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

Belgium| Feb 19 2026
Belgian Consumer Confidence Clings to a Positive Reading
Belgian consumer confidence slipped in February. But it has made a long climb back to positive territory and that reading is holding on at +1 in February, down from +4 in January.

Belgian consumer confidence has been slowing progressing from a reading of -4 twelve-months ago to -2 six-months ago and to +2 just three-months ago. This progression shows a trend of improvement under way for the Belgian consumer.

Also, importantly, the queue reading of the consumer index in February is at a standing of 85.3, a top 15-percentile reading on data since 1991.

The economic situation is not as robust. It has improved for the next 12 months to -25 from a reading of -29 in January. There is a slight weakening in readings from 12-months to 6-months to 3-months, and the current February reading of -25 diffusion has a 15-percentile standing on data back to 1991. This concept carries a larger negative value over the next 12 months than under the last 12 months. However, that reading nonetheless has a stronger standing at its 24.9 percentile than the outlook for the 12 months ahead. The economic situation is clearly suppressed compared to the confidence reading.

Prices show a slight weakening for the next 12 months compared to the January reading. However, the 12-month to 6-month to 3-month readings show a move up to stronger price levels. The ranking of the February price reading is a top 16-percentile reading; inflation in Belgium is still on the hot side.

However, prospects for unemployment have shifted sharply to show a much lower expectation of unemployment; unemployment expectations increased from -20 in January to a diffusion reading of -11 in February, with a ranking in its lower two percentile.

The environment for making a major household purchase over the next 12 months has eroded over the past few months, although it shows a trend toward improvement from 12-months to 6-months to 3-months. Still, the February reading has a 29.7 percentile standing, well below its historical median (represented by a 50 percentile standing).

The ‘favorable to spend at present’ index weakened quite sharply in February and has been slipping from 12-months to 6-months to 3-months. It registered in February a standing in only its 10th percentile, extremely weak. The consumer is not leading Belgium into recovery on the back of spending.

The financial situation expected over the next 12 months has been relatively static month-to-month as well as across the last 12 months. The ranking for expected conditions is weak at a 34th percentile reading. But the current financial situation, while stepping back on the month, has an 82.7 percentile standing. The financial situation reading appears to be in some flux, but the actual current readings have been firm in relatively strong territory for some time.

Household savings for the next 12 months backed down in February but had been strengthening over the past year. The February reading is quite high, a top 9-percentile reading. The favorability to save has not changed much over the past year but has eroded slightly in February. The February current assessment for savings is at a 62.2 percentile reading, much weaker than its 12-month outlook reading.

The Belgian consumer is experiencing some crosscurrents. Consumer readings are underpinned by low expectations for unemployment and by a solid current situation appraisal. However, the economic situation remains weak and is not trending higher and inflation readings are still uncomfortably high.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Feb 18 2026
U.K. Inflation Waffles and Percolates
Inflation in the United Kingdom has irregularly downshifted over the past two months. In January, consumer price inflation remained steady at 2.8% over three months, the same pace as over six months. Core inflation ticked up to 3.3% over three months from 3.1% over six months but settled below the 12-month pace of 3.4%. Yet another measure, the HICP, comparable to the inflation rates reported by ECB numbers, logs 2.5% over three months, a slight uptick from six-month pace but less than the 12-month pace of 3%.

Diffusion The diffusion statistics that measure the breadth of acceleration of inflation across categories month-to-month came in at only 16.7% in January, down from 66.7% in December and compared to 33.3% in November. Diffusion readings below 50% indicate more deceleration than acceleration. So, inflation has been under control, with recent results showing more deceleration for inflation monthly than to accelerate. December was an exception. Over the 3 , 6 , and 12 month periods, inflation shows some acceleration tendency over 3 months, with diffusion at 58.3%; but that compares to 6-month diffusion at 16.7% and 12-month diffusion at 25%. Once again, the broad stroke for inflation, trending from 12 months to 6 months to 3 months, is showing more categories decelerating than accelerating.

Inflation rate ranking The final right-hand column ranks inflation rates on data back to 2000 based on their year-over-year performance. The current HICP, at 3%, has a 73.8 percentile standing among inflation rates back to 2000, marking it near the upper 25 percentile of the collection of results. The CPIH has a 79.6 percentile standing, putting it closer to the top 20% of observations over that same span. Core inflation at 3.4% has an 83.7 percentile standing, putting it in nearly the top 15% of results on data back to 2000.

