Sunday, July 31, 2016

“Business Fixed Investment Has Been Soft,” Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars below Trend, Stagnating Real Private Fixed Investment, United States Housing Collapse, Decline of United States Homeownership, World Cyclical Slow Growth and Global Recession Risk: Part IV

 

“Business Fixed Investment Has Been Soft,” Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars below Trend, Stagnating Real Private Fixed Investment, United States Housing Collapse, Decline of United States Homeownership, World Cyclical Slow Growth and Global Recession Risk

Carlos M. Pelaez

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

I Mediocre Cyclical United States Economic Growth with GDP Two Trillion Dollars below Trend

IA Mediocre Cyclical United States Economic Growth

IA1 Stagnating Real Private Fixed Investment

II United States Housing Collapse

II B Decline of United States Homeownership

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 IVQ2015 available now for all countries. There are preliminary estimates for all countries for IQ2016. Growth is weak throughout most of the world.

  • Japan. The GDP of Japan increased 1.0 percent in IQ2012, 3.9 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 3.5 percent in IQ2012. Growth of 3.5 percent in IIQ2012 in Japan relative to IIQ2011 has effects of the low level of output because of Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Japan’s GDP contracted 0.5 percent in IIIQ2012 at the SAAR of minus 2.0 percent and increased 0.2 percent relative to a year earlier. Japan’s GDP changed 0.0 percent in IVQ2012 at the SAAR of minus 0.2 percent and changed 0.0 percent relative to a year earlier. Japan grew 1.0 percent in IQ2013 at the SAAR of 4.2 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 1.9 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 0.3 percent, increasing 2.1 percent relative to a year earlier. Japan’s GDP increased 1.3 percent in IQ2014 at the SAAR of 5.3 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 0.7 percent in IIIQ2014 at the SAAR of minus 2.7 percent and fell 1.5 percent relative to a year earlier. In IVQ2014, Japan’s GDP grew 0.5 percent, at the SAAR of 2.1 percent, decreasing 1.0 percent relative to a year earlier. The GDP of Japan increased 1.3 percent in IQ2015 at the SAAR of 5.2 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 1.7 percent and increased 0.7 percent relative to a year earlier. The GDP of Japan increased 0.4 percent in IIIQ2015 at the SAAR of 1.7 percent and increased 1.8 percent relative to a year earlier. Japan’s GDP contracted 0.4 percent in IVQ2015 at the SAAR of minus 1.8 percent and grew 0.7 percent relative to a year earlier. In IQ2016, the GDP of Japan increased 0.5 percent at the SAAR of 1.9 percent and increased 0.1 percent relative to a year earlier.
  • China. China’s GDP grew 1.8 percent in IQ2012, annualizing to 7.4 percent, and 8.1 percent relative to a year earlier. The GDP of China grew at 2.2 percent in IIQ2012, which annualizes to 9.1 percent, and 7.6 percent relative to a year earlier. China grew at 1.8 percent in IIIQ2012, which annualizes at 7.4 percent, and 7.5 percent relative to a year earlier. In IVQ2012, China grew at 1.9 percent, which annualizes at 7.8 percent, and 8.1 percent in IVQ2012 relative to IVQ2011. In IQ2013, China grew at 1.9 percent, which annualizes at 7.8 percent, and 7.9 percent relative to a year earlier. In IIQ2013, China grew at 1.7 percent, which annualizes at 7.0 percent, and 7.6 percent relative to a year earlier. China grew at 2.1 percent in IIIQ2013, which annualizes at 8.7 percent, and increased 7.9 percent relative to a year earlier. China grew at 1.6 percent in IVQ2013, which annualized to 7.0 percent, and 7.7 percent relative to a year earlier. China’s GDP grew 1.7 percent in IQ2014, which annualizes to 7.0 percent, and 7.4 percent relative to a year earlier. China’s GDP grew 1.8 percent in IIQ2014, which annualizes at 7.4 percent, and 7.5 percent relative to a year earlier. China’s GDP grew 1.9 percent in IIIQ2014, which is equivalent to 7.8 percent in a year, and 7.1 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 1.6 percent in IQ2015, which annualizes at 6.6 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 1.2 percent in IQ2016, which annualizes at 4.9 percent, and increased 6.7 percent relative to a year earlier. In IIQ2016, the GDP of China increased 1.8 percent, which annualizes to 7.4 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 2016.
  • 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 0.4 percent relative to the prior quarter and fell 1.0 percent relative to a year earlier. In IQ2013, the GDP of the euro area fell 0.3 percent and decreased 1.1 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 0.4 percent in IVQ2015 and increased 1.7 percent relative to a year earlier. Euro area’s GDP increased 0.6 percent in IQ2016 and increased 1.7 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. In IQ2016, the GDP of Germany increased 0.7 percent and grew 1.3 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 2.8 percent SAAR, 0.7 percent relative to the prior quarter and 1.3 percent relative to the same quarter in 2012. In IIQ2013, US GDP grew at 0.8 percent in SAAR, 0.2 percent relative to the prior quarter and 1.0 percent relative to IIQ2012. US GDP grew at 3.1 percent in SAAR in IIIQ2013, 0.8 percent relative to the prior quarter and 1.7 percent relative to the same quarter a year earlier (Section I and earlier http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html and earlier http://cmpassocregulationblog.blogspot.com/2016/05/appropriate-for-fed-to-increase.html). In IVQ2013, US GDP grew 1.0 percent at 4.0 percent SAAR and 2.7 percent relative to a year earlier. In IQ2014, US GDP decreased 0.3 percent, increased 1.6 percent relative to a year earlier and fell 1.2 percent at SAAR. In IIQ2014, US GDP increased 1.0 percent at 4.0 percent SAAR and increased 2.4 percent relative to a year earlier. US GDP increased 1.2 percent in IVQ2014 at 5.0 percent SAAR and increased 2.9 percent relative to a year earlier. In IVQ2014, US GDP increased 0.6 percent at SAAR of 2.3 percent and increased 2.5 percent relative to a year earlier. GDP increased 0.5 percent in IQ2015 at SAAR of 2.0 percent and grew 3.3 percent relative to a year earlier. US GDP grew at SAAR 2.6 percent in IIQ2015, increasing 0.6 percent in the quarter and 3.0 percent relative to a year earlier. GDP increased 0.5 percent in IIIQ2015 at SAAR of 2.0 percent and grew 2.2 percent in IIIQ2015 relative to a year earlier. US GDP grew at SAAR of 0.9 percent in IVQ2015, increasing 0.2 percent in the quarter and 1.9 percent relative to a year earlier. In IQ2016, US GDP grew 0.2 percent at SAAR of 0.8 percent and increased 1.6 percent relative to a year earlier. US GDP grew at SAAR of 1.2 percent in IQ2016, increasing 0.3 percent in the quarter and 1.2 percent relative to a year earlier.
  • United Kingdom. In IQ2012, UK GDP increased 0.4 percent and increased 1.2 percent relative to a year earlier. In IIQ2012, GDP fell 0.1 percent relative to IQ2012 and increased 1.0 percent relative to a year earlier. In IIIQ2012, GDP increased 1.1 percent and increased 1.8 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.2 percent and increased 1.3 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. GDP increased 1.5 percent in IQ2013 relative to a year earlier and 0.6 percent in IQ2013 relative to IVQ2012. In IIQ2013, GDP increased 0.5 percent and 2.1 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 1.7 percent relative to a year earlier. GDP increased 0.5 percent in IVQ2013 and 2.4 percent relative to a year earlier. In IQ2014, GDP increased 0.8 percent and 2.6 percent relative to a year earlier. GDP increased 0.9 percent in IIQ2014 and 3.1 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 3.1 percent relative to a year earlier. In IVQ2014, GDP increased 0.8 percent and 3.5 percent relative to a year earlier. GDP increased 0.3 percent in IQ2015 and increased 2.9 percent relative to a year earlier. GDP increased 0.4 percent in IIQ2015 and increased 2.3 percent relative to a year earlier. UK GDP increased 0.4 percent in IIIQ2015 and increased 2.0 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2015 and increased 1.8 percent relative to a year earlier. GDP increased 0.4 percent in IQ2016 and increased 2.0 percent relative to a year earlier. GDP increased 0.6 percent in IIQ2016 and grew 2.2 percent relative to a year earlier.
  • Italy. The GDP of Italy increased 0.3 percent in IQ2016 and grew 1.0 percent relative to a year earlier. GDP increased 0.2 percent in IVQ2015 and increased 1.1 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 0.1 percent relative to a year earlier. GDP decreased 0.1 percent in IVQ2014 and fell 0.4 percent relative to a year earlier. GDP decreased 0.1 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 0.1 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 0.9 percent in IQ2013 and declined 2.7 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 0.6 percent in IVQ2012 and minus 0.9 percent in IQ2013. GDP contracted cumulatively 5.1 percent in eight consecutive quarterly contractions from IIIQ2011 to IIQ2013 at the annual equivalent rate of minus 2.6 percent. The total contraction in the 13 quarters including IVQ2013, IQ2014, IIQ2014, IIIQ2014 and IVQ2014 accumulates to 5.6 percent. The yearly rate has fallen from 2.3 percent in IVQ2010 to minus 2.7 percent in IVQ2012, minus 2.7 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 0.1 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 0.4 percent in IVQ2014 relative to a year earlier. GDP increased 0.1 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 1.1 percent in IVQ2015 relative to a year earlier. GDP increased 1.0 percent in IQ2016 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 IQ2016 is lower by 8.5 percent relative to IQ2008. The GDP of the euro zone is 0.5 percent higher in IQ2016 relative to IQ2008. The GDP of Italy increased at the annual equivalent rate of 1.5 percent from IQ1999 to IQ2008, which is lower than 2.3 percent for the euro zone as a whole in the same period. 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 decreased 0.1 percent in IQ2012 and increased 0.4 percent relative to a year earlier. France’s GDP decreased 0.2 percent in IIQ2012 and increased 0.3 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.2 percent and increased 0.2 percent relative to a year earlier. France’s GDP changed 0.0 percent in IVQ2012 and changed 0.0 percent relative to a year earlier. In IQ2013, France’s GDP changed 0.0 percent and changed 0.0 percent relative to a year earlier. The GDP of France increased 0.7 percent in IIQ2013 and increased 0.9 percent relative to a year earlier. France’s GDP changed 0.0 percent in IIIQ2013 and increased 0.6 percent relative to a year earlier. The GDP of France increased 0.3 percent in IVQ2013 and increased 0.9 percent relative to a year earlier. In IQ2014, France’s GDP changed 0.0 percent and increased 0.9 percent relative to a year earlier. In IIQ2014, France’s GDP increased 0.1 percent and increased 0.4 percent relative to a year earlier. France’s GDP increased 0.3 percent in IIIQ2014 and increased 0.7 percent relative to a year earlier. The GDP of France increased 0.2 percent in IVQ2014 and increased 0.6 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2015 and increased 1.3 percent relative to a year earlier. In IIQ2015, France’s GDP decreased 0.1 percent and increased 1.1 percent relative to a year earlier. France’s GDP increased 0.4 percent in IIIQ2015 and increased 1.1 percent relative to a year earlier. In IVQ2015, the GDP of France increased 0.4 percent and increased 1.3 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2016 and increased 1.3 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: 1.0

SAAR: 3.9

3.5

China

1.8

8.1

Euro Area

-0.2

-0.5

Germany

0.4

1.5

France

-0.1

0.4

Italy

-0.9

-2.3

United Kingdom

0.4

1.2

 

IIQ2012/IQ2012

IIQ2012/IIQ2011

United States

QOQ: 0.5        

SAAR: 1.9

2.5

Japan

QOQ: -0.4
SAAR: -1.6

3.5

China

2.2

7.6

Euro Area

-0.3

-0.8

Germany

0.1

0.3 0.8 CA

France

-0.2

0.3

Italy

-0.7

-3.2

United Kingdom

-0.1

1.0

 

IIIQ2012/ IIQ2012

IIIQ2012/ IIIQ2011

United States

QOQ: 0.1 
SAAR: 0.5

2.4

Japan

QOQ: –0.5
SAAR: –2.0

0.2

China

1.8

7.5

Euro Area

-0.1

-0.9

Germany

0.2

0.2

France

0.2

0.2

Italy

-0.5

-3.2

United Kingdom

1.1

1.8

 

IVQ2012/IIIQ2012

IVQ2012/IVQ2011

United States

QOQ: 0.0
SAAR: 0.1

1.3

Japan

QOQ: 0.0

SAAR: -0.2

0.0

China

1.9

8.1

Euro Area

-0.4

-1.0

Germany

-0.5

-0.3

France

0.0

0.0

Italy

-0.6

-2.7

United Kingdom

-0.2

1.3

 

IQ2013/IVQ2012

IQ2013/IQ2012

United States

QOQ: 0.7
SAAR: 2.8

1.3

Japan

QOQ: 1.0

SAAR: 4.2

0.3

China

1.9

7.9

Euro Area

-0.3

-1.1

Germany

-0.3

-1.7

France

0.0

0.0

Italy

-0.9

-2.7

UK

0.6

1.5

 

IIQ2013/IQ2013

IIQ2013/IIQ2012

United States

QOQ: 0.2

SAAR: 0.8

1.0

Japan

QOQ: 0.7

SAAR: 2.7

1.1

China

1.7

7.6

Euro Area

0.4

-0.4

Germany

0.9

0.7

France

0.7

0.9

Italy

-0.1

-2.0

UK

0.5

2.1

 

IIIQ2013/IIQ2013

III/Q2013/  IIIQ2012

USA

QOQ: 0.8
SAAR: 3.1

1.7

Japan

QOQ: 0.5

SAAR: 1.9

2.0

China

2.1

7.9

Euro Area

0.3

0.0

Germany

0.4

1.0

France

0.0

0.6

Italy

0.2

-1.4

UK

0.8

1.7

 

