US Consumer Price Index Increased 8.5 Percent in 12 Months Ending in Mar 2022, which is the Highest Increase since 8.9 Percent in Dec 1981, Producer Prices of Finished Goods Increased 15.2 Percent in 12 Months Ending in Mar 2022 and Final Demand Producer Prices Increased 11.2 Percent, United States International Trade, United States Current Account and Net International Investment Position, United States Inflation, Stagflation Risks, Worldwide Fiscal, Monetary and External Imbalances, World Cyclical Slow Growth, and Government Intervention in Globalization
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022.
IC United States Inflation
IC Long-term US Inflation
ID Current US Inflation
IIA United States International Trade
II United States Current Account of Balance of Payments and International Investment Position
III World Financial Turbulence
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
Preamble. United States total public debt outstanding is $30.3 trillion and debt held by the public $23.8 trillion (https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny). The Net International Investment Position of the United States, or foreign debt, is $18.1 trillion (https://www.bea.gov/sites/default/files/2022-03/intinv421.pdf Section II and earlier https://cmpassocregulationblog.blogspot.com/2022/01/increase-in-dec-2021-of-nonfarm-payroll.html). The United States current account deficit is 3.6 percent of GDP in IVQ2021 (https://cmpassocregulationblog.blogspot.com/2022/03/accelerating-inflation-throughout-world.html https://www.bea.gov/sites/default/files/2022-03/trans421.pdf). The Treasury deficit of the United States reached $2.8 trillion in fiscal year 2021 (https://fiscal.treasury.gov/reports-statements/mts/). Total assets of Federal Reserve Banks reached $9.0 trillion on Apr 13, 2022 and securities held outright reached $8.5 trillion (https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1). US GDP nominal NSA reached $24.0 trillion in IVQ2021 (https://apps.bea.gov/iTable/index_nipa.cfm). Total Treasury interest-bearing, marketable debt held by private investors increased from $3635 billion in 2007 to $16,439 billion in Sep 2021 (Fiscal Year 2021) or increase by 352.2 percent (https://fiscal.treasury.gov/reports-statements/treasury-bulletin/). John Hilsenrath, writing on “Economists Seek Recession Cues in the Yield Curve,” published in the Wall Street Journal on Apr 2, 2022, analyzes the inversion of the Treasury yield curve with the two-year yield at 2.430 on Apr 1, 2022, above the ten-year yield at 2.374. Hilsenrath argues that inversion appears to signal recession in market analysis but not in alternative Fed approach.
Chart CPI-H provides 12 months percentage changes of the US Consumer Price Index from 1981 to 2022. The increase of 8.5 percent of the US CPI in the 12 months ending in Mar 2022 is the highest since 8.9 percent in Dec 1981 in the beginning adjustment from the Great Inflation.
Chart CPI-H, US, Consumer Price Index, 12-Month Percentage Change, NSA, 1981-2022
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart VII-4 of the Energy Information Administration provides the price of the Natural Gas Futures Contract increasing from $2.581 on Jan 4, 2021 to $6.680 per million Btu on Apr 12, 2022 or 158.8 percent.
Chart VII-4, US, Natural Gas Futures Contract 1
Source: US Energy Information Administration
https://www.eia.gov/dnav/ng/hist/rngc1d.htm
Chart VII-5 of the US Energy Administration provides US field production of oil decreasing from a peak of 12,966 thousand barrels per day in Nov 2019 to the final point of 11.371 thousand barrels per day in Jan 2022.
Chart VII-5, US, US, Field Production of Crude Oil, Thousand Barrels Per Day
Source: US Energy Information Administration
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
Chart VI-6 of the US Energy Information Administration provides imports of crude oil. Imports increased from 245,369 thousand barrels per day in Jan 2021 to 252,916 thousand in Jan 2022.
Chart VII-6, US, US, Imports of Crude Oil and Petroleum Products, Thousand Barrels
Source: US Energy Information Administration
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMUS1&f=M
Chart VI-7 of the EIA provides US Petroleum Consumption, Production, Imports, Exports and Net Imports 1950-2020. There was sharp increase in production in the final segment that reached consumption in 2020.
Chart VI-7, US Petroleum Consumption, Production, Imports, Exports and Net Imports 1950-2020, Million Barrels Per Day
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php
V World Economic Slowdown. Table V-1 is constructed with the database of the IMF (https://www.imf.org/external/pubs/ft/weo/2020/01/weodata/index.aspx) to show GDP in dollars in 2018 and the growth rate of real GDP of the world and selected regional countries from 2018 to 2021. The data illustrate the concept often repeated of “two-speed recovery” of the world economy from the recession of 2007 to 2009. There is a major change in the sharp contraction of world real GDP of 3.1 percent in 2020 in the probable global recession originating in the lockdown of economic activity in the COVID-19 event. The IMF has changed its measurement of growth of the world economy to 3.6 percent in 2018 and reducing the forecast rate of growth to 2.9 percent in 2019, minus 3.1 percent in 2020 and 5.8 percent in 2021. Slow-speed recovery occurs in the “major advanced economies” of the G7 that are projected to grow at much lower rates than world output, 0.4 percent on average from 2018 to 2021, in contrast with 2.2 percent for the world as a whole. While the world would grow 9.3 percent in the four years from 2018 to 2021, the G7 as a whole would grow 1.6 percent. The “two speed” concept is in reference to the growth of the 150 countries labeled as emerging and developing economies (EMDE). The EMDEs would grow cumulatively 14.2 percent or at the average yearly rate of 3.4 percent.
Table V-1, IMF World Economic Outlook Database Projections of Real GDP Growth
| GDP USD Billions 2018 | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | Real GDP ∆% | |
| World | 135,762 | 3.6 | 2.9 | -3.1 | 5.8 |
| G7 | 40,783 | 2.0 | 1.6 | -6.2 | 4.5 |
| Canada | 1,842 | 2.0 | 1.6 | -6.2 | 4.3 |
| France | 2,970 | 1.7 | 1.3 | -7.2 | 4.5 |
| DE | 4,343 | 1.5 | 0.6 | -7.0 | 5.2 |
| Italy | 2,406 | 0.8 | 0.3 | -9.1 | 4.8 |
| Japan | 5,578 | 0.3 | 0.7 | -5.2 | 3.0 |
| UK | 3,065 | 1.3 | 1.4 | -6.5 | 4.0 |
| US | 20,580 | 2.9 | 2.3 | -5.9 | 4.7 |
| Euro Area | NA | 1.9 | 1.2 | -7.5 | 4.7 |
| DE | 4,343 | 1.5 | 0.6 | -7.0 | 5.2 |
| France | 2,970 | 1.7 | 1.3 | 7.2 | 4.5 |
| Italy | 2,406 | 0.8 | 0.3 | -9.1 | 4.8 |
| POT | 334 | 2.6 | 2.2 | -8.0 | 5.0 |
| Ireland | 389 | 8.3 | 5.5 | -6.8 | 6.3 |
| Greece | 312 | 1.9 | 1.9 | -10.0 | 5.1 |
| Spain | 1,854 | 2.4 | 2.0 | -8.0 | 4.3 |
| EMDE | 80,401 | 4.5 | 3.7 | -1.1 | 6.6 |
| Brazil | 3,383 | 1.3 | 1.1 | -5.3 | 2.9 |
| Russia | 4,258 | 2.5 | 1.3 | -5.5 | 3.5 |
| India | 10,413 | 6.1 | 4.2 | 1.9 | 7.4 |
| China | 25,294 | 6.8 | 6.1 | 1.2 | 9.2 |
Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries); POT: Portugal
Source: IMF World Economic Outlook databank
https://www.imf.org/external/pubs/ft/weo/2020/01/weodata/index.aspx
Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (Continuing high rates of unemployment in advanced economies constitute another characteristic of the database of the WEO (https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/index.aspx). Table V-2 is constructed with the WEO database to provide rates of unemployment from 2017 to 2021 for major countries and regions. In fact, unemployment rates for 2017 in Table V-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 2017 for the countries with sovereign debt difficulties in Europe: 8.9 percent for Portugal (POT), 6.7 percent for Ireland, 21.5 percent for Greece, 17.2 percent for Spain and 11.3 percent for Italy, which is lower but still high. The G7 rate of unemployment is 5.0 percent. Unemployment rates are not likely to decrease substantially if relative slow cyclical growth persists in advanced economies. There are sharp increases in the rates of unemployment in 2020 in the probable global recession originating in the lockdown of economy activity in the COVID-19 event. The rate of unemployment increases to 7.8 percent for the G7 countries and 10.4 percent for the euro area.
Table V-2, IMF World Economic Outlook Database Projections of Unemployment Rate as Percent of Labor Force
| % Labor Force 2017 | % Labor Force 2018 | % Labor Force 2019 | % Labor Force 2020 | % Labor Force 2021 | |
| World | NA | NA | NA | NA | NA |
| G7 | 5.0 | 4.5 | 4.3 | 7.8 | 6.9 |
| Canada | 6.3 | 5.8 | 5.7 | 7.5 | 7.2 |
| France | 9.4 | 9.0 | 8.5 | 10.4 | 10.4 |
| DE | 3.8 | 3.4 | 3.2 | 3.9 | 3.5 |
| Italy | 11.3 | 10.6 | 10.0 | 12.7 | 10.5 |
| Japan | 2.8 | 2.4 | 2.4 | 3.0 | 2.3 |
| UK | 4.4 | 4.1 | 3.8 | 4.8 | 4.4 |
| US | 4.3 | 3.9 | 3.7 | 10.4 | 9.1 |
| Euro Area | 9.1 | 8.2 | 7.6 | 10.4 | 8.9 |
| DE | 3.8 | 3.4 | 3.2 | 3.9 | 3.5 |
| France | 9.4 | 9.0 | 8.5 | 10.4 | 10.4 |
| Italy | 11.3 | 10.6 | 10.0 | 12.7 | 10.5 |
| POT | 8.9 | 7.0 | 6.5 | 13.9 | 8.7 |
| Ireland | 6.7 | 5.8 | 5.0 | 12.1 | 7.9 |
| Greece | 21.5 | 19.3 | 17.3 | 22.3 | 19.0 |
| Spain | 17.2 | 15.3 | 14.1 | 20.8 | 17.5 |
| EMDE | NA | NA | NA | NA | NA |
| Brazil | 12.8 | 12.3 | 11.9 | 14.7 | 13.5 |
| Russia | 5.2 | 4.8 | 4.6 | 4.9 | 4.8 |
| India | NA | NA | NA | NA | NA |
| China | 3.9 | 3.8 | 3.6 | 4.3 | 3.8 |
Notes; DE: Germany; EMDE: Emerging and Developing Economies (150 countries)
Source: IMF World Economic Outlook
https://www.imf.org/external/pubs/ft/weo/2020/01/weodata/index.aspx
There are references to adverse periods as “lost decades.” There is a more prolonged and adverse period in Table V-3A: the lost economic cycle of the Global Recession with economic growth underperforming below trend worldwide. Economic contractions were relatively high but not comparable to the decline of GDP during the Great Depression. In fact, during the Great Depression in the four years of 1930 to 1933, US GDP in constant dollars fell 26.3 percent cumulatively and fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the State, Vol. II (2009b), 205-7 and revisions in http://bea.gov/iTable/index_nipa.cfm). Data are available for the 1930s only on a yearly basis. The contraction of GDP in the current cycle of the Global Recession was much lower, 3.8 percent (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 50 quarters from IIIQ2009 to IVQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 201 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (https://apps.bea.gov/iTable/index_nipa.cfm) and the third estimate of GDP for IVQ2021 (https://www.bea.gov/sites/default/files/2022-03/gdp4q21_3rd.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.9 percent obtained by dividing GDP of $15,605.6 billion in IIQ2010 by GDP of $15,161.8 billion in IIQ2009 {[($15,605.6/$15,161.8) -1]100 = 2.9%], or accumulating the quarter on quarter growth rates (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.3 percent from IQ1983 to IIIQ1986, 5.1 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IQ1988, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988, 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.6 percent from IQ1983 to IIIQ1989, 4.5 percent from IQ1983 to IVQ1989, 4.5 percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990, 4.3 percent from IQ1983 to IIIQ1990, 4.0 percent from IQ1983 to IVQ1990, 3.8 percent from IQ1983 to IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983 to IIIQ1991, 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to IIIQ1992, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993, 3.6 percent from IQ1983 to IIQ1993, 3.6 percent from IQ1983 to IIIQ1993, 3.7 percent from IQ1983 to IVQ1993, 3.7 percent from IQ1983 to IQ1994, 3.7 percent from IQ1983 to IIQ1994, 3.7 percent from IQ1983 to IIIQ1994, 3.7 percent from IQ1983 to IVQ1994, 3.6 percent from IQ1983 to IQ1995, 3.6 percent from IQ1983 to IIQ1995 and at 7.9 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). The National Bureau of Economic Research (NBER) dates a contraction of the US from IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP contracted 1.4 percent from the pre-recession peak of $9404.5 billion of chained 2012 dollars in IIIQ1990 to the trough of $9275.3 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). 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 IVQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) would have accumulated to 51.3 percent. GDP in IVQ2021 would be $23,849.2 billion (in constant dollars of 2012) if the US had grown at trend, which is higher by $4042.9 billion than actual $19,806.3 billion. There are more than four trillion dollars of GDP less than at trend, explaining the 21.8 million unemployed or underemployed equivalent to actual unemployment/underemployment of 12.5 percent of the effective labor force with the largest part originating in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event (https://cmpassocregulationblog.blogspot.com/2022/04/increase-in-mar-2022-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2022/03/increase-in-feb-2022-of-nonfarm-payroll.html). Unemployment is decreasing while employment is increasing in initial adjustment of the lockdown of economic activity in the global recession resulting from the COVID-19 event (https://www.bls.gov/covid19/effects-of-covid-19-pandemic-and-response-on-the-employment-situation-news-release.htm). US GDP in IVQ2021 is 17.0 percent lower than at trend. US GDP grew from $15,767.1 billion in IVQ2007 in constant dollars to $19,806.3 billion in IVQ2021 or 25.6 percent at the average annual equivalent rate of 1.6 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 3.0 percent per year from Feb 1919 to Feb 2022. Growth at 3.0 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 162.3669 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579 which is 37.5 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing grew at the average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 169.1965 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579, which is 40.0 percent below trend. Manufacturing output grew at average 1.8 percent between Dec 1986 and Feb 2022. Using trend growth of 1.8 percent per year, the index would increase to 137.5298 in Feb 2022. The output of manufacturing at 101.4579 in Feb 2022 is 26.2 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 108.5167 in Jul 2007 to the low of 84.7321 in May 2009 or 21.9 percent. The NAICS manufacturing index increased from 84.7321 in Apr 2009 to 102.5311 in Feb 2022 or 21.0 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.5 percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS manufacturing output index from 104.6868 in Dec 2007 to 170.4304 in Feb 2022. The NAICS index at 102.5311 in Feb 2021 is 39.8 percent below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 104.6868 in Dec 2007 to 132.9246 in Feb 2022. The NAICS index at 102.5311 in Feb 2022 is 22.9 percent below trend under this alternative calculation.
Table V-3A, Cycle 2007-2021, Percentage Contraction, Average Growth Rate in Expansion, Average Growth Rate in Whole Cycle and GDP Percent Below Trend
| Contraction ∆% | Expansion Average ∆% | Whole Cycle Average ∆% | Below Trend Percent | |
| USA | 3.8 | 2.2 | 1.6 | 17.0 |
| Japan | 8.8 | 0.9 | 0.2 | NA |
| Euro Area 19 | 5.7 | 1.2 | 0.6 | 18.0 |
| France | 3.8 | 1.2 | 0.8 | 12.4 |
| Germany | 7.0 | 1.5 | 0.9 | NA |
| UK | 5.9 | 1.6 | 1.0 | 17.5 |
Note: AV: Average. Expansion and Whole Cycle AV ∆% calculated with quarterly growth, seasonally adjusted and quarterly adjusted when applicable, rates and converted into annual equivalent except for average quarterly rate for the UK. Combines the Global Recession after 2007 and the COVID-19 Global Recession after IQ2020.
Data reported periodically in this blog.
Source: Country Statistical Agencies https://www.bls.gov/bls/other.htm https://www.census.gov/programs-surveys/international-programs/about/related-sites.html
Manufacturing is underperforming in the lost cycle of the global recession. Manufacturing (NAICS) in Feb 2022 is lower by 5.5 percent relative to the peak in Jun 2007, as shown in Chart V-3A. Manufacturing (SIC) in Feb 2022 at 101.4579 is lower by 8.5 percent relative to the peak at 110.8954 in Jun 2007. 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 3.0 percent per year from Feb 1919 to Feb 2022. Growth at 3.0 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 162.3669 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579 which is 37.5 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing grew at the average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 169.1965 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579, which is 40.0 percent below trend. Manufacturing output grew at average 1.8 percent between Dec 1986 and Feb 2022. Using trend growth of 1.8 percent per year, the index would increase to 137.5298 in Feb 2022. The output of manufacturing at 101.4579 in Feb 2022 is 26.2 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 108.5167 in Jul 2007 to the low of 84.7321 in May 2009 or 21.9 percent. The NAICS manufacturing index increased from 84.7321 in Apr 2009 to 102.5311 in Feb 2022 or 21.0 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.5 percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS manufacturing output index from 104.6868 in Dec 2007 to 170.4304 in Feb 2022. The NAICS index at 102.5311 in Feb 2021 is 39.8 percent below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 104.6868 in Dec 2007 to 132.9246 in Feb 2022. The NAICS index at 102.5311 in Feb 2022 is 22.9 percent below trend under this alternative calculation.
Chart V-3A, United States Manufacturing (NAICS) NSA, Dec 2007 to Feb 2022
Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htm
Chart V-3A, United States Manufacturing (NAICS) NSA, Jun 2007 to Feb 2022
Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htm
Chart V-3B provides the civilian noninstitutional population of the United States, or those available for work. The civilian noninstitutional population increased from 231.713 million in Jun 2007 to 263.324 million in Feb 2022 or 31.611 million.
Chart V-3B, United States, Civilian Noninstitutional Population, Million, NSA, Jan 2007 to Feb 2022
Source: US Bureau of Labor Statistics
Chart V-3C provides nonfarm payroll manufacturing jobs in the United States from Jan 2007 to Feb 2022. Nonfarm payroll manufacturing jobs fell from 13.987 million in Jun 2007 to 12.568 million in Feb 2022, or 1.419 million.
Chart V-3C, United States, Payroll Manufacturing Jobs, NSA, Jan 2007 to Feb 2022, Thousands
Source: US Bureau of Labor Statistics
Chart V-3D provides the index of US manufacturing (NAICS) from Jan 1972 to Feb 2022. The index continued increasing during the decline of manufacturing jobs after the early 1980s. There are likely effects of changes in the composition of manufacturing with also changes in productivity and trade. There is sharp decline in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).
Chart V-3D, United States Manufacturing (NAICS) NSA, Jan 1972 to Feb 2022
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htm
Chart V-3E provides the US noninstitutional civilian population, or those in condition of working, from Jan 1948, when first available, to Feb 2022. The noninstitutional civilian population increased from 170.042 million in Jun 1981 to 263.324 million in Feb 2022 or 93.282 million.
Chart V-3E, United States, Civilian Noninstitutional Population, Million, NSA, Jan 1948 to Feb 2022
Source: US Bureau of Labor Statistics
Chart V-3F provides manufacturing jobs in the United States from Jan 1939 to Feb 2022. Nonfarm payroll manufacturing jobs decreased from a peak of 18.890 million in Jun 1981 to 12.568 million in Feb 2022.
Chart V-3F, United States, Payroll Manufacturing Jobs, NSA, Jan 1939 to Feb 2022, Thousands
Source: US Bureau of Labor Statistics
There is global stress in manufacturing. Table V-3B provides month and 12-month percentage changes of new orders in manufacturing and output of manufacturing in Germany.
Table V-3B, Germany, Manufacturing Orders and Manufacturing Output, ∆% Month and 12 Months
| MFG New Orders Month ∆% | MFG New Orders 12 Months ∆% | MFG Output Month ∆% | MFG Output 12 Month ∆% | |
| Jan 2022 | 1.8 | 10.5 | 1.3 | 3.9 |
| Dec 2021 | 3.0 | 8.0 | 2.2 | 0.9 |
| Nov | 3.6 | 3.1 | 0.5 | -1.4 |
| Oct | -5.8 | -2.8 | 3.1 | -5.1 |
| Sep | 2.4 | 10.3 | -1.0 | -1.2 |
| Aug | -9.1 | 13.4 | -4.2 | 6.4 |
| Jul | 5.0 | 22.6 | 1.3 | 2.7 |
| Jun | 4.2 | 30.2 | -0.3 | 11.2 |
| May | -2.6 | 55.1 | -0.8 | 20.4 |
| Apr | 1.1 | 80.2 | -0.4 | 35.3 |
| Mar | 2.9 | 33.0 | 0.8 | 9.9 |
| Feb | 1.7 | 7.2 | -2.3 | -5.1 |
| Jan | 0.4 | -4.3 | 0.1 | -9.7 |
| Dec 2020 | -0.7 | 10.7 | 1.0 | 3.2 |
| Nov | 1.7 | 9.5 | 1.2 | -1.1 |
| Oct | 3.6 | 3.9 | 3.6 | -3.6 |
| Sep | 2.2 | 2.4 | 2.7 | -5.3 |
| Aug | 4.4 | -3.8 | -0.3 | -14.1 |
| Jul | 4.8 | -6.4 | 2.0 | -11.2 |
| Jun | 28.2 | -6.3 | 11.6 | -6.9 |
| May | 13.1 | -33.5 | 11.6 | -28.3 |
| Apr | -27.7 | -38.4 | -22.2 | -30.4 |
| Mar | -15.4 | -12.1 | -10.8 | -8.6 |
| Feb | -2.8 | 0.3 | 1.3 | -3.2 |
| Jan | 5.9 | -1.0 | 2.8 | -4.1 |
| Dec 2019 | -0.4 | -7.1 | -2.1 | -4.5 |
| Nov | -2.0 | -8.5 | 0.5 | -7.0 |
| Oct | -0.5 | -5.4 | -1.1 | -5.7 |
| Sep | 1.3 | -1.8 | -1.0 | -1.1 |
| Aug | -0.5 | -9.0 | 0.3 | -7.5 |
| Jul | -0.4 | -1.8 | -0.5 | -0.6 |
| Jun | 1.2 | -11.0 | -0.8 | -14.5 |
| May | -1.1 | -3.6 | 0.9 | 1.4 |
| Apr | -0.8 | -5.2 | -2.7 | -4.0 |
| Mar | 1.6 | -6.2 | 0.8 | -3.3 |
| Feb | -4.0 | -7.2 | 0.2 | 0.0 |
| Jan | -3.3 | -3.6 | -0.9 | -3.1 |
| Dec 2018 | 2.5 | -8.2 | 0.8 | -6.7 |
| Dec 2017 | 3.4 | 3.9 | -0.7 | 3.7 |
| Dec 2016 | 4.8 | 11.2 | -1.8 | 2.0 |
| Dec 2015 | -1.4 | -0.5 | 0.8 | 1.1 |
Source: Federal Statistical Agency of Germany, https://www.destatis.de/EN/Home/_node.html
Table V-3 provides the latest available estimates of GDP for the regions and countries followed in this blog from IQ2012 to IIIQ2021 available now for all countries. Growth is weak throughout most of the world.