Convergence around 2.8% The chart, supplemented by diffusion data, clearly shows that there is some inflation deceleration in progress; however, the level of year-over-year inflation still shows inflation among the upper ranges of what it's been over the last 25 years.
by:Robert Brusca
|in:Economy in Brief
Europe| Feb 17 2026
IP in EMU Weakens in December; Sector Trends Show Slow or Erratic Improvements
Industrial output in the European monetary union fell by 1.4% in December. Manufacturing output fell by 1.3%. Output of consumer goods fell by 0.3%, output of intermediate goods fell by 0.1%, and output of capital goods fell by 1.9% in December. The subsector, consumer durables, showed an increase in output of 0.2% in December. Headline and manufacturing output in December reversed the increases seen in October and November. However, consumer goods, consumer nondurables, and intermediate goods saw two consecutive months of output declines for November and December.

Turning to sequential trends, overall industrial output rises by 1.1% over 12 months, falls at a 0.8% annual rate over six months, and then falls at a 1.2% annual rate over three months showing a tendency for deceleration. Manufacturing shows the same pattern of eroding growth rates for the one-year and shorter horizons.

Sector stories However, for consumer goods, manufacturing output is accelerating steadily from a growth rate of 2% over 12 months, to a 7% pace over six months, and to a 16.6% annual rate over three months; the inclusion of ‘semi-durables’ in this category total makes it stronger than the two detailed subcategories of durable and nondurable goods. Consumer durables output transitions from falling 2.3% over 12 months to growing at a 3% pace over three months. Consumer nondurables output shows persistent declines, with slightly more intense over shorter periods, echoing the deceleration phenomenon. Intermediate goods and capital goods do not show clear sequential trends, but both categories show increases in output over all three horizons.

Cross currents These cross currents among sectors make it hard to characterize what's happening with output trends in the European Monetary Union. The country detail shows a good deal of turbulence, with a number of countries showing decelerating output trends and others showing accelerating output trends. It's fair to say that manufacturing in the EMU continues in the grip of cross currents. While the short-term data in the table that look at growth rates from 12-months to 6-months to 3-months show more weakening than strengthening, the trends in the graph across recent 12-month growth rates seem to show a little more solidifying and expanding behavior – albeit with confusing volatility as well.

Quarter-to-date (concluded Q4) In the quarter to date, all of the sectors and subsectors show output rising except for the aggregate for manufacturing that is flat, and consumer nondurables that show a decline at 6.7% at an annual rate. In the quarter to date, overall output is growing at a 1.4% annual rate, while consumer goods output is expanding at a 13.8% annual rate, immediate goods output is expanding at 1.5% annual rate, and capital goods output is expanding at a 3.7% annual rate. Those sector numbers look exceptionally healthy.

Ranking the trends The far-right hand column analyzes the 12-month growth rates comparing them to historic growth rates since 2006. Most of the growth rate rankings over this span are moderate, with standings above their respective 50th percentiles, placing them above their historic medians. However, consumer durable goods and nondurable goods are exceptions, with rankings in their 31st percentile and 10th percentile, respectively. Consumer nondurables output is particularly weak in comparison with historical trends. On the other hand, intermediate goods and capital goods output have rankings in their 60th percentile, and for all consumer goods output, the ranking is near its 60th percentile. Looking only at manufacturing, the ranking slips to its 52.9 percentile; for the headline series which excludes construction, the ranking is at its 53.8 percentile.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Feb 12 2026
U.K. Second Half GDP Slows to a Crawl
U.K. GDP slowed to a crawl at the end of the year, with growth at a 0.2% (annualized) rate logged in both the third and fourth quarters as 2025 drew to a close. The year had started with a strong 2.7% growth rate in Q1, which slipped to a 0.8% pace in the second quarter and decelerated to negligible growth at the end of the year.

These quarterly growth rates correspond to higher but obviously declining year over year growth rates. Because the quarterly growth rates diminished as the year progressed, year over year growth to start 2025 was at 1.8%; growth slipped to 1.4% in the second quarter and then to 1.2% in the third quarter. By the end of the year, growth had slipped to 1%.