IVQ2013/IIIQ2013

IVQ2013/IVQ2012

USA

QOQ: 1.0

SAAR: 4.0

2.7

Japan

QOQ: -0.1

SAAR: -0.3

2.1

China

1.6

7.7

Euro Area

0.2

0.6

Germany

0.3

1.2

France

0.3

0.9

Italy

-0.1

-0.9

UK

0.5

2.4

 

IQ2014/IVQ2013

IQ2014/IQ2013

USA

QOQ -0.3

SAAR -1.2

1.6

Japan

QOQ: 1.3

SAAR: 5.3

2.7

China

1.7

7.4

Euro Area

0.2

1.1

Germany

0.7

2.6

France

0.0

0.9

Italy

-0.1

-0.1

UK

0.8

2.6

 

IIQ2014/IQ2014

IIQ2014/IIQ2013

USA

QOQ 1.0

SAAR 4.0

2.4

Japan

QOQ: -2.0

SAAR: -7.9

-0.3

China

1.8

7.5

Euro Area

0.1

0.8

Germany

-0.1

1.0

France

0.1

0.4

Italy

-0.1

-0.2

UK

0.9

3.1

 

IIIQ2014/IIQ2014

IIIQ2014/IIIQ2013

USA

QOQ: 1.2

SAAR: 5.0

2.9

Japan

QOQ: -0.7

SAAR: -2.7

-1.5

China

1.9

7.1

Euro Area

0.3

0.8

Germany

0.2

1.2

France

0.3

0.7

Italy

-0.1

-0.4

UK

0.8

3.1

 

IVQ2014/IIIQ2014

IVQ2014/IVQ2013

USA

QOQ: 0.6

SAAR: 2.3

2.5

Japan

QOQ: 0.5

SAAR: 2.1

-1.0

China

1.7

7.2

Euro Area

0.4

1.0

Germany

0.6

1.6

France

0.2

0.6

Italy

-0.1

-0.4

UK

0.8

3.5

 

IQ2015/IVQ2014

IQ2015/IQ2014

USA

QOQ: 0.5

SAAR: 2.0

3.3

Japan

QOQ: 1.3

SAAR: 5.2

-1.0

China

1.6

7.0

Euro Area

0.6

1.3

Germany

0.4

1.3

France

0.6

1.3

Italy

0.4

0.1

UK

0.3

2.9

 

IIQ2015/IQ2015

IIQ2015/IIQ2014

USA

QOQ: 0.6

SAAR: 2.6

3.0

Japan

QOQ: -0.4

SAAR: -1.7

0.7

China

1.8

7.0

Euro Area

0.4

1.6

Germany

0.4

1.6

France

-0.1

1.1

Italy

0.3

0.6

UK

0.4

2.3

 

IIIQ2015/IIQ2015

IIIQ2015/IIIQ2014

USA

QOQ: 0.5

SAAR: 2.0

2.2

Japan

QOQ: 0.4

SAAR: 1.7

1.8

China

1.8

6.9

Euro Area

0.3

1.6

Germany

0.3

1.7

France

0.4

1.1

Italy

0.2

0.8

UK

0.4

2.0

 

IVQ2015/IIIQ2015

IVQ2015/IVQ2014

USA

QOQ: 0.2

SAAR: 0.9

1.9

Japan

QOQ: -0.4

SAAR: -1.8

0.7

China

1.5

6.8

Euro Area

0.4

1.7

Germany

0.3

2.1

France

0.4

1.3

Italy

0.2

1.1

UK

0.7

1.8

 

IQ2016/IVQ2015

IQ2016/IQ2015

USA

QOQ: 0.2

SAAR: 0.8

1.6

Japan

QOQ: 0.5

SAAR: 1.9

0.1

China

1.2

6.7

Euro Area

0.6

1.7

Germany

0.7

1.3

France

0.6

1.3

Italy

0.3

1.0

UK

0.4

2.0

 

IIQ2016/IQ2016

IIQ2016/IIQ2015

USA

QOQ: 0.3

SAAR: 1.2

1.2

China

1.8

6.7

UK

0.6

2.2

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.

  • China. In Jun 2016, China exports decreased 4.8 percent relative to a year earlier and imports decreased 2.8 percent.
  • Germany. Germany’s exports decreased 1.8 percent in the month of May 2016 and increased 1.6 percent in the 12 months ending in May 2016. Germany’s imports increased 0.1 percent in the month of May 2016 and decreased 0.1 percent in the 12 months ending in May 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 and deducted 0.1 percentage points in IQ2016.
  • 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 0.8 percentage points to UK value added in IQ2014 and 0.3 percentage points in IIQ2014. Net trade deducted 0.7 percentage points from GDP growth in IIIQ2014 and added 0.3 percentage points in IVQ2014. Net traded deducted 0.6 percentage points from growth in IQ2015. Net trade added 0.6 percentage points to GDP growth in IIQ2015 and deducted 0.5 percentage points in IIIQ2015. Net trade added 0.1 percentage points to GDP growth in IVQ2015. Net trade deducted 0.2 percentage points from GDP growth in IQ2016.
  • France. France’s exports increased 1.4 percent in May 2016 while imports decreased 3.5 percent. France’s exports decreased 0.6 percent in the 12 months ending in May 2016 and imports decreased 4.8 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 0.4 percentage points to GDP growth in IIQ2015 and deducted 0.7 percentage points in IIIQ2015. Net trade deducted 0.6 percentage points from GDP growth in IVQ2015 and deducted 0.2 percentage points from GDP growth in IQ2016.
  • United States. US exports decreased 0.2 percent in May 2016 and goods exports decreased 6.9 percent in Jan-May 2016 relative to a year earlier. Imports increased 1.6 percent in May 2016 and goods imports decreased 5.2 percent in Jan-May 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 added 0.30 percentage points to US GDP growth in IQ2013 and deducted 0.21 percentage points in IIQ2013. Net traded added 0.13 percentage points to US GDP growth in IIIQ2013. Net trade added 1.29 percentage points to US GDP growth in IVQ2013. Net trade deducted 1.16 percentage points from US GDP growth in IQ2014 and deducted 0.41 percentage points in IIQ2014. Net trade added 0.50 percentage points to GDP growth in IIIQ2014. Net trade deducted 1.14 percentage points from GDP growth in IVQ2014 and deducted 1.65 percentage points from GDP growth in IQ2015. Net trade deducted 0.08 percentage points from GDP growth in IIQ2015. Net trade deducted 0.52 percentage points from GDP growth in IIIQ2015. Net trade deducted 0.45 percentage points from GDP growth in IVQ2015. Net trade added 0.01 percentage points to GDP growth in IQ2016. Net trade added 0.23 percentage points to GDP growth in IIQ2016. Industrial production increased 0.6 percent in Jun 2016 and decreased 0.3 percent in May 2016 after increasing 0.5 percent in Apr 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 fell 22.3 from the peak in Jun 2007 to the trough in Apr 2009 and increased 16.0 percent from the trough in Apr 2009 to Dec 2015. Manufacturing in Jun 2016 is lower by 6.1 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 IIQ2016 would have accumulated to 28.6 percent. GDP in IIQ2016 would be $19,279.5 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2704.4 billion than actual $16,575.1 billion. There are about two trillion dollars of GDP less than at trend, explaining the 23.7 million unemployed or underemployed equivalent to actual unemployment/underemployment of 14.1 percent of the effective labor force (http://cmpassocregulationblog.blogspot.com/2016/07/fluctuating-valuations-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html). US GDP in IIQ2016 is 14.0 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,575.1 billion in IIQ2016 or 10.6 percent at the average annual equivalent rate of 1.2 percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane (2016May02) measures GDP growth in the US at average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at 2.0 percent annual equivalent in the current expansion. Cochrane (2016May02) proposes drastic changes in regulation and legal obstacles to private economic activity. 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 Jun 1919 to Jun 2016. Growth at 3.2 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 141.4587 in Jun 2016. The actual index NSA in Jun 2016 is 105.6646, which is 25.3 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 129.1203 in Jun 2016. The output of manufacturing at 105.6646 in Jun 2016 is 18.2 percent below trend under this alternative calculation.

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

 

Exports
M ∆%

Exports 12 M ∆%

Imports
M ∆%

Imports 12 M ∆%

USA

-0.2 May

-6.9

Jan-May

1.6 May

-5.2

Jan-May

Japan

 

Jun 2016

-7.8

May 2016

-11.3

Apr 2016

-10.1

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

 

Jun 2016

-18.8

May 2016

-13.8

Apr 2016

-23.3

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

Jun

-4.8

May

-4.1

Apr

-1.8

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

Jun

-2.8

May

-0.4

Apr

-10.6

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

-0.9 12-M Apr

-1.0 Jan-Apr

-5.4 12-M Apr

-3.4 Jan-Apr

Germany

-1.8 May CSA

1.6 May

0.1 May CSA

-0.1 May

France

May

1.4

-0.6

-3.5

-4.8

Italy May

-0.2

2.4

-1.2

-0.2

UK

-4.4 May

2.2 Mar 16-May 16 /Mar 15-May 15

-3.5 May

1.9 Mar 16-May 16 /Mar 15-May 15

Net Trade % Points GDP Growth

Points

     

USA

IIQ2016

0.23

IQ2016

0.01

IVQ2015

-0.45

IIIQ2015

-0.52

IIQ2015

-0.08

IQ2015

-1.65

IVQ2014

-1.14

IIIQ2014

0.50

IIQ2014

-0.41

IQ2014

-1.16

IVQ2013

1.29

IIIQ2013

0.13

IIQ2013

-0.21

IQ2013

0.30

IVQ2012 +0.58

IIIQ2012

0.16

IIQ2012 0.28

IQ2012 -0.02

     

Japan

0.4

IQ2012

-1.7 IIQ2012

-1.9

IIIQ2012

-0.5 IVQ2012

1.9

IQ2013

-0.3

IIQ2013

-1.5

IIIQ2013

-1.9

IVQ2013

-0.8

IQ2014

3.5

IIQ2014

0.2

IIIQ2014

1.5

IVQ2014

0.4

IQ2015

-1.4

IIQ2015

0.5

IIIQ2015

0.3

IVQ2015

0.7

IQ2016

     

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

IQ2016

-0.1

     

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

0.4

IIQ2015

-0.7

IIIQ2015

-0.6

IVQ2015

-0.2

IQ2016

     

UK

0.7

IIQ2013

-1.7

IIIQ2013

0.1

IVQ2013

0.8

IQ2014

0.3

IIQ2014

-0.7

IIIQ2014

0.3

IVQ2014

-0.6

IQ2015

0.6

IIQ2015

-0.5

IIIQ2015

0.1

IVQ2015

-0.2

IQ2016

     

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 Jun 2016. The share of Asia in Japan’s trade is close to one-half for 52.3 percent of exports and 50.8 percent of imports. Within Asia, exports to China are 17.3 percent of total exports and imports from China 25.9 percent of total imports. While exports to China decreased 10.0 percent in the 12 months ending in Jun 2016, imports from China decreased 12.4 percent. The largest export market for Japan in Jun 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 11.2 percent in total imports. Japan’s exports to the US decreased 6.5 percent in the 12 months ending in Jun 2016 and imports from the US decreased 17.2 percent. Western Europe has share of 11.4 percent in Japan’s exports and of 13.2 percent in imports. Rates of growth of exports of Japan in Jun 2016 are minus 6.5 percent for exports to the US, minus 35.1 percent for exports to Brazil and 1.4 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Jun 2016 are mixed. Imports from Asia decreased 15.1 percent in the 12 months ending in Jun 2016 while imports from China decreased 12.4 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

Jun 2016

Exports
Millions Yen

12 months ∆%

Imports Millions Yen

12 months ∆%

Total

6,025,460

-7.4

5,332,625

-18.8

Asia

3,150,518

% Total 52.3

-10.6

2,708,921 % Total 50.8

-15.1

China

1,043,810

% Total 17.3

-10.0

1,378,862 % Total 25.9

-12.4

USA

1,217,963

% Total 20.2

-6.5

599,588 % Total

11.2

-17.2

Canada

75,248

-1.0

87,300

-15.2

Brazil

27,223

-35.1

58,728

-21.4

Mexico

94,829

-6.6

43,046

-11.6

Western Europe

684,152 % Total 11.4

-1.1

704,359% Total 13.2

-7.5

Germany

161,680

1.4

183,756

-8.9

France

51,276

5.1

80,873

-22.9

UK

127,300

3.7

53,117

-8.5

Middle East

219,772

-17.8

540,235

-34.7

Australia

131,961

-6.1

222,614

-32.4

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, did not change to 51.1 in Jun from 51.1 in May, indicating expansion at the same rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/02a2e9b6c0aa46ada822f4da12b4235d). This index has remained above the contraction territory of 50.0 during 44 consecutive months. The employment index decreased from 51.0 in May to 50.9 in Jun with input prices rising at slower rate, new orders increasing at faster rate and output increasing at the same rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/02a2e9b6c0aa46ada822f4da12b4235d). David Hensley, Director of Global Economic Coordination at JP Morgan, finds slowing growth (https://www.markiteconomics.com/Survey//PressRelease.mvc/02a2e9b6c0aa46ada822f4da12b4235d). The JP Morgan Global Manufacturing PMI, produced by JP Morgan and Markit in association with ISM and IFPSM, increased to 50.4 in Jun from 50.0 in May (https://www.markiteconomics.com/Survey//PressRelease.mvc/7f1b528a012647468d9ed1725076ec85). New export orders decreased. David Hensley, Director of Global Economic Coordination at JP Morgan, weak growth around stagnation levels (https://www.markiteconomics.com/Survey//PressRelease.mvc/7f1b528a012647468d9ed1725076ec85). The Markit Brazil Composite Output Index increased from 38.3 in May to 42.3 in Jun, indicating contraction in activity of Brazil’s private sector (https://www.markiteconomics.com/Survey//PressRelease.mvc/2bafa023184f4e5f9868ef522a9b74c4). The Markit Brazil Services Business Activity index, compiled by Markit, decreased from 37.4 in Apr to 37.3 in May, indicating contracting services activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/f84121ad2bb443f99061c8540b586ed4). Pollyanna de Lima, Economist at Markit, finds deteriorating conditions (https://www.markiteconomics.com/Survey//PressRelease.mvc/2bafa023184f4e5f9868ef522a9b74c4). The Markit Brazil Purchasing Managers’ IndexTM (PMI) increased from 41.6 in May to 43.2 in Jun, indicating deterioration in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/44fd737c80c04e18a5f1d42344590e47). Pollyanna De Lima, Economist at Markit, finds stress in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/44fd737c80c04e18a5f1d42344590e47).

