IMF View of World Economy and Finance, Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates, 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 V

 

IMF View of World Economy and Finance, Squeeze of Economic Activity by Carry Trades Induced by Zero Interest Rates, 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, 2016

I IMF View of World Economy and Finance

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

IIA 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 2014 and the growth rate of real GDP of the world and selected regional countries from 2014 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 and 3.1 percent in 2015 but accelerating to 3.2 percent in 2016 and 3.5 percent in 2017. Slow-speed recovery occurs in the “major advanced economies” of the G7 that account for $35,570 billion of world output of $77,825 billion, or 45.7 percent, but are projected to grow at much lower rates than world output, 1.8 percent on average from 2014 to 2017 in contrast with 3.3 percent for the world as a whole. While the world would grow 13.9 percent in the four years from 2014 to 2017, the G7 as a whole would grow 7.4 percent. The difference in dollars of 2014 is high: growing by 13.9 percent would add around $10.8 trillion of output to the world economy, or roughly, two times the output of the economy of Japan of $4,596 billion but growing by 7.4 percent would add $5.8 trillion of output to the world, or about the output of Japan in 2014. 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 2014 of $30,690 billion, or 39.4 percent of world output. The EMDEs would grow cumulatively 18.6 percent or at the average yearly rate of 4.4 percent, contributing $5.7 trillion from 2014 to 2017 or the equivalent of somewhat more than one half the GDP of $10,431 billion of China in 2014. 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 2014 adds to $16,921 billion, or 21.7 percent of world output, which is equivalent to 47.5 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 2014	Real GDP ∆% 2014	Real GDP ∆% 2015	Real GDP ∆% 2016	Real GDP ∆% 2017
World	77,825	3.4	3.1	3.2	3.5
G7	35,570	1.7	1.8	1.8	1.9
Canada	1,784	2.5	1.2	1.5	1.9
France	2,834	0.2	1.1	1.1	1.3
DE	3,874	1.6	1.5	1.5	1.6
Italy	2,142	-0.3	0.8	1.0	1.2
Japan	4,596	0.0	0.5	0.5	-0.1
UK	2,992	2.9	2.2	1.9	2.2
US	17,348	2.4	2.4	2.4	2.5
Euro Area	13,430	0.9	1.6	1.5	1.6
DE	3,874	1.6	1.5	1.5	1.6
France	2,834	0.2	1.1	1.1	1.3
Italy	2,142	-0.3	0.8	1.0	1.2
POT	230	0.9	1.5	1.4	1.3
Ireland	251	5.2	7.8	5.0	3.6
Greece	236	0.7	-0.2	-0.6	2.7
Spain	1,384	1.4	3.2	2.6	2.3
EMDE	30,690	4.6	4.0	4.1	4.7
Brazil	2,417	0.1	-3.8	-3.8	0.0
Russia	2,030	0.7	-3.7	-1.8	0.8
India	2,043	7.2	7.3	7.5	7.5
China	10,431	7.3	6.9	6.5	6.2

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/2016/01/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/2016/01/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 12.6 percent for Italy, which is lower but still high. The G7 rate of unemployment is 6.4 percent. Unemployment rates are not likely to decrease substantially if slow growth persists in advanced economies.

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

	% Labor Force 2013	% Labor Force 2014	% Labor Force 2015	% Labor Force 2016	% Labor Force 2017
World	NA	NA	NA	NA	NA
G7	7.1	6.4	5.8	5.5	5.5
Canada	7.1	6.9	6.9	7.3	7.4
France	10.3	10.3	10.4	10.1	10.0
DE	5.2	5.0	4.6	4.6	4.8
Italy	12.2	12.6	11.9	11.4	10.9
Japan	4.0	3.6	3.4	3.3	3.3
UK	7.6	6.2	5.4	5.0	5.0
US	7.4	6.2	5.3	4.9	4.8
Euro Area	12.0	11.6	10.9	10.3	9.9
DE	5.2	5.0	4.6	4.6	4.8
France	10.3	10.3	10.4	10.1	10.0
Italy	12.2	12.6	11.9	11.4	10.9
POT	16.2	13.9	12.4	11.6	11.1
Ireland	13.0	11.3	9.4	8.3	7.5
Greece	27.5	26.5	25.0	25.0	23.4
Spain	26.1	24.5	22.1	19.7	18.3
EMDE	NA	NA	NA	NA	NA
Brazil	5.4	4.8	6.8	9.2	10.2
Russia	5.5	5.2	5.6	6.5	6.3
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/2016/01/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 IIIQ2015 available now for all countries. There are preliminary estimates for all countries for IVQ2015. Growth is weak throughout most of the world.

• Japan. The GDP of Japan increased 0.9 percent in IQ2012, 3.7 percent at SAAR (seasonally adjusted annual rate) and 3.5 percent relative to a year earlier but part of the jump could be the low level a year earlier because of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan is experiencing difficulties with the overvalued yen because of worldwide capital flight originating in zero interest rates with risk aversion in an environment of softer growth of world trade. Japan’s GDP fell 0.4 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 1.6 percent, which is much lower than 3.7 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 0.1 percent in IVQ2012 at the SAAR of minus 0.3 percent and changed 0.0 percent relative to a year earlier. Japan grew 1.0 percent in IQ2013 at the SAAR of 4.1 percent and increased 0.3 percent relative to a year earlier. Japan’s GDP increased 0.7 percent in IIQ2013 at the SAAR of 2.7 percent and increased 1.1 percent relative to a year earlier. Japan’s GDP grew 0.5 percent in IIIQ2013 at the SAAR of 2.1 percent and increased 2.0 percent relative to a year earlier. In IVQ2013, Japan’s GDP decreased 0.1 percent at the SAAR of minus 0.4 percent, increasing 2.1 percent relative to a year earlier. Japan’s GDP increased 1.3 percent in IQ2014 at the SAAR of 5.2 percent and increased 2.7 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 2.0 percent at the SAAR of minus 7.9 percent and fell 0.3 percent relative to a year earlier. Japan’s GDP contracted 0.6 percent in IIIQ2014 at the SAAR of minus 2.5 percent and fell 1.5 percent relative to a year earlier. In IVQ2014, Japan’s GDP grew 0.5 percent, at the SAAR of 2.2 percent, decreasing 1.0 percent relative to a year earlier. The GDP of Japan increased 1.1 percent in IQ2015 at the SAAR of 4.6 percent and decreased 1.0 percent relative to a year earlier. Japan’s GDP decreased 0.4 percent in IIQ2015 at the SAAR of minus 1.4 percent and increased 0.7 percent relative to a year earlier. The GDP of Japan increased 0.3 percent in IIIQ2015 at the SAAR of 1.4 percent and increased 1.7 percent relative to a year earlier. Japan’s GDP contracted 0.3 percent in IVQ2015 at the SAAR of minus 1.1 percent and grew 0.7 percent relative to a year earlier
• China. China’s GDP grew 1.8 percent in IQ2012, annualizing to 7.4 percent, and 8.0 percent relative to a year earlier. The GDP of China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent and 7.5 percent relative to a year earlier. China grew at 1.8 percent in IIIQ2012, which annualizes at 7.4 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 8.0 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.8 percent, which annualizes at 7.4 percent and 7.8 percent relative to a year earlier. In IIQ2013, China grew at 1.7 percent, which annualizes at 7.0 percent and 7.5 percent relative to a year earlier. China grew at 2.2 percent in IIIQ2013, which annualizes at 9.1 percent, and increased 7.9 percent relative to a year earlier. China grew at 1.6 percent in IVQ2013, which annualized to 6.6 percent and 7.6 percent relative to a year earlier. China’s GDP grew 1.7 percent in IQ2014, which annualizes to 7.0 percent, and 7.3 percent relative to a year earlier. China’s GDP grew 1.8 percent in IIQ2014, which annualizes at 7.4 percent, and 7.4 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 7.1 percent relative to a year earlier. The GDP of China grew 1.7 percent in IVQ2014, which annualizes at 7.0 percent, and 7.2 percent relative to a year earlier. The GDP of China grew at 1.4 percent in IQ2015, which annualizes at 5.7 percent, and 7.0 percent relative to a year earlier. The GDP of China grew 1.8 percent in IIQ2015, which annualizes at 7.4 percent, and increased 7.0 percent relative to a year earlier. In IIIQ2015, China’s GDP grew at 1.8 percent, which annualizes at 7.4 percent and increased 6.9 percent relative to a year earlier. The GDP of China grew at 1.5 percent in IVQ2015, which annualizes at 6.1 percent and increased 6.8 percent relative to a year earlier. The GDP of China grew 1.1 percent in IQ2016, which annualizes at 4.5 percent and increased 6.7 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 0.2 percent in the euro area in IQ2012 and decreased 0.5 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 0.9 percent relative to a year earlier. In IVQ2012, euro area GDP fell 0.5 percent relative to the prior quarter and fell 1.1 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.2 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 0.4 percent relative to a year earlier. In IIIQ2013, euro area GDP increased 0.3 percent and changed 0.0 percent relative to a year earlier. The GDP of the euro area increased 0.2 percent in IVQ2013 and increased 0.6 percent relative to a year earlier. In IQ2014, the GDP of the euro area increased 0.2 percent and increased 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 0.3 percent in IIIQ2014 and increased 0.8 percent relative to a year earlier. The GDP of the euro area increased 0.4 percent in IVQ2014 and increased 1.0 percent relative to a year earlier. Euro area GDP increased 0.6 percent in IQ2015 and increased 1.3 percent relative to a year earlier. The GDP of the euro area increased 0.4 percent in IIQ2015 and increased 1.6 percent relative to a year earlier. The euro area’s GDP increased 0.3 percent in IIIQ2015 and increased 1.6 percent relative to a year earlier. Euro area GDP increased 0.3 percent in IVQ2015 and increased 1.6 percent relative to a year earlier.
• Germany. The GDP of Germany increased 0.4 percent in IQ2012 and increased 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 0.2 percent and 0.1 percent relative to a year earlier. Germany’s GDP contracted 0.5 percent in IVQ2012 and decreased 0.3 percent relative to a year earlier. In IQ2013, Germany’s GDP decreased 0.3 percent and fell 1.7 percent relative to a year earlier. In IIQ2013, Germany’s GDP increased 0.9 percent and grew 0.7 percent relative to a year earlier. The GDP of Germany increased 0.4 percent in IIIQ2013 and grew 1.0 percent relative to a year earlier. In IVQ2013, Germany’s GDP increased 0.3 percent and increased 1.2 percent relative to a year earlier. The GDP of Germany increased 0.7 percent in IQ2014 and grew 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 0.2 percent in IIIQ2014 and increased 1.2 percent relative to a year earlier. Germany’s GDP increased 0.6 percent in IVQ2014 and increased 1.6 percent relative to a year earlier. The GDP of Germany increased 0.4 percent in IQ2015 and increased 1.3 percent relative to a year earlier. Germany’s GDP increased 0.4 percent in IIQ2015 and grew 1.6 percent relative to a year earlier. The GDP of Germany increased 0.3 percent in IIIQ2015 and grew 1.7 percent relative to a year earlier. Germany’s GDP increased 0.3 percent in IVQ2015 and grew 2.1 percent relative to a year earlier.
• United States. Growth of US GDP in IQ2012 was 0.7 percent, at SAAR of 2.7 percent and higher by 2.8 percent relative to IQ2011. US GDP increased 0.5 percent in IIQ2012, 1.9 percent at SAAR and 2.5 percent relative to a year earlier. In IIIQ2012, US GDP grew 0.1 percent, 0.5 percent at SAAR and 2.4 percent relative to IIIQ2011. In IVQ2012, US GDP grew 0.0 percent, 0.1 percent at SAAR and 1.3 percent relative to IVQ2011. In IQ2013, US GDP grew at 1.9 percent SAAR, 0.5 percent relative to the prior quarter and 1.1 percent relative to the same quarter in 2013. In IIQ2013, US GDP grew at 1.1 percent in SAAR, 0.3 percent relative to the prior quarter and 0.9 percent relative to IIQ2012. US GDP grew at 3.0 percent in SAAR in IIIQ2013, 0.7 percent relative to the prior quarter and 1.5 percent relative to the same quarter a year earlier (http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/mediocre-cyclical-united-states.html). In IVQ2013, US GDP grew 0.9 percent at 3.8 percent SAAR and 2.5 percent relative to a year earlier. In IQ2014, US GDP decreased 0.2 percent, increased 1.7 percent relative to a year earlier and fell 0.9 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 1.1 percent in IIIQ2014 at 4.3 percent SAAR and increased 2.9 percent relative to a year earlier. In IVQ2014, US GDP increased 0.5 percent at SAAR of 2.1 percent and increased 2.5 percent relative to a year earlier. GDP increased 0.2 percent in IQ2015 at SAAR of 0.6 percent and grew 2.9 percent relative to a year earlier. US GDP grew at SAAR 3.9 percent in IIQ2015, increasing 1.0 percent in the quarter and 2.7 percent relative to a year earlier. GDP increased 0.5 percent in IIIQ2015 at SAAR of 2.0 percent and grew 2.1 percent in IIIQ2015 relative to a year earlier. US GDP grew at SAAR of 1.4 percent in IVQ2015, increasing 0.3 percent in the quarter and 2.0 percent relative to a year earlier
• United Kingdom. In IQ2012, UK GDP increased 0.2 percent and increased 1.5 percent relative to a year earlier. In IIQ2012, GDP fell 0.2 percent relative to IQ2012 and increased 1.0 percent relative to a year earlier. In IIIQ2012, GDP increased 1.0 percent and increased 1.2 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.1 percent and increased 1.0 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. Growth increased to 1.4 percent in IQ2013 relative to a year earlier and 0.7 percent in IQ2013 relative to IVQ2012. In IIQ2013, GDP increased 0.6 percent and 2.2 percent relative to a year earlier. GDP increased 0.9 percent in IIIQ2013 and 2.1 percent relative to a year earlier. GDP increased 0.6 percent in IVQ2013 and 2.8 percent relative to a year earlier. In IQ2014, GDP increased 0.6 percent and 2.8 percent relative to a year earlier. GDP increased 0.8 percent in IIQ2014 and 3.0 percent relative to a year earlier. GDP increased 0.7 percent in IIIQ2013 and 2.8 percent relative to a year earlier. In IVQ2014, GDP increased 0.7 percent and 2.8 percent relative to a year earlier. GDP increased 0.5 percent in IQ2015 and increased 2.6 percent relative to a year earlier. GDP increased 0.6 percent in IIQ2015 and increased 2.4 percent relative to a year earlier. UK GDP increased 0.4 percent in IIIQ2015 and increased 2.2 percent relative to a year earlier. GDP increased 0.6 percent in IVQ2015 and increased 2.1 percent relative to a year earlier.
• Italy. GDP increased 0.1 percent in IVQ2015 and increased 1.0 percent relative to a year earlier. In IIIQ2015, GDP increased 0.2 percent and increased 0.8 percent relative to a year earlier. GDP increased 0.3 percent in IIQ2015 and 0.6 percent relative to a year earlier. GDP increased 0.4 percent in IQ2015 and increased 0.2 percent relative to a year earlier. GDP decreased 0.1 percent in IVQ2014 and fell 0.3 percent relative to a year earlier. GDP changed 0.0 percent in IIIQ2014 and fell 0.4 percent relative to a year earlier. Italy’s GDP fell 0.1 percent in IIQ2014 and declined 0.2 percent relative to a year earlier. The GDP of Italy decreased 0.1 percent in IQ2014 and fell 0.2 percent relative to a year earlier. Italy’s GDP decreased 0.1 percent in IVQ2013 and fell 0.9 percent relative to a year earlier. The GDP of Italy increased 0.2 percent in IIIQ2013 and fell 1.4 percent relative to a year earlier. Italy’s GDP decreased 0.1 percent in IIQ2013, continuing eight consecutive quarterly declines, and fell 2.0 percent relative to a year earlier. Italy’s GDP fell 0.8 percent in IQ2013 and declined 2.6 percent relative to IQ2012. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011. Italy’s GDP fell in eight consecutive quarters from IIIQ2011 to IIQ2013 at increasingly higher rates of contraction from 0.5 percent in IIIQ2011 to 1.0 percent in IVQ2011, 0.9 percent in IQ2012, 0.7 percent in IIQ2012 and 0.5 percent in IIIQ2012. The pace of decline accelerated to minus 0.5 percent in IVQ2012 and minus 0.8 percent in IQ2013. GDP contracted cumulatively 4.9 percent in eight consecutive quarterly contractions from IIIQ2011 to IIQ2013 at the annual equivalent rate of minus 2.5 percent. The total contraction in the 12 quarters including IVQ2013, IQ2014, IIQ2014, IIIQ2014 and IVQ2014 accumulates to 5.3 percent. The yearly rate has fallen from 2.3 percent in IVQ2010 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 0.9 percent in IVQ2013 relative to a year earlier. GDP fell 0.2 percent in IQ2014 relative to a year earlier and fell 0.2 percent in IIQ2014 relative to a year earlier. GDP fell 0.4 percent in IIIQ2014 relative to a year earlier and fell 0.3 percent in IVQ2014 relative to a year earlier. GDP increased 0.2 percent in IQ2015 relative to a year earlier and increased 0.6 percent in IIQ2015 relative to a year earlier. GDP increased 0.8 percent in IIIQ2015 relative to a year earlier and increased 1.0 percent in IVQ2015 relative to a year earlier. Using seasonally and calendar adjusted chained volumes in the dataset of EUROSTAT (http://ec.europa.eu/eurostat), the GDP of Italy in IVQ2015 is lower by 8.8 percent relative to IQ2008. The fiscal adjustment of Italy is significantly more difficult with the economy not growing especially on the prospects of increasing government revenue. The strategy is for reforms to improve productivity, facilitating future fiscal consolidation.
• 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 decreased 0.1 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 0.7 percent in IIQ2013 and increased 1.1 percent relative to a year earlier. France’s GDP changed 0.0 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 0.3 percent in IIIQ2014 and increased 0.1 percent relative to a year earlier. The GDP of France increased 0.1 percent in IVQ2014 and increased 0.1 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2015 and increased 1.0 percent relative to a year earlier. In IIQ2015, France’s GDP changed 0.0 percent and increased 1.1 percent relative to a year earlier. France’s GDP increased 0.4 percent in IIIQ2015 and increased 1.2 percent relative to a year earlier. In IVQ2015, the GDP of France increased 0.3 percent and increased 1.4 percent relative to a year earlier