- Japan. The GDP of Japan increased 1.4 percent in IQ2012, 5.6 percent at SAAR (seasonally adjusted annual rate) and increased 3.0 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 0.9 percent in IIQ2012 at the seasonally adjusted annual rate (SAAR) of minus 3.5 percent, which is much lower than 5.6 percent in IQ2012. Growth of 2.8 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 0.4 percent in IIIQ2012 at the SAAR of minus 1.5 percent and decreased 0.1 percent relative to a year earlier. Japan’s GDP decreased 0.1 percent in IVQ2012 at the SAAR of minus 0.3 percent and decreased 0.1 percent relative to a year earlier. Japan’s GDP grew 1.4 percent in IQ2013 at the SAAR of 5.6 percent and changed 0.0 percent relative to a year earlier. Japan’s GDP increased 0.9 percent in IIQ2013 at the SAAR of 3.7 percent and increased 1.8 percent relative to a year earlier. Japan’s GDP grew 1.0 percent in IIIQ2013 at the SAAR of 3.9 percent and increased 3.0 percent relative to a year earlier. In IVQ2013, Japan’s GDP decreased 0.1 percent at the SAAR of minus 0.5 percent, increasing 3.1 percent relative to a year earlier. Japan’s GDP increased 0.8 percent in IQ2014 at the SAAR of 3.3 percent and increased 2.9 percent relative to a year earlier. In IIQ2014, Japan’s GDP fell 1.8 percent at the SAAR of minus 7.1 percent and fell 0.1 percent relative to a year earlier. Japan’s GDP increased 0.1 percent in IIIQ2014 at the SAAR of 0.4 percent and fell 1.1 percent relative to a year earlier. In IVQ2014, Japan’s GDP grew 0.5 percent, at the SAAR of 1.9 percent, decreasing 0.5 percent relative to a year earlier. The GDP of Japan increased 1.5 percent in IQ2015 at the SAAR of 6.3 percent and increased 0.3 percent relative to a year earlier. Japan’s GDP increased 0.1 percent in IIQ2015 at the SAAR of 0.6 percent and increased 2.4 percent relative to a year earlier. The GDP of Japan increased 0.1 percent in IIIQ2015 at the SAAR of 0.4 percent and increased 2.2 percent relative to a year earlier. Japan’s GDP contracted 0.1 percent in IVQ2015 at the SAAR of minus 0.6 percent and grew 1.5 percent relative to a year earlier. In IQ2016, the GDP of Japan increased 0.7 percent at the SAAR of 2.9 percent and increased 1.0 percent relative to a year earlier. Japan’s GDP decreased 0.1 percent in IIQ2016 at the SAAR of minus 0.6 percent and increased 0.5 percent relative to a year earlier. In IIIQ2016, the GDP of Japan increased 0.2 percent at the SAAR of 0.7 percent and increased 0.5 percent relative to a year earlier. Japan’s GDP increased 0.2 percent in IVQ2016 at the SAAR of 0.6 percent and increased 1.0 percent relative to a year earlier. In IQ2017, the GDP of Japan increased 0.8 percent at the SAAR of 3.2 percent and increased 1.0 percent relative to a year earlier. Japan’s GDP increased 0.4 percent in IIQ2017 at the SAAR of 1.7 percent and increased 1.4 percent relative to a year earlier. In IIIQ2017, the GDP of Japan increased 0.8 percent at the SAAR of 3.1 percent and increased 2.1 percent relative to a year earlier. Japan’s GDP increased 0.1 percent in IVQ2017, at the SAAR of 0.4 percent, and increased 2.2 percent relative to a year earlier. In IQ2018, the GDP of Japan increased 0.1 percent, at the SAAR of 0.5 percent and increased 1.4 percent relative to a year earlier. Japan’s GDP increased 0.4 percent in IIQ2018, at the SAAR of 1.6 percent and increased 1.3 percent relative to a year earlier. In IIIQ2018, the GDP of Japan contracted 0.7 percent at the SAAR of minus 2.9 percent and decreased 0.1 percent relative to a year earlier. Japan’s GDP decreased 0.2 percent in IVQ2018, at the SAAR of minus 0.8 percent and decreased 0.2 percent relative to a year earlier. In IQ2019, the GDP of Japan increased 0.5 percent at the SAAR of 1.9 percent and decreased 0.1 percent relative to a year earlier. Japan’s GDP increased 0.5 percent in IIQ2019, at the SAAR of 2.1 percent and increased 0.1 percent relative to a year earlier. In IIIQ2019, the GDP of Japan changed 0.0 percent at the SAAR of 0.0 percent and increased 0.8 percent relative to a year earlier. Japan’s GDP decreased 2.7 percent in IVQ2019, at the SAAR of minus 10.5 percent and decreased 1.7 percent relative to a year earlier. In IQ2020, the GDP of Japan grew 0.4 percent at the SAAR of 1.7 percent and decreased 1.8 percent relative to a year earlier. The GDP of Japan contracted 7.9 percent in IIQ2020 at the SAAR of minus 28.2 percent and decreased 10.1 percent relative to a year earlier. In IIIQ2020, the GDP of Japan increased 5.3 percent at the SAAR of 23.0 percent and decreased 5.4 percent relative to a year earlier. The GDP of Japan increased 1.9 percent in IVQ2020 at the SAAR of 7.7 percent and decreased 0.8 percent relative to a year earlier. In IQ2021, the GDP of Japan contracted 0.5 percent at the SAAR of minus 2.2 percent and decreased 1.8 percent relative to a year earlier. The GDP of Japan increased 0.6 percent in IIQ2021 at the SAAR of 2.4 percent and increased 7.3 percent relative to a year earlier. In IIIQ2021, the GDP of Japan decreased 0.7 percent at the SAAR of minus 2.8 percent and increased 1.2 percent relative to a year earlier. The GDP of Japan increased 1.1 percent in IVQ2021 at the SAAR of 4.6 percent and increased 0.4 percent relative to a year earlier.
- China. China’s GDP grew 1.9 percent in IQ2012, annualizing to 7.8 percent, and 8.1 percent relative to a year earlier. The GDP of China grew at 2.1 percent in IIQ2012, which annualizes to 8.7 percent, and 7.6 percent relative to a year earlier. China grew at 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 2.0 percent, which annualizes at 8.2 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 1.8 percent, which annualizes at 7.4 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 6.6 percent, and 7.7 percent relative to a year earlier. GDP grew 7.5 percent in IQ2014 relative to a year earlier and 1.8 percent in IQ2014 that is equivalent to 7.4 percent per year. GDP grew 7.6 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 7.2 percent relative to a year earlier and 1.8 percent relative to the prior quarter, which is 7.4 percent in annual equivalent. GDP grew 1.7 percent in IVQ2014, which is 7.0 percent in annual equivalent and 7.3 percent relative to a year earlier. In IQ2015, GDP grew 1.9 percent, which is equivalent to 7.8 in a year and 7.1 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 7.1 percent relative to a year earlier. GDP grew at 1.7 percent in IIIQ2015, which is equivalent to 7.0 percent in a year, and grew 7.0 percent relative to a year earlier. GDP grew at 1.6 percent in IVQ2015, which is equivalent to 6.6 percent in a year and increased 6.9 percent relative to a year earlier. In IQ2016, GDP grew at 1.4 percent, which is equivalent to 5.7 percent in a year, and increased 6.9 percent relative to a year earlier. GDP grew at 1.9 percent in IIQ2016, which is annual equivalent to 7.8 percent, and increased 6.8 percent relative to a year earlier. In IIIQ2016, GDP grew at 1.7 percent, which is equivalent to 7.0 percent in a year and increased 6.8 percent relative to a year earlier. In IVQ2016, GDP grew at 1.6 percent, equivalent to 6.6 percent in a year, and increased 6.9 percent relative to a year earlier. GDP grew 7.0 percent in IQ2017 relative to a year earlier and increased at 1.7 percent, which is 7.0 percent in annual equivalent. In IIQ2017, GDP grew at 1.7 percent, which is annual equivalent at 7.0 percent, and increased 7.0 percent relative to a year earlier. GDP grew at 1.6 percent in IIIQ2017, which is annual equivalent at 6.6 percent, and increased at 6.9 percent relative to a year earlier. In IVQ2017, GDP grew 1.6 percent, which is annual equivalent to 6.6 percent, and increased 6.8 percent relative to a year earlier. GDP grew at 1.8 percent in IQ2018, which is annual equivalent at 7.4 percent, and increased 6.9 percent relative to a year earlier. In IIQ2018, GDP grew at 1.6 percent, which is annual equivalent to 6.6 percent, and increased 6.9 percent relative to a year earlier. GDP grew at 1.4 percent in IIIQ2018, which is annual equivalent at 5.7 percent, and increased 6.7 percent relative to a year earlier. In IVQ2018, GDP grew at 1.5 percent, which is annual equivalent to 6.1 percent, and increased 6.5 percent relative to a year earlier. GDP grew at 1.6 percent in IQ2019, which is annual equivalent to 6.6 percent, and increased 6.3 percent relative to a year earlier. In IIQ2019, GDP grew at 1.2 percent, which is annual equivalent to 4.9 percent and increased 6.0 percent relative to a year earlier. GDP grew at 1.4 percent in IIIQ2019, which is annual equivalent to 5.7 percent, and increased 5.9 percent relative to a year earlier. In IVQ2019, GDP grew at 1.3 percent, which is annual equivalent to 5.3 percent, and increased 5.8 percent relative to a year earlier. GDP contracted minus 10.5 percent in IQ2020, which is annual equivalent to minus 35.8 percent, and contracted minus 6.9 percent in IQ2020 relative to a year earlier, in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). GDP grew at 11.6 percent in IIQ2020, which is equivalent to 55.1 percent in a year and grew 3.1 percent relative to a year earlier. In IIIQ2020, GDP grew 3.4 percent, which is annual equivalent at 14.3 percent, and grew 4.8 percent relative to a year earlier. GDP grew at 2.6 percent in IVQ2020, which is equivalent to 10.8 percent in a year, and grew 6.4 percent relative to a year earlier. In IQ2021, GDP grew 0.3 percent, which is annual equivalent at 1.2 percent, and grew 18.3 percent relative to a year earlier. GDP grew 1.3 percent in IIQ2021, which is annual equivalent at 5.3 percent, and increased 7.9 percent relative to a year earlier. In IIIQ2021, GDP grew 0.7 percent, which is annual equivalent at 2.8 percent and increased 4.9 percent relative to a year earlier. GDP grew 1.6 percent in IVQ2021, which is annual equivalent at 6.6 percent, and increased 4.0 percent relative to a year earlier. Growth rates of GDP of China in a quarter relative to the same quarter a year earlier have been declining from 2011 to 2021.
- 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 1.0 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 0.4 percent and decreased 1.2 percent relative to a year earlier. The GDP of the euro area increased 0.5 percent in IIQ2013 and fell 0.4 percent relative to a year earlier. In IIIQ2013, euro area GDP increased 0.3 percent and increased 0.1 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IVQ2013 and increased 0.7 percent relative to a year earlier. In IQ2014, the GDP of the euro area increased 0.4 percent and increased 1.5 percent relative to a year earlier. The GDP of the euro area increased 0.2 percent in IIQ2014 and increased 1.2 percent relative to a year earlier. The euro area’s GDP increased 0.4 percent in IIIQ2014 and increased 1.4 percent relative to a year earlier. The GDP of the euro area increased 0.4 percent in IVQ2014 and increased 1.5 percent relative to a year earlier. Euro area GDP increased 0.7 percent in IQ2015 and increased 1.8 percent relative to a year earlier. The GDP of the euro area increased 0.4 percent in IIQ2015 and increased 2.0 percent relative to a year earlier. The euro area’s GDP increased 0.4 percent in IIIQ2015 and increased 2.0 percent relative to a year earlier. Euro area GDP increased 0.5 percent in IVQ2015 and increased 2.0 percent relative to a year earlier. Euro area’s GDP increased 0.6 percent in IQ2016 and increased 1.9 percent relative to a year earlier. The GDP of the euro area increased 0.2 percent in IIQ2016 and increased 1.7 percent relative to a year earlier. In IIIQ2016, the GDP of the euro area increased 0.5 percent and increased 1.7 percent relative to a year earlier. The GDP of the euro area increased 0.7 percent in IVQ2016 and increased 2.0 percent relative to a year earlier. In IQ2017, euro area GDP increased 0.7 percent and increased 2.2 percent relative to a year earlier. The GDP of the euro area increased 0.8 percent in IIQ2017 and increased 2.7 percent relative to a year earlier. In IIIQ2017, the GDP of the euro area increased 0.7 percent and grew 3.0 percent relative to a year earlier. The GDP of the euro area grew 0.9 percent in IVQ2017 and increased 3.1 percent relative to a year earlier. In IQ2018, the GDP of the euro area increased 0.1 percent and grew 2.4 percent relative to a year earlier. The GDP of the euro area grew 0.5 percent in IIQ2018 and increased 2.1 percent relative to a year earlier. In IIIQ2018, the GDP of the euro area increased 0.1 percent and increased 1.5 percent relative to a year earlier. The GDP of the euro area increased 0.6 percent in IVQ2018 and increased 1.2 percent relative to a year earlier. In IQ2019, the GDP of the euro area increased 0.7 percent and increased 1.9 percent relative to a year earlier. The GDP of the euro area increased 0.2 percent in IIQ2019 and increased 1.6 percent relative to a year earlier. In IIIQ2019, the GDP of the euro area increased 0.2 percent and increased 1.8 percent relative to a year earlier. The GDP of the euro area decreased 0.1 percent in IVQ2019 and increased 1.1 percent relative to a year earlier. In IQ2020, the GDP of the euro area decreased 3.5 percent and decreased 3.2 percent relative to a year earlier. The GDP of the euro area contracted 11.6 percent in IIQ2020 and contracted 14.6 percent relative to a year earlier. In IIIQ2020, the GDP of the euro area increased 12.6 percent and contracted 4.0 percent relative to a year earlier. The GDP of the euro area contracted 0.3 percent in IVQ2020 and contracted 4.3 percent relative to a year earlier. In IQ2021, the GDP of the euro area contracted 0.1 percent and contracted 0.9 percent relative to a year earlier. The GDP of the euro area increased 2.2 percent in IIQ2021 and grew 14.6 percent relative to a year earlier. In IIIQ2021, the GDP of the euro area increased 2.3 percent and grew 4.0 percent relative to a year earlier. The GDP of the euro area increased 0.3 percent in IVQ2021 and grew 4.6 percent relative to a year earlier.
- Germany. The GDP of Germany increased 0.2 percent in IQ2012 and increased 1.5 percent relative to a year earlier but 1.0 percent when adjusted for calendar effects (CA). In IIQ2012, Germany’s GDP increased 0.2 percent and increased 0.4 percent relative to a year earlier but 0.9 percent relative to a year earlier when adjusted for calendar effects (CA). In IIIQ2012, Germany’s GDP increased 0.3 percent and decreased 0.1 percent relative to a year earlier. Germany’s GDP contracted 0.4 percent in IVQ2012 and decreased 0.1 percent relative to a year earlier. In IQ2013, Germany’s GDP decreased 0.5 percent and fell 1.5 percent relative to a year earlier. In IIQ2013, Germany’s GDP increased 1.1 percent and grew 0.8 percent relative to a year earlier. The GDP of Germany increased 0.6 percent in IIIQ2013 and grew 1.2 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 0.9 percent in IQ2014 and grew 3.2 percent relative to a year earlier. In IIQ2014, Germany’s GDP changed 0.0 percent and increased 1.4 percent relative to a year earlier. The GDP of Germany increased 0.5 percent in IIIQ2014 and increased 1.8 percent relative to a year earlier. Germany’s GDP increased 0.8 percent in IVQ2014 and increased 2.4 percent relative to a year earlier. The GDP of Germany decreased 0.5 percent in IQ2015 and increased 1.0 percent relative to a year earlier. Germany’s GDP increased 0.7 percent in IIQ2015 and grew 1.5 percent relative to a year earlier. The GDP of Germany increased 0.5 percent in IIIQ2015 and grew 1.5 percent relative to a year earlier. Germany’s GDP increased 0.4 percent in IVQ2015 and grew 1.9 percent relative to a year earlier. In IQ2016, the GDP of Germany increased 0.8 percent and grew 2.2 percent relative to a year earlier. Germany’s GDP increased 0.4 percent in IIQ2016 and increased 3.6 percent relative to a year earlier. In IIIQ2016, the GDP of Germany increased 0.3 percent and grew 1.9 percent relative to a year earlier. Germany’s GDP increased 0.3 percent in IVQ2016 and grew 1.4 percent relative to a year earlier. In IQ2017, the GDP of Germany increased 1.2 percent and grew 3.6 percent relative to a year earlier. Germany’s GDP increased 0.8 percent in IIQ2017 and grew 1.3 percent relative to a year earlier and 2.7 percent relative to a year earlier adjusting for calendar effects (CA). In IIIQ2017, the GDP of Germany increased 0.9 percent and increased 2.7 percent relative to a year earlier and 3.2 percent relative to a year earlier (CA). Germany’s GDP increased 0.8 percent in IVQ2017, 3.1 percent relative to a year earlier and 3.7 percent relative to a year earlier (CA). The GDP of Germany decreased 0.4 percent in IQ2018 and grew 1.4 percent relative to a year earlier and 2.1 percent relative to a year earlier (CA). Germany’s GDP increased 0.6 percent in IIQ2018, 2.2 percent relative to a year earlier and 1.8 relative to a year earlier (CA). The GDP of Germany decreased 0.4 percent in IIIQ2018, increasing 0.4 percent relative to a year earlier and 0.5 percent relative to a year earlier (CA). Germany’s GDP increased 0.4 percent in IVQ2018, increasing 0.3 percent relative to a year earlier and 0.1 relative to a year earlier (CA). The GDP of Germany increased 1.1 percent in IQ2019, increasing 1.5 percent relative to a year earlier and increasing 1.6 percent relative to a year earlier (CA). Germany’s GDP contracted 0.5 percent in IIQ2019, increased 0.1 percent relative to a year earlier and increased 0.5 relative to a year earlier (CA). The GDP of Germany increased 0.4 percent in IIIQ2019, increasing 1.8 percent relative to a year earlier and increasing 1.3 percent relative to a year earlier (CA). Germany’s GDP decreased 0.1 percent in IVQ2019, increased 0.7 percent relative to a year earlier and increased 0.9 percent relative to a year earlier (CA). Germany’s GDP decreased 1.8 percent in IQ2020, decreased 1.5 percent relative to a year earlier and decreased 1.9 percent relative to a year earlier (CA). The GDP of Germany decreased 10.0 percent in IIQ2020, decreased 11.3 percent relative to a year earlier and decreased 11.3 percent relative to a year earlier (CA). Germany’s GDP increased 9.0 percent in IIIQ2020, decreased 3.6 percent relative to a year earlier and decreased 3.7 percent relative to a year earlier (CA). Germany’s GDP increased 0.7 percent in IVQ2020, decreased 1.9 percent relative to a year earlier and decreased 2.9 percent relative to a year earlier (CA). Germany’s GDP decreased 1.7 percent in IQ2021, decreased 3.0 percent relative to a year earlier and decreased 2.7 percent relative to a year earlier (CA). The GDP of Germany increased 2.2 percent in IIQ2021, increased 10.8 percent relative to a year earlier and increased 10.4 percent relative to a year earlier (CA). The GDP of Germany increased 1.7 percent in IIIQ2021, increased 2.8 percent relative to a year earlier and increased 2.9 percent relative to a year earlier (CA). Germany’s GDP decreased 0.3 percent in IVQ2021, increased 1.8 percent relative to a year earlier and decreased 1.8 percent relative to a year earlier (CA).
- United States. Growth of US GDP in IQ2012 was 0.8 percent, at SAAR of 3.3 percent and higher by 2.6 percent relative to IQ2011. US GDP increased 0.5 percent in IIQ2012, 1.8 percent at SAAR and 2.4 percent relative to a year earlier. In IIIQ2012, US GDP grew 0.2 percent, 0.7 percent at SAAR and 2.6 percent relative to IIIQ2011. In IVQ2012, US GDP grew 0.1 percent, 0.4 percent at SAAR and 1.6 percent relative to IVQ2011. In IQ2013, US GDP grew at 3.5 percent SAAR, 0.9 percent relative to the prior quarter and 1.6 percent relative to the same quarter in 2012. In IIQ2013, US GDP grew at 0.6 percent in SAAR, 0.1 percent relative to the prior quarter and 1.3 percent relative to IIQ2012. US GDP grew at 3.2 percent in SAAR in IIIQ2013, 0.8 percent relative to the prior quarter and 1.9 percent relative to the same quarter a year earlier (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). In IVQ2013, US GDP grew 0.7 percent at 2.9 percent SAAR and 2.5 percent relative to a year earlier. In IQ2014, US GDP decreased 0.4 percent, increased 1.3 percent relative to a year earlier and fell 1.4 percent at SAAR. In IIQ2014, US GDP increased 1.3 percent at 5.2 percent SAAR and increased 2.5 percent relative to a year earlier. US GDP increased 1.2 percent in IIIQ2014 at 4.7 percent SAAR and increased 2.8 percent relative to a year earlier. In IVQ2014, US GDP increased 0.4 percent at SAAR of 1.8 percent and increased 2.6 percent relative to a year earlier. GDP increased 0.8 percent in IQ2015 at SAAR of 3.3 percent and grew 3.8 percent relative to a year earlier. US GDP grew at SAAR of 2.3 percent in IIQ2015, increasing 0.6 percent in the quarter and 3.0 percent relative to a year earlier. GDP increased 0.3 percent in IIIQ2015 at SAAR of 1.3 percent and grew 2.2 percent in IIIQ2015 relative to a year earlier. US GDP grew at SAAR of 0.6 percent in IVQ2015, increasing 0.1 percent in the quarter and 1.9 percent relative to a year earlier. In IQ2016, US GDP grew 0.6 percent at SAAR of 2.4 percent and increased 1.6 percent relative to a year earlier. US GDP grew at SAAR of 1.2 percent in IIQ2016, increasing 0.3 percent in the quarter and 1.4 percent relative to a year earlier. In IIIQ2016, US GDP grew 0.6 percent at SAAR of 2.4 percent and increased 1.6 percent relative to a year earlier. US GDP grew at SAAR of 2.0 percent in IVQ2016, increasing 0.5 percent in the quarter, and increasing 2.0 percent relative to a year earlier. In IQ2017, US GDP grew 0.5 percent at SAAR of 1.9 percent and increased 1.9 percent relative to a year earlier. US GDP grew at SAAR of 2.3 percent in IIQ2017, increasing 0.6 percent in the quarter, and increasing 2.1 percent relative to a year earlier. In IIIQ2017, US GDP grew 0.7 percent at SAAR of 2.9 percent and increased 2.3 percent relative to a year earlier. US GDP grew at SAAR of 3.8 percent in IVQ2017, increasing 0.9 percent in the quarter, and increasing 2.7 percent relative to a year earlier. In IQ2018, US GDP grew at SAAR of 3.1 percent, increasing 0.8 percent in the quarter, and increasing 3.0 percent relative to a year earlier. US GDP grew at SAAR of 3.4 percent in IIQ2018, increasing 0.8 percent in the quarter, and increasing 3.3 percent relative to a year earlier. In IIIQ2018, US GDP grew at SAAR of 1.9 percent, increasing 0.5 percent in the quarter, and increasing 3.1 percent relative to a year earlier. US GDP grew at SAAR of 0.9 percent in IVQ2018, increasing 0.2 percent in the quarter, and increasing 2.3 percent relative to a year earlier. In IQ2019, US GDP grew at SAAR of 2.4 percent, increasing 0.6 percent in the quarter and increasing 2.2 percent relative to a year earlier. US GDP grew at SAAR of 3.2 percent in IIQ2019, increasing 0.8 percent in the quarter, and increasing 2.1 percent relative to a year earlier. In IIIQ2019, US GDP grew at SAAR of 2.8 percent, increasing 0.7 percent in the quarter, and increasing 2.3 percent relative to a year earlier. US GDP grew at SAAR of 1.9 percent in IVQ2019, increasing 0.5 percent in the quarter, and increasing 2.6 percent relative to a year earlier. In IQ2020, US GDP contracted at SAAR of minus 5.1 percent, decreasing 1.3 percent in the quarter, and increasing 0.6 percent relative to a year earlier. In IIQ2020, US GDP contracted at SAAR of minus 31.2 percent, decreasing 8.9 percent in the quarter and decreasing 9.1 percent relative to a year earlier. US GDP grew at SAAR of 33.8 percent in IIIQ2020, increasing 7.5 percent in the quarter, and decreasing 2.9 percent relative to a year earlier. In IVQ2020, US GDP grew at SAAR of 4.5 percent, increasing 1.1 percent in the quarter and decreasing 2.3 percent relative to a year earlier. US GDP grew at SAAR of 6.3 percent in IQ2021, increasing 1.5 percent in the quarter and increasing 0.5 percent relative to a year earlier. In IIQ2021, US GDP grew at SAAR of 6.7 percent, increasing 1.6 percent in the quarter and increasing 12.2 percent relative to a year earlier. US GDP increased at SAAR of 2.3 percent in IIIQ2021, increasing 0.5 percent in the quarter and increasing 4.9 percent relative to a year earlier. In IVQ2021, US GDP grew at SAAR of 6.9 percent, increasing 1.7 percent in the quarter and increasing 5.5 percent relative to a year earlier.
- United Kingdom. In IQ2012, UK GDP increased 0.7 percent and increased 1.2 percent relative to a year earlier. In IIQ2012, GDP fell 0.1 percent relative to IQ2012 and increased 1.1 percent relative to a year earlier. In IIIQ2012, GDP increased 1.2 percent and increased 2.0 percent relative to the same quarter a year earlier. In IVQ2012, GDP fell 0.2 percent and increased 1.6 percent relative to a year earlier. Fiscal consolidation in an environment of weakening economic growth is much more challenging. GDP increased 1.4 percent in IQ2013 relative to a year earlier and 0.5 percent in IQ2013 relative to IVQ2012. In IIQ2013, GDP increased 0.7 percent and 2.1 percent relative to a year earlier. GDP increased 0.8 percent in IIIQ2013 and 1.6 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 0.9 percent and 2.9 percent relative to a year earlier. GDP increased 0.8 percent in IIQ2014 and 3.1 percent relative to a year earlier. GDP increased 0.7 percent in IIIQ2014 and 3.0 percent relative to a year earlier. In IVQ2014, GDP increased 0.6 percent and 3.0 percent relative to a year earlier. GDP increased 0.6 percent in IQ2015 and increased 2.7 percent relative to a year earlier. GDP increased 0.7 percent in IIQ2015 and increased 2.6 percent relative to a year earlier. UK GDP increased 0.5 percent in IIIQ2015 and increased 2.5 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2015 and increased 2.6 percent relative to a year earlier. GDP increased 0.4 percent in IQ2016 and increased 2.4 percent relative to a year earlier. GDP increased 0.6 percent in IIQ2016 and grew 2.3 percent relative to a year earlier. UK GDP increased 0.4 percent in IIIQ2016 and increased 2.2 percent relative to a year earlier. GDP increased 0.7 percent in IVQ2016 and increased 2.2 percent relative to a year earlier. UK GDP increased 0.6 percent in IQ2017 and increased 2.4 percent relative to a year earlier. GDP increased 0.3 percent in IIQ2017 and increased 2.2 percent relative to a year earlier. In IIIQ2017, GDP increased 0.4 percent and increased 2.1 percent relative to a year earlier. GDP increased 0.4 percent in IVQ2017 and increased 1.8 percent relative to a year earlier. In IQ2018, GDP increased 0.2 percent and increased 1.4 percent relative to a year earlier. GDP increased 0.5 percent in IIQ2018 and increased 1.6 percent relative to a year earlier. In IIIQ2018, GDP increased 0.6 percent and increased 1.8 percent relative to a year earlier. GDP increased 0.3 percent in IVQ2018 and increased 1.8 percent relative to a year earlier. In IQ2019, GDP increased 0.6 percent and increased 2.2 percent relative to a year earlier. GDP increased 0.1 percent in IIQ2019 and increased 1.8 percent relative to a year earlier. In IIIQ2019, GDP increased 0.5 percent and increased 1.6 percent relative to a year earlier. GDP changed 0.0 percent in IVQ2019 and increased 1.2 percent relative to a year earlier. In IQ2020, GDP decreased 2.5 percent and decreased 2.0 percent relative to a year earlier. GDP decreased 19.4 percent in IIQ2020 and decreased 21.1 percent relative to a year earlier. In IIIQ2020, GDP increased 17.6 percent and decreased 7.7 percent relative to a year earlier. GDP increased 1.5 percent in IVQ2020 and decreased 6.3 percent relative to a year earlier. In IQ2021, GDP contracted 1.2 percent and contracted 5.0 percent relative to a year earlier. GDP increased 5.6 percent in IIQ2021 and increased 24.5 percent relative to a year earlier. In IIIQ2021, GDP increased 0.9 percent and increased 6.9 percent relative to a year earlier. GDP increased 1.3 percent in IVQ2021 and increased 6.6 percent relative to a year earlier.