VA United States. The Markit Flash US Manufacturing Purchasing Managers’ Index (PMI) seasonally adjusted increased to 52.9 in Jul from 51.3 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/24075a8e417d4c29bd7c747031da681e). New export orders increased. Chris Williamson, Chief Economist at Markit, finds improvement with challenges (https://www.markiteconomics.com/Survey//PressRelease.mvc/24075a8e417d4c29bd7c747031da681e). The Markit Flash US Services PMI™ Business Activity Index decreased from 51.4 in Jun to 50.9 in Jul (https://www.markiteconomics.com/Survey//PressRelease.mvc/a1ec8ce07b9a4f5d90188116b110efe9). The Markit Flash US Composite PMI™ Output Index increased from 51.2 in Jun to 51.5 in Jul. Andrew Harker, Senior Economist at Markit, finds that the surveys are consistent with subdued growth (https://www.markiteconomics.com/Survey//PressRelease.mvc/a1ec8ce07b9a4f5d90188116b110efe9). The Markit US Composite PMI™ Output Index of Manufacturing and Services increased to 51.2 in Jun from 50.9 in May (https://www.markiteconomics.com/Survey//PressRelease.mvc/bb8b2e3e686e4869894f8c7ac6ab4108). The Markit US Services PMI™ Business Activity Index increased from 51.3 in May to 51.4 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/bb8b2e3e686e4869894f8c7ac6ab4108). Chris Williamson, Chief Economist at Markit, finds the indexes suggesting stagnating growth with annual growth at 1.0 percent in IIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/bb8b2e3e686e4869894f8c7ac6ab4108). The Markit US Manufacturing Purchasing Managers’ Index (PMI) increased to 51.3 in Jun from 50.7 in May, which indicates expansion at faster rate (https://www.markiteconomics.com/Survey//PressRelease.mvc/6af4890597674e268079c8acfd3446e7). New foreign orders increased. Chris Williamson, Chief Economist at Markit, finds weak factory output (https://www.markiteconomics.com/Survey//PressRelease.mvc/6af4890597674e268079c8acfd3446e7). The purchasing managers’ index (PMI) of the Institute for Supply Management (ISM) Report on Business® increased 1.9-percentage points from 51.3 in May to 53.2 in Jun, which indicates faster expansion (https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?navItemNumber=28965). The index of new orders increased 1.3 percentage points from 55.7 in May to 57.0 in Jun. The index of new exports increased 2.0 percentage points from 50.0 in May to 52.0 in Jun, expanding at the same rate. The Non-Manufacturing ISM Report on Business® PMI increased 3.6 percentage points from 52.9 in May to 56.5 in Jun, indicating growth of business activity/production during 83 consecutive months, while the index of new orders increased 5.7 percentage points from 54.2 in May to 59.9 in Jun (https://www.instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?navItemNumber=30492). Table USA provides the country economic indicators for the US.

Table USA, US Economic Indicators

Consumer Price Index

Jun 12 months NSA ∆%: 1.0; ex food and energy ∆%: 2.3 Jun month SA ∆%: 0.2; ex food and energy ∆%: 0.2
Blog 7/17/16

Producer Price Index

Finished Goods

Jun 12-month NSA ∆%: -2.0; ex food and energy ∆% 1.2
Jun month SA ∆% = 0.8; ex food and energy ∆%: 0.2

Final Demand

Jun 12-month NSA ∆%: 0.3; ex food and energy ∆% 1.3
Jun month SA ∆% = 0.5; ex food and energy ∆%: 0.4
Blog 7/17/16

PCE Inflation

May 12-month NSA ∆%: headline 0.9; ex food and energy ∆% 1.6
Blog 7/3/16

Employment Situation

Household Survey: Jun Unemployment Rate SA 4.9%
Blog calculation People in Job Stress Jun: 23.7 million NSA, 14.1% of Labor Force
Establishment Survey:
Jun Nonfarm Jobs +287,000; Private +265,000 jobs created 
May 12-month Average Hourly Earnings Inflation Adjusted ∆%: 2.7
Blog 7/10/16

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 May 2016 5.225 million lower by 5.8 percent than 5.546 million in May 2006
Blog 7/17/16

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 1.3

IIQ2013/IIQ2012 1.0

IIIQ2013/IIIQ2012 1.7

IVQ2013/IVQ2012 2.7

IQ2014/IQ2013 1.6

IIQ2014/IIQ2013 2.4

IIIQ2014/IIIQ2013 2.9

IVQ2014/IVQ2013 2.5

IQ2015/IQ2014 3.3

IIQ2015/IIQ2014 3.0

IIIQ2015/IIIQ2014 2.2

IVQ2015/IVQ2014 1.9

IQ2016/IQ2015 1.6

IIQ2016/IIQ2015 1.2

IQ2012 SAAR 2.7

IIQ2012 SAAR 1.9

IIIQ2012 SAAR 0.5

IVQ2012 SAAR 0.1

IQ2013 SAAR 2.8

IIQ2013 SAAR 0.8

IIIQ2013 SAAR 3.1

IVQ2013 SAAR 4.0

IQ2014 SAAR -1.2

IIQ2014 SAAR 4.0

IIIQ2014 SAAR 5.0

IVQ2014 SAAR 2.3

IQ2015 SAAR 2.0

IIQ2015 SAAR: 2.6

IIIQ2015 SAAR: 2.0

IVQ2015 SAAR: 0.9

IQ2016 SAAR: 0.8

IIQ2016 SAAR: 1.2
Blog 7/31/16

Real Private Fixed Investment

SAAR IIQ2016 ∆% -3.2 IVQ2007 to IIQ2016: 6.9% Blog 7/31/16

Corporate Profits

IQ2016 SAAR: Corporate Profits 1.8; Undistributed Profits 4.5 Blog 7/3/16

Personal Income and Consumption

May month ∆% SA Real Disposable Personal Income (RDPI) SA ∆% 0.1
Real Personal Consumption Expenditures (RPCE): 0.3
12-month May NSA ∆%:
RDPI: 3.2; RPCE ∆%: 2.3
Blog 7/3/16

Quarterly Services Report

IQ16/IQ15 NSA ∆%:
Information 5.8

Financial & Insurance 3.1

Earlier Data:
Blog 3/22/15

Employment Cost Index

Compensation Private IIQ2016 SA ∆%: 0.6 Jun 12 months ∆%: 2.4

Earlier Data:
Blog 2/1/15

Industrial Production

Jun month SA ∆%: 0.6
Jun 12 months SA ∆%: -0.7

Manufacturing Jun SA 0.4 ∆% Jun 12 months SA ∆% 0.4, NSA 0.5
Capacity Utilization: 75.4
Blog 7/24/16

Productivity and Costs

Nonfarm Business Productivity IQ2016∆% SAAE -0.6; IQ2016/IQ2015 ∆% 0.7; Unit Labor Costs SAAE IQ2016 ∆% 4.5; IQ2016/IQ2015 ∆%: 3.0

Blog 6/12/16

New York Fed Manufacturing Index

General Business Conditions From Jun 6.09 to Jul 0.55
New Orders: From Jun 10.9 to Jul -1.82
Blog 7/24/16

Philadelphia Fed Business Outlook Index

General Index from Jun 4.7 to Jul -2.9
New Orders from Jun minus 3.0 to Jul 11.8
Blog 7/24/16

Manufacturing Shipments and Orders

May Orders SA ∆% -1.0 Ex Transport 0.1

Jan-May 16/Jan-May 15 NSA New Orders ∆% minus 1.9 Ex transport minus 3.4

Earlier data:
Blog 4/5/15

Durable Goods

Jun New Orders SA ∆%: minus 4.0; ex transport ∆%: minus 0.5
Jan-Jun 16/Jan-Jun 15 New Orders NSA ∆%: 0.0; ex transport ∆% -1.1

Earlier Data:
Blog 4/26/15

Sales of New Motor Vehicles

Jun 2016 8,645,016; Jun 2015 8,521,260. Jun 16 SAAR 16.66 million, May 16 SAAR 17.45 million, Jun 2015 SAAR 17.00 million

Blog 7/3/16

Sales of Merchant Wholesalers

Jan-May 2016/Jan-May 2015 NSA ∆%: Total -2.1; Durable Goods: minus -0.5; Nondurable
Goods: -3.6

EARLIER DATA:
Blog 4/12/15

Sales and Inventories of Manufacturers, Retailers and Merchant Wholesalers

May 16 12-M NSA ∆%: Sales Total Business 0.9; Manufacturers -3.1
Retailers 6.1; Merchant Wholesalers 0.4
Blog 7/24/16

Sales for Retail and Food Services

Jan-Jun 2016/Jan-Jun 2015 ∆%: Retail and Food Services 3.1; Retail ∆% 2.6
Blog 7/24/16

Value of Construction Put in Place

SAAR month SA May ∆%: minus 0.8 Jan-May 16/Jan-May 15 NSA: 8.2

Earlier Data:
Blog 4/5/15

Case-Shiller Home Prices

May 2016/ May 2015 ∆% NSA: 10 Cities 4.4; 20 Cities: 5.2; National: 5.0
∆% May SA: 10 Cities -0.2 ; 20 Cities: -0.1
Blog 7/31/16

FHFA House Price Index Purchases Only

May SA ∆% 0.2;
12 month NSA ∆%: 5.6
Blog 7/31/16

New House Sales

Jun 2016 month SAAR ∆%: 3.5
Jan-Jun 2016/Jan-Jun 2015 NSA ∆%: 10.8
Blog 7/31/16

Housing Starts and Permits

Jun Starts month SA ∆% 4.8; Permits ∆%: 1.5
Jan-Jun 2016/Jan-Jun 2015 NSA ∆% Starts 7.1; Permits  ∆% -1.1

Earlier Data:
Blog 4/19/15

Rate of Homeownership

IIQ2016: 62.9

Blog 7/31/16

Trade Balance

Balance May SA -$41,144 million versus Apr -$37,383 million
Exports May SA ∆%: -0.2 Imports May SA ∆%: 1.6
Goods Exports Jan-May 2016/Jan-May 2015 NSA ∆%: minus 6.9
Goods Imports Jan-May 2016/Jan-May 2015 NSA ∆%: minus 5.2
Blog 7/10/16

Export and Import Prices

Jun 12-month NSA ∆%: Imports -4.8; Exports -3.5

Earlier Data:
Blog 4/12/15

Consumer Credit

May ∆% annual rate: Total 6.2; Revolving 3.0; Nonrevolving 7.3

Earlier Data:
Blog 5/10/15

Net Foreign Purchases of Long-term Treasury Securities

May Net Foreign Purchases of Long-term US Securities: minus $91.5 billion
Major Holders of Treasury Securities: China $1244.0 billion; Japan $1133.2 billion; Total Foreign US Treasury Holdings Nov $6208.3 billion
Blog 7/24/16

Treasury Budget

Fiscal Year 2016/2015 ∆% Jun: Receipts 0.9; Outlays 3.9; Individual Income Taxes 0.4
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 7/24/2016

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

2046: Long-term Debt/GDP 141.1%

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 7/24/16

Commercial Banks Assets and Liabilities

Jun 2016 SAAR ∆%: Securities 7.1 Loans 5.6 Cash Assets -18.4 Deposits 7.0

Blog 7/24/16

Flow of Funds Net Worth of Families and Nonprofits

IQ2016 ∆ since 2007

Assets +$21,657.7 BN

Nonfinancial 3355.5 BN

Real estate $2407.3 BN

Financial +18,302.1 BN

Net Worth +$21,509.6 BN

Blog 6/26/16

Current Account Balance of Payments

IQ2016 -103,135 MM

% GDP 2.8

Blog 7/24/16

Collapse of United States Dynamism of Income Growth and Employment Creation

Blog 7/24/16

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: 7/24/16 http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html

7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

7/10/16 http://cmpassocregulationblog.blogspot.com/2016/07/fluctuating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

6/26/16 http://cmpassocregulationblog.blogspot.com/2016/06/of-course-considerable-uncertainty.html

6/12/16 http://cmpassocregulationblog.blogspot.com/2016/06/considerable-uncertainty-about-economic.html

6/5/16 http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html

5/1/16 http://cmpassocregulationblog.blogspot.com/2016/05/economic-activity-appears-to-have.html

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

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 2015. 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 1.4 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 1.0 percent higher than in calendar year 2007. Japan’s real GDP grew 8.0 percent from the trough of 2009 to 2015 at the average yearly rate of 1.3 percent (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 Apr 29, 2016 (https://www.boj.or.jp/en/mopo/outlook/gor1604b.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 0.7 to 0.7 percent, with the all items CPI less fresh food of 0.0 percent (https://www.boj.or.jp/en/mopo/outlook/gor1604b.pdf). The critical difference is forecast of the CPI excluding fresh food of 0.0 to 0.2 percent in 2016 and 1.8 to 3.0 percent in 2017 (https://www.boj.or.jp/en/mopo/outlook/gor1604b.pdf). Consumer price inflation in Japan excluding fresh food was 0.1 percent in Mar 2016 and minus 0.3 percent in 12 months (http://www.stat.go.jp/english/data/cpi/1581.htm). The CPI increased 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

     

