
	IQ2015/IVQ2014	IQ2015/IQ2014
USA	QOQ: 0.1 SAAR: 0.2	3.0
Japan	QOQ: 0.6 SAAR: 2.4	-1.4
China	1.3	7.0
Euro Area	0.4	1.0
Germany	0.3	1.1
France	0.6	0.7
Italy	0.3	0.0
UK	0.3	2.4

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/2015/04/imf-view-of-economy-and-finance-united.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier 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 Mar 2015, Japan’s exports increased 8.5 percent in 12 months while imports decreased 14.5 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 Apr 2015, China exports decreased 6.4 percent relative to a year earlier and imports decreased 16.2 percent.
• Germany. Germany’s exports increased 1.2 percent in the month of Mar 2015 and increased 12.4 percent in the 12 months ending in Mar 2015. Germany’s imports increased 2.4 percent in the month of Mar 2015 and increased 7.1 percent in the 12 months ending in Mar. 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 0.2 percentage points to GDP growth in IIQ2014 and added 0.4 percentage points in IIIQ2014. Net trade deducted 0.3 percentage points to GDP growth in IVQ2014 and deducted 0.2 percentage points in IQ2015.
• 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 0.1 percentage points to UK value added in IQ2014 and 0.2 percentage points in IIQ2014. Net trade deducted 0.5 percentage points to GDP growth in IIIQ2014 and added 0.8 percentage points in IVQ2014.
• France. France’s exports increased 0.9 percent in Mar 2015 while imports increased 3.1 percent. France’s exports increased 3.8 percent in the 12 months ending in Mar 2015 and imports increased 3.1 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 0.3 percentage points in IIIQ2014. Net trade added 0.2 percentage points to France’s GDP growth in IVQ2014 and deducted 0.5 percentage points in IQ2015
• United States. US exports increased 1.6 percent in Mar 2015 and goods exports decreased 5.1 percent in Jan-Mar 2015 relative to a year earlier. Imports increased 7.7 percent in Mar 2015 and goods imports decreased 1.4 percent in Jan-Mar 2015 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 1.03 percentage points from GDP growth in IVQ2014 and deducted 1.25 percentage points from GDP growth in IQ2015. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” In the six months ending in Apr 2015, United States national industrial production accumulated change of 0.0 percent at the annual equivalent rate of 0.0 percent, which is lower than growth of 1.9 percent in the 12 months ending in Apr 2015. Excluding growth of 1.1 percent in Nov 2014, growth in the remaining five months from Nov 2014 to Apr 2015 accumulated to minus 1.1 percent or minus 2.6 percent annual equivalent. Industrial production declined in five of the past six months. Industrial production contracted at annual equivalent 2.8 percent in the most recent quarter from Feb 2015 to Apr 2015 and expanded at 2.8 percent in the prior quarter Nov 2014 to Jan 2015. Business equipment accumulated growth of 0.0 percent in the six months from Nov 2014 to Apr 2015 at the annual equivalent rate of 0.0 percent, which is lower than growth of 2.2 percent in the 12 months ending in Apr 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 decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and weakening growth in past months.

Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased 25.1 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 25.7 percent from the trough in Apr 2009 to Apr 2015. Manufacturing output in Apr 2015 is 1.9 percent below the peak in Jun 2007. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IQ2015 would have accumulated to 23.9 percent. GDP in IQ2015 would be $18,574.8 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,270.0 billion than actual $16,304.8 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.6 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.4 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html). US GDP in IQ2015 is 12.2 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,304.8 billion in IQ2015 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 Apr 1919 to Apr 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 125.9172 in Apr 2015. The actual index NSA in Apr 2015 is 101.1122, which is 19.7 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014. Using trend growth of 2.4 percent per year, the index would increase to 118.0899 in Apr 2015. The output of manufacturing at 101.1122 in Apr 2015 is 14.4 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	1.6 Mar	-5.1 Jan-Mar	7.7 Jan	-1.4 Jan-Mar
Japan		Mar 2015 8.5 Feb 2.4 Jan 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		Mar 2015 -14.5 Feb -3.6 Jan -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 -6.4 Apr -15.0 Mar 48.3 Feb -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 -16.2 Apr -12.7 Mar -20.5 Feb -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	2.2 12 M-Feb	1.8 Jan-Feb	0.1 12-M Feb	-2.8 Jan-Feb
Germany	1.2 Mar CSA	12.4 Mar	2.4 Mar CSA	7.1 Mar
France Mar	0.9	3.8	3.1	3.1
Italy Feb	2.5	3.7	0.6	1.0
UK	0.7 Mar	1.1 Jan 15-Mar 15 /Jan 14-Mar 14	-0.4 Mar	-2.1 Jan 15-Mar 15 /Jan 14-Mar 14
Net Trade % Points GDP Growth	% Points
USA	IQ2015 -1.25 IVQ2014 -1.03 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 -1.5 IIQ2012 -1.9 IIIQ2012 -0.6 IVQ2012 1.6 IQ2013 0.1 IIQ2013 -1.5 IIIQ2013 -2.1 IVQ2013 -1.3 IQ2014 4.3 IIQ2014 0.2 IIIQ2014 1.1 IVQ2014 -0.7 IQ2015
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 0.2 IIIQ2014 0.4 IVQ2014 -0.3 IQ2015 -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 -0.3 IIIQ2014 0.2 IVQ2014 -0.5 IQ2015
UK	0.7 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.1 IQ2014 0.2 IIQ2214 -0.5 IIIQ2014 0.8 IVQ2014

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

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, decreased to 54.2 in Apr from 54.8 in Mar, indicating expansion at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/8554b240eda74a019242005c06c2b843). This index has remained above the contraction territory of 50.0 during 69 consecutive months. The employment index increased from 52.0 in Mar to 52.5 in Apr with input prices rising at faster rate, new orders increasing at slower rate and output increasing at faster rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/8554b240eda74a019242005c06c2b843). Joseph Lupton, Senior Economist at JP Morgan, finds sound world growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/8554b240eda74a019242005c06c2b843). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, decreased to 51.0 in Apr from 51.7 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/76478971e7cf4b029cab8fa1f12db82d). New export orders expanded for the twenty-first consecutive month. Joseph Lupton, Senior Economist at JP Morgan Chase, finds slowing growth in global manufacturing that could recover in the second half (http://www.markiteconomics.com/Survey/PressRelease.mvc/76478971e7cf4b029cab8fa1f12db82d). The HSBC Brazil Composite Output Index, compiled by Markit, decreased from 47.0 in Mar to 44.2 in Apr, indicating contraction in activity of Brazil’s private sector (http://www.markiteconomics.com/Survey/PressRelease.mvc/f89cfda3837d4c2da8a147b232648a45). The HSBC Brazil Services Business Activity index, compiled by Markit, decreased from 47.9 in Mar to 44.6 in Apr, indicating contracting services activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/f89cfda3837d4c2da8a147b232648a45). Pollyana De Lima, Economist at Markit, finds weaker private sector activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/f89cfda3837d4c2da8a147b232648a45). The HSBC Brazil Purchasing Managers’ Index^TM (PMI^™) decreased from 46.2 in Mar to 46.0 in Apr, indicating deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4f2a7d5a203642648f3425beb3190e0b). Pollyanna De Lima, Economist at Markit, finds decline in output and new orders (http://www.markiteconomics.com/Survey/PressRelease.mvc/4f2a7d5a203642648f3425beb3190e0b).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 53.8 in May from 54.1 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1972463970c4c208c7b400689223bf5). New export orders declined partly because of dollar revaluation. Chris Williamson, Chief Economist at Markit, finds that manufacturing expanding with challenges to competitiveness from the strong dollar (http://www.markiteconomics.com/Survey/PressRelease.mvc/a1972463970c4c208c7b400689223bf5). The Markit Flash US Services PMI™ Business Activity Index decreased from 59.2 in Mar to 57.8 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/abca94e77ba4442fa8a7a7549544852d). The Markit Flash US Composite PMI™ Output Index decreased from 59.2 in Mar to 57.4 in Apr. Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with slowing GDP growth that may accelerate to about 3.0 percent in the second quarter (http://www.markiteconomics.com/Survey/PressRelease.mvc/abca94e77ba4442fa8a7a7549544852d). The Markit US Composite PMI™ Output Index of Manufacturing and Services decreased to 59.2 in Mar from 57.0 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/8f79665402c84fd78e566add1d5183a0). The Markit US Services PMI™ Business Activity Index decreased from 59.2 in Mar to 57.4 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/8f79665402c84fd78e566add1d5183a0). Chris Williamson, Chief Economist at Markit, finds the indexes consistent with US growth at 3.0 percent in IIQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/8f79665402c84fd78e566add1d5183a0). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) decreased to 54.1 in Apr from 55.7 in Mar, which indicates expansion at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/53537500330a406db888ccdfe834f91b). New foreign orders decreased. Chris Williamson, Chief Economist at Markit, finds that the index suggests restrain of foreign orders because of dollar appreciation (http://www.markiteconomics.com/Survey/PressRelease.mvc/53537500330a406db888ccdfe834f91b). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® changed 0.0 percentage points from 51.5 in Mar to 51.5 in Apr, which indicates growth at the same rate (https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?navItemNumber=29317). The index of new orders increased 1.7 percentage points from 51.8 in Mar to 53.5 in Apr. The index of new export orders increased 4.0 percentage points from 47.5 in Mar to 51.5 in Apr, expanding at faster rate. The Non-Manufacturing ISM Report on Business^® PMI increased 1.3 percentage points from 56.5 in Mar to 57.8 in Apr, indicating growth of business activity/production during 69 consecutive months, while the index of new orders increased 1.4 percentage points from 57.8 in Mar to 59.2 in Apr (https://www.instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?navItemNumber=29318). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	Apr 12 months NSA ∆%: minus 0.2; ex food and energy ∆%: 1.8 Apr month SA ∆%: 0.1; ex food and energy ∆%: 0.3 Blog 4/19/15
Producer Price Index	Finished Goods Apr 12-month NSA ∆%: -4.4; ex food and energy ∆% 2.0 Apr month SA ∆% = -0.6; ex food and energy ∆%: 0.1 Final Demand Apr 12-month NSA ∆%: -1.3; ex food and energy ∆% 0.8 Apr month SA ∆% = -0.4; ex food and energy ∆%: -0.2 Blog 5/17/15 5/24/15
PCE Inflation	Mar 12-month NSA ∆%: headline 0.3; ex food and energy ∆% 1.3 Blog 5/3/15
Employment Situation	Household Survey: Apr Unemployment Rate SA 5.4% Blog calculation People in Job Stress Mar: 25.6 million NSA, 15.4% of Labor Force Establishment Survey: Apr Nonfarm Jobs +223,000; Private +213,000 jobs created  Mar 12-month Average Hourly Earnings Inflation Adjusted ∆%: 2.2 Blog 5/10/15
Nonfarm Hiring	Nonfarm Hiring fell from 63.3 million in 2006 to 54.2 million in 2013 or by 9.1 million and to 58.7 million in 2014 or by 4.6 million Private-Sector Hiring Mar 2015 4.505 million lower by 0.222 million than 4.727 million in Mar 2006 Blog 5/17/15
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 IQ2015/IVQ2014 3.0 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 IQ2015 SAAR 0.2 Blog 5/3/15
Real Private Fixed Investment	SAAR IQ2015 ∆% minus 2.5 IVQ2007 to IQ2015: 2.7% Blog 5/3/15
Corporate Profits	IVQ2014 SAAR: Corporate Profits -1.4; Undistributed Profits -6.6 Blog 3/29/15
Personal Income and Consumption	Mar month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% -0.2 Real Personal Consumption Expenditures (RPCE): 0.3 12-month Mar NSA ∆%: RDPI: 3.3; RPCE ∆%: 2.7 Blog 5/3/15
Quarterly Services Report	IVQ14/IVQ13 NSA ∆%: Information 4.6 Financial & Insurance 5.2 Blog 3/22/15
Employment Cost Index	Compensation Private IVQ2014 SA ∆%: 0.6 Dec 12 months ∆%: 2.3 Blog 2/1/15
Industrial Production	Apr month SA ∆%: -0.3 Apr 12 months SA ∆%: 1.9 Manufacturing Apr SA 0.0 ∆% Apr 12 months SA ∆% 2.3, NSA 2.3 Capacity Utilization: 78.2 Blog 5/17/15
Productivity and Costs	Nonfarm Business Productivity IQ2015∆% SAAE -1.9; IQ2015/IQ2014 ∆% 0.6; Unit Labor Costs SAAE IQ2015 ∆% 5.0; IQ2015/IQ2014 ∆%: 1.1 Blog 5/10/15
New York Fed Manufacturing Index	General Business Conditions From Apr -1.19 to May 3.09 New Orders: From Apr minus 6.00 to May 3,85 Blog 5/17/15
Philadelphia Fed Business Outlook Index	General Index from Apr 7.5 to May 6.7 New Orders from Apr 0.7 to May 4.0 Blog 5/24/15
Manufacturing Shipments and Orders	New Orders SA Mar ∆% 2.1 Ex Transport 0.0 Jan-Mar NSA New Orders ∆% minus 4.8 Ex transport minus 5.9 Earlier data: Blog 4/5/15
Durable Goods	Mar New Orders SA ∆%: 4.0; ex transport ∆%: minus 0.2 Jan-Mar 15/Jan-Mar 14 New Orders NSA ∆%: 0.1; ex transport ∆% -0.7 Blog 4/26/15
Sales of New Motor Vehicles	Apr 2015 5,409,495; Apr 2014 5,134,255. Apr 15 SAAR 16.50 million, Mar 15 SAAR 17.15 million, Apr 2014 SAAR 16.05 million Blog 5/3/15
Sales of Merchant Wholesalers	Jan-Mar 2015/Jan-Mar 2014 NSA ∆%: Total -2.3; Durable Goods: 4.1; Nondurable Goods: -7.7 EARLIER DATA: Blog 4/12/15
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Mar 15 12-M NSA ∆%: Sales Total Business -0.8; Manufacturers -2.1 Retailers 1.4; Merchant Wholesalers -1.3 Blog 5/17/15
Sales for Retail and Food Services	Jan-Apr 2015/Jan-Apr 2014 ∆%: Retail and Food Services 1.9; Retail ∆% 1.0 Blog 5/17/15
Value of Construction Put in Place	Feb SAAR month SA ∆%: minus 0.1 Feb 12-month NSA:3.1 Blog 4/5/15
Case-Shiller Home Prices	Feb 2015/ Feb 2014 ∆% NSA: 10 Cities 4.8; 20 Cities: 5.0; National: 4.2 ∆% Feb SA: 10 Cities 0.9 ; 20 Cities: 0.9 Blog 5/3/15
FHFA House Price Index Purchases Only	Feb SA ∆% 0.7; 12 month NSA ∆%: 5.4 Blog 4/26/15
New House Sales	Mar 2015 month SAAR ∆%: minus 11.4 Jan-Mar 2015/Jan-Mar 2014 NSA ∆%: 20.6 Blog 4/26/15
Housing Starts and Permits	Apr Starts month SA ∆% 20.2; Permits ∆%: 10.1 Jan-Mar 2015/Jan-Mar 2014 NSA ∆% Starts 5.5; Permits  ∆% 8.1 Earlier Data: Blog 4/19/15
Trade Balance	Balance Mar SA -$51,367 million versus Feb -$35,892 million Exports Mar SA ∆%: 1.6 Imports Mar SA ∆%: 7.7 Goods Exports Jan-Mar 2015/Jan-Mar 2014 NSA ∆%: -5.1 Goods Imports Jan-Mar 2015/Jan-Mar 2014 NSA ∆%: -1.4 Blog 5/10/15
Export and Import Prices	Apr 12-month NSA ∆%: Imports -10.7; Exports -6.3 Earlier Data: Blog 4/12/15
Consumer Credit	Mar ∆% annual rate: Total 7.4; Revolving 5.9; Nonrevolving 7.9 Blog 5/10/15
Net Foreign Purchases of Long-term Treasury Securities	Mar Net Foreign Purchases of Long-term US Securities: minus $1.6 billion Major Holders of Treasury Securities: China $1261.0 billion; Japan $1226.9 billion; Total Foreign US Treasury Holdings Jan $6175.9 billion Blog 5/17/15
Treasury Budget	Fiscal Year 2015/2014 ∆% Apr: Receipts 8.9; Outlays 6.4; Individual Income Taxes 12.9 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Deficit Fiscal Year 2014 $483 billion Blog 5/17/2015
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	Apr 2015 SAAR ∆%: Securities 7.3 Loans 9.8 Cash Assets minus 9.5 Deposits minus 3.0 Blog 5/24/15
Flow of Funds Net Worth of Families and Nonprofits	IVQ2014 ∆ since 2007 Assets +$15,921.0 BN Nonfinancial $898.5 BN Real estate $172.1 BN Financial +15,022.4 BN Net Worth +$16,162.4 BN Blog 3/29/15
Current Account Balance of Payments	IVQ2014 -111,222 MM % GDP 2.6 Blog 3/22/15
Collapse of United States Dynamism of Income Growth and Employment Creation	Blog 5/24/15
IMF View	World Real Economic Growth 2015 ∆% 3.5 Blog 4/26/15

Links to blog comments in Table USA:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/10/15 http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/26/2015 http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

4/12/15 http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

3/29/15 http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html

3/22/15 http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html

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

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

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

Table VA-1 shows improvement after prior deterioration followed by current soft improvement of the Business Outlook Survey of the Federal Reserve Bank of Philadelphia. The general index moved out of contraction at 7.9 in Feb 2013 to 6.7 in May 2015 together with 4.0 for new orders. Expectations for the next six months are brighter with the general index at 33.9 in May 2015 and the index of new orders at 32.0.