- Italy. The GDP of Italy grew 0.6 percent in IVQ2021 and grew 6.2 percent relative to a year earlier. GDP grew 2.5 percent in IIIQ2021 and grew 3.9 percent relative to a year earlier. The GDP of Italy grew 2.7 percent in IIQ2021 and grew 17.6 percent relative to a year earlier. GDP grew 0.3 percent in IQ2021 and increased 0.1 percent relative to a year earlier. Italy’s GDP contracted 1.6 percent in IVQ2020 and contracted 6.1 percent relative to a year earlier. GDP grew 16.0 percent in IIIQ2020 and contracted 5.4 percent relative to a year earlier. The GDP of Italy contracted 12.6 percent in IIQ2020 and contracted 18.5 percent relative to a year earlier in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Italy’s GDP contracted 5.9 percent in IQ2020 and decreased 6.4 percent relative to a year earlier. The GDP of Italy decreased 0.8 percent in IVQ2019 and decreased 0.3 percent relative to a year earlier. Italy’s GDP changed 0.0 percent in IIIQ2019 and increased 0.8 percent relative to a year earlier. In IIQ2019, Italy’s GDP increased 0.3 percent and increased 0.9 percent relative to a year earlier. Italy’s GDP increased 0.2 percent in IQ2019 and increased 0.6 percent relative to a year earlier. In IVQ2018, the GDP of Italy increased 0.3 percent and increased 0.4 percent relative to a year earlier. Italy’s GDP changed 0.1 percent in IIIQ2018 and increased 0.6 percent relative to a year earlier. In IIQ2018, the GDP of Italy changed 0.0 percent and increased 0.9 percent relative to a year earlier. Italy’s GDP changed 0.0 percent in IQ2018 and increased 1.3 percent relative to a year earlier. In IVQ2017, the GDP of Italy increased 0.5 percent and increased 1.9 percent relative to a year earlier. Italy’s GDP increased 0.4 percent in IIIQ2017 and increased 1.6 percent relative to a year earlier. In IIQ2017, the GDP of Italy increased 0.4 percent and increased 1.8 percent relative to a year earlier. Italy’s GDP increased 0.5 percent in IQ2017 and increased 1.6 percent relative to a year earlier. In IVQ2016, the GDP of Italy increased 0.3 percent and increased 1.3 percent relative to a year earlier. Italy’s GDP increased 0.6 percent in IIIQ2016 and increased 1.6 percent relative to a year earlier. In IIQ2016, GDP increased 0.2 percent and increased 1.3 percent relative to a year earlier. GDP increased 0.3 percent in IQ2016 and increased 1.4 percent relative to a year earlier. GDP increased 0.5 percent in IVQ2015 and increased 1.4 percent relative to a year earlier. In IIIQ2015, GDP increased 0.2 percent and increased 0.6 percent relative to a year earlier. GDP increased 0.4 percent in IIQ2015 and 0.5 percent relative to a year earlier. GDP increased 0.3 percent in IQ2015 and increased 0.1 percent relative to a year earlier. GDP decreased 0.3 percent in IVQ2014 and changed 0.0 percent relative to a year earlier. GDP increased 0.1 percent in IIIQ2014 and changed 0.0 percent relative to a year earlier. Italy’s GDP changed 0.0 percent in IIQ2014 and increased 0.1 percent relative to a year earlier. The GDP of Italy increased 0.2 percent in IQ2014 and increased 0.2 percent relative to a year earlier. Italy’s GDP decreased 0.2 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 changed 0.0 percent in IIQ2013 and fell 2.2 percent relative to a year earlier. Italy’s GDP fell 0.9 percent in IQ2013 and declined 2.9 percent relative to IQ2013. GDP had been growing during six consecutive quarters but at very low rates from IQ2010 to IIQ2011. Italy’s GDP fell in seven consecutive quarters from IIIQ2011 to IQ2013 at increasingly higher rates of contraction from 0.5 percent in IIIQ2011 to 0.9 percent in IVQ2011, 1.1 percent in IQ2012, 0.7 percent in IIQ2012 and 0.5 percent in IIIQ2012. The pace of decline accelerated to minus 0.8 percent in IVQ2012 and minus 0.9 percent in IQ2013. GDP contracted cumulatively 5.3 percent in seven consecutive quarterly contractions from IIIQ2011 to IQ2013 at the annual equivalent rate of minus 3.1 percent. The year-on-year rate has fallen from 2.1 percent in IVQ2010 to minus 3.1 percent in IVQ2012, minus 2.9 percent in IQ2013, minus 2.2 percent in IIQ2013 and minus 1.4 percent in IIIQ2013. GDP fell 0.9 percent in IVQ2013 relative to a year earlier. GDP increased 0.2 percent in IQ2014 relative to a year earlier and increased 0.1 percent in IIQ2014 relative to a year earlier. GDP changed 0.0 percent in IIIQ2014 relative to a year earlier and changed 0.0 percent in IVQ2014 relative to a year earlier. GDP increased 0.1 percent in IQ2015 relative to a year earlier and increased 0.5 percent in IIQ2015 relative to a year earlier. GDP increased 0.6 percent in IIIQ2015 relative to a year earlier and increased 1.4 percent in IVQ2015 relative to a year earlier. GDP increased 1.4 percent in IQ2016 relative to a year earlier and increased 1.3 percent in IIQ2016 relative to a year earlier. GDP increased 1.6 percent in IIIQ2016 relative to a year earlier and increased 1.3 percent in IVQ2016 relative to a year earlier. GDP increased 1.6 percent in IQ2017 relative to a year earlier and increased 1.8 percent in IIQ2017 relative to a year earlier. GDP increased 1.6 percent in IIIQ2017 relative to a year earlier and increased 1.9 percent in IVQ2017 relative to a year earlier. GDP increased 1.3 percent in IQ2018 relative to a year earlier and increased 0.9 percent in IIQ2018 relative to a year earlier. GDP increased 0.6 percent in IIIQ2018 relative to a year earlier and increased 0.4 percent in IVQ2018 relative to a year earlier. GDP increased 0.6 percent in IQ2019 relative to a year earlier and increased 0.9 percent in IIQ2019 relative to a year earlier. GDP increased 0.8 percent in IIIIQ2019 relative to a year earlier and decreased 0.3 percent in IVQ2019 relative to a year earlier. GDP contracted 6.4 percent in IQ2020 relative to a year earlier and contracted 18.5 percent in IIQ2020 relative to a year earlier in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). GDP contracted 5.4 percent in IIIQ2020 relative to a year earlier and contracted 6.1 percent in IVQ2020 relative to a year earlier. GDP increased 0.1 percent in IQ2021 relative to a year earlier. GDP grew 17.6 percent in IIQ2021 relative to a year earlier. In IIIQ2021, GDP grew 3.9 percent relative to a year earlier. GDP increased 6.2 percent in IVQ2021 relative to a year earlier. Istat updated the national accounts of Italy, using 2015 base, with the release of Mar 3, 2021 (https://www.istat.it/it/archivio/254320). Using seasonally and calendar adjusted chained volumes in the dataset of EUROSTAT (https://ec.europa.eu/eurostat/), the GDP of Italy (using the base of 2015) in IVQ2021 of €403,280.5 million (https://www.istat.it/it/archivio/266825) is lower by 5.4 percent relative to €426,370.9 million in IQ2008 (https://ec.europa.eu/eurostat/). Using seasonally and calendar adjusted chained volumes in the dataset of EUROSTAT (https://ec.europa.eu/eurostat/), the GDP of Italy increased from €368,574.1 million in IQ1998 to €426,370.9 million in IQ2008 at the annual equivalent rate of 1.5 percent. 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 increased 0.1 percent in IQ2012 and increased 0.7 percent relative to a year earlier. France’s GDP decreased 0.2 percent in IIQ2012 and increased 0.5 percent relative to a year earlier. In IIIQ2012, France’s GDP increased 0.2 percent and increased 0.3 percent relative to a year earlier. France’s GDP decreased 0.1 percent in IVQ2012 and increased 0.1 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 0.8 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 0.5 percent in IVQ2013 and increased 1.1 percent relative to a year earlier. In IQ2014, France’s GDP increased 0.1 percent and increased 1.2 percent relative to a year earlier. In IIQ2014, France’s GDP increased 0.1 percent and increased 0.7 percent relative to a year earlier. France’s GDP increased 0.5 percent in IIIQ2014 and increased 1.2 percent relative to a year earlier. The GDP of France increased 0.1 percent in IVQ2014 and increased 0.8 percent relative to a year earlier. France’s GDP increased 0.5 percent in IQ2015 and increased 1.2 percent relative to a year earlier. In IIQ2015, France’s GDP changed 0.0 percent and increased 1.1 percent relative to a year earlier. France’s GDP increased 0.3 percent in IIIQ2015 and increased 0.9 percent relative to a year earlier. In IVQ2015, the GDP of France increased 0.2 percent and increased 1.0 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2016 and increased 1.1 percent relative to a year earlier. The GDP of France decreased 0.2 percent in IIQ2016 and increased 1.0 percent relative to a year earlier. France’s GDP increased 0.2 percent in IIIQ2016 and increased 0.8 percent relative to a year earlier. In IVQ2016, the GDP of France increased 0.5 percent and increased 1.2 percent relative to a year earlier. France’s GDP increased 0.8 percent in IQ2017 and increased 1.4 percent relative to a year earlier. In IIQ2017, the GDP of France increased 0.8 percent and increased 2.4 percent relative to a year earlier. France’s GDP increased 0.6 percent in IIIQ2017 and increased 2.8 percent relative to a year earlier. In IVQ2017, the GDP of France increased 0.8 percent and increased 3.1 percent relative to a year earlier. France’s GDP changed 0.0 percent in IQ2018 and increased 2.3 percent relative to a year earlier. In IIQ2018, the GDP of France increased 0.3 percent and increased 1.9 percent relative to a year earlier. France’s GDP increased 0.4 percent in IIIQ2018 and increased 1.6 percent relative to a year earlier. In IVQ2018, the GDP of France increased 0.7 percent and increased 1.5 percent relative to a year earlier. France’s GDP increased 0.6 percent in IQ2019 and increased 2.1 percent relative to a year earlier. In IIQ2019, the GDP of France increased 0.5 percent and increased 2.3 percent relative to a year earlier. France’s GDP increased 0.1 percent in IIIQ2019 and increased 2.0 percent relative to a year earlier. In IVQ2019, the GDP of France decreased 0.4 percent and increased 0.9 percent relative to a year earlier. France’s GDP decreased 5.7 percent in IQ2020 and decreased 5.5 percent relative to a year earlier. In IIQ2020, the GDP of France decreased 13.5 percent and decreased 18.6 percent relative to a year earlier. France’s GDP increased 18.6 percent in IIIQ2020 and decreased 3.6 percent relative to a year earlier. In IVQ2020, the GDP of France contracted 1.1 percent and decreased 4.3 percent relative to a year earlier. France’s GDP increased 0.2 percent in IQ2021 and increased 1.7 percent relative to a year earlier. In IIQ2021, the GDP of France increased 1.3 percent and increased 19.0 percent relative to a year earlier. France’s GDP increased 3.1 percent in IIIQ2021 and increased 3.5 percent relative to a year earlier. The GDP of France increased 0.7 percent in IVQ2021 and increased 5.4 percent relative to a year earlier.
Table V-3, Percentage Changes of GDP Quarter on Prior Quarter and on Same Quarter Year Earlier, ∆%
QOQ: quarter relative to prior quarter; SAAR: seasonally adjusted annual rate
AE: annual equivalent
Source: Country Statistical Agencies http://www.bls.gov/bls/other.htm https://www.census.gov/programs-surveys/international-programs/about/related-sites.html
Brazil’s GDP grew 0.5 percent in IIIQ2021 (https://sidra.ibge.gov.br/tabela/5932#/n1/all/v/6564/p/202004,202101,202102,202103,202104/c11255/all/d/v6564%201/l/v,p,t+c11255/resultado) and grew 4.6 percent in IVQ2021 relative to a year earlier (https://sidra.ibge.gov.br/tabela/5932#/n1/all/v/6562/p/202004,202101,202102,202103,202104/c11255/all/d/v6562%201/l/v,p,t+c11255/resultado).
Japan’s GDP increased 1.3 percent in IVQ2021 at SAAR of 5.4 percent and increased 0.7 percent relative to a year earlier. The National Bureau of Statistics of China released a preliminary estimate of growth of GDP of 4.0 percent in IVQ2021 relative to IVQ2020 and 8.1 percent in cumulative IQ2021 to IVQ2021 relative to a year earlier, as shown in Table V-3C. GDP grew 1.6 percent in IVQ2021 at the annual equivalent rate of 6.6 percent. The GDP of the euro area increased 0.3 percent in IVQ2021 and grew 4.6 percent relative to a year earlier. Germany’s GDP contracted 0.7 percent in IVQ2021 and increased 1.4 percent relative to a year earlier. The GDP of France increased 0.7 percent in IVQ2021 and grew 5.4 percent relative to a year earlier. Italy’s GDP increased 0.6 percent in IVQ2021 and increased 6.4 percent relative to a year earlier. UK’s GDP increased 1.0 percent in IVQ2021 and grew 6.5 percent relative to a year earlier.
Table V-3C, Flash Estimates of Percentage Changes of GDP Quarter on Prior Quarter and on Same Quarter Year Earlier, ∆%
| IVQ2021/IIIQ2021 | IVQ2021/IVQ2020 | |
| Brazil | 0.5 | 4.6 |
| Japan | 1.3 SAAR: 5.4 | 0.7 |
| China | 1.6 (AE 6.6) | 4.0 |
| Euro Area | 0.3 | 4.6 |
| Germany | -0.7 | 1.4 |
| France | 0.7 | 5.4 |
| Italy | 0.6 | 6.4 |
| UK | 1.0 | 6.5 |
QOQ: Quarter relative to prior quarter; SAAR: seasonally adjusted annual rate; AE: Annual Equivalent
Source: Eurostat: https://ec.europa.eu/eurostat Country Statistical Agencies http://www.bls.gov/bls/other.htm https://www.census.gov/programs-surveys/international-programs/about/related-sites.html https://www.ibge.gov.br/estatisticas/economicas/contas-nacionais/9300-contas-nacionais-trimestrais.html?=&t=resultados
Table V-4 provides two types of data: growth of exports and imports in the latest available months and in the past 12 months; and contributions of net trade (exports less imports) to growth of real GDP.
- Japan. Japan provides the most worrisome data (http://cmpassocregulationblog.blogspot.com/2015/08/global-decline-of-values-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/07/valuation-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/dollar-revaluation-squeezing-corporate.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/imf-view-of-economy-and-finance-united.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/05/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/financial-risks-slow-cyclical-united.html and earlier http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations_8763.html http://cmpass ocregulationblog.blogspot.com/2013/08/interest-rate-risks-duration-dumping.html and earlier http://cmpassocregulationblog.blogspot.com/2013/07/duration-dumping-steepening-yield-curve.html and earlier http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and_4699.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/05/united-states-commercial-banks-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2013/03/united-states-commercial-banks-assets.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html and earlier at http://cmpassocregulationblog.blogspot.com/2013/02/thirty-one-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html and earlier http://cmpassocregulationblog.blogspot.com/2012/11/contraction-of-united-states-real_25.html and for GDP http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what_13.html). In Feb 2022, Japan’s exports increased 19.1 percent in 12 months while imports increased 34.0 percent. The second part of Table V-4 shows that net trade added 0.7 percent in IQ2012, deducting 1.9 percent in IIQ2012. Net trade deducted 1.9 percent in IIIQ2012. Net traded deducted 0.3 percent in IVQ2012. Net trade added 1.4 percentage points to GDP growth in IQ2013 but deducted 0.2 percentage points in IIQ2013, deducting 1.3 percentage points in IIIQ2013 and 2.1 percentage points in IVQ2013. Net trade deducted 1.0 percentage points from GDP growth in IQ2014. Net trade added 4.2 percentage points to GDP growth in IIQ2014 and deducted 0.2 percentage points in IIIQ2014. Net trade added 1.8 percentage points to GDP growth in IVQ2014. Net trade contributed 0.4 percentage points to GDP growth in IQ2015 and deducted 0.7-percentage points in IIQ2015. Net trade deducted 0.4 percentage points from GDP growth in IIIQ2015. Net trade deducted 0.2 percentage points from GDP growth in IVQ2015 and added 1.4 percentage points in IQ2016. Net trade contributed 0.4 percentage points to GDP growth in IIQ2016. Net trade added 1.1 percentage points to GDP growth in IIIQ2016 and contributed 0.9 percentage points in IVQ2016. Net trade contributed 0.7 percentage points to GDP growth in IQ2017 and deducted 0.7 percentage points in IIQ2017. Net trade contributed 1.9 percentage points to GDP growth in IIIQ2017 and deducted 0.5 percentage-point in IVQ2017. Net trade contributed 0.4 percentage points to GDP growth in IQ2018 and contributed 0.4 percentage points in IIQ2018. Net trade deducted 0.9 percentage points from GDP growth in IIIQ2018 and deducted 2.4 percentage points in IVQ2018. Net trade contributed 1.2 percentage points to GDP growth in IQ2019 with export contraction deducting 1.4 percent and import contraction contributing 2.7 percent. Net trade deducted 0.6 percentage points from GDP growth in IIQ2019. Net trade deducted 1.5 percentage points from GDP growth in IIIQ2019. Net trade contributed 1.3 percentage points to GDP growth in IVQ2019. Net trade deducted 0.7 percentage points from GDP growth in IQ2020 with export contraction deducting 3.3 percentage points and import contraction adding 2.6 percentage points. Net trade deducted 9.8 percentage points in IIQ2020 with export contraction deducting 11.1 percentage points and imports contributing 1.2 percentage points. Net trade contributed 11.2 percentage points to GDP growth in IIIQ2020 with export growth contributing 5.6 percentage points and import contraction contribution of 5.6 percentage points. Net trade contributed 3.1 percentage points to GDP in IVQ2020 with export growth contributing 6.7 percentage points and imports deducting 3.6 percentage points. Net trade deducted 0.4 percentage points from GDP growth in IQ2021 with exports contributing 1.4 percent and imports deducting 1.8 percent. Net trade deducted 0.3 percentage points in IIQ2021 with exports contributing 2.1 percent and imports deducting 2.5 percent. Net trade contributed 0.4 percentage points in IIIQ2021 with exports deducting 0.2 percent and imports contributing 0.6 percent. Net trade contributed 0.9 percent in IVQ2021 with exports contributing 0.6 percent and imports 0.2 percent. Private consumption assumed the role of driver of Japan’s economic growth but should moderate as in most mature economies.
- China. The exports of China increased 14.7 percent in Mar 2022 relative to a year earlier while imports decreased 0.1 percent.
- Germany. Germany’s exports increased 6.4 percent in the month of Feb 2022 and increased 14.3 percent in the 12 months ending in Feb 2022. Germany’s imports increased 4.5 percent in the month of Feb 2022 and increased 24.6 percent in the 12 months ending in Feb 2022. Net trade contributed 0.8 percentage points to growth of GDP in IQ2012, contributed 0.3 percentage points in IIQ2012, contributed 0.4 percentage points in IIIQ2012, deducted 0.5 percentage points in IVQ2012, deducted 0.3 percentage points in IQ2013 and deducted 0.3 percentage points in IIQ2013. Net traded deducted 0.0 percentage points from Germany’s GDP growth in IIIQ2013 and added 0.9 percentage points to GDP growth in IVQ2013. Net trade deducted 0.1 percentage points from GDP growth in IQ2014. Net trade deducted 0.3 percentage points from GDP growth in IIQ2014 and added 0.7 percentage points in IIIQ2014. Net trade added 0.1 percentage points to GDP growth in IVQ2014 and deducted 0.4 percentage points in IQ2015. Net trade added 0.6 percentage points to GDP growth in IIQ2015 and deducted 0.4 percentage points in IIIQ2015. Net trade deducted 0.6 percentage points in IVQ2015 and deducted 0.9 percentage points in IQ2016. Net trade contributed 0.0 percentage points to GDP growth in IIQ2016. Net trade deducted 0.6 percentage points from GDP growth in IIIQ2016. Net trade deducted 0.9 percentage points in IVQ2016. Net trade added 1.1 percentage points to GDP growth in IQ2017. Net trade deducted 1.0 percentage points from GDP growth in IIQ2017. Net trade added 0.2 percentage points to GDP growth in IIIQ2017. Net trade added 0.6 percentage points to GDP growth in IVQ2017. Net trade contributed 0.2 percentage points to GDP growth in IQ2018 and contributed 0.6 percentage points to GDP growth in IIQ2018. Net trade deducted 1.3 percentage points from GDP growth in IIIQ2018. Net trade deducted 1.4 percentage points from GDP growth in IVQ2018. Net trade deducted 1.1 percentage points from GDP growth in IQ2019. Net trade deducted 1.6 percentage points from GDP growth in IIQ2019. Net traded added 0.3 percentage points to GDP growth in IIIQ2019. Net trade deducted 0.3 percentage points from GDP growth in IVQ2019. Net trade deducted 1.2 percentage points in IQ2020 and deducted 3.3 percentage points in IIQ2020. Net trade deducted 0.1 percentage points in IIIQ2020. Net trade contributed 1.2 percentage points in IVQ2020. Net trade contributed 0.1 percentage points in IQ2021. Net trade contributed 3.8 percentage points in IIQ2021. Net trade deducted 0.3 percentage points in IIIQ2021. Net trade deducted 1.0 percentage points in IVQ2021.
- 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 0.0 percentage points in IVQ2014. Net traded deducted 0.4 percentage points from growth in IQ2015. Net trade added 1.1 percentage points to GDP growth in IIQ2015 and deducted 0.4 percentage points in IIIQ2015. Net trade deducted 0.2 percentage points from GDP growth in IVQ2015. Net trade deducted 0.1-percentage points from GDP growth in IQ2016. Net trade added 0.1 percentage points to GDP growth in IIQ2016. Net trade deducted 1.8 percentage points from GDP growth in IIIQ2016. Net trade added 1.7 percentage points to GDP growth in IVQ2016. Net trade added 0.33 percentage points to GDP growth in IQ2017 and contributed 0.01 percentage points in IIQ2017. Net trade contributed 0.11 percentage points to GDP growth in IIIQ2017. Net trade deducted 0.28 percentage points from GDP growth in IVQ2017. Net trade added 0.42 percentage points to GDP growth in IQ2018. Net trade deducted 0.48 percentage points from GDP growth in IIQ2018. Net trade contributed 0.45 percentage points to GDP growth in IIIQ2018. Net trade deducted 1.29 percentage points from GDP growth in IVQ2018. Net trade deducted 2.85 percentage points from GDP growth in IQ2019. Net trade contributed 2.86 percentage points to GDP growth in IIQ2019. Net trade contributed 1.37 percentage points to GDP growth in IIIQ2019. Net trade contributed 2.20 percentage points to GDP growth in IVQ2019. Net trade deducted 2.15 percentage points from GDP growth in IQ2020. Net trade contributed 3.17 percentage points to GDP growth in IIQ2020. Net trade deducted 4.30 percentage points from GDP in IIIQ2020. Net trade deducted 2.36 percentage points from GDP growth in IVQ2020. Net trade contributed 1.54 percentage points to GDP growth in IQ2021. Net trade contributed 0.55 percentage points to GDP growth in IIQ2021. Net trade deducted 2.31 percentage points in IIIQ2021. Net trade contributed 1.65 percentage points in IVQ2021.
- France. France’s exports decreased 3.9 percent in Feb 2022 while imports increased 0.8 percent. France’s exports increased 18.9 percent in the 12 months ending in Feb 2022 and imports increased 27.8 percent relative to a year earlier. Net trade deducted 0.1 percentage points from GDP growth in IQ2012. Net trade added 0.1 percentage points in IIQ2012. Net traded contributed 0.0 percentage points to France’s GDP in IIIQ2012 and 0.0 percentage points in IVQ2012. Net trade contributed 0.0 percentage points to France’s GDP growth in IQ2013 and added 0.1 percentage points in IIQ2013, deducting 0.4 percentage points in IIIQ2013. Net trade contributed 0.0 percentage points to France’s GDP in IVQ2013 and deducted 0.1 percentage points in IQ2014. Net trade deducted 0.3 percentage points from France’s GDP growth in IIQ2014 and deducted 0.2 percentage points in IIIQ2014. Net trade added 0.1 percentage points to France’s GDP growth in IVQ2014 and deducted 0.2 percentage points in IQ2015. Net trade added 0.4 percentage points to GDP growth in IIQ2015 and deducted 0.5 percentage points in IIIQ2015. Net trade deducted 0.6 percentage points from GDP growth in IVQ2015 and contributed 0.0 percentage points to GDP growth in IQ2016. Net trade added 0.5 percentage points to GDP in IIQ2016. Net trade deducted 0.4 percentage points from GDP in IIIQ2016 and contributed 0.0 percentage points in IVQ2016. Net trade deducted 0.7 percentage points from GDP in IQ2017 and added 1.0 percentage points in IIQ2017. Net trade deducted 0.2 percentage points from GDP growth in IIIQ2017. Net trade added 0.3 percentage points to GDP growth in IVQ2017. Net trade contributed 0.0 percentage points to GDP growth in IQ2018. Net trade deducted 0.1 percentage points from GDP growth in IIQ2018. Net trade added 0.4 percentage points to GDP growth in IIIQ2018. Net trade added 0.1 percentage points to GDP in IVQ2018. Net trade deducted 0.2 percentage points from GDP in IQ2019. Net trade deducted 0.2 percentage points from GDP growth in IIQ219. Net trade deducted 0.2 percentage points from GDP growth in IIIQ2019. Net trade deducted 0.1 percentage points from GDP growth in IVQ2019. Net trade deducted 0.1 percentage points in IQ2020. Net trade deducted 1.8 percentage points in IIQ2020. Net trade contributed 0.6 percentage points to GDP growth in IIIQ2020. Net trade contributed 0.8 percentage points in IVQ2020. Net trade deducted 0.4 percentage points in IQ2021. Net trade contributed 0.0 percentage points in IIQ2021. Net trade added 0.2 percentage points in IIIQ2021. Net trade deducted 1.1 percentage points in IVQ2021.