Feb 2016

+0.7 to +0.7

[+0.7]

0.0

 

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

     

Jul 2016

+0.8 to +1.0

[+1.0]

0.0 to +0.3

[0.5]

0.0 to +0.3

[0.5]

Apr 2016

+0.8 to +1.4

[+1.2]

0.0 to +0.8

[+0.5]

0.0 to +0.8

[+0.5]

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

     

Jul 2016

1.0 to +1.5
[+1.3]

+0.8 to +1.8
[+1.7]

+0.8 to +1.8
[+1.7]

Apr 2016

0.0 to + +0.3

[+0.1]

1.8 to +3.0

[+2.7]

0.8 to +2.0

[+1.7

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]

2018

     

Jul 2016

+0.8 to +1.0
[+0.9]

+1.0 to +2.0
[+1.9]

+1.0 to +2.0
[+1.9]

Apr 2016

+0.6 to +1.2

[+1.0]

+1.0 to +2.1

[+1.9]

+1.0 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

https://www.boj.or.jp/en/mopo/outlook/gor1604b.pdf

https://www.boj.or.jp/en/mopo/outlook/gor1607b.pdf

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

Manufacturing PMI™ increased from 48.1 in Jun to 49.0 in Jul and the Flash Japan

Manufacturing Output Index™ increased from 48.1 in Jun to 49.3 in Jul

(https://www.markiteconomics.com/Survey//PressRelease.mvc/d85ef1c794fb4c248724bd80b1e20e64). New export orders decreased at faster rate. Amy Brownbill, Economist at

Markit, finds slowing conditions in Japan’s manufacturing with adverse effects from the strengthening yen/dollar rate

(https://www.markiteconomics.com/Survey//PressRelease.mvc/d85ef1c794fb4c248724bd80b1e20e64).The Nikkei Composite Output PMI Index decreased from 49.2 in May to 49.0 in Jun, indicating decrease of business activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/a8c82125e05d4c3ba28b6ada0cddb041). The Nikkei Business Activity Index of Services decreased to 49.4 in Jun from 50.4 in May (https://www.markiteconomics.com/Survey//PressRelease.mvc/a8c82125e05d4c3ba28b6ada0cddb041). Amy Brownbill, Ecoomist at Markit and author of the report, find moderate deterioration (https://www.markiteconomics.com/Survey//PressRelease.mvc/a8c82125e05d4c3ba28b6ada0cddb041). The Nikkei Purchasing Managers’ Index (PMI™), seasonally adjusted, increased from 47.7 in May to 48.1 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/603a92353f00482ebf974b5715ad9fb5). New orders contracted from home and abroad. Amy Brownbill, Economist at Markit, finds deteriorating conditions in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/603a92353f00482ebf974b5715ad9fb5).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

Jun ∆% -0.1
12 months ∆% -4.2
Blog 7/17/16

Consumer Price Index

Jun NSA ∆% -0.2; Jun 12 months NSA ∆% -0.4
Blog 7/31/16

Real GDP Growth

IQ2016 ∆%: 0.5 on IVQ2015;  IQ2016 SAAR 1.9;
∆% from quarter a year earlier: 0.1 %
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 5/22/16 6/12/16

Employment Report

Jun Unemployed 2.10 million

Change in unemployed since last year: -140 thousand
Unemployment rate: 3.1%
Blog 7/31/16

All Industry Indices

May month SA ∆% -1.0
12-month NSA ∆% 0.5

Earlier Data:

Blog 4/26/15

Industrial Production

May SA month ∆%: -2.3
May 12-month NSA ∆% -0.1

Earlier Data:
Blog 3/29/15

Machine Orders

Total Apr ∆% -12.8

Private ∆%: -20.2 Apr ∆% Excluding Volatile Orders minus 11.0

Earlier Data:
Blog 4/19/15

Tertiary Index

May month SA ∆% -0.7
May 12 months NSA ∆% 0.7

Earlier Data:
Blog 4/26/15

Wholesale and Retail Sales

May 12 months:
Total ∆%: -5.1
Wholesale ∆%: -6.6
Retail ∆%: -1.9

Earlier Data:
Blog 3/29/15

Family Income and Expenditure Survey

May 12-month ∆% total nominal consumption -1.6, real -1.1

Earlier Data:

Blog 3/29/15

Trade Balance

Exports Jun 12 months ∆%: minus 7.4 Imports May 12 months ∆% -18.8

Earlier Data:

Blog 4/26/15

Links to blog comments in Table JPY: 7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

6/12/16 http://cmpassocregulationblog.blogspot.com/2016/06/considerable-uncertainty-about-economic.html

5/22/16 http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.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 employment report for Japan in Jun 2016 is in Table VB-1. The number unemployed reached 2.10 million in Jun 2016, decreasing 140 thousand from a year earlier or 6.3 percent. The rate of unemployment not seasonally adjusted reached 3.1 percent, decreasing 0.3 percentage points from a year earlier. Population changed 0.0 percent from a year earlier. The labor force increased 0.9 percent from a year earlier and the labor participation rate stood at 60.5, increasing 0.5 percentage points from a year earlier. The employment rate moved to 58.6 percent, increasing 0.6 percentage points relative to a year earlier.

Table VB-1, Japan, Employment Report Jun 2016

Jun 2016 Unemployed

2.10 million

Change since last year

-140 thousand; ∆% -6.3

Unemployment rate

SA 3.1%, -0.1 from earlier month;

NSA 3.1%, -0.3 from earlier year

Population ≥ 15 years

110.79 million

Change since last year

∆% 0.0

Labor Force

67.07 million

Change since last year

∆% 0.9

Employed

64.97 million

Change since last year

∆% 1.1

Labor force participation rate

60.5

Change since last year

0.5

Employment rate

58.6%

Change since last year

0.6

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

Table VB-2 provides the rate of unemployment of Japan seasonally adjusted that decreased to 3.4 percent in Dec 2014 from 4.4 percent in Jul 2012. The rate of unemployment SA fell 0.1 percentage points from 3.4 percent in Jun 2015 to 3.1 percent in Jun 2016.

Table VB-2, Japan, Unemployment Rate, SA

 

Unemployment Rate SA

Jun 2016

3.1

May

3.2

Apr

3.2

Mar

3.2

Feb

3.3

Jan

3.2

Dec 2015

3.3

Nov

3.3

Oct

3.2

Sep

3.4

Aug

3.4

Jul

3.3

Jun

3.4

May

3.3

Apr

3.4

Mar

3.4

Feb

3.5

Jan

3.5

Dec 2014

3.4

Nov

3.5

Oct

3.6

Sep

3.5

Aug

3.5

Jul

3.7

Jun

3.7

May

3.6

Apr

3.6

Mar

3.6

Feb

3.6

Jan

3.7

Dec 2013

3.7

Nov

3.9

Oct

4.0

Sep

4.0

Aug

4.1

Jul

3.8

Jun

3.9

May

4.1

Apr

4.1

Mar

4.1

Feb

4.3

Jan

4.2

Dec 2012

4.3

Nov

4.1

Oct

4.1

Sep

4.3

Aug

4.2

Jul

4.4

Jun

4.3

May

4.4

Source: Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

Chart VB-1 of Japan’s Statistics Bureau at the Ministry of Internal Affairs and Communications provides the unemployment rate of Japan from 2012 to 2016. There is clear trend of decline with multiple oscillations and increase in Jun-Jul 2014. The rate increased in Sep 2014 and fell in Oct 2014, stabilizing in Nov 2014 and declining in Dec 2014. The rate decreased in Feb-Apr 2015, stabilizing in May 2015. The rate increased in Jun 2015 and fell in Jul 2015, increasing in Aug 2015 and stabilizing in Sep 2015. The rate fell in Oct 2015, increasing in Nov 2015, remaining unchanged in Dec 2015 and decreasing in Jan 2016. The rate increased in Feb 2016 and decreased in Mar 2016, stabilizing in Apr-May 2016. The rate decreased in Jun 2016.

clip_image002

Chart VB-1, Japan, Unemployment Rate, Seasonally Adjusted

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

During the “lost decade” of the 1990s from 1991 to 2002 (Pelaez and Pelaez, The Global Recession Risk (2007), 82-3), Japan’s GDP grew at the average yearly rate of 1.0 percent, the CPI at 0.1 percent and the implicit deflator at minus 0.8 percent. Japan’s growth rate from the mid-1970s to 1992 was 4 percent (Ito 2004). Table VB-3 provides Japan’s rates of unemployment, participation in labor force and employment for selected years from 1953 to 1985 and yearly from 1990 to 2014. The rate of unemployment jumped from 2.1 percent in 1991 to 5.4 percent in 2002, which was a year of global economic weakness. The participation rate dropped from 64.0 percent in 1992 to 61.2 percent in 2002 and the employment rate fell from 62.6 percent in 1992 to 57.9 percent in 2002. The rate of unemployment rose from 3.9 percent in 2007 to 5.1 percent in 2010, falling to 4.6 percent in 2011, 4.3 percent in 2012 and 3.6 percent in 2014. The rate of unemployment fell to 3.4 percent in 2015. The participation rate fell from 60.4 percent in 2007 to 59.6 percent in 2010, falling to 59.3 percent in 2011 and 59.1 in 2012 and increasing to 59.4 percent in 2014. The participation rate increased to 59.6 in 2015. The employment rate fell from 58.1 in percent in 2007 to 56.6 percent in 2010 and 56.5 percent in 2011 and 2012, increasing to 57.3 percent in 2014. The employment rate increased to 57.6 in 2015. The global recession adversely affected labor markets in advanced economies.

Table VB-3, Japan, Rates of Unemployment, Participation in Labor Force and Employment, %

 

Participation
Rate

Employment Rate

Unemployment Rate

1953

70.0

68.6

1.9

1960

69.2

68.0

1.7

1965

65.7

64.9

1.2

1970

65.4

64.6

1.1

1975

63.0

61.9

1.9

1980

63.3

62.0

2.0

1985

63.0

61.4

2.6

1990

63.3

61.9

2.1

1991

63.8

62.4

2.1

1992

64.0

62.6

2.2

1993

63.8

62.2

2.5

1994

63.6

61.8

2.9

1995

63.4

61.4

3.2

1996

63.5

61.4

3.4

1997

63.7

61.5

3.4

1998

63.3

60.7

4.1

1999

62.9

59.9

4.7

2000

62.4

59.5

4.7

2001

62.0

58.9

5.0

2002

61.2

57.9

5.4

2003

60.8

57.6

5.3

2004

60.4

57.6

4.7

2005

60.4

57.7

4.4

2006

60.4

57.9

4.1

2007

60.4

58.1

3.9

2008

60.2

57.8

4.0

2009

59.9

56.9

5.1

2010

59.6

56.6

5.1

2011

59.3

56.5

4.6

2012

59.1

56.5

4.3

2013

59.3

56.9

4.0

2014

59.4

57.3

3.6

2015

59.6

57.6

3.4

Source: Japan, Statistics Bureau, Ministry of Internal Affairs and Communications

http://www.stat.go.jp/english/data/roudou/results/month/index.htm

The geographical breakdown of exports and imports of Japan with selected regions and countries is in Table VB-4 for Jun 2016. The share of Asia in Japan’s trade is close to one-half for 52.3 percent of exports and 50.8 percent of imports. Within Asia, exports to China are 17.3 percent of total exports and imports from China 25.9 percent of total imports. While exports to China decreased 10.0 percent in the 12 months ending in Jun 2016, imports from China decreased 12.4 percent. The largest export market for Japan in Jun 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 11.2 percent in total imports. Japan’s exports to the US decreased 6.5 percent in the 12 months ending in Jun 2016 and imports from the US decreased 17.2 percent. Western Europe has share of 11.4 percent in Japan’s exports and of 13.2 percent in imports. Rates of growth of exports of Japan in Jun 2016 are minus 6.5 percent for exports to the US, minus 35.1 percent for exports to Brazil and 1.4 percent for exports to Germany. Comparisons relative to 2011 may have some bias because of the effects of the Tōhoku or Great East Earthquake and Tsunami of Mar 11, 2011. Deceleration of growth in China and the US and threat of recession in Europe can reduce world trade and economic activity. Growth rates of imports in the 12 months ending in Jun 2016 are mixed. Imports from Asia decreased 15.1 percent in the 12 months ending in Jun 2016 while imports from China decreased 12.4 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-4, Japan, Value and 12-Month Percentage Changes of Exports and Imports by Regions and Countries, ∆% and Millions of Yen

Jun 2016

Exports
Millions Yen

12 months ∆%

Imports Millions Yen

12 months ∆%

Total

6,025,460

-7.4

5,332,625

-18.8

Asia

3,150,518

% Total 52.3

-10.6

2,708,921 % Total 50.8

-15.1

China

1,043,810

% Total 17.3

-10.0

1,378,862 % Total 25.9

-12.4

USA

1,217,963

% Total 20.2

-6.5

599,588 % Total

11.2

-17.2

Canada

75,248

-1.0

87,300

-15.2

Brazil

27,223

-35.1

58,728

-21.4

Mexico

94,829

-6.6

43,046

-11.6

Western Europe

684,152 % Total 11.4

-1.1

704,359% Total 13.2

-7.5

Germany

161,680

1.4

183,756

-8.9

France

51,276

5.1

80,873

-22.9

UK

127,300

3.7

53,117

-8.5

Middle East

219,772

-17.8

540,235

-34.7

Australia

131,961

-6.1

222,614

-32.4

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 53.7 in Jun 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 Jun 2016.

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

 

Total Index

New Orders

Interm.
Input Prices

Subs Prices

Exp

Jun 2016

53.7

50.8

51.6

50.6

58.6

May

53.1

49.2

51.6

49.8

57.8

Apr

53.5

48.7

52.1

49.1

59.1

Mar

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 53.7 in Jun 2016.

clip_image003

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 50.0 in Jun 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 50.5 in Jun 2016.