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

	IQ2012/IVQ2011	IQ2012/IQ2011
United States	QOQ: 0.7        SAAR: 2.7	2.8
Japan	QOQ: 0.9 SAAR: 3.7	3.5
China	1.8	8.0
Euro Area	-0.2	-0.5
Germany	0.4	1.5
France	0.0	0.4
Italy	-0.9	-2.3
United Kingdom	0.2	1.5
	IIQ2012/IQ2012	IIQ2012/IIQ2011
United States	QOQ: 0.5         SAAR: 1.9	2.5
Japan	QOQ: -0.4 SAAR: -1.6	3.5
China	2.1	7.5
Euro Area	-0.3	-0.8
Germany	0.1	0.3 0.8 CA
France	-0.3	0.2
Italy	-0.7	-3.2
United Kingdom	-0.2	1.0
	IIIQ2012/ IIQ2012	IIIQ2012/ IIIQ2011
United States	QOQ: 0.1  SAAR: 0.5	2.4
Japan	QOQ: –0.5 SAAR: –1.8	0.2
China	1.8	7.4
Euro Area	-0.1	-0.9
Germany	0.2	0.1
France	0.3	0.3
Italy	-0.5	-3.2
United Kingdom	1.0	1.2
	IVQ2012/IIIQ2012	IVQ2012/IVQ2011
United States	QOQ: 0.0 SAAR: 0.1	1.3
Japan	QOQ: -0.1 SAAR: -0.3	0.0
China	1.9	8.0
Euro Area	-0.5	-1.1
Germany	-0.5	-0.3
France	-0.1	0.0
Italy	-0.5	-2.7
United Kingdom	-0.1	1.0
	IQ2013/IVQ2012	IQ2013/IQ2012
United States	QOQ: 0.5 SAAR: 1.9	1.1
Japan	QOQ: 1.0 SAAR: 4.1	0.3
China	1.8	7.8
Euro Area	-0.2	-1.2
Germany	-0.3	-1.7
France	0.1	0.1
Italy	-0.8	-2.6
UK	0.7	1.4
	IIQ2013/IQ2013	IIQ2013/IIQ2012
United States	QOQ: 0.3 SAAR: 1.1	0.9
Japan	QOQ: 0.7 SAAR: 2.7	1.1
China	1.7	7.5
Euro Area	0.4	-0.4
Germany	0.9	0.7
France	0.7	1.1
Italy	-0.1	-2.0
UK	0.6	2.2
	IIIQ2013/IIQ2013	III/Q2013/  IIIQ2012
USA	QOQ: 0.7 SAAR: 3.0	1.5
Japan	QOQ: 0.5 SAAR: 2.1	2.0
China	2.2	7.9
Euro Area	0.3	0.0
Germany	0.4	1.0
France	0.0	0.8
Italy	0.2	-1.4
UK	0.9	2.1
	IVQ2013/IIIQ2013	IVQ2013/IVQ2012
USA	QOQ: 0.9 SAAR: 3.8	2.5
Japan	QOQ: -0.1 SAAR: -0.4	2.1
China	1.6	7.6
Euro Area	0.2	0.6
Germany	0.3	1.2
France	0.2	1.0
Italy	-0.1	-0.9
UK	0.6	2.8
	IQ2014/IVQ2013	IQ2014/IQ2013
USA	QOQ -0.2 SAAR -0.9	1.7
Japan	QOQ: 1.3 SAAR: 5.2	2.7
China	1.7	7.3
Euro Area	0.2	1.1
Germany	0.7	2.6
France	-0.2	0.7
Italy	-0.1	-0.2
UK	0.6	2.8
	IIQ2014/IQ2014	IIQ2014/IIQ2013
USA	QOQ 1.1 SAAR 4.6	2.6
Japan	QOQ: -2.0 SAAR: -7.9	-0.3
China	1.8	7.4
Euro Area	0.1	0.8
Germany	-0.1	1.0
France	-0.1	-0.2
Italy	-0.1	-0.2
UK	0.8	3.0
	IIIQ2014/IIQ2014	IIIQ2014/IIIQ2013
USA	QOQ: 1.1 SAAR: 4.3	2.9
Japan	QOQ: -0.6 SAAR: -2.5	-1.5
China	1.9	7.1
Euro Area	0.3	0.8
Germany	0.2	1.2
France	0.3	0.1
Italy	0.0	-0.4
UK	0.7	2.8
	IVQ2014/IIIQ2014	IVQ2014/IVQ2013
USA	QOQ: 0.5 SAAR: 2.1	2.5
Japan	QOQ: 0.5 SAAR: 2.2	-1.0
China	1.7	7.2
Euro Area	0.4	1.0
Germany	0.6	1.6
France	0.1	0.1
Italy	-0.1	-0.3
UK	0.7	2.8
	IQ2015/IVQ2014	IQ2015/IQ2014
USA	QOQ: 0.2 SAAR: 0.6	2.9
Japan	QOQ: 1.1 SAAR: 4.6	-1.0
China	1.4	7.0
Euro Area	0.6	1.3
Germany	0.4	1.3
France	0.6	1.0
Italy	0.4	0.2
UK	0.5	2.6
	IIQ2015/IQ2015	IIQ2015/IIQ2014
USA	QOQ: 1.0 SAAR: 3.9	2.7
Japan	QOQ: -0.4 SAAR: -1.4	0.7
China	1.8	7.0
Euro Area	0.4	1.6
Germany	0.4	1.6
France	0.0	1.1
Italy	0.3	0.6
UK	0.6	2.4
	IIIQ2015/IIQ2015	IIIQ2015/IIIQ2014
USA	QOQ: 0.5 SAAR: 2.0	2.1
Japan	QOQ: 0.3 SAAR: 1.4	1.7
China	1.8	6.9
Euro Area	0.3	1.6
Germany	0.3	1.7
France	0.4	1.2
Italy	0.2	0.8
UK	0.4	2.2
	IVQ2015/IIIQ2015	IVQ2015/IVQ2014
USA	QOQ: 0.3 SAAR: 1.0	1.9
Japan	QOQ: -0.3 SAAR: -1.1	0.7
China	1.5	6.8
Euro Area	0.3	1.6
Germany	0.3	2.1
France	0.3	1.4
Italy	0.1	1.0
UK	0.6	2.1
	IQ2016/IVQ2015	IQ2016/IQ2015
China	1.1	6.7

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

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

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

• Japan. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2015/08/global-decline-of-values-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/07/valuation-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/dollar-revaluation-squeezing-corporate.html and earlier 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/2015/09/interest-rate-policy-dependent-on-what_13.html). In Mar 2016, Japan’s exports decreased 6.8 percent in 12 months while imports decreased 14.9 percent. The second part of Table V-4 shows that net trade deducted 1.6 percentage points from Japan’s growth of GDP in IIQ2012, deducted 1.8 percentage points from GDP growth in IIIQ2012 and deducted 0.6 percentage points from GDP growth in IVQ2012. Net trade added 0.4 percentage points to GDP growth in IQ2012, 1.8 percentage points in IQ2013 and deducted 0.3 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.3 percentage points from GDP growth in Japan. Net trade ducted 2.0 percentage points from GDP growth in Japan in IVQ2013. Net trade deducted 0.9 percentage points from GDP growth of Japan in IQ2014. Net trade added 3.6 percentage points to GDP growth in IIQ2014. Net trade added 0.5 percentage points to GDP growth in IIIQ2014 and added 1.4 percentage points in IVQ2014. Net trade deducted 0.0 percentage points from GDP growth in IQ2015 and deducted 1.3 percentage points in IIQ2015. Net trade added 0.8 percentage points to GDP growth in IIIQ2015 and added 0.6 percentage points in IVQ2015

• China. In Mar 2016, China exports increased 11.5 percent relative to a year earlier and imports decreased 7.6 percent.
• Germany. Germany’s exports increased 1.3 percent in the month of Feb 2016 and increased 4.1 percent in the 12 months ending in Feb 2016. Germany’s imports increased 0.4 percent in the month of Feb 2016 and increased 4.0 percent in the 12 months ending in Feb 2016. 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 contributed 0.0 percentage points to GDP growth in IQ2014. Net trade added 0.2 percentage points to GDP growth in IIQ2014 and added 0.5 percentage points in IIIQ2014. Net trade deducted 0.3 percentage points from GDP growth in IVQ2014 and deducted 0.2 percentage points in IQ2015. Net trade added 0.6 percentage points to GDP growth in IIQ2015 and deducted 0.3 percentage points in IIIQ2015. Net trade deducted 0.5 percentage points in IVQ2015.
• United Kingdom. Net trade contributed 0.7 percentage points in IIQ2013. In IIIQ2013, net trade deducted 1.7 percentage points from UK growth. Net trade contributed 0.1 percentage points to UK value added in IVQ2013. Net trade contributed 0.2 percentage points to UK value added in IQ2014 and 0.5 percentage points in IIQ2014. Net trade deducted 0.5 percentage points to GDP growth in IIIQ2014 and added 0.2 percentage points in IVQ2014. Net traded deducted 1.2 percentage points from growth in IQ2015. Net trade added 1.7 percentage points to GDP growth in IIQ2015 and deducted 1.1 percentage points in IIIQ2015. Net trade deducted 0.3 percentage points from GDP growth in IVQ2015.
• France. France’s exports decreased 0.2 percent in Feb 2016 while imports increased 2.8 percent. France’s exports increased 1.5 percent in the 12 months ending in Feb 2016 and imports increased 5.9 percent relative to a year earlier. Net traded added 0.1 percentage points to France’s GDP in IIIQ2012 and 0.1 percentage points in IVQ2012. Net trade deducted 0.1 percentage points from France’s GDP growth in IQ2013 and added 0.3 percentage points in IIQ2013, deducting 1.7 percentage points in IIIQ2013. Net trade added 0.1 percentage points to France’s GDP in IVQ2013 and deducted 0.1 percentage points in IQ2014. Net trade deducted 0.2 percentage points from France’s GDP growth in IIQ2014 and deducted 0.2 percentage points in IIIQ2014. Net trade added 0.2 percentage points to France’s GDP growth in IVQ2014 and deducted 0.2 percentage points in IQ2015. Net trade added 0.3 percentage points to GDP growth in IIQ2015 and deducted 0.6 percentage points in IIIQ2015. Net trade deducted 0.4 percentage points from GDP growth in IVQ2015
• United States. US exports increased 1.0 percent in Feb 2016 and goods exports decreased 7.4 percent in Feb 2016 relative to a year earlier. Imports increased 1.3 percent in Feb 2016 and goods imports decreased 2.4 percent in Feb 2016 relative to a year earlier. Net trade added 0.28 percentage points to GDP growth in IIQ2012 and added 0.16 percentage points in IIIQ2012 and 0.58 percentage points in IVQ2012. Net trade deducted 0.01 percentage points from US GDP growth in IQ2013 and deducted 0.24 percentage points in IIQ2013. Net traded added 0.16 percentage points to US GDP growth in IIIQ2013. Net trade added 1.26 percentage points to US GDP growth in IVQ2013. Net trade deducted 1.39 percentage points from US GDP growth in IQ2014 and deducted 0.24 percentage points in IIQ2014. Net trade added 0.39 percentage points to GDP growth in IIIQ2014. Net trade deducted 0.89 percentage points from GDP growth in IVQ2014 and deducted 1.92 percentage points from GDP growth in IQ2015. Net trade added 0.18 percentage points to GDP growth in IIQ2015. Net trade deducted 0.26 percentage points from GDP growth in IIIQ2015. Net trade deducted 0.14 percentage points from GDP growth in IVQ2015. Industrial production decreased 0.6 percent in Mar 2016 and decreased 0.6 percent in Feb 2016 after increasing 0.5 percent in Jan 2016, with all data seasonally adjusted. The Board of Governors of the Federal Reserve System conducted the annual revision of industrial production released on Apr 1, 2016 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):

“The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization.[1] Total IP is now reported to have increased about 2 1/2 percent per year, on average, from 2011 through 2014 before falling 1 1/2 percent in 2015.[2] Relative to earlier reports, the current rates of change are lower, especially for 2014 and 2015. Total IP is now estimated to have returned to its pre-recession peak in November 2014, six months later than previously estimated. Capacity for total industry is now reported to have increased about 2 percent in 2014 and 2015 after having increased only 1 percent in 2013. Compared with the previously reported estimates, the gain in 2015 is 1/2 percentage point higher, and the gain in 2013 is 1/2 percentage point lower. Industrial capacity is expected to increase 1/2 percent in 2016.”

Manufacturing declined 22.3 from the peak in Jun 2007 to the trough in Apr 2009 and increased of 16.1 percent from the trough in Apr 2009 to Dec 2015. Manufacturing grew 18.1 percent from the trough in Apr 2009 to Mar 2016. Manufacturing in Mar 2016 is lower by 8.3 percent relative to 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 IVQ2015 would have accumulated to 26.7 percent. GDP in IVQ2015 would be $18,994.6 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2524.0 billion than actual $16,470.6 billion. There are about two trillion dollars of GDP less than at trend, explaining the 24.5 million unemployed or underemployed equivalent to actual unemployment/underemployment of 14.6 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html). US GDP in IVQ2015 is 13.3 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,470.6 billion in IVQ2015 or 9.9 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 of manufacturing at average 3.2 percent per year from Mar 1919 to Mar 2016. Growth at 3.2 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 140.3764 in Mar 2016. The actual index NSA in Mar 2016 is 103.2208, which is 26.5 percent below trend. Manufacturing output grew at average 2.1 percent between Dec 1986 and Dec 2015. Using trend growth of 2.1 percent per year, the index would increase to 128.4709 in Mar 2016. The output of manufacturing at 103.2208 in Mar 2016 is 19.7 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	1.0 Feb	-7.4 Jan-Feb	1.3 Feb	-2.4 Jan-Feb
Japan		Mar 2016 -6.8 Feb 2016 -4.0 Jan 2016 -12.9 Dec 2015 -8.0 Nov 2015 -3.3 Oct 2015 -2.1 Sep 2015 0.6 Aug 3.1 Jul 2015 7.6 Jun 2015 9.5 May 2015 2.4 Apr 8.0 Mar 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 2016 -14.9 Feb 2016 -14.2 Jan 2016 -18.0 Dec 2015 -18.0 Nov 2015 -10.2 Oct 2015 -13.4 Sep 2015 -11.1 Aug -3.1 Jul 2015 -3.2 Jun 2015 -2.9 May 2015 -8.7 Apr -4.2 Mar -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	Jan-Dec 2015 -2.8	2016 Mar 11.5 Feb -25.4 Jan -11.2 2015 -1.4 Dec -6.8 Nov -6.9 Oct -3.7 Sep -5.5 Aug -8.3 Jul 2.8 Jun -2.5 May -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	Jan-Dec 2015 -14.1	2016 Mar -7.6 Feb -13.8 Jan -18.8 2015 -7.6 Dec -8.7 Nov -18.8 Oct -20.4 Sep -13.8 Aug -8.1 Jul -6.1 Jun -17.6 May -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	1.3 12-M Feb	-0.3 Jan-Feb	2.0 12-M Feb	-0.3 Jan-Feb
Germany	1.3 Feb CSA	4.1 Feb	0.4 Feb CSA	4.0 Feb
France Feb	-0.2	1.5	2.8	5.9
Italy Feb	2.5	3.3	0.6	2.4
UK	0.9 Feb	-2.5 Dec 15-Feb 16 /Dec 14-Feb 15	0.0 Jan	-1.2 Dec 15-Feb 16 /Dec 14-Feb 15
Net Trade % Points GDP Growth	Points
USA	IVQ2015 -0.14 IIIQ2015 -0.26 IIQ2015 0.18 IQ2015 -1.92 IVQ2014 -0.89 IIIQ2014 0.39 IIQ2014 -0.24 IQ2014 -1.39 IVQ2013 1.26 IIIQ2013 0.16 IIQ2013 -0.24 IQ2013 -0.01 IVQ2012 +0.58 IIIQ2012 0.16 IIQ2012 0.28 IQ2012 -0.02
Japan	0.4 IQ2012 -1.6 IIQ2012 -1.8 IIIQ2012 -0.6 IVQ2012 1.8 IQ2013 -0.3 IIQ2013 -1.3 IIIQ2013 -2.0 IVQ2013 -0.9 IQ2014 3.6 IIQ2014 0.5 IIIQ2014 1.4 IVQ2014 0.0 IQ2015 -1.3 IIQ2015 0.8 IIIQ2015 0.6 IVQ2015
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 0.0 IIQ2014 0.2 IIIQ2014 0.5 IVQ2014 -0.3 IQ2015 -0.2 IIQ2015 0.6 IIIQ2015 -0.3 IVQ2015 -0.5
France	0.1 IIIQ2012 0.1 IVQ2012 -0.1 IQ2013 0.3 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 -0.1 IQ2014 -0.2 IIQ2014 -0.2 IIIQ2014 0.2 IVQ2014 -0.2 IQ2015 0.3 IIQ2015 -0.6 IIIQ2015 -0.4 IVQ2015
UK	0.7 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.2 IQ2014 0.5 IIQ2014 -0.5 IIIQ2014 0.2 IVQ2014 -1.2 IQ2015 1.7 IIQ2015 -1.1 IIIQ2015 -0.3 IVQ2015

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

The geographical breakdown of exports and imports of Japan with selected regions and countries is in Table V-5 for Mar 2016. The share of Asia in Japan’s trade is close to one-half for 51.4 percent of exports and 51.0 percent of imports. Within Asia, exports to China are 17.3 percent of total exports and imports from China 25.7 percent of total imports. While exports to China decreased 7.1 percent in the 12 months ending in Mar 2016, imports from China increased 6.3 percent. The largest export market for Japan in Mar 2016 is the US with share of 20.2 percent of total exports, which is close to that of China, and share of imports from the US of 10.9 percent in total imports. Japan’s exports to the US decreased 5.1 percent in the 12 months ending in Mar 2016 and imports from the US decreased 20.0 percent. Western Europe has share of 12.6 percent in Japan’s exports and of 12.9 percent in imports. Rates of growth of exports of Japan in Mar 2016 are minus 5.1 percent for exports to the US, minus 37.0 percent for exports to Brazil and minus 3.6 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Mar 2016 are mixed. Imports from Asia decreased 5.3 percent in the 12 months ending in Mar 2016 while imports from China increased 6.3 percent. Data are in millions of yen, which may have effects of recent depreciation of the yen relative to the United States dollar (USD) and revaluation of the dollar relative to the euro.