Table IV-1, US, Federal Reserve Bank of Philadelphia Business Outlook Survey, SA

	Current General Index	Current New Orders	Current Shipments	Future General Index	Future New Orders	Future Shipments
11-Jan	15.8	20.0	10.8	43.6	36.5	37.6
11-Feb	28.7	19.2	24.1	41.4	38.4	43.4
11-Mar	35.4	33.4	28.1	55.8	54.6	53.5
11-Apr	13.2	13.5	20.8	34.6	30.1	35.9
11-May	6.4	8.6	8.6	25.6	25	28.3
11-Jun	0.4	-3.9	7.6	7.5	8.2	9.3
11-Jul	7.7	4.2	8	28.4	32.7	28
11-Aug	-18.9	-16.7	-1.7	13.1	27.3	24.4
11-Sep	-13.4	-5.7	-8.9	22.4	20.6	23.2
11-Oct	7	5.6	9.2	26.6	29.2	29.9
11-Nov	6	1.7	6.8	37.2	36.5	34.1
11-Dec	3.3	4.3	5.8	34.1	38.4	32
12-Jan	5.6	10.2	3.7	43.6	44.1	42.9
12-Feb	9.1	10.6	8.5	28.8	31.6	27.2
12-Mar	7.3	-0.6	-0.1	28.3	35.6	28.9
12-Apr	5.8	-0.1	-3.9	38	40.7	33.6
12-May	-0.6	2.4	7.6	23.6	34.5	29.8
12-Jun	-10.9	-15.8	-10.5	24.4	33.6	37.7
12-Jul	-11.7	-3.1	-9.8	21.6	26.9	20.4
12-Aug	-1.1	2.4	-0.7	21.8	27.2	19.8
12-Sep	-3.1	0.7	-12.1	36.6	44.6	36.9
12-Oct	0	-5.7	-6.4	18.2	21.8	21.3
12-Nov	-7.9	-6.7	-6.4	18.5	23.6	25.2
12-Dec	4	2.3	13.6	23.4	28.8	28.4
13-Jan	-4.9	-2.7	-0.7	27.9	31.9	35
13-Feb	-7.9	-1.1	2.2	29.2	37.6	31.5
13-Mar	0.3	0.4	3.2	32.1	35.8	31.1
13-Apr	0.4	-0.7	2.9	28.2	32.2	31.8
13-May	0.2	-4.1	-2.5	37.6	40.5	37.4
13-Jun	15.9	14.6	9.3	35.8	39.1	40
13-Jul	16.9	8.8	10.6	42	54.1	46.1
13-Aug	10.5	9.8	5.9	42.2	41.9	43.5
13-Sep	16.8	19	20.4	54.4	54	50.5
13-Oct	14.7	21.1	16.9	56.8	62.5	52.6
13-Nov	8.1	10.5	5.3	45.2	47.9	43
13-Dec	6.2	11.3	11.5	43.1	44.7	41.7
14-Jan	10	6.7	11.1	36	39.7	34.4
14-Feb	-2	2.5	-6	39.8	37.5	38.7
14-Mar	10.7	8.2	7.6	37.7	35.7	42.4
14-Apr	16	15	21	36	35.9	37.2
14-May	18.3	13.6	16.4	40.8	39.8	41.7
14-Jun	19.6	14.4	17.5	51	53.5	47.7
14-Jul	22.8	31.4	29.9	54.6	50.8	54.3
14-Aug	25.5	15.8	18.9	66	56.2	65.2
14-Sep	18.6	13.1	20	52.4	47.6	53.4
14-Oct	19	13.8	15.9	52.7	51	51.8
14-Nov	40.2	32.4	29.6	55	47.6	50.5
14-Dec	24.3	13.6	15.1	50.4	44.8	47.5
15-Jan	6.3	8.5	-6.9	50.9	44.8	40.8
15-Feb	5.2	5.4	8.1	29.7	42.8	38.2
15-Mar	5	3.9	-7.8	32	34.3	32.3
15-Apr	7.5	0.7	-1.8	35.5	30.8	34
15-May	6.7	4.0	1.0	33.9	31.7	32.0

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

Chart VA-2 of the Federal Reserve Bank of Philadelphia is very useful, providing current and future general activity indexes from Jan 1995 to May 2015. The shaded areas are the recession cycle dates of the National Bureau of Economic Research (NBER) (http://www.nber.org/cycles.html). The Philadelphia Fed index dropped during the initial period of recession and then led the recovery, as industry overall. There was a second decline of the index into 2011 followed now by what hopefully appeared as renewed strength from late 2011 into Jan 2012. There is decline to negative territory of the current activity index in Nov 2012 and return to positive territory in Dec 2012 with decline of current conditions into contraction in Jan-Feb 2013 and rebound to mild expansion in Mar-Apr 2013. The index of current activity moved into expansion in Jun-Oct 2013 with weakness in Nov-Dec 2013, improving in Jan 2014. There is renewed deterioration in Feb 2014 with rebound in Apr-Sep 2014 and mild deterioration in Oct 2014 followed by improvement in Nov 2014. The index deteriorated in Jan-Feb 2015, stabilizing in Mar-May 2015.

Chart VA-2, Federal Reserve Bank of Philadelphia Business Outlook Survey, Current and Future Activity Indexes

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

The index of current new orders of the Business Outlook Survey of the Federal Reserve Bank of Philadelphia in Chart VA-2 illustrates the weakness of the cyclical expansion. The index weakened in 2006 and 2007 and then fell sharply into contraction during the global recession. There have been twelve readings into contraction from Jan 2012 to May 2013 and generally weak readings with some exceptions. The index of new orders moved into expansion in Jun-Oct 2013 with moderation in Nov-Dec 2013 and into Jan 2014. The index fell into contraction in Feb 2014, recovering in Mar-Apr 2014 but weaker reading in May 2014. There is marked improvement in Jun-Jul 2014 with slowing in Aug-Oct 2014 followed by acceleration in Nov 2014. New orders deteriorated in Jan-Apr 2015, improving in May 2015.

Chart VA-3, Federal Reserve Bank of Philadelphia Business Outlook Survey, Current New Orders Diffusion Index SA

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

VB Japan. The GDP of Japan grew at 1.0 percent per year on average from 1991 to 2002, with the GDP implicit deflator falling at 0.8 percent per year on average. The average growth rate of Japan’s GDP was 4 percent per year on average from the middle of the 1970s to 1992 (Ito 2004). Low growth in Japan in the 1990s is commonly labeled as “the lost decade” (see Pelaez and Pelaez, The Global Recession Risk (2007), 81-115). Table VB-GDP provides yearly growth rates of Japan’s GDP from 1995 to 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 1.7 percent in 2012. Japan’s GDP grew 1.6 percent in 2013 and stagnated in 2014 at minus 0.1. 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 0.6 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	1.7
2013	1.6
2014	-0.1

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

The Markit/JMMA Flash Japan Manufacturing PMI Index™ with the Flash Japan Manufacturing PMI™ increased from 49.9 in Apr to 50.9 in May and the Flash Japan Manufacturing Output Index™ increased from 49.3 in Apr to 51.7 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/00b8ed52e9154549b1e39c2d675b033b). New export orders increased at faster pace. Amy Brownbill, Economist at Markit, finds improvement in Japan’s manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/00b8ed52e9154549b1e39c2d675b033b). The Markit Composite Output PMI Index increased from 48.4 in Mar to 50.7 in Apr, indicating mildly improving business activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/256c1de800394daa9c16cfd21fc1da9a). The Markit Business Activity Index of Services increased to 51.3 in Apr from 48.4 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/256c1de800394daa9c16cfd21fc1da9a). Amy Brownbill, Ecoomist at Markit and author of the report, finds improved conditions with positive business expectations (http://www.markiteconomics.com/Survey/PressRelease.mvc/256c1de800394daa9c16cfd21fc1da9a). The Markit/JMMA Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 50.3 in Mar to 49.9 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/5d78d5dab2e248818c2dd7292148740a). New orders declined while growth of foreign orders slowed. Amy Brownbill, Economist at Markit, finds manufacturing contracting with slowing growth foreign orders even with devaluation of the yen (http://www.markiteconomics.com/Survey/PressRelease.mvc/5d78d5dab2e248818c2dd7292148740a).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	Apr ∆% 0.1 12 months ∆% -2.1 Blog 5/17/15
Consumer Price Index	Mar NSA ∆% 0.4; Mar 12 months NSA ∆% 2.3 Blog 5/3/15
Real GDP Growth	IQ2015 ∆%: 0.6 on IVQ2014;  IVQ2014 SAAR 2.4; ∆% from quarter a year earlier: -1.4 % 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 3/15/15 5/24/15
Employment Report	Mar Unemployed 2.28 million Change in unemployed since last year: minus 180 thousand Unemployment rate: 3.4 % Blog 5/3/15
All Industry Indices	Mar month SA ∆% -1/3 12-month NSA ∆% -2.4 Earlier Data: Blog 4/26/15
Industrial Production	Feb SA month ∆%: -3.4 12-month NSA ∆% -2.6 Blog 3/29/15
Machine Orders	Total Mar ∆% 1.8 Private ∆%: 24.9 Mar ∆% Excluding Volatile Orders minus 2.9 Earlier Data: Blog 4/19/15
Tertiary Index	Mar month SA ∆% -1.0 Mar 12 months NSA ∆% minus -2.7 Earlier Data: Blog 4/26/15
Wholesale and Retail Sales	Feb 12 months: Total ∆%: -3.1 Wholesale ∆%: -3.7 Retail ∆%: -1.8 Blog 3/29/15
Family Income and Expenditure Survey	Feb 12-month ∆% total nominal consumption -0.4, real -2.9 Blog 3/29/15
Trade Balance	Exports Mar 12 months ∆%: 8.5 Imports Mar 12 months ∆% -14.5 Blog 4/26/15

Links to blog comments in Table JPY:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/26/2015 http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

3/29/15 http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html

3/15/15 http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html

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

Japan’s economy grew 1.2 percent in IQ2014, seasonally adjusted, partly because of anticipation of purchases to avoid the increase in the tax on value added of consumption in Apr 2014, contracting 1.8 percent in IIQ2014, as shown in Table VB-1, incorporating the latest estimates and revisions. Japan’s GDP contracted 0.5 percent in IIIQ2014 and grew 0.3 percent in IVQ2014. The GDP of Japan increased 0.6 percent in IQ2015. The economy of Japan contracted 0.3 percent in IVQ2013 after growing 0.5 percent in IIIQ2013, 0.7 percent in IIQ2013 and 1.4 percent in IQ2013. Japan’s GDP decreased 0.2 percent in IVQ2012 relative to IIIQ2012. IQ2012 GDP growth was revised to 1.1 percent; IIQGDP growth was revised to -0.5 percent; and IIIQ2012 growth was revised to -0.5 percent. The economy of Japan had already weakened in IVQ2010 when GDP fell revised 0.5 percent. As in other advanced economies, Japan’s recovery from the global recession has not been robust. GDP fell 1.9 percent in IQ2011 and fell again 0.6 percent in IIQ2011 because of the disruption of the tragic Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Recovery was robust in the first two quarters of 2010 but GDP grew at 1.5 percent in IIIQ2010 and fell 0.5 percent in IVQ2010. The deepest quarterly contractions in the global recession were 3.3 percent in IVQ2008 and 4.0 percent in IQ2009. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). Using seasonally adjusted and price adjusted data (http://www.esri.cao.go.jp/index-e.html), Japan’s GDP fell 9.2 percent from the pre-downturn peak in IQ2008 to the lowest reading in IQ2009. Japan’s GDP fell 0.5 percent from IQ2008 to IQ2015. GDP in Japan grew 9.6 percent from IIQ2009 to IQ2015 at the annual equivalent rate of 1.5 percent, using the latest revision (http://www.esri.cao.go.jp/index-e.html).

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

	IQ	IIQ	IIIQ	IVQ
2015	0.6
2014	1.2	-1.8	-0.5	0.3
2013	1.4	0.7	0.5	-0.3
2012	1.1	-0.5	-0.5	-0.2
2011	-1.9	-0.6	2.7	0.2
2010	1.5	1.1	1.5	-0.5
2009	-4.0	1.7	0.1	1.7
2008	0.7	-1.2	-1.1	-3.3
2007	1.0	0.1	-0.4	0.9
2006	0.4	0.4	-0.1	1.3
2005	0.2	1.3	0.3	0.2
2004	0.9	0.1	0.1	-0.3
2003	-0.6	1.3	0.4	1.0
2002	-0.2	1.1	0.6	0.4
2001	0.6	-0.2	-1.1	-0.1
2000	1.6	0.2	-0.3	0.7
1999	-0.9	0.4	-0.2	0.5
1998	-1.9	-0.5	0.3	0.6
1997	0.8	-1.0	0.4	-0.1

Source: Japan Economic and Social Research Institute, Cabinet Office

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

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

Table VB-2 provides contributions to real GDP at seasonally adjusted annual rates (SAAR). GDP grew at 2.4 percent in IQ2015 with highest contributions of 0.9 percent by personal consumption expenditures (PC) and increase in inventory investment (PINV) at 2.0 percent. Gross Fixed Capital Formation increased at 0.1 percent while trade deducted 0.7 percentage points and government consumption expenditures deducted 0.1 percentage points. GDP expanded at 1.1 percent in IVQ2014 with contribution of 0.9 percent by personal consumption expenditures, 1.1 percent by net trade and 0.2 percent by government consumption expenditures. Gross fixed capital formation deducted 0.1 percent and private inventory divestment deducted 1.0 percent. Trade added 1.1 percentage points. Japan contracted at 2.1 percent in IIIQ2014 with deduction of 0.5 percentage points of GFCF and deduction of 2.8 percentage points of inventory divestment. Traded added 0.2 percentage points and government 0.2 percent. Japan’s GDP contracted at 6.9 percent in IIQ2014 with deductions of 12.6 percent by personal consumption and 4.4 percent by gross fixed capital formation. Trade added 4.3 percentage points and government expenditures 0.3 percent. Inventory divestment added 5.5 percent. The GDP of Japan expanded at 4.9 percent in IQ2014 with contributions of 5.2 percent by personal consumption and 3.4 percent of gross fixed capital formation. There were deductions of 1.3 percent by trade, 2.2 percent by inventory divestment and 0.2 percent by government expenditures. The GDP of Japan contracted at 1.0 percent annual equivalent in IVQ2013 with contraction of personal consumption expenditures of 0.4 percent and growth of GFCF at 1.1 percent. Trade deducted 2.1 percentage points. Japan grew at 1.9 percent in IIIQ 2013 with contribution of 0.8 percentage points by personal consumption and 1.9 percentage points by GFCF. Trade deducted 1.5 percentage points. Japan grew at 2.7 percent SAAR in IIQ2013 driven by contributions of 2.1 percent of personal consumption (PC), 0.1 percent of net trade and gross fixed capital formation (GFCF) at 1.9 percent. In IQ2013, Japan’s GDP increased at the SAAR of 5.6 percent in large part because of 3.1 percent in personal consumption and 1.6 percent in trade. The SAAR of GDP in IVQ2012 was minus 0.7 percent: 0.1 percentage points from growth of personal consumption expenditures (PC) less 0.6 percentage points of net trade (exports less imports) less 0.6 percentage points of private inventory investment (PINV) plus 0.5 percentage points of government consumption and minus 0.2 percentage points of gross fixed capital formation (GFCF). The SAAR of GDP in IIIQ2011 was revised to a high 11.1 percent. Net trade deducted from GDP growth in three quarters of 2011 and provided the growth impulse of 3.9 percentage points in IIIQ2011. Growth in 2011 and IQ2012 was driven by personal consumption expenditures that deducted 0.8 percentage points from GDP growth in IIIQ2012 but added 0.1 percentage points to GDP growth in IVQ2012.