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

 

IPM

PI

NOI

INV

EMP

SDEL

2016

           

Jun

50.0

52.5

50.5

47.0

47.9

50.7

May

50.1

52.3

50.7

47.6

48.2

50.4

Apr

50.1

52.2

51.0

47.4

47.8

50.1

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 50.0 in Jun 2016.

clip_image004

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 IIQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IIQ2016 was 6.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 39.4 percent of cumulative GDP in IIQ2016. In cumulative IIQ2016, industry accounts for 33.7 percent of GDP and construction for 5.8 percent. Tertiary industry accounts for 54.1 percent of cumulative GDP in IIQ2016 and primary industry for 6.5 percent. China’s growth strategy consisted of rapid increases in productivity in industry to absorb population from agriculture where incomes are lower (Pelaez and Pelaez, The Global Recession Risk (2007), 56-80). The strategy is shifting to lower growth rates with improvement in living standards 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 10.0 percent in IQ2011 to 6.1 percent in IVQ2011 and 7.4 percent in IQ2012, rebounding to 9.1 percent in IIQ2012, 7.4 percent in IIIQ2012 and 7.8 percent in IVQ2012. Annual equivalent growth in IQ2013 eased to 7.8 percent and to 7.0 percent in IIQ2013, rebounding to 8.7 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 6.6 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 4.9 percent in IQ2016. Growth increased to annual equivalent 7.4 percent in IIQ2016.

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

Cumulative GDP IQ2015

Value Current CNY Billion IIQ2016

Value Current CNY Billion IQ2016 to IIQ2016

IIQ2016 Year-on-Year Constant Prices ∆%

Cumulative to IIQ2016

∆%

GDP

17,992.7

34,063.7

6.7

6.7

Primary Industry

1,329.4

2,209.7

3.1

3.1

Farming

1,377.9

2,293.2

3.3

3.2

Secondary Industry

7,326.8

13,425.0

6.3

6.1

Industry

6,114.6

11,494.3

6.0

5.9

Construction

1,242.6

1,987.8

7.3

7.5

Tertiary Industry

9,336.5

18,429.0

7.5

7.5

Transport, Storage, Post

828.6

1,553.7

5.7

4.6

Wholesale, Retail Trades

1,704.8

3,334.1

6.5

6.2

Accommodation and Restaurants

303.8

615.1

6.8

6.9

Finance

1,542.8

3,121.9

5.3

6.7

Real Estate

1,167.4

2,249.3

8.8

9.0

Other

3,710.1

7,414.2

9.0

8.9

Growth in Quarter Relative to Prior Quarter

∆% on Prior Quarter

 

∆% Annual Equivalent

∆% Year-on-Year

2016

       

IIQ2016

1.8

 

7.4

6.7

IQ2016

1.2

 

4.9

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

1.6

 

6.6

7.0

2014

       

IVQ2014

1.7

 

7.0

7.2

IIIQ2014

1.9

 

7.8

7.1

IIQ2014

1.8

 

7.4

7.5

IQ2014

1.7

 

7.0

7.4

2013

       

IVQ2013

1.6

 

6.6

7.7

IIIQ2013

2.1

 

8.7

7.9

IIQ2013

1.7

 

7.0

7.6

IQ2013

1.9

 

7.8

7.9

2012

       

IVQ2012

1.9

 

7.8

8.1

IIIQ2012

1.8

 

7.4

7.5

IIQ2012

2.2

 

9.1

7.6

IQ2012

1.8

 

7.4

8.1

2011

       

IVQ2011

1.5

 

6.1

8.8

IIIQ2011

1.9

 

7.8

9.4

IIQ2011

2.4

 

10.0

10.0

IQ2011

2.4

 

10.0

10.2

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

Growth of China’s GDP in IIQ2016 relative to the same period in 2015 was 6.7 percent and cumulative growth to IIQ2016 was 6.7 percent, as shown in Table VC-GDP. Secondary industry accounts for 39.4 percent of cumulative GDP in IIQ2016. In cumulative IIQ2016, industry accounts for 33.7 percent of GDP and construction for 5.8 percent. Tertiary industry accounts for 54.1 percent of cumulative GDP in IIQ2016 and primary industry for 6.5 percent. China’s growth strategy consisted of rapid increases in productivity in industry to absorb population from agriculture where incomes are lower (Pelaez and Pelaez, The Global Recession Risk (2007), 56-80). The strategy is shifting to lower growth rates with improvement in living standards 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 7.9 percent in IQ2013, 7.6 percent in IIQ2013 and 7.9 percent in IIIQ2013. GDP grew 7.7 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 7.4 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 7.5 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 1.6 percent, which is equivalent to 6.6 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 1.2 percent, which is equivalent to 4.9 percent, and increased 6.7 percent relative to a year earlier. GDP grew at 1.8 percent in IIQ2016, which is annual equivalent to 7.4 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

IIQ2016

   

GDP

7.0

7.0

6.9

6.8

6.7

6.7

   

Primary Industry

3.2

3.5

3.8

4.1

2.9

3.1

   

Secondary Industry

6.4

6.1

6.0

6.1

5.8

6.3

   

Tertiary Industry

7.9

8.4

8.4

8.2

7.6

7.5

   

GDP ∆% Relative to a Prior Quarter

1.6

1.8

1.8

1.5

1.2

1.8

   
 

IQ 2013

IIQ 2013

IIIQ 2013

IVQ 2013

IQ

2014

IIQ 2014

IIIQ 2014

IVQ

2014

GDP

7.9

7.6

7.9

7.7

7.4

7.5

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

1.9

1.7

2.1

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

10.0

9.4

8.8

8.1

7.6

7.5

8.1

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

2.4

2.4

1.9

1.5

1.8

2.2

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.

clip_image005

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.

clip_image006

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.

clip_image007

Chart VC-Trade, China, Imports and Exports of Goods, 2009-2013, $100 Million US Dollars

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, decreasing from 50.5 in May to 50.3 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/ce5d07d4ed1b4010803aae81b96d02c2). He Fan, Chief Economist at Caixin Insight Group, finds challenging activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/ce5d07d4ed1b4010803aae81b96d02c2). The Caixin General Manufacturing PMI decreased to 48.6 in Jun from 49.2 in May, indicating moderate deterioration in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/2f42a97a9d79446f80212705b32854d0). He Fan, Chief Economist at Caixin Insight Group, finds headwinds (https://www.markiteconomics.com/Survey//PressRelease.mvc/2f42a97a9d79446f80212705b32854d0). Table CNY provides the country data table for China.

Table CNY, China, Economic Indicators

Price Indexes for Industry

Jun 12-month ∆%: minus 2.6

Jun month ∆%: -0.2
Blog 7/17/16

Consumer Price Index

Jun 12-month ∆%: 1.9 Jun month ∆%: -0.1
Blog 7/17/16

Value Added of Industry

Jun month ∆%: 0.47

Jan-Jun 2016/Jan-Jun 2015 ∆%: 6.0

Earlier Data
Blog 4/19/15

GDP Growth Rate

Year IIQ2016 ∆%: 6.7

Second Quarter 2016 ∆%: 1.8
Quarter IIQ2016 AE ∆%: 7.4
Blog 7/24/16

Investment in Fixed Assets

Total Jan-Jun 2015 ∆%: 9.0

Real estate development: 6.1

Earlier Data:
Blog 4/19/15

Retail Sales

Jun month ∆%: 0.92
Jan-Jun 2016 ∆%:10.3

Earlier Data:
Blog 4/19/15

Trade Balance

Jun balance $48.11 billion
Exports 12M ∆% -4.8
Imports 12M ∆% -8.4

2015 Exports ∆% -2.8

2015 Imports ∆% -14.1

Cumulative Jun 2016: $269.39 billion

Cumulative May 2015: $261.75

Earlier Data:
Blog 4/19/15

Links to blog comments in Table CNY: 7/24/16 http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html

7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

6/19/2016 http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html

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

VD Euro Area. Using calendar and seasonally adjusted data (http://ec.europa.eu/eurostat), the GDP of the euro area (19 countries) fell 5.7 percent from IQ2008 to IIQ2009. The GDP of the euro area (19 countries) increased 6.6 percent from IIIQ2009 to IQ2016 at the annual equivalent rate of 1.0 percent. The GDP of the euro area (19 countries) is higher by 0.5 percent in IQ2016 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 1.7 percent in 2015.

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

Year

HICP ∆%

Unemployment
%

GDP ∆%

1999

1.2

9.7

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

1.7

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 $13,429.8 billion or 17.4 percent of world GDP of $77,825.3 billion (http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx). The sum of the GDP of France $2833.7 billion with the GDP of Germany of $3874.4 billion, Italy of $2141.9 billion and Spain $1383.5 billion is $10,233.5 billion or 76.2 percent of total euro area GDP and 13.1 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

1.7

1.7

1.3

0.8

3.2

2014

0.9

1.6

0.6

-0.3

1.4

2013

-0.3

0.3

0.6

-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

-1.1

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

1.7

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

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 Jun to 52.9 in Jul (https://www.markiteconomics.com/Survey//PressRelease.mvc/231d233872e24e2f932294d291cc61aa). Chris Williamson, Chief Economist at Markit, finds that the Markit Flash Eurozone PMI index suggests GDP annual growth about 1.5 percent (https://www.markiteconomics.com/Survey//PressRelease.mvc/231d233872e24e2f932294d291cc61aa). The Markit Eurozone PMI® Composite Output Index, combining services and manufacturing activity with close association with GDP did not change from 53.1 in May to 53.1 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/cb3ca9b7538f42919071ab5b24bb39fc). Chris Williamson, Chief Economist at Markit, finds potential for growth of about 0.3 percent in IIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/cb3ca9b7538f42919071ab5b24bb39fc). The Markit Eurozone Services Business Activity Index decreased from 53.3 in May to 52.8 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/cb3ca9b7538f42919071ab5b24bb39fc). The Markit Eurozone Manufacturing PMI® increased from 51.5 in May to 52.8 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/bf05f1e4218848aebe9f9f145b4d6bc3). New export orders increased. Chris Williamson, Chief Economist at Markit, finds industrial growth around 2 percent annual (https://www.markiteconomics.com/Survey//PressRelease.mvc/bf05f1e4218848aebe9f9f145b4d6bc3). Table EUR provides the data table for the euro area.

Table EUR, Euro Area Economic Indicators

GDP

IQ2015 ∆% 0.6; IQ2016/IQ2015 ∆% 1.7 Blog 9/13/15 11/22/15 12/13/15 2/14/16 3/13/16 5/1/16 5/15/16 6/12/16

Unemployment 

Jun 2016: 10.1 % unemployment rate; Jun 2016: 16.269 million unemployed

Blog 7/1/16

HICP

Jun month ∆%: 0.2

12 months May ∆%: 0.1
Blog 7/17/16

Producer Prices

Euro Zone industrial producer prices May ∆%: 0.6
May 12-month ∆%: -3.9
Blog 7/10/16

Industrial Production

May Month ∆%: -1.2; 12 months ∆%: 0.5

Earlier Data:
Blog 4/19/15

Retail Sales

May month ∆%: 0.4
May 12 months ∆%: 1.6

Earlier Data:
Blog 3/15/15

Confidence and Economic Sentiment Indicator

Sentiment 104.6 Jul 2016

Consumer minus 7.9 Jul 2016

Earlier Data:

Blog 4/5/15

Trade

Jan-Apr 2016/Jan-Apr 2015 Exports ∆%: -1.0
Imports ∆%: -3.4

Apr 2016 12-month Exports ∆% -0.9 Imports ∆% -5.4

Earlier Data:
Blog 4/19/15

Links to blog comments in Table EUR: 7/10/16 http://cmpassocregulationblog.blogspot.com/2016/07/fluctuating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

6/12/16 http://cmpassocregulationblog.blogspot.com/2016/06/considerable-uncertainty-about-economic.html

5/15/16 http://cmpassocregulationblog.blogspot.com/2016/05/recovery-without-hiring-ten-million.html

5/1/16 http://cmpassocregulationblog.blogspot.com/2016/05/economic-activity-appears-to-have.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

EUROSTAT estimates the rate of unemployment in the euro area at 10.1 percent in

Jun 2016, as shown in Table VD-1. The number of unemployed in Jun 2016 was 16.269 million, which was 1.363 million lower than 17.632 million in Jun 2015. The rate of unemployment fell from 11.0 percent in Jun 2015 to 10.1 percent in Jun 2016.

