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| Aug 09 2024
Germany Finalizes Inflation with Acceleration
German inflation is accelerating, rising month-to-month by 0.2% in May, by 0.3% in June, and by 0.5% in July. A broader acceleration sees the HICP up by 2.7% over 12 months, up at a 3.5% annual rate over six months, and up at a 4.1% annual rate over three months. Domestic CPI inflation excluding energy is on a rising path, up by 2.7% over 12 months, up at a 2.6% pace over six months then clearly accelerating, rising to a 3.1% annual rate over three months. The domestic headline inflation rate provides a counter-point, rising 2.3% over 12 months, accelerating ever so slightly to 2.4% over six months then sitting back at a 2% pace over three months.

Germany is in step with the other large economics in Europe as Spain and Italy both report core inflation accelerating over six months compared to 12-months and for 3-months compared to 6-months. Germanys 3.1% ex-energy rate increase is slower than Spain’s and Italy’s where the core rates rise by 4.3% and 3.5%, respectively.

The numbers on inflation are disappointing but not all threats are worsening. Brent oil prices are not stoking pressures as oil prices fell by 7% month-to-month in May, rose by 0.3% m/m in June and rose by 0.1% m/m in July. There is also good news from diffusion as inflation only accelerates year-over-year compared to a year ago in 18% of the major industry groups. Over six months, inflation accelerates in only 45.5% of the groups compared to their 12-month pace. Over three months, inflation accelerates in 36.4% of the categories compared to their pace over six months. So, the inflation acceleration Germany records is partly a matter of ‘bad luck’ in the sense that inflation is heating up the most in the categories that carry the largest weights in the index. Similarly, monthly inflation shows diffusion below 50% in two of the three most recent months.

Inflation is accelerating from 12-months to 6-months to 3-months for transportation equipment. It accelerates in 6-months and 3-months for ‘other’, recreation & culture, and transportation equipment again.

Inflation decelerates from 12-months to 6-months to 3-months for alcohol, health care, communications, and restaurants & hotels.
by:Robert Brusca
|in:Economy in Brief
Japan| Aug 08 2024
Modest Rebound in Japan’s Economy Watchers Index
The economy watchers index rose to 47.5 in July from 47.0 in June, indicating less contraction on the month. Similarly, the future index improved to 48.3 in July from 47.9 in June, also signaling less deterioration is expected in July compared to June.

The current index has a 50.6 percentile standing on data back to 2003; the future index is slightly weaker at a 46.6 percentile standing. The current index is just above its median mark while the future index is below its median on that same period.

There are no indications of steady net gains being made over 12 months, six months, and three months for either the current or future surveys. That is not reassuring. However, there is persistent deterioration for five current components and five future components. The future declines that register persistent erosion also display net diffusion readings below 50 in July; so do four of the five current readings. Household-related metrics show a preponderance of persistent weakness. In the current survey, it is housing, employment, and eating and drinking places that are persistently weaker from period to period. In the future index, it is also household-related measures that are persistently weak: households overall, retailing, housing, and employment. Consumer-related sectors are weak and weakening.

The economy watchers survey shows momentum weakness as well as weak standings. The current index has four of nine components with standings below their historic medians and seven with diffusion values below 50, indicating contraction. In addition, the ranking of the employment metric at 22.1% is the lowest of all current components and that is disturbing. The future index has five components with rankings below 50% in addition to the headline. Eight of nine components have diffusion values below 50, as well as the headline. The weakest future standing is for housing at a 24-percentile value, but employment is also extremely weak with a 31-percentile standing.

The chart on the economy watchers survey shows that weakness was arrested over the last two months. Still, there is not much of a rebound established and there are still modest-to-weak readings all around. Broader momentum still points lower since the rebound as it stands is only a very localized affair. Despite two months of diffusion improvement, this is still a report that does not offer a lot of encouragement.
by:Robert Brusca
|in:Economy in Brief
Germany| Aug 07 2024
German IP Grows in June But Still Has Weak Momentum
German industrial production rose 1.4% in June after falling 3.1% in May and edging up by 0.2% in April. Sequential growth rates do not set a clear course, but on all horizons, growth is weak or lower. IP falls by 3.9% over 12 months, rises at a 0.9% annual rate over six months, then falls at a 5.8% annual rate over three months. Three-month growth is weaker than 12-month growth, but there is a rise in-between, over six months. Still, the overall pattern is weak. In the quarter just completed, IP falls at a 5.1% annual rate. Also, note that there is a legacy of weakness in IP that is still standing in June, 10.6% below its level in January of 2020 (4 ½ years ago) just before COVID struck.