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

Mar 2016	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,456,599	-6.8	5,701,614	-14.9
Asia	3,318,583 % Total 51.4	-9.7	2,909,164 % Total 51.0	-5.3
China	1,116,069 % Total 17.3	-7.1	1,467,142 % Total 25.7	6.3
USA	1,307,213 % Total 20.2	-5.1	621,430 % Total 10.9	-20.0
Canada	85,941	-8.7	86,271	-13.4
Brazil	31,982	-37.0	73,391	-15.9
Mexico	96,090	-19.4	45,566	-0.8
Western Europe	812,446 % Total 12.6	13.3	732,807 % Total 12.9	-6.4
Germany	167,012	-3.6	208,315	-14.7
France	60,488	10.4	92,083	4.6
UK	161,773	67.6	69,324	6.8
Middle East	254,504	-17.8	558,076	-39.4
Australia	119,174	-3.4	274,899	-25.8

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

World trade projections of the IMF are in Table V-6. There is decreasing growth of the volume of world trade of goods and services from 3.5 percent in 2014 to 2.8 percent in 2015 and 3.1 percent in 2016. Growth improves to 4.2 percent on average from 2017 to 2019. World trade would be slower for advanced economies while emerging and developing economies (EMDE) experience faster growth. World economic slowdown would be more challenging with lower growth of world trade.

Table V-6, IMF, Projections of World Trade, USD Billions, USD/Barrel and Annual ∆%

	2014	2015	2016	Average ∆% 2017-2021
World Trade Volume (Goods and Services)	3.5	2.8	3.1	4.2
Exports Goods & Services	3.4	2.8	3.0	4.0
Imports Goods & Services	3.6	2.9	3.3	4.3
Average Oil Price USD/Barrel	96.25	50.79	34.75	Average ∆% 2008-2017 77.37
Average Annual ∆% Export Unit Value of Manufactures	-0.7	-4.0	-2.7	Average ∆% 2008-2017 0.1
Exports of Goods & Services	2014	2015	2016	Average ∆% 2008-2017
EMDE	3.1	1.7	3.8	3.9
G7	3.5	3.4	2.5	2.5
Imports Goods & Services
EMDE	3.7	0.5	3.0	4.6
G7	3.5	4.3	3.4	2.2
Terms of Trade of Goods & Services
EMDE	-0.4	-3.9	-2.3	-0.2
G7	0.3	1.9	1.1	0.1
Terms of Trade of Goods
EMDE	-0.4	-4.1	-1.9	-0.2
G7	0.1	1.8	1.2	-0.1

Notes: Commodity Price Index includes Fuel and Non-fuel Prices; Commodity Industrial Inputs Price includes agricultural raw materials and metal prices; Oil price is average of WTI, Brent and Dubai

Source: International Monetary Fund World Economic Outlook databank

http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx

The JP Morgan Global All-Industry Output Index of the JP Morgan Manufacturing and Services PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, with high association with world GDP, increased to 51.3 in Mar from 50.8 in Feb, indicating expansion at faster rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/dcaf0a9b1dc54693831a9e30c1562cfb). This index has remained above the contraction territory of 50.0 during 41 consecutive months. The employment index decreased from 51.5 in Feb to 51.4 in Mar with input prices rising at faster rate, new orders increasing at slower rate and output increasing at faster rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/dcaf0a9b1dc54693831a9e30c1562cfb). David Hensley, Director of Global Economic Coordination at JP Morgan, finds slowing growth at the beginning of 2016 with potential recovery in the middle of the year (https://www.markiteconomics.com/Survey//PressRelease.mvc/dcaf0a9b1dc54693831a9e30c1562cfb). The JP Morgan Global Manufacturing PMI^™, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 50.5 in Mar from 50.0 in Feb (https://www.markiteconomics.com/Survey//PressRelease.mvc/6dca312245734f8daf9488dd7e1088a9). New export orders decrease at slower rate. Senior Economist at JP Morgan, finds the index suggesting fragile conditions (https://www.markiteconomics.com/Survey//PressRelease.mvc/6dca312245734f8daf9488dd7e1088a9). The Markit Brazil Composite Output Index increased from 39.0 in Feb to 40.8 in Mar, indicating contraction in activity of Brazil’s private sector (https://www.markiteconomics.com/Survey//PressRelease.mvc/cf70fd75c7384d5b98afd7676b849413). The Markit Brazil Services Business Activity index, compiled by Markit, increased from 36.9 in Feb to 38.6 in Mar, indicating contracting services activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/cf70fd75c7384d5b98afd7676b849413). Pollyanna de Lima, Economist at Markit, finds deteriorating conditions (https://www.markiteconomics.com/Survey//PressRelease.mvc/cf70fd75c7384d5b98afd7676b849413). The Markit Brazil Purchasing Managers’ Index^TM (PMI^™) increased from 44.5 in Feb to 46.0 in Mar, indicating deterioration in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/93a6863fecb84f3daca0b0a3ec8e40b5). Pollyanna De Lima, Economist at Markit, finds stress in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/93a6863fecb84f3daca0b0a3ec8e40b5).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index^™ (PMI^™) seasonally adjusted decreased to 50.8 in Apr from 51.5 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/923b3dc0f4314b259e101c31f406a676). New export orders decreased because of the strong US dollar and weak world economy. Chris Williamson, Chief Economist at Markit, finds the weakest business environment in more than three years (https://www.markiteconomics.com/Survey//PressRelease.mvc/923b3dc0f4314b259e101c31f406a676). The Markit Flash US Services PMI™ Business Activity Index increased from 49.7 in Feb to 51.0 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/673fe609a2ec4e6d8835ef927a94a1bf). The Markit Flash US Composite PMI™ Output Index increased from 50.0 in Feb to 51.1 in Mar. Chris Williamson, Chief Economist at Markit, finds that the surveys are consistent with growth at 0.7 percent annual rate in IQ2015 (https://www.markiteconomics.com/Survey//PressRelease.mvc/673fe609a2ec4e6d8835ef927a94a1bf). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased to 51.3 in Mar from 50.0 in Feb (https://www.markiteconomics.com/Survey//PressRelease.mvc/5cfd7e03fa634394b497dbf0cd5620c7). The Markit US Services PMI™ Business Activity Index increased from 49.7 in Feb to 51.3 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/5cfd7e03fa634394b497dbf0cd5620c7). Chris Williamson, Chief Economist at Markit, finds the indexes suggesting stagnating growth with annual growth at 0.7 percent in IQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/5cfd7e03fa634394b497dbf0cd5620c7). The Markit US Manufacturing Purchasing Managers’ Index^™ (PMI^™) increased to 51.5 in Mar from 51.3 in Feb, which indicates expansion at faster rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/abbe8801546e464fafd899bcd405acb2). New foreign orders stabilized. Tim Moore, Senior Economist at Markit, finds slow growth (https://www.markiteconomics.com/Survey//PressRelease.mvc/abbe8801546e464fafd899bcd405acb2). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business^® increased 2.3 percentage points from 49.5 in Feb to 51.8 in Mar, which indicates change to expansion (https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?). The index of new orders increased 6.8 percentage points from 51.5 in Feb to 58.3 in Mar. The index of new exports increased 5.5 percentage points from 46.5 in Feb to 52.0 in Mar, expanding. The Non-Manufacturing ISM Report on Business^® PMI increased 1.1 percentage points from 53.4 in Feb to 54.5 in Mar, indicating growth of business activity/production during 80 consecutive months, while the index of new orders increased 1.2 percentage points from 55.5 in Feb to 56.7 in Mar (https://www.instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index	Mar 12 months NSA ∆%: 0.9; ex food and energy ∆%: 2.2 Mar month SA ∆%: 0.1; ex food and energy ∆%: 0.1 Blog 4/17/16
Producer Price Index	Finished Goods Mar 12-month NSA ∆%: -1.9; ex food and energy ∆% 1.5 Mar month SA ∆% = 0.2; ex food and energy ∆%: 0.1 Final Demand Mar 12-month NSA ∆%: -0.1; ex food and energy ∆% 1.0 Mar month SA ∆% = -0.1; ex food and energy ∆%: -0.1 Blog 4/17/16
PCE Inflation	Feb 12-month NSA ∆%: headline 1.0; ex food and energy ∆% 1.7 Blog 4/3/16
Employment Situation	Household Survey: Mar Unemployment Rate SA 5.0% Blog calculation People in Job Stress Mar: 24.5 million NSA, 14.6% of Labor Force Establishment Survey: Mar Nonfarm Jobs +242,000; Private +215,000 jobs created  Feb 12-month Average Hourly Earnings Inflation Adjusted ∆%: 0.7 Blog 4/3/16
Nonfarm Hiring	Nonfarm Hiring fell from 63.5 million in 2006 to 58.6 million in 2014 or by 4.9 million and to 61.7 million in 2015 or by 1.8 million Private-Sector Hiring Feb 2016 4.185 million higher by 1.7 percent than 4.116 million in Feb 2006 Blog 4/10/16
GDP Growth	BEA Revised National Income Accounts IQ2012/IQ2011 ∆%: 2.8 IIQ2012/IIQ2011 2.5 IIIQ2012/IIIQ2011 2.4 IVQ2012/IVQ2011 1.3 IQ2013/IQ2012 1.1 IIQ2013/IIQ2012 0.9 IIIQ2013/IIIQ2012 1.5 IVQ2013/IVQ2012 2.5 IQ2014/IQ2013 1.7 IIQ2014/IIQ2013 2.6 IIIQ2014/IIIQ2013 2.9 IVQ2014/IVQ2013 2.5 IQ2015/IQ2014 2.9 IIQ2015/IIQ2014 2.7 IIIQ2015/IIIQ2014: 2.1 IVQ2015/IVQ2014 2.0 IQ2012 SAAR 2.7 IIQ2012 SAAR 1.9 IIIQ2012 SAAR 0.5 IVQ2012 SAAR 0.1 IQ2013 SAAR 1.9 IIQ2013 SAAR 1.1 IIIQ2013 SAAR 3.0 IVQ2013 SAAR 3.8 IQ2014 SAAR -0.9 IIQ2014 SAAR 4.6 IIIQ2014 SAAR 4.3 IVQ2014 SAAR 2.1 IQ2015 SAAR 0.6 IIQ2015 SAAR: 3.9 IIIQ2015 SAAR: 2.0 IVQ2015 SAAR: 1.4 Blog 3/27/16
Real Private Fixed Investment	SAAR IVQ2015 ∆% 0.4 IVQ2007 to IVQ2015: 6.8% Blog 3/27/16
Corporate Profits	IVQ2015 SAAR: Corporate Profits -7.8; Undistributed Profits -18.6 Blog 3/27/16
Personal Income and Consumption	Feb month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.3 Real Personal Consumption Expenditures (RPCE): 0.2 12-month Feb NSA ∆%: RDPI: 2.7; RPCE ∆%: 2.8 Blog 4/3/16
Quarterly Services Report	IVQ15/IVQ14 NSA ∆%: Information 4.8 Financial & Insurance 1.8 Earlier Data: Blog 3/22/15
Employment Cost Index	Compensation Private IVQ2015 SA ∆%: 0.5 Dec 12 months ∆%: 1.9 Earlier Data: Blog 2/1/15
Industrial Production	Mar month SA ∆%: -0.6 Mar 12 months SA ∆%: -2.0 Manufacturing Mar SA -0.3 ∆% Mar 12 months SA ∆% 0.4, NSA -0.2 Capacity Utilization: 74.8 Blog 4/17/16
Productivity and Costs	Nonfarm Business Productivity IVQ2015∆% SAAE -2.2; IVQ2015/IVQ2014 ∆% 0.5; Unit Labor Costs SAAE IVQ2015 ∆% 3.3; IVQ2015/IVQ2014 ∆%: 2.1 Blog 3/6/16
New York Fed Manufacturing Index	General Business Conditions From Mar 0.62 to Apr 9.56 New Orders: From Mar 9.57 to Apr 10.17 Blog 4/17/16
Philadelphia Fed Business Outlook Index	General Index from Mar 12.4 to Apr -1.6 New Orders from Mar 15.7 to Apr 0.0 Blog 4/24/16
Manufacturing Shipments and Orders	Feb Orders SA Feb ∆% -1.7 Ex Transport -0.8 Feb 16/Feb 15 NSA New Orders ∆% minus 1.7 Ex transport minus 3.4 Earlier data: Blog 4/5/15
Durable Goods	Feb New Orders SA ∆%: -2.8 ; ex transport ∆%: -1.0 Jan-Feb 16/Jan-Feb 15 New Orders NSA ∆%: 2.6; ex transport ∆% 0.0 Earlier Data: Blog 4/26/15
Sales of New Motor Vehicles	Mar 2016 4,087,765; Mar 2015 3,954,544. Mar 16 SAAR 16.57 million, Feb 16 SAAR 17.54 million, Mar 2015 SAAR 17.14 million Blog 4/3/16
Sales of Merchant Wholesalers	Jan-Feb 2016/Jan-Feb 2015 NSA ∆%: Total -3.2; Durable Goods: minus 1.7; Nondurable Goods: -4.6 EARLIER DATA: Blog 4/12/15
Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers	Feb 16 12-M NSA ∆%: Sales Total Business 2.0; Manufacturers -0.1 Retailers 6.3; Merchant Wholesalers -0.7 Blog 4/17/16
Sales for Retail and Food Services	Jan-Mar 2016/Jan-Mar 2015 ∆%: Retail and Food Services 3.8; Retail ∆% 3.4 Blog 4/17/16
Value of Construction Put in Place	SAAR month SA Jan ∆%: 1.5 Jan 16/Jan 15 NSA: 9.5 Earlier Data: Blog 4/5/15
Case-Shiller Home Prices	Dec 2015/ Dec 2014 ∆% NSA: 10 Cities 5.1; 20 Cities: 5.7; National: 5.4 ∆% Dec SA: 10 Cities 0.7 ; 20 Cities: 0.8 Blog 2/28/16
FHFA House Price Index Purchases Only	Mar SA ∆% 0.4; 12 month NSA ∆%: 5.6 Blog 4/24/16
New House Sales	Feb 2016 month SAAR ∆%: 2.0 Feb 2016/Feb 2015 NSA ∆%: minus 2.4 Blog 3/27/16
Housing Starts and Permits	Feb Starts month SA ∆% 5.2; Permits ∆%: -3.1 Jan-Feb 2016/Jan-Feb 2015 NSA ∆% Starts 10.5; Permits  ∆% 6.8 Earlier Data: Blog 4/19/15
Rate of Homeownership	IVQ2015: 63.8 Blog 1/31/16
Trade Balance	Balance Feb SA -$47,060 million versus Jan -$45,882 million Exports Feb SA ∆%: 1.0 Imports Feb SA ∆%: 1.3 Goods Exports Jan-Feb 2016/Jan-Feb 2015 NSA ∆%: minus 7.4 Goods Imports Jan-Feb 2016/Jan-Dec 2015 NSA ∆%: minus 2.4 Blog 4/10/16
Export and Import Prices	Mar 12-month NSA ∆%: Imports -6.2; Exports -6.1 Earlier Data: Blog 4/12/15
Consumer Credit	Feb ∆% annual rate: Total 5.8; Revolving 3.7; Nonrevolving 6.6 Earlier Data: Blog 5/10/15
Net Foreign Purchases of Long-term Treasury Securities	Feb Net Foreign Purchases of Long-term US Securities: $60.9 billion Major Holders of Treasury Securities: China $1252.3 billion; Japan $1133.1 billion; Total Foreign US Treasury Holdings Nov $6236.2 billion Blog 4/24/16
Treasury Budget	Fiscal Year 2016/2015 ∆% Mar: Receipts 4.0; Outlays 4.2; Individual Income Taxes 5.2 Deficit Fiscal Year 2011 $1,300 billion Deficit Fiscal Year 2012 $1,087 billion Deficit Fiscal Year 2013 $680 billion Deficit Fiscal Year 2014 $485 billion Deficit Fiscal Year 2015 $438 billion Blog 4/17/2016
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 72.6% GDP 2014 Deficit $485 B 2.8% GDP Debt $12,780 B 74.4% GDP 2015 Deficit $438 B 2.5% GDP Debt $13,117 B 73.6% GDP 2026 Deficit $1,343B, 4.9% GDP Debt $23,672B 85.6% GDP 2040: Long-term Debt/GDP 103% 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 6/21/15 1/3/16 4/10/16
Commercial Banks Assets and Liabilities	Mar 2016 SAAR ∆%: Securities 0.2 Loans 5.0 Cash Assets -11.1 Deposits 8.4 Blog 4/24/16
Flow of Funds Net Worth of Families and Nonprofits	IVQ2015 ∆ since 2007 Assets +$20,374.8 BN Nonfinancial 2790.0 BN Real estate $1897.1 BN Financial +17,853.9 BN Net Worth +$20,260.0 BN Blog 3/13/16
Current Account Balance of Payments	IVQ2015 -127,927 MM % GDP 2.8 Blog 4/10/16
Collapse of United States Dynamism of Income Growth and Employment Creation	Blog 4/24/16
IMF View	World Real Economic Growth 2016 ∆% 3.2 Blog 4/24/16
Income, Poverty and Health Insurance in the United States	46.657 Million Below Poverty in 2014, 14.8% of Population Median Family Income CPI-2014 Adjusted $53,657 in 2014 back to 1996 Levels Uncovered by Health Insurance 32.968 Million in 2014 Blog 10/11/15
Monetary Policy and Cyclical Valuation of Risk Financial Assets	Blog 1/17/2016

Links to blog comments in Table USA: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/10/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-reducing.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

3/27/16 http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.html

3/13/16 http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-fluctuations-of_13.html

3/6/16 http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html

2/28/16 http://cmpassocregulationblog.blogspot.com/2016/02/mediocre-cyclical-united-states.html

1/31/16 http://cmpassocregulationblog.blogspot.com/2016/01/closely-monitoring-global-economic-and.html

1/17/16 http://cmpassocregulationblog.blogspot.com/2016/01/unconventional-monetary-policy-and.html

1/3/16 http://cmpassocregulationblog.blogspot.com/2016/01/weakening-equities-and-dollar.html

10/11/15 http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-uncertainty-imf.html

6/21/15 http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html

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

3/22/15 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 4.7 in Feb 2013 to contraction at minus 1.6 in Apr 2016. New orders moved from minus 0.2 in Feb 2013 to 0.0 in Apr 2016. Expectations for the next six months are brighter with the general index at 42.2 in Apr 2016 and the index of new orders at 48.7.

