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| Sep 22 2025
Belgian Consumer Confidence Makes Modest Gain; On a Slow Improvement Track
This steady progression is underpinned by a six-month-ago reading of -10 and a 12-month-ago reading of -7. Belgium is an interesting mid-European economy. It is industrialized, it is middle-sized and it's in the middle of the monetary union itself.

When the performance of confidence in Belgium is compared with the European Monetary Union total, we find that there is an average correlation in confidence of 0.56 across seven key economies including the monetary union measure itself. Belgium has a 0.79 correlation with confidence in the Netherlands, 0.69 relationship with France and the 0.76 correlation with the EMU overall, so it's a reasonably consistent bellwether for what's going on in the monetary union. And the correlation is close to 0.5 with Italy and Portugal. Belgium's weakest correlation in the monetary union among these countries is 0.18 with Greece. This suggests to me is that Belgium is a country that's relatively plugged into the activity trend of the monetary union itself.

Belgium’s ranking for consumer confidence at 78.8% on data back to 1991; since January 2020, its consumer index is up by just 5 points, a very shallow gain for such a long period of time – but still a solid and firm ranking.

For the economic situation over the next 12 months, the reading has a ranking at its 17th percentile, substantial steep down from a 40th percentile standing of the past 12 months. That’s not a good sign.

Price trends are slightly elevated on a ranked basis but are falling month-to-month from July to August to September. However, sequentially since 12 months ago, they are on the rise- so the inflation picture is more complicated. Expected inflation (price trend) at a 69th percentile standing for the next 12 months, is down from what is now a 77.9 percentile standing over the previous 12 months.

However, unemployment expectations are mild and falling both short term and sequentially with a low 9 percentile queue standing. That is very good news.

The financial situation of households is little changed on both short- and long-term trends with modest near median ranking for the next- was well as the last-12-months.

The appraisal of the current situation is down a notch in the month and sequentially has eased a bit as well but stands with an 83.2 percentile ranking, one of the highest standings in the table.

Household standings have a high 94.4 percentile standing, the favorability to save at the 74.6 percentile mark.

On balance The Belgian readings are solid and mostly upbeat. Inflation readings show concerns more than fear about what might be happening on the price front. On the whole, the response standings and trends are a positive signal for this country set in the belly of the European Union.
by:Robert Brusca
|in:Economy in Brief
Germany| Sep 19 2025
German PPI Shows Ongoing Release of Inflation Pressure
The German PPI report showed a drop of 0.5% in the August headline, continuing a string of inflation data on the producer price front that is laying a solid disinflationary trend for the German economy. The PPI rose by 0.1% in July and in June. Sequentially the PPI falls 2.2% over 12 months, falls at 3.9% annual rate over six months, and falls at a 1.3% annual rate over three months, an impressive record of inflation discipline at a time that consumer inflation has been running hot globally.

Germany's PPI excluding energy also fell in August, dropping by 0.2% on the month after being flat in July and rising 0.1% in June. The PPI excluding energy for Germany rises 0.8% over 12 months, rises at a 0.8% annual rate over six months, and falls at a 0.3% annual rate over three months. The inflation discipline extends past energy; it is not simply disciplined energy prices although that has been part of the story.

Sectoral German PPI data are not seasonally adjusted making their sequential patterns a little bit less dependable. However, sequentially German consumer prices show inflation has been dropping, the same is true for investment goods, whereas for intermediate goods, not only is inflation dropping but prices are dropping too; inflation is negative over 12 months, six months and three months with the 3-month drop in intermediate prices at a -3.4% annual rate.

The behavior of producer prices compares to modest results on the CPI front where, sequentially, the German CPI rose 2.3% over 12 months, at a 1.8% pace over six months, and then at a 2% pace over three months, all well-contained changes. The CPI excluding energy rose by 2.6% over 12 months, 2.5% over six months, and 2.4% over three months showing a very slight deceleration with inflation looking still very sticky at about 1/2 of a percentage point above what is the target pace set by the ECB for the European Monetary Union as a whole.
by:Robert Brusca
|in:Economy in Brief
Australia| Sep 18 2025
Australian Unemployment Steady and Low Despite a Broader Rising Trend
Unemployment in Australia in August remained low, standing at 4.2%, the level it dropped to in July. June brought a rise in unemployment to 4.3% after posting 4.1% in May. However, at 4.2% the unemployment rate in Australia is low, since about 2000 the unemployment rate has been lower only about 16% of the time.

The labor force participation rate in August fell to 66.8 from 67.0 where it had been for the previous several months. The participation rate, however, is high on historic comparison at about the 95th percentile; the participation from people ages 15 to 64 is even higher with a 97.7 percentile standing on the participation rate of 80.6%.

However, employment gains in Australia have been slowing. The year-over-year gain is 1.5%, over six months, employment speeded up, gaining a pace of 1.9% at an annual rate, but over three months the growth rate for employment has fallen to a sharply lower 0.6% annualized.

