Introducing

Robert Brusca

Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

Publications by Robert Brusca

Germany| Nov 11 2026
German CPI Deflates...on Some Metrics—Shows Promise...and in Promise There Is Peril
The basic news analysis of the recent German inflation report is that it confirms the preliminary report showing that inflation broke lower, as it did in October. In October, the HICP for Germany fell by 0.2%; the core rose by 0.1%; the domestic gauge showed headline inflation at -0.2%, with the CPI ex-energy flat. These four metrics constitute a good inflation report for Germany on the month. Prices fell month-to-month for food, clothing & footwear, transportation, and recreation & culture.

Sequential inflation HICP However, if we look at sequential trends, a slightly broader look at inflation over 12 months, six months, and three months, we find a slightly different narrative on German inflation. The HICP shows inflation at 2.8% over 12 months, easing to 2.7% at an annual rate over six months and to 2.6% at an annual rate over three months. That’s a clear progression lower and also a very slow progression lower. The core HICP is up 2% over 12 months, up at a 2% pace over six months, and at a 1.6% annual rate over three months. Again, this is a very good sequence of numbers, with the core basically hewing to the pace sought by the European Central Bank and then a three-month growth rate that dips well below it.

Sequential inflation using the domestic gauge The German domestic CPI shows 12-month inflation at 2.8%, decelerating to a 2.1% annual rate over six months, then springing back up to 2.9% at an annual rate over three months, showing a higher inflation rate over three months than over 12 months—goodbye, inflation progress. The domestic CPI excluding energy is up 1.9% over 12 months, about a 2% pace over six months, and up at a 1.6% annual rate over three months. The ex-energy metric continues to perform in line with the ECB guidelines and produces an even weaker inflation rate over three months. So, there is still good news—but mixed news—in the domestic CPI.

Optimism confirmed On balance, there is good reason to be optimistic about German inflation. The October number was strikingly positive good news, and the three-month annual rate, at least for the core or ex-energy versions, is a stellar result. However, if we try to trace this through diffusion statistics, what we see is that inflation diffusion over 12 months is at 45.5%. While that's good news, a diffusion metric at 50% shows as much acceleration as deceleration across categories. So, readings above 50% show relatively more acceleration and readings below 50% show relatively more deceleration. The 12-month inflation rate shows more deceleration over 12 months than there was 12 months ago, but by a small increment. The six-month inflation diffusion metric is also at 45.5%, and this compares six-month inflation to 12-month inflation. Over the three months, however, the diffusion metric is at 63.6%, showing that inflation over three months has suddenly moved up broadly, even though the inflation rate itself remains contained for the core. It is high for the headline, but the diffusion or breadth reading is something that goes across all categories. So, this finding is not confirming the good three-month inflation results.

Encouraging with a caveat German inflation data are certainly encouraging. The uptick in breadth for inflation is something that's somewhat worrisome. But on a monthly or quarterly basis, inflation numbers are almost always going to produce at least one uncomfortable metric when you're trying to assess inflation prospects. Brent, measured in euros, is up by 76% over 12 months; over three months compared to six months, it shot up by 200%.
by:Robert Brusca
|in:Economy in Brief
Japan| Nov 10 2026
Japan’s Economy Watcher Index Slips in October; Outlook Fades
Japan’s economy watchers index slipped in October, falling to a 46.1 diffusion reading from 47.0 in September. Five of the 9 components of the index are weaker in October than in September; improving month-to-month are the assessments for eating and drinking places, for corporations, and for nonmanufacturers. Nonmanufacturers are showing a substantial improvement from September to October.

In September, four of the 9 categories slipped, although the headline improved in September. Over three months and six months, the index shows point-to-point improvement; however, the 12-month change still shows a decline for the headline of 2.1 points and for all the components except for eating and drinking places.

The current assessment from the economy watchers is mixed. Despite deterioration on the month, the period-to-period changes show a slow crawl up to better readings although failing to reach the year-ago mark.

If we look at the rank standings of the indexes, we find that the headline has only a 41.9 percentile standing; any percentile reading below 50% shows a standing below its historic median although four components have readings above the 50th percentiles: eating and drinking places have a 77.9 percentile standing, services have a 63.6 percentile standing, nonmanufacturers have a 59.7 percentile standing, and corporations have a 51.4 percentile standing.