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

	GDP	PC	GFCF	Trade	PINV	GOVC
2015
I	2.4	0.9	0.1	-0.7	2.0	-0.1
2014
I	4.9	5.2	3.4	-1.3	-2.2	-0.2
II	-6.9	-12.6	-4.4	4.3	5.3	0.3
III	-2.1	0.8	-0.5	0.2	-2.8	0.2
IV	1.1	0.9	-0.1	1.1	-1.0	0.2
2013
I	5.6	3.1	0.5	1.6	-0.2	0.7
II	2.7	2.1	1.9	0.1	-2.1	0.5
III	1.9	0.8	1.9	-1.5	0.8	-0.1
IV	-1.0	-0.4	1.1	-2.1	0.2	0.0
2012
I	4.3	1.4	-0.4	0.3	2.0	0.9
II	-1.9	1.6	0.5	-1.5	-2.2	-0.3
III	-1.8	-0.8	-0.9	-1.9	1.4	0.4
IV	-0.7	0.1	-0.2	-0.6	-0.6	0.5
2011
I	-7.3	-4.0	-0.2	-1.2	-1.8	-0.1
II	-2.5	2.6	0.2	-4.5	-1.4	0.4
III	11.1	3.9	1.3	3.9	1.7	0.1
IV	0.8	1.0	3.2	-2.9	-0.7	0.2
2010
I	6.2	1.8	0.2	2.4	2.4	-0.5
II	4.4	0.2	1.2	0.0	1.9	1.2
III	6.0	3.1	0.9	0.5	1.3	0.3
IV	-2.1	-1.1	-1.2	-0.3	0.1	0.3
2009
I	-14.9	-1.9	-2.0	-4.4	-7.4	0.7
II	7.0	4.2	-3.0	7.3	-2.2	0.7
III	0.2	-0.1	-1.4	2.2	-1.4	1.0
IV	7.0	3.4	0.0	2.8	0.5	0.3
2008
I	2.8	1.5	0.4	1.2	-0.3	-0.1
II	-4.6	-3.1	-2.2	0.4	1.0	-0.8
III	-4.2	-0.6	-1.0	0.0	-2.6	0.0
IV	-12.5	-2.8	-4.6	-11.4	5.7	0.3
2007
I	4.1	0.9	0.5	1.2	1.3	0.3
II	0.6	0.6	-1.5	0.7	0.0	0.5
III	-1.6	-1.0	-1.7	2.0	-0.6	-0.2
IV	3.4	0.3	0.3	1.4	0.9	0.6

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

Source: Japan Economic and Social Research Institute, Cabinet Office

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

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

Long-term economic growth in Japan significantly improved by increasing competitiveness in world markets. Net trade of exports and imports is an important component of the GDP accounts of Japan. Table VB-3 provides quarterly data for net trade, exports and imports of Japan. Net trade had strong positive contributions to GDP growth in Japan in all quarters from IQ2007 to IIQ2009 with exception of IVQ2008 and IQ2009. The US recession is dated by the National Bureau of Economic Research (NBER) as beginning in IVQ2007 (Dec) and ending in IIQ2009 (Jun) (http://www.nber.org/cycles/cyclesmain.html). Net trade contributions helped to cushion the economy of Japan from the global recession. Net trade deducted from GDP growth in seven of the nine quarters from IVQ2010 IQ2012. The only strong contribution of net trade was 3.9 percent in IIIQ2011. Net trade added 1.6 percentage points to GDP growth in IQ2013 and 0.1 percentage points in IIQ2013 but deducted 1.5 percentage points in IIIQ2013 and deducted 2.1 percentage points in IVQ2013. Net trade deducted 1.3 percentage points from GDP growth in IQ2014. Net trade added 4.3 percentage points to GDP growth in IIQ2014 and 0.2 percentage points in IIIQ2014. Net trade added 1.1 percentage points to GDP growth in IVQ2014. Net trade deducted 0.7 percentage points from GDP growth in IQ2015. Private consumption assumed the role of driver of Japan’s economic growth but should moderate as in most mature economies.

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

	Net Trade	Exports	Imports
2015
I	-0.7	1.8	-2.4
2014
I	-1.3	4.0	-5.2
II	4.3	0.0	4.3
III	0.2	1.1	-0.9
IV	1.1	2.3	-1.2
2013
I	1.6	2.3	-0.7
II	0.1	1.7	-1.6
III	-1.5	-0.2	-1.2
IV	-2.1	0.0	-2.1
2012
I	0.3	1.6	-1.3
II	-1.5	-0.2	-1.2
III	-1.9	-2.3	0.4
IV	-0.6	-2.1	1.6
2011
I	-1.2	-0.5	-0.7
II	-4.5	-4.6	0.2
III	3.9	5.8	-1.9
IV	-2.9	-2.0	-0.9
2010
I	2.4	3.7	-1.3
II	0.0	2.7	-2.7
III	0.5	1.4	-0.9
IV	-0.3	0.1	-0.4
2009
I	-4.4	-16.4	12.0
II	7.3	4.7	2.6
III	2.2	5.3	-3.1
IV	2.8	4.1	-1.3
2008
I	1.2	2.1	-0.9
II	0.4	-1.6	2.0
III	0.0	0.1	-0.2
IV	-11.4	-10.2	-1.2
2007
I	1.2	1.7	-0.5
II	0.7	1.6	-0.9
III	2.0	1.4	0.6
IV	1.4	2.1	-0.6

Source: Japan Economic and Social Research Institute, Cabinet Office

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

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

Japan’s percentage growth of GDP not seasonally adjusted in a quarter relative to the same quarter a year earlier is shown in Table VB-4. Contraction of GDP in a quarter relative to the same quarter a year earlier extended over seven quarters from IIQ2008 through IVQ2009. Contraction was sharpest in IQ2009 with output declining 9.4 percent relative to a year earlier. Yearly quarterly rates of growth of Japan were relatively high for a mature economy through the decade with the exception of the contractions from IVQ2001 to IIQ2002 and after 2007. The Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 caused flat GDP in IQ2011 at 0.1 percent relative to the same quarter a year earlier and decline of 1.5 percent in IIQ2011. GDP fell 0.5 percent in IIIQ2011 relative to a year earlier and increased 0.1 percent in IVQ2011 relative to a year earlier. Growth resumed with 3.4 percent in IQ2012 relative to a year earlier. Growth of 3.5 percent in IIQ2012 is largely caused by the low level in IIQ2011 resulting from the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. GDP increased 0.2 percent in IIIQ2012 relative to a year earlier and changed 0.0 percent in IVQ2012 relative to a year earlier. GDP increased 0.5 percent in IQ2013 relative to a year earlier and 1.4 percent in IIQ2013. Growth of 2.2 percent in IIIQ2013 relative to a year earlier is partly due to the decline of 0.5 percent in GDP in IIIQ2012. GDP increased 2.3 percent in IVQ2013 relative to a year earlier. The GDP of Japan increased 2.4 percent in IQ2014 relative to a year earlier. Japan’s GDP contracted 0.4 percent in IIQ2014 relative to a year earlier. GDP contracted 1.4 percent in IIIQ2014 relative to a year earlier. Japan’s GDP contracted 0.9 percent in IVQ2014 relative to a year earlier. GDP fell 1.4 percent relative to a year earlier in IQ2015. Japan faces the challenge of recovery from the devastation of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011 in an environment of declining world trade and bouts of risk aversion that cause appreciation of the Japanese yen, eroding the country’s competitiveness in world markets. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). Using price adjusted but not seasonally adjusted data (http://www.esri.cao.go.jp/index-e.html), Japan’s GDP contracted 11.5 percent from the high in IVQ2007 to the low in IIQ2009. GDP fell 1.6 percent from IVQ2007 to IQ2015. Japan’s GDP grew 11.2 percent from IIIQ2009 to IQ2015 at the annual equivalent rate of 1.9 percent.

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

	IQ	IIQ	IIIQ	IVQ
2015	-1.4
2014	2.4	-0.4	-1.4	-0.9
2013	0.5	1.4	2.2	2.3
2012	3.4	3.5	0.2	0.0
2011	0.1	-1.5	-0.5	0.1
2010	5.0	4.5	6.1	3.4
2009	-9.4	-6.6	-5.6	-0.5
2008	1.4	-0.1	-0.6	-4.7
2007	2.8	2.3	2.0	1.6
2006	2.6	1.3	0.9	2.0
2005	0.4	1.4	1.5	1.9
2004	4.0	2.6	2.2	0.7
2003	1.7	1.8	1.5	1.8
2002	-1.6	-0.2	1.4	1.6
2001	1.6	0.9	0.0	-1.0
2000	2.7	2.4	2.2	1.8
1999	-0.3	0.1	-0.1	-0.5
1998	-2.4	-1.8	-2.3	-1.5
1997	3.5	1.5	1.7	-0.2

Source: Japan Economic and Social Research Institute, Cabinet Office

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

Long-term economic growth in Japan significantly improved by increasing competitiveness in world markets. Net trade of exports and imports is an important component of the GDP accounts of Japan. Table VB-3 provides quarterly data for net trade, exports and imports of Japan. Net trade had strong positive contributions to GDP growth in Japan in all quarters from IQ2007 to IIQ2009 with exception of IVQ2008 and IQ2009. The US recession is dated by the National Bureau of Economic Research (NBER) as beginning in IVQ2007 (Dec) and ending in IIQ2009 (Jun) (http://www.nber.org/cycles/cyclesmain.html). Net trade contributions helped to cushion the economy of Japan from the global recession. Net trade deducted from GDP growth in seven of the nine quarters from IVQ2010 IQ2012. The only strong contribution of net trade was 3.9 percent in IIIQ2011. Net trade added 1.6 percentage points to GDP growth in IQ2013 and 0.1 percentage points in IIQ2013 but deducted 1.5 percentage points in IIIQ2013 and deducted 2.1 percentage points in IVQ2013. Net trade deducted 1.3 percentage points from GDP growth in IQ2014. Net trade added 4.3 percentage points to GDP growth in IIQ2014 and 0.2 percentage points in IIIQ2014. Net trade added 1.1 percentage points to GDP growth in IVQ2014. Net trade deducted 0.7 percentage points from GDP growth in IQ2015. Private consumption assumed the role of driver of Japan’s economic growth but should moderate as in most mature economies.

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

	Net Trade	Exports	Imports
2015
I	-0.7	1.8	-2.4
2014
I	-1.3	4.0	-5.2
II	4.3	0.0	4.3
III	0.2	1.1	-0.9
IV	1.1	2.3	-1.2
2013
I	1.6	2.3	-0.7
II	0.1	1.7	-1.6
III	-1.5	-0.2	-1.2
IV	-2.1	0.0	-2.1
2012
I	0.3	1.6	-1.3
II	-1.5	-0.2	-1.2
III	-1.9	-2.3	0.4
IV	-0.6	-2.1	1.6
2011
I	-1.2	-0.5	-0.7
II	-4.5	-4.6	0.2
III	3.9	5.8	-1.9
IV	-2.9	-2.0	-0.9
2010
I	2.4	3.7	-1.3
II	0.0	2.7	-2.7
III	0.5	1.4	-0.9
IV	-0.3	0.1	-0.4
2009
I	-4.4	-16.4	12.0
II	7.3	4.7	2.6
III	2.2	5.3	-3.1
IV	2.8	4.1	-1.3
2008
I	1.2	2.1	-0.9
II	0.4	-1.6	2.0
III	0.0	0.1	-0.2
IV	-11.4	-10.2	-1.2
2007
I	1.2	1.7	-0.5
II	0.7	1.6	-0.9
III	2.0	1.4	0.6
IV	1.4	2.1	-0.6

Source: Japan Economic and Social Research Institute, Cabinet Office

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

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

There was milder increase in Japan’s export corporate goods price index during the global recession in 2008 but similar sharp decline during the bank balance sheets effect in late 2008, as shown in Chart IV-5 of the Bank of Japan. Japan exports industrial goods whose prices have been less dynamic than those of commodities and raw materials. As a result, the export CGPI on the yen basis in Chart IV-5 trends down with oscillations after a brief rise in the final part of the recession in 2009. The export corporate goods price index on the yen basis fell from 104.9 in Jun 2009 to 94.0 in Jan 2012 or minus 10.4 percent and increased to 112.5 in Apr 2015 for gain of 19.7 percent relative to Jan 2012 and 7.2 percent relative to Jun 2009. The choice of Jun 2009 is designed to capture the reversal of risk aversion beginning in Sep 2008 with the announcement of toxic assets in banks that would be withdrawn with the Troubled Asset Relief Program (TARP) (Cochrane and Zingales 2009). Reversal of risk aversion in the form of flight to the USD and obligations of the US government opened the way to renewed carry trades from zero interest rates to exposures in risk financial assets such as commodities. Japan exports industrial products and imports commodities and raw materials. The recovery from the global recession began in the third quarter of 2009.

Chart IV-5, Japan, Export Corporate Goods Price Index, Monthly, Yen Basis, 2008-2015

Source: Bank of Japan

http://www.stat-search.boj.or.jp/index_en.html

Chart IV-5A provides the export corporate goods price index on the basis of the contract currency. The export corporate goods price index on the basis of the contract currency increased from 97.9 in Jun 2009 to 103.1 in Apr 2012 or 5.3 percent but dropped to 93.9 in Apr 2015 or minus 8.9 percent relative to Apr 2012 and fell 4.1 percent to 93.9 in Apr 2015 relative to Jun 2009.

Chart IV-5A, Japan, Export Corporate Goods Price Index, Monthly, Contract Currency Basis, 2008-2015

Source: Bank of Japan

http://www.stat-search.boj.or.jp/index_en.html

Japan imports primary commodities and raw materials. As a result, the import corporate goods price index on the yen basis in Chart IV-6 shows an upward trend after declining from the increase during the global recession in 2008 driven by carry trades from fed funds rates. The index increases with carry trades from zero interest rates into commodity futures and declines during risk aversion from late 2008 into beginning of 2008 originating in doubts about soundness of US bank balance sheets. More careful measurement should show that the terms of trade of Japan, export prices relative to import prices, declined during the commodity shocks originating in unconventional monetary policy. The decline of the terms of trade restricted potential growth of income in Japan (for the relation of terms of trade and growth see Pelaez 1979, 1976a). The import corporate goods price index on the yen basis increased from 93.5 in Jun 2009 to 113.1 in Apr 2012 or 21.0 percent and to 114.8 in Apr 2015 or gain of 1.5 percent relative to Apr 2012 and 22.8 percent relative to Jun 2009.