Table VA-2, 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
Jan-11	16.4	21.2	11.3	43.9	36.1	38.2
Feb-11	29.1	20.8	24.2	41.9	38.8	43.8
Mar-11	36.6	35.0	28.9	57.0	55.5	54.8
Apr-11	13.2	14.4	21.2	35.7	31	36.4
May-11	6.2	8.3	9.5	26.2	25.1	28.7
Jun-11	-0.3	-5.1	7.6	8.3	8.4	8.4
Jul-11	6.8	3.4	7.3	28.5	32.2	27.4
Aug-11	-19.6	-18.3	-2.7	12.9	26.5	23.9
Sep-11	-11.2	-7.1	-9.9	17.9	19.6	21.4
Oct-11	6.0	5.0	8.5	26.1	28.5	29.6
Nov-11	3.9	1.0	6.6	36.2	36.2	33.7
Dec-11	2.4	4.4	5.3	33.8	38.6	32.1
Jan-12	7.4	11.7	5.1	44.3	43.8	43.9
Feb-12	10.8	12.1	8.4	30.3	32.4	28.3
Mar-12	9.2	2.0	2.2	30.6	37.3	31.2
Apr-12	6.1	1.6	-2.9	39.9	42.7	34.9
May-12	-0.6	2.3	9.2	24.7	35.4	30.7
Jun-12	-12.4	-17.7	-11.2	25.1	33.7	36.5
Jul-12	-13.1	-4.0	-10.8	21.3	25.5	18.7
Aug-12	-2.8	-0.2	-3	20.6	25.3	18.6
Sep-12	-0.7	-0.7	-13.8	31.2	42.7	34.3
Oct-12	-1.5	-5.1	-7.3	16.8	20.6	20.7
Nov-12	-10.9	-8.1	-6.5	16.3	22.6	23.8
Dec-12	2.1	2.2	12	23.1	29.2	28.5
Jan-13	-1.2	-1.1	2	29.6	32.1	36.7
Feb-13	-4.7	-0.2	1.7	32.3	39.3	33.9
Mar-13	3.3	4.1	8.1	35.8	38.8	34.8
Apr-13	1.5	1.9	5.3	31.2	35.5	34.4
May-13	0.6	-3.5	-0.1	38.9	42.1	38.6
Jun-13	12.8	11.3	7.3	36.2	38.4	38.1
Jul-13	14.7	7.2	8.6	40.9	51.5	42.9
Aug-13	7.5	6.8	2	39.6	38.8	41
Sep-13	19.9	17.9	17.5	48.1	51.1	47.2
Oct-13	12.7	22.1	16.2	54.2	60.9	51.4
Nov-13	3.5	8.4	5.1	41.5	45.9	40.6
Dec-13	3	11	8.2	43	45.6	41.8
Jan-14	15.9	8.7	15.5	38.7	40.9	37.1
Feb-14	3.6	3.5	-6.8	44.7	39.8	42.4
Mar-14	15	12.5	15.7	43.3	40.3	47.7
Apr-14	18.3	18.7	24.8	40.6	41.2	41.6
May-14	19.3	15	20.1	42.2	42.5	43.6
Jun-14	14.3	9.8	13.7	50.9	51.9	44.9
Jul-14	19	28.8	25.7	52.3	46.5	49.3
Aug-14	21.4	12.8	13.9	63.2	51.7	61.2
Sep-14	21.3	12.4	15.6	45.6	44	49.7
Oct-14	17.1	15.1	15.8	48.5	48.2	49.8
Nov-14	33.6	29.1	29	49.5	44.3	47.1
Dec-14	20.5	12.8	10.4	50.9	46.5	47.7
Jan-15	14.1	11.1	-1.3	54.9	46.9	44.7
Feb-15	13	7.7	8.2	36.3	46.2	43.4
Mar-15	10.7	9.4	3.3	39.3	40.6	39
Apr-15	10.8	6	3.4	41.8	37.8	40.3
May-15	8.1	5.5	5.2	35.5	35	34.4
Jun-15	8.1	9.6	9.3	38.9	42	52.2
Jul-15	0.7	3.1	-0.8	38.2	40.7	43.1
Aug-15	3.4	2.5	11	37.6	40.5	32.3
Sep-15	-3.6	8.6	9.3	36.8	40.3	37.2
Oct-15	-5.9	-9.3	-5.3	31.4	35.4	34.5
Nov-15	-5.7	-7.8	-3.6	36.9	44.9	40.1
Dec-15	-10.2	-11.1	-2.1	24.1	34.5	36.6
Jan-16	-3.5	-1.4	9.6	19.1	21.1	22
Feb-16	-2.8	-5.3	2.5	17.3	19.8	20.2
Mar-16	12.4	15.7	22.1	28.8	38.8	34.2
Apr-16	-1.6	0.0	-10.8	42.2	48.7	41

Source: Federal Reserve Bank of Philadelphia

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

Chart VA-1 of the Federal Reserve Bank of Philadelphia is very useful, providing current and future general activity indexes from Jan 2006 to Apr 2016. 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 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 and improving in Jun 2015. The index deteriorated in Jul 2015, improved in Aug 2015 and deteriorated in Sep-Oct 2015. The index shows contraction in Nov 2015 to Feb 2016 with recovery in Mar 2016. There is deterioration in Apr 2016.

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-Jun 2015. New orders deteriorated in Jul-Aug 2015 and improved in Sep 2015. New orders deteriorated in Oct-2015 to Dec 2015, contracting at slower pace in Jan 2016. There is sharper contraction in Feb 2016 and an upward jump in Mar 2016 followed by deterioration in Apr 2016.

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

IIB2 United States House Prices. The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, provides the FHFA House Price Index (HPI) that “is calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages” (http://fhfa.gov/webfiles/24216/q22012hpi.pdf 1). The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, provides the FHFA House Price Index (HPI) that “is calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages” (http://fhfa.gov/webfiles/24216/q22012hpi.pdf 1). Table IIA2-1 provides the FHFA HPI for purchases only, which shows behavior similar to that of the Case-Shiller index but with lower magnitudes. House prices catapulted from 2000 to 2003, 2005 and 2006. From IVQ2000 to IVQ2006, the index for the US as a whole rose 55.0 percent, with 62.1 percent for New England, 72.0 percent for Middle Atlantic, 71.2 percent for South Atlantic but only by 33.1 percent for East South Central. Prices fell relative to 2014 for the US and all regions from 2006 with exception of increase of 2.6 percent for East South Central. Prices for the US increased 4.9 percent in IVQ2014 relative to IVQ2013 and 12.9 percent from IVQ2012 to IVQ2014. From IVQ2000 to IVQ2014, prices rose for the US and the four regions in Table IIA2-1.

Table IIA2-1, US, FHFA House Price Index Purchases Only NSA ∆%

	United States	New England	Middle Atlantic	South Atlantic	East South Central
IVQ2000 to IVQ2003	24.0	40.6	35.8	25.9	11.0
IVQ2000 to IVQ2005	50.5	65.0	67.6	62.9	25.4
IVQ2000 to IVQ2006	55.0	62.1	72.0	71.2	33.1
IVQ2005 to IVQ2014	-1.5	-8.7	-2.3	-7.4	8.9
IVQ2006 to IVQ2014	-4.4	-7.1	-4.8	-11.9	2.6
IVQ2007 to IVQ2014	-1.9	-5.1	-5.0	-8.6	0.7
IVQ2011 to IVQ2014	18.9	7.3	6.9	19.9	11.8
IVQ2012 to IVQ2014	12.9	6.8	5.7	13.8	8.6
IVQ2013 to IVQ2014	4.9	2.5	2.2	5.1	4.2
IVQ2000 to IVQ2014	48.3 144.27	50.6 138.40	63.7 127.30	50.9 140.28	36.6 146.07

Source: Federal Housing Finance Agency

http://www.fhfa.gov/KeyTopics/Pages/House-Price-Index.aspx

Data of the FHFA HPI for the remaining US regions are in Table IIA2-2. Behavior is not very different from that in Table IIA2-1 with the exception of East North Central. House prices in the Pacific region doubled between 2000 and 2006. Although prices of houses declined sharply from 2005 and 2006 to 2014 with exception of West South Central and West North Central, there was still appreciation relative to 2000.

Table IIA2-2, US, FHFA House Price Index Purchases Only NSA ∆%

	West South Central	West North Central	East North Central	Mountain	Pacific
IVQ2000 to IVQ2003	11.1	18.3	14.7	18.9	44.6
IVQ2000 to IVQ2005	23.9	31.0	23.8	58.0	107.7
IVQ2000 to IVQ2006	31.6	33.7	23.7	68.6	108.7
IVQ2005 to IVQ2014	26.6	4.7	-5.4	-2.6	-14.7
IVQ2006 to IVQ2014	19.1	2.6	-5.4	-8.7	-15.1
IVQ2007 to IVQ2014	15.2	3.2	-2.1	-5.6	-6.0
IVQ2011 to IVQ2014	18.1	13.5	14.2	32.9	37.6
IVQ2012 to IVQ2014	12.1	8.9	11.1	17.9	24.4
IVQ2013 to IVQ2014	5.9	4.0	4.6	5.5	7.3
IVQ2000 to IVQ2014	56.8 145.53	37.1 158.59	17.1 155.13	53.9 172.46	77.1 132.21

Source: Federal Housing Finance Agency

http://www.fhfa.gov/KeyTopics/Pages/House-Price-Index.aspx

Monthly and 12-month percentage changes of the FHFA House Price Index are in Table IIA2-3. Percentage monthly increases of the FHFA index were positive from Apr to Jul 2011 with exception of declines in May and Aug 2011 while 12 months percentage changes improved steadily from around minus 6 percent in Mar to May 2011 to minus 4.4 percent in Jun 2011. The FHFA house price index fell 0.6 percent in Oct 2011 and fell 3.1 percent in the 12 months ending in Oct 2011. There was significant recovery in Nov 2011 with increase in the house price index of 0.4 percent and reduction of the 12-month rate of decline to 2.3 percent. The house price index rose 0.4 percent in Dec 2011 and the 12-month percentage change improved to minus 1.2 percent. There was further improvement with revised change of minus 0.2 percent in Jan 2012 and decline of the 12-month percentage change to minus 1.1 percent. The index improved to positive change of 0.1 percent in Feb 2012 and increase of 0.2 percent in the 12 months ending in Feb 2012. There was strong improvement in Mar 2012 with gain in prices of 1.0 percent and 2.2 percent in 12 months. The house price index of FHFA increased 0.6 percent in Apr 2012 and 2.6 percent in 12 months and improvement continued with increase of 0.7 percent in May 2012 and 3.5 percent in the 12 months ending in May 2012. Improvement consolidated with increase of 0.4 percent in Jun 2012 and 3.6 percent in 12 months. In Jul 2012, the house price index increased 0.2 percent and 3.5 percent in 12 months. Strong increase of 0.6 percent in Aug 2012 pulled the 12-month change to 4.2 percent. There was another increase of 0.6 percent in Oct and 5.2 percent in 12 months followed by increase of 0.4 percent in Nov 2012 and 5.2 percent in 12 months. The FHFA house price index increased 0.8 percent in Jan 2013 and 6.4 percent in 12 months. Improvement continued with increase of 0.5 percent in Apr 2013 and 7.2 percent in 12 months. In May 2013, the house price indexed increased 0.7 percent and 7.2 percent in 12 months. The FHFA house price index increased 0.6 percent in Jun 2013 and 7.6 percent in 12 months. In Jul 2013, the FHFA house price index increased 0.7 percent and 8.2 percent in 12 months. Improvement continued with increase of 0.4 percent in Aug 2013 and 8.0 percent in 12 months. In Sep 2013, the house price index increased 0.5 percent and 8.0 percent in 12 months. The house price index increased 0.4 percent in Oct 2013 and 7.8 percent in 12 months. In Nov 2013, the house price index increased 0.1 percent and increased 7.3 percent in 12 months. The house price index rose 0.6 percent in Dec 2013 and 7.4 percent in 12 months. Improvement continued with increase of 0.5 percent in Jan 2014 and 7.2 percent in 12 months. In Feb 2014, the house price index increased 0.4 percent and 6.9 percent in 12 months. The house price index increased 0.5 percent in Mar 2014 and 6.3 percent in 12 months. In Apr 2014, the house price index increased 0.2 percent and increased 5.9 percent in 12 months. The house price index increased 0.3 percent in May 2014 and 5.5 percent in 12 months. In Jun 2014, the house price index increased 0.4 percent and 5.3 percent in 12 months. The house price index increased 0.3 percent in Jul 2014 and 4.9 percent in 12 months. In Sep 2014, the house price index increased 0.2 percent and increased 4.6 percent in 12 months. The house price index increased 0.5 percent in Oct 2014 and 4.7 percent in 12 months. In Nov 2014, the house price index increased 0.7 percent and 5.2 percent in 12 months. The house price index increased 0.8 percent in Dec 2014 and increased 5.5 percent in 12 months. In Feb 2015, the house price index increased 0.8 percent and increased 5.5 percent in 12 months. The house price index increased 0.4 percent in Mar 2015 and 5.4 percent in 12 months. In Apr 2015, the house price index increased 0.4 percent and 5.6 percent in 12 months. The house price index increased 0.5 percent in May 2015 and 5.9 percent in 12 months. House prices increased 0.2 percent in Jun 2015 and 5.7 percent in 12 months. The house price index increased 0.5 percent in Jul 2015 and increased 5.9 percent in 12 months. House prices increased 0.2 percent in Aug 2015 and increased 5.6 percent in 12 months. In Sep 2015, the house price index increased 0.8 percent and increased 6.1 percent in 12 months. The house price index increased 0.5 percent in Oct 2015 and increased 6.1 percent in 12 months. House prices increased 0.5 percent in Nov 2015 and increased 5.9 percent in 12 months. The house price index increased 0.5 percent in Dec 2015 and increased 5.7 percent in 12 months. House prices increased 0.5 percent in Jan 2016 and increased 6.0 percent in 12 months. The house price index increased 0.4 percent in Feb 2016 and increased 5.6 percent in 12 months.

Table IIA2-3, US, FHFA House Price Index Purchases Only SA. Month and NSA 12-Month ∆%

	Month ∆% SA	12 Month ∆% NSA
Feb 2016	0.4	5.6
Jan	0.5	6.0
Dec 2015	0.5	5.7
Nov	0.5	5.9
Oct	0.5	6.1
Sep	0.8	6.1
Aug	0.2	5.6
Jul	0.5	5.9
Jun	0.2	5.7
May	0.5	5.9
Apr	0.4	5.6
Mar	0.4	5.4
Feb	0.8	5.5
Jan	0.1	5.1
Dec 2014	0.8	5.5
Nov	0.7	5.2
Oct	0.5	4.7
Sep	0.2	4.6
Aug	0.5	4.9
Jul	0.3	4.9
Jun	0.4	5.3
May	0.3	5.5
Apr	0.2	5.9
Mar	0.5	6.3
Feb	0.4	6.9
Jan	0.5	7.2
Dec 2013	0.6	7.4
Nov	0.1	7.3
Oct	0.4	7.8
Sep	0.5	8.0
Aug	0.4	8.0
Jul	0.7	8.2
Jun	0.6	7.6
May	0.7	7.2
Apr	0.5	7.2
Mar	1.2	7.3
Feb	0.7	6.9
Jan	0.8	6.4
Dec 2012	0.6	5.4
Nov	0.4	5.2
Oct	0.6	5.2
Sep	0.5	4.1
Aug	0.6	4.2
Jul	0.2	3.5
Jun	0.4	3.6
May	0.7	3.5
Apr	0.6	2.6
Mar	1.0	2.2
Feb	0.1	0.2
Jan	-0.2	-1.1
Dec 2011	0.4	-1.2
Nov	0.4	-2.3
Oct	-0.6	-3.1
Sep	0.6	-2.4
Aug	-0.3	-3.7
Jul	0.3	-3.5
Jun	0.3	-4.4
May	-0.2	-5.9
Apr	0.2	-5.7
Mar	-0.9	-5.9
Feb	-1.1	-5.1
Jan	-0.4	-4.5
Dec 2010		-3.9
Dec 2009		-2.0
Dec 2008		-10.3
Dec 2007		-3.2
Dec 2006		2.4
Dec 2005		9.8
Dec 2004		10.2
Dec 2003		8.0
Dec 2002		7.8
Dec 2001		6.7
Dec 2000		7.2
Dec 1999		6.1
Dec 1998		5.9
Dec 1997		3.4
Dec 1996		2.8
Dec 1995		2.9
Dec 1994		2.6
Dec 1993		3.1
Dec 1992		2.4

Source: Federal Housing Finance Agency

http://www.fhfa.gov/DataTools

The bottom part of Table IIA2-3 provides 12-month percentage changes of the FHFA house price index since 1992 when data become available for 1991. Table IIA2-4 provides percentage changes and average rates of percent change per year for various periods. Between 1992 and 2015, the FHFA house price index increased 118.9 percent at the yearly average rate of 3.5 percent. In the period 1992-2000, the FHFA house price index increased 39.3 percent at the average yearly rate of 4.2 percent. The average yearly rate of price increase accelerated to 7.5 percent in the period 2000-2003, 8.5 percent in 2000-2005 and 7.5 percent in 2000-2006. At the margin, the average rate jumped to 10.0 percent in 2003-2005 and 7.4 percent in 2003-2006. House prices measured by the FHFA house price index increased 2.0 percent at the average yearly rate of 0.2 percent between 2006 and 2015 and 4.5 percent between 2005 and 2015 at the average yearly rate of 0.4 percent.