The future economy watchers index slipped in October to a reading of 46.5 from 47.4 in September. It also slipped in September compared to August. In October, three of the 9 components improved: eating and drinking places, services, and manufacturers. In September, with the headline also falling month-to-month, there was only an improvement in retailing, which rose to 47.3 from 47.0 in August; that is thin gruel for good news.

In terms of point-to-point changes, the outlook is a little bit better, with the three-month change in the future index up by 0.7 points. The six-month change is up by a heartier 7.1 points, although the year-over-year change is lower by 5.7 points. Once again, we see this lower year-over-year assessment paired against some more modest increases over the last three and six months.

Over three months, the future index shows deterioration in only two categories, retailing and employment, with the other 7 components showing improvement. The six-month change is defined by a strong 7.1-point gain for the headline and shows positive results across all sectors on that time frame as they all improve, with the smallest improvement being a 4.9-point increase in retailing. The largest improvement is a gain of 10.6 diffusion points for manufacturers. However, the percentile standing results for the future index are poor, with the index headline and all components except one posting standings below the 50-percentile mark.

The levels of the diffusion readings are poor in October. The headline for the future index has a 37.5 percentile standing, with the current index at a 41.9 percentile standing; it also is below its median. Year-on-year, both indexes are lower and both are creeping higher over three months and six months. But the progression to higher ground is slow. The setbacks recorded in October month-to-month only serve to make us more wary about the state of this slow-motion economic recovery.
by:Robert Brusca
|in:Economy in Brief
Japan| Nov 09 2026
Japan’s LEI Weakens in September
Japan's leading economic index, released by the Cabinet Office, has moved up from much lower readings in mid-2025. In July and August, it made two sizable moves higher, reaching a peak in August at an index level of 118. However, in September, the index fell sharply to a level of 116.4, a sharper fall than had been expected (but this reading is still preliminary). After the fall, the September reading is only marginally higher than its readings in May and June of this year.

The leading index has been boosted by rising share prices until recently, and the interest rate spread has also signaled advance as the Bank of Japan has been raising rates.

As a reference, I include the consumer confidence indicator where we see that confidence has been mildly rising since April of this year; yet, the gradient has been extremely mild and it comes after a more lengthy period of weakness for that indicator, so that the year-over-year increase in confidence shows a 1.1% rise. However, the change over 24 months for consumer confidence is negative. But over the same 24 months, the May index is up by 7.4%, and share prices and the interest rate spread also show increases over that two-year span.

Through September, the Economy Watchers index is showing modest contraction in its headline and modest expected contraction in its future index, with a percentile standing for the Economy Watchers current index in its 47th percentile, whereas the outlook index is only in its 41st percentile; neither one of those is registering much strength. Both of those readings are below their historic medians; the median on ranking data occurs at a percentile standing of 50%.

The detail from the Economy Watchers index tells us that households are expressing some degree of normalcy in current conditions that is showing contraction but that nonetheless has a historic percentile standing above its median, ranking in its 53.4 percentile. The eating and drinking places category is a reading that tends to be volatile and depends on the overall state of the economy. It is showing less shrinkage in September than in August, but it has a queue standing that is elevated, in its 60th percentile, relatively firm. Manufacturers also have a queue percentile standing above neutral. But the overall picture remains modest.
by:Robert Brusca
|in:Economy in Brief
Germany| Nov 06 2026
German IP: Solid Gains in September; Strong Survey Results
German industrial production rose by 0.7% in September after rising 1% in August. Consumer goods and capital goods sectors also had strong gains in each of the last two months. Intermediate goods showed milder and more erratic output results and trends.

Sequentially, IP headline gains are 0.5% over 12 months; that rises to a 1.5% annualized pace over six months but edges slightly lower to a 1.3% pace over three months. Still, there are output gains on all horizons, and the three-month and six-month gains are each stronger than the year-on-year.

Consumer goods output sequentially is less buoyant even over three months, largely because of a huge drop in July that gains in August and September could not erase. So, the sequential output trend for consumer goods is erratic despite two solid months of back-to-back gains. Capital goods output shows acceleration and building momentum, with its annualized pace at 8% over three months. Intermediate goods output shows contractions over each of the sequential horizons and a tendency toward deceleration.