Chart IV-6, Japan, Import Corporate Goods Price Index, Monthly, Yen Basis, 2008-2015

Source: Bank of Japan

http://www.stat-search.boj.or.jp/index_en.html

Chart IV-6A provides the import corporate goods price index on the contract currency basis. The import corporate goods price index on the basis of the contract currency increased from 86.2 in Jun 2009 to 119.5 in Apr 2012 or 38.6 percent and to 92.6 in Apr 2015 or minus 22.5 percent relative to Apr 2012 and gain of 7.4 percent relative to Jun 2009. There is evident deterioration of the terms of trade of Japan: the export corporate goods price index on the basis of the contract currency decreased 4.1 percent from Jun 2009 to Apr 2015 while the import corporate goods price index increased 7.2 percent. Prices of Japan’s exports of corporate goods, mostly industrial products, increased only 5.3 percent from Jun 2009 to Apr 2012, while imports of corporate goods, mostly commodities and raw materials increased 38.6 percent. Unconventional monetary policy induces carry trades from zero interest rates to exposures in commodities that squeeze economic activity of industrial countries by increases in prices of imported commodities and raw materials during periods without risk aversion. Reversals of carry trades during periods of risk aversion decrease prices of exported commodities and raw materials that squeeze economic activity in economies exporting commodities and raw materials. Devaluation of the dollar by unconventional monetary policy could increase US competitiveness in world markets but economic activity is squeezed by increases in prices of imported commodities and raw materials. Unconventional monetary policy causes instability worldwide instead of the mission of central banks of promoting financial and economic stability.

Chart IV-6A, Japan, Import Corporate Goods Price Index, Monthly, Contract Currency Basis, 2008-2015

Source: Bank of Japan

http://www.stat-search.boj.or.jp/index_en.html

Table IV-6B provides the Bank of Japan’s Corporate Goods Price indexes of exports and imports on the yen and contract bases from Jan 2008 to Apr 2015. There are oscillations of the indexes that are shown vividly in the four charts above. For the entire period from Jan 2008 to Apr 2015, the export index on the contract currency basis decreased 5.3 percent and decreased 2.6 percent on the yen basis. For the entire period from Jan 2008 to Apr 2015, the import price index decreased 8.0 percent on the contract currency basis and decreased 3.5 percent on the yen basis. During significant part of the expansion period, prices of Japan’s exports of corporate goods, mostly industrial products, increased only 5.3 percent from Jun 2009 to Apr 2012, while imports of corporate goods, mostly commodities and raw materials increased 38.6 percent. The charts show sharp deteriorations in relative prices of exports to prices of imports during multiple periods. Price margins of Japan’s producers are subject to periodic squeezes resulting from carry trades from zero interest rates of monetary policy to exposures in commodities.

Table IV-6B, Japan, Exports and Imports Corporate Goods Price Index, Contract Currency Basis and Yen Basis

	X-CC	X-Y	M-CC	M-Y
2008/01	99.2	115.5	100.7	119.0
2008/02	99.8	116.1	102.4	120.6
2008/03	100.5	112.6	104.5	117.4
2008/04	101.6	115.3	110.1	125.2
2008/05	102.4	117.4	113.4	130.4
2008/06	103.5	120.7	119.5	140.3
2008/07	104.7	122.1	122.6	143.9
2008/08	103.7	122.1	123.1	147.0
2008/09	102.7	118.3	117.1	137.1
2008/10	100.2	109.6	109.1	121.5
2008/11	98.6	104.5	97.8	105.8
2008/12	97.9	100.6	89.3	93.0
2009/01	98.0	99.5	85.6	88.4
2009/02	97.5	100.1	85.7	89.7
2009/03	97.3	104.2	85.2	93.0
2009/04	97.6	105.6	84.4	93.0
2009/05	97.5	103.8	84.0	90.8
2009/06	97.9	104.9	86.2	93.5
2009/07	97.5	103.1	89.2	95.0
2009/08	98.3	104.4	89.6	95.8
2009/09	98.3	102.1	91.0	94.7
2009/10	98.0	101.2	91.0	94.0
2009/11	98.4	100.8	92.8	94.8
2009/12	98.3	100.7	95.4	97.5
2010/01	99.4	102.2	97.0	100.0
2010/02	99.7	101.6	97.6	99.8
2010/03	99.7	101.8	97.0	99.2
2010/04	100.5	104.6	99.9	104.6
2010/05	100.7	102.9	101.7	104.9
2010/06	100.1	101.6	100.0	102.3
2010/07	99.4	99.0	99.9	99.8
2010/08	99.1	97.3	99.5	97.5
2010/09	99.4	97.0	100.0	97.2
2010/10	100.1	96.4	100.5	95.8
2010/11	100.7	97.4	102.6	98.2
2010/12	101.2	98.3	104.4	100.6
2011/01	102.1	98.6	107.2	102.6
2011/02	102.9	99.5	109.0	104.3
2011/03	103.5	99.6	111.8	106.3
2011/04	104.1	101.7	115.9	111.9
2011/05	103.9	99.9	118.8	112.4
2011/06	103.8	99.3	117.5	110.5
2011/07	103.6	98.3	118.3	110.2
2011/08	103.6	96.6	118.6	108.1
2011/09	103.7	96.1	117.0	106.2
2011/10	103.0	95.2	116.6	105.6
2011/11	101.9	94.8	115.4	105.4
2011/12	101.5	94.5	116.1	106.2
2012/01	101.8	94.0	115.0	104.2
2012/02	102.4	95.8	115.8	106.4
2012/03	102.9	99.2	118.3	112.9
2012/04	103.1	98.7	119.5	113.1
2012/05	102.3	96.3	118.1	109.8
2012/06	101.4	95.0	115.2	106.7
2012/07	100.6	94.0	112.0	103.5
2012/08	100.9	94.1	112.4	103.6
2012/09	101.0	94.1	114.7	105.2
2012/10	101.1	94.7	113.8	105.2
2012/11	100.9	95.9	113.2	106.5
2012/12	100.7	98.0	113.4	109.5
2013/01	101.0	102.4	113.8	115.4
2013/02	101.5	105.9	114.8	120.2
2013/03	101.3	106.6	115.1	122.0
2013/04	100.2	107.5	114.1	123.8
2013/05	99.6	109.1	112.6	125.3
2013/06	99.2	106.1	112.0	121.2
2013/07	99.1	107.5	111.6	122.8
2013/08	99.0	106.1	111.8	121.3
2013/09	99.0	107.2	113.0	124.0
2013/10	99.2	106.7	113.1	122.9
2013/11	99.1	108.0	113.1	124.9
2013-12	99.1	110.4	113.8	129.0
2014-01	99.2	110.7	114.4	130.1
2014-02	98.9	109.2	113.8	127.7
2014-03	98.6	109.1	113.4	127.4
2014-04	98.3	109.0	112.7	126.9
2014-05	98.1	108.2	112.4	125.9
2014-06	97.9	108.0	112.5	126.2
2014-07	98.0	107.9	112.5	125.9
2014-08	98.1	108.8	112.3	126.7
2014-09	97.9	111.0	111.5	129.4
2014-10	97.3	110.7	109.6	127.9
2014-11	96.9	115.7	106.9	131.6
2014-12	96.0	116.4	103.3	129.3
2015-01	94.5	113.2	98.3	121.4
2015-02	93.8	112.2	93.1	114.8
2015-03	93.8	113.0	93.8	116.9
2015-04	93.9	112.5	92.6	114.8

Note: X-CC: Exports Contract Currency; X-Y: Exports Yen; M-CC: Imports Contract; M-Y: Imports Yen

Source: Bank of Japan

http://www.boj.or.jp/en/statistics/index.htm/

Chart IV-7 provides the monthly corporate goods price index (CGPI) of Japan from 1970 to 2015. Japan also experienced sharp increase in inflation during the 1970s as in the episode of the Great Inflation in the US. Monetary policy focused on accommodating higher inflation, with emphasis solely on the mandate of promoting employment, has been blamed as deliberate or because of model error or imperfect measurement for creating the Great Inflation (http://cmpassocregulationblog.blogspot.com/2011/05/slowing-growth-global-inflation-great.html http://cmpassocregulationblog.blogspot.com/2011/04/new-economics-of-rose-garden-turned.html http://cmpassocregulationblog.blogspot.com/2011/03/is-there-second-act-of-us-great.html and Appendix I The Great Inflation; see Taylor 1993, 1997, 1998LB, 1999, 2012FP, 2012Mar27, 2012Mar28, 2012JMCB and http://cmpassocregulationblog.blogspot.com/2012/06/rules-versus-discretionary-authorities.html). A remarkable similarity with US experience is the sharp rise of the CGPI of Japan in 2008 driven by carry trades from policy interest rates rapidly falling to zero to exposures in commodity futures during a global recession. Japan had the same sharp waves of consumer price inflation during the 1970s as in the US (see Chart IV-26 and associated table at http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks_71.html http://cmpassocregulationblog.blogspot.com/2014/03/financial-uncertainty-mediocre-cyclical_8145.html http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html http://cmpassocregulationblog.blogspot.com/2013/12/exit-risks-of-zero-interest-rates-world_1.html and earlier http://cmpassocregulationblog.blogspot.com/2013/10/twenty-eight-million-unemployed-or_561.html and at http://cmpassocregulationblog.blogspot.com/2013/09/increasing-interest-rate-risk_1.html http://cmpassocregulationblog.blogspot.com/2012/07/recovery-without-jobs-stagnating-real_09.html).

Chart IV-7, Japan, Domestic Corporate Goods Price Index, Monthly, 1970-2015

Source: Bank of Japan

http://www.stat-search.boj.or.jp/index_en.html

The producer price index of the US from 1970 to 2015 in Chart IV-8 shows various periods of more rapid or less rapid inflation but no bumps. The major event is the decline in 2008 when risk aversion because of the global recession caused the collapse of oil prices from $148/barrel to less than $80/barrel with most other commodity prices also collapsing. The event had nothing in common with explanations of deflation but rather with the concentration of risk exposures in commodities after the decline of stock market indexes. Eventually, there was a flight to government securities because of the fears of insolvency of banks caused by statements supporting proposals for withdrawal of toxic assets from bank balance sheets in the Troubled Asset Relief Program (TARP), as explained by Cochrane and Zingales (2009). The bump in 2008 with decline in 2009 is consistent with the view that zero interest rates with subdued risk aversion induce carry trades into commodity futures.

Chart IV-8, US, Producer Price Index Finished Goods, Monthly, 1970-2015

Source: US Bureau of Labor Statistics

http://www.bls.gov/ppi/

Further insight into inflation of the corporate goods price index (CGPI) of Japan is provided in Table IV-7. The increase in the tax on value added of consumption caused sharp increases in prices across all segments. Petroleum and coal with weight of 5.7 percent increased 0.4 percent in Apr 2015 and decreased 23.4 percent in 12 months. Japan exports manufactured products and imports raw materials and commodities such that the country’s terms of trade, or export prices relative to import prices, deteriorate during commodity price increases. In contrast, prices of production machinery, with weight of 3.1 percent, decreased 0.2 percent in Apr 2015 and increased 1.2 percent in 12 months. In general, most manufactured products have been experiencing negative or low increases in prices while inflation rates have been high in 12 months for products originating in raw materials and commodities. Ironically, unconventional monetary policy of zero interest rates and quantitative easing that intended to increase aggregate demand and GDP growth deteriorated the terms of trade of advanced economies with adverse effects on real income (for analysis of terms of trade and growth see Pelaez (1979, 1976a). There are now inflation effects of the intentional policy of devaluing the yen and recent collapse of commodity prices.

Table IV-7, Japan, Corporate Goods Prices and Selected Components, % Weights, Month and 12 Months ∆%

Apr 2015	Weight	Month ∆%	12 Month ∆%
Total	1000.0	0.1	-2.1
Food, Beverages, Tobacco, Feedstuffs	137.5	0.0	0.5
Petroleum & Coal	57.4	0.4	-23.4
Production Machinery	30.8	-0.2	1.2
Electronic Components	31.0	-0.1	1.7
Electric Power, Gas & Water	52.7	0.7	4.7
Iron & Steel	56.6	-0.3	-2.5
Chemicals	92.1	0.0	-5.9
Transport Equipment	136.4	0.2	0.2

Source: Bank of Japan

http://www.boj.or.jp/en/statistics/index.htm/

Percentage point contributions to change of the corporate goods price index (CGPI) in Mar 2015 are provided in Table IV-8 divided into domestic, export and import segments. The final block provides change in the corporate goods price without the effects of the increase in the tax on value added of consumption. In the domestic CGPI, increasing 0.1 percent in Apr 2015, the energy shock is evident in the contribution of 0.02 percentage points by petroleum and coal products and 0.05 percentage points by electric power, gas and water in renewed carry trades of exposures in commodity futures. The exports CGPI increased 0.1 percent on the basis of the contract currency with contribution of 0.27 percentage points by chemicals and related products and deduction of 0.08 percentage points by electric and electronic products. The imports CGPI decreased 1.3 percent on the contract currency basis. Petroleum, coal and natural gas products deducted 1.17 percentage points. Shocks of risk aversion cause unwinding carry trades that result in declining commodity prices with resulting downward pressure on price indexes. The volatility of inflation adversely affects financial and economic decisions worldwide. The final block D shows that the change in the domestic corporate goods price index without the effects of the consumption tax is 0.1 percent.

Table IV-8, Japan, Percentage Point Contributions to Change of Corporate Goods Price Index

Groups Apr 2015	Contribution to Change Percentage Points
A. Domestic Corporate Goods Price Index	Monthly Change:  0.1%
Electric Power, Gas & Water	0.05
Metal Products	0.03
Agriculture, Forestry & Fishery Products	0.03
Transportation Equipment	0.02
Petroleum & Coal Products	0.02
Plastic Products	-0.02
B. Export Price Index	Monthly Change:    0.1% contract currency
Chemicals & Related Products	0.27
Metals & Related Products	-0.12
Electric & Electronic Products	-0.08
Other Primary Products & Manufactured Goods	-0.02
C. Import Price Index	Monthly Change: -1.3% contract currency basis
Petroleum, Coal & Natural Gas	-1.17
Metals & Related Products	-0.25
Foodstuffs & Feedstuffs	-0.07
Electric & Electronic Products	0.14
Chemicals & Related Products	0.05
D. Domestic Corporate Goods Price Index Excluding Consumption Tax	Monthly Change: 0.1%
Electric Power, Gas & Water	0.05
Metal Products	0.03
Agriculture, Forestry & Fishery Products	0.03
Transportation Equipment	0.02
Petroleum & Coal Products	0.02
Plastic Products	-0.02

Source: Bank of Japan

http://www.boj.or.jp/en/statistics/index.htm/

There are two categories of responses in the Empire State Manufacturing Survey of the Federal Reserve Bank of New York (http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html): current conditions and expectations for the next six months. There are responses in the survey for two types of prices: prices received or inputs of production and prices paid or sales prices of products. Table IV-5 provides indexes for the two categories and within them for the two types of prices from Jan 2011 to May 2015. The index of current prices paid or costs of inputs moved from 16.13 in Dec 2012 to 9.38 in May 2015 while the index of current prices received or sales prices decreased from 1.08 in Dec 2012 to 1.04 in May 2015. The farther the index is from the area of no change at zero, the faster the rate of change. Prices paid or costs of inputs at 9.38 in May 2015 are expanding at faster pace than prices received or of sales of products at 1.04. The index of future prices paid or expectations of costs of inputs in the next six months fell from 51.61 in Dec 2012 to 26.04 in May 2015 while the index of future prices received or expectation of sales prices in the next six months decreased from 25.81 in Dec 2012 to 7.29 in May 2015. Priced paid or of inputs are expected to increase at a faster pace in the next six months than prices received or prices of sales products. Prices of sales of finished products are less dynamic than prices of costs of inputs during waves of increases. Prices of costs of costs of inputs fall less rapidly than prices of sales of finished products during waves of price decreases. As a result, margins of prices of sales less costs of inputs oscillate with typical deterioration against producers, forcing companies to manage tightly costs and labor inputs. Instability of sales/costs margins discourages investment and hiring.