The IP sectors show the same trend ambivalence as the headline. Only capital goods show output decline on all horizons, but even then, the progression is not clear as the weakness dissipates over six months.

Total manufacturing output and real orders rose in June as real sales fell. Sequentially, manufacturing output is weaker over three months than over 12 months but without clear trend. Real orders rise solidly over three months despite a double-digit pace of decline over 12 months and a deeper drop over six months. Real sales do show a clear trend and a trend to deterioration amid negative growth rates.

Other indicators for German industry show an uneven monthly sequence. The broader sequential data show strengthening over three months compared to six months for the ZEW current assessment, for IFO manufacturing and for IFO manufacturing expectations. The EU Commission assessment shows a weakening from 12-months to 6-months to 3-months. It is the exception. All indicators except the EU Commission indexes show improvement in the quarter as well.

IP in other European countries shows declines in Portugal, Spain, and France while Norway (an EEA member) shows output higher in June by 1.3%. The broader progressions show ongoing deterioration in Portugal and in France. There is secular improvement in Norway as growth improves form a -0.9% pace over 12 months to a 4.1% gain over three months. Spain shows erratic behavior with no clear trend and a sharp 10.1% annual rate of decline over three months.

On balance, the IP report for June shows a one month rebound for Germany but still weak trends in place across sectors. Other indicators show a somewhat more positive picture. Individual European IP reports largely show weakness in play. There is not much cause for optimism here.
by:Robert Brusca
|in:Economy in Brief
Germany| Aug 06 2024
German Orders Stir in June But Are Still Quite Weak
Real German industrial orders rose 3.9% in June after falling 1.7% in May and 0.6% in April. The sharp rise in June has driven the three-month growth rate into positive territory to 6.4% at an annual rate. Orders in June were largely driven by domestic orders that rose by 9.1% in June after rising 0.4% in May and being flat in April. Foreign orders rose by 0.4% after falling 3% in May and 1% in April. June was a good month for German orders especially for domestic orders; however, the trend for German orders is still poor (see the year-on-year growth data-plot chart).

Sequential trends Sequential growth rates show that 12-month growth for real orders is -11.7%, over six months the annualized growth rate is -20.9%, and over three months that trend reverses to plus 6.4% at an annual rate. Foreign orders fall by 15.5% over 12 months, they drop at a 28.3% annual rate over six months, and that pace of decline is reduced to -14% at an annual rate over three months. Domestic orders fall 6.1% over 12 months, they drop at an annual rate of 9.4% over six months and then rebound strongly, growing at a 44% annual rate over three months. The progression of German orders is largely negative until the last 3 months when the negative paces reverses quite sharply in the case of domestic orders and in the case of foreign orders the pace of decline is simply diminished.

Manufacturing Overall manufacturing sales fell 0.9% in June after falling 0.3% in May and 1% in April. For manufacturing, there's a sequential decline that is getting progressively worse from -5.1% over 12 months to -6.2% at an annual rate over six months to -8.7% at an annual rate over three months.

Sector sales Sector results show consumer goods sales in June fell by 3.7%, consumer nondurables sales fell by 5.1% with durables sales rising by 4%. Capital goods sales fell by 1.7% and intermediate goods sales rose by 0.7%. That's rather a hodgepodge of pluses and minuses. However, taking a longer string of data, consumer goods sales are progressively contracting from a -4.9% decline over 12 months to a -6% rate of decline over six months to -12.7% rate of decline over three months. That progression is driven by nondurable goods that get sequentially worse, while consumer durable goods sales show the opposite trend, progressive acceleration from -6.4% over 12 months to a +5.3% pace of expansion over six months to a +13.3% pace of expansion over three months. Capital goods sales do not give us a clean reading on trend; sales are negative over 12 months; the negative growth rate worsens over six months but then it's trimmed back over three months. However, capital goods do show negative growth rates over each horizon. Intermediate goods are also confusing hodgepodge of growth rates with -4.5% growth over 12 months, 0.2% positive growth over six months and then -9.3% growth at an annual rate over three months.