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

 

Unemployment Rate %

Number Unemployed
Millions

Jun 2016

10.1

16.269

May

10.1

16.306

Apr

10.2

16.404

Mar

10.2

16.470

Feb

10.3

16.687

Jan

10.4

16.728

Dec 2015

10.4

16.822

Nov

10.5

16.884

Oct

10.6

17.030

Sep

10.6

17.098

Aug

10.7

17.192

Jul

10.8

17.326

Jun

11.0

17.632

May

11.0

17.720

Apr

11.1

17.732

Mar

11.2

17.904

Feb

11.2

17.919

Jan

11.2

18.033

Dec 2014

11.3

18.191

Nov

11.5

18.512

Oct

11.5

18.515

Sep

11.5

18.527

Aug

11.5

18.431

Jul

11.6

18.605

Jun

11.5

18.502

May

11.7

18.687

Apr

11.7

18.735

Mar

11.8

18.875

Feb

11.9

18.965

Jan

11.9

19.003

Dec 2013

11.9

18.955

Nov

11.9

19.029

Oct

11.9

19.117

Sep

12.0

19.255

Aug

12.0

19.259

Jul

12.1

19.304

Jun

12.1

19.320

May

12.1

19.314

Apr

12.1

19.333

Mar

12.0

19.277

Feb

12.0

19.264

Jan

12.0

19.202

Dec 2012

11.9

19.000

Nov

11.8

18.908

Oct

11.7

18.806

Sep

11.6

18.561

Aug

11.5

18.406

Jul

11.5

18.335

Jun

11.4

18.235

May

11.3

18.059

Apr

11.2

17.893

Mar

11.1

17.670

Feb

10.9

17.405

Jan

10.8

17.133

Dec 2011

10.7

17.062

Nov

10.6

16.889

Oct

10.5

16.629

Sep

10.4

16.471

Aug

10.2

16.226

Jul 

10.1

16.076

Jun

10.0

15.912

May

10.0

15.851

Apr

9.9

15.739

Mar

10.0

15.838

Feb

10.0

15.844

Jan

10.1

15.915

Dec 2010

10.1

16.007

Source: EUROSTAT

http://ec.europa.eu/eurostat

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

Jun 2016

Unemployment Rate %

Unemployed Millions

Euro Zone

10.1

16.269

Germany

4.2

1.802

France

9.9

2.925

Netherlands

6.1

0.550

Finland

9.0

0.241

Portugal

11.2

0.569

Ireland

7.8

0.169

Italy

11.6

2.983

Greece

25.3*

1.115*

Spain

19.9

4.542

Belgium

8.5

0.416

European Union

8.6

20.986

*Apr 2016

Source: EUROSTAT

http://ec.europa.eu/eurostat

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

clip_image008

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

Source: EUROSTAT

http://ec.europa.eu/eurostat

VE Germany. Table VE-DE provides yearly growth rates of the German economy from 1971 to 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

https://www.destatis.de/EN/PressServices/Press/pr/2016/05/PE16_162_811.html

The Flash Germany Composite Output Index of the Markit Flash Germany PMI®, combining manufacturing and services, increased from 54.4 in Jun to 55.3 in Jul. The index of manufacturing output reached 56.8 in Jul, increasing from 55.7 in Jun, while the index of services increased to 54.6 in Jul from 53.7 in Jun. The overall Flash Germany Manufacturing PMI® decreased from 54.5 in Jun to 53.7 in Jul (https://www.markiteconomics.com/Survey//PressRelease.mvc/1e938c5263b1412087eb9e87c55e42d8). New orders in manufacturing increased. Oliver Kolodseike, Economist at Markit, finds continuing growth of the private sector of Germany (https://www.markiteconomics.com/Survey//PressRelease.mvc/1e938c5263b1412087eb9e87c55e42d8). 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 54.5 in May to 54.4 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/f8eca976268c4ecd8636e939d70e6ff8). Oliver Kolodseike, Economist at Markit and author of the report, finds steadying growth of the private sector of Germany (https://www.markiteconomics.com/Survey//PressRelease.mvc/f8eca976268c4ecd8636e939d70e6ff8). The Germany Services Business Activity Index decreased from 55.2 in May to 53.7 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/f8eca976268c4ecd8636e939d70e6ff8). The Markit/BME Germany Purchasing Managers’ Index® (PMI®), showing close association with Germany’s manufacturing conditions, increased from 52.1 in May to 54.5 in

Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/e42ed1b7ebdc495a9c1fa245606a9f62). New export orders increased. Oliver Kolodseike, Economist at Markit and author of the report, finds improving conditions (https://www.markiteconomics.com/Survey//PressRelease.mvc/e42ed1b7ebdc495a9c1fa245606a9f62).Table DE provides the country data table for Germany.

Table DE, Germany, Economic Indicators

GDP

IQ2016 0.7 ∆%; IQ2016/IQ2015 ∆% 1.3

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 5/15/16 5/29/16

Consumer Price Index

Jun month NSA ∆%: 0.1
Jun 12-month NSA ∆%: 0.3
Blog 7/17/16

Producer Price Index

Jun month ∆%: 0.4 NSA, 0.1 CSA
12-month NSA ∆%: -2.2
Blog 7/24/16

Industrial Production

MFG May month CSA ∆%: minus 1.8
12-month NSA: 4.2

Earlier Data:
Blog 4/12/15

Machine Orders

MFG May month ∆%: 0.0
May 12-month ∆%: 3.7

Earlier Data:
Blog 4/12/15

Retail Sales

May Month ∆% 0.9 Apr -0.3

12-Month May % 2.6 Apr 2.7

Earlier Data:

Blog 4/5/15

Employment Report

Unemployment Rate SA Apr 4.2%
Blog 7/31/16

Trade Balance

Exports May 12-month NSA ∆%: 1.6
Imports May 12 months NSA ∆%: -0.1
Exports May month CSA ∆%: -1.8; Imports May month CSA minus 0.1

Earlier Data:

Blog 4/12/15

Links to blog comments in Table DE: 7/24/16 http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html

7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

5/29/16 http://cmpassocregulationblog.blogspot.com/2016/05/appropriate-for-fed-to-increase.html

5/15/16 http://cmpassocregulationblog.blogspot.com/2016/05/recovery-without-hiring-ten-million.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

Germany’s labor market continues to show strength not found in most of the advanced economies, as shown in Table VE-1A. The number unemployed, not seasonally adjusted, decreased from 1.93 million in Jun 2015 to 1.80 million in Jun 2016, or 6.7 percent, while the unemployment rate decreased from 4.6 percent in Jun 2015 to 4.2 percent in Jun 2016. The number of persons in employment, not seasonally adjusted, increased from 39.89 million in Jun 2015 to 40.91 million in Jun 2016, or 2.6 percent, while the employment rate increased from 65.0 percent in Jun 2015 to 65.8 percent in Jun 2016. The number unemployed, seasonally adjusted, decreased 0.6 percent from 1.81 million in May 2016 to 1.80 million in Jun 2016, while the unemployment rate did not change from 4.2 percent in May 2016 to 4.2 percent in Jun 2016. The number of persons in employment, seasonally adjusted, did not change from 40.86 million in May 2016 to 40.87 million in Jun 2016, or 0.0 percent. The employment rate seasonally adjusted did not change from 65.7 in May 2016 to 65.7 in Jun 2016.

Table VE-1A, Germany, Unemployment Labor Force Survey

 

Jun 2016

May 2016

Jun 2015

NSA

     

Number
Unemployed Millions

1.80

∆% Jun 2016 /May 2016: 1.1

∆% Jun 2016/Jun 2015: -6.7

1.78

1.93

% Rate Unemployed

4.2

4.2

4.6

Persons in Employment Millions

40.91

∆% Jun 2016/May 2016: 0.6

∆% Jun 2016/Jun 2015: 2.6

40.66

39.89

Employment Rate

65.8

65.4

65.0

SA

     

Number
Unemployed Millions

1.80

∆% Jun 2016/ May  2016: -0.6

∆% Jun 2016/Jun 2015: –7.7

1.81

1.95

% Rate Unemployed

4.2

4.2

4.7

Persons in Employment Millions

40.87

∆% Jun 2016/ My 2016: 0.0

∆% Jun 2016/Jun 2015: 2.3

40.86

39.94

Employment Rate

65.7

65.7

65.1

NSA: not seasonally adjusted; SA: seasonally adjusted

Source: Statistisches Bundesamt Deutschland

https://www.destatis.de/EN/PressServices/Press/pr/2016/07/PE16_261_132.html

The unemployment rate in Germany as percent of the labor force in Table VE-2A stood at 6.5 percent in Sep, Oct and Nov 2012, increasing to 6.7 percent in Dec 2012, 7.4 percent in Jan 2013, 7.3 in Mar 2013 and 7.1 percent in Apr 2013. The unemployment rate fell to 6.8 percent in May 2013 and 6.6 percent in Jun 2013 and rose to 6.8 percent in Jul-Aug 2013. The rate fell to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013 and Nov 2013. The unemployment rate increased to 6.7 percent in Dec 2013 and 7.3 percent in Jan 2013. The unemployment rate reached 7.3 percent in Feb 2014 and 7.1 percent in Mar 2014. The unemployment rate fell to 6.8 percent in Apr 2014 and 6.6 percent in May 2014. The unemployment rate fell to 6.5 percent in Jun 2014, increasing to 6.6 percent in Jun 2014 and 6.7 percent in Aug 2014. The unemployment rate fell to 6.5 percent in Sep 2014 and 6.3 percent in Oct 2014 and Nov 2014. The unemployment rate increased to 6.4 percent in Dec 2014 and 7.0 percent in Jan 2015, falling to 6.9 percent in Feb 2015 and 6.5 percent in Apr 2015. The unemployment rate fell to 6.3 percent in May 2015 and 6.2 percent in Jun 2015. The unemployment rate increased to 6.3 percent in Jul 2015 and 6.4 percent in Aug 2015. The unemployment rate fell from 6.4 percent in Aug 2015 to 6.1 percent in Dec 2015, increasing to 6.7 percent in Jan 2016. The unemployment rate fell to 6.6 percent in Feb 2016 and 6.5 percent in Mar 2016. The unemployment rate fell to 6.3 percent in Apr 2016, decreasing to 6.0 percent in May 2016. The unemployment rate fell to 5.9 percent in Jun 2016, increasing to 6.0 percent in Jul 2016. The rate is much lower than 11.1 percent in 2005 and 9.6 percent in 2006.

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

Jul 2016

6.0

Jun

5.9

May

6.0

Apr

6.3

Mar

6.5

Feb

6.6

Jan

6.7

Dec 2015

6.1

Nov

6.0

Oct

6.0

Sep

6.2

Aug

6.4

Jul

6.3

Jun

6.2

May

6.3

Apr

6.5

Mar

6.8

Feb

6.9

Jan

7.0

Dec 2014

6.4

Nov

6.3

Oct

6.3

Sep

6.5

Aug

6.7

Jul

6.6

Jun

6.5

May

6.6

Apr

6.8

Mar

7.1

Feb

7.3

Jan

7.3

Dec 2013

6.7

Nov

6.5

Oct

6.5

Sep

6.6

Aug

6.8

Jul

6.8

Jun

6.6

May

6.8

Apr

7.1

Mar

7.3

Feb

7.4

Jan

7.4

Dec 2012

6.7

Nov

6.5

Oct

6.5

Sep

6.5

Aug

6.8

Jul

6.8

Jun

6.6

May

6.7

Apr

7.0

Mar

7.2

Feb

7.4

Jan

7.3

Dec 2011

6.6

Nov

6.4

Oct

6.5

Sep

6.6

Aug

7.0

Jul

7.0

Jun

6.9

May

7.0

Apr

7.3

Mar

7.6

Feb

7.9

Jan

7.9

Dec 2010

7.1

Dec 2009

7.8

Dec 2008

7.4

Dec 2007

8.1

Dec 2006

9.6

Dec 2005

11.1

Source: Statistisches Bundesamt Deutschland

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

Chart VE-1A of Statistisches Bundesamt Deutschland, or Federal Statistical Office of Germany, shows the long-term decline of the rate of unemployment in Germany from more than 12 percent in early 2005 to 6.6 percent in Dec 2011, increasing to 6.7 percent in Dec 2012, 6.8 percent in Apr 2013 and 6.6 percent in May 2013. The unemployment rate rose slightly to 6.8 percent in Aug 2013, falling to 6.6 percent in Sep 2013 and 6.5 percent in Oct 2013. The rate remained at 6.5 percent in Nov 2013, increasing to 6.7 percent in Dec 2013 and 7.3 in Jan 2014. The rate remained at 7.3 percent in Feb 2014, declining to 7.1 percent in Mar 2014. The rate fell to 6.8 percent in Apr 2014, 6.6 percent in May 2014 and 6.5 percent in Jun 2014. The rate increased to 6.6 percent in Jul 2014 and 6.7 percent in Aug 2014, falling to 6.5 percent in Sep 2014. The rate fell to 6.3 percent in Oct 2014 and 6.3 percent in Nov 2014, increasing to 6.4 percent in Dec 2014. The rate increased to 7.0 percent in Jan 2015, falling to 6.9 percent in Feb 2015 and 6.8 percent in Mar 2015. The unemployment rate fell to 6.5 percent in Apr 2015 and 6.3 percent in May 2015. The unemployment rate fell to 6.2 percent in Jun 2015, increasing to 6.3 percent in Jul 2015 and 6.4 percent in Aug 2015. The unemployment rate fell to 6.2 percent in Sep 2015 and 6.0 percent in Oct 2015. The unemployment rate stabilized at 6.0 percent in Nov 2015, increasing to 6.1 percent in Dec 2015. The unemployment rate increased to 6.7 percent in Jan 2016 and fell to 6.6 percent in Feb 2016 and 6.5 percent in Mar 2016. The unemployment rate fell to 6.3 percent in Apr 2016, decreasing to 6.0 percent in May 2016 and 5.9 percent in Jun 2016. The unemployment rate increased to 6.0 percent in Jul 2016.

clip_image009

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

Source: Statistisches Bundesamt Deutschland

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

VF France. Table VF-FR provides growth rates of GDP of France with the estimates of Institut National de la Statistique et des Études Économiques (INSEE). The long-term rate of GDP growth of France from IVQ1949 to IQ2016 is quite high at 3.2 percent. France’s growth rates were quite high in the four decades of the 1950s, 1960, 1970s and 1980s with an average growth rate of 4.0 percent compounding the average rates in the decades and discounting to one decade. The growth impulse diminished with 2.0 percent in the 1990s and 1.8 percent from 2000 to 2007. The average growth rate from 2000 to 2015, using fourth quarter data, is 1.1 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 ∆%

1949-2016

3.2

2007-2016**

0.5

2007-2015*

0.5

2007-2014

0.3

2000-2015

1.1

2000-2014

1.1

2000-2007

1.8

1990-1999

2.0

1980-1989

2.6

1970-1979

3.7

1960-1969

5.7

1950-1959

4.2

*IVQ2007 to IVQ2015 **IVQ2007 to IQ2016

Source: Institut National de la Statistique et des Études Économiques

http://www.insee.fr/en/themes/info-rapide.asp?id=28&date=20160624

The Markit Flash France Composite Output Index increased from 49.6 in Jun to 50.0 in Jul (https://www.markiteconomics.com/Survey//PressRelease.mvc/b6f2d99ff3b048b48b82a0ff0f27dfa0) Jack Kennedy, Senior Economist at Markit and author of the report, finds stabilizing activity (https://www.markiteconomics.com/Survey//PressRelease.mvc/b6f2d99ff3b048b48b82a0ff0f27dfa0). The Markit France Composite Output Index, combining services and manufacturing with close association with French GDP, decreased from 50.9 in May to 49.6 in Jun, indicating moderately deteriorating activity of the private sector (https://www.markiteconomics.com/Survey//PressRelease.mvc/e44e667203174270a1d5c0000ff30227). Samuel Agass, Economist at Markit and author of the France Services PMI®, finds stagnating conditions (https://www.markiteconomics.com/Survey//PressRelease.mvc/e44e667203174270a1d5c0000ff30227). The Markit France Services Activity index decreased from 51.6 in May to 49.9 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/e44e667203174270a1d5c0000ff30227). The Markit France Manufacturing Purchasing Managers’ Index® decreased to 48.3 in Jun from 48.4 in May (https://www.markiteconomics.com/Survey//PressRelease.mvc/162f8973e4f94b2bbf95b7ad5f4c3ce9). Jack Kennedy, Senior Economist at Markit and author of the France Manufacturing PMI®, finds challenging conditions in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/162f8973e4f94b2bbf95b7ad5f4c3ce9). Table FR provides the country data table for France.