Table IV-5, US, FRBNY Empire State Manufacturing Survey, Diffusion Indexes, Prices Paid and Prices Received, SA

	Current Prices Paid	Current Prices Received	Six Months Prices Paid	Six Months Prices Received
Jan-11	35.79	15.79	60	42.11
Feb-11	45.78	16.87	55.42	27.71
Mar-11	53.25	20.78	71.43	36.36
Apr-11	57.69	26.92	56.41	38.46
May-11	69.89	27.96	68.82	35.48
Jun-11	56.12	11.22	55.1	19.39
Jul-11	43.33	5.56	51.11	30
Aug-11	28.26	2.17	42.39	15.22
Sep-11	32.61	8.7	53.26	22.83
Oct-11	22.47	4.49	40.45	17.98
Nov-11	18.29	6.1	36.59	25.61
Dec-11	24.42	3.49	56.98	36.05
Jan-12	26.37	23.08	53.85	30.77
Feb-12	25.88	15.29	62.35	34.12
Mar-12	50.62	13.58	66.67	32.1
Apr-12	45.78	19.28	50.6	22.89
May-12	37.35	12.05	57.83	22.89
Jun-12	19.59	1.03	34.02	17.53
Jul-12	7.41	3.7	35.8	16.05
Aug-12	16.47	2.35	31.76	14.12
Sep-12	19.15	5.32	40.43	23.4
Oct-12	17.2	4.3	44.09	24.73
Nov-12	14.61	5.62	39.33	15.73
Dec-12	16.13	1.08	51.61	25.81
Jan-13	22.58	10.75	38.71	21.51
Feb-13	26.26	8.08	44.44	13.13
Mar-13	25.81	2.15	50.54	23.66
Apr-13	28.41	5.68	44.32	14.77
May-13	20.45	4.55	29.55	14.77
Jun-13	20.97	11.29	45.16	17.74
Jul-13	17.39	1.09	28.26	11.96
Aug-13	20.48	3.61	40.96	19.28
Sep-13	21.51	8.6	39.78	24.73
Oct-13	21.69	2.41	45.78	25.3
Nov-13	17.11	-3.95	42.11	17.11
Dec-13	15.66	3.61	48.19	27.71
Jan-14	36.59	13.41	45.12	23.17
Feb-14	25	15	40	23.75
Mar-14	21.18	2.35	43.53	25.88
Apr-14	22.45	10.2	33.67	14.29
May-14	19.78	6.59	31.87	14.29
Jun-14	17.2	4.3	36.56	16.13
Jul-14	25	6.82	37.5	18.18
Aug-14	27.27	7.95	42.05	21.59
Sep-14	23.91	17.39	43.48	32.61
Oct-14	11.36	6.82	42.05	26.14
Nov-14	10.64	0	41.49	25.53
Dec-14	10.42	6.25	40.63	32.29
Jan-15	12.63	12.63	33.68	15.79
Feb-15	14.61	3.37	26.97	5.62
Mar-15	12.37	8.25	31.96	12.37
Apr-15	19.15	4.26	38.3	13.83
May-15	9.38	1.04	26.04	7.29

http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html

Price indexes of the Federal Reserve Bank of Philadelphia Outlook Survey are in Table IV-5. As inflation waves throughout the world (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html) indexes of both current and expectations of future prices paid and received were quite high until May 2011. Prices paid, or inputs, were more dynamic, reflecting carry trades from zero interest rates to commodity futures. All indexes softened after May 2011 with even decline of prices received in Aug 2011 during the first round of risk aversion. Current and future price indexes have increased again but not back to the intensity in the beginning of 2011 because of risk aversion frustrating carry trades even induced by zero interest rates. The index of prices paid or prices of inputs moved from 20.8 in Dec 2012 to minus 14.2 in Apr 2015. The index of current prices received was minus 2.4 in Apr 2013, indicating decrease of prices received. The index of current prices received decreased from 9.2 in Dec 2012 to minus 5.4 in May 2015. The farther the index is from the area of no change at zero, the faster the rate of change. The index of current prices paid or costs of inputs at minus 14.2 in May 2015 indicates faster contraction than the index of current prices received or sales prices of production contracting at minus 5.4. Prices paid indicate faster expansion than prices received during most of the history of the index. The index of future prices paid decreased to 20.9 in Apr 2015 from 40.6 in Dec 2012 while the index of future prices received decreased from 21.9 in Dec 2012 to 19.4 in Apr 2015. Expectations are incorporating faster increases in prices of inputs or costs of production, 20.9 in May 2015, than of sales prices of produced goods, 19.4 in May 2015, forcing companies to manage tightly costs and labor inputs. Volatility of margins of sales/costs discourages investment and hiring.

Table IV-5, US, Federal Reserve Bank of Philadelphia Business Outlook Survey, Current and Future Prices Paid and Prices Received, SA

	Current Prices Paid	Current Prices Received	Future Prices Paid	Future Prices Received
10-Dec	42.8	5.3	56.0	24.2
11-Jan	48.1	12.3	58.3	34.8
11-Feb	61.1	13.4	67.7	31.5
11-Mar	59	17.6	62.4	33.4
11-Apr	52.1	23.6	56.2	35.7
11-May	49.8	20.6	54.9	28.6
11-Jun	37.4	7.2	41.4	6.9
11-Jul	34.4	5.5	49.3	17.5
11-Aug	23.6	-3.9	43.5	22.8
11-Sep	30.7	6.3	38.3	20.6
11-Oct	23	1.7	41.5	27.9
11-Nov	22.2	5.3	33.3	26.3
11-Dec	25.1	5.8	42	21.1
12-Jan	25.8	8.6	46.9	22.2
12-Feb	32.7	9.9	50.5	26.3
12-Mar	16.6	6.5	38.7	24.3
12-Apr	19.9	10	36.7	23.7
12-May	8.9	0.9	39.9	9.6
12-Jun	3.4	-4.5	34.5	16.9
12-Jul	9	3.5	29.1	21.4
12-Aug	17	6.1	36.8	23.9
12-Sep	14	2.6	39	24.9
12-Oct	18	5.2	44.1	15.4
12-Nov	22.8	5.1	44.6	10.6
12-Dec	20.8	9.2	40.6	21.9
13-Jan	12.3	-0.5	33.2	22.3
13-Feb	11.9	-0.7	33.9	22.5
13-Mar	11.4	0.6	34.3	19.3
13-Apr	7.6	-2.4	31.1	14.7
13-May	11.9	0.5	34.3	19.8
13-Jun	20.8	13.6	33.1	24
13-Jul	20.3	6	42.7	26.9
13-Aug	19.6	12	36.9	23
13-Sep	23.8	11.6	39	27.9
13-Oct	18.5	10.2	41.2	35
13-Nov	24.4	7.6	39.4	36
13-Dec	16.9	8.5	37.9	28.8
14-Jan	18.8	6.3	34.3	14.2
14-Feb	14.8	7.9	27.2	18.1
14-Mar	18.3	6.4	31.8	18.8
14-Apr	14.5	9.6	38.3	18.6
14-May	26.5	18	36.9	29.6
14-Jun	32	13.1	45.1	30.1
14-Jul	32.3	14.7	40.1	25
14-Aug	24.1	5.1	47.5	27.7
14-Sep	24.4	8	41.9	26.6
14-Oct	24.9	18.2	30.5	23
14-Nov	15.8	10	30.5	18.7
14-Dec	14.4	9.8	22.3	20.6
15-Jan	9.8	-0.2	26	20.7
15-Feb	4.7	-0.2	32.2	19.3
15-Mar	-3	-6.4	27.5	7.4
15-Apr	-7.5	-4.1	19.9	10.7
15-May	-14.2	-5.4	20.9	19.4

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

Chart IV-1 of the Business Outlook Survey of the Federal Reserve Bank of Philadelphia Outlook Survey provides the diffusion index of current prices paid or prices of inputs from 2006 to 2015. Recession dates are in shaded areas. In the middle of deep global contraction after IVQ2007, input prices continued to increase in speculative carry trades from central bank policy rates falling toward zero into commodities futures. The index peaked above 70 in the second half of 2008. Inflation of inputs moderated significantly during the shock of risk aversion in late 2008, even falling briefly into contraction territory below zero during several months in 2009 in the flight away from risk financial assets into US government securities (Cochrane and Zingales 2009) that unwound carry trades. Return of risk appetite induced carry trade with significant increase until return of risk aversion in the first round of the European sovereign debt crisis in Apr 2010. Carry trades returned during risk appetite in expectation that the European sovereign debt crisis was resolved. The various inflation waves originating in carry trades induced by zero interest rates with alternating episodes of risk aversion are mirrored in the prices of inputs after 2011, in particular after Aug 2012 with the announcement of the Outright Monetary Transactions Program of the European Central Bank (http://www.ecb.int/press/pr/date/2012/html/pr120906_1.en.html). Subsequent risk aversion and flows of capital away from commodities into stocks and high-yield bonds caused sharp decline in the index of prices paid followed by another recent rebound with marginal decline and new increase. The index falls, rebounds and falls again in the final segment but there are no episodes of contraction after 2009 with exception of minus 3.0 in Mar 2015, minus 7.5 in Apr 2015 and minus 14.5 in May 2015.

Chart IV-1, Federal Reserve Bank of Philadelphia Business Outlook Survey Current Prices Paid Diffusion Index SA

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

Chart IV-2 of the Federal Reserve Bank of Philadelphia Outlook Survey provides the diffusion index of current prices received from 2006 to 2015. The significant difference between the index of current prices paid in Chart IV-1 and the index of current prices received in Chart IV-2 is that increases in prices paid are significantly sharper than increases in prices received. There were several periods of negative readings of prices received from 2010 to 2015. There were only three contraction of prices paid: 3.0 Mar 2015 with sharper contraction of 6.4 of prices received; minus 7.5 for prices paid in Apr 2015 with minus 4.1 for prices received; and minus 14.2 for prices paid in May 2015 with minus 5.4 for prices received. Prices received relative to prices paid deteriorate most of the time largely because of the carry trades from zero interest rates to commodity futures. Profit margins of business are compressed intermittently by fluctuations of commodity prices induced by unconventional monetary policy of zero interest rates, frustrating production, investment and hiring decisions of business, which is precisely the opposite outcome pursued by unconventional monetary policy.

Chart IV-2, Federal Reserve Bank of Philadelphia Business Outlook Survey Current Prices Received Diffusion Index SA

Source: Federal Reserve Bank of Philadelphia

http://www.philadelphiafed.org/index.cfm

VC China. China estimates an index of nonmanufacturing purchasing managers based on a sample of 1200 nonmanufacturing enterprises across the country (http://www.stats.gov.cn/english/pressrelease/t20121009_402841094.htm). Table CIPMNM provides this index and components. The total index increased from 55.7 in Jan 2011 to 58.0 in Mar 2012, decreasing to 53.9 in Aug 2013. The index decreased from 56.0 in Nov 2013 to 54.6 in Dec 2013, easing to 53.4 in Jan 2014. The index moved to 53.7 in Mar 2015. The index of new orders increased from 52.2 in Jan 2012 to 54.3 in Dec 2012 but fell to 50.1 in May 2013, barely above the neutral frontier of 50.0. The index of new orders stabilized at 51.0 in Nov-Dec 2013, easing to 50.9 in Jan 2014. The index of new orders moved to 50.3 in Mar 2015.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Mar 2015	53.7	50.3	50.0	48.4	58.8
Feb	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 53.7 in Mar 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 50.1 in Mar 2015. The index of new orders fell from 54.5 in Apr 2012 to 51.2 in Dec 2012. The index of new orders fell from 52.3 in Nov 2013 to 52.0 in Dec 2013. The index fell to 50.9 in Jan 2014 and moved to 50.4 in Dec 2014. The index moved to 50.2 in Mar 2015.

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

	IPM	PI	NOI	INV	EMP	SDEL
2015
Mar	50.1	52.1	50.2	48.0	48.4	50.1
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 50.1 in Mar 2015.

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

Source: National Bureau of Statistics of China

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

Cumulative growth of China’s GDP in IQ2015 relative to the same period in 2014 was 7.0 percent, as shown in Table VC-GDP. Secondary industry accounts for 42.9 percent of cumulative GDP in IQ2015. In cumulative IQ2015, industry accounts for 38.0 percent of GDP and construction for 5.1 percent. Tertiary industry accounts for 51.6 percent of cumulative GDP in IQ2015 and primary industry for 5.5 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 8.2 percent in IIQ2014. Annual equivalent growth slowed to 7.8 percent in IIIQ2014 and 6.1 percent in IVQ2014. Growth slowed to annual equivalent 5.3 percent in IQ2015.

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

Cumulative GDP IVQ2014	Value Current CNY Billion	IQ2015 Year-on-Year Constant Prices ∆%
GDP	14,066.7	7.0
Primary Industry	777.0	3.2
Farming	807.9	3.3
Secondary Industry	6,029.2	6.4
Industry	5,345.2	6.1
Construction	715.0	8.8
Tertiary Industry	7,260.5	7.9
Transport, Storage, Post	707.2	5.5
Wholesale, Retail Trades	1,346.0	5.8
Accommodation and Restaurants	255.9	5.3
Finance	1,366.9	15.9
Real Estate	970.3	2.0
Other	2,552.4	9.0
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter	∆% Annual Equivalent
2015
IQ2015	1.3	5.3
2014
IVQ2014	1.5	6.1
IIIQ2014	1.9	7.8
IIQ2014	2.0	8.2
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/

Cumulative growth of China’s GDP in IQ2015 relative to the same period in 2014 was 7.0 percent, as shown in Table VC-GDPA. Secondary industry accounts for 42.6 percent of cumulative GDP in IVQ2014. Secondary industry accounts for 42.9 percent of cumulative GDP in IQ2015. In cumulative IQ2015, industry accounts for 38.0 percent of GDP and construction for 5.1 percent. Tertiary industry accounts for 51.6 percent of cumulative GDP in IQ2015 and primary industry for 5.5 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. 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 2.0 percent relative to the prior quarter, which is equivalent 8.2 percent. In IIIQ2014, GDP grew 7.3 percent relative to a year earlier and 1.9 percent relative to the prior quarter, which is 7.8 percent in annual equivalent. GDP grew 1.5 percent in IVQ2014, which is 6.1 percent in annual equivalent and 7.3 percent relative to a year earlier. In IQ2015, GDP grew 1.3 percent, which is equivalent in a year to a year earlier.