- United States. US exports decreased 1.8 percent in Feb 2022 and goods exports increased 18.4 percent in Jan-Feb 2022 relative to a year earlier. Imports increased 1.3 percent in Feb 2022 and goods imports increased 21.0 percent in Jan-Feb 2021 relative to a year earlier. Net traded added 0.37 percentage points to GDP in IQ2012. Net trade added 0.31 percentage points to GDP growth in IIQ2012 and deducted 0.02 percentage points in IIIQ2012, adding 0.68 percentage points in IVQ2012. Net trade added 0.30 percentage points to US GDP growth in IQ2013 and deducted 0.49 percentage points in IIQ2013. Net traded subtracted 0.01 percentage points from US GDP growth in IIIQ2013. Net trade added 1.04 percentage points to US GDP growth in IVQ2013. Net trade deducted 1.36 percentage points from US GDP growth in IQ2014 and deducted 0.29 percentage points in IIQ2014. Net trade added 0.12 percentage points to GDP growth in IIIQ2014. Net trade deducted 1.24 percentage points from GDP growth in IVQ2014 and deducted 1.34 percentage points from GDP growth in IQ2015. Net trade deducted 0.32 percentage points from GDP growth in IIQ2015. Net trade deducted 0.95 percentage points from GDP growth in IIIQ2015. Net trade deducted 0.20 percentage points from GDP growth in IVQ2015. Net trade deducted 0.06 percentage points from GDP growth in IQ2016. Net trade added 0.30 percentage points to GDP growth in IIQ2016. Net trade added 0.33 percentage points to GDP growth in IIIQ2016. Net trade deducted 1.19 percentage points from GDP growth in IVQ2016. Net trade added 0.31 percentage points to GDP growth in IQ2017. Net trade deducted 0.42 percentage points from GDP growth in IIQ2017. Net trade added 0.36 percentage points to GDP growth in IIIQ2017. Net trade deducted 0.37 percentage points from GDP growth in IVQ2017. Net trade subtracted 0.16 percentage points to GDP growth in IQ2018. Net trade added 0.40 percentage points to GDP growth in IIQ2018. Net trade deducted 1.66 percentage points from GDP growth in IIIQ2018, deducting 0.51 percentage points in IVQ2018. Net trade added 0.39 percentage points in IQ2019, deducting 0.50 percentage points in IIQ2019. Net trade added 0.07 percentage points in IIIQ2019. Net trade added 1.43 percentage points in IVQ2019, deducting 0.05 percentage points in IQ2020. Net trade added 1.53 percentage points in IIQ2020, deducting 3.25 percentage points in IIIQ2020. Net trade deducted 1.65 percentage points in IVQ2020. Net trade deducted 1.56 percentage points in IQ2021. Net trade deducted 0.18 percentage points in IIQ2021. Net trade deducted 1.16 percentage points from GDP in IIIQ2021. Net trade deducted 0.23 percentage points from GDP in IVQ2021.
Industrial production increased 0.5 percent in Feb 2022 and increased 1.4 percent in Jan 2022 after decreasing 0.4 percent in Dec 2021, with all data seasonally adjusted, as shown in Table I-1. Manufacturing decreased 22.4 percent from the peak in Jun 2007 to the trough in Apr 2009 and increased 13.5 percent from the trough in Apr 2009 to Dec 2019. Manufacturing increased 10.9 percent from the trough in Apr 2009 to Dec 2020. Manufacturing in Dec 2020 is lower by 13.9 percent relative to the peak in Jun 2007. Manufacturing increased 14.9 percent from the trough in Apr 2009 to Dec 2021. Manufacturing in Dec 2021 is 10.8 percent below the peak in Jun 2007. Manufacturing increased 17.8 percent from the trough in Apr 2009 to Feb 2022. Manufacturing in Feb 2022 is 8.5 percent below the peak in Apr 2009. US economic growth has been at only 2.2 percent on average in the cyclical expansion in the 50 quarters from IIIQ2009 to IVQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 201 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (https://apps.bea.gov/iTable/index_nipa.cfm) and the third estimate of GDP for IVQ2021 (https://www.bea.gov/sites/default/files/2022-03/gdp4q21_3rd.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.9 percent obtained by dividing GDP of $15,605.6 billion in IIQ2010 by GDP of $15,161.8 billion in IIQ2009 {[($15,605.6/$15,161.8) -1]100 = 2.9%], or accumulating the quarter on quarter growth rates (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.3 percent from IQ1983 to IIIQ1986, 5.1 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IQ1988, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to IIIQ1988, 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.6 percent from IQ1983 to IIIQ1989, 4.5 percent from IQ1983 to IVQ1989, 4.5 percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990, 4.3 percent from IQ1983 to IIIQ1990, 4.0 percent from IQ1983 to IVQ1990, 3.8 percent from IQ1983 to IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983 to IIIQ1991, 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to IIIQ1992, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993, 3.6 percent from IQ1983 to IIQ1993, 3.6 percent from IQ1983 to IIIQ1993, 3.7 percent from IQ1983 to IVQ1993, 3.7 percent from IQ1983 to IQ1994, 3.7 percent from IQ1983 to IIQ1994, 3.7 percent from IQ1983 to IIIQ1994, 3.7 percent from IQ1983 to IVQ1994, 3.6 percent from IQ1983 to IQ1995, 3.6 percent from IQ1983 to IIQ1995 and at 7.9 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). The National Bureau of Economic Research (NBER) dates a contraction of the US from IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP contracted 1.4 percent from the pre-recession peak of $9404.5 billion of chained 2012 dollars in IIIQ1990 to the trough of $9275.3 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). 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 IVQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) would have accumulated to 51.3 percent. GDP in IVQ2021 would be $23,849.2 billion (in constant dollars of 2012) if the US had grown at trend, which is higher by $4042.9 billion than actual $19,806.3 billion. There are more than four trillion dollars of GDP less than at trend, explaining the 21.8 million unemployed or underemployed equivalent to actual unemployment/underemployment of 12.5 percent of the effective labor force with the largest part originating in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event ( https://cmpassocregulationblog.blogspot.com/2022/04/increase-in-mar-2022-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2022/03/increase-in-feb-2022-of-nonfarm-payroll.html). Unemployment is decreasing while employment is increasing in initial adjustment of the lockdown of economic activity in the global recession resulting from the COVID-19 event (https://www.bls.gov/covid19/effects-of-covid-19-pandemic-and-response-on-the-employment-situation-news-release.htm). US GDP in IVQ2021 is 17.0 percent lower than at trend. US GDP grew from $15,767.1 billion in IVQ2007 in constant dollars to $19,806.3 billion in IVQ2021 or 25.6 percent at the average annual equivalent rate of 1.6 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 3.0 percent per year from Feb 1919 to Feb 2022. Growth at 3.0 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 162.3669 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579 which is 37.5 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing grew at the average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 169.1965 in Feb 2022. The actual index NSA in Feb 2022 is 101.4579, which is 40.0 percent below trend. Manufacturing output grew at average 1.8 percent between Dec 1986 and Feb 2022. Using trend growth of 1.8 percent per year, the index would increase to 137.5298 in Feb 2022. The output of manufacturing at 101.4579 in Feb 2022 is 26.2 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 108.5167 in Jul 2007 to the low of 84.7321 in May 2009 or 21.9 percent. The NAICS manufacturing index increased from 84.7321 in Apr 2009 to 102.5311 in Feb 2022 or 21.0 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.5 percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS manufacturing output index from 104.6868 in Dec 2007 to 170.4304 in Feb 2022. The NAICS index at 102.5311 in Feb 2021 is 39.8 percent below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 104.6868 in Dec 2007 to 132.9246 in Feb 2022. The NAICS index at 102.5311 in Feb 2022 is 22.9 percent below trend under this alternative calculation. Table I-13 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 88.1 percent in IVQ2021. Most of US national income is in the form of services. In Mar 2022, there were 149.938 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (https://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 127.509 million NSA in Feb 2022 accounted for 85.0 percent of total nonfarm jobs of 149.938 million, of which 12.626 million, or 9.9 percent of total private jobs and 8.4 percent of total nonfarm jobs, were in manufacturing. Private service-providing jobs were 106.895 million NSA in Mar 2022, or 71.3 percent of total nonfarm jobs and 83.8 percent of total private-sector jobs. Manufacturing has share of 9.8 percent in US national income in IVQ2021 and durable goods 5.6 percent, as shown in Table I-13. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.
Table V-4, Growth of Trade and Contributions of Net Trade to GDP Growth, ∆% and % Points
| Exports | Exports 12 M ∆% | Imports | Imports 12 M ∆% | |
| USA | 1.8 Feb SA | 18.4 Jan-Feb NSA | 1.3 Feb SA | 21.0 Jan-Feb NSA |
| Japan | Feb 2022 19.1 Jan 2022 9.6 Dec 2021 17.5 Nov 2021 20.5 Oct 2021 9.4 Sep 2021 13.0 Aug 2021 26.2 Jul 2021 37.0 Jun 2021 48.6 May 2021 49.6 Apr 2021 38.0 Mar 2021 16.1 Feb 2021 -4.5 Jan 2021 6.4 Dec 2020 2.0 Nov 2020 -4.2 Oct 2020 -0.2 Sep 2020 -4.9 Aug 2020 -14.8 Jul 2020 -19.2 Jun 2020 -26.2 May 2020 -28.3 Apr 2020 -21.9 Mar 2020 -11.7 Feb 2020 -1.0 Jan 2020 -2.6 Dec 2019 -6.3 Nov 2019 -7.9 Oct 2019 -9.2 Sep 2019 -5.2 Aug 2019 -8.2 Jul 2019 -1.6 Jun 2019 -6.7 May 2019 -7.8 Apr 2019 -2.4 Mar 2019 -2.4 Feb 2019 -1.2 Jan 2019 -8.4 Dec 2018 -3.8 Nov 2018 0.1 Oct 2018 8.2 Sep 2018 -1.2 Aug 2018 6.6 Jul 2018 3.9 Jun 2018 6.7 May 2018 8.1 Apr 2018 7.8 Mar 2018 2.1 Feb 2018 1.8 Jan 2018 12.2 Dec 2017 9.3 Nov 2017 16.2 Oct 2017 14.0 Sep 2017 14.1 Aug 2017 18.1 Jul 2017 13.4 Jun 2017 9.7 May 2017 14.9 Apr 2017 7.5 Mar 2017 12.0 Feb 2017 11.3 Jan 2017 1.3 Dec 2016 5.4 Nov 2016 -0.4 Oct 2016 -10.3 Sep 2016 -6.9 Aug 2016 9.6 Jul 2016 -14.0 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 | Feb 2022 34.0 Jan 2022 39.6 Dec 2021 41.1 Nov 2021 43.8 Oct 2021 26.7 Sep 2021 38.6 Aug 2021 44.7 Jul 2021 28.5 Jun 2021 32.7 May 2021 27.9 Apr 2021 12.8 Mar 2021 5.8 Feb 2021 11.8 Jan 2021 -9.5 Dec 2020 -11.6 Nov 2020 -11.1 Oct 2020 -13.3 Sep 2020 -17.2 Aug 2020 -20.8 Jul 2020 -22.3 Jun 2020 -14.4 May 2020 -26.2 Apr 2020 -7.2 Mar 2020 -5.0 Feb 2020 -14.0 Jan 2020 -3.6 Dec 2019 -4.9 Nov 2019 -15.7 Oct 2019 -14.8 Sep 2019 -1.5 Aug 2019 -12.0 Jul 2019 -1.2 Jun 2019 -5.2 May 2019 -1.5 Apr 2019 6.4 Mar 2019 1.1 Feb 2019 -6.7 Jan 2019 -0.6 Dec 2018 1.9 Nov 2018 12.5 Oct 2018 19.9 Sep 2018 7.0 Aug 2018 15.4 Jul 2018 14.6 Jun 2018 2.5 May 2018 14.0 Apr 2018 5.9 Mar 2018 -0.6 Feb 2018 16.6 Jan 2018 7.9 Dec 2017 14.9 Nov 2017 17.2 Oct 2017 18.9 Sep 2017 12.0 Aug 2017 15.2 Jul 2017 16.3 Jun 2017 15.5 May 2017 17.8 Apr 2017 15.1 Mar 2017 15.8 Feb 2017 1.2 Jan 2017 8.5 Dec 2016 -2.6 Nov 2016 -8.8 Oct 2016 -16.5 Sep 2016 -16.3 Aug 2016 -17.3 Jul 2016 -24.7 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 3.6 Jan-Dec 0.5 Jan-Dec 9.9 Jan-Dec 2017 7.9 Jan-Dec 2016 -7.7 Jan-Dec 2015 -2.8 | 2022 Mar 14.7 Jan-Feb 16.3 2021 Dec 20.9 Nov 22.0 Oct 27.1 Sep 28.1 Aug 25.6 Jul 19.3 Jun 33.2 May 27.9 Apr 32.3 Mar 30.6 Jan-Feb 60.6 2020 Dec 18.1 Nov 21.1 Oct 11.4 Sep 9.9 Aug 9.5 Jul 7.2 Jun 0.5 May -3.3 Apr 8.2 Mar -2.9 Jan-Feb -17.2 2019 Dec 7.6 Nov -1.1 Oct -0.9 Sep -3.2 Aug -1.0 Jul 3.3 Jun -1.3 May 1.1 Apr -2.7 Mar 14.2 Feb -20.7 Jan 9.3 2018 Dec -4.4 Nov 5.4 Oct 15.6 Sep 14.5 Aug 9.8 Jul 12.2 Jun 11.3 May 12.6 Apr 12.9 Mar -2.7 Feb 44.5 Jan 11.1 2017 Dec 10.9 Nov 12.3 Oct 6.9 Sep 8.1 Aug 5.5 Jul 7.2 Jun 11.3 May 8.7 Apr 8.0 Mar 16.4 Feb -1.3 Jan 7.9 2016 Dec 3.1 Nov 0.1 Oct -7.3 Sep -10.0 Aug -2.8 Jul -4.4 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 -1.1 Jan-Dec -2.8 Jan-Dec 15.8 Jan-Dec 2017 15.9 Jan-Dec 2016 -5.5 Jan-Dec 2015 -14.1 | 2022 Mar -0.1 Jan-Feb 15.5 2021 Dec 19.5 Nov 31.7 Oct 20.6 Sep 17.6 Aug 33.1 Jul 28.1 Jun 36.7 May 51.1 Apr 43.1 Mar 38.1 Jan-Feb 22.2 2020 Dec 6.5 Nov 4.5 Oct 4.7 Sep 13.2 Aug -2.1 Jul 1.4 Jun 2.7 May -16.7 Apr -10.2 Mar -1.1 Jan-Feb -4.0 2019 Dec 16.3 Nov 0.3 Oct -6.4 Sep -8.5 Aug -5.6 Jul -5.3 Jun -7.3 May -8.5 Apr 4.0 Mar -7.6 Feb -5.2 Jan -1.5 2018 Dec -7.6 Nov 3.0 Oct 21.4 Sep 14.3 Aug 20.0 Jul 27.3 Jun 14.1 May 26.0 Apr 21.5 Mar 14.4 Feb 6.3 Jan 36.9 2017 Dec 4.5 Nov 17.7 Oct 17.2 Sep 18.7 Aug 13.3 Jul 11.0 Jun 17.2 May 14.8 Apr 11.9 Mar 20.3 Feb 38.1 Jan 16.7 2016 Dec -7.7 Nov 6.7 Oct -1.4 Sep -1.9 Aug 1.5 Jul -12.5 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 | 18.9 12-M Jan 2022 | 14.1 Jan-Dec 2021 | 44.3 12-M Jan 2022 | 21.4 Jan-Dec 2021 |
| Germany | 6.4 Feb CSA | 14.3 Feb | 4.5 Feb CSA | 24.6 Feb |
| France Feb | -3.9 | 18.9 | 0.8 | 27.8 |
| Italy Jan | 5.3 | 22.6 | NA | 44.5 |
| UK Feb | 7.8 | 16.1 | -2.5 | 30.6 |
| Net Trade % Points GDP Growth | Points | |||
| USA | IVQ2021 -0.23 IIIQ2021 -1.26 IIQ2021 -0.18 IQ2021 -1.56 IVQ2020 -1.65 IIIQ2020 -3.25 IIQ2020 1.53 IQ2020 -0.05 IVQ2019 1.43 IIIQ2019 0.07 IIQ2019 -0.50 IQ2019 0.39 IVQ 2018 -0.51 IIIQ2018 -1.66 IIQ2018 0.40 IQ2018 -0.16 IVQ2017 -0.37 IIIQ2017 0.36 IIQ2017 -0.42 IQ2017 0.31 IVQ2016 -1.19 IIIQ2016 0.33 IIQ2016 0.30 IQ2016 -0.06 IVQ2015 -0.20 IIIQ2015 -0.95 IIQ2015 -0.32 IQ2015 -1.34 IVQ2014 -1.24 IIIQ2014 0.12 IIQ2014 -0.29 IQ2014 -1.36 IVQ2013 1.04 IIIQ2013 -0.01 IIQ2013 -0.49 IQ2013 0.30 IVQ2012 +0.68 IIIQ2012 -0.02 IIQ2012 0.31 IQ2012 0.37 | |||
| Japan | 0.7 IQ2012 -1.9 IIQ2012 -1.9 IIIQ2012 -0.3 IVQ2012 1.4 IQ2013 -0.2 IIQ2013 -1.3 IIIQ2013 -2.1 IVQ2013 -1.0 IQ2014 4.2 IIQ2014 -0.2 IIIQ2014 1.8 IVQ2014 0.4 IQ2015 -0.7 IIQ2015 -0.4 IIIQ2015 -0.2 IVQ2015 1.4 IQ2016 0.4 IIQ2016 1.1 IIIQ2016 0.9 IVQ2016 0.7 IQ2017 -0.7 IIQ2017 1.9 IIIQ2017 -0.5 IVQ2017 0.4 IQ2018 0.4 IIQ2018 -0.9 IIIQ2018 -2.4 IVQ2018 1.2 IQ2019 -0.6 IIQ2019 -1.5 IIIQ2019 1.3 IVQ2019 -0.7 IQ2020 -9.8 IIQ2020 11.2 IIIQ2020 3.1 IVQ2020 -0.4 IQ2021 -0.3 IIQ2021 0.4 IIIQ2021 0.9 IVQ2021 | |||
| Germany | IQ2012 0.8 IIQ2012 0.3 IIIQ2012 0.4 IVQ2012 -0.5 IQ2013 -0.3 IIQ2013 -0.3 IIIQ2013 0.0 IVQ2013 0.9 IQ2014 -0.1 IIQ2014 -0.3 IIIQ2014 0.7 IVQ2014 0.1 IQ2015 -0.4 IIQ2015 0.6 IIIQ2015 -0.4 IVQ2015 -0.6 IQ2016 -0.9 IIQ2016 0.0 IIIQ2016 -0.6 IVQ2016 -0.9 IQ2017 1.1 IIQ2017 -1.0 IIIQ2017 0.2 IVQ2017 0.6 IQ2018 0.2 IIQ2018 0.6 IIIQ2018 -1.3 IVQ2018 -1.4 IQ2019 -1.1 IIQ2019 -1.6 IIIQ2019 0.3 IVQ2019 -0.3 IQ2020 -1.2 IIQ2020 -3.3 IIIQ2020 -0.1 IVQ2020 1.2 IQ2021 1.1 IIQ2021 3.8 IIIQ2021 -0.3 IVQ2021 -1.0 | |||
| France | -0.1 IQ2012 0.1 IIQ2012 0.0 IIIQ2012 0.0 IVQ2012 0.0 IQ2013 0.1 IIQ2013 -0.4 IIIQ2013 0.0 IVQ2013 -0.1 IQ2014 -0.3 IIQ2014 -0.2 IIIQ2014 0.1 IVQ2014 -0.2 IQ2015 0.4 IIQ2015 -0.5 IIIQ2015 -0.6 IVQ2015 0.0 IQ2016 0.5 IIQ2016 -0.4 IIIQ2016 0.0 IVQ2016 -0.7 IQ2017 1.0 IIQ2017 -0.2 IIIQ2017 0.3 IVQ2017 0.0 IQ2018 -0.1 IIQ2018 0.4 IIIQ2018 0.1 IVQ2018 -0.2 IQ2019 -0.2 IIQ2019 -0.2 IIIQ2019 -0.1 IVQ2019 -0.1 IQ2020 -1.8 IIQ2020 0.6 IIIQ2020 0.8 IVQ2020 -0.4 IQ2021 0.0 IIQ2021 0.2 IIIQ2021 -0.2 IVQ2021 -1.1 | |||
| UK | 0.7 IIQ2013 -1.7 IIIQ2013 0.1 IVQ2013 0.8 IQ2014 0.3 IIQ2014 -0.7 IIIQ2014 0.0 IVQ2014 -0.4 IQ2015 1.1 IIQ2015 -0.4 IIIQ2015 -0.2 IVQ2015 -0.1 IQ2016 0.1 IIQ2016 -1.8 IIIQ2016 1.7 IVQ2016 0.33 IQ2017 0.01 IIQ2017 | |||
| 0.11 | ||||
| IIIQ2017 -0.28 IVQ2017 0.42 IQ2018 -0.48 IIQ2018 0.45 IIIQ2018 -1.29 IVQ2018 -2.85 IQ2019 2.86 IIQ2019 1.37 IIIQ2019 2.20 IVQ2019 -2.15 IQ2020 3.17 IIQ2020 -4.30 IIIQ2020 -2.36 IVQ2020 1.54 IQ2021 0.55 IIQ2021 -2.31 IIIQ2021 1.65 IVQ2021 |
Sources: Country Statistical Agencies
https://www.bls.gov/bls/other.htm https://www.census.gov/programs-surveys/international-programs/about/related-sites.html
Table VI-7C provides additional information required for understanding the deficit/debt situation of the United States. The table is divided into four parts: Treasury budget in the 2022 fiscal year beginning on Oct 1, 2021 and ending on Sep 30, 2022; federal fiscal data for the years from 2009 to 2019; federal fiscal data for the years from 2005 to 2008; and Treasury debt held by the public from 2005 to 2019. Receipts increased 24.5 percent in the cumulative fiscal year 2022 ending in Mar 2022 relative to the cumulative in fiscal year 2021. Individual income taxes increased 36.3 percent relative to the same fiscal period a year earlier. Outlays decreased 18.2 percent relative to a year earlier. There are also receipts, outlays, deficit and debt for fiscal years 2013, 2014, 2015, 2016, 2017, 2018 and 2019. In fiscal year 2019, the deficit reached $984.4 billion or 4.6 percent of GDP. Outlays of 4,446.6 billion were 21.0 percent of GDP and receipts of $3,462.2 billion were 16.3 percent of GDP. It is quite difficult for the US to raise receipts above 18 percent of GDP. Total revenues of the US from 2009 to 2012 accumulate to $9021.2 billion, or $9.0 trillion, while expenditures or outlays accumulate to $14,104.5 billion, or $14.1 trillion, with the deficit accumulating to $5083.3 billion, or $5.1 trillion. Revenues decreased 6.5 percent from $9652.5 billion in the four years from 2005 to 2008 to $9021.2 billion in the years from 2009 to 2012. Decreasing revenues were caused by the global recession from IVQ2007 (Dec) to IIQ2009 (Jun) and by growth of only 2.2 percent on average in the cyclical expansion from IIIQ2009 to IVQ2021. In contrast, the expansion from IQ1983 to IIQ1995 was at the average annual growth rate of 3.6 percent and at 7.9 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2022/04/us-gdp-growing-at-saar-of-69-percent-in.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html). Because of mediocre GDP growth, there are 21.8 million unemployed or underemployed in the United States for an effective unemployment/underemployment rate of 12.5 percent (https://cmpassocregulationblog.blogspot.com/2022/04/increase-in-mar-2022-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2022/03/increase-in-feb-2022-of-nonfarm-payroll.html). Weakness of growth and employment creation is analyzed in II Collapse of United States Dynamism of Income Growth and Employment Creation (Section II and earlier https://cmpassocregulationblog.blogspot.com/2021/07/total-nonfarm-hires-move-from-4986.html). In contrast with the decline of revenue, outlays or expenditures increased 30.1 percent from $10,838.2 billion, or $10.8 trillion, in the four years from 2005 to 2008, to $14,104.5 billion, or $14.1 trillion, in the four years from 2009 to 2012. Increase in expenditures by 30.1 percent while revenue declined by 6.5 percent caused the increase in the federal deficit from $1185.8 billion in 2005-2008 to $5083.3 billion in 2009-2012. Federal revenue was 14.8 percent of GDP on average in the years from 2009 to 2012, which is well below 17.3 percent of GDP on average from 1962 to 2019. Federal outlays were 23.3 percent of GDP on average from 2009 to 2012, which is well above 20.1 percent of GDP on average from 1962 to 2019. The lower part of Table VI-7C shows that debt held by the public swelled from $5803 billion in 2008 to $13,117 billion in 2015, by $7314 billion or 126.0 percent. Debt held by the public as percent of GDP or economic activity jumped from 39.4 percent in 2008 to 79.2 percent in 2019, which is well above the average of 41.7 percent from 1962 to 2019. The United States faces tough adjustment because growth is unlikely to recover, creating limits on what can be obtained by increasing revenues, while continuing stress of social programs restricts what can be obtained by reducing expenditures. The Congressional Budget Office (CBO) provides a preliminary estimate of the impact of Public Law 116-136 of Mar 27, 2020, CARES Act or Coronavirus Aid, Relief and Economic Security Act (https://www.cbo.gov/system/files/2020-04/hr748.pdf). This preliminary estimate finds that the CARES Act “will increase federal deficits by about $1.8 trillion over the 2020-2030 period (https://www.cbo.gov/system/files/2020-04/hr748.pdf).