Table IIA2-4, US, FHFA House Price Index, Percentage Change and Average Rate of Percentage Change per Year, Selected Dates 1992-2013

Dec	∆%	Average ∆% per Year
1992-2015	118.9	3.5
1992-2000	39.3	4.2
2000-2003	24.2	7.5
2000-2005	50.4	8.5
2003-2005	21.0	10.0
2005-2015	4.5	0.4
2000-2006	54.0	7.5
2003-2006	24.0	7.4
2006-2015	2.0	0.2

Source: Federal Housing Finance Agency

http://www.fhfa.gov/DataTools

Risk aversion channels funds toward US long-term and short-term securities that finance the US balance of payments and fiscal deficits benefitting from risk flight to US dollar denominated assets. There are now temporary interruptions because of fear of rising interest rates that erode prices of US government securities because of mixed signals on monetary policy and exit from the Fed balance sheet of four trillion dollars of securities held outright. Net foreign purchases of US long-term securities (row C in Table VA-4) improved from minus $42.7 billion in Jan 2016 to $60.9 billion in Feb 2016. Foreign (residents) purchases minus sales of US long-term securities (row A in Table VA-4) in Jan 2016 of minus $33.4 billion improved to $28.3 billion in Feb 2016. Net US (residents) purchases of long-term foreign securities (row B in Table VA-4) improved from $21.5 billion in Jan 2016 to $43.7 billion in Feb 2016. Other transactions (row C2 in Table VA-4) changed from minus $30.8 billion in Jan 2016 to minus $11.1 billion in Feb 2016. In Feb 2016,

C = A + B + C2 = $28.3 billion + $43.7 billion -$11.1 billion = $60.9 billion

There are minor rounding errors. There strengthening demand in Table VA-4 in Feb in A1 private purchases by residents overseas of US long-term securities of $68.5 billion of which strengthening in A11 Treasury securities of $58.2 billion, strengthening in A12 of $11.1 billion in agency securities, strengthening of $11.5 billion of corporate bonds and weakening of $12.4 billion in equities. Worldwide risk aversion causes flight into US Treasury obligations with significant oscillations. Official purchases of securities in row A2 decreased $40.2 billion with decrease of Treasury securities of $48.3 billion in Feb 2016. Official purchases of agency securities increased $7.4 billion in Feb 2016. Row D shows decrease in Feb 2016 of $6.2 billion in purchases of short-term dollar denominated obligations. Foreign private holdings of US Treasury bills increased $7.5 billion (row D11) with foreign official holdings decreasing $10.7 billion while the category “other” decreased $3.0 billion. Foreign private holdings of US Treasury bills increased $7.5 billion in what could be arbitrage of duration exposures. Risk aversion of default losses in foreign securities dominates decisions to accept zero interest rates in Treasury securities with no perception of principal losses. In the case of long-term securities, investors prefer to sacrifice inflation and possible duration risk to avoid principal losses with significant oscillations in risk perceptions.

Table VA-4, Net Cross-Borders Flows of US Long-Term Securities, Billion Dollars, NSA

	Feb 15 12 Months	Feb 2016 12 Months	Jan 2016	Feb 2016
A Foreign Purchases less Sales of US LT Securities	168.1	161.2	-33.4	28.3
A1 Private	114.0	447.8	22.9	68.5
A11 Treasury	-2.9	308.1	6.8	58.2
A12 Agency	62.2	124.8	4.6	11.1
A13 Corporate Bonds	41.5	138.5	5.7	11.5
A14 Equities	13.2	-123.6	5.8	-12.4
A2 Official	54.1	-286.6	-56.3	-40.2
A21 Treasury	21.4	-307.8	-57.2	-48.3
A22 Agency	32.3	38.8	1.8	7.4
A23 Corporate Bonds	5.8	-2.3	0.4	-0.5
A24 Equities	-5.4	-15.3	-1.2	1.2
B Net US Purchases of LT Foreign Securities	23.9	207.5	21.5	43.7
B1 Foreign Bonds	137.2	309.5	28.1	45.2
B2 Foreign Equities	-113.4	-102.0	-6.6	-1.5
C1 Net Transactions	192.0	368.7	-11.9	72.0
C2 Other	-165.3	-226.0	-30.8	-11.1
C Net Foreign Purchases of US LT Securities	26.7	142.7	-42.7	60.9
D Increase in Foreign Holdings of Dollar Denominated Short-term	27.5	28.1	-2.4	-6.2
D1 US Treasury Bills	1.3	35.2	-5.6	-3.2
D11 Private	38.3	67.6	1.5	7.5
D12 Official	-37.1	-32.4	-7.0	-10.7
D2 Other	26.3	-7.0	3.2	-3.0

C1 = A + B; C = C1+C2

A = A1 + A2

A1 = A11 + A12 + A13 + A14

A2 = A21 + A22 + A23 + A24

B = B1 + B2

D = D1 + D2

Sources: United States Treasury

http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticpress.aspx

http://www.treasury.gov/press-center/press-releases/Pages/jl2609.aspx

Table VA-5 provides major foreign holders of US Treasury securities. China is the largest holder with $1252.3 billion in Feb 2016, decreasing 1.2 percent from $1237.9 billion in Jan 2016 while decreasing $28.6 billion from Feb 2015 or 2.3 percent. The United States Treasury estimates US government debt held by private investors at $10,730 billion in Dec 2015. China’s holding of US Treasury securities represent 11.7 percent of US government marketable interest-bearing debt held by private investors (http://www.fms.treas.gov/bulletin/index.html). Min Zeng, writing on “China plays a big role as US Treasury yields fall,” on Jul 16, 2004, published in the Wall Street Journal (http://online.wsj.com/articles/china-plays-a-big-role-as-u-s-treasury-yields-fall-1405545034?tesla=y&mg=reno64-wsj), finds that acceleration in purchases of US Treasury securities by China has been an important factor in the decline of Treasury yields in 2014. Japan decreased its holdings from $1224.4 billion in Feb 2015 to $1133.1 billion in Feb 2016 or 7.5 percent. The combined holdings of China and Japan in Feb 2016 add to $2385.4 billion, which is equivalent to 22.0 percent of US government marketable interest-bearing securities held by investors of $10,730 billion in Dec 2015 (http://www.fms.treas.gov/bulletin/index.html). Total foreign holdings of Treasury securities increased from $6163.4 billion in Feb 2015 to $6236.2 billion in Feb 2016, or 1.2 percent. The US continues to finance its fiscal and balance of payments deficits with foreign savings (see Pelaez and Pelaez, The Global Recession Risk (2007)). A point of saturation of holdings of US Treasury debt may be reached as foreign holders evaluate the threat of reduction of principal by dollar devaluation and reduction of prices by increases in yield, including possibly risk premium. Shultz et al (2012) find that the Fed financed three-quarters of the US deficit in fiscal year 2011, with foreign governments financing significant part of the remainder of the US deficit while the Fed owns one in six dollars of US national debt. Concentrations of debt in few holders are perilous because of sudden exodus in fear of devaluation and yield increases and the limit of refinancing old debt and placing new debt. In their classic work on “unpleasant monetarist arithmetic,” Sargent and Wallace (1981, 2) consider a regime of domination of monetary policy by fiscal policy (emphasis added):

“Imagine that fiscal policy dominates monetary policy. The fiscal authority independently sets its budgets, announcing all current and future deficits and surpluses and thus determining the amount of revenue that must be raised through bond sales and seignorage. Under this second coordination scheme, the monetary authority faces the constraints imposed by the demand for government bonds, for it must try to finance with seignorage any discrepancy between the revenue demanded by the fiscal authority and the amount of bonds that can be sold to the public. Suppose that the demand for government bonds implies an interest rate on bonds greater than the economy’s rate of growth. Then if the fiscal authority runs deficits, the monetary authority is unable to control either the growth rate of the monetary base or inflation forever. If the principal and interest due on these additional bonds are raised by selling still more bonds, so as to continue to hold down the growth of base money, then, because the interest rate on bonds is greater than the economy’s growth rate, the real stock of bonds will growth faster than the size of the economy. This cannot go on forever, since the demand for bonds places an upper limit on the stock of bonds relative to the size of the economy. Once that limit is reached, the principal and interest due on the bonds already sold to fight inflation must be financed, at least in part, by seignorage, requiring the creation of additional base money.”

Table VA-5, US, Major Foreign Holders of Treasury Securities $ Billions at End of Period

	Feb 2016	Jan 2016	Feb 2015
Total	6236.2	6183.3	6163.4
China	1252.3	1237.9	1223.7
Japan	1133.1	1123.5	1224.4
Caribbean Banking Centers	361.3	350.5	281.6
Oil Exporters	281.0	293.0	296.8
Ireland	255.5	252.2	206.5
Brazil	247.3	255.7	259.9
United Kingdom	236.5	222.3	194.0
Switzerland	236.2	237.4	201.7
Luxembourg	208.8	200.2	179.2
Hong Kong	201.7	201.6	175.4
Taiwan	182.7	183.3	165.9
Belgium	143.0	137.5	345.3
India	118.8	119.8	101.7
Foreign Official Holdings	4081.8	4093.6	4097.4
A. Treasury Bills	319.0	329.6	351.4
B. Treasury Bonds and Notes	3762.9	3763.9	3746.0

Source: United States Treasury

http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticpress.aspx

http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/index.aspx

http://ticdata.treasury.gov/Publish/mfh.txt

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 1.7 percent in 2013 and stagnated in 2014 at 0.0. The GDP of Japan increased 0.5 percent in 2015. 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 2015 is 0.9 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	1.4
2014	0.0
2015	0.5

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

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

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

Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (https://www.boj.or.jp/en/mopo/outlook/gor1504b.pdf) with changes on Jul 21, 2015 (https://www.boj.or.jp/en/announcements/release_2015/k150121a.pdf). For fiscal 2015, the forecast is of growth of GDP between 1.5 to 2.1 percent, with the all items CPI less fresh food 0.2 to 1.2 to 3.3 percent (https://www.boj.or.jp/en/mopo/outlook/gor1504b.pdf). The critical difference is forecast of the CPI excluding fresh food of 0.2 to 1.2 percent in 2015 and 1.2 to 2.2 percent in 2016 (https://www.boj.or.jp/en/mopo/outlook/gor1504b.pdf). Consumer price inflation in Japan excluding fresh food was minus 0.4 percent in Mar 2014 and 2.2 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm), significantly because of the increase of the tax on value added of consumption in Apr 2014. The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

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

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

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

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

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

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

Table VB-BOJF provides the forecasts of economic activity and inflation in Japan by the majority of members of the Policy Board of the Bank of Japan, which is part of their Outlook for Economic Activity and Prices (https://www.boj.or.jp/en/mopo/outlook/gor1510b.pdf) with changes on Jan 29, 2016 (https://www.boj.or.jp/en/mopo/outlook/gor1601b.pdf). On Jun 19, 2015, the Bank of Japan announced a “New Framework for Monetary Policy Meetings,” which provides for quarterly release of the forecasts of the economy and prices beginning in Jan 2016 (https://www.boj.or.jp/en/announcements/release_2015/rel150619a.pdf). For fiscal 2015, the forecast is of growth of GDP between 1.0 to 1.3 percent, with the all items CPI less fresh food 0.0 to 0.2 percent (https://www.boj.or.jp/en/mopo/outlook/gor1601b.pdf). The critical difference is forecast of the CPI excluding fresh food of 0.2 to 1.6 percent in 2016 and 2.0 to 3.1 percent in 2017 (https://www.boj.or.jp/en/mopo/outlook/gor1601b.pdf). Consumer price inflation in Japan excluding fresh food was minus 0.2 percent in Dec 2015 and 0.1 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm), significantly because of the increase of the tax on value added of consumption in Apr 2014. The new monetary policy of the Bank of Japan aims to increase inflation to 2 percent. These forecasts are biannual in Apr and Oct. The Cabinet Office, Ministry of Finance and Bank of Japan released on Jan 22, 2013, a “Joint Statement of the Government and the Bank of Japan on Overcoming Deflation and Achieving Sustainable Economic Growth” (http://www.boj.or.jp/en/announcements/release_2013/k130122c.pdf) with the important change of increasing the inflation target of monetary policy from 1 percent to 2 percent:

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

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

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

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

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

1. Monetary Base Control. Most central banks in the world pursue interest rates instead of monetary aggregates, injecting bank reserves to lower interest rates to desired levels. The Bank of Japan (BOJ) has shifted back to monetary aggregates, conducting money market operations with the objective of increasing base money, or monetary liabilities of the government, at the annual rate of 60 to 70 trillion yen. The BOJ estimates base money outstanding at “138 trillion yen at end-2012) and plans to increase it to “200 trillion yen at end-2012 and 270 trillion yen at end 2014” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
2. Maturity Extension of Purchases of Japanese Government Bonds. Purchases of bonds will be extended even up to bonds with maturity of 40 years with the guideline of extending the average maturity of BOJ bond purchases from three to seven years. The BOJ estimates the current average maturity of Japanese government bonds (JGB) at around seven years. The BOJ plans to purchase about 7.5 trillion yen per month (http://www.boj.or.jp/en/announcements/release_2013/rel130404d.pdf). Takashi Nakamichi, Tatsuo Ito and Phred Dvorak, wiring on “Bank of Japan mounts bid for revival,” on Apr 4, 2013, published in the Wall Street Journal (http://online.wsj.com/article/SB10001424127887323646604578401633067110420.html), find that the limit of maturities of three years on purchases of JGBs was designed to avoid views that the BOJ would finance uncontrolled government deficits.
3. Seigniorage. The BOJ is pursuing coordination with the government that will take measures to establish “sustainable fiscal structure with a view to ensuring the credibility of fiscal management” (http://www.boj.or.jp/en/announcements/release_2013/k130404a.pdf).
4. Diversification of Asset Purchases. The BOJ will engage in transactions of exchange traded funds (ETF) and real estate investment trusts (REITS) and not solely on purchases of JGBs. Purchases of ETFs will be at an annual rate of increase of one trillion yen and purchases of REITS at 30 billion yen.
5. Bank Lending Facility and Growth Supporting Funding Facility. At the meeting on Feb 18, the Bank of Japan doubled the scale of these lending facilities to prevent their expiration in the near future (http://www.boj.or.jp/en/announcements/release_2014/k140218a.pdf).
6. Quantitative and Qualitative Monetary Easing (QQE) with Negative Nominal Interest Rate. On January 29, 2016, the Policy Board of the Bank of Japan introduced a new policy to attain the “price stability target of 2 percent at the earliest possible time” (https://www.boj.or.jp/en/announcements/release_2016/k160129a.pdf). The new framework consists of three dimensions: quantity, quality and interest rate. The interest rate dimension consists of rates paid to current accounts that financial institutions hold at the Bank of Japan of three tiers zero, positive and minus 0.1 percent. The quantitative dimension consists of increasing the monetary base at the annual rate of 80 trillion yen. The qualitative dimension consists of purchases by the Bank of Japan of Japanese government bonds (JGBs), exchange traded funds (ETFs) and Japan real estate investment trusts (J-REITS).