Table VC-GDPA, China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter

	IQ2015
GDP	7.0
Primary Industry	3.2
Secondary Industry	6.4
Tertiary Industry	7.9
GDP ∆% Relative to a Prior Quarter	1.3
	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	2.0	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/e01f1a716c744d1786b87e2b721c6451) is mixed. The overall Flash HSBC China Manufacturing PMI^™ increased from 48.9 in Apr to 49.1 in May, while the Flash HSBC China Manufacturing Output Index decreased from 50.0 in Apr to 48.4 in Apr, indicating moderate contraction. Exports orders indicate contraction. Annabel Fiddes, Economist at Markit, finds moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/e01f1a716c744d1786b87e2b721c6451). The HSBC China Services PMI^™, compiled by Markit, shows the HSBC Composite Output, combining manufacturing and services, decreasing from 51.8 in Mar to 51.3 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/4b2a07b43cc1485ab3baab5bb5c64856). Annabel Fiddes, Economist at Markit, finds stronger services with relatively weaker manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/4b2a07b43cc1485ab3baab5bb5c64856). The HSBC China Services Business Activity index increased from 52.3 in Mar to 52.9 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/4b2a07b43cc1485ab3baab5bb5c64856). The HSBC Purchasing Managers’ Index^™ (PMI^™), compiled by Markit, decreased to 48.9 in Apr from 49.6 in Mar, indicating moderate deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/c2eec91c11d34e57a282d2a15f6f00ee). New export orders increased modestly. Annabel Fiddes, Economist at Markit, finds weak internal demand (http://www.markiteconomics.com/Survey/PressRelease.mvc/c2eec91c11d34e57a282d2a15f6f00ee). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Apr 12-month ∆%: minus 4.6 Apr month ∆%: -0.3 Blog 5/17/15
Consumer Price Index	Apr 12-month ∆%: 1.5 Feb month ∆%: -0.2 Blog 5/17/15
Value Added of Industry	Apr month ∆%: 0.57 Jan-Apr 2015/Jan-Apr 2014 ∆%: 6.2 Earlier Data Blog 4/19/15
GDP Growth Rate	Year IQ2015 ∆%: 7.0 First Quarter 2015 ∆%: 7.0 Quarter IQ2015 AE ∆%: 5.3 Blog 4/26/15
Investment in Fixed Assets	Total Jan-Apr 2015 ∆%: 12.0 Real estate development: 6.0 Earlier Data: Blog 4/19/15
Retail Sales	Apr month ∆%: 0.74 Jan-Apr 12 month ∆%: NA Jan-Apr ∆%: 10.4 Earlier Data: Blog 4/19/15
Trade Balance	Apr balance $34.13 billion Exports 12M ∆% -6.4 Imports 12M ∆% -16.2 Cumulative Apr 2015: $158.16 billion Earlier Data: Blog 4/19/15

Links to blog comments in Table CNY:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

4/26/2015 http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

VD Euro Area. Using calendar and seasonally adjusted data (http://ec.europa.eu/eurostat), the GDP of the euro area (18 countries) fell 5.8 percent from the high pre-recession date on IQ2008 to the trough in IIQ2009 while the GDP of the euro area (19 countries) fell 5.8 percent. The GDP of the euro area (18 countries) increased 4.5 percent from IIIQ2009 to IQ2015 at the annual equivalent rate of 0.8 percent while that of the euro area (19 countries) increased 4.5 percent at the annual equivalent rate of 0.8 percent. The GDP of the euro area (18) countries in IQ2015 is lower by 1.5 percent relative to the pre-recession peak in IQ2008 and that of the euro area (19 countries) is lower by 1.5 percent relative to the pre-recession peak in IQ2008. The GDP of the euro area (18) countries increased at the average yearly rate of 2.3 percent from IQ1999 to IQ2008 while that of the euro area (19 countries) increased at 2.3 percent. Table VD-EUR provides yearly growth rates of the combined GDP of the members of the European Monetary Union (EMU) or euro area since 1999. Growth was very strong at 3.3 percent in 2006 and 3.1 percent in 2007. The global recession had strong impact with growth of only 0.5 percent in 2008 and decline of 4.5 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 0.8 percent in 2012 and minus 0.4 percent in 2013 but 0.9 percent in 2014.

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

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	9.7	2.9
2000	2.2	8.9	3.8
2001	2.4	8.3	2.1
2002	2.3	8.6	0.9
2003	2.1	9.1	0.7
2004	2.2	9.3	2.2
2005	2.2	9.1	1.7
2006	2.2	8.4	3.3
2007	2.2	7.5	3.1
2008	3.3	7.6	0.5
2009	0.3	9.6	-4.5
2010	1.6	10.2	2.0
2011	2.7	10.2	1.6
2012	2.5	11.4	-0.8
2013	1.3	12.0	-0.4
2014	0.4	11.6	0.9

http://ec.europa.eu/eurostat

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

The GDP of the euro area in 2013 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $12,753.7 billion or 17.1 percent of world GDP of $74,699.3 billion (http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/weoselgr.aspx). The sum of the GDP of France $2807.3 billion with the GDP of Germany of $3635.9 billion, Italy of $2071.9 billion and Spain $1358.7 billion is $9873.8 billion or 77.4 percent of total euro area GDP and 13.2 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 2014. 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
2014	0.9	1.6	0.4	-0.4	1.4
2013	-0.4	0.1	0.3	-1.7	-1.2
2012	-0.8	0.4	0.3	-2.8	-2.1
2011	1.6	3.6	2.1	0.6	-0.6
2010	2.0	4.1	2.0	1.7	0.0
2009	-4.5	-5.6	-2.9	-5.5	-3.6
2008	0.5	1.1	0.2	-1.0	1.1
2007	3.1	3.3	2.4	1.5	3.8
2006	3.3	3.7	2.4	2.0	4.2
2005	1.7	0.7	1.6	0.9	3.7
2004	2.2	1.2	2.8	1.6	3.2
2003	0.7	-0.7	0.8	0.2	3.2
2002	0.9	0.0	1.1	0.3	2.9
2001	2.1	1.7	2.0	1.8	4.0
2000	3.8	3.0	3.9	3.7	5.3
1999	2.9	2.0	3.4	1.6	4.5
1998	2.9	2.0	3.6	1.4	4.3
1997	2.6	1.8	2.3	1.8	3.7
1996	1.6	0.8	1.4	1.3	2.7

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, decreased from 53.9 in Apr to 53.4 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/05f244462a684f919365061ec0875dcc). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP growth at around 0.4 percent in IIQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/05f244462a684f919365061ec0875dcc). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP decreased from 54.0 in Mar to 53.9 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/2989b1ecd4074b158d4881cd5324729b). Chris Williamson, Chief Economist at Markit, finds slowing growth of GDP at around 0.4 percent in IIQ2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/2989b1ecd4074b158d4881cd5324729b). The Markit Eurozone Services Business Activity Index decreased from 54.2 in Mar to 54.1 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/2989b1ecd4074b158d4881cd5324729b). The Markit Eurozone Manufacturing PMI^® decreased from 52.2 in Mar to 52.0 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/75c70e83d725473bb481371c2239970a). New export orders increased. Chris Williamson, Chief Economist at Markit, finds improvement of industrial growth in the euro area (http://www.markiteconomics.com/Survey/PressRelease.mvc/75c70e83d725473bb481371c2239970a). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IQ2015 ∆% 0.4; IQ2015/IVQ2014 ∆% 1.0 Blog 5/17/15
Unemployment	Mar 2015: 11.3 % unemployment rate; Mar 2015: 18.105 million unemployed Blog 5/3/15
HICP	Apr month ∆%: 0.2 12 months Apr ∆%: 0.0 Blog 5/24/15
Producer Prices	Euro Zone industrial producer prices Feb ∆%: 0.5 Feb 12-month ∆%: -2.8 Blog 4/12/15
Industrial Production	Month month ∆%: -0.3; Month 12 months ∆%: 1.8 Earlier Data: Blog 4/19/15
Retail Sales	Mar month ∆%: -0.8 Mar 12 months ∆%: 1.6 Earlier Data: Blog 3/15/15
Confidence and Economic Sentiment Indicator	Sentiment 103.9 Mar 2015 Consumer minus 3.7 Mar 2015 Blog 4/5/15
Trade	Jan-Mar 2015/Jan-Mar 2014 Exports ∆%: 5.0 Imports ∆%: 0.4 Mar 2015 12-month Exports ∆% 10.9 Imports ∆% 7.3 Earlier Data: Blog 4/19/15

Links to blog comments in Table EUR:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

4/12/15 http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

3/15/15 http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html

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	4.1
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.6
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

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_173_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 54.1 in Apr to 52.8 in May. The index of manufacturing output reached 52.7 in May, decreasing from 54.3 in Apr, while the index of services decreased to 52.9 in May from 54.0 in Apr. The overall Flash Germany Manufacturing PMI^® decreased from 52.1 in Apr to 51.4 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/c8063ea227634aad8ebc68c535e086ab). New orders in manufacturing expanded moderately. Oliver Kolodseike, Economist at Markit, finds continuing GDP growth at slower rate (http://www.markiteconomics.com/Survey/PressRelease.mvc/c8063ea227634aad8ebc68c535e086ab). The Markit Germany Composite Output Index of the Markit Germany Services PMI^®, combining manufacturing and services with close association with Germany’s GDP, decreased from 55.4 in Mar to 54.1 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/317d980899924deeada58333a5bdfd82). Oliver Kolodseike, Economist at Markit and author of the report, finds improvement in 2015 (http://www.markiteconomics.com/Survey/PressRelease.mvc/126dd4b9c0244796bf59910d40f88ef8). The Germany Services Business Activity Index decreased from 55.4 in Mar to 54.0 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/317d980899924deeada58333a5bdfd82). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 52.8 in Mar to 52.1 in

Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/dcbfc9aea0e445b18f69927685fccb23). New export orders increased. Oliver Kolodseike, Senior Economist at Markit and author of the report, finds moderate growth of manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/dcbfc9aea0e445b18f69927685fccb23).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IQ2015 0.3 ∆%; IQ2015/IQ2014 ∆% 1.1 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 5/17/15 5/24/15
Consumer Price Index	Apr month NSA ∆%: 0.0 Apr 12-month NSA ∆%: 0.5 Blog 5/17/15
Producer Price Index	Apr month ∆%: 0.1 NSA, 0.0 CSA 12-month NSA ∆%: -1.5 Blog 5/24/15
Industrial Production	MFG Mar month CSA ∆%: minus 0.8 12-month NSA: 4.3 Earlier Data: Blog 4/12/15
Machine Orders	MFG Mar month ∆%: 0.9 Mar 12-month ∆%: 6.2 Earlier Data: Blog 4/12/15
Retail Sales	Feb Month ∆% -0.5 12-Month ∆% 3.6 Blog 4/5/15
Employment Report	Unemployment Rate SA Mar 4.7% Blog 5/3/15
Trade Balance	Exports Mar 12-month NSA ∆%: 12.4 Imports Mar 12 months NSA ∆%: 7.1 Exports Mar month CSA ∆%: 1.2; Imports Mar month CSA 2.4 Earlier Data: Blog 4/12/15

Links to blog comments in Table DE:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/12/15 http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

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

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

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

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

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

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

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

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

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

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

1/26/14 http://cmpassocregulationblog.blogspot.com/2014/01/capital-flows-exchange-rates-and.html

11/24/13 http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html

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

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

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

Table VE-1 provides percentage change of Germany’s GDP in one quarter relative to the prior quarter from 2001 to 2015. Germany’s GDP contracted during four consecutive quarters from IIQ2008 to IQ2009. The deepest contraction was 4.5 percent in IQ2009. Growth was quite strong from IIIQ2009 to IQ2011 for cumulative growth of 7.8 percent in seven quarters or at the average rate of 1.1 percent per quarter, which is equivalent to 4.4 percent per year. Economic growth decelerated in IIQ2011 to 0.2 percent and 0.4 percent in IIIQ2011. The economy grew 0.0 percent in IVQ2011 and grew 0.3 percent in IQ2012 but at 0.1 percent in IIQ2012. GDP growth in IIIQ2012 was 0.1 percent relative to IIQ2012. Germany’s GDP contracted 0.4 percent in IVQ2012 relative to IIIQ2012. GDP decreased 0.4 percent in IQ2013 and increased 0.8 percent in IIQ2013. Growth of GDP was 0.3 percent in IIIQ2013 and 0.4 percent in IVQ2013. Germany’s growth was robust at 0.8 percent in IQ2014 or 3.2 percent in annual equivalent. GDP contracted 0.1 percent in IIQ2014. GDP increased 0.1 percent in IIIQ2014. The GDP of Germany increased 0.7 percent in IVQ2014. GDP increased 0.3 percent in IQ2015. Using seasonally and calendar adjusted data (https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalAccounts/DomesticProduct/DomesticProduct.html), Germany’s GDP contracted 6.9 percent from IQ2008 to IQ2009. GDP grew 12.0 percent from IQ2009 to IQ2015 at the annual equivalent rate of 1.9 percent. GDP grew 4.1 percent from IQ2008 to IQ2015 at the annual equivalent rate of 0.6 percent.

Table VE-1, Germany Quarter GDP ∆% Relative to Prior Quarter, Seasonally and Calendar Adjusted 

	IQ	IIQ	IIIQ	IV
2015	0.3
2014	0.8	-0.1	0.1	0.7
2013	-0.4	0.8	0.3	0.4
2012	0.3	0.1	0.1	-0.4
2011	1.8	0.2	0.4	0.0
2010	0.8	2.1	0.8	0.7
2009	-4.5	0.1	0.5	0.9
2008	0.8	-0.2	-0.4	-2.0
2007	0.5	0.7	0.8	0.3
2006	1.0	1.6	1.0	1.3
2005	-0.2	0.7	0.8	0.3
2004	0.0	0.4	-0.2	0.1
2003	-1.2	0.1	0.5	0.3
2002	-0.3	0.2	0.5	-0.2
2001	1.6	0.1	-0.3	0.2
2000	1.0	1.0	-0.2	0.1
1999	0.9	0.2	1.1	1.2

Seasonal and calendar adjusted Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Table VE-2 provides percentage changes of Germany’s GDP in a quarter relative to the same quarter a year earlier. Growth was weak in the recovery from the recession of 2001 through 2005, as in most of the euro area (see Pelaez and Pelaez, The Global Recession Risk (2007), 116-46). Germany’s economy then grew robustly in 2006 and 2007 until the global recession after 2007. Germany recovered with strong growth in 2010 and vigorous 6.0 percent in IQ2011. The economy decelerated in the final three quarters of 2011, growing 1.5 percent in IQ2012 relative to IQ2011. Growth decelerated further to 0.3 percent in IIQ2012 without calendar adjustment and 0.8 percent with calendar adjustment and to 0.1 percent in IIIQ2012. Growth in IVQ2012 relative to IVQ2011 was minus 0.3 percent. GDP fell 1.8 percent in IQ2013 relative to a year earlier and increased 0.5 percent in IIQ2013 relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 relative to a year earlier and 1.0 percent in IVQ2013 relative to a year earlier. GDP increased 2.6 percent in IQ2014 relative to a year earlier and 1.0 percent in IIQ2014 relative to a year earlier. GDP increased 1.2 percent in IIIQ2014 relative to a year earlier and increased 1.6 percent in IVQ2014 relative to a year earlier. GDP increased 1.1 percent in IQ2015 relative to a year earlier.

Table VE-2, Germany, Quarter GDP ∆% Relative to Same Quarter a Year Earlier, Price Adjusted NCSA 

	IQ	IIQ	IIIQ	IV
2015	1.1
2014	2.6	1.0	1.2	1.6
2013	-1.8	0.5	0.8	1.0
2012	1.5	0.3	0.1	-0.3
2011	6.0	3.6	3.1	1.8
2010	2.6	4.7	4.6	4.4
2009	-6.6	-7.9	-5.6	-2.4
2008	2.0	3.0	1.1	-1.9
2007	4.3	3.4	3.3	2.1
2006	4.3	2.4	3.5	4.6
2005	-0.7	1.3	1.3	1.0
2004	1.6	1.6	0.6	0.9
2003	-0.4	-1.3	-0.8	-0.3
2002	-1.1	0.2	1.1	-0.1
2001	2.4	1.6	1.5	1.4
2000	4.4	4.0	2.6	1.0
1999	0.9	1.7	2.1	3.3

Price adjusted NSA Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

There are strong calendar effects in economic activity in Germany. Table VE-3 provides Germany’s percentage change in a quarter relative to the same quarter a year earlier adjusting for price changes and calendar effects. Germany’s GDP increased 0.8 percent in IIQ2012 calendar-adjusted in contrast with only 0.3 percent without calendar adjustment. GDP growth adjusting for calendar effects was 0.5 percent in IIIQ2012 relative to IIIQ2011 and 0.1 percent without calendar adjustment. Growth in IVQ2012 was 0.0 percent calendar and price adjusted in contrast with minus 0.3 percent without calendar adjustment. Growth in IQ2013 was minus 0.5 percent relative to a year earlier with adjustment for calendar effects and minus 1.8 percent without adjustment. GDP without calendar adjustment increased 0.5 percent in IIQ2013 relative to a year earlier and 0.0 percent with calendar adjustment. In IIIQ2013, growth without calendar adjustment was 0.8 percent in contrast with 0.3 percent calendar adjusted. In IVQ2013, GDP with calendar adjustment increased 1.1 percent relative to a year earlier and 1.0 percent without calendar adjustment. In IQ2014, GDP increased 2.6 percent without calendar adjustment and 2.4 percent with calendar adjustment. GDP increased 1.4 percent in IIQ2014 with calendar adjustment and 1.0 percent without calendar adjustment. GDP increased 1.2 percent relative to a year earlier in IIIQ2014 without calendar adjustment and 1.2 percent with calendar adjustment. GDP increased 1.6 percent in IVQ2014 relative to a year earlier without calendar adjustment and 1.4 percent with calendar adjustment. GDP increased 1.1 percent in IQ2015 relative to a year earlier without calendar adjustment and 1.0 percent with calendar adjustment.