Quarter-to-date The quarter-to-date calculations show that overall orders are falling in the recently completed second quarter by 5.3% at an annual rate, but this is the result of a nearly 12% annual rate decline in foreign orders tempered by an increase in domestic orders of about 5%. Across sectors, we find declines in the quarter for all sectors except for consumer durable goods but they post a significant growth rate of +8.9% at an annual rate in the quarter.

Industrial Europe Measures of industrial confidence for Germany and the three other largest economies in the European Monetary Union also give us a mixed picture; in the current month all three of them score a negative values for industrial confidence. However, over the last three months there's very little trend involved for either Germany, France, Italy, or Spain; they're all pretty much hugging a consistent negative growth rate on the period. And the same is true when we look for sequential growth rate patterns from 12-months to 6-months to 3-months. All four of these countries continue to present pretty much the same values without any clear trends over the period. Additionally, we create queue standings for these four countries and find that they are all in June below their mean values on data since 1990. The weakest standing is for Germany with a 16-percentile standing. The strongest is for Spain with a 42-percentile spending, with France at 37-percentile and in Italy at a 23.5 percentile standing.
by:Robert Brusca
|in:Economy in Brief
Global| Aug 05 2024
Global Composite PMIs Tail in July
Composite PMI data for July show a slight worsening compared to June across most of the 24 countries and areas reporting composite PMI data. Among the 24 countries and areas that supply early data on this measure, only 8 show improvement month-to-month in July that's after seven showed improvements in June.

The unweighted average for the sample shows a slight cooling to 51.6 in July from 51.9 in June continuing the slowdown from 52.9 in May. However, median statistics provide a slightly different picture, with the median reading in July strengthening the 51.2 from 50.8 in June compared to a median value of 52.3 in May. On both average and median metrics, there is a weakening from May to July that averages a downgrade of about one diffusion point.

Sequential data showing performance over 12 months, six months, and three months indicate little change across reporters for the average metric. The 12-month average is at 51.5, the six-month average moves up to 52.2 and the three-month average moves down to 52.1. Median data over 12 months show a reading at 51.3 moving up to 51.8 over six months and then moving back down to 51.3 over three months. Conditions are relatively static at readings just slightly above the breakeven diffusion value of 50.

In July, there are 7 reporters with PMI values below 50, indicating overall economic contraction. That compares to 8 in June and 4 in May. Sequential data show 8 jurisdictions below 50 over 12 months, 6 below 50 over six months and 5 below 50 over three months.

Tendencies to decelerate have fluctuated, with 40% showing deceleration month-to-month in May compared to 72% in June and 56% in July. Looking at the averages from 12-months to six-months to three-months, 52.2% of reporters show slowing over 12 months compared to 12-months ago, 30.4% show slowing over six months compared to 12-months, and 56.5% show slowing over three months compared to six-months. There is no trend here and there's little evidence of any significant strength. But there is growth.

The queue percentile standing data stand on average at 41.2% with a median at 38.1%; these are roughly similar figures showing that the average or median representative country is below its mean/median by about 10 percentile-standing points. Eighteen of these 24 jurisdictions have percentile standings below their 50th percentile, while only 6 have standings above their fiftieth percentiles. However, in terms of diffusion standings, only seven jurisdictions have readings that are below the diffusion value a 50 which indicates not just underperformance but economic contraction.
by:Robert Brusca
|in:Economy in Brief
Global| Aug 02 2024
Money Supplies Bounce Back; Money Growth Is Up Ahead of Central Banks Taking Strong Rate-Cut Action
The money supply picture in June is beginning to turn with growth on the rise. In the European Monetary Union, M2 growth progresses from a 1.3% pace over 12 months to 2.1% over six months and accelerates to a 4.3% annual rate over three months. The rate of growth in private credit in the Monetary Union is 0.8% over 12 months, moves up to 0.9% over six months, and to 1.6% over three months.

Real money growth: EMU- Indexing these variables for inflation to look at rates of growth in real money balances in the European Monetary Union, shows a decline of one-half of one percent over 12 months, a decline at a 0.3% annual rate over six months and an increase at a 0.7% annual rate over three months. Monetary growth has completed the progression from being in a contractionary mode to being expansionary in real terms. Real private credit has not yet made that turn. The growth in credit over 12 months is -1.7%. That contraction is reduced to a pace of -1.5% over six months, but then, over three months private credit growth contracts 2% at an annual rate. On balance, real private credit growth continues to be restrictive.