Table VI-7C, US, Treasury Budget in Fiscal Year to Date Million Dollars
| Mar 2022 | Fiscal Year 2022 | Fiscal Year 2021 | ∆% |
| Receipts | 2,121,987 | 1,703,948 | 24.5 |
| Outlays | 2,790,254 | 3,410,204 | -18.2 |
| Deficit | -668,267 | -1,706,256 | |
| Individual Income Tax | 1,124,485 | 824,713 | 36.3 |
| Corporation Income Tax | 127,259 | 104,379 | 21.9 |
| Social Insurance | 504,835 | 472,430 | 6.9 |
| Receipts | Outlays | Deficit (-), Surplus (+) | |
| $ Billions | |||
| Fiscal Year 2019 | 3,462.2 | 4,446.6 | -984.4 |
| % GDP | 16.3 | 21.0 | -4.6 |
| Fiscal Year 2018 | 3,329.9 | 4,109.0 | -779.1 |
| % GDP | 16.4 | 20.2 | -3.8 |
| Fiscal Year 2017 | 3,316.2 | 3,981.6 | -665.4 |
| % GDP | 17.2 | 20.6 | -3.5 |
| Fiscal Year 2016 | 3,268.0 | 3,852.6 | -584.7 |
| % GDP | 17.6 | 20.8 | -3.2 |
| Fiscal Year 2015 | 3,249.9 | 3,691.8 | -442.0 |
| % GDP | 18.0 | 20.4 | -2.4 |
| Fiscal Year 2014 | 3,021.5 | 3,506.3 | -484.8 |
| % GDP | 17.4 | 20.2 | -2.8 |
| Fiscal Year 2013 | 2,775.1 | 3,454.9 | -679.8 |
| % GDP | 16.7 | 20.8 | -4.1 |
| Fiscal Year 2012 | 2,450.0 | 3,526.6 | -1,076.6 |
| % GDP | 15.3 | 22.0 | -6.7 |
| Fiscal Year 2011 | 2,303.5 | 3,603.1 | -1,299.6 |
| % GDP | 15.0 | 23.4 | -8.4 |
| Fiscal Year 2010 | 2,162.7 | 3,457.1 | -1,294.4 |
| % GDP | 14.6 | 23.3 | -8.7 |
| Fiscal Year 2009 | 2,105.0 | 3,517.7 | -1,412.7 |
| % GDP | 14.6 | 24.4 | -9.8 |
| Total 2009-2012 | 9,021.2 | 14,104.5 | -5,083.3 |
| Average % GDP 2009-2012 | 14.8 | 23.3 | -8.4 |
| Fiscal Year 2008 | 2,524.0 | 2,982.5 | -458.6 |
| % GDP | 17.1 | 20.2 | -3.1 |
| Fiscal Year 2007 | 2,568.0 | 2,728.7 | -160.7 |
| % GDP | 18.0 | 19.1 | -1.1 |
| Fiscal Year 2006 | 2,406.9 | 2,655.1 | -248.2 |
| % GDP | 17.6 | 19.5 | -1.8 |
| Fiscal Year 2005 | 2,153.6 | 2,472.0 | -318.3 |
| % GDP | 16.8 | 19.3 | -2.5 |
| Total 2005-2008 | 9,652.5 | 10,838.2 | -1,185.8 |
| Average % GDP 2005-2008 | 17.4 | 19.5 | -2.1 |
| Debt Held by the Public | Billions of Dollars | Percent of GDP | |
| 2005 | 4,592 | 35.8 | |
| 2006 | 4,829 | 35.4 | |
| 2007 | 5,035 | 35.2 | |
| 2008 | 5,803 | 39.4 | |
| 2009 | 7,545 | 52.3 | |
| 2010 | 9,019 | 60.8 | |
| 2011 | 10,128 | 65.8 | |
| 2012 | 11,281 | 70.3 | |
| 2013 | 11,983 | 72.2 | |
| 2014 | 12,780 | 73.7 | |
| 2015 | 13,117 | 72.5 | |
| 2016 | 14,168 | 76.4 | |
| 2017 | 14,666 | 76.0 | |
| 2018 | 15,750 | 77.4 | |
| 2019 | 16,803 | 79.2 |
Source: https://www.fiscal.treasury.gov/reports-statements/mts/
https://www.treasury.gov/press-center/press-releases/Pages/sm0184.aspx https://home.treasury.gov/news/press-releases/sm806 CBO, The budget and economic outlook: 2018 to 2028. Washington, DC, Apr 9 https://www.cbo.gov/publication/53651
CBO, The budget and economic outlook: 2017-2027. Washington, DC, Jan 24, 2017 https://www.cbo.gov/publication/52370 CBO, An update to the budget and economic outlook: 2016 to 2026. Washington, DC, Aug 23, 2016.
https://www.cbo.gov/about/products/budget-economic-data#6
CBO (2012NovMBR). CBO (2011AugBEO); Office of Management and Budget 2011. Historical Tables. Budget of the US Government Fiscal Year 2011. Washington, DC: OMB; CBO. 2011JanBEO. Budget and Economic Outlook. Washington, DC, Jan. CBO. 2012AugBEO. Budget and Economic Outlook. Washington, DC, Aug 22. CBO. 2012Jan31. Historical budget data. Washington, DC, Jan 31. CBO. 2012NovCDR. Choices for deficit reduction. Washington, DC. Nov. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO. 2013HBDFeb5. Historical budget data—February 2013 baseline projections. Washington, DC, Congressional Budget Office, Feb 5. CBO (2013Aug12). 2013AugHBD. Historical budget data—August 2013. Washington, DC, Congressional Budget Office, Aug. CBO, Historical Budget Data—February 2014, Washington, DC, Congressional Budget Office, Feb. CBO, Historical budget data—April 2014 release. Washington, DC, Congressional Budget Office, Apr. Congressional Budget Office, August 2014 baseline: an update to the budget and economic outlook: 2014 to 2024. Washington, DC, CBO, Aug 27, 2014. CBO, Monthly budget review: summary of fiscal year 2014. Washington, DC, Congressional Budget Office, Nov 10, 2014. CBO, The budget and economic outlook: 2015 to 2025. Washington, DC, Congressional Budget Office, Jan 26, 2015.
https://www.cbo.gov/about/products/budget-economic-data#6
https://www.cbo.gov/about/products/budget_economic_data#3 https://www.cbo.gov/about/products/budget_economic_data#2
Table VH-L3 provides indicators of the labor force survey of the UK for Dec-Feb 2022 and earlier quarters. There had been stability in UK labor markets with the rate of unemployment changing from 5.0 percent in Dec-Feb 2021 to 3.8 percent in Dec-Feb 2022.
Table VH-L3, UK, Labor Force Survey Indicators, Thousands, SA
| LFHP | EMP | PART | UNE | RATE | |
| Dec-Feb 2020 | 41,388 | 33,073 | 76.6 | 1,364 | 4.0 |
| Dec-Feb 2021 | 41,308 | 32,155 | 74.7 | 1,705 | 5.0 |
| Mar-May 2021 | 41,295 | 32,180 | 74.8 | 1,637 | 4.8 |
| Jun-Aug 2021 | 41,285 | 32,416 | 75.3 | 1,510 | 4.5 |
| Sep-Nov 2021 | 41,293 | 32,475 | 75.5 | 1,382 | 4.1 |
| Dec-Feb 2022 | 41,306 | 32,485 | 75.5 | 1,296 | 3.8 |
| ∆ on Quarter | 13 | 10 | 0.0 | -86 | -0.2 |
| ∆% | 0.0 | 0.0 | -6.2 | ||
| ∆ on Year | -2 | 330 | 0.8 | -408 | -1.2 |
| ∆% | 0.0 | 1.0 | -24.0 |
Notes: LFHP: Labor Force Household Population Ages 16 to 64 in thousands; EMP: Employed Ages 16 and over in thousands; PART: Employment as % of Population Ages 16 to 64; UNE: Unemployed Ages 16 and over in thousands; Rate: Number Unemployed Ages 16 and over as % of Employed plus Unemployed
Source: UK Office for National Statistics
VI Valuation of Risk Financial Assets. The financial crisis and global recession were caused by interest rate and housing subsidies and affordability policies that encouraged high leverage and risks, low liquidity and unsound credit (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 157-66, Regulation of Banks and Finance (2009b), 217-27, International Financial Architecture (2005), 15-18, The Global Recession Risk (2007), 221-5, Globalization and the State Vol. II (2008b), 197-213, Government Intervention in Globalization (2008c), 182-4). Several past comments of this blog elaborate on these arguments, among which: http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html http://cmpassocregulationblog.blogspot.com/2011/01/professor-mckinnons-bubble-economy.html http://cmpassocregulationblog.blogspot.com/2011/01/world-inflation-quantitative-easing.html http://cmpassocregulationblog.blogspot.com/2011/01/treasury-yields-valuation-of-risk.html http://cmpassocregulationblog.blogspot.com/2010/11/quantitative-easing-theory-evidence-and.html http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.html
Table VI-1 shows the phenomenal impulse to valuations of risk financial assets originating in the initial shock of near zero interest rates in 2003-2004 with the fed funds rate at 1 percent, in fear of deflation that never materialized, and quantitative easing in the form of suspension of the auction of 30-year Treasury bonds to lower mortgage rates. World financial markets were dominated by monetary and housing policies in the US. Between 2002 and 2008, the DJ UBS Commodity Index rose 165.5 percent largely because of unconventional monetary policy encouraging carry trades from low US interest rates to long leveraged positions in commodities, exchange rates and other risk financial assets. The charts of risk financial assets show sharp increase in valuations leading to the financial crisis and then profound drops that are captured in Table VI-1 by percentage changes of peaks and troughs. The first round of quantitative easing and near zero interest rates depreciated the dollar relative to the euro by 39.3 percent between 2003 and 2008, with revaluation of the dollar by 25.1 percent from 2008 to 2010 in the flight to dollar-denominated assets in fear of world financial risks. The dollar appreciated 9.3 percent by Apr 15, 2022. Dollar devaluation is a major vehicle of monetary policy in reducing the output gap that is implemented in the probably erroneous belief that devaluation will not accelerate inflation, misallocating resources toward less productive economic activities and disrupting financial markets. The last row of Table VI-1 shows CPI inflation in the US rising from 1.9 percent in 2003 to 4.1 percent in 2007 even as monetary policy increased the fed funds rate from 1 percent in Jun 2004 to 5.25 percent in Jun 2006.
Table VI-1, Volatility of Assets
| DJIA | 10/08/02-10/01/07 | 10/01/07-3/4/09 | 3/4/09- 4/6/10 | |
| ∆% | 87.8 | -51.2 | 60.3 | |
| NYSE Financial | 1/15/04- 6/13/07 | 6/13/07- 3/4/09 | 3/4/09- 4/16/07 | |
| ∆% | 42.3 | -75.9 | 121.1 | |
| Shanghai Composite | 6/10/05- 10/15/07 | 10/15/07- 10/30/08 | 10/30/08 7/30/09 | |
| ∆% | 444.2 | -70.8 | 85.3 | |
| STOXX EUROPE 50 | 3/10/03- 7/25/07 | 7/25/07- 3/9/09 | 3/9/09- 4/21/10 | |
| ∆% | 93.5 | -57.9 | 64.3 | |
| UBS Com. | 1/23/02- 7/1/08 | 7/1/08- 2/23/09 | 2/23/09- 1/6/10 | |
| ∆% | 165.5 | -56.4 | 41.4 | |
| 10-Year Treasury | 6/10/03 | 6/12/07 | 12/31/08 | 4/5/10 |
| % | 3.112 | 5.297 | 2.247 | 3.986 |
| USD/EUR | 6/26/03 | 7/14/08 | 6/07/10 | 04/15/2022 |
| Rate | 1.1423 | 1.5914 | 1.192 | 1.0814 |
| CNY/USD | 01/03 | 07/21 | 7/15 | 04/15/ 2022 |
| Rate | 8.2798 | 8.2765 | 6.8211 | 6.3712 |
| New House | 1963 | 1977 | 2005 | 2009 |
| Sales 1000s | 560 | 819 | 1283 | 375 |
| New House | 2000 | 2007 | 2009 | 2010 |
| Median Price $1000 | 169 | 247 | 217 | 222 |
| 2003 | 2005 | 2007 | 2010 | |
| CPI | 2.3 | 3.4 | 2.8 | 1.6 |
Sources: https://www.wsj.com/market-data
https://www.census.gov/construction/nrs/index.html
https://www.federalreserve.gov/data.htm
Table VI-2 provides the Euro/Dollar (EUR/USD) exchange rate and Chinese Yuan/Dollar (CNY/USD) exchange rate that reveal pursuit of exchange rate policies resulting from monetary policy in the US and capital control/exchange rate policy in China. The ultimate intentions are the same: promoting internal economic activity at the expense of the rest of the world. The easy money policy of the US was deliberately or not but effectively to devalue the dollar from USD 1.1423/EUR on Jun 26, 2003 to USD 1.5914/EUR on Jul 14, 2008, or by 39.3 percent. The flight into dollar assets after the global recession caused revaluation to USD 1.192/EUR on Jun 7, 2010, or by 25.1 percent. After the temporary interruption of the sovereign risk issues in Europe from Apr to Jul 2010, shown in Table VI-4 below, the dollar has revalued to USD 1.0814/EUR on Apr 15 or by 9.3 percent {[(1.0814/1.192)-1]100 = -9.3%}. Yellen (2011AS, 6) admits that Fed monetary policy results in dollar devaluation with the objective of increasing net exports, which was the policy that Joan Robinson (1947) labeled as “beggar-my-neighbor” remedies for unemployment. Risk aversion erodes devaluation of the dollar. On Aug 27, 2020, the Federal Open Market Committee changed its Longer-Run Goals and Monetary Policy Strategy, including the following (https://www.federalreserve.gov/monetarypolicy/review-of-monetary-policy-strategy-tools-and-communications-statement-on-longer-run-goals-monetary-policy-strategy.htm): “The Committee judges that longer-term inflation expectations that are well anchored at 2 percent foster price stability and moderate long-term interest rates and enhance the Committee's ability to promote maximum employment in the face of significant economic disturbances. In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” The new policy can affect relative exchange rates depending on relative inflation rates and country risk issues. China fixed the CNY to the dollar for an extended period at a highly undervalued level of around CNY 8.2765/USD subsequently revaluing to CNY 6.8211/USD until Jun 7, 2010, or by 17.6 percent. After fixing again the CNY to the dollar, China revalued to CNY 6.3712/USD on Fri Apr 15, 2022, or by 6.6 percent, for cumulative revaluation of 23.0 percent. The final row of Table VI-2 shows devaluation of 0.1 percent in the week of Mar 25, 2022; revaluation of 0.1 percent in the week of Apr 1, 2022; change of 0.0 percent in the week of Apr 8, 2022; and devaluation of 0.1 percent in the week of Apr 15, 2022. There could be reversal of revaluation to devalue the Yuan, but the outcome depends on ongoing negotiations and relative world economic conditions.
Table VI-2, Dollar/Euro (USD/EUR) Exchange Rate and Chinese Yuan/Dollar (CNY/USD) Exchange Rate
| USD/EUR | 12/26/03 | 7/14/08 | 6/07/10 | 04/15/22 |
| Rate | 1.1423 | 1.5914 | 1.192 | 1.0814 |
| CNY/USD | 01/03 | 07/21 | 7/15 | 04/15/22 |
| Rate | 8.2765 | 6.8211 | 6.8211 | 6.3712 |
| Weekly Rates | 03/25/2022 | 04/01/2022 | 04/08/2022 | 04/15/22 |
| CNY/USD | 6.3663 | 6.3631 | 6.3651 | 6.3712 |
| ∆% from Earlier Week* | -0.1% | 0.1% | 0.0% | -0.1% |
*Negative sign is depreciation; positive sign is appreciation
Source: http://professional.wsj.com/mdc/public/page/mdc_currencies.html?mod=mdc_topnav_2_3000
Bob Davis and Lingling Wei, writing on “China shifts course, lets Yuan drop,” on Jul 25, 2012, published in the Wall Street Journal (http://professional.wsj.com/article/SB10000872396390444840104577548610131107868.html?mod=WSJPRO_hpp_LEFTTopStories), find that China is depreciating the CNY relative to the USD in an effort to diminish the impact of appreciation of the CNY relative to the EUR. Table VI-2A provides the CNY/USD rate from Oct 28, 2011 to Apr 15, 2022 in selected intervals on Fridays. The CNY/USD revalued by 0.9 percent from Oct 28, 2012 to Apr 27, 2012. The CNY was virtually unchanged relative to the USD by Aug 24, 2012 to CNY 6.3558/USD from the rate of CNY 6.3588/USD on Oct 28, 2011 and then revalued slightly by 1.1 percent to CNY 6.2858/USD on Sep 28, 2012. Devaluation of 0.6 percent from CNY 6.2858/USD on Sep 28, 2012 to CNY 6.3240/USD on Oct 5, 2012, reduced to 0.5 percent the cumulative revaluation from Oct 28, 2011 to Oct 5, 2012. Revaluation by 0.2 percent to CNY 6.2546/USD on Oct 12, 2012 and revalued the CNY by 1.6 percent relative to the dollar from CNY 6.3588/USD on Oct 29, 2011. By Apr 15, 2022, the CNY devalued 0.2 percent to CNY 6.3712/USD relative to CNY 6.3588/USD on Oct 28, 2011. There could be reversal of revaluation in favor of devaluation. Robin Harding and Josh Noble, writing on “US warns China after renminbi depreciation,” on Apr 8, 2014, published in the Financial Times (http://www.ft.com/intl/cms/s/0/3355dc74-bed7-11e3-a1bf-00144feabdc0.html?siteedition=intl#axzz2ynwr9l6s), quote concerns of a senior US Treasury official on possible change in China’s policy of revaluation. Meanwhile, the Senate of the US periodically considers a bill on China’s trade that could create a confrontation but may not be approved by the entire Congress. An important statement by the People’s Bank of China (PBC), China’s central bank, on Apr 14, 2012, announced the widening of the daily maximum band of fluctuation of the renminbi (RMB) yuan (http://www.pbc.gov.cn/publish/english/955/2012/20120414090756030448561/20120414090756030448561_.html):
“Along with the development of China’s foreign exchange market, the pricing and risk management capabilities of market participants are gradually strengthening. In order to meet market demands, promote price discovery, enhance the flexibility of RMB exchange rate in both directions, further improve the managed floating RMB exchange rate regime based on market supply and demand with reference to a basket of currencies, the People’s Bank of China has decided to enlarge the floating band of RMB’s trading prices against the US dollar and is hereby making a public announcement as follows:
Effective from April 16, 2012 onwards, the floating band of RMB’s trading prices against the US dollar in the inter-bank spot foreign exchange market is enlarged from 0.5 percent to 1 percent, i.e., on each business day, the trading prices of the RMB against the US dollar in the inter-bank spot foreign exchange market will fluctuate within a band of ±1 percent around the central parity released on the same day by the China Foreign Exchange Trade System. The spread between the RMB/USD selling and buying prices offered by the foreign exchange-designated banks to their customers shall not exceed 2 percent of the central parity, instead of 1 percent, while other provisions in the Circular of the PBC on Relevant Issues Managing the Trading Prices in the Inter-bank Foreign Exchange Market and Quoted Exchange Rates of Exchange-Designated Banks (PBC Document No.[2010]325) remain valid.”