Table VE-3, Germany, Quarter GDP ∆% Relative to Same Quarter a Year Earlier, Calendar and Price Adjusted NSA 

	IQ	IIQ	IIIQ	IV
2015	1.0
2014	2.4	1.4	1.2	1.4
2013	-0.5	0.0	0.3	1.1
2012	1.0	0.8	0.5	0.0
2011	5.7	3.5	3.2	2.3
2010	2.5	4.3	4.6	4.3

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Table VE-4 provides annual 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 in 2013 was 0.1 percent. Germany’s GDP increased 1.6 percent in 2014.

Table VE-4, 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	4.1
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.6
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

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_173_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Chart VE-1 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides GDP at current prices from 2005 to 2014. The German economy is productive with significant dynamism over the long term. There are fluctuations in an increasing trend since 2009. Growth is oscillating.

Chart VE-1, Germany, GDP, Current Prices, Billion Euro

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-1A provides US GDP in current prices at seasonally adjusted annual rates (SAAR) from 2005 to 2015. There is sharp decline with the recession beginning in IVQ2007 and upward trend during the expansion after IIIQ2009.

Chart VE-1A, US, Gross Domestic Product, Current Prices, Seasonally Adjusted at Annual Rates, Billions of Dollars, 2006-2015

Sources: Bureau of Economic Analysis

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

Chart VE-2 of the Statistisches Bundesamt Deutschland (Federal Statistics Agency of Germany) provides the index of price-adjusted chain-linked GDP of Germany from 2009 to 2015. Germany was growing rapidly before the global contraction and rebounded with significant strength along a strong upward trend that could be increasing again.

Chart VE-2, Germany, Gross Domestic Product Price Adjusted, Trend and Trend Ends

Source: Statistisches Bundesamt Deutschland (Destatis)

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

Chart VE-2A provides US real GDP, seasonally adjusted at annual rates (SAAR) in billions of chained dollars of 2009 from 2010 to 2015.

Chart VE-2A, US, Real Gross Domestic Product, Seasonally Adjusted at Annual Rates, Billions of Chained 2009 Dollars, 2011-2015

Sources: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm

The Statistisches Bundesamt (Federal Statistical Office of Germany) provides the analysis of percentage point contributions to GDP on growth from a quarter a year earlier, shown in Table VE-5. The original data are adjusted for price but not for seasonality. There is strong internal demand, or consumption and investment, which is uncommon in advanced economies. Consumption added 1.8 percentage points in IQ2015. Growth of fixed capital formation (GFCF) deducted 0.7 percentage points from growth of GDP in IQ2015. Domestic uses added 1.1 percentage points in IQ2015. Net exports contributed 0.0 percentage points in IQ2015. The rates of growth of exports and imports fell from over 10 percent to single digits. Exports grew 4.3 percent in IQ2015 relative to the same quarter a year earlier and imports 5.0 percent.

Table VE-5, Germany, Percentage Point Contributions of Use of Gross Domestic Product on Growth from Same Year and Same Quarter of Prior Year, Price Adjusted  

	IIQ 14 PP	∆% IIQ 14	IIIQ 14 PP	∆% III 14	IVQ 14  PP	∆% IVQ 14	IQ15 PP	∆% IQ 15
Consumption Total	0.7	0.9	0.7	0.9	1.4	1.8	1.8	2.4
Household Consumption	0.5	0.8	0.4	0.8	1.1	1.8	1.3	2.4
Government Consumption	0.2	1.2	0.3	1.3	0.3	1.6	0.5	2.4
Gross Capital Formation	0.4	2.4	-0.5	-2.4	-0.1	-0.7	-0.7	-3.3
Gross Fixed Capital Formation (GFCF)	0.4	2.1	0.3	1.4	0.3	1.5	0.0	-0.2
GFCF in Machinery & Equipment	0.2	3.6	0.3	4.1	0.2	2.4	0.1	1.5
GFCF in Construction	0.2	1.5	0.0	-0.1	0.1	1.0	-0.2	-1.9
Change in Inventories	0.0		-0.8		-0.4		-0.6
Domestic Uses	1.1	1.2	0.2	0.2	1.3	1.4	1.1	1.1
Net Exports	-0.1		1.0		0.3		0.0
Exports		2.4		4.5		4.2		4.3
Imports		3.0		2.4		4.0		5.0
GDP		1.0		1.2		1.6		1.1
GDP per Person in Employment		0.1		0.4		0.7		0.4
GDP per Hour Worked		0.4		0.2		-0.1		0.6

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Table VE-6 provides segments of Germany’s GDP with growth in IQ2015 and contributions to growth in percentage points. Growth of GDP in IQ2015 consisted of contribution of 0.5 percentage points by total consumption of which 0.3 percentage points by household consumption. Net exports deducted 0.2 percentage points. Exports grew 0.8 percent in IQ2015 and imports 1.5 percent. Gross fixed capital formation (GFCF) contributed 0.2 percentage points mostly from GFCF in construction contributing 0.3 percentage points. Inventory change deducted 0.3 percentage points. Domestic uses contributed 0.5 percentage points.

Table VE-6, Germany, Percentage Point Contributions of Use of Gross Domestic Product on Growth from Prior Quarter, Price Adjusted  

	IIQ 14 PP	∆% IIQ 14	IIIQ 13 PP	∆% IIIQ 13	IVQ 14  PP	∆% IVQ 14	IQ15 PP	∆% IQ 15
Consumption Total	0.2	0.2	0.5	0.7	0.5	0.6	0.5	0.6
Household Consumption	0.0	0.0	0.4	0.7	0.4	0.7	0.3	0.6
Government Consumption	0.1	0.7	0.1	0.6	0.1	0.3	0.1	0.7
Gross Capital Formation	-0.4	-2.0	-0.8	-4.1	0.5	2.9	0.0	0.0
Gross Fixed Capital Formation (GFCF)	-0.4	-1.7	-0.2	-1.2	0.2	0.8	0.3	1.5
GFCF in Machinery & Equipment	0.0	0.6	-0.1	-1.4	0.0	0.4	0.1	1.5
GFCF in Construction	-0.4	-3.7	-0.2	-1.5	0.1	1.3	0.2	1.7
Change in Inventories	-0.1		-0.5		0.4		-0.3
Domestic Uses	-0.2	-0.3	-0.3	-0.3	1.0	1.1	0.5	0.5
Net Exports	0.2		0.4		-0.3		-0.2
Exports		1.0		1.5		1.0		0.8
Imports		0.7		0.8		1.9		1.5
GDP		-0.1		0.1		0.7		0.3
GDP per Person in Employment		-0.4		-0.1		0.5		0.2
GDP per Hour Worked		0.2		-0.2		0.6		0.1

PP: Percentage Points

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Percentage changes from year earlier of gross value added by economic sectors in Germany are in Table VE-7. Industry ex construction grew 1.1 percent in IQ2015 relative to a year earlier. Business services increased 1.8 percent in IQ2015 relative to a year earlier. Construction decreased 3.1 percent in IQ2015 relative to a year earlier. Total gross value added expanded 1.0 percent in IQ2015 relative to a year earlier.

Table VE-7, Germany, Percentage Change from Year Earlier of Gross Value Added by Economic Sector, Price Adjusted NSA

	IQ2014	II2014	III2014	IVQ2014	IQ2015
Agriculture	7.0	7.0	7.9	6.3	-1.4
Industry ex Construction	3.3	-0.1	1.0	1.1	1.1
Manufacturing	4.6	0.7	2.0	1.4	0.6
Construction	11.9	2.1	0.4	-0.3	-3.1
Trade, Transport, Accommodation & Food Services	2.5	0.9	1.1	1.3	2.3
Information & Communications	2.3	2.3	2.7	1.6	0.9
Finance & Insurance	0.0	1.6	1.1	0.9	0.4
Real Estate	1.3	1.2	1.2	1.1	0.4
Business Services	2.9	1.9	2.6	2.4	1.8
Public Services, Education & Health	1.6	0.9	1.1	1.2	0.9
Other Services	0.8	-0.3	0.2	0.3	-0.4
Total Gross Value Added	2.6	0.9	1.3	1.3	1.0

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Table VE-8 provides the savings as percent of disposable income and percentage growth of disposable income year-on-year from 2010 to 2015. The savings ratio remained at a relatively high level for an advanced economy, exceeding 9.0 percent from 2010 to 2014. The savings ratio increased to 12.6 percent in IQ2014 and fell to 8.9 percent in IIQ2014, 8.0 percent in IIIQ2014 and 8.1 percent in IVQ2014. The savings ratio increased to 12.9 percent in IQ2015. The year on year growth rate of disposable income decreased from 5.7 percent in IQ2014 to 3.4 percent in IQ2015.

Table VE-8, Germany, Savings as Percent of Disposable Income and Yearly Change of Disposable Income, % and ∆%

	Savings as % Percent of Disposable Income	Year on Year ∆% of Disposable Income
IQ2015	12.9	3.4
IVQ2014	8.1	3.3
IIIQ2014	8.0	3.9
IIQ2014	8.9	3.0
IQ2014	12.6	5.7
2014	9.4	3.7
2013	9.1	1.8
2012	9.4	1.5
2011	9.6	5.9
2010	9.9	5.0

Source: Statistisches Bundesamt Deutschland (Destatis)

https://www.destatis.de/EN/PressServices/Press/pr/2015/05/PE15_187_811.html

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

Chart IB-14A provides the US personal savings rate, or personal savings as percent of disposable personal income, on an annual basis from 1929 to 2014. The US savings rate shows decline from around 10 percent in the 1960s to around 5 percent currently.

Chart IB-14A, US, Personal Savings as a Percentage of Disposable Personal Income, Annual, 1929-2014

Source: US Bureau of Economic Analysis

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

Table IB-7 provides personal savings as percent of disposable income and annual change of real disposable personal income in selected years since 1930. Savings fell from 4.4 percent of disposable personal income in 1930 to minus 0.8 percent in 1933 while real disposable income contracted 6.3 percent in 1930 and 2.9 percent in 1933. Savings as percent of disposable personal income swelled during World War II to 27.9 percent in 1944 with increase of real disposable income of 3.1 percent. Savings as percent of personal disposable income fell steadily over decades from 11.5 percent in 1982 to 2.5 percent in 2005. Savings as percent of disposable personal income was 4.9 percent in 2013 while real disposable income fell 0.2 percent. The savings rate was 4.8 percent of GDP in 2014 with growth of real disposable income of 2.5 percent. The average ratio of savings as percent of disposable income fell from 9.3 percent in 1980 to 1989 to 5.3 percent on average from 2007 to 2014. Real disposable income grew on average at 3.5 percent from 1980 to 1989 and at 1.5 percent on average from 2007 to 2014.

Table IB-7, US, Personal Savings as Percent of Disposable Personal Income, Annual, Selected Years 1929-1914

	Personal Savings as Percent of Disposable Personal Income	Annual Change of Real Disposable Personal Income
1930	4.4	-6.3
1933	-0.8	-2.9
1944	27.9	3.1
1947	6.3	-4.1
1954	10.3	1.4
1958	11.4	1.1
1960	10.0	2.6
1970	12.6	4.6
1975	13.0	2.5
1982	11.5	2.1
1989	7.8	3.0
1992	8.9	4.3
2002	5.0	3.1
2003	4.8	2.7
2004	4.6	3.6
2005	2.5	1.5
2006	3.3	4.0
2007	3.0	2.1
2008	4.9	1.5
2009	6.1	-0.4
2010	5.6	1.0
2011	6.0	2.5
2012	7.2	3.0
2013	4.9	-0.2
2014	4.8	2.5
Average Savings Ratio
1980-1989	9.3
2007-2014	5.3
Average Yearly ∆% Real Disposable Income
1980-1989		3.5
2007-2014		1.5

Source: US Bureau of Economic Analysis

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

Chart IB-15 of the US Bureau of Economic Analysis provides personal savings as percent of personal disposable income, or savings ratio, from Jan 2007 to Mar 2015. The uncertainties caused by the global recession resulted in sharp increase in the savings ratio that peaked at 7.9 percent in May 2008 (http://www.bea.gov/iTable/index_nipa.cfm). The second peak occurred at 8.1 percent in May 2009. There was another rising trend until 5.9 percent in Jun 2010 and then steady downward trend until 5.6 percent in Nov 2011. This was followed by an upward trend with 7.1 percent in Jun 2012 but decline to 6.4 percent in Aug 2012 followed by jump to 10.5 percent in Dec 2012. Swelling realization of income in Oct-Dec 2012 in anticipation of tax increases in Jan 2013 caused the jump of the savings rate to 10.5 percent in Dec 2012. The BEA explains as “Personal income in November and December was boosted by accelerated and special dividend payments to persons and by accelerated bonus payments and other irregular pay in private wages and salaries in anticipation of changes in individual income tax rates. Personal income in December was also boosted by lump-sum social security benefit payments” (page 2 at http://www.bea.gov/newsreleases/national/pi/2013/pdf/pi1212.pdf). There was a reverse effect in Jan 2013 with decline of the savings rate to 4.5 percent. Real disposable personal income fell 5.9 percent and real disposable per capita income fell from $38,699 in Dec 2012 to $36.378 in Jan 2013 or by 6.0 percent (http://www.bea.gov/iTable/index_nipa.cfm), which is explained by the Bureau of Economic Analysis as follows (page 3 http://www.bea.gov/newsreleases/national/pi/2013/pdf/pi0213.pdf):

“Contributions for government social insurance -- a subtraction in calculating personal income --increased $6.4 billion in February, compared with an increase of $126.8 billion in January. The

January estimate reflected increases in both employer and employee contributions for government social insurance. The January estimate of employee contributions for government social insurance reflected the expiration of the “payroll tax holiday,” that increased the social security contribution rate for employees and self-employed workers by 2.0 percentage points, or $114.1 billion at an annual rate. For additional information, see FAQ on “How did the expiration of the payroll tax holiday affect personal income for January 2013?” at www.bea.gov. The January estimate of employee contributions for government social insurance also reflected an increase in the monthly premiums paid by participants in the supplementary medical insurance program, in the hospital insurance provisions of the Patient Protection and Affordable Care Act, and in the social security taxable wage base; together, these changes added $12.9 billion to January. Employer contributions were boosted $5.9 billion in January, which reflected increases in the social security taxable wage base (from $110,100 to $113,700), in the tax rates paid by employers to state unemployment insurance, and in employer contributions for the federal unemployment tax and for pension guaranty. The total contribution of special factors to the January change in contributions for government social insurance was $132.9 billion.”

Chart IB-15, US, Personal Savings as a Percentage of Disposable Income, Monthly 2007-2015

Source: US Bureau of Economic Analysis

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

Table IB-8 provides personal saving as percent of disposable income, change of real disposable income relative to Dec 2007 (RDPI ∆% 12/07), monthly percentage change of real disposable income (RDPI ∆% month) and percentage change of real disposable income in a month relative to the same month a year earlier (RDPI ∆% YOY). The ratio of personal saving to disposable income eased to 5.3 percent in Mar 2014 with cumulative growth of real disposable income of 12.7 percent since Dec 2007 at the rate of 1.7 percent annual equivalent, which is much lower than 3.2 percent over the long term from 1929 to 2014.