Other monetary centers- Turning to the other major monetary center countries, we see positive nominal money growth in U.S. M2 and U.K. M4 over three months, six months, and 12 months. Japan moves in the opposite direction with growth rates of money slowing down and showing contraction over three months. Japan has been on the opposite cycle for some time. Japan just this week executed a rate hike as all the rest of the money center central banks have begun or are anticipating interest rate cutting. The ECB began cutting rates a while ago. The Bank of England cut its key policy rate just this week while the Federal Reserve had a meeting this week and decided not to cut rates although it began to point to September. In the wake of some surprising data, especially the U.S. employment report for July, U.S. markets have gone a little nutty, and they're starting to price in not just a rate cut but a large rate cut and several of them. The U.S. case marks a strong change in market pricing. I would caution what markets are doing on the heels of this employment report since the employment report clearly showed that there were flaws. A large increase in the number of workers who were not able to work because of weather conditions and yet markets have completely ignored this and treated all of the weakness in that report as though it's authentic weakness. It's not clear that that's the case, but for now markets are on that bandwagon- keep an eye on U.S. data.

The growth rate in U.S. real money balances shows that, without the Federal Reserve changing policy, money growth has become stimulative. Over 12 months the U.S. monetary aggregate M2 declines by 1.9%, over six months it declines at a 0.2% annual rate, and over three months it increases at a 2.6% annual rate. U.K. 12-month money growth in M4 declines by 1.9%, then it increases at a 0.8% pace over six months and at a 0.7% pace over three months. In Japan, with a tightening kicked off, the 12-month growth rate for M2 plus CDs is -1.3%. That stays pretty level at -1.4% at an annual rate over six months, but over three months that tightens considerably to a decline rate of -4.9% at an annual rate. Japan is barely touching the brakes on interest rates while money supply is showing some significant weakness. Since late-2022, Japan's M2 growth has been consistently showing declines; about a year ago, Japan began to show some slight increases. However, declines are back and now they're starting to progress to even weaker numbers. Japan’s situation is still in flux as its headline inflation rate has been moving up, but its core inflation rate has remained relatively stable and to right around its target rate.
by:Robert Brusca
|in:Economy in Brief
Global| Aug 01 2024
S&P Global MFG PMIs Weaken…So What?
Asian MFG mostly turns lower in July- but it’s not trending there The final S&P manufacturing PMIs show weakening median and average readings in July. The table above shows that of the 18 reporters, only 16.7% improved month-to-month. The table sorts these observations into cohorts of PMI values. Having only 38.9% in the sweet spot of 50-55 diffusion reading cohort is telling. The 40-50 cohort growth, the first tier of output declines, houses over half of the reporters (55.6%) in July. That proportion is slightly larger for the 12-month average and has been even worse (larger) for the 12-months before that.

In July, there are 10 reporters below the 50% breakeven mark. That total has been at 9 to 10 over three months, six months, and 12 months.

The number (percentage) of reporters in the first upper tier of growth 55-60 has been consistent at 5.6% (one reporter).

The pattern of the manufacturing PMI readings suggests there is a lull in manufacturing. But manufacturing has been stagnant and weak-to-contracting throughout 2023. In 2024, conditions began to improve. We are now seeing a back off in July compared to June. However, the median reading in June had improved relative to May, although the July reading is below the May median and it was last weaker in December 2023. In contrast, the average for the group is back to its April value. There is some easing of conditions, but it’s a mixed bag.

Data-watching market-watchers are looking for consistencies and trends to jump on. Unfortunately, there is little evidence here of any new trend. July is weaker than June but 2024 has been stronger than 2023; it is far too soon to look at a one-month drop as evidence of new weakness.
by:Robert Brusca
|in:Economy in Brief
Europe| Jul 31 2024
EMU HICP: Stuck in the Middle with You?
Inflation in the European Monetary Union picked up in July, rising by 0.4% compared with a 0.1% rise in June. Progressive inflation rates calculated over 12 months, six months and three months don't show a clear pattern, but the tendency is uncomfortable. The 12-month pace of 2.5% is exceeded by both over three months and six months. Over six months the pace jumps to 2.8%; over three months it backs down but by just a tick to 2.7%. To the extent that represents a pattern is not a good one.