September data conclude the data for Q3. On a full quarter-over-quarter basis, output is falling in two of three sectors. The exception is capital goods, where output posts a quarterly gain of just 0.4% at an annual rate.

To put growth in a greater perspective, annual growth rates of output ranked on data back to 2006 place total German IP growth at a 50.8 percentile standing. Capital goods have a 52.4 percentile standing for growth, while consumer goods growth is a laggard at a 36.7 percentile standing and intermediate goods at a 42.7 percentile standing. Only total IP growth and capital goods have standings above their respective 50% mark, placing them above their median gain on this horizon.

German manufacturing output, real orders, and real sales show erratic-to-weaker trends. Manufacturing output shows gains on all sequential horizons, while real orders and real sales are both showing significant declines as well as a pattern of deceleration. Manufacturing output and real sales are falling in Q3. But in terms of ranked year-over-year growth rates, real orders and real sales have standings above their historic median rates.

The survey indicators for the German economy show a progression toward strength over the last three months, and so do the sequential readings, for the most part. All the indicators are higher month-to-month. But their percentile standings, conducted on levels of these survey data, all register below median standings on data back to 2006. Recent performance is good, but it is weak in a historic context.
by:Robert Brusca
|in:Economy in Brief
Germany| Nov 05 2026
German Orders Make Strong Jump, but from a Too-Deep Hole
On the German long-term chart of year-over-year growth rates, we can see that German orders, both domestic- and foreign-sourced, while quite volatile, are making a consistent trend move to stronger ground.

The table, in contrast, focuses on growth rates over the last two years and principally over the last year and shorter horizons. On that shorter time horizon, orders are generally weakening.

Orders overview Total orders show improved growth over 12 months compared to the growth rate a year ago. On a shorter view, however, comparing the six-month growth rate to the 12-month growth rate finds a step down to -4.7% over six months from 3.3% over 12 months, then comparing the three-month growth rate to the six-month growth rate, another step down to an -11.9% annual rate from a -4.7% annual rate occurs. Despite improvement in the year-over-year growth performance, the pattern of orders from the one-year horizon on shows a general weakening.

Foreign vs. domestic patterns: inconsistent meets convoluted Foreign orders improve over 12 months compared to their year-ago growth rate, with the year-ago growth rate at -2.5% compared to +0.2% over the last 12 months. Over six months, that pace degrades to a -13% annual rate, then, over three months, it makes the most modest improvement to -12.1% from -13%. In contrast, domestic orders make a sharp improvement over 12 months compared to a year ago as the 12-month growth rate jumps to 7.9% compared to -1% a year ago. Over six months, that growth rate steps up from 7.9% to 9.1% at an annual rate, but then over three months, it falls back hard to a -12.1% growth rate.

Monthly patterns Monthly growth rates tell somewhat similar stories about the twists and turns being convoluted and echoing the sequential pattern since the month-to-month data show an extremely weak August with a strong bounce-back in September, but that September bounce-back is paltry in comparative terms, compared to the setback experienced in August. Rolling all of this up into a pattern for the quarter-to-date results for the now-completed third quarter shows total foreign order growth falling at an 11.8% annual rate, as domestic orders surge ahead at a 21.8% annual rate, pushing total orders up at a paltry 0.7% annual rate. Evaluating performance by looking at the standing of the 12-month growth rates, those growth rates year-over-year for total orders have a 58.2 percentile standing driven substantially by domestic orders that have an 82.8 percentile standing against what are weak foreign growth rates for orders at a 38.1 percentile standing.

Real sales overall and by sector Moving on to look at real sales and what's going on with sector sales expressed in real terms, we see a smaller increase in real sales that rose by 0.2% in September after rising by 0.1% in August compared to a 1.4% drop in July. Sequential real sales follow the pattern for orders, with the year-over-year growth rate at 1.8% stronger than a -2.6% year-ago pace, then, over six months that growth rate falls from 1.8% to -2.5%, and then over three months it falls again to -4.1%. Real sales across sectors generally follow this same pattern. The growth rates for manufacturing sales are nearly identical to the headline number for mining and manufacturing.