Table VI-2A, Renminbi Yuan US Dollar Rate
| CNY/USD | ∆% from CNY 6.3588/USD 0n 10/28/2011 | |
| 04/15/22 | 6.3712 | -0.2 |
| 04/08/22 | 6.3651 | -0.1 |
| 04/01/22 | 6.3631 | -0.1 |
| 03/25/22 | 6.3663 | -0.1 |
| 03/18/22 | 6.3612 | 0.0 |
| 03/11/22 | 6.3398 | 0.3 |
| 03/04/22 | 6.3177 | 0.6 |
| 02/25/22 | 6.3171 | 0.7 |
| 02/18/22 | 6.3256 | 0.5 |
| 02/11/22 | 6.3546 | 0.1 |
| 02/04/22 | 6.3610 | 0.0 |
| 01/28/22 | 6.3610 | 0.0 |
| 01/21/22 | 6.3390 | 0.3 |
| 01/14/22 | 6.3528 | 0.1 |
| 01/07/22 | 6.3778 | -0.3 |
| 12/31/21 | 6.3559 | 0.0 |
| 12/24/21 | 6.3676 | -0.1 |
| 12/17/21 | 6.3754 | -0.3 |
| 12/10/21 | 6.3699 | -0.2 |
| 12/03/21 | 6.3764 | -0.3 |
| 11/26/21 | 6.3930 | -0.5 |
| 11/19/21 | 6.3872 | -0.4 |
| 11/12/21 | 6.3796 | -0.3 |
| 11/05/21 | 6.3989 | -0.6 |
| 10/29/21 | 6.4057 | -0.7 |
| 10/22/21 | 6.3849 | -0.4 |
| 10/15/21 | 6.4358 | -1.2 |
| 10/08/21 | 6.4433 | -1.3 |
| 10/01/21 | 6.4467 | -1.4 |
| 09/24/21 | 6.4667 | -1.7 |
| 09/17/21 | 6.4662 | -1.7 |
| 09/10/21 | 6.4443 | -1.3 |
| 09/03/21 | 6.4535 | -1.5 |
| 08/27/21 | 6.4718 | -1.8 |
| 08/20/21 | 6.5015 | -2.2 |
| 08/13/21 | 6.4774 | -1.9 |
| 08/06/21 | 6.4836 | -2.0 |
| 07/30/21 | 6.4615 | -1.6 |
| 07/23/21 | 6.4814 | -1.9 |
| 07/16/21 | 6.4792 | -1.9 |
| 07/09/21 | 6.4789 | -1.9 |
| 07/02/21 | 6.4730 | -1.8 |
| 06/25/21 | 6.4562 | -1.5 |
| 06/18/21 | 6.4531 | -1.5 |
| 06/11/21 | 6.3987 | -0.6 |
| 06/04/21 | 6.3952 | -0.6 |
| 05/28/21 | 6.3684 | -0.2 |
| 05/21/21 | 6.4342 | -1.2 |
| 05/14/21 | 6.4371 | -1.2 |
| 05/07/21 | 6.4325 | -1.2 |
| 04/30/21 | 6.4745 | -1.8 |
| 04/23/21 | 6.4954 | -2.1 |
| 04/16/21 | 6.5209 | -2.5 |
| 04/09/21 | 6.5530 | -3.1 |
| 04/02/21 | 6.5675 | -3.3 |
| 03/26/21 | 6.5415 | -2.9 |
| 03/19/21 | 6.5090 | -2.4 |
| 03/12/21 | 6.5085 | -2.4 |
| 03/05/21 | 6.4968 | -2.2 |
| 02/26/21 | 6.4752 | -1.8 |
| 02/19/21 | 6.4869 | -2.0 |
| 02/12/21 | 6.4582 | -1.6 |
| 02/05/21 | 6.4667 | -1.7 |
| 01/29/21 | 6.4277 | -1.1 |
| 01/22/21 | 6.4819 | -1.9 |
| 01/15/21 | 6.4808 | -1.9 |
| 01/08/20 | 6.4754 | -1.8 |
| 01/01/21 | 6.5327 | -2.7 |
| 12/25/20 | 6.5301 | -2.7 |
| 12/18/20 | 6.5370 | -2.8 |
| 12/11/20 | 6.5467 | -3.0 |
| 12/04/20 | 6.5316 | -2.7 |
| 11/27/20 | 6.5770 | -3.4 |
| 11/20/20 | 6.5630 | -3.2 |
| 11/13/20 | 6.6064 | -3.9 |
| 11/06/20 | 6.6114 | -4.0 |
| 10/30/20 | 6.6927 | -5.3 |
| 10/23/20 | 6.6868 | -5.2 |
| 10/16/20 | 6.6976 | -5.3 |
| 10/09/20 | 6.6947 | -5.3 |
| 10/02/20 | 6.7909 | -6.8 |
| 09/25/20 | 6.8238 | -7.3 |
| 09/18/20 | 6.7690 | -6.5 |
| 09/11/20 | 6.8344 | -7.5 |
| 09/04/20 | 6.8425 | -7.6 |
| 08/28/20 | 6.8654 | -8.0 |
| 08/21/20 | 6.9195 | -8.8 |
| 08/14/20 | 6.9503 | -9.3 |
| 08/07/20 | 6.9678 | -9.6 |
| 07/31/20 | 6.9752 | -9.7 |
| 07/24/20 | 7.0173 | -10.4 |
| 07/17/20 | 6.9922 | -10.0 |
| 07/10/20 | 7.0018 | -10.1 |
| 07/03/20 | 7.0664 | -11.1 |
| 06/26/20 | 7.0784 | -11.3 |
| 06/19/20 | 7.0723 | -11.2 |
| 06/12/20 | 7.0834 | -11.4 |
| 06/05/20 | 7.0820 | -11.4 |
| 05/29/20 | 7.1373 | -12.2 |
| 05/22/20 | 7.1304 | -12.1 |
| 05/15/20 | 7.1021 | -11.7 |
| 05/08/20 | 7.0741 | -11.2 |
| 05/01/20 | 7.0623 | -11.1 |
| 04/24/20 | 7.0819 | -11.4 |
| 04/17/20 | 7.0732 | -11.2 |
| 04/10/20 | 7.0361 | -10.7 |
| 04/03/20 | 7.0923 | -11.5 |
| 03/27/20 | 7.0964 | -11.6 |
| 03/20/20 | 7.0958 | -11.6 |
| 03/13/20 | 7.0082 | -10.2 |
| 03/06/20 | 6.9320 | -9.0 |
| 02/28/20 | 6.9919 | -10.0 |
| 02/21/20 | 7.0272 | -10.5 |
| 02/14/20 | 6.9871 | -9.9 |
| 02/07/20 | 7.0016 | -10.1 |
| 01/31/20 | 6.9367 | -9.1 |
| 01/24/20 | 6.9367 | -9.1 |
| 01/17/20 | 6.8597 | -7.9 |
| 01/10/20 | 6.9197 | -8.8 |
| 01/03/20 | 6.9655 | -9.5 |
| 12/27/19 | 6.9958 | -10.0 |
| 12/20/19 | 7.0067 | -10.2 |
| 12/13/19 | 6.9729 | -9.7 |
| 12/06/19 | 7.0353 | -10.6 |
| 11/29/19 | 7.0326 | -10.6 |
| 11/22/19 | 7.0392 | -10.7 |
| 11/15/19 | 7.0084 | -10.2 |
| 11/08/19 | 6.9960 | -10.0 |
| 11/01/19 | 7.0374 | -10.7 |
| 10/25/19 | 7.0657 | -11.1 |
| 10/18/19 | 7.0817 | -11.4 |
| 10/11/19 | 7.0882 | -11.5 |
| 10/04/19 | 7.1485 | -12.4 |
| 09/27/19 | 7.1228 | -12.0 |
| 09/20/19 | 7.0916 | -11.5 |
| 09/13/19 | 7.0795 | -11.3 |
| 09/06/19 | 7.1157 | -11.9 |
| 08/30/19 | 7.1567 | -12.5 |
| 08/23/19 | 7.0960 | -11.6 |
| 08/16/19 | 7.0429 | -10.8 |
| 08/09/19 | 7.0624 | -11.1 |
| 08/02/19 | 6.9402 | -9.1 |
| 07/26/19 | 6.8792 | -8.2 |
| 07/19/19 | 6.8819 | -8.2 |
| 07/12/19 | 6.8808 | -8.2 |
| 07/05/19 | 6.8936 | -8.4 |
| 06/28/19 | 6.8668 | -8.0 |
| 06/21/19 | 6.8699 | -8.0 |
| 06/14/19 | 6.9254 | -8.9 |
| 06/07/19 | 6.9098 | -8.7 |
| 05/31/19 | 6.9051 | -8.6 |
| 05/24/19 | 6.9002 | -8.5 |
| 05/17/19 | 6.9186 | -8.8 |
| 05/10/19 | 6.8241 | -7.3 |
| 05/03/19 | 6.7346 | -5.9 |
| 04/26/19 | 6.7297 | -5.8 |
| 04/19/19 | 6.7044 | -5.4 |
| 04/12/19 | 6.7042 | -5.4 |
| 04/05/19 | 6.7179 | -5.6 |
| 03/29/19 | 6.7121 | -5.6 |
| 03/22/19 | 6.7181 | -5.7 |
| 03/15/19 | 6.7135 | -5.6 |
| 03/08/19 | 6.7216 | -5.7 |
| 03/01/19 | 6.7064 | -5.5 |
| 02/22/19 | 6.7142 | -5.6 |
| 02/15/19 | 6.7731 | -6.5 |
| 02/08/19 | 6.7448 | -6.1 |
| 02/01/19 | 6.7449 | -6.1 |
| 01/25/19 | 6.7487 | -6.1 |
| 01/18/19 | 6.7788 | -6.6 |
| 01/11/19 | 6.7627 | -6.4 |
| 01/04/19 | 6.8694 | -8.0 |
| 12/28/18 | 6.8782 | -8.2 |
| 12/21/18 | 6.9064 | -8.6 |
| 12/14/18 | 6.9076 | -8.6 |
| 12/07/18 | 6.8744 | -8.1 |
| 11/30/18 | 6.9590 | -9.4 |
| 11/23/18 | 6.9485 | -9.3 |
| 11/16/18 | 6.9380 | -9.1 |
| 11/09/18 | 6.9569 | -9.4 |
| 11/02/18 | 6.8909 | -8.4 |
| 10/26/18 | 6.9435 | -9.2 |
| 10/19/18 | 6.9296 | -9.0 |
| 10/12/18 | 6.9222 | -8.9 |
| 10/05/18 | 6.8689 | -8.0 |
| 09/28/18 | 6.8690 | -8.0 |
| 09/21/18 | 6.8568 | -7.8 |
| 09/14/18 | 6.8705 | -8.0 |
| 09/07/18 | 6.8448 | -7.6 |
| 08/31/18 | 6.8316 | -7.4 |
| 08/24/18 | 6.8077 | -7.1 |
| 08/17/18 | 6.8776 | -8.2 |
| 08/10/18 | 6.8469 | -7.7 |
| 08/03/18 | 6.8306 | -7.4 |
| 07/27/18 | 6.8137 | -7.2 |
| 07/20/18 | 6.7709 | -6.5 |
| 07/13/18 | 6.6908 | -5.2 |
| 07/06/18 | 6.6434 | -4.5 |
| 06/29/18 | 6.6225 | -4.1 |
| 06/22/18 | 6.5059 | -2.3 |
| 06/15/18 | 6.4389 | -1.3 |
| 06/08/18 | 6.4065 | -0.8 |
| 06/01/18 | 6.4204 | -1.0 |
| 05/25/18 | 6.3919 | -0.5 |
| 05/18/18 | 6.3780 | -0.3 |
| 05/11/18 | 6.3341 | 0.4 |
| 05/04/18 | 6.3627 | -0.1 |
| 04/27/18 | 6.3336 | 0.4 |
| 04/20/18 | 6.2965 | 1.0 |
| 04/13/18 | 6.2788 | 1.3 |
| 04/06/18 | 6.3044 | 0.9 |
| 03/30/18 | 6.2911 | 1.1 |
| 03/23/18 | 6.3157 | 0.7 |
| 03/16/18 | 6.3346 | 0.4 |
| 03/09/18 | 6.3346 | 0.4 |
| 03/02/18 | 6.3485 | 0.2 |
| 02/23/18 | 6.3358 | 0.4 |
| 02/16/18 | 6.3458 | 0.2 |
| 02/09/18 | 6.2890 | 1.1 |
| 02/02/18 | 6.3033 | 0.9 |
| 01/26/18 | 6.3154 | 0.7 |
| 01/19/18 | 6.4058 | -0.7 |
| 01/12/18 | 6.4518 | -1.5 |
| 01/05/18 | 6.4891 | -2.0 |
| 12/29/17 | 6.5030 | -2.3 |
| 12/22/17 | 6.5744 | -3.4 |
| 12/15/17 | 6.5989 | -3.8 |
| 12/08/17 | 6.6179 | -4.1 |
| 12/01/17 | 6.6134 | -4.0 |
| 11/24/17 | 6.5983 | -3.8 |
| 11/17/17 | 6.6287 | -4.2 |
| 11/10/17 | 6.6415 | -4.4 |
| 11/03/17 | 6.6387 | -4.4 |
| 10/27/17 | 6.6507 | -4.6 |
| 10/20/17 | 6.6221 | -4.1 |
| 10/13/17 | 6.5901 | -3.6 |
| 10/06/17 | 6.6534 | -4.6 |
| 09/29/17 | 6.6366 | -4.4 |
| 09/22/17 | 6.5935 | -3.7 |
| 09/15/17 | 6.5537 | -3.1 |
| 09/08/17 | 6.4817 | -1.9 |
| 09/01/17 | 6.5591 | -3.1 |
| 08/25/17 | 6.6482 | -4.6 |
| 08/18/17 | 6.6719 | -4.9 |
| 08/11/17 | 6.6647 | -4.8 |
| 08/04/17 | 6.7305 | -5.8 |
| 07/28/17 | 6.7374 | -6.0 |
| 07/21/17 | 6.7670 | -6.4 |
| 07/14/17 | 6.7840 | -6.7 |
| 07/07/17 | 6.8128 | -7.1 |
| 06/30/17 | 6.7787 | -6.6 |
| 06/23/17 | 6.8359 | -7.5 |
| 06/16/17 | 6.8103 | -7.1 |
| 06/09/17 | 6.7987 | -6.9 |
| 06/02/17 | 6.8105 | -7.1 |
| 05/26/17 | 6.8556 | -7.8 |
| 05/19/17 | 6.8839 | -8.3 |
| 05/12/17 | 6.8998 | -8.5 |
| 05/05/17 | 6.9031 | -8.6 |
| 04/28/17 | 6.8940 | -8.4 |
| 04/21/17 | 6.8848 | -8.3 |
| 04/14/17 | 6.8854 | -8.3 |
| 04/07/17 | 6.9044 | -8.6 |
| 03/31/17 | 6.8866 | -8.3 |
| 03/24/17 | 6.8772 | -8.2 |
| 03/17/17 | 6.9093 | -8.7 |
| 03/10/17 | 6.9071 | -8.6 |
| 03/03/17 | 6.8955 | -8.4 |
| 02/24/17 | 6.8668 | -8.0 |
| 02/17/17 | 6.8650 | -8.0 |
| 02/10/17 | 6.8776 | -8.2 |
| 02/03/17 | 6.8661 | -8.0 |
| 01/27/17 | 6.8811 | -8.2 |
| 01/20/17 | 6.8765 | -8.1 |
| 01/13/17 | 6.8998 | -8.5 |
| 01/06/17 | 6.9185 | -8.8 |
| 12/30/16 | 6.9448 | -9.2 |
| 12/23/16 | 6.9463 | -9.2 |
| 12/16/16 | 6.9593 | -9.4 |
| 12/09/16 | 6.9077 | -8.6 |
| 12/02/16 | 6.8865 | -8.3 |
| 11/25/16 | 6.9236 | -8.9 |
| 11/18/16 | 6.8883 | -8.3 |
| 11/11/16 | 6.8151 | -7.2 |
| 11/04/16 | 6.7540 | -6.2 |
| 10/28/16 | 6.7983 | -6.9 |
| 10/21/16 | 6.7624 | -6.3 |
| 10/14/16 | 6.7296 | -5.8 |
| 10/07/16 | 6.6728 | -4.9 |
| 09/30/16 | 6.6711 | -4.9 |
| 09/23/16 | 6.6724 | -4.9 |
| 09/16/16 | 6.6701 | -4.9 |
| 09/09/16 | 6.6876 | -5.2 |
| 09/02/16 | 6.6822 | -5.1 |
| 08/26/16 | 6.6685 | -4.9 |
| 08/19/16 | 6.6523 | -4.6 |
| 08/12/16 | 6.6408 | -4.4 |
| 08/05/16 | 6.6438 | -4.5 |
| 07/29/16 | 6.6550 | -4.7 |
| 07/22/16 | 6.6819 | -5.1 |
| 07/15/16 | 6.6924 | -5.2 |
| 07/08/16 | 6.6881 | -5.2 |
| 07/01/16 | 6.6564 | -4.7 |
| 06/24/16 | 6.6128 | -4.0 |
| 06/17/16 | 6.5836 | -3.5 |
| 06/10/16 | 6.5720 | -3.4 |
| 06/03/16 | 6.5518 | -3.0 |
| 05/27/16 | 6.5630 | -3.2 |
| 05/20/16 | 6.5464 | -3.0 |
| 05/13/16 | 6.5319 | -2.7 |
| 05/06/16 | 6.4965 | -2.2 |
| 04/29/16 | 6.4741 | -1.8 |
| 04/22/16 | 6.5068 | -2.3 |
| 04/15/16 | 6.4781 | -1.9 |
| 04/08/16 | 6.4673 | -1.7 |
| 04/01/16 | 6.4787 | -1.9 |
| 03/25/16 | 6.5204 | -2.5 |
| 03/18/16 | 6.4716 | -1.8 |
| 03/11/16 | 6.4961 | -2.2 |
| 03/04/16 | 6.5027 | -2.3 |
| 02/26/16 | 6.5433 | -2.9 |
| 02/19/16 | 6.5225 | -2.6 |
| 02/12/16 | 6.5733 | -3.4 |
| 02/05/16 | 6.5736 | -3.4 |
| 01/29/16 | 6.5761 | -3.4 |
| 01/22/16 | 6.5789 | -3.5 |
| 01/15/16 | 6.5836 | -3.5 |
| 01/08/16 | 6.5934 | -3.7 |
| 01/01/16 | 6.4931 | -2.1 |
| 12/25/15 | 6.4801 | -1.9 |
| 12/18/15 | 6.4827 | -1.9 |
| 12/11/15 | 6.4558 | -1.5 |
| 12/04/15 | 6.4006 | -0.7 |
| 11/27/15 | 6.3964 | -0.6 |
| 11/20/15 | 6.3885 | -0.5 |
| 11/13/15 | 6.3738 | -0.2 |
| 11/06/15 | 6.3515 | 0.1 |
| 10/30/15 | 6.3161 | 0.7 |
| 10/23/15 | 6.3542 | 0.1 |
| 10/16/15 | 6.3529 | 0.1 |
| 10/09/15 | 6.3447 | 0.2 |
| 10/02/15 | 6.3552 | 0.1 |
| 09/25/15 | 6.3754 | -0.3 |
| 09/18/15 | 6.3639 | -0.1 |
| 09/11/15 | 6.3734 | -0.2 |
| 09/04/15 | 6.3701 | -0.2 |
| 08/28/15 | 6.3872 | -0.4 |
| 08/21/15 | 6.3870 | -0.4 |
| 08/14/15 | 6.3907 | -0.5 |
| 08/07/15 | 6.2097 | 2.3 |
| 07/31/15 | 6.2077 | 2.4 |
| 07/24/15 | 6.2085 | 2.4 |
| 07/17/15 | 6.2110 | 2.3 |
| 07/10/15 | 6.2115 | 2.3 |
| 07/03/15 | 6.2048 | 2.4 |
| 06/26/15 | 6.2090 | 2.4 |
| 06/19/15 | 6.2098 | 2.3 |
| 06/12/15 | 6.2068 | 2.4 |
| 06/05/15 | 6.2016 | 2.5 |
| 05/29/15 | 6.2004 | 2.5 |
| 05/22/15 | 6.1974 | 2.5 |
| 05/15/15 | 6.2054 | 2.4 |
| 05/08/15 | 6.2143 | 2.3 |
| 05/01/15 | 6.2134 | 2.3 |
| 04/24/15 | 6.1935 | 2.6 |
| 04/17/15 | 6.1953 | 2.6 |
| 04/10/15 | 6.2063 | 2.4 |
| 04/03/15 | 6.1466 | 3.3 |
| 03/27/15 | 6.2150 | 2.3 |
| 03/20/15 | 6.2046 | 2.4 |
| 03/13/15 | 6.2599 | 1.6 |
| 03/06/15 | 6.2644 | 1.5 |
| 02/27/1 5 | 6.2671 | 1.4 |
| 02/20/15 | 6.2546 | 1.6 |
| 02/13/2015 | 6.2446 | 1.8 |
| 02/06/2015 | 6.2445 | 1.8 |
| 01/30/2015 | 6.2543 | 1.6 |
| 01/23/2015 | 6.2309 | 2.0 |
| 01/16/2015 | 6.2063 | 2.4 |
| 01/09/2015 | 6.2045 | 2.4 |
| 01/02/2015 | 6.2063 | 2.4 |
| 12/26/2014 | 6.2276 | 2.1 |
| 12/19/2014 | 6.2226 | 2.1 |
| 12/12/2014 | 6.1852 | 2.7 |
| 12/05/2014 | 6.1502 | 3.3 |
| 11/28/2014 | 6.1431 | 3.4 |
| 11/21/2014 | 6.1228 | 3.7 |
| 11/14/2014 | 6.1313 | 3.6 |
| 11/07/2014 | 6.1238 | 3.7 |
| 10/31/2014 | 6.1133 | 3.9 |
| 10/24/2014 | 6.1181 | 3.8 |
| 10/17/2014 | 6.1246 | 3.7 |
| 10/10/2014 | 6.1299 | 3.6 |
| 0/03/2014 | 6.1363 | 3.5 |
| 9/26/2014 | 6.1272 | 3.6 |
| 9/19/2014 | 6.1412 | 3.4 |
| 9/12/2014 | 6.1334 | 3.5 |
| 9/05/2014 | 6.1406 | 3.4 |
| 8/29/2014 | 6.1457 | 3.4 |
| 8/22/2014 | 6.1522 | 3.2 |
| 8/15/2014 | 6.1463 | 3.3 |
| 8/8/2014 | 6.1548 | 3.2 |
| 8/1/2014 | 6.1781 | 2.8 |
| 7/25/2014 | 6.1923 | 2.6 |
| 7/18/2014 | 6.2074 | 2.4 |
| 7/11/2014 | 6.2040 | 2.4 |
| 7/4/2014 | 6.2036 | 2.4 |
| 6/27/2014 | 6.2189 | 2.2 |
| 6/20/14 | 6.2238 | 2.1 |
| 6/13/2014 | 6.2097 | 2.3 |
| 6/6/2014 | 6.2507 | 1.7 |
| 5/30/2014 | 6.2486 | 1.7 |
| 5/23/2014 | 6.2354 | 1.9 |
| 5/16/2014 | 6.2340 | 2.0 |
| 5/9/2014 | 6.2281 | 2.1 |
| 5/3/2014 | 6.2595 | 1.6 |
| 4/28/2014 | 6.2539 | 1.6 |
| 4/18/2014 | 6.2377 | 1.9 |
| 4/11/2014 | 6.2111 | 2.3 |
| 4/4/2014 | 6.2102 | 2.3 |
| 3/28/2014 | 6.2130 | 2.3 |
| 3/21/2014 | 6.2247 | 2.1 |
| 3/14/2014 | 6.1496 | 3.3 |
| 3/7/2014 | 6.1260 | 3.7 |
| 2/28/2014 | 6.1481 | 3.3 |
| 2/21/2014 | 6.0913 | 4.2 |
| 2/14/2014 | 6.0670 | 4.6 |
| 2/7/2014 | 6.0634 | 4.6 |
| 1/31/2014 | 6.0589 | 4.7 |
| 1/24/2014 | 6.0472 | 4.9 |
| 1/17/2014 | 6.0503 | 4.9 |
| 1/10/2014 | 6.0503 | 4.9 |
| 1/3/2014 | 6.0516 | 4.8 |
| 12/27/2013 | 6.0678 | 4.6 |
| 12/20/2013 | 6.0725 | 4.5 |
| 12/13/2013 | 6.0691 | 4.6 |
| 12/6/2013 | 6.0801 | 4.4 |
| 11/29/2013 | 6.0914 | 4.2 |
| 11/22/2013 | 6.0911 | 4.2 |
| 11/15/2013 | 6.0928 | 4.2 |
| 11/8/2013 | 6.0912 | 4.2 |
| 11/1/2013 | 6.0996 | 4.1 |
| 10/25/2013 | 6.0830 | 4.3 |
| 10/18/2013 | 6.0973 | 4.1 |
| 10/11/2013 | 6.1210 | 3.7 |
| 10/4/2013 | 6.1226 | 3.7 |
| 9/27/2013 | 6.1196 | 3.8 |
| 9/20/2013 | 6.1206 | 3.7 |
| 9/13/2013 | 6.1190 | 3.8 |
| 9/6/2013 | 6.1209 | 3.7 |
| 8/30/2013 | 6.1178 | 3.8 |
| 8/23/2013 | 6.1211 | 3.7 |
| 8/16/2013 | 6.1137 | 3.9 |
| 8/9/2013 | 6.1225 | 3.7 |
| 8/2/2013 | 6.1295 | 3.6 |
| 7/26/2013 | 6.1305 | 3.6 |
| 7/19/2013 | 6.1380 | 3.5 |
| 7/12/2013 | 6.1382 | 3.5 |
| 7/5/2013 | 6.1316 | 3.6 |
| 6/28/2013 | 6.1910 | 2.6 |
| 6/21/2013 | 6.1345 | 3.5 |
| 6/14/2013 | 6.1323 | 3.6 |
| 6/7/2013 | 6.1334 | 3.5 |
| 5/31/2013 | 6.1347 | 3.5 |
| 5/24/2013 | 6.1314 | 3.6 |
| 5/17/2013 | 6.1395 | 3.4 |
| 5/10/2013 | 6.1395 | 3.4 |
| 5/3/2013 | 6.1553 | 3.2 |
| 4/26/2013 | 6.1636 | 3.1 |
| 4/19/13 | 6.1788 | 2.8 |
| 4/12/2013 | 6.1947 | 2.6 |
| 4/5/2013 | 6.2051 | 2.4 |
| 3/29/2013 | 6.2119 | 2.3 |
| 3/22/2013 | 6.2112 | 2.3 |
| 3/15/2013 | 6.2131 | 2.3 |
| 3/8/2013 | 6.2142 | 2.3 |
| 3/1/2013 | 6.2221 | 2.1 |
| 2/22/2013 | 6.2350 | 1.9 |
| 2/15/2013 | 6.2328 | 2.0 |
| 2/8/2013 | 6.2323 | 2.0 |
| 2/1/2013 | 6.2316 | 2.0 |
| 1/25/2013 | 6.2228 | 2.1 |
| 1/18/2013 | 6.2182 | 2.2 |
| 1/11/2013 | 6.2168 | 2.2 |
| 1/4/2013 | 6.2316 | 2.0 |
| 12/28/2012 | 6.2358 | 1.9 |
| 12/21/2012 | 6.2352 | 1.9 |
| 12/14/2012 | 6.2460 | 1.8 |
| 12/7/2012 | 6.2254 | 2.1 |
| 11/30/2012 | 6.2310 | 2.0 |
| 11/23/2012 | 6.2328 | 2.0 |
| 11/16/2012 | 6.2404 | 1.9 |
| 11/9/2012 | 6.2452 | 1.8 |
| 11/2/2012 | 6.2458 | 1.8 |
| 10/26/2012 | 6.2628 | 1.5 |
| 10/19/2012 | 6.2546 | 1.6 |
| 10/12/2012 | 6.2670 | 1.4 |
| 10/5/2012 | 6.3240 | 0.5 |
| 9/28/2012 | 6.2858 | 1.1 |
| 9/21/2012 | 6.3078 | 0.8 |
| 9/14/2012 | 6.3168 | 0.7 |
| 9/7/2012 | 6.3438 | 0.2 |
| 8/31/2012 | 6.3498 | 0.1 |
| 8/24/2012 | 6.3558 | 0.0 |
| 8/17/2012 | 6.3589 | 0.0 |
| 8/10/2012 | 6.3604 | 0.0 |
| 8/3/2012 | 6.3726 | -0.2 |
| 7/27/2012 | 6.3818 | -0.4 |
| 7/20/2012 | 6.3750 | -0.3 |
| 7/13/2012 | 6.3868 | -0.4 |
| 7/6/2012 | 6.3658 | -0.1 |
| 6/29/2012 | 6.3552 | 0.1 |
| 6/22/2012 | 6.3650 | -0.1 |
| 6/15/2012 | 6.3678 | -0.1 |
| 6/8/2012 | 6.3752 | -0.3 |
| 6/1/2012 | 6.3708 | -0.2 |
| 4/27/2012 | 6.3016 | 0.9 |
| 3/23/2012 | 6.3008 | 0.9 |
| 2/3/2012 | 6.3030 | 0.9 |
| 12/30/2011 | 6.2940 | 1.0 |
| 11/25/2011 | 6.3816 | -0.4 |
| 10/28/2011 | 6.3588 | - |
Source:
http://professional.wsj.com/mdc/public/page/mdc_currencies.html?mod=mdc_topnav_2_3000
http://federalreserve.gov/releases/h10/Hist/dat00_ch.htm
Professor Edward P Lazear (2013Jan7), writing on “Chinese ‘currency manipulation’ is not the problem,” on Jan 7, 2013, published in the Wall Street Journal (http://professional.wsj.com/article/SB10001424127887323320404578213203581231448.html), provides clear thought on the role of the yuan in trade between China and the United States and trade between China and Europe. There is conventional wisdom that Chinese exchange rate policy causes the loss of manufacturing jobs in the United States, which is shown by Lazear (2013Jan7) to be erroneous. The fact is that manipulation of the CNY/USD rate by China has only minor effects on US employment. Lazear (2013Jan7) shows that the movement of monthly exports of China to its major trading partners, United States and Europe, since 1995 cannot be explained by the fixing of the CNY/USD rate by China. The period is quite useful because it includes rapid growth before 2007, contraction until 2009 and weak subsequent expansion. Professor Charles W. Calomiris, at Columbia University, writing in the Wall Street Journal on Apr 17, 2017, provides perceptive analysis of China’s exchange rate. According to Calomiris (2017Apr), long-run exchange rate appreciation in China originates in productivity growth in accordance with Harrod (1939), Balassa (1964) and Samuelson (1964). In this view, reforms allowing increasing participation of private economic activity caused an increase in productivity measured by Calomiris (2017Apr) as only about 3 percent of US productivity around 1978 to current 13 percent of US productivity. Calomiris (2017Apr) attributes recent depreciation of the Yuan to rapidly increasing debt, slowing growth and inflation motivating capital flight. Chart VI-1 of the Board of Governors of the Federal Reserve System provides the CNY/USD exchange rate from Jan 3, 1995 to Apr 8, 2022 together with US recession dates in shaded areas. China fixed the CNY/USD rate for an extended period as shown in the horizontal segment from 1995 to 2005. There was systematic revaluation of 17.6 percent from CNY 8.2765 on Jul 21, 2005 to CNY 6.8211 on Jul 15, 2008. China fixed the CNY/USD rate until Jun 7, 2010, to avoid adverse effects on its economy from the global recession, which is shown as a horizontal segment from 2009 until mid-2010. China then continued the policy of appreciation of the CNY relative to the USD with oscillations until the beginning of 2012 when the rate began to move sideways followed by a final upward slope of devaluation that is measured in Table VI-2A but virtually disappeared in the rate of CNY 6.3589/USD on Aug 17, 2012 and was nearly unchanged at CNY 6.3558/USD on Aug 24, 2012. China then appreciated 0.2 percent in the week of Dec 21, 2012, to CNY 6.2352/USD for cumulative 1.9 percent revaluation from Oct 28, 2011 and left the rate virtually unchanged at CNY 6.2316/USD on Jan 11, 2013, moving to CNY 6.3643/USD on Apr 8, 2022, which is the last data point in Chart VI-1. Revaluation of the CNY relative to the USD of 23.0 percent by Apr 15, 2022 has not reduced the trade surplus of China but reversal of the policy of revaluation could result in international confrontation. The interruption with upward slope in the final segment on the right of Chart VI-I is measured as virtually stability in Table VI-2A followed with decrease or revaluation and subsequent increase or devaluation. The final segment shows decline or revaluation with another upward move or devaluation. Linglin Wei, writing on “China intervenes to lower yuan,” on Feb 26, 2014, published in the Wall Street Journal (http://online.wsj.com/news/articles/SB10001424052702304071004579406810684766716?KEYWORDS=china+yuan&mg=reno64-wsj), finds from informed sources that the central bank of China conducted the ongoing devaluation of the yuan with the objective of driving out arbitrageurs to widen the band of fluctuation. There is concern if the policy of revaluation is changing to devaluation.