The four largest economies in the Monetary Union each shows acceleration for July compared to June. Italian inflation jumped by 0.9% month-to-month in July after rising 0.2% in June. German inflation rose by 0.5% after rising 0.3% in June. In France, prices rose by 0.4% after rising 0.1% in June. Spain logged an increase of 0.2% after having prices fall 0.1% in June. These monthly numbers show a clear tendency toward acceleration.

Headline trends- Over three months the large country trends are mixed. Germany and Italy show accelerations in their respective HICPs over three months compared to six months. And both also show acceleration over six months compared to 12 months. But France and Spain each show weaker inflation over three months than over six months; Spain shows inflation steadily cooling from 12-months to 6-months to 3-months. Only Spain shows 3-month inflation below 12-month inflation. The 12-month pace of inflation is higher in July than in June for three of four large countries, again with Spain as the exception. Despite this inflation slowdown, Spain has also been a leading growth economy in the second quarter. However, below we will see that Spain’s core inflation trend tells a different story.

Core trends- Core (or ex-energy inflation) shows acceleration in Germany, Italy, and Spain. Despite Spain’s encouraging headline inflation and inflation progression, the core tells a different story. Spanish and Italian core inflation rates show steady acceleration from 12-months to 6-months to 3-months. Germany’s three-month pace exceeds its six-month pace and its 12-month pace; there is a slight one-tick reduction in the pace from 12-months to 6-months. On balance, core inflation is not encouraging. Core inflation rates are well above 2% over 12 months, ranging from 2.5% to 2.8%. The 3-month paces range from 3.1% to 4.3%.

Central bankers- Central bankers have been poised to announce rate cuts and the ECB has already started the process. But inflation developments do not seem to be encouraging for that process to continue. Meanwhile, the Federal Reserve in the U.S. continues to talk of inflation behaving and looking more manageable. In the U.S., there is some motivation for a policy shift from a steady rise in the rate of unemployment. Of course, cutting against this grain, is the BOJ that has been on a different path and just today announced a long-awaited rate hike.

Trend dilemma- The chart is clear that inflation in the U.S. and in EMU has dropped then has flattened out to a pace above target in both the U.S. and the EMU. The U.K. faces similar resistant trends. Central banks are eager to try to put growth back in gear. Recent EMU growth has been lackluster; growth in the U.S. has been much better, but the U.S. employment-creating machine shows signs of aging. Policy makers have a motivation to cut rates, but they also have a lengthening legacy of being over target. Something has shifted in their central bank reaction functions and priority schemes to create this difference. Inflation is no longer the only objective in town, and it may no longer be the main one. Alternatively, central bankers may have simply effectively loosened their targets by reducing their vigilance and adherence rather than shifting the actual target. They do this by excusing short-term overshoots but claiming 2% is still the long-term target. There has been a lot of criticism of central bankers targeting 2%. And while central banks continue to voice their devotion to 2%, their actions suggest something else.
by:Robert Brusca
|in:Economy in Brief
Europe| Jul 30 2024
EMU Flash GDP Runs a Tick Slower in Q2
EMU growth is a tick slower in Q2 2024 with a flash growth rate of 1.0%, down from 1.1% in Q1. Essentially, it’s an unchanged performance in the quarter at a slow one-percent annual rate.

The Q2 annualized quarterly pacer fails to slow in only two of the seven early GDP reporters in the table as Irish GDP ramps up to a 5.1% annual rate in Q2 from 2.8% in Q1 and French GDP steadies at 1.1%.

However, splitting EMU GDP into the four largest EMU economies (Germany, France, Italy, and Spain) vs. the rest, shows that the slowing is concentrated on the largest EMU economies. For them, growth slows on a weighted basis to a 0.8% pace in Q2 from 1.3% in Q1. The rest of the EMU is estimated to have flash growth at 2.0% in Q2 compared to 0.4% in Q1.

Over four quarters, the Q2 growth rates show EMU speeding up slightly to 0.6% in Q2 from 0.5% in Q1. The four largest EMU economies log growth of 0.8% in Q2, the same as in Q1, while growth in the rest of the EMU falls by 0.3% annualized compared to dropping at a 0.8% pace in Q1.