The quarterly growth rates in the fourth quarter show public spending picked up to a 1.7% annual rate following 1% in the third quarter and erratic behavior in the first two quarters. Capital formation has remained relatively strong but has also oscillated, with first quarter growth at a blowout annual rate of 14.3%, falling to a contraction of 3.1% in Q2, rising back to 4.4% in Q3, and then declining at a 0.5% annual rate in Q4. So the year-over-year growth rates for capital formation during the course of the year only slipped from 4% in the first quarter to 3.6% in the fourth quarter, holding up fairly solidly and indicating strong rates of expansion for capital spending.

Housing, which was firm and strong in Q1 and Q2, slipped to a 0.8% annual rate of growth in the third quarter, and then housing investment fell at a 9.1% annualized rate in the fourth quarter. Year over year trends for housing show mostly low to moderate spending growth for residential investment.

U.K. exports have been floundering quarter-to-quarter, alternating between expanding and contracting; this corresponds to year over year growth rates that steadily diminish. In the first quarter of 2025, exports grew 3.5% year-over-year; that slipped to a 2% growth rate in Q2, then to a 1.5% growth rate in the third quarter. In the fourth quarter, U.K. exports are falling at a 0.5% annual rate of growth.

The export pattern contrasts with U.K. imports. They have mostly continued to grow, posting positive growth rates in three of the four quarters, starting the year with 5% quarterly growth and ending the fourth quarter with a 3.3% annual growth rate. Import growth rates have slipped, but not as much as other growth rates in GDP. For example, first quarter import growth was extremely strong at 7.6%; that year over year growth rate slips to 2.1% in Q2, then rises back to 5.3% in Q3, and finishes the year at 2.3%. There is slippage, but still significant growth, and the year began on a really high note.

Domestic demand has been fluctuating. In both quarterly and annual terms, there is unevenness. Quarterly growth rates range from 3.1% at an annual rate in Q1, to a 0.6% and 0.7% annual rate in the middle two quarters of the year; domestic demand ends the fourth quarter with a quarterly growth rate of 2.1% annualized. This causes year-over-year growth to be 2.9% in the first quarter; that falls to 1.2% in the second quarter, rebounds to 2.1% in the third quarter, and ends the year at 1.6% year-over-year.

Domestic demand has consistently been stronger than private consumption and it has been supported by both public consumption and by capital formation. Private consumption in 2025 has been erratic, logging 1.2% quarterly growth, annualized, in the first quarter; growth dropped to 0.2% in Q2, rising back to 1.7% in Q3, and then ending the year at a 0.6% rate of expansion quarter-over-quarter. The year-over-year data showed private consumption slipping but not dramatically, at a pace of 1.1% in the first quarter, up to 1.2% in the second quarter and then logging 0.9% in both the third and fourth quarters of 2025 as domestic demand ended the year stronger.

All of the U.K. growth rates are consistently and substantially below their five year growth rates. The economy continues to have a problem with inflation. Some recent inflation signals, however, suggest that there may be deceleration and progress, but the Bank of England hasn’t been convinced yet, even though Monetary Policy Committee members continue to speak favorably about the prospects for rate reductions ahead. The U.K. also has a corseted fiscal situation as there’s not much flexibility to spend more given its relatively bloated budget. The economy is waffling. The current administration has had its share of political issues, having recently had to eject several members from leadership positions in government. The outlook for growth is still touch and go. The outlook for inflation holds slightly more promise for deescalation. But overall, there is a lot of uncertainty over events and the growth path for the U.K. economy.
by:Robert Brusca
|in:Economy in Brief
Italy| Feb 11 2026
Italian IP Shows Gains in Progress
Italian industrial production fell nearly across the board. In December, headline production fell by 0.2%; consumer goods output fell by 0.9% and intermediate goods output fell by 0.4%, while capital goods output was the exception, rising by 0.5%. Output had risen in all sectors in November; it had fallen across all sectors in October. As a result, the recent data are quite choppy and it's hard to make sense of what the underlying trend is or what might be developing.

Sequential data offer some opinions on this idea of where the trend is going. The headline output shows a 3.6% gain over 12 months, advances at a 1.1% annual rate over six months, and then declines at a 1.3% annualized rate over three months. The headline rate is clearly in a persistently declining phase. That phase is supported by intermediate goods where output is up 3.4% over 12 months, rises at a 0.7% annual rate over six months, and then falls at a 2.2% annualized pace over three months. Consumer goods and capital goods do not offer much clarity, swinging sequentially and failing to provide steppingstones to a new trend. Consumer goods output shows a 12-month gain of 0.3%, but that is substantially undermined by a 6.1% annualized decline over three months. However, for capital goods, a 7.2% growth rate over 12 months is quite similar to a 7% annualized gain over three months, showing that capital goods output has hardly lost a step despite a stumble over six months.