Chart VI-1, Chinese Yuan (CNY) per US Dollar (USD), Business Days, Jan 3, 1995-Apr 8, 2022
Note: US Recessions in Shaded Areas
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/datadownload/Choose.aspx?rel=h10
Chart VI-1A provides the daily CNY/USD rate from Jan 5, 1981 to Apr 8, 2022. The exchange rate was CNY 1.5418/USD on Jan 5, 1981. There is sharp cumulative depreciation of 107.8 percent to CNY 3.2031 by Jul 2, 1986, continuing to CNY 5.8145/USD on Dec 29, 1993 for cumulative 277.1 percent since Jan 5, 1981. China then devalued sharply to CNY 8.7117/USD on Jan 7, 1994 for 49.8 percent relative to Dec 29, 1993 and cumulative 465.0 percent relative to Jan 5, 1981. China then fixed the rate at CNY 8.2765/USD until Jul 21, 2005 and revalued as analyzed in Chart VI-1. The final data point in Chart VI-1A is CNY 6.3643/USD on Apr 8, 2022. To be sure, China fixed the exchange rate after substantial prior devaluation. It is unlikely that the devaluation could have been effective after many years of fixing the exchange rate with high inflation and multiple changes in the world economy. The argument of Lazear (2013Jan7) is still valid in view of the lack of association between monthly exports of China to the US and Europe since 1995 and the exchange rate of China.
Chart VI-1A, Chinese Yuan (CNY) per US Dollar (USD), Business Days, Jan 5, 1981-Apr 8, 2022
Note: US Recessions in Shaded Areas
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/datadownload/Choose.aspx?rel=h10
Chart VI-1B provides finer details with the rate of Chinese Yuan (CNY) to the US Dollar (USD) from Oct 28, 2011 to Apr 8, 2022. There have been alternations of revaluation and devaluation. The initial data point is CNY 6.5370 on Nov 3, 2011. There is an episode of devaluation from CNY 6.2790 on Apr 30, 2012 to CNY 6.3879 on Jul 25, 2012, or devaluation of 1.4 percent. Another devaluation is from CNY 6.0402/USD on Jan 21, 2014 to CNY 6.3643/USD on Apr 8, 2022, or devaluation of 5.4 percent. Calomiris (2017Apr) attributes recent depreciation of the Yuan to rapidly increasing debt, slowing growth and inflation motivating capital flight. China is the second largest holder of US Treasury Securities with $1060.1 billion in Jan 2022, decreasing 0.8 percent from $1068.7 billion in Dec 2021 while decreasing $35.1 billion from Jan 2021 or 3.2 percent. The United States Treasury estimates US government debt held by private investors at $16,932 billion in Dec 2021 (Fiscal Year 2022). China’s holding of US Treasury securities in Jan 2022 represents 6.3 percent of US government marketable interest-bearing debt held by private investors (https://fiscal.treasury.gov/reports-statements/treasury-bulletin/). Min Zeng, writing on “China plays a big role as US Treasury yields fall,” on Jul 16, 2014, published in the Wall Street Journal (http://online.wsj.com/articles/china-plays-a-big-role-as-u-s-treasury-yields-fall-1405545034?tesla=y&mg=reno64-wsj), finds that acceleration in purchases of US Treasury securities by China has been an important factor in the decline of Treasury yields in 2014. Japan increased its holdings from $1276.9 billion in Jan 2021 to $1303.1 billion in Jan 2022 or 2.1 percent. The combined holdings of China and Japan in Jan 2022 add to $2363.2 billion, which is equivalent to 14.0 percent of US government marketable interest-bearing securities held by investors of $16,932 billion in Dec 2021 (Fiscal Year 2022) (https://www.fiscal.treasury.gov/reports-statements/treasury-bulletin/). Total foreign holdings of Treasury securities increased from $7128.0 billion in Jan 2021 to $7661.7 billion in Jan 2022, or 7.5 percent. The US continues to finance its fiscal and balance of payments deficits with foreign savings (see Pelaez and Pelaez, The Global Recession Risk (2007). Professor Martin Feldstein, at Harvard University, writing on “The Debt Crisis Is Coming Soon,” published in the Wall Street Journal on Mar 20, 2019 (https://www.wsj.com/articles/the-debt-crisis-is-coming-soon-11553122139?mod=hp_opin_pos3), foresees a US debt crisis with deficits moving above $1 trillion and debt above 100 percent of GDP. A point of saturation of holdings of US Treasury debt may be reached as foreign holders evaluate the threat of reduction of principal by dollar devaluation and reduction of prices by increases in yield, including possibly risk premium. Shultz et al (2012) find that the Fed financed three-quarters of the US deficit in fiscal year 2011, with foreign governments financing significant part of the remainder of the US deficit while the Fed owns one in six dollars of US national debt. Concentrations of debt in few holders are perilous because of sudden exodus in fear of devaluation and yield increases and the limit of refinancing old debt and placing new debt. In their classic work on “unpleasant monetarist arithmetic,” Sargent and Wallace (1981, 2) consider a regime of domination of monetary policy by fiscal policy (emphasis added):
“Imagine that fiscal policy dominates monetary policy. The fiscal authority independently sets its budgets, announcing all current and future deficits and surpluses and thus determining the amount of revenue that must be raised through bond sales and seignorage. Under this second coordination scheme, the monetary authority faces the constraints imposed by the demand for government bonds, for it must try to finance with seignorage any discrepancy between the revenue demanded by the fiscal authority and the amount of bonds that can be sold to the public. Suppose that the demand for government bonds implies an interest rate on bonds greater than the economy’s rate of growth. Then if the fiscal authority runs deficits, the monetary authority is unable to control either the growth rate of the monetary base or inflation forever. If the principal and interest due on these additional bonds are raised by selling still more bonds, so as to continue to hold down the growth of base money, then, because the interest rate on bonds is greater than the economy’s growth rate, the real stock of bonds will growth faster than the size of the economy. This cannot go on forever, since the demand for bonds places an upper limit on the stock of bonds relative to the size of the economy. Once that limit is reached, the principal and interest due on the bonds already sold to fight inflation must be financed, at least in part, by seignorage, requiring the creation of additional base money.”
Chart VI-1B, Chinese Yuan (CNY) per US Dollar (US), Business Days, Oct 28, 2011-Apr 8, 2022
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/datadownload/Choose.aspx?rel=h10
Chart VI-1C provides two exchange rates. Measured on the left axis is the Yuan (CNY) per US Dollar (US) rate and measured on the right axis is the US Dollar (US) per Euro rate from Jan 2, 2019 to Apr 8, 2022. In multiple months since May 2020, the Yuan revalued relative to the dollar while the dollar has devalued relative to the euro with recent partial reversals. On Aug 27, 2020, the Federal Open Market Committee changed its Longer-Run Goals and Monetary Policy Strategy, including the following (https://www.federalreserve.gov/monetarypolicy/review-of-monetary-policy-strategy-tools-and-communications-statement-on-longer-run-goals-monetary-policy-strategy.htm): “The Committee judges that longer-term inflation expectations that are well anchored at 2 percent foster price stability and moderate long-term interest rates and enhance the Committee's ability to promote maximum employment in the face of significant economic disturbances. In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” The new policy can affect relative exchange rates depending on relative inflation rates and country risk issues. Jon Sindreu, in an article on “The Dollar Helped Fuel an ‘Everything Rally—But It could Bite Back,” published in the Wall Street Journal, on Sep 30, 2020, analyzes the impact of the weakening dollar on valuations of risk financial assets. Caitlin Ostroff, in an article on “Dollar Regains Appeal in Carry Trades,” published in the Wall Street Journal, on Sep 29, 2020, analyzes the carry trade of borrowing in dollars to invest in higher risk assets in countries such as Brazil with positions also in gaining from relative revaluation of the Chinese yuan.
Chart VI-1C, Chinese Yuan (CNY) per US Dollar (US) and US Dollar (US) per Euro, Business Days, Jan 2, 2019-Apr 8, 2022
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/datadownload/Choose.aspx?rel=h10
Inflation and unemployment in the period 1966 to 1985 is analyzed by Cochrane (2011Jan, 23) by means of a Phillips circuit joining points of inflation and unemployment. Chart VI-1B for Brazil in Pelaez (1986, 94-5) was reprinted in The Economist in the issue of Jan 17-23, 1987 as updated by the author. Cochrane (2011Jan, 23) argues that the Phillips circuit shows the weakness in Phillips curve correlation. The explanation is by a shift in aggregate supply, rise in inflation expectations or loss of anchoring. The case of Brazil in Chart VI-1B cannot be explained without taking into account the increase in the fed funds rate that reached 22.36 percent on Jul 22, 1981 (http://www.federalreserve.gov/releases/h15/data.htm) in the Volcker Fed that precipitated the stress on a foreign debt bloated by financing balance of payments deficits with bank loans in the 1970s. The loans were used in projects, many of state-owned enterprises with low present value in long gestation. The combination of the insolvency of the country because of debt higher than its ability of repayment and the huge government deficit with declining revenue as the economy contracted caused adverse expectations on inflation and the economy. This interpretation is consistent with the case of the 24 emerging market economies analyzed by Reinhart and Rogoff (2010GTD, 4), concluding that “higher debt levels are associated with significantly higher levels of inflation in emerging markets. Median inflation more than doubles (from less than seven percent to 16 percent) as debt rises frm the low (0 to 30 percent) range to above 90 percent. Fiscal dominance is a plausible interpretation of this pattern.”
The reading of the Phillips circuits of the 1970s by Cochrane (2011Jan, 25) is doubtful about the output gap and inflation expectations:
“So, inflation is caused by ‘tightness’ and deflation by ‘slack’ in the economy. This is not just a cause and forecasting variable, it is the cause, because given ‘slack’ we apparently do not have to worry about inflation from other sources, notwithstanding the weak correlation of [Phillips circuits]. These statements [by the Fed] do mention ‘stable inflation expectations. How does the Fed know expectations are ‘stable’ and would not come unglued once people look at deficit numbers? As I read Fed statements, almost all confidence in ‘stable’ or ‘anchored’ expectations comes from the fact that we have experienced a long period of low inflation (adaptive expectations). All these analyses ignore the stagflation experience in the 1970s, in which inflation was high even with ‘slack’ markets and little ‘demand, and ‘expectations’ moved quickly. They ignore the experience of hyperinflations and currency collapses, which happen in economies well below potential.”
Yellen (2014Aug22) states that “Historically, slack has accounted for only a small portion of the fluctuations in inflation. Indeed, unusual aspects of the current recovery may have shifted the lead-lag relationship between a tightening labor market and rising inflation pressures in either direction.”
Chart VI-1B provides the tortuous Phillips Circuit of Brazil from 1963 to 1987. There were no reliable consumer price index and unemployment data in Brazil for that period. Chart VI-1B used the more reliable indicator of inflation, the wholesale price index, and idle capacity of manufacturing as a proxy of unemployment in large urban centers.
Chart VI1-B, Brazil, Phillips Circuit, 1963-1987
Source: ©Carlos Manuel Pelaez, Cruzado e o Austral: Análise das Reformas Monetárias do Brasil e da Argentina. São Paulo: Editora Atlas, 1986, pages 94-5. Reprinted in: Brazil. Tomorrow’s Italy, The Economist, 17-23 January 1987, page 25.
Chart VI1-B, Brazil, Phillips Circuit, 1963-1987
Source:
©Carlos Manuel Pelaez, O Cruzado e o Austral: Análise das Reformas Monetárias do Brasil e da Argentina. São Paulo: Editora Atlas, 1986, pages 94-5. Reprinted in: Brazil. Tomorrow’s Italy, The Economist, 17-23 January 1987, page 25.
The key to success in stabilizing an economy with significant risk aversion is finding parity of internal and external interest rates. Brazil implemented fiscal consolidation and reforms that are advisable in explosive foreign debt environments. In addition, Brazil had the capacity to find parity in external and internal interest rates to prevent capital flight and disruption of balance sheets (for analysis of balance sheets, interest rates, indexing, devaluation, financial instruments and asset/liability management in that period see Pelaez and Pelaez (2007), The Global Recession Risk: Dollar Devaluation and the World Economy, 178-87). Table VI-2C provides monthly percentage changes of inflation, devaluation and indexing and the monthly percent overnight interest rate. Parity was attained by means of a simple inequality:
Cost of Domestic Loan ≥ Cost of Foreign Loan
This ordering was attained in practice by setting the domestic interest rate of the overnight interest rate plus spread higher than indexing of government securities with lower spread than loans in turn higher than devaluation plus spread of foreign loans. Interest parity required equality of inflation, devaluation and indexing. Brazil devalued the cruzeiro by 30 percent in 1983 because the depreciation of the German mark DM relative to the USD had eroded the competitiveness of Brazil’s products in Germany and in competition with German goods worldwide. The database of the Board of Governors of the Federal Reserve System quotes DM 1.7829/USD on Mar 3 1980 and DM 2.4425/USD on Mar 15, 1983 (https://www.federalreserve.gov/releases/h10/hist/dat89_ge.htm) for devaluation of 37.0 percent. Parity of costs and rates of domestic and foreign loans and assets required ensuring that there would not be appreciation of the exchange rate, inducing capital flight in expectation of future devaluation that would have reversed stabilization. Table VI-2C provides inflation, devaluation, overnight interest rate and indexing. One of the main problems of adjustment of members of the euro area with high debts is that they cannot adjust the exchange rate because of the common euro currency. This is not an argument in favor of breaking the euro area because there would be also major problems of adjustment such as exiting the euro in favor of a new Drachma in the case of Greece. Another hurdle of adjustment in the euro area is that Brazil could have moved swiftly to adjust its economy in 1983 but the euro area has major sovereignty and distribution of taxation hurdles in moving rapidly.
Table VI-2C, Brazil, Inflation, Devaluation, Overnight Interest Rate and Indexing, Percent per Month, 1984
| 1984 | Inflation IGP ∆% | Devaluation ∆% | Overnight Interest Rate % | Indexing ∆% |
| Jan | 9.8 | 9.8 | 10.0 | 9.8 |
| Feb | 12.3 | 12.3 | 12.2 | 12.3 |
| Mar | 10.0 | 10.1 | 11.3 | 10.0 |
| Apr | 8.9 | 8.8 | 10.1 | 8.9 |
| May | 8.9 | 8.9 | 9.8 | 8.9 |
| Jun | 9.2 | 9.2 | 10.2 | 9.2 |
| Jul | 10.3 | 10.2 | 11.9 | 10.3 |
| Aug | 10.6 | 10.6 | 11.0 | 10.6 |
| Sep | 10.5 | 10.5 | 11.9 | 10.5 |
| Oct | 12.6 | 12.6 | 12.9 | 12.6 |
| Nov | 9.9 | 9.9 | 10.9 | 9.9 |
| Dec | 10.5 | 10.5 | 11.5 | 10.5 |
Source: Carlos Manuel Pelaez, O Cruzado e o Austral: Análise das Reformas Monetárias do Brasil e da Argentina. São Paulo, Editora Atlas, 1986, 86.
“We, Ministers and Governors, reviewed a strategy for addressing global imbalances. We recognized that global imbalances are the product of a wide array of macroeconomic and microeconomic forces throughout the world economy that affect public and private sector saving and investment decisions. We reaffirmed our view that the adjustment of global imbalances:
- Is shared responsibility and requires participation by all regions in this global process;
- Will importantly entail the medium-term evolution of private saving and investment across countries as well as counterpart shifts in global capital flows; and
- Is best accomplished in a way that maximizes sustained growth, which requires strengthening policies and removing distortions to the adjustment process.
In this light, we reaffirmed our commitment to take vigorous action to address imbalances. We agreed that progress has been, and is being, made. The policies listed below not only would be helpful in addressing imbalances, but are more generally important to foster economic growth.
- In the United States, further action is needed to boost national saving by continuing fiscal consolidation, addressing entitlement spending, and raising private saving.
- In Europe, further action is needed to implement structural reforms for labor market, product, and services market flexibility, and to encourage domestic demand led growth.
- In Japan, further action is needed to ensure the recovery with fiscal soundness and long-term growth through structural reforms.
Others will play a critical role as part of the multilateral adjustment process.
- In emerging Asia, particularly China, greater flexibility in exchange rates is critical to allow necessary appreciations, as is strengthening domestic demand, lessening reliance on export-led growth strategies, and actions to strengthen financial sectors.
- In oil-producing countries, accelerated investment in capacity, increased economic diversification, enhanced exchange rate flexibility in some cases.
- Other current account surplus countries should encourage domestic consumption and investment, increase micro-economic flexibility and improve investment climates.
We recognized the important contribution that the IMF can make to multilateral surveillance.”
The concern at that time was that fiscal and current account global imbalances could result in disorderly correction with sharp devaluation of the dollar after an increase in premiums on yields of US Treasury debt (see Pelaez and Pelaez, The Global Recession Risk (2007)). The IMF was entrusted with monitoring and coordinating action to resolve global imbalances. The G7 was eventually broadened to the formal G20 in the effort to coordinate policies of countries with external surpluses and deficits.
The database of the WEO (https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/index.aspx) is used to construct Table VI-3 with fiscal and current account imbalances projected for 2018 and 2019. The WEO finds the need to rebalance external and domestic demand (IMF 2011WEOSep xvii):
“Progress on this front has become even more important to sustain global growth. Some emerging market economies are contributing more domestic demand than is desirable (for example, several economies in Latin America); others are not contributing enough (for example, key economies in emerging Asia). The first set needs to restrain strong domestic demand by considerably reducing structural fiscal deficits and, in some cases, by further removing monetary accommodation. The second set of economies needs significant currency appreciation alongside structural reforms to reduce high surpluses of savings over investment. Such policies would help improve their resilience to shocks originating in the advanced economies as well as their medium-term growth potential.”
The IMF (2012WEOApr, XVII) explains decreasing importance of the issue of global imbalances as follows:
“The latest developments suggest that global current account imbalances are no longer expected to widen again, following their sharp reduction during the Great Recession. This is largely because the excessive consumption growth that characterized economies that ran large external deficits prior to the crisis has been wrung out and has not been offset by stronger consumption in .surplus economies. Accordingly, the global economy has experienced a loss of demand and growth in all regions relative to the boom years just before the crisis. Rebalancing activity in key surplus economies toward higher consumption, supported by more market-determined exchange rates, would help strengthen their prospects as well as those of the rest of the world.”
The IMF (http://www.imf.org/external/pubs/ft/weo/2014/02/pdf/c4.pdf) analyzes global imbalances as:
- Global current account imbalances have narrowed by more than a third from
their peak in 2006. Key imbalances—the large deficit of the United States and
the large surpluses of China and Japan—have more than halved.
- The narrowing in imbalances has largely been driven by demand contraction
(“expenditure reduction”) in deficit economies.
- Exchange rate adjustment has facilitated rebalancing in China and the United
States, but in general the contribution of exchange rate changes (“expenditure
switching”) to current account adjustment has been relatively modest.
- The narrowing of imbalances is expected to be durable, as domestic demand in
deficit economies is projected to remain well below pre-crisis trends.
- Since flow imbalances have narrowed but not reversed, net creditor and debtor
positions have widened further. Weak growth has also contributed to still high
ratios of net external liabilities to GDP in some debtor economies.
- Risks of a disruptive adjustment in global current account balances have
decreased, but global demand rebalancing remains a policy priority. Stronger
external demand will be instrumental for reviving growth in debtor countries and
reducing their net external liabilities.”
| GDP 2018 | FD | CAD | Debt | FD%GDP | CAD%GDP | Debt | |
| US | 20580 | -3.5 | -2.4 | 80.0 | -3.6 | -2.5 | 80.9 |
| Japan | 4972 | -2.9 | 3.5 | 153.2 | -2.9 | 3.3 | 153.8 |
| UK | 2829 | 0.1 | -3.9 | 77.5 | 0.0 | -3.5 | 76.1 |
| Euro | 13639 | 1.1 | 2.9 | 70.0 | 0.7 | 2.8 | 68.9 |
| Ger | 3951 | 2.6 | 7.3 | 42.7 | 1.8 | 7.0 | 40.1 |
| France | 2780 | -0.9 | -0.6 | 89.5 | -1.8 | -0.5 | 90.4 |
| Italy | 2076 | 1.4 | 2.5 | 120.2 | 1.4 | 2.9 | 121.3 |
| Can | 1712 | -0.1 | -2.6 | 26.8 | -0.5 | -1.9 | 26.4 |
| China | 13368 | -3.8 | 1.4 | 50.6 | -5.0 | 0.4 | 55.6 |
| Brazil | 1868 | -1.7 | -0.8 | 54.2 | -1.9 | -1.2 | 58.1 |
Note: GER = Germany; Can = Canada; FD = fiscal deficit; CAD = current account deficit
FD is primary except total for China; Debt is net except gross for China
Source: IMF World Economic Outlook databank
https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/index.aspx
United States Current Account of Balance of Payments and International Investment Position. The current account of the US balance of payments is in Table VI-3A for IVQ2020 and IVQ2021. The Bureau of Economic Analysis analyzes as follows (https://www.bea.gov/sites/default/files/2022-03/trans421.pdf):
“The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $2.0 billion, or 0.9 percent, to $217.9 billion in the fourth quarter of 2021, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). The revised third-quarter deficit was $219.9 billion. The fourth-quarter deficit was 3.6 percent of current-dollar gross domestic product (GDP), down from 3.8 percent in the third quarter. The $2.0 billion narrowing of the current-account deficit in the fourth quarter reflected a reduced deficit on secondary income and expanded surpluses on services and on primary income that were mostly offset by an expanded deficit on goods.”
The US has a large deficit in goods or exports less imports of goods but it has a surplus in services that helps to reduce the trade account deficit or exports less imports of goods and services. The current account deficit of the US not seasonally adjusted increased from $175.7 billion in IVQ2020 to $218.4 billion in IVQ2021. The current account deficit seasonally adjusted at annual rate increased from 3.3 percent of GDP in IVQ2020 to 3.8 percent of GDP in IIIQ2021, decreasing at 3.6 percent of GDP in IVQ2021 (using the second update of GDP for IVQ2021 (https://www.bea.gov/sites/default/files/2022-02/gdp4q21_2nd.pdf https://apps.bea.gov/iTable/index_nipa.cfm) in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). The ratio of the current account deficit to GDP has stabilized around 3 percent of GDP compared with much higher percentages before the recession but is combined now with much higher imbalance in the Treasury budget (see Pelaez and Pelaez, The Global Recession Risk (2007), Globalization and the State, Vol. II (2008b), 183-94, Government Intervention in Globalization (2008c), 167-71). There is still a major challenge in the combined deficits in current account and in federal budgets.
Table VI-3A, US, Balance of Payments, Millions of Dollars NSA
| IVQ2020 | IVQ2021 | Difference | |
| Goods Balance | -259,332 | -291,623 | -32,291 |
| X Goods | 392,062 | 482,542 | 23.1 ∆% |
| M Goods | -651,394 | -774,165 | 18.8 ∆% |
| Services Balance | 62,849 | 62,885 | 36 |
| X Services | 184,529 | 214,556 | 16.3 ∆% |
| M Services | -121,680 | -151,671 | 24.6 ∆% |
| Balance Goods and Services | -196,482 | -228,738 | -32,256 |
| Exports of Goods and Services and Income Receipts | 870,017 | 1,025,510 | 155,493 |
| Imports of Goods and Services and Income Payments | -1,045,705 | -1,243,922 | -198,218 |
| Current Account Balance | -175,688 | -218,412 | -42,724 |
| % GDP SA | IVQ2020 | IVQ2021 | IIIQ2021 |
| 3.3 | 3.6 | 3.8 |
X: exports; M: imports
Balance on Current Account = Exports of Goods and Services – Imports of Goods and Services and Income Payments
Source: Bureau of Economic Analysis
https://www.bea.gov/data/economic-accounts/international#bop
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IVQ2021. There is improvement in IVQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) .
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2022-03/trans421.pdf
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2022-03/trans421.pdf
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIIQ2021. There is deterioration in IIIQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) .
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-12/trans321.pdf
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-12/trans321.pdf
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIQ2021. There is deterioration in IIQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) .
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-09/trans221.pdf
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-09/trans221.pdf
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IQ2021. There is deterioration in IQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic ac lockdown of economic activity in the COVID-19 event.
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-06/trans121.pdf
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-06/trans121.pdf
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IVQ2020. There is deterioration in IVQ2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event.
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-03/trans420.pdf
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2021-03/trans420.pdf
The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIIQ2020. There is deterioration in IIIQ2020 the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event.
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/sites/default/files/2020-12/trans320_0.pdf
The BEA analyzes the impact on data of the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event:
“Coronavirus (COVID-19) Impact on Second Quarter 2020 International Transactions
All major categories of current account transactions declined in the second quarter of 2020 resulting in part from the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. In the financial account, the ending of some currency swaps between the U.S. Federal Reserve System and some central banks in Europe and Japan contributed to U.S. withdrawal of deposit assets and U.S. repayment of deposit liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified. For more information on the impact of COVID-19 on the statistics, see the technical note that accompanies this release.”
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-second-quarter-2020
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-second-quarter-2020
Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-first-quarter-2020-and-annual-update
Chart VI-3B1*, US, Current Account Transactions, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-first-quarter-2020-and-annual-update
Chart VI-3B1, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2019/us-international-transactions-first-quarter-2019-and-annual-update
Chart VI-3B1, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-fourth-quarter-and-year-2019
Chart VI-3B2, US, Current Account and Components Balances, Quarterly SA
Source: https://www.bea.gov/news/2020/us-international-transactions-fourth-quarter-and-year-2019
The Bureau of Economic Analysis (BEA) provides analytical insight and data on the 2017 Tax Cuts and Job Act:
“In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. In response to the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings, some U.S. multinational enterprises repatriated accumulated prior earnings of their foreign affiliates. In the first, second, and fourth quarters of 2018, the repatriation of dividends exceeded current-period earnings, resulting in negative values being recorded for reinvested earnings. In the first quarter of 2019, dividends were $100.2 billion while reinvested earnings were $40.2 billion (see table below). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account (table 6). For more information, see "How does the 2017 Tax Cuts and Jobs Act affect BEA’s business income statistics?" and "How are the international transactions accounts affected by an increase in direct investment dividend receipts?"”