By country, the quarterly four-quarter growth rates slow in Belgium, France, and Portugal.

The annual four-quarter growth rates in Q2 show only Italy and Spain at a pace above their historic medians; however, Portugal is close with a 47.8 percentile standing. EMU growth has been stronger nearly three-quarters of the time. The four largest economies have been stronger nearly one-third of the time while the rest of the EMU has been stronger more often, about four-fifths of the time.

These ranking benchmarks help to establish a general relatively as a reference for the countries and the country groups as well as for the EMU. The median four-quarter growth among reporters at a 38-percentile standing is relatively stronger than the (weighted) EMU total. This is slightly surprising since four largest EMU economies log growth that ranks higher than for the rest of the EMU.

U.S. growth performance leaves the EMU and all its early reporters in the dust with the partial exception of Spain whose four-quarter growth rate of 2.9% is close to the U.S. at 3.1%. But the relative strength of U.S. growth is at its 73.9 percentile compared to Spain that has a stronger structural growth rate and logs growth only at a 56.5 percentile.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Jul 29 2024
U.K. Posts Weak Readings in Retailing
Bad weather is being cited for poor U.K. retail performance in July as sales compared to a year-ago in retailing fell to a net diffusion reading of -43 from -24 in June. However, expected sales are being marked down calling to question the notion that weakness is all weather-related.

Retailing Reported Sales- Orders compared to a year-ago dropped to a net reading of -40 in July from -14 in June. However, sales for time-of-year improved slightly to -36 in July from -39 in June. Stocks relative to sales moved sharply higher into a net +32 in July from a level of +3 in June. Stocks relative to sales showed a huge increase from June to July. The diffusion reading of +32 gives it a 97.5 percentile standing, a standing that has been its higher historically only about 2.5% of the time, marking it as quite unusual.

Sales Issues- An increase in stocks relative to sales like this would usually occur for unintended reasons and so this increase bolsters the argument that sales were unexpectedly weak in July. However, against this background, it’s also clear that sales compared to a year-ago, and orders compared to a year-ago, both have been weakening persistently from May, to June, to July; more than what can be explained by one-month’s bad weather. Sales for the time-of-year were also sharply weaker in June and July than they were in May despite the small improvement in July. The rank standings for both the sales measures and the orders show percentile standings in the bottom 10 percentile or lower by rank for all three of those metrics.

Expected Sales- However, with the July survey, we also get expectations for August. I would expect that if weather had been a primary factor causing conditions in July to be poor, we would expect some bounce back in August and that's not what we see in the survey. Instead for August, we see a sharp deterioration for expected sales compared to a year-ago and expected orders compared to a year-ago; both weaken in August compared to what had been posted for July. Once again sales for the time-of-year improved, this time in August to -21 from -29 in July. The expected stock-sales ratio is up sharply to 21 in August from zero in July and again to a 91.2 percentile standing. Meanwhile, the percentile standings for both the sales and the orders measures are weak in the bottom 15 percentile or lower.

Wholesaling Reported Sales- In wholesaling, we see a repeat of some of the dynamics that appear in retailing for July. Sales compared to a year-ago weakened sharply to -21 in July from -12 in June. Orders compared to a year-ago weakened to -11 in July from -6 in June. Sales for the time-of-year also weakened, and weakened more sharply, for wholesaling to -28 in July from +4 in June. The stock-sales balance for the time-of-year moved up modestly to +9 in July from +5 in June. The queue standings are still weak across the board, in wholesaling but quite different from what we observe for retail sales. Wholesale sales compared to a year-ago and sales for the time-of-year are both weak. But the year-ago measure has a 12.7 percentile standing and the time-of-year or seasonally-adjusted comparison is at a weaker 4.9 percentile standing. Orders compared to a year-ago have a 28.5 percentile standing, still weak, but not in the same dregs as those plumbed by sales measures. The stock-sales balance has a 36.3 percentile standing, elevated compared to the other measures, but again no comparison with the very high ranked standings that we see for inventories in retailing.