Table FR, France, Economic Indicators

CPI

Jun month ∆% 0.1
12 months ∆%: 0.2
7/17/16

PPI

Jun month ∆%: 0.4
Jun 12 months ∆%: -3.1

Blog 7/31/16

GDP Growth

IQ2016/IVQ2015 ∆%: 0.6
IQ2016/IQ2016 ∆%: 1.3
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 5/1/16 6/5/16 06/26/16

Industrial Production

May ∆%:
Manufacturing 0.0 Quarter YOY ∆%: 0.3

Earlier Data:
Blog 4/12/15

Consumer Spending

Manufactured Goods
Jun ∆%: -1.2 May 12-Month Manufactured Goods
∆%: 0.6

Earlier Data:
Blog 4/5/15

Employment

Unemployment Rate: IQ2016 9.9%
Blog 5/22/16

Trade Balance

May Exports ∆%: month 1.4, 12 months -0.6

Imports ∆%: month -3.5, 12 months -4.8

Earlier Data:

Blog 4/12/15

Confidence Indicators

Historical average 100

Jun Mfg Business Climate 103.0

Earlier Data:

Blog 3/29/15

Links to blog comments in Table FR: 7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

6/26/16 http://cmpassocregulationblog.blogspot.com/2016/06/of-course-considerable-uncertainty.html

6/5/16 http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html

5/22/16 http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html

5/1/16 http://cmpassocregulationblog.blogspot.com/2016/05/economic-activity-appears-to-have.html

3/27/16 http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.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 0.3 percent in IQ2016 and grew 1.0 percent relative to a year earlier. GDP increased 0.2 percent in IVQ2015 and increased 1.1 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 0.1 percent relative to a year earlier. GDP decreased 0.1 percent in IVQ2014 and fell 0.4 percent relative to a year earlier. GDP decreased 0.1 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 0.1 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 0.9 percent in IQ2013 and declined 2.7 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 0.6 percent in IVQ2012 and minus 0.9 percent in IQ2013. GDP contracted cumulatively 5.1 percent in eight consecutive quarterly contractions from IIIQ2011 to IIQ2013 at the annual equivalent rate of minus 2.6 percent. The total contraction in the 13 quarters including IVQ2013, IQ2014, IIQ2014, IIIQ2014 and IVQ2014 accumulates to 5.6 percent. The yearly rate has fallen from 2.3 percent in IVQ2010 to minus 2.7 percent in IVQ2012, minus 2.7 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 0.1 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 0.4 percent in IVQ2014 relative to a year earlier. GDP increased 0.1 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 1.1 percent in IVQ2015 relative to a year earlier. GDP increased 1.0 percent in IQ2016 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 IQ2016 is lower by 8.5 percent relative to IQ2008. The GDP of the euro zone is 0.5 percent higher in IQ2016 relative to IQ2008. The GDP of Italy increased at the annual equivalent rate of 1.5 percent from IQ1999 to IQ2008, which is lower than 2.3 percent for the euro zone as a whole in the same period.

Table VG-IT, Italy, GDP ∆%

 

Quarter ∆% Relative to Preceding Quarter

Quarter ∆% Relative to Same Quarter Year Earlier

IQ2016

0.3

1.0

IVQ2015

0.2

1.1

IIIQ2015

0.2

0.8

IIQ2015

0.3

0.6

IQ2015

0.4

0.1

IVQ2014

-0.1

-0.4

IIIQ2014

-0.1

-0.4

IIQ2014

-0.1

-0.2

IQ2014

-0.1

-0.1

IVQ2013

-0.1

-0.9

IIIQ2013

0.2

-1.4

IIQ2013

-0.1

-2.0

IQ2013

-0.9

-2.7

IVQ2012

-0.6

-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/186730

The Markit Italy Business Activity Index increased from 49.8 in May to 51.9 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/94d1fbf9ef544e04bb6287f0be96a934). Phil Smith, Economist at Markit and author of the Italy Services PMI®, finds slowing recovery in IIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/94d1fbf9ef544e04bb6287f0be96a934). The Markit Italy Purchasing Managers’ Index® (PMI®), increased from 52.4 in May to 53.5 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/c0f0e743fcb541f58dddbe6909e0481d). New export orders continued to increase. Phil Smith, Economist at Markit and author of the Italian Manufacturing PMI®, finds steadying growth in manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/c0f0e743fcb541f58dddbe6909e0481d). Table IT provides the country data table for Italy.

Table IT, Italy, Economic Indicators

Consumer Price Index

Jun month ∆% 0.1
12 months ∆%: -0.4
7/17/16

Producer Price Index

May month ∆%: 0.7
May 12-month ∆%: -4.2

Blog 7/3/16

GDP Growth

IQ2016/IVQ2015 SA ∆%: 0.3
IQ2016/IQ2015 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 5/15/16 6/5/16

Labor Report

Jun 2016

Participation rate 64.9%

Employment ratio 57.3%

Unemployment rate 11.6%

Youth Unemployment 36.5%

Blog 7/31/16

Industrial Production

May month ∆%: -0.6
12 months CA ∆%: -0.6

Earlier Data:
Blog 4/19/15

Retail Sales

May month ∆%: 0.3

May 12-month ∆%: -1.3

Earlier Data:

Blog 4/26/15

Business Confidence

Mfg Jul 103.1, Mar 102.2

Construction Jul 126.2, Mar 118.4

Earlier Data:

Blog 4/5/15

Trade Balance

Balance May SA €4790 million
Exports May month SA ∆%: -0.2; Imports month ∆%: -1.2
Exports 12 months May NSA ∆%: 2.4 Imports 12 months NSA ∆%: -0.2

Earlier Data:
Blog 4/19/15

Links to blog comments in Table IT: 7/17/16 http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

6/5/16 http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html

5/15/16 http://cmpassocregulationblog.blogspot.com/2016/05/recovery-without-hiring-ten-million.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

Data on Italy’s labor market since 2004 are in Table VG-1A. The unemployment rate has risen from 6.2 percent in Dec 2006 to 11.6 percent in Jun 2016. The rate of youth unemployment for ages 15 to 24 years increased from 21.4 percent in Dec 2006 to 36.5 percent in Jun 2016. As in other advanced economies, unemployment has reached high levels.

Table VG-1A, Italy, Labor Report

 

Participation Rate %

Employment Ratio %

Unemployment Rate %

Unemployment
Rate 15-24 Years %

Jun 2016

64.9

57.3

11.6

36.5

May

64.7

57.2

11.5

36.8

Apr

64.7

57.0

11.6

36.9

Mar

64.4

56.8

11.5

36.7

Feb

64.3

56.6

11.7

38.3

Jan

64.4

56.7

11.7

39.0

Dec 2015

64.1

56.5

11.7

38.6

Nov

64.2

56.6

11.5

38.2

Oct

64.2

56.6

11.6

39.3

Sep

64.1

56.6

11.5

39.3

Aug

64.1

56.6

11.5

39.9

Jul

63.9

56.3

11.7

39.3

Jun

64.2

56.2

12.2

42.0

May

64.0

56.0

12.3

41.2

Apr

64.0

56.1

12.1

41.4

Mar

64.0

55.9

12.4

42.2

Feb

64.0

56.0

12.2

41.6

Jan

63.9

55.9

12.3

40.9

Dec 2014

64.0

56.0

12.3

40.9

Nov

64.4

55.8

13.1

42.9

Oct

64.3

55.9

12.9

42.3

Sep

64.3

55.9

12.8

42.1

Aug

63.7

55.6

12.4

43.3

Jul

64.0

55.8

12.6

43.1

Jun

63.7

55.8

12.1

42.4

May

63.8

55.7

12.5

41.9

Apr

63.6

55.4

12.6

43.0

Mar

63.9

55.7

12.7

43.5

Feb

63.8

55.5

12.8

42.9

Jan

63.7

55.4

12.8

43.2

Dec 2013

63.5

55.5

12.5

42.7

Dec 2012

63.5

56.2

11.4

38.2

Dec 2011

62.9

56.8

9.6

31.8

Dec 2010

62.0

56.9

8.1

28.9

Dec 2009

62.2

56.9

8.4

26.5

Dec 2008

62.4

58.1

6.8

22.8

Dec 2007

62.9

58.7

6.6

21.8

Dec 2006

62.4

58.4

6.2

21.4

Dec 2005

62.6

57.8

7.5

23.1

Dec 2004

62.5

57.6

7.8

23.8

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/189631

Table VG-2A provides more detail on the labor report for Italy in Jun 2016. The level of employment increased 0.3 percent from May 2016 to Jun 2016 and increased 329,000 from Jun 2015 to Jun 2016. Unemployment increased 27,000 in Jun 2016 and decreased 140,000 from a year earlier. A dramatic aspect found in most advanced economies is the high rate of unemployment of youth at 36.5 percent in Jun 2016 for ages 15 to 24 years.

Table VG-2A, Italy, Labor Report, NSA

Jun 2016

1000s

Change from Prior Month 1000s

∆% from Prior Month

Change from Prior Year 1000s

∆% from Prior Year

EMP

22,781

71

0.3

329

1.5

UNE

2,983

27

0.9

-140

-4.5

INA   15-64

13,657

-57

-0.4

-325

-2.3

EMP 15-24

1,017

15

1.5

110

12.3

UNE 15-24

580

2

0.3

-70

-10.8

INA 15-24

4,322

-15

-0.3

-65

-1.5

EMP %

57.3

 

0.1

 

0.4*

UNE %

11.6

 

0.1

 

0.0*

Youth UNE %  15-24

36.5

 

-0.3

 

-1.2*

INA % 15-64

35.1

 

-0.1

 

-0.4*

Notes: EMP: Employed; UNE: Unemployed; INA 15-64: Inactive aged 15 to 64; EMP %: Employment Rate; UNE %: Unemployment Rate; Youth UNE % 15-24: Youth Unemployment Rate aged 15 to 24; INA % 15-64: Inactive Rate aged 15 to 64. *Percentage change from prior quarter to current quarter

Source: Istituto Nazionale di Statistica

http://www.istat.it/it/archivio/189631

Chart VG-1A provides the rate of unemployment in Italy that decreased from 12.2 percent in Jun 2015 to 11.6 percent in Jun 2016.

clip_image010

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

Source: Istituto Nazionale di Statistica

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

Chart VG-2A of the Istituto Nazionale di Statistica provides the total number of employed persons in Italy. The level of employment increased from 22.452 million in Jun 2015 to 22.781 million in Jun 2016.

clip_image011

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

Source: Istituto Nazionale di Statistica

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

VH United Kingdom. Annual data in Table VH-UK show the strong impact of the global recession in the UK with decline of GDP of 4.3 percent in 2009 after dropping 0.6 percent in 2008. Recovery of 1.9 percent in 2010 is relatively low in comparison with annual growth rates in 2007 and earlier years. Growth was only 1.5 percent in 2011 and 1.3 percent in 2012. Growth increased to 1.9 percent in 2013 and 3.1 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 2.7 percent. Growth in the current cyclical expansion from 2010 to 2015 has been only at 2.0 percent as advanced economies struggle with weak internal demand and world trade. GDP in 2015 is higher by 7.0 percent relative to 2007 while it would have been 23.8 higher at trend of 2.7 percent as from 2000 to 2007.

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

 

∆% on Prior Year

1998

3.2

1999

3.3

2000

3.7

2001

2.7

2002

2.4

2003

3.5

2004

2.5

2005

3.0

2006

2.5

2007

2.6

2008

-0.6

2009

-4.3

2010

1.9

2011

1.5

2012

1.3

2013

1.9

2014

3.1

2015

2.2

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

2.2

2000-2007

2.7

2007-2013*

1.6

2007-2014*

4.7

2007-2015

0.9

2000-2015

1.7

*Absolute change from 2007 to 2013 and 2007 to 2014

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

The Markit Flash UK PMI® Composite Output Index fell from 52.4 in Jun to 47.7 in Jul, which is the lowest in 87 months (https://www.markiteconomics.com/Survey//PressRelease.mvc/b68c3686a48c40198505b81e4e55cd81). Chris Williamson, Chief Economist at Markit, finds the index suggests pace of contraction of GDP at 0.4 percent in IIIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/b68c3686a48c40198505b81e4e55cd81). The Business Activity Index of the Markit/CIPS UK Services PMI® decreased from 53.5 in May to 52.3 in Jun (https://www.markiteconomics.com/Survey//PressRelease.mvc/b93210b9d29a440383344176b79696c2). Chris Williamson, Chief Economist at Markit, finds the combined indices consistent with the UK economy growing at around 0.2 percent in IIQ2016 (https://www.markiteconomics.com/Survey//PressRelease.mvc/b93210b9d29a440383344176b79696c2). The Markit/CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) increased to 52.1 in Jun from 50.4 in May (https://www.markiteconomics.com/Survey//PressRelease.mvc/6f0f6957993c482997cc6370a2dea31d). New export orders increased. Rob Dobson, Senior Economist at Markit that compiles the Markit/CIPS Manufacturing PMI®, finds improving manufacturing (https://www.markiteconomics.com/Survey//PressRelease.mvc/6f0f6957993c482997cc6370a2dea31d). Table UK provides the economic indicators for the United Kingdom.