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

Fiscal Year Date of Forecast	Real GDP	CPI All Items Less Fresh Food	Excluding Effects of Consumption Tax Hikes
2013
Apr 2014	+2.2 to +2.3 [+2.2]	+0.8
Jan 2014	+2.5 to +2.9 [+2.7]	+0.7 to +0.9 [+0.7]
Oct 2013	+2.6 to +3.0 [+2.7]	+0.6 to +1.0 [+0.7]
Jul 2013	+2.5 to +3.0 [+2.8]	+0.5 to +0.8 [+0.6]
2014
Apr 2015	-1.0 to -0.8 [-0.9]	+2.8	+0.8
Jan 2015	-0.6 to -0.4 [-0.5]	+2.9 to +3.2 [+2.9]	+0.9 to +1.2 [+0.9]
Oct 2014	+0.2 to +0.7 [+0.5]	+3.1 to +3.4 [+3.2]	+1.1 to +1.4 [+1.2]
Jul 2014	+0.6 to +1.3 [+1.0]	+3.2 to +3.5 [+3.3]	+1.2 to +1.5 [+1.3]
Apr 2014	+0.8 to +1.3 [+1.1]	+3.0 to +3.5 [+3.3]	+1.0 to +1.5 [+1.3]
Jan 2014	+0.9 to 1.5 [+1.4]	+2.9 to +3.6 [+3.3]	+0.9 to +1.6 [+1.3]
Oct 2013	+0.9 to +1.5 [+1.5]	+2.8 to +3.6 [+3.3]	+0.8 to +1.6 [+1.3]
Jul 2013	+0.8 to +1.5 [+1.3]	+2.7 to +3.6 [+3.3]	+0.7 to +1.6 [+1.3]
2015
Jan 2016	+1.0 to +1.3 [+1.1]	0.0 to 0.2 [+0.1]
Oct 2015	+0.8 to +1.4 [+1.2]	0.0 to +0.4 [+0.1
Jul 2015	+1.5 to +1.9 [+1.7]	+0.3 to +1.0 [+0.7]
Apr 2015	+1.5 to +2.1 [+2.0]	+0.2 to 1.2 [+0.8]	+0.2 to 1.2 [+0.8]
Jan 2015	+1.8 to +2.3 [+2.1]	+0.4 to +1.3 [+1.0]	+0.4 to +1.3 [+1.0]
Oct 2014	+1.2 to +1.7 [+1.5]	+1.8 to 2.6 [+2.4]	+1.1 to +1.9 [+1.7]
Jul 2014	+1.2 to +1.6 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
Apr 2014	+1.2 to +1.5 [+1.5]	+1.9 to +2.8 [+2.6]	+1.2 to +2.1 [+1.9]
Jan 2014	+1.2 to +1.8 [+1.5]	+1.7 to +2.9 [+2.6]	+1.0 to +2.2 [+1.9]
Oct 2013	+1.3 to +1.8 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
Jul 2013	+1.3 to +1.9 [+1.5]	+1.6 to +2.9 [+2.6]	+0.9 to +2.2 [+1.9]
2016
Jan 2016	+1.0 to +1.7 [+1.5]	0.2 to 1.2 [+0.8]
Oct 2015	+1.2 to +1.6 [+1.4]	+0.8 to +1.5 [+1.4]
Jul 2015	+1.5 to 1.7 [+1.5]	+1.2 to +2.1 [+1.9]
Apr 2015	+1.4 to +1.8 [+1.5]	+1.2 to +2.2 [+2.0]	+1.2 to +2.2 [+2.0]
Jan 2015	+1.5 to +1.7 [+1.6]	+1.5 to +2.3 [+2.2]	+1.5 to +2.3 [+2.2]
Oct 2014	+1.0 to +1.4 [+1.2]	+1.9 to 3.0 [+2.8]	+1.2 to 2.3 [+2.1]
Jul 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]
Apr 2014	+1.0 to +1.5 [+1.3]	+2.0 to +3.0 [+2.8]	+1.3 to +2.3 [+2.1]
2017
Jan 2016	+0.1 to + 0.5 [+0.3]	+2.0 to +3.1 [+2.8]	+ 1.0 to +2.1 [+1.8]
Oct 2015	+0.1 to +0.5 [+0.3]	+2.5 to +3.4 [+3.1]	+1.2 to 2.1 [+1.8]
Jul 2015	+0.1 to +0.5 [+0.2]	+2.7 to +3.4 [+3.1]	+1.4 to +2.1 [+1.8]
Apr 2015	+0.1 to +0.5 [+0.2]	+2.7 to +3.4 [+3.2]	+1.4 to +2.1 [+1.9]

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

Source: Policy Board, Bank of Japan

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

Source: Policy Board, Bank of Japan

https://www.boj.or.jp/en/announcements/release_2015/k150121a.pdf

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

https://www.boj.or.jp/en/mopo/outlook/gor1504b.pdf

https://www.boj.or.jp/en/mopo/outlook/gor1510b.pdf

https://www.boj.or.jp/en/mopo/outlook/gor1601b.pdf

The Nikkei Flash Japan Manufacturing PMI Index™ with the Flash Japan

Manufacturing PMI™ decreased from 49.1 in Mar to 48.0 in Apr and the Flash Japan

Manufacturing Output Index™ decreased from 49.8 in Mar to 47.9 in Apr

(https://www.markiteconomics.com/Survey//PressRelease.mvc/3f772307ed544e5bb9e58cd00e85cd29). New export orders decreased at faster rate. Amy Brownbill, Economist at

Markit, finds slowing conditions in Japan’s manufacturing with sharp reduction of foreign orders

(https://www.markiteconomics.com/Survey//PressRelease.mvc/3f772307ed544e5bb9e58cd00e85cd29).The Nikkei Composite Output PMI Index decreased from 51.0 in Feb to 49.9 in Mar, indicating decrease of business activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/7d8a575a490c4e21ade799af7b87e6c0). The Nikkei Business Activity Index of Services decreased to 50.0 in Mar from 51.2 in Feb (https://www.markiteconomics.com/Survey//PressRelease.mvc/7d8a575a490c4e21ade799af7b87e6c0). Amy Brownbill, Ecoomist at Markit and author of the report, finds stability (https://www.markiteconomics.com/Survey//PressRelease.mvc/7d8a575a490c4e21ade799af7b87e6c0). The Nikkei Purchasing Managers’ Index^™ (PMI™), seasonally adjusted, decreased from 50.1 in Feb to 49.1 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/59a346a62a1d444da816bc03fb53d5df). New orders contracted from home and abroad. Amy Brownbill, Economist at Markit, finds deteriorating conditions in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/59a346a62a1d444da816bc03fb53d5df).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	Mar ∆% -0.1 12 months ∆% -3.8 Blog 4/17/16
Consumer Price Index	Feb NSA ∆% 0.1; Feb 12 months NSA ∆% 0.3 Blog 3/27/16
Real GDP Growth	IVQ2015 ∆%: -0.3 on IIIQ2015;  IVQ2015 SAAR minus 1.1; ∆% from quarter a year earlier: 0.7 % 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 6/14/15 8/23/15 9/13/15 11/22/15 12/13/15 2/21/16 3/13/16
Employment Report	Feb Unemployed 2.13 million Change in unemployed since last year: -130 thousand Unemployment rate: 3.3 % Blog 4/3/16
All Industry Indices	Jan month SA ∆% 2.0 12-month NSA ∆% -0.7 Earlier Data: Blog 4/26/15
Industrial Production	Jan SA month ∆%: 3.7 Jan 12-month NSA ∆% -3.8 Earlier Data: Blog 3/29/15
Machine Orders	Total Dec ∆% 3.6 Private ∆%: 5.4 Dec ∆% Excluding Volatile Orders 4.2 Earlier Data: Blog 4/19/15
Tertiary Index	Feb month SA ∆% -0.1 Feb 12 months NSA ∆% 2.3 Earlier Data: Blog 4/26/15
Wholesale and Retail Sales	Jan 12 months: Total ∆%: -4.3 Wholesale ∆%: -6.3 Retail ∆%: -0.1 Earlier Data: Blog 3/29/15
Family Income and Expenditure Survey	Jan 12-month ∆% total nominal consumption -3.1, real -3.1 Earlier Data: Blog 3/29/15
Trade Balance	Exports Mar 12 months ∆%: minus 6.8 Imports Mar 12 months ∆% -14.9 Earlier Data: Blog 4/26/15

Links to blog comments in Table JPY: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

3/27/16 http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.html

3/13/16 http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-fluctuations-of_13.html

12/13/15 http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-volatile_17.html

11/22/15 http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html

9/13/15 http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what_13.html

08/23/15 http://cmpassocregulationblog.blogspot.com/2015/08/global-decline-of-values-of-financial.html

6/14/15 http://cmpassocregulationblog.blogspot.com/2015/06/volatility-of-financial-asset.html

5/24/15 http://cmpassocregulationblog.blogspot.com/2015/05/interest-rate-policy-and-dollar.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

The geographical breakdown of exports and imports of Japan with selected regions and countries is in Table VB-1 for Mar 2016. The share of Asia in Japan’s trade is close to one-half for 51.4 percent of exports and 51.0 percent of imports. Within Asia, exports to China are 17.3 percent of total exports and imports from China 25.7 percent of total imports. While exports to China decreased 7.1 percent in the 12 months ending in Mar 2016, imports from China increased 6.3 percent. The largest export market for Japan in Mar 2016 is the US with share of 20.2 percent of total exports, which is close to that of China, and share of imports from the US of 10.9 percent in total imports. Japan’s exports to the US decreased 5.1 percent in the 12 months ending in Mar 2016 and imports from the US decreased 20.0 percent. Western Europe has share of 12.6 percent in Japan’s exports and of 12.9 percent in imports. Rates of growth of exports of Japan in Mar 2016 are minus 5.1 percent for exports to the US, minus 37.0 percent for exports to Brazil and minus 3.6 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Mar 2016 are mixed. Imports from Asia decreased 5.3 percent in the 12 months ending in Mar 2016 while imports from China increased 6.3 percent. Data are in millions of yen, which may have effects of recent depreciation of the yen relative to the United States dollar (USD) and revaluation of the dollar relative to the euro.

Table VB-1, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen

Mar 2016	Exports Millions Yen	12 months ∆%	Imports Millions Yen	12 months ∆%
Total	6,456,599	-6.8	5,701,614	-14.9
Asia	3,318,583 % Total 51.4	-9.7	2,909,164 % Total 51.0	-5.3
China	1,116,069 % Total 17.3	-7.1	1,467,142 % Total 25.7	6.3
USA	1,307,213 % Total 20.2	-5.1	621,430 % Total 10.9	-20.0
Canada	85,941	-8.7	86,271	-13.4
Brazil	31,982	-37.0	73,391	-15.9
Mexico	96,090	-19.4	45,566	-0.8
Western Europe	812,446 % Total 12.6	13.3	732,807 % Total 12.9	-6.4
Germany	167,012	-3.6	208,315	-14.7
France	60,488	10.4	92,083	4.6
UK	161,773	67.6	69,324	6.8
Middle East	254,504	-17.8	558,076	-39.4
Australia	119,174	-3.4	274,899	-25.8

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

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 53.8 in Mar 2016. 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 50.8 in Mar 2016.

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

	Total Index	New Orders	Interm. Input Prices	Subs Prices	Exp
Mar 2016	53.8	50.8	51.4	49.5	59.0
Feb	52.7	48.7	50.5	48.3	59.5
Jan	53.5	49.6	49.9	47.7	58.4
Dec2015	54.4	51.7	49.0	48.2	58.3
Nov	53.6	50.2	49.3	47.7	60.0
Oct	53.1	51.2	51.2	48.8	61.1
Sep	53.4	50.2	50.8	47.9	60.0
Aug	53.4	49.6	49.6	47.8	59.7
Jul	53.9	50.1	48.9	47.4	60.0
Jun	53.8	51.3	50.6	48.7	59.7
May	53.2	49.5	52.8	50.4	60.1
Apr	53.4	49.1	50.8	48.9	60.0
Mar	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 53.8 in Mar 2016.

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 50.2 in Mar 2016. 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 51.4 in Mar 2016.

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

	IPM	PI	NOI	INV	EMP	SDEL
2016
Mar	50.2	52.3	51.4	48.2	48.1	51.3
Feb	49.0	50.2	48.6	48.0	47.6	49.8
Jan	49.4	51.4	49.5	46.8	47.8	50.5
2015
Dec	49.7	52.2	50.2	47.6	47.4	50.7
Nov	49.6	51.9	49.8	47.1	47.6	50.6
Oct	49.8	52.2	50.3	47.2	47.8	50.6
Sep	49.8	52.3	50.2	47.5	47.9	50.8
Aug	49.7	51.7	49.7	48.3	47.9	50.6
Jul	50.0	52.4	49.9	48.4	48.0	50.4
Jun	50.2	52.9	50.1	48.7	48.1	50.3
May	50.2	52.9	50.6	48.2	48.2	50.9
Apr	50.1	52.6	50.2	48.2	48.0	50.4
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 50.2 in Mar 2016.

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

Source: National Bureau of Statistics of China

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

Growth of China’s GDP in IQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IQ2016 was 6.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 37.5 percent of cumulative GDP in IQ2016. In cumulative IQ2016, industry accounts for 33.0 percent of GDP and construction for 4.7 percent. Tertiary industry accounts for 56.9 percent of cumulative GDP in IQ2016 and primary industry for 5.6 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 by increasing growth of services. The bottom block of Table VC-1 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 IQ2011 to 6.1 percent in IVQ2011 and 7.4 percent in IQ2012, rebounding to 8.7 percent in IIQ2012, 7.4 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 eased to 7.4 percent and to 7.0 percent in IIQ2013, rebounding to 9.1 percent in IIIQ2013. Annual equivalent growth was 6.6 percent in IVQ2013, increasing to 7.0 percent in IQ2014 and increasing to 7.4 percent in IIQ2014. Annual equivalent growth increased to 7.8 percent in IIIQ2014 and slowed to 7.0 percent in IVQ2014. Growth slowed to annual equivalent 5.7 percent in IQ2015, increasing to 7.4 percent in IIQ2015 and 7.4 percent in IIIQ2015. Growth slowed to 6.1 percent in annual equivalent in IVQ2015 and 4.5 percent in IQ2016.

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

Cumulative GDP IQ2016	Value Current CNY Billion IQ2016	Value Current CNY Billion IQ2016 to IQ2016	IQ2016 Year-on-Year Constant Prices ∆%	Cumulative to IQ2016 ∆%
GDP	15,852.6	15,852.6	6.7	6.7
Primary Industry	880.3	880.3	2.9	2.9
Farming	915.3	915.3	3.1	3.1
Secondary Industry	5,951.0	5,951.0	5.8	5.8
Industry	5,233.5	5,233.5	5.5	5.5
Construction	743.8	743.8	7.8	7.8
Tertiary Industry	9,021.4	9,021.4	7.6	7.6
Transport, Storage, Post	724.9	724.9	3.3	3.3
Wholesale, Retail Trades	1,629.3	1,629.3	5.8	5.8
Accommodation and Restaurants	311.3	311.3	7.0	7.0
Finance	1,579.1	1,579.1	8.1	8.1
Real Estate	1,081.9	1,081.9	9.1	9.1
Other	3,633.6	3,633.6	8.7	8.7
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter		∆% Annual Equivalent	∆% Year-on-Year
2016
IQ2016	1.1		4.5	6.7
2015
IVQ2015	1.5		6.1	6.8
IIIQ2015	1.8		7.4	6.9
IIQ2015	1.8		7.4	7.0
IQ2015	1.4		5.7	7.0
2014
IVQ2014	1.7		7.0	7.2
IIIQ2014	1.9		7.8	7.1
IIQ2014	1.8		7.4	7.4
IQ2014	1.7		7.0	7.3
2013
IVQ2013	1.6		6.6	7.6
IIIQ2013	2.2		9.1	7.9
IIQ2013	1.7		7.0	7.5
IQ2013	1.8		7.4	7.8
2012
IVQ2012	1.9		7.8	8.0
IIIQ2012	1.8		7.4	7.4
IIQ2012	2.1		8.7	7.5
IQ2012	1.8		7.4	8.0
2011
IVQ2011	1.5		6.1	8.7
IIIQ2011	2.0		8.2	9.4
IIQ2011	2.4		10.0	9.9
IQ2011	2.5		10.4	10.2

Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/

Growth of China’s GDP in IQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IQ2016 was 6.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 37.5 percent of cumulative GDP in IQ2016. In cumulative IQ2016, industry accounts for 33.0 percent of GDP and construction for 4.7 percent. Tertiary industry accounts for 56.9 percent of cumulative GDP in IQ2016 and primary industry for 5.6 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 by increasing growth of services. Table VC-GDPA shows that 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 1.6 percent relative to IIIQ2013, which is equivalent to 6.6 percent per year. GDP grew 7.3 percent in IQ2014 relative to a year earlier and 1.7 percent in IQ2014 that is equivalent to 7.0 percent per year. GDP grew 7.4 percent in IIQ2014 relative to a year earlier and 1.8 percent relative to the prior quarter, which is annual equivalent 7.4 percent. In IIIQ2014, GDP grew 7.1 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 1.7 percent in IVQ2014, which is 7.0 percent in annual equivalent and 7.2 percent relative to a year earlier. In IQ2015, GDP grew 1.4 percent, which is equivalent to 5.7 in a year and 7.0 percent relative to a year earlier. GDP grew 1.8 percent in IIQ2015, which is equivalent to 7.4 percent in a year, and grew 7.0 percent relative to a year earlier. GDP grew at 1.8 percent in IIIQ2015, which is equivalent to 7.4 percent in a year, and grew 6.9 percent relative to a year earlier. GDP grew at 1.5 percent in IVQ2015, which is equivalent to 6.1 percent in a year and increased 6.8 percent relative to a year earlier. In IQ2016, GDP grew at 1.1 percent, which is equivalent to 4.5 percent, and increased 6.7 percent relative to a year earlier.