EU Commission industrial confidence in EMU’s Big-Four economies The panel at the bottom looks at a sampling of the large monetary union economies, Germany, France, Italy, and Spain, comparing the results in terms of the EU industrial confidence metrics. These measures generally find improvement for the economies in September compared to August with France as the exception. In France, the September value of -5.3 was a decline from -3.3 in August, whereas the other countries experienced slightly less deeply negative assessments in September compared to August. The average data presented in the sequential pattern find Germany slightly improving on the EU industrial confidence index from a -15 reading over 12 months to -12.4 over six months, to -10.6 over three months, a clear progression toward improvement. Even France has a progression toward improvement although with a much slighter tendency for improvement. Italy and Spain also show small movements toward improvement from 12 months to six months, to three months. However, the 12-month change shows some mixed performance. Compared to a year ago, Germany and Italy show improvement, from their year-ago values, while France and Spain show deterioration. Evaluating the September industrial confidence level readings by comparing them to those back to 1990, we find all of them reside at a level at or above their 50th percentile except for Germany; the German reading has a 45.7 percentile standing, fewer than 5-percentile points below its median. Italy has a standing at its 52.6 percentile, France at its 59.7 percentile. In Spain, the ongoing success story of the Monetary Union, there is a 76.8 percentile standing.
by:Robert Brusca
|in:Economy in Brief
Global| Nov 04 2026
Composite Global PMIs Lose Breadth but Not Much Strength
The S&P Global PMI data for October show a very broad worsening, with only 6 of 25 reporting countries logging month-to-month improvement. However, the average PMI reading for the total PMIs on an unweighted basis in October yields a value of 52.1 compared to 52.8 in September, a modest drop for such broad weakening. The group median, however, was unchanged at 52.3 in October compared to 52.3 in September. The number of jurisdictions contracting in October rose to 7 from 5 in September, back to where it was in August and back to its six-month average for the number of reporters contracting.

There is no single number that can adequately pin down exactly how this diverse group of countries is performing; no single metric can characterize the global economy adequately. However, we can see from the various metrics that there's a good deal of irregularity, and the deterioration itself may not have been large. There's a fairly broad-based deterioration that occurred from September to October. Even so, the average reading in October is slightly below the three-month average of 52.4, which is stronger than its six-month and 12-month readings for the pooled group average. The group median, at 52.3, is nearly the same as the 52.4 reading for the last three months, which is a reading above its six-month and 12-month values. In short, there appears to be some mixing around and oscillation of the performance metrics by some of the reporting countries, but not so clear erosion.

The average reading for the group consisting of the United States, the United Kingdom, and the European Monetary Union shows 52.1 for the 12-month average, 52.4 for the six-month average, and then a rise to 53.9 for the three-month average. The October reading for this group at 53.6 is below the three-month average. But the October reading is still above the six-month and 12-month averages.

The shaded areas in the table identify periods when the readings are below 50, indicating a decline in activity in PMI terms. There are five reporting areas that have this characteristic over three months, six months, and 12 months. They are France, Brazil, Zambia, Egypt, and Qatar.

Despite various degrees of improving or deteriorating, there are 17 reporters that record total PMI values above 50 over three months, six months, and 12 months. And there are 16 that show expansion over each of the last three months. Growth rules.

At least growth has been the rule. It's not clear that there's been a lot of strength. To assess strength, we look at the queue percentile standings that rank the current October readings against all previous values back to January 2021. Queue percentile standings have an average value of 52.1% and a median of 48%. The average is about two percentile points above the neutral diffusion reading of 50, while the median across these reporters is about two percentile points below the neutral reading, indicating no change in output. There are 11 reporters with queue standings below their 50th percentile, putting them below their medians for the period. Among the weakest reporters are Qatar at a 4.3% standing and Brazil at a 7.2% standing; Australia and Zambia have standings at their respective 17th percentiles. That leaves 14 countries above their 50% mark and, therefore, above their historic medians. Only two countries log standings in their 90th percentiles, Kenya and Nigeria. Other than these two, the highest standings are in the 70th percentile, such as the U.S. (at a 79.7 percentile), Spain, Germany, Singapore, and Japan. The more advanced countries have standings at higher percentile markers; however, France and Italy are exceptions with readings that are in their respective 30th percentiles.
by:Robert Brusca
|in:Economy in Brief
Switzerland| Nov 03 2026
Even Swiss Inflation Heads North
The Swiss inflation rate is the envy of every central banker in the G7 and beyond. Yet, Swiss inflation has turned north in October, with the headline HICP rate gaining 0.4% in October, the Swiss domestic headline metric rising by 0.4% on the month, and the Swiss domestic core inflation rate remaining flat at a 0% change on the month.