Output in the transportation sector in Italy is contrarily showing a tendency to acceleration in monthly data from October to November to December. Sequentially, this series is giving us no clear signals.

Other trends In the quarter to date, Italian output is falling by a 0.8% annual rate, led by a 4.3% annual rate decline in consumer goods. However, capital goods output is increasing at a 3.4% annual rate, and intermediate goods output is up at a tepid 1.6% annualized pace. Since January 2021, the cumulative change in output is lower for manufacturing overall, for consumer goods output, and for intermediate goods, while capital goods output is up by 1.6% over that span. The ranking of year-over-year growth rates on data back to 2004 shows all the sectors with growth rates above the 50% mark, indicating that year-over-year growth across the Italian sectors is greater than their median over this broad period. Headline growth is exceptionally solid, with the ranking in its 81st percentile. The transportation sector, however, has a growth rate that ranks only at its 24th percentile.

Indicators and surveys The bottom panel of the table presents performance by surveys; these tend to be more up-to-date, and they've come to be relied upon. Here we feature indicators from the EU industrial survey and from Istat on current orders and on the outlook for current production. In December, all three of these metrics showed declines; in November they all showed increases, and they showed increases in October similar to the increases logged in November. The changes in the levels of the variables over different horizons show a mild tendency toward weakening, but nothing that is clear or dramatic, looking at changes from 3-months. to 6-months, to 12-months. In the just-completed quarter (QTD), the change in the indicators is either flat or lower. All of them track below their historic median levels (rankings <50). The indicators clearly are showing weaker conditions than actual production data. These sorts of rifts are common between accounting data and survey-style diffusion data. They also generate controversy about which is right. I favor the accounting data.
by:Robert Brusca
|in:Economy in Brief
Europe| Feb 10 2026
IP in Europe Shows Lethargy
In December, among ten reporting monetary union members, output increased for six of them and declined in four of them. In addition, two reporting European economies, Sweden and Norway, each showed increases in output in December. In November, five monetary union members showed decreases, while only two showed declines in October. The recent trends and data on industrial production are not exactly friendly, but neither are they scathing results. In December, the median change in the monetary union was a 0.1% increase in manufacturing output following a 0.9% median drop in November and a 0.3% median increase in October.

For the full set of reporting countries, 60% showed acceleration in December, about the same as in October. However, in November only 23% showed output accelerating on a month-to-month basis. Coupled with weak median results, the recent reports on industrial production are not particularly impressive.

Sequential results, looking at 12-month, to 6-month to 3-month growth rates, are disappointing as well. The 12-month growth rate puts the annualized median rise of manufacturing output at 2.2%, the 6-month annualized growth rate at -2%, and the 3-month growth rate at -2% for EMU member countries. For the full sample of countries, there is acceleration in 50% over 12 months, 61.5% of them over six months, and that drops down to 38.5% over three months.

In addition, these sequential data show that five reporting countries have persistent decelerations in output growth rates from 12-months to 6-months to 4-months. Those countries include France, the Netherlands, Spain, Greece, and Portugal. However, there are contrary accelerating trends in three reporting countries Malta, Sweden, and Norway; the latter two, of course, are not monetary union members but have various affiliations with the European trading bloc.

Quarter-to-date data (covering the completed fourth quarter) for the full sample show that five countries have output declining on balance in Q4. However, among monetary union members, the median change in the quarter is an annual rate of 1.1% increase in manufacturing industrial production.

Assessing the growth rates based on year-over-year growth in industrial output, only four countries in the sample have output growth rates below their historic medians on data back to 2006. Those are Austria, Germany, Luxembourg, and Malta. Other reporters have growth rates that rank above the 50% mark which puts them above their historic median. Sweden has a year-over-year growth rate in its 93.7 percentile; Norway has a growth rate in its 85.3 percentile; Greece, Portugal, and France have growth rates in their 70th percentiles, respectively.

The December news is not upbeat, but it is not dismal either. It suggests the same old industrial slog is still underway in Europe.
by:Robert Brusca
|in:Economy in Brief
Japan| Feb 09 2026
Economy Watchers Indexes Show Firmness; Impact of Takaichi Election to Come in Months Ahead
Japan's economy watchers index has flattened out and backed off slightly for the current and future outlooks depending on the time horizon that you seek. However, what's clear is that the index reached the low point around the middle of last year, has been rebounding and now the rebound has either run out of gas or slowed after the index has rebuilt itself considerably.