Chart VI-3B, US, Direct Investment Earnings Receipts and Components
Source: https://www.bea.gov/news/2019/us-international-transactions-first-quarter-2019-and-annual-update
In their classic work on “unpleasant monetarist arithmetic,” Sargent and Wallace (1981, 2) consider a regime of domination of monetary policy by fiscal policy (emphasis added):
“Imagine that fiscal policy dominates monetary policy. The fiscal authority independently sets its budgets, announcing all current and future deficits and surpluses and thus determining the amount of revenue that must be raised through bond sales and seignorage. Under this second coordination scheme, the monetary authority faces the constraints imposed by the demand for government bonds, for it must try to finance with seignorage any discrepancy between the revenue demanded by the fiscal authority and the amount of bonds that can be sold to the public. Suppose that the demand for government bonds implies an interest rate on bonds greater than the economy’s rate of growth. Then if the fiscal authority runs deficits, the monetary authority is unable to control either the growth rate of the monetary base or inflation forever. If the principal and interest due on these additional bonds are raised by selling still more bonds, so as to continue to hold down the growth of base money, then, because the interest rate on bonds is greater than the economy’s growth rate, the real stock of bonds will growth faster than the size of the economy. This cannot go on forever, since the demand for bonds places an upper limit on the stock of bonds relative to the size of the economy. Once that limit is reached, the principal and interest due on the bonds already sold to fight inflation must be financed, at least in part, by seignorage, requiring the creation of additional base money.”
The alternative fiscal scenario of the CBO (2012NovCDR, 2013Sep17) resembles an economic world in which eventually the placement of debt reaches a limit of what is proportionately desired of US debt in investment portfolios. This unpleasant environment is occurring in various European countries.
The current real value of government debt plus monetary liabilities depends on the expected discounted values of future primary surpluses or difference between tax revenue and government expenditure excluding interest payments (Cochrane 2011Jan, 27, equation (16)). There is a point when adverse expectations about the capacity of the government to generate primary surpluses to honor its obligations can result in increases in interest rates on government debt.
First, Unpleasant Monetarist Arithmetic. Fiscal policy is described by Sargent and Wallace (1981, 3, equation 1) as a time sequence of D(t), t = 1, 2,…t, …, where D is real government expenditures, excluding interest on government debt, less real tax receipts. D(t) is the real deficit excluding real interest payments measured in real time t goods. Monetary policy is described by a time sequence of H(t), t=1,2,…t, …, with H(t) being the stock of base money at time t. In order to simplify analysis, all government debt is considered as being only for one time period, in the form of a one-period bond B(t), issued at time t-1 and maturing at time t. Denote by R(t-1) the real rate of interest on the one-period bond B(t) between t-1 and t. The measurement of B(t-1) is in terms of t-1 goods and [1+R(t-1)] “is measured in time t goods per unit of time t-1 goods” (Sargent and Wallace 1981, 3). Thus, B(t-1)[1+R(t-1)] brings B(t-1) to maturing time t. B(t) represents borrowing by the government from the private sector from t to t+1 in terms of time t goods. The price level at t is denoted by p(t). The budget constraint of Sargent and Wallace (1981, 3, equation 1) is:
D(t) = {[H(t) – H(t-1)]/p(t)} + {B(t) – B(t-1)[1 + R(t-1)]} (1)
Equation (1) states that the government finances its real deficits into two portions. The first portion, {[H(t) – H(t-1)]/p(t)}, is seigniorage, or “printing money.” The second part,
{B(t) – B(t-1)[1 + R(t-1)]}, is borrowing from the public by issue of interest-bearing securities. Denote population at time t by N(t) and growing by assumption at the constant rate of n, such that:
N(t+1) = (1+n)N(t), n>-1 (2)
The per capita form of the budget constraint is obtained by dividing (1) by N(t) and rearranging:
B(t)/N(t) = {[1+R(t-1)]/(1+n)}x[B(t-1)/N(t-1)]+[D(t)/N(t)] – {[H(t)-H(t-1)]/[N(t)p(t)]} (3)
On the basis of the assumptions of equal constant rate of growth of population and real income, n, constant real rate of return on government securities exceeding growth of economic activity and quantity theory equation of demand for base money, Sargent and Wallace (1981) find that “tighter current monetary policy implies higher future inflation” under fiscal policy dominance of monetary policy. That is, the monetary authority does not permanently influence inflation, lowering inflation now with tighter policy but experiencing higher inflation in the future.
Second, Unpleasant Fiscal Arithmetic. The tool of analysis of Cochrane (2011Jan, 27, equation (16)) is the government debt valuation equation:
(Mt + Bt)/Pt = Et∫(1/Rt, t+τ)st+τdτ (4)
Equation (4) expresses the monetary, Mt, and debt, Bt, liabilities of the government, divided by the price level, Pt, in terms of the expected value discounted by the ex-post rate on government debt, Rt, t+τ, of the future primary surpluses st+τ, which are equal to Tt+τ – Gt+τ or difference between taxes, T, and government expenditures, G. Cochrane (2010A) provides the link to a web appendix demonstrating that it is possible to discount by the ex post Rt, t+τ. The second equation of Cochrane (2011Jan, 5) is:
MtV(it, ·) = PtYt (5)
Conventional analysis of monetary policy contends that fiscal authorities simply adjust primary surpluses, s, to sanction the price level determined by the monetary authority through equation (5), which deprives the debt valuation equation (4) of any role in price level determination. The simple explanation is (Cochrane 2011Jan, 5):
“We are here to think about what happens when [4] exerts more force on the price level. This change may happen by force, when debt, deficits and distorting taxes become large so the Treasury is unable or refuses to follow. Then [4] determines the price level; monetary policy must follow the fiscal lead and ‘passively’ adjust M to satisfy [5]. This change may also happen by choice; monetary policies may be deliberately passive, in which case there is nothing for the Treasury to follow and [4] determines the price level.”
An intuitive interpretation by Cochrane (2011Jan 4) is that when the current real value of government debt exceeds expected future surpluses, economic agents unload government debt to purchase private assets and goods, resulting in inflation. If the risk premium on government debt declines, government debt becomes more valuable, causing a deflationary effect. If the risk premium on government debt increases, government debt becomes less valuable, causing an inflationary effect.
There are multiple conclusions by Cochrane (2011Jan) on the debt/dollar crisis and Global recession, among which the following three:
(1) The flight to quality that magnified the recession was not from goods into money but from private-sector securities into government debt because of the risk premium on private-sector securities; monetary policy consisted of providing liquidity in private-sector markets suffering stress
(2) Increases in liquidity by open-market operations with short-term securities have no impact; quantitative easing can affect the timing but not the rate of inflation; and purchase of private debt can reverse part of the flight to quality
(3) The debt valuation equation has a similar role as the expectation shifting the Phillips curve such that a fiscal inflation can generate stagflation effects similar to those occurring from a loss of anchoring expectations.
This analysis suggests that there may be a point of saturation of demand for United States financial liabilities without an increase in interest rates on Treasury securities. A risk premium may develop on US debt. Such premium is not apparent currently because of distressed conditions in the world economy and international financial system. Risk premiums are observed in the spread of bonds of highly indebted countries in Europe relative to bonds of the government of Germany.
The issue of global imbalances centered on the possibility of a disorderly correction (Pelaez and Pelaez, The Global Recession Risk (2007), Globalization and the State Vol. II (2008b) 183-94, Government Intervention in Globalization (2008c), 167-71). Such a correction has not occurred historically but there is no argument proving that it could not occur. The need for a correction would originate in unsustainable large and growing United States current account deficits (CAD) and net international investment position (NIIP) or excess of financial liabilities of the US held by foreigners net relative to financial liabilities of foreigners held by US residents. The IMF estimated that the US could maintain a CAD of two to three percent of GDP without major problems (Rajan 2004). The threat of disorderly correction is summarized by Pelaez and Pelaez, The Global Recession Risk (2007), 15):
“It is possible that foreigners may be unwilling to increase their positions in US financial assets at prevailing interest rates. An exit out of the dollar could cause major devaluation of the dollar. The depreciation of the dollar would cause inflation in the US, leading to increases in American interest rates. There would be an increase in mortgage rates followed by deterioration of real estate values. The IMF has simulated that such an adjustment would cause a decline in the rate of growth of US GDP to 0.5 percent over several years. The decline of demand in the US by four percentage points over several years would result in a world recession because the weakness in Europe and Japan could not compensate for the collapse of American demand. The probability of occurrence of an abrupt adjustment is unknown. However, the adverse effects are quite high, at least hypothetically, to warrant concern.”
The United States could be moving toward a situation typical of heavily indebted countries, requiring fiscal adjustment and increases in productivity to become more competitive internationally. The CAD and NIIP of the United States are not observed in full deterioration because the economy is well below trend. There are two complications in the current environment relative to the concern with disorderly correction in the first half of the past decade. In the release of Jun 14, 2013, the Bureau of Economic Analysis (http://www.bea.gov/newsreleases/international/transactions/2013/pdf/trans113.pdf) informs of revisions of US data on US international transactions since 1999:
“The statistics of the U.S. international transactions accounts released today have been revised for the first quarter of 1999 to the fourth quarter of 2012 to incorporate newly available and revised source data, updated seasonal adjustments, changes in definitions and classifications, and improved estimating methodologies.”
The BEA introduced new concepts and methods (http://www.bea.gov/international/concepts_methods.htm) in comprehensive restructuring on Jun 18, 2014 (http://www.bea.gov/international/modern.htm):
“BEA introduced a new presentation of the International Transactions Accounts on June 18, 2014 and will introduce a new presentation of the International Investment Position on June 30, 2014. These new presentations reflect a comprehensive restructuring of the international accounts that enhances the quality and usefulness of the accounts for customers and bring the accounts into closer alignment with international guidelines.”
Table IIA2-3 provides data on the US fiscal and balance of payments imbalances incorporating all revisions and methods. In 2007, the federal deficit of the US was $161 billion corresponding to 1.1 percent of GDP while the Congressional Budget Office estimates the federal deficit in 2012 at $1077 billion or 6.7 percent of GDP. The estimate of the deficit for 2013 is $680 billion or 4.1 percent of GDP. The combined record federal deficits of the US from 2009 to 2012 are $5094 billion or 31.6 percent of the estimate of GDP for fiscal year 2012 implicit in the CBO (CBO 2013Sep11) estimate of debt/GDP. The deficits from 2009 to 2012 exceed one trillion dollars per year, adding to $5.084 trillion in four years, using the fiscal year deficit of $1077 billion for fiscal year 2012, which is the worst fiscal performance since World War II. Federal debt in 2007 was $5035 billion, slightly less than the combined deficits from 2009 to 2012 of $5084 billion. Federal debt in 2012 was 70.3 percent of GDP (CBO 2015Jan26) and 72.2 percent of GDP in 2013, as shown in Table VI-3B with the latest revisions (https://www.cbo.gov/about/products/budget-economic-data#2) . This situation may worsen in the future (CBO 2013Sep17):
“Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.
The gap between federal spending and revenues would widen steadily after 2015 under the assumptions of the extended baseline, CBO projects. By 2038, the deficit would be 6½ percent of GDP, larger than in any year between 1947 and 2008, and federal debt held by the public would reach 100 percent of GDP, more than in any year except 1945 and 1946. With such large deficits, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable.
Incorporating the economic effects of the federal policies that underlie the extended baseline worsens the long-term budget outlook. The increase in debt relative to the size of the economy, combined with an increase in marginal tax rates (the rates that would apply to an additional dollar of income), would reduce output and raise interest rates relative to the benchmark economic projections that CBO used in producing the extended baseline. Those economic differences would lead to lower federal revenues and higher interest payments. With those effects included, debt under the extended baseline would rise to 108 percent of GDP in 2038.”
The most recent CBO long-term budget on Jun 25, 2019 projects US federal debt at 144.0 percent of GDP in 2049 (Congressional Budget Office, The 2019 long-term budget outlook. Washington, DC, Jun 25 https://www.cbo.gov/publication/55331). Table VI-3B provides the balance of payments and net international investment position together with the fiscal imbalances of the US that were critical at the onset of the global recession after 2007 (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 157-66, Regulation of Banks and Finance (2009b), 217-27, International Financial Architecture (2005), 15-18, The Global Recession Risk (2007), 221-5, Globalization and the State Vol. II (2008b), 197-213, Government Intervention in Globalization (2008c), 182-4). Several past comments of this blog elaborate on these arguments, among which: http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html http://cmpassocregulationblog.blogspot.com/2011/01/professor-mckinnons-bubble-economy.html http://cmpassocregulationblog.blogspot.com/2011/01/world-inflation-quantitative-easing.html http://cmpassocregulationblog.blogspot.com/2011/01/treasury-yields-valuation-of-risk.html http://cmpassocregulationblog.blogspot.com/2010/11/quantitative-easing-theory-evidence-and.html http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.html ) and are exploding again with the fiscal stimulus of the COVID-19 event.
Table VI-3B, US, Current Account, NIIP, Fiscal Balance, Nominal GDP, Federal Debt and Direct Investment, Dollar Billions and %
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Goods & | -705 | -709 | -384 | -495 | -549 |
| Exports Goods & Services & Income Receipts | 2559.3 | 2742.3 | 2283.1 | 2624.0 | 2981.5 |
| Imports Goods & Services & Income Payments | -3270.4 | -3423.6 | -2655.6 | -3055.3 | -3427.2 |
| Current Account | -711 | -681 | -373 | -431 | -445 |
| NGDP | 14452 | 14713 | 14449 | 14992 | 15543 |
| Current Account % GDP | -4.9 | -4.6 | -2.6 | -2.9 | -2.9 |
| NIIP | -1279 | -3995 | -2628 | -2512 | -4455 |
| US Owned Assets Abroad | 20705 | 19423 | 19426 | 21767 | 22209 |
| Foreign Owned Assets in US | 21984 | 23418 | 22054 | 24279 | 26664 |
| NIIP % GDP | -8.8 | -27.2 | -18.2 | -16.8 | -28.7 |
| Exports | 2559 | 2742 | 2283 | 2624 | 2982 |
| NIIP % | -50 | -146 | -115 | -96 | -149 |
| DIA MV | 5858 | 3707 | 4945 | 5486 | 5215 |
| DIUS MV | 4134 | 3091 | 3619 | 4099 | 4199 |
| Fiscal Balance | -161 | -459 | -1413 | -1294 | -1300 |
| Fiscal Balance % GDP | -1.1 | -3.1 | -9.8 | -8.7 | -8.4 |
| Federal Debt | 5035 | 5803 | 7545 | 9019 | 10128 |
| Federal Debt % GDP | 35.2 | 39.4 | 52.3 | 60.8 | 65.8 |
| Federal Outlays | 2729 | 2983 | 3518 | 3457 | 3603 |
| ∆% | 2.8 | 9.3 | 17.9 | -1.7 | 4.2 |
| % GDP | 19.1 | 20.2 | 24.4 | 23.3 | 23.4 |
| Federal Revenue | 2568 | 2524 | 2105 | 2163 | 2303 |
| ∆% | 6.7 | -1.7 | -16.6 | 2.7 | 6.5 |
| % GDP | 18.0 | 17.1 | 14.6 | 14.6 | 15.0 |
| 2012 | 2013 | 2014 | 2015 | 2016 | |
| Goods & | -537 | -461 | -490 | -499 | -503 |
| Exports Goods & Services & Income Receipts | 3095.0 | 3213.0 | 3341.8 | 3207.3 | 3188.5 |
| Exports Goods & Services & Income Receipts | 3521.9 | 3561.8 | 3707.0 | -3615.1 | 3616.9 |
| Current Account | -426 | -349 | -365 | -408 | -428 |
| NGDP | 16197 | 16785 | 17527 | 18225 | 18715 |
| Current Account % GDP | -2.6 | -2.1 | -2.1 | -2.2 | -2.3 |
| NIIP | -4518 | -5369 | -6945 | -7462 | -8192 |
| US Owned Assets Abroad | 22562 | 24145 | 24883 | 23431 | 24060 |
| Foreign Owned Assets in US | 27080 | 29513 | 31828 | 30892 | 32252 |
| NIIP % GDP | -27.9 | -32.0 | -39.6 | -40.9 | -43.8 |
| Exports | 3095 | 3213 | 3342 | 3207 | 3189 |
| NIIP % | -146 | -167 | -208 | -233 | -257 |
| DIA MV | 5969 | 7121 | 72421 | 7057 | 7422 |
| DIUS MV | 4662 | 5815 | 6370 | 6729 | 7596 |
| Fiscal Balance | -1077 | -680 | -485 | -442 | -585 |
| Fiscal Balance % GDP | -6.7 | -4.1 | -2.8 | -2.4 | -3.2 |
| Federal Debt | 11281 | 11983 | 12780 | 13117 | 14168 |
| Federal Debt % GDP | 70.3 | 72.2 | 73.7 | 72.5 | 76.4 |
| Federal Outlays | 3527 | 3455 | 3506 | 3692 | 3853 |
| ∆% | -2.1 | -2.0 | 1.5 | 5.3 | 4.4 |
| % GDP | 22.0 | 20.8 | 20.2 | 20.4 | 20.8 |
| Federal Revenue | 2450 | 2775 | 3022 | 3250 | 3268 |
| ∆% | 6.4 | 13.3 | 8.9 | 7.6 | 0.6 |
| % GDP | 15.3 | 16.7 | 17.4 | 18.0 | 17.6 |
| 2017 | 2018 | 2019 | |||
| Goods & | -550 | -628 | -616 | ||
| Exports Goods & Services & Income Receipts | 3444.8 | 3735.7 | 3763.9 | ||
| Imports Goods & Services & Income Payments | 3884.5 | 4226.7 | 4262.3 | ||
| Current Account | -440 | -491 | -498 | ||
| NGDP | 19519 | 20580 | 21428 | ||
| Current Account % GDP | 2.3 | 2.4 | 2.3 | ||
| NIIP | -7743 | -9555 | -10991 | ||
| US Owned Assets Abroad | 27773 | 25241 | 29317 | ||
| Foreign Owned Assets in US | 35516 | 34796 | 40309 | ||
| NIIP % GDP | -39.7 | -46.4 | -51.3 | ||
| Exports | 3445 | 3736 | 3764 | ||
| NIIP % | -225 | -256 | -292 | ||
| DIA MV | 8910 | 7504 | 8838 | ||
| DIUS MV | 8925 | 8483 | 10581 | ||
| Fiscal Balance | -665 | -779 | -984 | ||
| Fiscal Balance % GDP | -3.5 | -3.8 | -4.6 | ||
| Federal Debt | 14665 | 15750 | 16803 | ||
| Federal Debt % GDP | 76.0 | 77.4 | 79.2 | ||
| Federal Outlays | 3982 | 4109 | 4447 | ||
| ∆% | 3.3 | 3.2 | 8.2 | ||
| % GDP | 20.6 | 20.2 | 21.0 | ||
| Federal Revenue | 3316 | 3330 | 3462 | ||
| ∆% | 1.5 | 0.4 | 4.0 | ||
| % GDP | 17.2 | 16.4 | 16.3 |
Sources:
Notes: NGDP: nominal GDP or in current dollars; NIIP: Net International Investment Position; DIA MV: US Direct Investment Abroad at Market Value; DIUS MV: Direct Investment in the US at Market Value. There are minor discrepancies in the decimal point of percentages of GDP between the balance of payments data and federal debt, outlays, revenue and deficits in which the original number of the CBO source is maintained. See Bureau of Economic Analysis, US International Economic Accounts: Concepts and Methods. 2014. Washington, DC: BEA, Department of Commerce, Jun 2014 http://www.bea.gov/international/concepts_methods.htm These discrepancies do not alter conclusions. Budget http://www.cbo.gov/
https://www.cbo.gov/about/products/budget-economic-data#6
https://www.cbo.gov/about/products/budget_economic_data#3
https://www.cbo.gov/about/products/budget-economic-data#2
https://www.cbo.gov/about/products/budget_economic_data#2 Balance of Payments and NIIP http://www.bea.gov/international/index.htm#bop Gross Domestic Product, , Bureau of Economic Analysis (BEA) http://www.bea.gov/iTable/index_nipa.cfm
Table VI-3C provides quarterly estimates NSA of the external imbalance of the United States. The current account deficit as percent of GDP at 2.2 percent in IIIQ2019 decreases to 2.2 percent in IVQ2019. The current account deficit at 2.1 percent in IQ2020 increases to 3.2 percent in IIQ2020. The current account deficit increases to 3.3 percent in IIIQ2020. The current account deficit stabilizes to 3.3 percent of GDP in IVQ2020. The current account deficit increases to 3.4 percent in IQ2021. The current account deficit increases to 3.5 percent of GDP in IIQ2021. The current account deficit increases to 3.8 percent in IIIQ2021. The current account deficit decreases to 3.6 percent of GDP in IVQ2021. The absolute value of the net international investment position increases to $13.8 trillion in IIIQ2020. The absolute value of the net international position increases to $14.0 trillion in IVQ2020. The absolute value of the net international investment position increased to $14.3 trillion in IQ2021. The absolute value of the net international investment position increases to $15.9 trillion in IIQ2021. The absolute value of the net international investment position increases to $16.4 trillion in IIIQ2021. The absolute value of the net international investment position increases to $18.1 trillion in IVQ2021. The BEA explains as follows (https://www.bea.gov/sites/default/files/2022-03/intinv421.pdf): “
- The U.S. net international investment position (IIP), the difference between U.S. residents’ foreign financial assets and liabilities, was –$18.10 trillion at the end of the fourth quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $35.21 trillion, and liabilities were $53.31 trillion. At the end of the third quarter, the net investment position was –$16.35 trillion. The net investment positions and components of assets and liabilities are presented in table 1.
- U.S. assets increased by $779.2 billion to a total of $35.21 trillion at the end of the fourth quarter, mostly reflecting increases in direct investment and portfolio investment assets. Direct investment assets increased by $498.7 billion to $11.03 trillion and portfolio investment assets increased by $265.6 billion to $16.42 trillion, driven mainly by increases in foreign stock prices that raised the value of these assets.
- U.S. liabilities increased by $2.53 trillion to a total of $53.31 trillion at the end of the fourth quarter, mostly reflecting increases in direct investment and portfolio investment liabilities. Direct investment liabilities increased by $1.27 trillion to $14.84 trillion and portfolio investment liabilities increased by $1.16 trillion to $28.59 trillion, driven mainly by increases in U.S. stock prices that raised the value of these liabilities.”
Table VI-3C, US, Current Account, Net International Investment Position and Direct Investment, Dollar Billions, NSA
| IIIQ2020 | IVQ2020 | IQ2021 | IIQ2021 | IIIQ2021 | IVQ2021 | |
| Goods & | -204 | -196 | -176 | -208 | -248 | -229 |
| Primary Income | 49 | 54 | 50 | 39 | 43 | 44 |
| Secondary Income | -34 | -33 | -33 | -30 | -38 | -33 |
| Current Account | -189 | -176 | -160 | -199 | -245 | -218 |
| Current Account % GDP SA | 3.3 | 3.3 | 3.4 | 3.5 | 3.8 | 3.6 |
| NIIP | -13767 | -14011 | -14301 | -15906 | -16351 | -18101 |
| US Owned Assets Abroad | 29518 | 32256 | 32838 | 34273 | 34432 | 35211 |
| Foreign Owned Assets in US | -43285 | -46268 | -47139 | -50179 | -50783 | -53312 |
| DIA MV | 8346 | 9405 | 9892 | 10563 | 10536 | 11034 |
| DIUS MV | 10843 | 11978 | 12563 | 13473 | 13574 | 14840 |
Notes: NIIP: Net International Investment Position; DIA MV: US Direct Investment Abroad at Market Value; DIUS MV: Direct Investment in the US at Market Value. See Bureau of Economic Analysis, US International Economic Accounts: Concepts and Methods. 2014. Washington, DC: BEA, Department of Commerce, Sep 2014
https://www.bea.gov/international/concepts_methods.htm
Chart VI-3CA of the US Bureau of Economic Analysis provides the quarterly and annual US net international investment position (NIIP) NSA in billion dollars. The NIIP deteriorated in 2008, improving in 2009-2011 followed by deterioration after 2012. There is improvement in 2017 and deterioration in 2018.
Chart VI-3CA, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
Chart VI-3C, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
Chart VI-3C1 provides the quarterly NSA NIIP.
Chart VI-3C1, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
Chart VI-3C2 updates annual and quarterly estimates of the US Net International Investment Position. There is continuing deterioration.
Chart VI-3C2, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
Chart VI-3C2 updates quarterly estimates of the US Net International Investment Position. There is continuing deterioration.
Chart VI-3C3, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
Chart VI-3C3, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2019/us-international-investment-position-third-quarter-2019
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2020/us-international-investment-position-fourth-quarter-and-year-2019
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2020/us-international-investment-position-second-quarter-2020
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2020/us-international-investment-position-third-quarter-2020
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2020/us-international-investment-position-third-quarter-2020
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-fourth-quarter-and-year-2020
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-fourth-quarter-and-year-2020
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-second-quarter-2021
Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-second-quarter-2021
Chart VI-3C5, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-third-quarter-2021
Chart VI-3C5A, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2021/us-international-investment-position-third-quarter-2021
Chart VI-3C6A, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2022/us-international-investment-position-fourth-quarter-and-year-2021
Chart VI-3C6A, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2022/us-international-investment-position-fourth-quarter-and-year-2021
Chart VI-3C6A, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2022/us-international-investment-position-fourth-quarter-and-year-2021
Chart VI-3C6A, US Net International Investment Position, NSA, Billion US Dollars
Source: Bureau of Economic Analysis
https://www.bea.gov/news/2022/us-international-investment-position-fourth-quarter-and-year-2021
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022.
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