Inflation breadth is gaining In October, Swiss inflation showed acceleration in 72.7% of the categories, a sharp increase from September when inflation accelerated in only 18.2% of the categories. However, in August, inflation month-to-month had accelerated in 81.8% of the categories.

Pressure is evident in all measures Switzerland is dealing with real inflation pressures. The 12-month inflation rate has hit a recent high at 1.6%, still an enviably low pace on the HICP measure. The Swiss domestic headline inflation rate is at 1.5%, while the Swiss core rate continues to be mild at a 0.5% increase over 12 months.

Acceleration is also real Turning to the sequential numbers, the HICP inflation rate moves up from 1.6% over 12 months to a 2.1% annual rate over six months to a 3.6% annual rate over three months, a clear pattern of acceleration. The Swiss domestic headline inflation rate is at 1.5% over 12 months, moves up to 1.9% over six months, and elevates to a 3.9% annual rate over three months. The Swiss core inflation rate, which is only 0.5% over 12 months, rises to 0.8% over six months and to 1% over three months, all expressed at annual rates.

Controlling for administered prices A lot of prices in Switzerland face administrative conditions, and there is a separate index for prices excluding administered prices. However, those also show inflation is moving up in October. The index excluding administered prices rose by 0.2% in October after rising 0.1% in September. The sequential move in the index excluding administered prices is up by 0.9% over 12 months; it’s up to a 1.3% annual rate over six months and to 1.6% at an annual rate over three months.

Broad acceleration identified by diffusion gauges Looking at the detailed Swiss categories, inflation accelerates in 81.8% of the categories over three months compared to six months, and in 54.5% of the categories over six months compared to 12 months. Then, 72.7% of the categories over 12 months show acceleration compared to the pace of 12 months ago. Inflation, on all these horizons, clearly is accelerating in more categories than it is decelerating. The tendency for acceleration appears to be moving higher based on the three-month diffusion reading of 81.8%.
by:Robert Brusca
|in:Economy in Brief
Global| Nov 02 2026
S&P MFG PMIs Show Modest Global Slowing
The PMI story for October shows PMIs weakening in 11 of the 18 countries that report manufacturing data. The manufacturing PMIs ticked down only slightly month-to-month, falling in 11 of eighteen reporters in October. The median reading over 12 months, six months, and three months progresses from 51.2 over 12 months to 52.2 over six months to 52.1 over three months. There's really not much change there to base a lot of analysis on; conditions have been substantially the same across this broad group of countries.

Sequentially the PMI data show that over three months 13 of the 18 early reporting countries have lower PMI values with only 5 showing better values. Over six months, six countries show worsening results with 12 showing improvement. Over 12 months, only four countries show worsening results with 14 showing improvement. As we look at the breadth of improvement versus deterioration from 12 months to six months to three months, there's a narrowing, a clear narrowing, in terms of the breadth of countries showing conditions getting better compared to those showing conditions getting worse. However, that statement also exists in the same world where the median for the group hasn't changed very much over any of those horizons.

Understanding this period – is it representative? To get a broader perspective, we can look at the rank or queue percentile standings that give us a percentile standing for each of the reporting countries or areas on data back to January 2021, a relatively broad period. However, it's not a time span in which activity was particularly strong. Still, using the EMU Commission readings on the EMU as a benchmark, the average back to 1990 shows the ranking of the current period average assessment has nearly normal average for the shorter period that makes the short period average seem representative in terms of the longer timeline as well. The reading for October is only 3% below the EMU mean on data back to 1990. So, the rankings over this period may also be a reasonable proxy for longer term rankings in the broadest sense.