Table UK, UK Economic Indicators

CPI

Jun month ∆%: 0.2
Jun 12-month ∆%: 0.5
Blog 7/24/16

Output/Input Prices

Output Prices: Jun 12-month NSA ∆%: -0.4; excluding food, petroleum ∆%: 0.7
Input Prices: Jun 12-month NSA
∆%: -0.5
Excluding ∆%: -0.4
Blog 7/24/16

GDP Growth

IIQ2016 prior quarter ∆% 0.6; year earlier same quarter ∆%: 2.2
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 5/1/16 5/29/16 7/3/16 7/31/16

Industrial Production

May 2016/May 2015 ∆%: Production Industries 1.4; Manufacturing 1.7

Earlier Data:
Blog 4/12/15

Retail Sales

Jun month ∆%: -0.9
Jun 12-month ∆%: 4.3

Earlier Data:
Blog 4/26/15

Labor Market

Mar-May 2016 Unemployment Rate: 5.0%
Blog 7/24/16 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 May minus ₤2263 million
Exports May ∆%: -4.4; Mar-May ∆%: 2.2
Imports May ∆%: -3.5 Mar-May ∆%: 1.9

EARLIER DATA:
Blog 4/12/15

Links to blog comments in Table UK: 7/24/16 http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html

7/3/16 http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html

5/29/16 http://cmpassocregulationblog.blogspot.com/2016/05/appropriate-for-fed-to-increase.html

5/1/16 http://cmpassocregulationblog.blogspot.com/2016/05/economic-activity-appears-to-have.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-1 provides quarter on quarter chained value measures of GDP since 1998 in the third estimate for IQ2016 (https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/quarterlynationalaccounts/quarter1jantomar2016). The UK Office for National Statistics provides revision of the national accounts in accordance with the European System of Accounts 2010 (ESA 2010) (http://www.ons.gov.uk/ons/rel/naa2/quarterly-national-accounts/q2-2015/index.html). GDP grew 0.4 percent in IQ2016 relative to IVQ2015. Growth of 1.1 percent in IIIQ2012 interrupted three consecutive quarters of weakness in GDP growth. Most advanced economies are underperforming relative to the period before the global recession. The UK Office for National Statistics analyzes that the decline in the impulse of growth in the UK originated in weakness in markets in the UK and worldwide. The UK Office for National Statistics data shows that GDP in IIQ2016 is higher by 7.7 percent relative to the peak in IQ2008 (https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016). UK GDP in chained value measures is ₤433,710 million in IQ2008 and ₤462,139 million in IVQ2015 or increase of 6.6 percent. Growth at trend of 2.7 percent per year would bring GDP to ₤533,176 million in IVQ2015. UK GDP in IVQ2015 at ₤462,139 million is lower by ₤71,037 million relative to trend at ₤533,176 million or lower by 13.3 percent compared with trend. The UK Office for National Statistics estimates the contraction of 6.3 percent from peak to trough (https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016), which is roughly equal at 6.3 percent to compounding the quarterly rates except for rounding in Table VH-1 from IIQ2008 to IIQ2009. UK GDP is ₤433,710 million in IQ2008 declining 6.3 percent to ₤406,353 million in IIQ2009. GDP increased 13.7 percent from IIQ2009 to ₤462,139 million in IVQ2015 or at the annual equivalent rate of 2.1 percent. GDP increased 6.6 percent from IQ2008 to IVQ2015 or at the annual equivalent rate of 0.8 percent. Using the seasonally adjusted chained-value measures (https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016), GDP increased from ₤433,710 million in IQ2008 to ₤466,997 million in IIQ2016, or 7.7 percent at the annual equivalent rate of 0.9 percent. UK GDP in IIQ2016 at ₤466,997 million is lower by ₤73,329 million relative to trend at ₤540,326 million or lower by 13.6 percent compared with trend. UK GDP increased 14.9 percent from IIQ2009 to IIQ2016 at the annual equivalent rate of 2.1 percent.

Table VH-1, UK, Percentage Change of GDP from Prior Quarter, Chained Value Measures ∆%

 

IQ

IIQ

IIIQ

IV

2016

0.4

0.6

   

2015

0.3

0.4

0.4

0.7

2014

0.8

0.9

0.8

0.8

2013

0.6

0.5

0.8

0.5

2012

0.4

-0.1

1.1

-0.2

2011

0.6

0.1

0.4

0.2

2010

0.5

1.0

0.6

0.1

2009

-1.6

-0.2

0.1

0.4

2008

0.1

-0.7

-1.7

-2.3

2007

1.0

0.7

0.8

0.8

2006

0.3

0.2

0.1

0.4

2005

0.6

1.1

1.1

1.4

2004

0.6

0.5

0.2

0.6

2003

0.8

0.9

1.0

0.8

2002

0.4

0.7

0.8

0.9

2001

1.3

0.7

0.7

0.4

2000

1.0

0.7

0.3

0.2

1999

0.7

0.1

1.8

1.4

1998

0.6

0.6

0.7

1.0

Source: UK Office for National Statistics https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

Chart VH-1 of the UK Office for National Statistics provides UK GDP in ₤ Billion SA CVM and percentage change in a quarter relative to the prior quarter. UK GDP contracted sharply during five consecutive quarters, rebounding above the pre-recession peak.

clip_image012

Chart VH-1, United Kingdom, Gross Domestic Product, CVM, SA, ₤ Billion, Percentage Change on Prior Quarter

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

There are four periods in growth of GDP in a quarter relative to the same quarter a year earlier in the UK in the years from 1998 to the present as shown in Table VH-2. (1) Growth rates were quite high from 2000 to 2007. (2) There were six consecutive quarters of contraction of GDP from IIIQ2008 to IVQ2009. Contractions relative to the quarter a year earlier were quite sharp with the highest of 4.4 percent in IVQ2008, 6.1 percent in IQ2009, 5.7 percent in IIQ2009 and 4.0 percent in IIIQ2009. (3) The economy bounced strongly with 2.1 percent in IIQ2010, 2.6 percent in IIIQ2010 and 2.3 percent in IVQ2010. (4) Recovery did not continue at rates comparable to those in 2000 to 2007 and even relative to those in the final three quarters of 2010. Growth relative to the same quarter a year earlier fell from 2.3 percent in IVQ2010 to 1.3 percent in IIQ2011, 1.2 percent in IIIQ2011, 1.3 percent in IVQ2011 but only 1.2 percent in IQ2012, increase of 1.0 percent in IIQ2012 relative to IIQ2011, increase of 1.8 percent in IIIQ2012 and 1.3 percent in IVQ2012. In IQ2012, UK GDP increased 0.4 percent and increased 1.2 percent relative to a year earlier. In IIQ2012, GDP fell 0.1 percent relative to IQ2012 and increased 1.0 percent relative to a year earlier. In IIIQ2012, GDP increased 1.1 percent and increased 1.8 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.2 percent and increased 1.3 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. GDP increased 1.5 percent in IQ2013 relative to a year earlier and 0.6 percent in IQ2013 relative to IVQ2012. In IIQ2013, GDP increased 0.5 percent and 2.1 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 1.7 percent relative to a year earlier. GDP increased 0.5 percent in IVQ2013 and 2.4 percent relative to a year earlier. In IQ2014, GDP increased 0.8 percent and 2.6 percent relative to a year earlier. GDP increased 0.9 percent in IIQ2014 and 3.1 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 3.1 percent relative to a year earlier. In IVQ2014, GDP increased 0.8 percent and 3.5 percent relative to a year earlier. GDP increased 0.3 percent in IQ2015 and increased 2.9 percent relative to a year earlier. GDP increased 0.4 percent in IIQ2015 and increased 2.3 percent relative to a year earlier. UK GDP increased 0.4 percent in IIIQ2015 and increased 2.0 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2015 and increased 1.8 percent relative to a year earlier. GDP increased 0.4 percent in IQ2016 and increased 2.0 percent relative to a year earlier. GDP increased 0.6 percent in IIQ2016 and grew 2.2 percent relative to a year earlier.

Table VH-2, UK, Percentage Change of GDP from Same Quarter a Year Earlier, Chained Value Measures ∆%

 

IQ

IIQ

IIIQ

IVQ

2016

2.0

2.2

   

2015

2.9

2.3

2.0

1.8

2014

2.6

3.1

3.1

3.5

2013

1.5

2.1

1.7

2.4

2012

1.2

1.0

1.8

1.3

2011

2.3

1.3

1.2

1.3

2010

0.8

2.1

2.6

2.3

2009

-6.1

-5.7

-4.0

-1.4

2008

2.4

1.0

-1.4

-4.4

2007

1.8

2.3

2.9

3.3

2006

3.9

3.0

2.1

1.1

2005

1.9

2.5

3.4

4.2

2004

3.3

2.9

2.1

1.8

2003

3.2

3.4

3.6

3.6

2002

2.2

2.2

2.3

2.8

2001

2.5

2.5

2.9

3.1

2000

4.4

5.0

3.5

2.2

1999

3.0

2.5

3.6

4.0

1998

3.6

3.1

3.2

2.9

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

Table VH-3 provides annual percentage changes of gross value added and key components. Production fell 8.7 percent in 2009 and its most important component manufacturing fell 9.4 percent. Services fell 3.0 percent in 2009. Services grew in all years from 2010 to 2015 while manufacturing fell 1.4 percent in 2012 and fell 1.1 percent in 2013. Manufacturing resumed growth with 2.7 percent in 2014 followed by decline of 0.3 percent in 2015.

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

 

TP

MFG

CONS

SERV

GVA BP

GVA EX

2013 Weights

146

103

59

788

1000

986

2011

-0.6

2.2

2.2

2.2

2.0

2.3

2012

-2.8

-1.4

-7.5

2.5

1.2

1.3

2013

-0.8

-1.1

1.6

2.8

2.2

2.4

2014

1.3

2.7

7.5

3.3

2.9

2.8

2015

1.0

-0.3

3.4

2.7

2.3

2.2

Note: TP: Total Production; MFG: Manufacturing; CONS: Construction; SERV: Services; GVA BP: Gross Value Added at Basic Prices; GVA EX: Gross Value Added excluding Oil and Gas

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

Table VH-4A shows that for IIQ2016 that GDP at market prices increased 0.6 percent. Total production increased 2.1 percent with growth of manufacturing at 1.8 percent. Services increased 0.5 percent.

Table VH-4A, UK, Gross Value Added by Components, ∆% on Prior Quarter

   

TP

MFG

CONS

SERV

GDP Market Prices

GAV EX

2013 Weights

 

146

103

59

788

1000

986

2012

Q4

-2.2

-1.7

0.8

-0.1

-0.2

-0.1

2013

Q1

0.4

-0.2

-0.4

0.4

0.6

0.4

 

Q2

0.7

0.7

1.7

0.1

0.5

0.3

 

Q3

0.4

0.3

2.8

0.4

0.8

0.5

 

Q4

0.4

0.4

1.3

0.5

0.5

0.6

2014

Q1

0.5

1.6

2.3

1.0

0.8

1.1

 

Q2

0.3

0.6

1.9

1.2

0.9

1.2

 

Q3

0.2

0.3

2.5

1.0

0.8

1.0

 

Q4

0.3

0.3

0.3

1.0

0.8

0.9

2015

Q1

0.4

-0.1

1.9

0.2

0.3

0.2

 

Q2

0.7

-0.5

1.0

0.4

0.4

0.2

 

Q3

0.1

-0.4

-1.1

0.6

0.4

0.4

 

Q4

-0.3

0.2

0.7

0.9

0.7

0.7

2016

Q1

-0.2

-0.2

-0.3

0.6

0.4

0.5

 

Q2

2.1

1.8

-0.4

0.5

0.6

0.6

Note: TP: Total Production; MFG: Manufacturing; CONS: Construction; SERV: Services; GVA BP: Gross Value Added at Basic Prices; GVA EX: Gross Value Added excluding Oil and Gas

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

Table VH-4B shows for IIQ2016 that GDP at market prices increased 2.2 percent relative to a year earlier while gross value added with exclusions increased 2.1 percent. Total production increased 1.8 percent and manufacturing expanded with growth at 1.4 percent. Services grew 2.6 percent relative to a year earlier.

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

2013 Weights

 

146

103

59

SERV

GDP Market Prices

GAV EX

2014

Q2

1.5

2.9

8.5

3.1

3.1

3.3

 

Q3

1.4

2.9

8.2

3.7

3.1

3.9

 

Q4

1.3

2.8

7.1

4.3

3.5

4.2

2015

Q1

1.2

1.1

6.7

3.5

2.9

3.3

 

Q2

1.5

-0.1

5.7

2.6

2.3

2.4

 

Q3

1.4

-0.8

2.1

2.2

2.0

1.7

 

Q4

0.9

-0.9

2.5

2.1

1.8

1.5

2016

Q1

0.3

-1.0

0.2

2.5

2.0

1.8

 

Q2

1.8

1.4

-1.2

2.6

2.2

2.1

Note: TP: Total Production; MFG: Manufacturing; CONS: Construction; SERV: Services; GVA BP: Gross Value Added at Basic Prices; GVA EX: Gross Value Added excluding Oil and Gas

Source: UK Office for National Statistics

https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/grossdomesticproductpreliminaryestimate/aprtojune2016

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

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