Table IB-8, US, Savings Ratio and Real Disposable Income, % and ∆%

	Personal Saving as % Disposable Income	RDPI ∆% 12/07	RDPI ∆% Month	RDPI ∆% YOY
May 2008	7.9	5.1	4.8	5.7
May 2009	8.1	2.5	1.6	-2.5
Jun 2010	5.9	1.8	0.0	1.0
Nov 2011	5.6	4.2	-0.1	1.5
Jun 2012	7.1	6.9	0.1	2.7
Aug 2012	6.4	6.5	-0.2	1.9
Dec 2012	10.5	12.3	2.8	7.0
Jan 2013	4.5	5.6	-5.9	-0.1
Feb 2013	4.7	6.2	0.5	-0.2
Mar 2013	4.9	6.5	0.4	0.0
Apr 2013	5.1	6.8	0.2	0.0
May 2013	5.2	7.2	0.4	0.4
Jun 2013	5.3	7.4	0.2	0.4
Jul 2013	5.1	7.3	-0.1	0.6
Aug 2013	5.3	7.7	0.4	1.1
Sep 2013	5.2	8.0	0.3	0.9
Oct 2013	4.7	7.7	-0.3	0.0
Nov 2013	4.3	7.8	0.1	-1.3
Dec 2013	4.1	7.6	-0.2	-4.2
Jan 2014	4.9	8.1	0.5	2.3
Feb 2014	5.0	8.6	0.5	2.3
Mar 2014	4.8	9.1	0.5	2.4
Apr 2014	5.0	9.2	0.1	2.3
May 2014	5.1	9.4	0.2	2.1
Jun 2014	5.1	9.7	0.2	2.1
Jul 2014	5.1	9.8	0.1	2.3
Aug 2014	4.7	10.2	0.4	2.3
Sep 2014	4.6	10.3	0.1	2.1
Oct 2014	4.5	10.5	0.2	2.6
Nov 2014	4.4	11.0	0.5	3.0
Dec 2014	4.9	11.6	0.5	3.8
Jan 2015	5.4	12.6	0.8	4.2
Feb 2015	5.7	12.9	0.3	3.9
Mar 2015	5.3	12.7	-0.2	3.3

Source: US Bureau of Economic Analysis

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

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=20150513

The Markit Flash France Composite Output Index increased from 50.6 in Apr to 51.0 in May (http://www.markiteconomics.com/Survey/PressRelease.mvc/15ae18943c084e04b701d404ecc98c61). Jack Kennedy, Senior Economist at Markit and author of the report, finds moderate growth (http://www.markiteconomics.com/Survey/PressRelease.mvc/15ae18943c084e04b701d404ecc98c61). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 51.5 in Mar to 50.6 in Apr, indicating expansion at slower pace (http://www.markiteconomics.com/Survey/PressRelease.mvc/b88d8461197d45bb8306f45e5759a377). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds slowing business activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/b88d8461197d45bb8306f45e5759a377). The Markit France Services Activity index decreased from 52.4 in Mar to 51.4 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/b88d8461197d45bb8306f45e5759a377). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 48.0 in Apr from 48.8 in Mar (http://www.markiteconomics.com/Survey/PressRelease.mvc/7f8cd6c38a0d4cf29619add036e91b5d). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds deterioration in manufacturing (http://www.markiteconomics.com/Survey/PressRelease.mvc/7f8cd6c38a0d4cf29619add036e91b5d). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Apr month ∆% 0.1 12 months ∆%: 0.1 5/17/15
PPI	Mar month ∆%: 0.0 Mar 12 months ∆%: -2.1 Blog 5/3/15
GDP Growth	IQ2015/IVQ2014 ∆%: 0.6 IQ2015/IQ2014 ∆%: 0.7 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 3/29/15 5/17/15
Industrial Production	Mar ∆%: Manufacturing 0.0 12-Month ∆%: 0.0 Manufacturing 0.3 Earlier Data: Blog 4/12/15
Consumer Spending	Manufactured Goods Feb ∆%: -0.1 Feb 12-Month Manufactured Goods ∆%: 2.4 Blog 4/5/15
Employment	Unemployment Rate: IVQ2014 10.0% Blog 3/15/15
Trade Balance	Mar Exports ∆%: month 0.9, 12 months 3.8 Mar Imports ∆%: month 3.1, 12 months 3.1 Earlier Data: Blog 4/12/15
Confidence Indicators	Historical average 100 May Mfg Business Climate 103.0 Earlier Data: Blog 3/29/15

Links to blog comments in Table FR:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/12/15 http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

3/29/15 http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html

3/15/15 http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html

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

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

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

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

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

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

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

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

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

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

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

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

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

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

VG Italy. Table VG-IT provides percentage changes in a quarter relative to the same quarter a year earlier of Italy’s expenditure components in chained volume measures. GDP has been declining at sharper rates from minus 1.0 percent in IVQ2011 to minus 2.7 percent in IVQ2012, minus 2.6 percent in IQ2013, minus 2.0 percent in IIQ2013 and minus 1.4 percent in IIIQ2013. GDP fell 0.8 percent in IVQ2013 relative to a year earlier. GDP fell 0.1 percent in IQ2014 relative to a year earlier and decreased 0.3 percent in IIQ2014 relative to a year earlier. GDP fell 0.5 percent in IIIQ2014 relative to a year earlier and fell 0.5 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 0.4 percent in IQ2014 and GFCF fell 2.5 percent. In IIQ2014, consumption decreased 0.1 percent relative to a year earlier and GFCF fell 3.3 percent. GDP fell 0.5 percent in IIIQ2014 relative to a year earlier while consumption increased 0.2 percent and GFCF fell 4.2 percent. GDP fell 0.5 percent in IVQ2014 relative to a year earlier while consumption increased 0.3 percent and GFCF fell 3.0 percent.

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

	GDP	Imports	Consumption	GFCF	Exports
2015
IQ	0.0
2014
IVQ	-0.5	2.0	0.3	-3.0	3.8
IIIQ	-0.5	1.3	0.2	-4.2	1.7
IIQ	-0.3	2.8	-0.1	-3.3	2.6
IQ	-0.1	0.4	-0.4	-2.5	3.8
2013
IVQ	-0.9	0.8	-1.2	-4.1	1.2
IIIQ	-1.4	-1.5	-2.1	-4.2	0.0
IIQ	-2.0	-3.7	-2.5	-6.4	0.2
IQ	-2.6	-4.3	-2.7	-8.4	1.5
2012
IVQ	-2.7	-7.5	-3.3	-9.6	1.7
IIIQ	-3.1	-8.2	-3.5	-10.2	3.0
IIQ	-3.1	-8.9	-3.5	-9.6	1.6
IQ	-2.3	-8.7	-3.1	-8.1	1.8
2011
IVQ	-1.0	-7.1	-2.0	-4.5	2.5
IIIQ	0.4	0.3	-0.8	-2.3	4.6
IIQ	1.4	3.8	0.3	-0.6	7.5
IQ	2.0	8.4	0.7	0.7	10.2
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/151830

The Markit/ADACI Business Activity Index increased from 51.6 in Mar to 53.1 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/db90515993744bf4ac7cb4d61cdb450b). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds signs of expansion of private sector activity (http://www.markiteconomics.com/Survey/PressRelease.mvc/db90515993744bf4ac7cb4d61cdb450b). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 53.3 in Mar to 53.8 in Apr (http://www.markiteconomics.com/Survey/PressRelease.mvc/909dce57802c4892be56246ab96ed3f7). 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/909dce57802c4892be56246ab96ed3f7). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Apr month ∆%: 0.2 Apr 12-month ∆%: -0.1 Blog 5/17/15
Producer Price Index	Mar month ∆%: -0.1 Mar 12-month ∆%: -3.1 Blog 5/3/15
GDP Growth	IQ2015/IVQ2014 SA ∆%: 0.3 IQ2015/IQ2014 NSA ∆%: minus 0.0 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 3/15/15 5/17/15
Labor Report	Mar 2015 Participation rate 64.0% Employment ratio 55.5% Unemployment rate 13.0% Youth Unemployment 43.1% Blog 5/3/15
Industrial Production	Mar month ∆%: 0.4 12 months CA ∆%: 1.5 Earlier Data: Blog 4/19/15
Retail Sales	Mar month ∆%: -0.1 Mar 12-month ∆%: -0.2 Earlier Data: Blog 4/26/15
Business Confidence	Mfg Mar 103.7, Nov 99.5 Construction Mar 116.0, Nov 103.7 Blog 4/5/15
Trade Balance	Balance Mar SA €3894 million versus Feb €4461 Exports Mar month SA ∆%: 1.8; Imports month ∆%: 4.0 Exports 12 months Mar NSA ∆%: 9.2 Imports 12 months NSA ∆%: 9.7 Earlier Data: Blog 4/19/15

Links to blog comments in Table IT:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/26/2015 http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

3/15/15 http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html

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

Professors Ricardo Caballero and Francesco Giavazzi (2012Jan15) find that the resolution of the European sovereign crisis with survival of the euro area would require success in the restructuring of Italy. Growth of the Italian economy would ensure that success. A critical problem is that the common euro currency prevents Italy from devaluing the exchange rate to parity or the exchange rate that would permit export growth to promote internal economic activity, which could generate fiscal revenues for primary fiscal surpluses that ensure creditworthiness. Fiscal consolidation and restructuring are important but of long-term gestation. Immediate growth of the Italian economy would consolidate the resolution of the sovereign debt crisis. Caballero and Giavazzi (2012Jan15) argue that 55 percent of the exports of Italy are to countries outside the euro area such that devaluation of 15 percent would be effective in increasing export revenue. Newly available data in Table VG-1 providing Italy’s trade with regions and countries supports the argument of Caballero and Giavazzi (2012Jan15). Italy’s exports to the European Monetary Union (EMU), or euro area, are only 40.3 percent of the total in Feb 2015. Exports to the non-European Union area with share of 45.3 percent in Italy’s total exports are growing at 6.1 percent in Jan-Mar 2015 relative to Jan-Mar 2014 while those to EMU are growing at minus 0.6 percent.

Table VG-1, Italy, Exports and Imports by Regions and Countries, % Share and 12-Month ∆%

Mar 2015	Exports % Share	∆% Jan-Mar 2015/ Jan-Mar 2014	Imports % Share	∆% Jan-Mar 2015/ Jan-Mar 2014
EU	54.7	1.0	57.1	5.0
EMU 19	40.3	-0.6	45.3	3.8
France	10.6	-3.4	8.6	2.6
Germany	12.6	-0.4	15.4	2.5
Spain	4.5	4.7	4.8	9.5
UK	5.3	7.2	2.8	3.8
Non EU	45.3	6.1	42.9	-1.4
Europe non EU	11.8	-3.3	11.3	-7.3
USA	7.5	39.4	3.5	15.8
China	2.6	-4.6	7.1	23.8
OPEC	5.7	7.1	5.8	-18.2
Total	100.0	3.2	100.0	2.2

Notes: EU: European Union; EMU: European Monetary Union (euro zone)

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/159993

Table VG-2 provides Italy’s trade balance by regions and countries. Italy had trade deficit of €748 million with the 19 countries of the euro zone (EMU 19) in Mar 2015 and cumulative deficit of €1586 million in Jan-Mar 2015. Depreciation to parity could permit greater competitiveness in improving the trade surplus of €1284million in Jan-Mar 2015 with Europe non-European Union, the trade surplus of €53733 million with the US and the trade surplus with non-European Union of €6186 million in Jan-Mar 2015. There is significant rigidity in the trade deficit in Jan-Mar 2015 of €5173 million with China. There is a trade surplus of €1260 million with members of the Organization of Petroleum Exporting Countries (OPEC). Higher exports could drive economic growth in the economy of Italy that would permit less onerous adjustment of the country’s fiscal imbalances, raising the country’s credit rating.

Table VG-2, Italy, Trade Balance by Regions and Countries, Millions of Euro 

Regions and Countries	Trade Balance Mar 2015 Millions of Euro	Trade Balance Cumulative Jan-Mar 2015 Millions of Euro
EU	487	1,642
EMU 19	-748	-1,586
France	784	2,406
Germany	-527	-1,365
Spain	-29	91
UK	1,012	2,702
Non EU	3,573	6,186
Europe non EU	372	1,284
USA	2,160	5,373
China	-1,580	-5,173
OPEC	906	1,260
Total	4,060	7,828

Notes: EU: European Union; EMU: European Monetary Union (euro zone)

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/159993

Growth rates of Italy’s trade and major products are in Table VG-3 for the period Jan-Mar 2015 relative to Jan-Mar 2014. Growth rates of cumulative imports relative to a year earlier are negative for energy with minus 25.2 percent. Exports of durable goods increased 3.4 percent and exports of capital goods increased 8.2 percent. The rate of growth of exports of 3.2 percent in Jan-Mar 2015/Jan-Mar 2014 relative to that of imports of 2.2 percent may reflect weak demand in Italy with GDP declining during seven consecutive quarters from IIIQ2011 through IQ2013 together with softening commodity prices. GDP increased 0.1 percent in IIIQ2013, changed 0.0 percent in IVQ2013, decreased 0.2 percent in IQ2014 and fell 0.2 percent in IIQ2014. Italy’s GDP fell 0.1 percent in IIIQ2014 and changed 0.0 percent in IVQ2014. Italy’s GDP increased 0.3 percent in IQ2015.

Table VG-3, Italy, Exports and Imports % Share of Products in Total and ∆%

	Exports Share %	Exports ∆% Jan-Mar 2015/ Jan-Mar 2014	Imports Share %	Imports ∆% Jan-Mar 2015/ Jan-Mar 2014
Consumer Goods	31.6	3.3	28.6	7.2
Durable	6.0	3.4	3.2	16.3
Non-Durable	25.6	3.3	25.4	6.1
Capital Goods	33.1	8.2	21.9	14.1
Inter- mediate Goods	31.7	1.1	33.2	4.6
Energy	3.7	-21.9	16.3	-25.2
Total ex Energy	96.3	4.2	83.7	7.9
Total	100.0	3.2	100.0	2.2

Note: % Share for 2014 total trade.

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/159993

Table VG-4 provides Italy’s trade balance by product categories in Mar 2015 and cumulative Jan-Mar 2015. Italy’s trade balance excluding energy, generated surplus of €7118 million in Mar 2015 and €16,371 million cumulative in Jan-Mar 2015 but the energy trade balance created deficit of €3067 million in Mar 2015 and cumulative €8543 million in Jan-Mar 2015. The overall surplus in Mar 2015 was €4060 million with cumulative surplus of €7828 million in Jan-Mar 2015. Italy has significant competitiveness in various economic activities in contrast with some other countries with debt difficulties.

Table VG-4, Italy, Trade Balance by Product Categories, € Millions

	Mar 2015	Cumulative 2015
Consumer Goods	1,867	4,720
Durable	1,096	2,769
Nondurable	771	1,950
Capital Goods	4,990	11,723
Intermediate Goods	260	-72
Energy	-3,057	-8,543
Total ex Energy	7,118	16,371
Total	4,060	7,828

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/159993

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 2.8 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 2014, 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 4.0 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	2.8
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*	4.0
2000-2014	1.7

*Absolute change from 2007 to 2013 and from 2007 to 2014

Source: UK Office for National Statistics

http://www.ons.gov.uk/ons/rel/gva/gross-domestic-product--preliminary-estimate/q1-2015/index.html

Table UK, UK Economic Indicators

CPI	Apr month ∆%: 0.2 Apr 12-month ∆%: -0.1 Blog 5/24/15
Output/Input Prices	Output Prices: Apr 12-month NSA ∆%: -1.7; excluding food, petroleum ∆%: 0.1 Input Prices: Apr 12-month NSA ∆%: -11.7 Excluding ∆%: -3.1 Blog 5/24/15
GDP Growth	IQ2015 prior quarter ∆% 0.3; year earlier same quarter ∆%: 2.4 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 4/5/15 5/3/15
Industrial Production	Mar 2015/Mar 2014 ∆%: Production Industries 0.7; Manufacturing 1.1 Earlier Data: Blog 4/12/15
Retail Sales	Apr month ∆%: 1.2 Apr 12-month ∆%: 4.7 Earlier Data: Blog 4/26/15
Labor Market	Jan-Mar Unemployment Rate: 5.5% Blog 5/17/15 LMGDP 5/17/15
GDP and the Labor Market	IQ2015 Employment 104.8 IQ2008 =100 GDP IQ15=104.0 IQ2008=100 Blog 5/17/14
Trade Balance	Balance SA Mar minus ₤2817 million Exports Mar%: 0.7; Jan-Mar ∆%: -1.1 Imports Mar ∆%: -0.4 Jan-Mar ∆%: -2.1 EARLIER DATA: Blog 4/12/15

Links to blog comments in Table UK:

5/17/15 http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html

5/3/15 http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html

4/26/2015 http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html

4/19/2015 http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html

4/12/15 http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html

4/5/15 http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html

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

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.