There was some strength in the recovery and in the immediate post-COVID. And then there was the invasion of Ukraine that really knocked things back down. Subsequently there were U.S. tariffs imposed that created another international kerfuffle, and then the attack by Hamas on Israel, and the subsequent attempt to rein in Iran by the U.S. and Israel with significant knock-on effects that are largely still in place involving the difficulty for oil and other commodities to pass safely through the Strait of Hormuz. So, rankings on this timeline are not for a period of robust growth, but then that is not unusual, statistically. Part of that is that our period begins on a post-COVID high with activity having rebounded. The median percentile standing for this group on data back to January 2021 is a 67.2 percentile standing, which places it just barely into the top third of all observations on this timeline. Only three countries log percentile standings in the top 20% of all their observations during this span. They are Japan, Indonesia, and Malaysia, all Asian economies. The weakest readings on the period, at readings of around 25% and lower, include India at a 20.9 percentile standing, Turkey at a 22.4 percentile standing, and Brazil at a very weak 6th percentile standing. The grouping of these weakest economies includes two BRIC economies plus Turkey.

The large economies are doing well compared to their performance over this timeline, with the euro area economies having a 76.1 percentile standing, Germany, in particular, having a 76.1 percentile standing, the U.S. having a 79.1 percentile standing, the U.K. having a 73.1 percentile standing, and Japan having an 80.6 percentile standing. However, in contrast, France, with all of its fiscal trouble, has only a 53.7 percentile standing over the same period. Oil prices are shooting up again as the U.S. midterm elections draw near. There is a creeping rumor mill of commentary that suggests that the U.S. will be increasing hostilities against Iran after the midterm elections. That buzz has markets on edge and oil prices are moving higher again.
by:Robert Brusca
|in:Economy in Brief
Europe| Oct 29 2026
EU Indexes Show EMU Weaker in October
The EU index for the European Monetary Union (EMU) fell to 96.9 in October from 97.5 in September. The index was last lower in June of this year, so this is a multi-month low.

The main sector indexes showed a monthly improvement in only one, the industrial sector, with a rise of one point. Weakening on the month were the construction sector, retail sector, consumer confidence, and the services sector. Each of them slipped by about one point.

Across reporters, eleven of the 16 countries that are early reporting show month-to-month declines. There were monthly increases in France and Italy as well as among the smaller economies Austria, Belgium, and Slovakia. Nine countries had shown monthly declines in September and only seven had logged weakening in August; still, that’s seven out of sixteen.

EMU-wide sectors By sector, only two of the five sectors have rankings in their queue standings of historic data above their respective medians. Those two are the industrial sector (58.0%) and construction (57.7%). Below-median rankings were turned in by retailing (43.9%), services (38.5%), and consumer confidence (13.0%). Consumer confidence globally appears much weaker than the sector you might expect to see it affect, like retailing, wholesaling, or services. Consumers keep worrying but keep spending. Still, the overall ranking for the EMU index is at its 37th percentile. That overall ranking is lower than the unweighted simple average of the five-sector ranking (at 42.2%).

Across countries, the rankings show only five of 16 reporting countries with rankings above the 50% mark, a ranking that would place them above their respective historic medians.
by:Robert Brusca
|in:Economy in Brief
Europe| Oct 28 2026
GfK Confidence Eases Slightly in Germany; Major Setback for Confidence in France
Consumer climate in the GfK readings from Germany in November edged slightly lower to -30.8 in November from -30.6 in October; the October level had dropped relatively sharply from -26.8 in September. The queue percentile standing also known as the count standing, was at a 2.7 percentile reading in November, which tells us it's been this weak or weaker only 2.7% of the time (based on data back to May 2002), an extremely weak reading.

The components of the GfK headline lag by one month; they showed an improvement in the economic expectations index to 2.1 in October from -3.4 in September, a deterioration in income expectations to -15.7 from -15.0, and for the propensity to buy there was a slippage to -11.9 in October from -10.8 in September.

The components show count rankings in their 43.9 percentile for economic expectations, in their 9.5 percentile for income expectations, an extremely low reading, and, for the propensity to buy, the standing is in its 26.5 percentile.