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

	IQ2015	IIQQ2015	IIIQ2015	IVQ2015	IQ2016
GDP	7.0	7.0	6.9	6.8	6.7
Primary Industry	3.2	3.5	3.8	4.1	2.9
Secondary Industry	6.4	6.1	6.0	6.1	5.8
Tertiary Industry	7.9	8.4	8.4	8.2	7.6
GDP ∆% Relative to a Prior Quarter	1.4	1.8	1.8	1.5	1.1
	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	7.3	7.4	7.1	7.2
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	1.8	1.7	2.2	1.6	1.7	1.8	1.9	1.7
	IQ 2011	IIQ 2011	IIIQ 2011	IVQ 2011	IQ  2012	IIQ 2012	IIIQ 2012	IVQ 2012
GDP	10.2	9.9	9.4	8.7	8.0	7.5	7.4	8.0
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	2.5	2.4	2.0	1.5	1.8	2.1	1.8	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 Caixin Flash China General Manufacturing Purchasing Managers’ Index^™ (PMI^™) compiled by Markit (http://www.markiteconomics.com/Survey//PressRelease.mvc/883014a121534f51bc42e5060845f727) is mixed. The overall Flash Caixin China General Manufacturing PMI^™ decreased from 47.3 in Aug to 47.0 in Sep, while the Flash Caixin China General Manufacturing Output Index decreased from 46.4 in Aug to 45.7 in Aug, indicating weaker conditions. He Fan, Chief Economist at Caixin Insight Group finds need of fiscal and monetary policy (http://www.markiteconomics.com/Survey//PressRelease.mvc/883014a121534f51bc42e5060845f727). The Caixin China General Services PMI^™, compiled by Markit, shows the Caixin Composite Output, combining manufacturing and services, increasing from 49.4 in Feb to 51.3 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/f1ba2582d96246acb2c8a86759f95b07). He Fan, Chief Economist at Caixin Insight Group, finds improving services activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/f1ba2582d96246acb2c8a86759f95b07). The Caixin General Manufacturing PMI^™ increased to 49.7 in Mar from 48.0 in Feb, indicating moderate improvement in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/3beba3df6e144abc9a96cac4be32ea17). He Fan, Chief Economist at Caixin Insight Group, finds headwinds (https://www.markiteconomics.com/Survey//PressRelease.mvc/3beba3df6e144abc9a96cac4be32ea17). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry	Mar 12-month ∆%: minus 4.3 Mar month ∆%: 0.5 Blog 4/17/16
Consumer Price Index	Mar 12-month ∆%: 2.3 Mar month ∆%: -0.4 Blog 4/17/16
Value Added of Industry	Feb month ∆%: 0.38 Jan-Feb 2016/Jan-Feb 2014 ∆%: 5.4 Earlier Data Blog 4/19/15
GDP Growth Rate	Year IQ2016 ∆%: 6.7 First Quarter 2016 ∆%: 1.1 Quarter IQ2016 AE ∆%: 4.5 Blog 4/24/16
Investment in Fixed Assets	Total Jan-Feb 2015 ∆%: 10.2 Real estate development: 3.0 Earlier Data: Blog 4/19/15
Retail Sales	Feb month ∆%: 0.81 Jan-Feb 10.2 Earlier Data: Blog 4/19/15
Trade Balance	Mar balance $29.86 billion Exports 12M ∆% 11.5 Imports 12M ∆% -7.6 2015 Exports ∆% -2.8 2015 Imports ∆% -14.1 Cumulative Mar 2016: $125.74 billion Cumulative Mar 2015: $123.72 Earlier Data: Blog 4/19/15

Links to blog comments in Table CNY: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

3/13/16 http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-fluctuations-of_13.html

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

Growth of China’s GDP in IQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IQ2016 was 6.7 percent, as shown in Table VC-1. Secondary industry accounts for 37.5 percent of cumulative GDP in IQ2016. In cumulative IQ2016, industry accounts for 33.0 percent of GDP and construction for 4.7 percent. Tertiary industry accounts for 56.9 percent of cumulative GDP in IQ2016 and primary industry for 5.6 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 by increasing growth of services. The bottom block of Table VC-1 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 IQ2011 to 6.1 percent in IVQ2011 and 7.4 percent in IQ2012, rebounding to 8.7 percent in IIQ2012, 7.4 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 eased to 7.4 percent and to 7.0 percent in IIQ2013, rebounding to 9.1 percent in IIIQ2013. Annual equivalent growth was 6.6 percent in IVQ2013, increasing to 7.0 percent in IQ2014 and increasing to 7.4 percent in IIQ2014. Annual equivalent growth increased to 7.8 percent in IIIQ2014 and slowed to 7.0 percent in IVQ2014. Growth slowed to annual equivalent 5.7 percent in IQ2015, increasing to 7.4 percent in IIQ2015 and 7.4 percent in IIIQ2015. Growth slowed to 6.1 percent in annual equivalent in IVQ2015 and 4.5 percent in IQ2016.

Table VC-1 China, Quarterly Growth of GDP, Current CNY 100 Million and Inflation Adjusted ∆%

Cumulative GDP IQ2016	Value Current CNY Billion IQ2016	Value Current CNY Billion IQ2016 to IQ2016	IQ2016 Year-on-Year Constant Prices ∆%	Cumulative to IQ2016 ∆%
GDP	15,852.6	15,852.6	6.7	6.7
Primary Industry	880.3	880.3	2.9	2.9
Farming	915.3	915.3	3.1	3.1
Secondary Industry	5,951.0	5,951.0	5.8	5.8
Industry	5,233.5	5,233.5	5.5	5.5
Construction	743.8	743.8	7.8	7.8
Tertiary Industry	9,021.4	9,021.4	7.6	7.6
Transport, Storage, Post	724.9	724.9	3.3	3.3
Wholesale, Retail Trades	1,629.3	1,629.3	5.8	5.8
Accommodation and Restaurants	311.3	311.3	7.0	7.0
Finance	1,579.1	1,579.1	8.1	8.1
Real Estate	1,081.9	1,081.9	9.1	9.1
Other	3,633.6	3,633.6	8.7	8.7
Growth in Quarter Relative to Prior Quarter	∆% on Prior Quarter		∆% Annual Equivalent	∆% Year-on-Year
2016
IQ2016	1.1		4.5	6.7
2015
IVQ2015	1.5		6.1	6.8
IIIQ2015	1.8		7.4	6.9
IIQ2015	1.8		7.4	7.0
IQ2015	1.4		5.7	7.0
2014
IVQ2014	1.7		7.0	7.2
IIIQ2014	1.9		7.8	7.1
IIQ2014	1.8		7.4	7.4
IQ2014	1.7		7.0	7.3
2013
IVQ2013	1.6		6.6	7.6
IIIQ2013	2.2		9.1	7.9
IIQ2013	1.7		7.0	7.5
IQ2013	1.8		7.4	7.8
2012
IVQ2012	1.9		7.8	8.0
IIIQ2012	1.8		7.4	7.4
IIQ2012	2.1		8.7	7.5
IQ2012	1.8		7.4	8.0
2011
IVQ2011	1.5		6.1	8.7
IIIQ2011	2.0		8.2	9.4
IIQ2011	2.4		10.0	9.9
IQ2011	2.5		10.4	10.2

Source: National Bureau of Statistics of China http://www.stats.gov.cn/english/

Growth of China’s GDP in IQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IQ2016 was 6.7 percent, as shown in Table VC-1. Secondary industry accounts for 37.5 percent of cumulative GDP in IQ2016. In cumulative IQ2016, industry accounts for 33.0 percent of GDP and construction for 4.7 percent. Tertiary industry accounts for 56.9 percent of cumulative GDP in IQ2016 and primary industry for 5.6 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 by increasing growth of services. Table VC-2 shows that 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 1.6 percent relative to IIIQ2013, which is equivalent to 6.6 percent per year. GDP grew 7.3 percent in IQ2014 relative to a year earlier and 1.7 percent in IQ2014 that is equivalent to 7.0 percent per year. GDP grew 7.4 percent in IIQ2014 relative to a year earlier and 1.8 percent relative to the prior quarter, which is annual equivalent 7.4 percent. In IIIQ2014, GDP grew 7.1 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 1.7 percent in IVQ2014, which is 7.0 percent in annual equivalent and 7.2 percent relative to a year earlier. In IQ2015, GDP grew 1.4 percent, which is equivalent to 5.7 in a year and 7.0 percent relative to a year earlier. GDP grew 1.8 percent in IIQ2015, which is equivalent to 7.4 percent in a year, and grew 7.0 percent relative to a year earlier. GDP grew at 1.8 percent in IIIQ2015, which is equivalent to 7.4 percent in a year, and grew 6.9 percent relative to a year earlier. GDP grew at 1.5 percent in IVQ2015, which is equivalent to 6.1 percent in a year and increased 6.8 percent relative to a year earlier. In IQ2016, GDP grew at 1.1 percent, which is equivalent to 4.5 percent, and increased 6.7 percent relative to a year earlier.

Table VC-2 China, Growth Rate of GDP, ∆% Relative to a Year Earlier and ∆% Relative to Prior Quarter

	IQ2015	IIQQ2015	IIIQ2015	IVQ2015	IQ2016
GDP	7.0	7.0	6.9	6.8	6.7
Primary Industry	3.2	3.5	3.8	4.1	2.9
Secondary Industry	6.4	6.1	6.0	6.1	5.8
Tertiary Industry	7.9	8.4	8.4	8.2	7.6
GDP ∆% Relative to a Prior Quarter	1.4	1.8	1.8	1.5	1.1
	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	7.3	7.4	7.1	7.2
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	1.8	1.7	2.2	1.6	1.7	1.8	1.9	1.7
	IQ 2011	IIQ 2011	IIIQ 2011	IVQ 2011	IQ  2012	IIQ 2012	IIIQ 2012	IVQ 2012
GDP	10.2	9.9	9.4	8.7	8.0	7.5	7.4	8.0
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	2.5	2.4	2.0	1.5	1.8	2.1	1.8	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/

VD Euro Area. Using calendar and seasonally adjusted data (http://ec.europa.eu/eurostat), the GDP of the euro area (19 countries) fell 5.7 percent from IQ2008 to IIQ2009. The GDP of the euro area (19 countries) increased 5.9 percent from IIIQ2009 to IVQ2015 at the annual equivalent rate of 0.9 percent. The GDP of the euro area (19 countries) is lower by 0.2 percent in IVQ2015 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 3.2 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 2.1 percent in 2010 and 1.6 percent in 2011. EUROSTAT estimates growth of GDP of the euro area of minus 0.9 percent in 2012 and minus 0.3 percent in 2013. Euro Area GDP grew 0.9 percent in 2014 and grew 1.6 percent in 2015.

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

Year	HICP ∆%	Unemployment %	GDP ∆%
1999	1.2	9.7	3.0
2000	2.2	8.9	3.8
2001	2.4	8.3	2.1
2002	2.3	8.6	1.0
2003	2.1	9.1	0.7
2004	2.2	9.3	2.3
2005	2.2	9.1	1.7
2006	2.2	8.4	3.2
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	2.1
2011	2.7	10.2	1.6
2012	2.5	11.4	-0.9
2013	1.3	12.0	-0.3
2014	0.4	11.6	0.9
2015	0.0	10.9	1.6

http://ec.europa.eu/eurostat

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

The GDP of the euro area in 2014 in current US dollars in the dataset of the World Economic Outlook (WEO) of the International Monetary Fund (IMF) is $13,457.0 billion or 17.4 percent of world GDP of $77,269.2 billion (http://www.imf.org/external/pubs/ft/weo/2015/02/weodata/index.aspx). The sum of the GDP of France $2833.7 billion with the GDP of Germany of $3874.4 billion, Italy of $2147.7 billion and Spain $1406.5 billion is $10,262.3 billion or 76.3 percent of total euro area GDP and 13.3 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 2015. The impact of the global recession on the overall euro area economy and on the four largest economies was quite strong. There was sharp contraction in 2009 and growth rates have not rebounded to earlier growth with exception of Germany in 2010 and 2011.

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

	Euro Area	Germany	France	Italy	Spain
2015	1.6	1.7	1.2	0.8	NA
2014	0.9	1.6	0.2	-0.3	1.4
2013	-0.3	0.3	0.7	-1.7	-1.7
2012	-0.9	0.4	0.2	-2.8	-2.6
2011	1.6	3.7	2.1	0.6	-1.0
2010	2.1	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	3.2	3.7	2.4	2.0	4.2
2005	1.7	0.7	1.6	0.9	3.7
2004	2.3	1.2	2.8	1.6	3.2
2003	0.7	-0.7	0.8	0.2	3.2
2002	1.0	0.0	1.1	0.2	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	3.0	2.0	3.4	1.6	4.5
1998	2.9	2.0	3.6	1.6	4.3
Average 1999-2015	1.2	1.2	1.3	0.2	1.6*
Average 1999-2007	2.2	1.6	2.1	1.5	3.8
1997	2.6	1.8	2.3	1.8	3.7
1996	1.7	0.8	1.4	1.3	2.7

*1999-2014

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 53.1 in Mar to 53.0 in Apr (https://www.markiteconomics.com/Survey//PressRelease.mvc/05025cb096404707930202baa63ba4e8). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP quarterly growth about 0.3 percent in the beginning of IIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/05025cb096404707930202baa63ba4e8). The Markit Eurozone PMI^® Composite Output Index, combining services and manufacturing activity with close association with GDP increased from 53.0 in Feb to 53.1 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/e2dd6323845c42c6bf170027e0f010dc). Chris Williamson, Chief Economist at Markit, finds potential for growth of about 0.3 percent in IQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/e2dd6323845c42c6bf170027e0f010dc). The Markit Eurozone Services Business Activity Index decreased from 53.3 in Feb to 53.1 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/e2dd6323845c42c6bf170027e0f010dc). The Markit Eurozone Manufacturing PMI^® increased from 51.2 in Feb to 51.6 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/e5e824625e064019a864fccbe152a994). New export orders slowed. Chris Williamson, Chief Economist at Markit, finds industrial growth at around 0.2 percent in IQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/e5e824625e064019a864fccbe152a994). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP	IVQ2015 ∆% 0.3; IVQ2015/IVQ2014 ∆% 1.6 Blog 9/13/15 11/22/15 12/13/15 2/14/16 3/13/16
Unemployment	Feb 2016: 10.3 % unemployment rate; Feb 2016: 16.634 million unemployed Blog 4/10/16
HICP	Mar month ∆%: 1.2 12 months Mar ∆%: 0.0 Blog 4/17/16
Producer Prices	Euro Zone industrial producer prices Feb ∆%: -0.7 Feb 12-month ∆%: -4.2 Blog 4/17/16
Industrial Production	Feb Month ∆%: 0.8; 12 months ∆%: 0.8 Earlier Data: Blog 4/19/15
Retail Sales	Feb month ∆%: 0.2 Feb 12 months ∆%: 2.4 Earlier Data: Blog 3/15/15
Confidence and Economic Sentiment Indicator	Sentiment 103.8 Feb 2016 Consumer minus 8.8 Feb 2016 Earlier Data: Blog 4/5/15
Trade	Jan-Feb 2016/Jan-Feb 2015 Exports ∆%: -0.3 Imports ∆%: -0.3 Feb 2016 12-month Exports ∆% 1.3 Imports ∆% 2.0 Earlier Data: Blog 4/19/15

Links to blog comments in Table EUR: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/10/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-reducing.html

3/13/16 http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-fluctuations-of_13.html

3/6/16 http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html

2/14/16 http://cmpassocregulationblog.blogspot.com/2016/02/subdued-foreign-growth-and-dollar.html

12/13/15 http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-volatile_17.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

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1971 to 2015, 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, 3.7 percent in 2011 and 0.4 percent in 2012. Growth decelerated to 0.3 percent in 2013, increasing to 1.6 percent in 2014. The German economy grew at 1.7 percent in 2015.

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 ∆% 1991-2015	1.3
Average ∆% 1991-1999	1.5
Average ∆% 2000-2007	1.4
Average ∆% 2003-2007	2.2
Average ∆% 2007-2015	0.9
Average ∆% 2009-2015	1.9
2015	1.7	1.4
2014	1.6	1.6
2013	0.3	0.4
2012	0.4	0.6
2011	3.7	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	1.8
1997	1.8	1.9
1996	0.8	0.9
1995	1.7	1.8
1994	2.5	2.5
1993	-1.0	-1.0
1992	1.9	1.5
1991	5.1	5.2
1990	5.3	5.5
1989	3.9	4.0
1988	3.7	3.4
1987	1.4	1.3
1986	2.3	2.3
1985	2.3	2.6
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/PressServices/Press/pr/2015/08/PE15_293_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/08/PE15_305_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/11/PE15_419_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2015/11/PE15_430_811.html

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

https://www.destatis.de/EN/PressServices/Press/pr/2016/02/PE16_056_811.html

https://www.destatis.de/EN/PressServices/Press/pr/2016/02/PE16_044_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI^®, combining manufacturing and services, decreased from 54.0 in Mar to 53.8 in Apr. The index of manufacturing output reached 52.2 in Apr, decreasing from 52.0 in Mar, while the index of services decreased to 54.6 in Apr from 55.1 in Mar. The overall Flash Germany Manufacturing PMI^® increased from 50.7 in Mar to 51.9 in Apr (https://www.markiteconomics.com/Survey//PressRelease.mvc/08f827e9097f4c8f9e21b6061bb6304f). New orders in manufacturing increased. Oliver Kolodseike, Economist at Markit, finds moderate growth of the private sector of Germany (https://www.markiteconomics.com/Survey//PressRelease.mvc/08f827e9097f4c8f9e21b6061bb6304f). 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 54.1 in Feb to 54.0 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/f389038b92534b7c826f4b224e2bee4a). Oliver Kolodseike, Economist at Markit and author of the report, finds continuing growth of the private sector of Germany (https://www.markiteconomics.com/Survey//PressRelease.mvc/f389038b92534b7c826f4b224e2bee4a). The Germany Services Business Activity Index decreased from 55.3 in Feb to 55.1 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/f389038b92534b7c826f4b224e2bee4a). The Markit/BME Germany Purchasing Managers’ Index^® (PMI^®), showing close association with Germany’s manufacturing conditions, increased from 50.5 in Feb to 50.7 in

Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/5aa47ab793bf40db8e1eff7394a621dc). New export orders nearly stagnated. Oliver Kolodseike, Economist at Markit and author of the report, finds slowing manufacturing with weak growth of exports and internal demand (https://www.markiteconomics.com/Survey//PressRelease.mvc/5aa47ab793bf40db8e1eff7394a621dc).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP	IVQ2015 0.3 ∆%; IVQ2015/IVQ2014 ∆% 2.1 2015/2014: 1.7% GDP ∆% 1970-2015 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 8/16/15 8/30/15 11/22/15 11/29/15 2/14/16 2/28/16
Consumer Price Index	Mar month NSA ∆%: 0.8 Mar 12-month NSA ∆%: 0.3 Blog 4/17/16
Producer Price Index	Mar month ∆%: 0.0 NSA, minus 0.2 CSA 12-month NSA ∆%: -3.1 Blog 4/24/16
Industrial Production	MFG Feb month CSA ∆%: minus 0.5 12-month NSA: 4.7 Earlier Data: Blog 4/12/15
Machine Orders	MFG Jan month ∆%: -1.2 Feb 12-month ∆%: 3.4 Earlier Data: Blog 4/12/15
Retail Sales	Feb Month ∆% -0.4 Jan -0.1 12-Month Feb % 5.4 Jan -1.2 Earlier Data: Blog 4/5/15
Employment Report	Unemployment Rate SA Feb 4.3% Blog 4/3/16
Trade Balance	Exports Feb 12-month NSA ∆%: 4.1 Imports Feb 12 months NSA ∆%: 4.0 Exports Feb month CSA ∆%: 1.3; Imports Feb month CSA 0.4 Earlier Data: Blog 4/12/15