It is certainly too early to get pessimistic on Japan's economy, with Prime Minister Sanae Takaichi having just won a significant - essentially a landslide - snap election that she called after recently having been elected. The LDP would appear to be back in the driver's seat, and she has her sights set on more fiscal stimulus and expanded military spending. She is apparently much more on the same wavelength as Donald Trump in the United States. Mr. Trump was an Abe supporter, and Ms. Takaichi is a disciple of Mr. Abe.

At the moment, Japan would seem to have a groundswell of support behind the government and that government is set to try to rekindle some growth which could potentially put the Bank of Japan in a more decisively defensive track as far as setting rates and potentially raising rates.

Economy watchers index is trending In January, the economy watchers index backed off for the second month in a row. However, it still has a percentile standing in its 51-percentile, slightly above its median standing since early-2005. The headline and all the components have standings above their respective 50th percentiles on this timeline, with the exception of housing, services, and employment; three readings that are extremely important to consumers. Housing has a 26.1 percentile standing, services (the employment sector) have a 45.8 percentile standing, while employment has a 22.9 percentile standing. Despite the otherwise solid and strong set of readings, there are these three significant flies in the ointment. Corporate Japan is doing extremely well with corporations having a 66.8 percentile standing; manufacturers and nonmanufacturers, separately, each come in with readings in their mid-to-upper 60th percentiles.

The future index The future readings from the economy watchers index show continued but slight increases over the last few months. Only two future readings weaken month-to-month: housing and employment—once again two key readings as far as consumers are concerned. However, in terms of current monthly diffusion readings, the assessment of households, retailing, housing, and employment all have current diffusion values below 50, indicating net declines rather than increases. The percentile standing is for the future index are, like those for the current index, generally upbeat - and generally stronger than for the current indexes - with the future headline posting a 66.4 percentile standing in January. However, like the current index, the standing for housing is at its 21.3 percentile and the standing for employment is at its 30th percentile, both well below the neutral level that would place the ranking at the 50th percentile. Corporations show high readings, higher for the future indexes than for the current index standings. There also are high readings and standings for eating and drinking places as well as services. It's good to see services come up with a strong rating since it creates hope for the future for employment because services are the core employment sector. It will be interesting to see how this value changes in the coming months as Takaichi’s new policies are implemented and take hold.

Summing up On balance, the economy watchers index has been firm to strong. There is some slight give-back in the current index in terms of trend. But beyond the index, there's more immediate reason to be more positive because Japan has just executed a very decisive and pro-growth snap election that is going to put the new Prime Minister Takaichi and strong control of the economy at a time where she seeks to cement economic strength. These elections were just completed over the weekend, and we will see the results reflected in data in the weeks and months to come.
by:Robert Brusca
|in:Economy in Brief
Germany| Feb 06 2026
German IP Reveals Chaotic Trends
With the December report, Germany’s production and some of the early European industrial production data reveal a good deal of chaos in terms of the embedded trends. On the month, German industrial production fell by 1.9%, with consumer goods output up by 0.5%, capital goods output falling by 5.3%, and intermediate goods output falling by 1.2%. Among the early reporters in the monetary union—France, Spain, and Portugal—only Spain showed an increase in manufacturing IP in December; however, Spanish industrial production is notoriously volatile.

Broader IP trends in Germany and elsewhere in Europe As for other early industrial production reporters, both Sweden and Norway showed strong-to-solid gains in December and each of them showed two-months of gains in a row. Beyond that, sequential growth rates from 12-months to six-months to three-months show accelerating growth in German consumer goods output against decelerating growth for intermediate goods. Real manufacturing output and real sales show mixed results- no clear trends; however, real manufacturing orders in Germany are off the map strong.

German manufacturing/industrial Surveys German industrial surveys from the IFO for manufacturing shows persistent weakening as well as for IFO manufacturing expectations, and in the EU Commission industrial index in the last three months. More broadly, Germany shows some modest but ongoing step up all of these based on average levels from 12-months to six-months to three-months for IFO expectations and the EU Commission industrial readings with mixed results for other survey readings.

IP trends in Europe For the early reporting EMU members France, Spain, and Portugal, who report industrial production trends, each show mixed monthly trends against ongoing decelerations for manufacturing output over the broader sequential periods (12-month, to 6-month, to 3-month). However, for other Europe, Sweden and Norway, manufacturing trends are steadily accelerating on this broader timeline.