Readings for Italy, France, and the United Kingdom are in the far-right-hand portion of the table. France and the U.K. have October readings and are up to date on the same timeline as the components of the GfK index. The reading for Italy is a month older, in September. All of the readings, regardless of how topical they are, for Italy, France, and the U.K., dropped compared to their respective previous monthly values. In the case of Italy, the reading dropped to 91.2 in September from 94.5 in August. In the case of France, the reading for October dropped to 80.3 from 85.1 in September, and the U.K. situation showed the October reading dropped to -24.0 from -13.0.

The count percentile standings for these three countries are around the 51st percentile for Italy, the 25th percentile for the U.K., and the 0.3 percentile (yes, less than one percentile) for France, where the index is hundredths of a point away from being the lowest ever. The level of the reading is a function of how the index itself is formed, but the count percentile standings rank the current reading against the history of the index, giving us a better feel for where the current standing is compared to where it's been in the past. Clearly, France logs the weakest reading, which is not surprising given what's going on in Europe and particularly in France at the moment. Italy has also had some demonstrations, but the month-to-month drop in Italy is not as severe; Italy’s percentile standing is still above its median; however, the reading is for September so we're going to have to hold judgment until we start getting readings in October and later for Italy.
by:Robert Brusca
|in:Economy in Brief
Global| Oct 27 2026
Money Supplies Slow Except in the U.S.
EMU Money Growth Money supply in the European Monetary Union had slowed in September as the near-term growth rates peaked at a 12-month pace of 4.4% annualized. Over six months, growth is 2.7%, annualized; over three months, M2 money supply growth is at an annualized rate of 1.8%. The EMU shows a clear slowing in nominal money growth. This has led to a decline and a contraction in real money balances in the monetary union. Real money supply growth over three years, two years, and one year is locked into a very narrow range of 0.5% to 0.6% at an annual rate. However, over six months, the annualized rate of growth is -1.9%; over three months, the annual rate of growth is -4.4%. Nominal money supply growth and the pace of real money balances are clearly pulling back in the monetary union.

Credit Growth in EMU Nominal credit growth is also slowing in the Monetary Union as nominal credit growth peaked over 12 months at 4.5% and has decelerated to a three-month growth rate annualized at 3.1%. Private sector credit peaked over 12 months at 4.5%, decelerated to a 3.8% annualized rate over six months, and then decelerated again to a 3.2% annualized rate over three months. In real terms, private credit is also slowing and contracting, with both total and private credit growth rates in the neighborhood of -3% growth, expressed at an annual rate over three months.

The U.S. - An Uneven Picture The U.S. shows only a hint of monetary slowing as nominal money growth is 4.1% over the last three years, climbing to 5.7% over 12 months and rising further to a 7.2% pace over six months. It does slow over three months but only to a pace of 6.0%, leaving it below its six-month pace and yet above all the other growth rate calculations, making the assessment of a ‘slowdown’ premature.

The U.S. monetary real balance growth rate shows a hint of slowing, but the signal is not clear. Real M2 growth is 1.1% over three years; it rises to 1.9% over 12 months, rises to 3.4% over six months, and then drifts lower to 1.3% over three months. This pace shows period-to-period deceleration but is still above its three-year pace, and the three-month decline may be too steep to take at face value.

U.K. Money Growth - Lagged Readings The U.K. is a month behind the other countries in reporting money growth for September. U.K. nominal M4 growth is in a nominal slowing mode, with the annualized growth pace down to 3.3% over three months. U.K. real money balances show monetary contraction over six months and three months, with the three-month pace at a chilling -1.8%, still not quite as steep as the money or credit slowing in the EMU.

Japanese Money Trends The last country on the table is Japan, where M2 plus CD nominal growth rates appear fairly flat. The three-year growth rate in Japan has averaged 1.6% at an annual rate; the 12-month pace stepped up to a 1.9% growth rate, which has since ticked down to a 1.8% annualized rate over both three and six months. Money growth in Japan is relatively flat in nominal terms while persistently shrinking in real terms. The growth hit to real balances in Japan shows them contracting over all periods in the table. Over 12 months, real balance growth is -0.3%; then the annual rate of decline becomes more intense over three months and six months at -1.3% for both of those tenors. The real balance slowdown is clear; however, for nominal money, the growth profile is simply flat.