Links to blog comments in Table DE: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

2/28/16 http://cmpassocregulationblog.blogspot.com/2016/02/mediocre-cyclical-united-states.html

2/14/16 http://cmpassocregulationblog.blogspot.com/2016/02/subdued-foreign-growth-and-dollar.html

11/29/15 http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html

11/22/15 http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html

08/30/15 http://cmpassocregulationblog.blogspot.com/2015/08/fluctuations-of-global-financial.html

08/16/15 http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html

5/24/15 http://cmpassocregulationblog.blogspot.com/2015/05/interest-rate-policy-and-dollar.html

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

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 IVQ2015 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 2.1 percent in the 1990s and 1.8 percent from 2000 to 2007. The average growth rate from 2000 to 2015, 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 ∆%
1949-2015	3.2
2007-2015*	0.4
2007-2014	0.3
2000-2015	1.0
2000-2014	1.0
2000-2007	1.8
1990-1999	2.1
1980-1989	2.6
1970-1979	3.7
1960-1969	5.7
1950-1959	4.2

*IVQ2007 to IVQ2015

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20160325

The Markit Flash France Composite Output Index increased from 50.0 in Mar to 50.5 in Apr (https://www.markiteconomics.com/Survey//PressRelease.mvc/396f0fab20024431873efa1752d2e243) Jack Kennedy, Senior Economist at Markit and author of the report, finds modest growth (https://www.markiteconomics.com/Survey//PressRelease.mvc/396f0fab20024431873efa1752d2e243). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, increased from 49.3 in Feb to 50.0 in Mar, indicating unchanged activity of the private sector (https://www.markiteconomics.com/Survey//PressRelease.mvc/afaa12943c5b4e7c931719993cb312ea). Jack Kennedy, Senior Economist at Markit and author of the France Services PMI^®, finds stagnating services (https://www.markiteconomics.com/Survey//PressRelease.mvc/afaa12943c5b4e7c931719993cb312ea). The Markit France Services Activity index increased from 49.2 in Feb to 49.9 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/afaa12943c5b4e7c931719993cb312ea). The Markit France Manufacturing Purchasing Managers’ Index^® decreased to 49.6 in Mar from 50.2 in Feb (https://www.markiteconomics.com/Survey//PressRelease.mvc/4cb646d5b7be4f36896095b966ed2b83). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI^®, finds stagnating manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/4cb646d5b7be4f36896095b966ed2b83). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI	Mar month ∆% 0.7 12 months ∆%: -0.1 4/17/16
PPI	Feb month ∆%: -0.5 Feb 12 months ∆%: -4.2 Blog 4/3/16
GDP Growth	IVQ2015/IIIQ2015 ∆%: 0.3 IVQ2015/IVQ2014 ∆%: 1.4 Blog 3/31/13 5/19/12 6/30/13 9/29/13 11/17/13 12/29/13 2/16/14 4/6/14 5/18/14 6/29/14 8/17/14 9/28/14 11/16/14 12/28/14 2/15/15 3/29/15 5/17/15 6/28/15 8/16/15 9/27/15 11/15/15 12/27/15 1/31/16 2/28/16 3/27/16
Industrial Production	Feb ∆%: Manufacturing -0.9 12-Month ∆%: 1.5 Earlier Data: Blog 4/12/15
Consumer Spending	Manufactured Goods Feb ∆%: 0.5 Feb 12-Month Manufactured Goods ∆%: 2.6 Earlier Data: Blog 4/5/15
Employment	Unemployment Rate: IVQ2015 10.0% Blog 3/6/16
Trade Balance	Feb Exports ∆%: month -0.2, 12 months 1.5 Imports ∆%: month 2.8, 12 months 5.9 Earlier Data: Blog 4/12/15
Confidence Indicators	Historical average 100 Apr Mfg Business Climate 104.0 Earlier Data: Blog 3/29/15

Links to blog comments in Table FR: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

3/27/16 http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.html

3/6/16 http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html

2/28/16 http://cmpassocregulationblog.blogspot.com/2016/02/mediocre-cyclical-united-states.html

1/31/16 http://cmpassocregulationblog.blogspot.com/2016/01/closely-monitoring-global-economic-and.html

12/27/15 http://cmpassocregulationblog.blogspot.com/2015/12/dollar-revaluation-and-decreasing.html

11/15/15 http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-policy-conundrum-recovery.html

9/27/15 http://cmpassocregulationblog.blogspot.com/2015/09/monetary-policy-designed-on-measurable.html

08/16/15 http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html

6/28/2015 http://cmpassocregulationblog.blogspot.com/2015/06/international-valuations-of-financial.html

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

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 revised percentage changes of GDP in Italy of quarter on prior quarter and quarter on same quarter a year earlier. GDP increased 0.1 percent in IVQ2015 and increased 1.0 percent relative to a year earlier. In IIIQ2015, GDP increased 0.2 percent and increased 0.8 percent relative to a year earlier. GDP increased 0.3 percent in IIQ2015 and 0.6 percent relative to a year earlier. GDP increased 0.4 percent in IQ2015 and increased 0.2 percent relative to a year earlier. GDP decreased 0.1 percent in IVQ2014 and fell 0.3 percent relative to a year earlier. GDP changed 0.0 percent in IIIQ2014 and fell 0.4 percent relative to a year earlier. Italy’s GDP fell 0.1 percent in IIQ2014 and declined 0.2 percent relative to a year earlier. The GDP of Italy decreased 0.1 percent in IQ2014 and fell 0.2 percent relative to a year earlier. Italy’s GDP decreased 0.1 percent in IVQ2013 and fell 0.9 percent relative to a year earlier. The GDP of Italy increased 0.2 percent in IIIQ2013 and fell 1.4 percent relative to a year earlier. Italy’s GDP decreased 0.1 percent in IIQ2013, continuing eight consecutive quarterly declines, and fell 2.0 percent relative to a year earlier. Italy’s GDP fell 0.8 percent in IQ2013 and declined 2.6 percent relative to IQ2012. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011. Italy’s GDP fell in eight consecutive quarters from IIIQ2011 to IIQ2013 at increasingly higher rates of contraction from 0.5 percent in IIIQ2011 to 1.0 percent in IVQ2011, 0.9 percent in IQ2012, 0.7 percent in IIQ2012 and 0.5 percent in IIIQ2012. The pace of decline accelerated to minus 0.5 percent in IVQ2012 and minus 0.8 percent in IQ2013. GDP contracted cumulatively 4.9 percent in eight consecutive quarterly contractions from IIIQ2011 to IIQ2013 at the annual equivalent rate of minus 2.5 percent. The total contraction in the 12 quarters including IVQ2013, IQ2014, IIQ2014, IIIQ2014 and IVQ2014 accumulates to 5.3 percent. The yearly rate has fallen from 2.3 percent in IVQ2010 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 0.9 percent in IVQ2013 relative to a year earlier. GDP fell 0.2 percent in IQ2014 relative to a year earlier and fell 0.2 percent in IIQ2014 relative to a year earlier. GDP fell 0.4 percent in IIIQ2014 relative to a year earlier and fell 0.3 percent in IVQ2014 relative to a year earlier. GDP increased 0.2 percent in IQ2015 relative to a year earlier and increased 0.6 percent in IIQ2015 relative to a year earlier. GDP increased 0.8 percent in IIIQ2015 relative to a year earlier and increased 1.0 percent in IVQ2015 relative to a year earlier. Using seasonally and calendar adjusted chained volumes in the dataset of EUROSTAT (http://ec.europa.eu/eurostat), the GDP of Italy in IVQ2015 is lower by 8.8 percent relative to IQ2008. The fiscal adjustment of Italy is significantly more difficult with the economy not growing especially on the prospects of increasing government revenue. The strategy is for reforms to improve productivity, facilitating future fiscal consolidation.

Table VG-IT, Italy, GDP ∆%

	Quarter ∆% Relative to Preceding Quarter	Quarter ∆% Relative to Same Quarter Year Earlier
IVQ2015	0.1	1.0
IIIQ2015	0.2	0.8
IIQ2015	0.3	0.6
IQ2015	0.4	0.2
IVQ2014	-0.1	-0.3
IIIQ2014	0.0	-0.4
IIQ2014	-0.1	-0.2
IQ2014	-0.1	-0.2
IVQ2013	-0.1	-0.9
IIIQ2013	0.2	-1.4
IIQ2013	-0.1	-2.0
IQ2013	-0.8	-2.6
IVQ2012	-0.5	-2.7
IIIQ2012	-0.5	-3.2
IIQ2012	-0.7	-3.2
IQ2012	-0.9	-2.3
IVQ2011	-1.0	-1.0
IIIQ2011	-0.5	0.4
IIQ2011	0.2	1.4
IQ2011	0.3	2.1
IVQ2010	0.4	2.3
IIIQ2010	0.5	1.8
IIQ2010	0.7	1.9
IQ2010	0.5	0.7
IVQ2009	-0.1	-3.5
IIIQ2009	0.4	-5.0
IIQ2009	-0.3	-6.6
IQ2009	-3.5	-6.9
IVQ2008	-1.6	-3.0
IIIQ2008	-1.3	-1.9
IIQ2008	-0.5	-0.2
IQ2008	0.5	0.5
IV2007	-0.4	0.1
IIIQ2007	0.3	1.7
IIQ2007	0.2	2.0
IQ2007	0.0	2.4

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/181805

The Markit/ADACI Business Activity Index decreased from 53.8 in Feb to 51.2 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/e6d70547a1c64a7c8de02ad61831c198). Phil Smith, Economist at Markit and author of the Italy Services PMI^®, finds slowing private sector activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/e6d70547a1c64a7c8de02ad61831c198). The Markit/ADACI Purchasing Managers’ Index^® (PMI^®), increased from 52.2 in Feb to 53.5 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/361286380af645f4bbaff9b2fd40c42f). New export orders continued to increase. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI^®, finds stronger growth in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/361286380af645f4bbaff9b2fd40c42f). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index	Mar month ∆% 0.2 12 months ∆%: -0.2 4/17/16
Producer Price Index	Feb month ∆%: -0.5 Feb 12-month ∆%: -4.1 Blog 4/3/16
GDP Growth	IVQ2015/IIIQ2015 SA ∆%: 0.1 IVQ2015/IVQ2014 NSA ∆%:1.0 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 5/31/15 8/16/15 9/6/15 11/15/15 12/6/15 2/14/16 3/6/16
Labor Report	Feb 2016 Participation rate 64.0% Employment ratio 56.4% Unemployment rate 11.7% Youth Unemployment 39.1% Blog 4/3/16
Industrial Production	Feb month ∆%: -0.6 12 months CA ∆%: 1.2 Earlier Data: Blog 4/19/15
Retail Sales	Feb month ∆%: 0.3 Feb 12-month ∆%: 2.7 Earlier Data: Blog 4/26/15
Business Confidence	Mfg Feb 102.0, Jan 103.0 Construction Feb 119.3, Jan 114.6 Earlier Data: Blog 4/5/15
Trade Balance	Balance Feb SA €4539 million Exports Feb month SA ∆%: 2.5; Imports month ∆%: 0.6 Exports 12 months Feb NSA ∆%: 3.3 Imports 12 months NSA ∆%: 2.4 Earlier Data: Blog 4/19/15

Links to blog comments in Table IT: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

3/6/16 http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html

2/14/16 http://cmpassocregulationblog.blogspot.com/2016/02/subdued-foreign-growth-and-dollar.html

12/6/15 http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-fed-funds-rate-followed-by.html

11/15/15 http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-policy-conundrum-recovery.html

9/6/15 http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html

08/16/15 http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html

5/31/15 http://cmpassocregulationblog.blogspot.com/2015/06/dollar-revaluation-squeezing-corporate.html

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

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

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 4.2 percent in 2009 after dropping 0.5 percent in 2008. Recovery of 1.5 percent in 2010 is relatively low in comparison with annual growth rates in 2007 and earlier years. Growth was only 2.0 percent in 2011 and 1.2 percent in 2012. Growth increased to 2.2 percent in 2013 and 2.9 percent in 2014. Growth fell to 2.2 percent in 2015.  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 2015, which is relatively high for an advanced economy. The growth rate of GDP between 2000 and 2007 is higher at 2.8 percent. Growth in the current cyclical expansion from 2010 to 2015 has been only at 2.1 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2015 is higher by 7.4 percent relative to 2007 while it would have been 24.7 higher at trend of 2.8 percent as from 2000 to 2007.

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

	∆% on Prior Year
1998	3.4
1999	3.1
2000	3.8
2001	2.8
2002	2.5
2003	3.3
2004	2.5
2005	3.0
2006	2.7
2007	2.6
2008	-0.5
2009	-4.2
2010	1.5
2011	2.0
2012	1.2
2013	2.2
2014	2.9
2015	2.3
Average Growth Rates ∆% per Year
1948-2015	2.6
1950-1959	3.1
1960-1969	3.1
1970-1979	2.6
1980-1989	3.2
1990-1999	2.3
2000-2007	2.8
2007-2013*	2.1
2007-2014*	5.0
2007-2015	0.9
2000-2015	1.8

*Absolute change from 2007 to 2013 and 2007 to 2014

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/quarterlynationalaccounts/quarter4octtodec2015

The Business Activity Index of the Markit/CIPS UK Services PMI^® increased from 52.7 in Feb to 53.7 in Mar (https://www.markiteconomics.com/Survey//PressRelease.mvc/5c33ba54f4b043b0ad7a7e7f6c1959b1). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.4 percent in IQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/5c33ba54f4b043b0ad7a7e7f6c1959b1). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index^® (PMI^®) increased to 51.0 in Mar from 50.8 in Feb (https://www.markiteconomics.com/Survey//PressRelease.mvc/adb649e380db4e439059704bf4d207ba). New export orders decreased. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI^®, finds manufacturing conditions nearing stagnation (https://www.markiteconomics.com/Survey//PressRelease.mvc/adb649e380db4e439059704bf4d207ba). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI	Mar month ∆%: 0.4 Mar 12-month ∆%: 0.5 Blog 4/17/16
Output/Input Prices	Output Prices: Mar 12-month NSA ∆%: -0.9; excluding food, petroleum ∆%: 0.2 Input Prices: Mar 12-month NSA ∆%: -6.5 Excluding ∆%: -2.6 Blog 4/17/16
GDP Growth	IVQ2015 prior quarter ∆% 0.6; year earlier same quarter ∆%: 2.1 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 5/31/15 7/5/15 8/2/15 9/6/15 10/4/15 11/1/15 11/29/15 12/27/15 1/31/16 2/28/16 4/3/16
Industrial Production	Feb 2016/Feb 2015 ∆%: Production Industries -0.5; Manufacturing -1.8 Earlier Data: Blog 4/12/15
Retail Sales	Mar month ∆%: -1.3 Mar 12-month ∆%: 2.7 Earlier Data: Blog 4/26/15
Labor Market	Dec-Feb 2016 Unemployment Rate: 5.1% Blog 4/24/16 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 Feb minus ₤4840 million Exports Jan ∆%: 0.9; Dec-Feb ∆%: -2.5 Imports Feb ∆%: 0.0 Dec-Feb ∆%: -1.2 EARLIER DATA: Blog 4/12/15

Links to blog comments in Table UK: 4/17/16 http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html

4/3/16 http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html

2/28/16 http://cmpassocregulationblog.blogspot.com/2016/02/mediocre-cyclical-united-states.html

1/31/16 http://cmpassocregulationblog.blogspot.com/2016/01/closely-monitoring-global-economic-and.html

12/27/15 http://cmpassocregulationblog.blogspot.com/2015/12/dollar-revaluation-and-decreasing.html

11/29/15 http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html

11/1/15 http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-increase-considered.html

10/4/15 http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html

9/6/15 http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html

08/02/15 http://cmpassocregulationblog.blogspot.com/2015/08/turbulence-of-valuations-of-financial.html

7/5/15 http://cmpassocregulationblog.blogspot.com/2015/07/turbulence-of-financial-asset.html

5/31/15 http://cmpassocregulationblog.blogspot.com/2015/06/dollar-revaluation-squeezing-corporate.html

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

4/12/15 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

Table VH-L3 provides indicators of the labor force survey of the UK for Dec-Feb 2016 and earlier quarters. There has been improvement in UK labor markets with the rate of unemployment decreasing from 5.6 percent in Dec-Feb 2015 to 5.1 percent in Dec-Feb 2016.

Table VH-L3, UK, Labor Force Survey Indicators, Thousands, SA

	LFHP	EMP	PART	UNE	RATE
Dec-Feb 2014	40,592	30,491	72.4	2,254	6.9
Dec-Feb 2015	40,681	31,049	73.4	1,838	5.6
Mar-May 2015	40,705	30,982	73.3	1,853	5.6
Jun-Aug 2015	40,730	31,122	73.6	1,774	5.4
Sep-Nov 2015	40,758	31,389	74.0	1,675	5.1
Dec-Feb 2016	40,785	31,409	74.1	1,696	5.1
∆ on Quarter	27	20	0.1	21	0.1
∆%	0.1	0.1		1.2
∆ on Year	103	360	0.7	-142	-0.5
∆%	0.3	1.2		-7.7

Notes: LFHP: Labor Force Household Population Ages 16 to 64 in thousands; EMP: Employed Ages 16 and over in thousands; PART: Employment as % of Population Ages 16 to 64; UNE: Unemployed Ages 16 and over in thousands; Rate: Number Unemployed Ages 16 and over as % of Employed plus Unemployed

Source: UK Office for National Statistics

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/april2016

© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016.