A feeling of ‘Deja- What?’ These combinations of opposed trends mixed with a lack of trends leave us with this sense of confusion about what's going on in manufacturing. For Germany, the extreme strength in orders is reassuring since orders should be forward-looking rather than backward-looking or even contemporaneous. But orders can also be a fickle series and so we'll have to watch it to see if the trends for German orders hold up.

Current quarter-What’s been happening now In addition, current quarter growth for Germany actually looks quite good with industrial production up 3.7% at an annual rate in the current quarter, led by output increases in manufacturing against a decline in the intermediate goods output. Real orders in the quarter are surging at a 44% growth rate, while real sales in manufacturing only had a 0.1% uptick at an annual rate. The industrial indicators for Germany in the quarter show weakness or flatness with the only exception being IFO manufacturing expectations that advanced by a small amount. The three EMU members who report industrial production data show positive growth in the just-completed quarter except for Portugal where industrial production is falling at a 2.9% rate in the fourth quarter. Sweden and Norway, European countries but not monetary union members, show a strong 22% annual rate gain in Sweden against the 3% annual rate decline in Norway.
by:Robert Brusca
|in:Economy in Brief
Germany| Feb 05 2026
German Orders Gain Pace- Clear Uptrend
German real orders in December adjusted for inflation rose strongly again, gaining 7.8% month-to-month after rising 5.7% month-to-month in November. Foreign orders were up by 5.6% in December compared to 5.2% in November. Domestic orders surged by 10.7% in December after rising 6.4% in November and 10% in October.

Real sales Real sales were mixed in December with overall sales falling 1.4% month-to-month mostly on weakness in capital goods sales.

Broad categorical acceleration Many flows are accelerating this month. Sequential growth rates show acceleration. Total real orders accelerate from a year ago, to the current year, to six-months, and to three-months. Sales growth rates for consumer goods, consumer nondurables, and intermediate goods all show accelerations in gear. The exceptions are foreign orders that are not as strong over six months compared to their 12-month growth. And on the sales side, consumer durables sales and capital goods sales are weak.

Quarter-to-quarter Quarterly annualized growth is complete for Q4 with this report. Foreign orders are the ‘weak flow’ expanding at a 13.6% annual rate – certainly not a weak growth rate. But domestic real orders are up at an astounding 101.9% annual rate. The net impact on the total real orders growth is to lift it to a pace of 44.1%.

Order ranking is very strong The table provides two rankings: one based on the level of variables and the other based on its year-on-year growth. The rankings this month for real orders overall, foreign, and domestic orders all reside in their top 80th to 90th percentiles- extremely strong based on level or growth. Sales do not follow suit. This gives us some reason to suspect that there is some lumpiness involved in the manufacturing data as distinct from strength. That will be something to watch. Overall mining and manufacturing sales growth is essentially at its historic median at a rank of 49.8. However, capital goods, intermediate goods and manufacturing sales all have rankings at or above their medians - as high as a 61-percentile standing for capital goods.

Industrial confidence Industrial confidence for Germany, France, Italy and Spain (the EU’s big-four economies) show rankings based on these survey levels that are much lower at the 11th percentile for Germany, the 42nd and 36th percentiles, for France and Italy, respectively. Spain scores better with a 61.8 percentile standing on its industrial confidence measure.

On balance, there is now an accelerating profile that is broad in sales trends and especially strong order trends. Perhaps Europe, under the pressure to stimulate its miliary capabilities, has a core of demand to help drive output ahead more consistently. This is something to watch in the coming months.
by:Robert Brusca
|in:Economy in Brief
Global| Feb 04 2026
S&P Composite PMIs Creep Higher
Composite PMIs for January show fewer reporters weakening in January compared to December with only about 40% of the reporters getting weaker month-to-month. The sequential data weakening versus strengthening shows that over 12 months 43.5% of reporters weakened, over six months 26.1% weakened, while over three months 43.5% weakened indicating that over this period, and - in recent months as well - the broad sequential periods are showing improvement as the underlying trend for global composite activity.

In January, 5 of 25 reporters had PMIs below a diffusion reading of 50, indicating contraction, compared to none in December and two in November. Over three, six and 12 months, the number of outright contractions varies between 2 and 4 based on average data. The percentile standing for ranked data over the period back to January 2022 shows a 61.7 percentile standing for the average of all of them, and a 61.9 percentile standing for the pooled data median. There is a stronger 85.7 percentile queue standing for an average of the United States, the United Kingdom, and the European Monetary Union where conditions have been firming although slowly..