Implications Having more resilient money growth in the U.S. could be a problem for the rest of the world if the U.S. takes this as a sign that it has more of an entrenched or even growing inflation problem because it will be then raising rates while other countries are experiencing weakening money growth and are going to be less able to absorb the increases in interest rates that rate hikes in the U.S. could start to impose on the global economy. All of the central banks in this table are engaged in some process of an interest-rate tightening. The Bank of Japan has been engaged in a very slow and steady process of ‘normalization.’ The ECB process has been a little bit more aggressive and preemptive, while in the U.K. the inflation numbers are starting to look a little bit worse and could motivate the Bank of England to go back on the rate hiking path after it had sought some moderation.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Oct 26 2026
U.K. CBI Survey Remains Weak but Sharply Rebounds
The Confederation of British Industry (CBI) survey responses in October, for October itself or looking to the month ahead, show sharp improvements in the current results and significant improvement in expected retail sales and less broad improvement for expected wholesale orders and sales.

The rank standings of the survey categories all are below their 50% marks, their respective medians, for all the survey items except for the retail survey on sales for the time of year and for inventory ratios.

Overview This means that despite some relatively pronounced recovery between September and October, conditions are still subpar for most of the categories. October levels are generally above levels posted a year ago as well and here, we're comparing the actual readings in October to October of one year ago, and the expectations for November to November of one year ago. For the most part, we're seeing significant improvements on that basis. We're also seeing significant improvements in the October-November values for current and expected activities compared to the 12-month averages. So, the U.K. economy has been through a real sort of baptism of fire over the last 12 months, with extremely weak readings having been posted and then, in October, or looking ahead to November, there is quite a remarkable improvement. But the economy was in such a deep hole that even with this sharp month-to-month jump, conditions continue to score out as weak compared to historic benchmarks.

Retailing in real time The retail survey, for example, is showing sales in October for the concept ‘sales compared to a year ago’ at a -10 diffusion reading, compared to -55 in September and a 12-month average of -41. Orders, compared to a year ago, at -36 in October sharply improve; they also are up from -62 in September, but they're only back to their 12-month average, which is -36. Sales ‘for the time of year’ improve sharply to -3 in October from -40 in September; that compares to a 12-month average of -25. Without referencing the ranking statistics, it's clear that there's a sharp improvement underway, but when we reference the queue rankings, we see that it's still an improvement that has a long way to go just to get back to ‘average.’

Retailing expectations Similarly, the expectations for retailing for ‘sales compared to a year ago’ in November are at -10 compared to -37 in October; that compares to a 12-month average of -34. Orders, compared to a year ago, come in at -29 for November’s expectations, up from -63 in October; that compares to a 12-month average of -35. So that marks a sharp improvement month-to-month, but a modest improvement compared to the 12-month average. Sales ‘for the time of year’ also improve to -24 for what's expected in November, from -39 in October; the -24 reading is only marginally better than the -26 average over the last 12 months.

Current wholesaling evaluations The volume assessments for the current situation in wholesaling show similar improvements in October compared to September and also for the October standings relative to the 12-month averages. Sales compared to a year ago, for example, are at a -4 reading in October compared to -24 in September, which compares to a 12-month average of -26. But here again the queue standing for that October reading is only in its 34th percentile, barely above the lower third of all readings chronicled back to August 2002. Orders compared to a year ago come in at -10 compared to -22 in September, which compares to a -34 average over 12 months. Sales ‘for the time of year,’ a sort of seasonally adjusted view, actually deteriorate in wholesaling to -26 in October from -21 in September, but there is an improvement when compared to the 12-month average of -31.

Wholesaling expectations Wholesaling expectations improve to -10 in November on the metric ‘sales compared to a year ago,’ a significant improvement from October’s -23 reading and an improvement from the 12-month average of -29. Orders ‘compared to a year ago’ improve to a reading of -21 in November from -28 in October; that's a nice improvement from the -37 average over 12 months. Sales ‘for the time of year,’ however, deteriorate slightly in November to -26 from -24 in October, although there is an improvement from the 12-month average of -32. Expected ‘sales for the time of year’ have an extremely low ranking, with a lower 12th percentile standing. But that was also the low ranking in retailing this month, for expected sales for the time of year in November, even though in retailing there was a sharp monthly improvement.
by:Robert Brusca
|in:Economy in Brief