Expected Sales- Expected sales for August also show sharp deteriorations with sales compared with a year-ago falling to -19 in August from -4 in July. Orders compared to a year-ago fall to -11 in August from +2 in July. Sales adjusted for the time-of-year fall to -21 in August from -3 in July. The stock-sales ratio balance shows a rise to +9 in August from +4 in July. The ranked percentile standings once again produce the highest standings for the stock-sales ratio with a 39.6 percentile standing that is still below its median which resides at a standing at the 50-percentile mark. The two sales figures are quite weak with sales compared to a year-ago with the 13.3 percentile standing and sales for the time-of-year with a 9.8 percentile standing. Orders compared to a year-ago have a 27-percentile standing, still quite low and just above the lower quartile of its historic ranking of values.
by:Robert Brusca
|in:Economy in Brief
France| Jul 26 2024
France: The Olympics Come and Growth Goes?
The INSEE manufacturing survey and services survey for France both took a considerable step lower in July in the wake of some turbulent French elections and on the doorstep of France hosting the Summer Olympics. As I write this, there are reports of acts of sabotage on French railway lines intended to disrupt the Olympics. None of those actions is reflected in the data presented here today. But they may emerge in subsequent reports. The monthly drops reported here are the seventh largest for services back to 2000 and for manufacturing the ninth largest month-to-month drop.

Industry climate in France fell to 95.5 in July from 98.9 in June. Climate has a ranking at its 16.7 percentile which means it has been lower less than 17% of the time.

Manufacturing Manufacturing production expectations fell sharply to a reading of -18 in July from a reading of -11.6 in June. The standing for the reading is in its 19.8 percentile, implying that expectations have been lower less than 20% of the time.

The recent trend of production also slipped to -5.4 in July from -2 in June; survey respondents reported that their own industries personal likely trend slipped to -4.9 in July from +1.8 in June. The overall recent trend assessment for industry has a 15-percentile standing, while the personal likely trend standing has a 7.3 percentile standing; both are still extremely low readings.

Overall orders and demand slipped in July to -19.9 from-18.4 in June. That series has a standing at its 35.6 percentile. Foreign orders and demand slipped by more, dropping to -18.5 in July from a reading of -8.6 in June; that series has a 27.1 percentile standing.

Inventory levels rose in July to 8.8 from 8.4 in June and have a 44.5 percentile standing, closer to their historic median; the median occurs at a reading of 50%.

Prices show some lift in July with the own likely price trend rising to +7.0 from +3.7 in June and logging a 62.8 percentile standing, above its historic median. The manufacturing price level indicator rose to +6.9 in July from +2.9 in June, logging or below median 42-percentile standing.

The far-right hand column shows that most of these survey entries are lower than they were in January 2020 before COVID struck. Inventories are slight exception, and prices are an exception as well, showing more pressure now than there had been prior to COVID.
by:Robert Brusca
|in:Economy in Brief
Belgium| Jul 25 2024
Belgian Bank Index Shows Still Weak Industry
The Belgian National Bank index in July weakened to -12.3 from -11.1 in June. The -12.3 reading is the weakest since it was -12.8 in February. The index has not weakened greatly; however, instead it has languished in the -10 to -11 region. July stepped down to the -12 region, indicating ongoing morass for Belgian industry. The three-month change in the index worsened by 0.4 points; however, over six months it improved by 4.1 points, but over 12 months it improved by only 2.5 points. There is some improvement in the history, but the improvement over six months is stronger than over 12 months, a good sign except that over three months some of that gain has been given back. This leaves the trend in an uncertain situation.

The standing for the index is in its 14.3 percentile which leaves it very low in its queue of historic readings. Manufacturing alone has a 17-percentile standing, slightly better than for total industry, but still not too different from the total industry mark that is poor.

Manufacturing worsened in July to -14.9 from -13.1 in June. The production trend for manufacturing, however, has improved slightly, rising from -3 in May to -2 in June to -1 in July. The July reading is its best since a rogue improvement brought the index to zero in March. Setting that aside, this is the strongest reading since June 2023.

The domestic order trend, on the other hand, is weak and somewhat worrisome. In May the reading was -7; in June it fell sharply to -19 and in July it stayed in that region with the -20 reading. The domestic portion of demand for Belgian industry has weakened significantly in the last two months and stayed at that weaker posture.

Foreign demand during this period weakened as well. The foreign order trend in May was 0 that weekend -5 in June and improved only slightly to -4 in July.

Price trends show negative readings in May and June that turned to a positive reading of plus one in July.
by:Robert Brusca
|in:Economy in Brief