The queue percentile standings across these 25 reporters’ composite indexes show that nine of them have rankings below their medians on data back to January 2022. Among all 25 reporters, only in France has 12-month, 6-month and 3-month average PMI readings below 50 in each of those time segments. France also has readings below 50 for its composite diffusion in two of the last three months.

When we look at rankings over a period, we also are interested in knowing what the performance has been over that span where we're creating these rankings. On these data back to 2022, only 6 reporters have average readings below 50, indicating persistent contraction. For the composite that's below 50, those reporters are Germany, France, Zambia, Ghana, Egypt, and Kenya. Only Egypt at 48.9 has an average reading below 49. Clearly the sense of contraction across this set of countries is small, moderate, and short-lived. At the other end of the spectrum, there are readings of 55 or greater for Sweden, India, Saudi Arabia, and the UAE; Singapore logs a reading at 54.4 for diffusion value.

The average and median data show that the readings have very gradually been drifting higher; however it's definitely a very gradual phenomenon. Looking at smoothed data, 12-month averages show 10 countries with readings below their respective 12-month averages of 12-months ago. However, only six of these show a reading that's one diffusion point or more weaker than it was one year ago. The biggest step back is from Brazil with a 4.5-point step back; the next biggest is Russia with a 2.1-point step back and Russian of course is engaged in war. There is a step back of about one point reported by Spain, the U.K., the UAE, Singapore, and Qatar. On the same metric, step ups of two points or more include Germany, Sweden, Zambia, and Nigeria with step ups of one point or more in Kenya, Australia, Ireland, and the U.S.

Over the whole 4-year period, the average country was in contraction for 14 months, a bit more than one year, accounting for 28.6% of the time. Over the last 2 years, the average country was in a state of contraction for 5.2 months or 21% of the time. Over the last year, the average country was in contraction 2.2 months or 18% of the time. The time spent under contraction has steadily fallen across the group. Over four years, three countries dominate the contraction with France, Egypt, and Kenya in contraction more than half the time (Egypt 89% of the time; France 71% of the time). Over 2 years, only Egypt and France were contracting more than half the time (Egypt 79% of the time; France 91% of the time). In the past one year, five countries are in a contractive state more that 50% of the time (France<91%>, Egypt<75%,> Brazil<75%>, Russia<50%> and Hong Kong<50%>). France and Egypt have serious structural issues. Only Saudi Arabia and the UAE have experienced no contractions over these periods (Ireland comes close, Singapore comes close, too). The top three countries dominate the contraction profile; that is France, Egypt, and a roving member, accounting for 29% of the contractions over four years, 40% over two years and 53% over the last year. These are countries with structural issues.

On balance, the composite PMI data are improving. On the chart the uptrend is visible, a definite tendency. These metrics are moving higher, but they are crawling at a very slow pace. It's encouraging that this improvement is also occurring in an environment in which inflation is improving or holding stable.
by:Robert Brusca
|in:Economy in Brief
Europe| Feb 03 2026
Inflation Tamed in France’s ‘Too-Early’ January Inflation Report
I have offered the table (below) as a presentation of French inflation statistics that is ‘too early’ largely because the report comes with a headline and without supporting detail. But the headline is too intriguing to wait for the details to emerge. To try to bridge that gap, I present the French detailed data for the CPI with the trends calculated based on a one-month lag. I also supplement that with the current report from Germany where the topical HICP reading for January is available, as it is for France. But Germany has also issued its domestic CPI data with detail. So, I present the domestic CPI trends without lag for Germany as a way to gain some better understanding about what's going on with inflation in the euro area and to gain perspective on France.

French-German comparisons; French results Of course, Germany is not France. We can't simply assume that the trends that we're seeing in Germany in January will translate through to France. But what we can do is notice what similarity/difference is there and point out that the sharp lowering of inflation in France is a French phenomenon and not a phenomenon that is shared by Germany. Therefore, the trend is not likely broadly applicable to the European Monetary Union. French inflation is running at only 0.4% over 12 months (!), annual rates of 0.2% over six months and three months; these are exceptionally low rates of inflation. In January, the French HICP index fell month-to-month by 0.1%.

German trends The German behavior is not really similar to this with the HICP at 2.1% over 12 months and then rising to annual rates of 2.8% over three months and six months, substantially similar to the sorts of numbers reported for headline inflation in the United States. The German domestic CPI reports slightly improving trends with annual inflation at 2.1%, six-month inflation at 2.1% at an annual rate, and at 1.6% over three months, inflation is tucked inside of the ECB 2% target over three months. The German CPI excluding energy - the early proxy that we have for the core rate - is at 2.4% over 12 months, 2.5% over six months and then drops to 2% annualized over three months. The month-to-month German data have been well behaved but not as weak as the monthly inflation numbers for the HICP headline monthly in France.

Different inflation in France and Germany; but a similar trend? So we have two bits of evidence here: one is that French inflation has really been behaving and it's quite weak. The other is that while German inflation is running at a higher pace and generally above the ECB target, there are also signs that German inflation is starting to come down over more recent periods.
by:Robert Brusca
|in:Economy in Brief
Global| Feb 02 2026
S&P MFG PMIs Power Ahead; PMIs Improve; U.S. ISM blasts a hole through MFG Pessimism
An unexpectedly happy New Year in manufacturing land It's a new year - and a fine new year it is, baby! S&P manufacturing PMIs are showing consistent and broad improvement on a monthly and sequential basis. In January, of the 18 early reporting countries only 5 showed worsening conditions. The median reading for the month moved to 50.8 in January from 50.1 in December and 49.0 in November. It's a slow-motion slog, but on the other hand, it is a steady up creep from November. The PMI's median is up by 1.8 points since November, which may be small potatoes, but it's still significant progress.

Over three months the median reading rises to 50.0, compared to a reading of 49.5 on average over six months and a reading of 49.0 on average over 12 months. These sequential readings are also showing slow but clear stepwise improvement.

Breadth In terms of breadth, in January 72.2% of the reporters showed month-to-month improvement, compared to 44% showing month-to-month improvement in December and 50% showing improvement in November. Yes, the recent performance has shown improvement versus deterioration, and in the two prior months, diffusion has been pretty close to a 50-50 proposition. Then, in January, the upside exploded to a 72.2 percentile reading. Sequential data show that over 12 months 38.9% of the reporters showed improvement compared to a year earlier; over six months 50% of the reporters showed improvement compared to performance over 12 months. Over three months there was improvement of 61.1% of the reporters compared to their six-month metrics.

Unexpected strength These are steady and consistent improving readings, with some explosive improvement in the most recent three-month or one-month periods. This report is really something that was quite unexpected since the trend has been flat, sitting in this position of minor contractive lethargy for quite some time.

Most reporters log readings that imply growth The percentile ranking data show that only six of the 18 countries—one third of reporters—have percentile readings below the 50th percentile, based on data going back to January 2022. 12 of the 18 reporters have percentile standings in the 70th percentile or higher, and 4 of 18 are in the 80th percentile range.

Strong showing in the U.S. a growth leader The breadth of this improvement is quite impressive. The table chronicles the S&P manufacturing PMIs. The chart plots these data for three regions but substitutes the U.S. ISM manufacturing reading freshly released today along-side the S&P readings. The U.S. ISM in January has simply exploded to the upside. That report’s headline snapped up to 52.6 in January from 47.9 in December; it was the strongest reading since the middle of 2022. The order diffusion reading jumped to 57.1, a month-to-month jump of nearly 10 points; the production diffusion rating rose by 5 points monthly; the prices-paid reading continued to snake higher; export and import ratings both rose relatively sharply. If the U.S. is a bellwether for how the rest of the world is going to perform, that bell is ringing loudly in January. The U.S. ISM standing evaluated on data back to 1996 gives an ISM queue standing at its 48.9 percentile – closing in on absolute normal.

Some U.S. detail… The U.S. weakness in imports would probably have something to do with tariffs. There also may be some negative spillovers that would affect exports, but exports would also depend more directly on activity overseas, which the PMI data from S&P suggests has begun to pick up. Employment, which showed an improvement on the month, is still lagging with a 31-percentile standing. However, the rest of the manufacturing readings are really quite solid, quite strong. And in terms of levels instead of rankings, all of the U.S. PMI readings are above their 50% mark in the ISM survey except for inventories and employment. Employment has a 48.1 percentile standing - not a terrible result, especially for a sector whose employment share has been dropping chronically for decades.
by:Robert Brusca
|in:Economy in Brief