Australia's labor force fell by 0.5% in August after rising robustly in previous months. The labor force was rising by 1.6% over 12 months, at a 2.2% annual rate over six months and at a 1.3% annual rate over three months. There's been some variability in labor force growth, but it still seems to be relatively solid. The year-over-year growth rate, however, has a ranking only in its 33 percentiles historically back to the year 2000- a lower one-third standing.

In terms of the overall economy, retail sales have picked up; some of this is inflation. The growth rate for retail sales over three months is 7.1%; over 12 months it's 4.9%. Headline inflation grew by 2.8% over 12 months, but it's rising over three months at a stronger 4.2% annual rate. Inflation excluding volatile measures has been relatively stable over three months, six months, and 12 months. However, it picked up quite considerably in June, rising at a very rapid double-digit pace.

Australia's low and consistent unemployment rate is in step with what's going on internationally. Globally there is stability or some small backtracking on unemployment gains made since COVID. In the European Monetary Union, we're looking at unemployment rates consistently low over 12 months, 3 months, and 6 months at a historically low level. Japan's unemployment rates are consistent and low near historically low levels as well. In the United States and in the United Kingdom, unemployment rates are relatively stable. The U.K. shows some drift up in its unemployment rate. But both the U.S. and the U.K. have unemployment rates that have been lower only about 30% of the time.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Sep 17 2025
U.K. CPIH Inflation: Stable and Excessive
Inflation in the United Kingdom in August rose by 0.3% on the CPIH measure; excluding food, alcohol, energy, and tobacco (core), the increase was a milder 0.2%. Headline inflation in the U.K. runs at a 4.3% annual pace over three months; the core measure runs at a 3.6% annual rate pace, a bit weaker but still over the top of the U.K. 2% target.

Sequential trends: Sequential inflation in the U.K. is stubborn at 4.1% over 12 months, at a 3.9% annual rate over six months, and at 4.3% an annual rate over three months - a pace that is consistent, steady, and excessive. Core inflation runs at 4% over 12 months, edges down to a 3.6% annual rate over six months and stays at 3.6% over three months - still relatively steady and excessive but with a hint of progress.

Inflation monthly: In August among the 10 detailed categories, inflation accelerated in five of them, in July it also accelerated in five of them, and in June there was an acceleration in four of them. Diffusion calculations show that the tendency for inflation to accelerate across categories, the headline and core has been slightly below the 50% mark making inflation slightly disinflationary.

Sequential diffusion: Sequentially diffusion has been behaving better, with 12-month inflation higher than 12-month-ago inflation by a slight margin with the diffusion reading of 54.5%. However, over 6 months comparing inflation to 12-months across categories, diffusion is only 45.5%, and over 3 months comparing inflation to inflation over 6 months, the diffusion calculation steps down to 36.4%. When diffusion is above 50%, inflation is accelerating in more categories than it is decelerating; when it's below 50%, inflation is showing more deceleration than it is acceleration. These diffusion calculations are encouraging, although they are only indications of breadth not of importance because they just compare across categories and they are executed without weighting. The headline and the core measures bring weighting into play, and we see the impact of that by comparing those measures sequentially. Still, diffusion is an interesting measure on its own because it helps to show how widespread pressures are.

U.K. unemployment- At the same time, that inflation has been stubborn. The unemployment rate in the U.K. has gradually been creeping up. The U.K. claimant rate of unemployment, which is just a little bit more topical, has been slightly more stable sequentially than the overall unemployment rate and in June and July that rate of unemployment gauge edged slightly lower. However, it's a different concept than for overall unemployment although the two readings are similar in terms of their levels when ranked over the same. They're very different with the unemployment ranking through June 2025 at 34.5% while the June claimant unemployment rate ranking is high relative to its historic experience at its 75.3 percentile - much higher.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 16 2025
Finalized EMU IP Shows More Strength
The finalized version for EMU industrial production in the European Monetary Union in July showed that much better than preliminary data had suggested. Overall output rose 0.3% in July, but output in manufacturing on the month rose by 0.7%. Consumer goods output rose by 1.4% on the month with consumer durables output up by 1.1% and nondurables output up by 1.5%. Intermediate goods output rose by 0.5% with capital goods output rising by 1.3%. All of these are very solid numbers.

The median result for reporting European Monetary Union members had shown a decline of 0.6% for manufacturing output. And, of course, the problem with that is that it's a median among countries without weights being applied to account for size. Germany, for example, showed an increase in output in July of 2.2% in its manufacturing sector, France showed a decline of 1.6%, Italy showed an increase of 1.4%, with Spain showing a rise of 3.8%. That's three of the largest 4 monetary union members showing solid increases in output.

Sequential data showed that output is holding up quite nicely with growth 2.2% over 12 months, up 3.1% at an annual rate over six months and up by 2.5% in an annual rate over three months. For manufacturing, the results are roughly the same, with a 2.1% gain over 12 months, 3.5% annualized over six months and 2.4% annualized over three months.

The quarter-to-date numbers showed that output is developing nicely in the third quarter with overall output up at a 1.2% annual rate as of July, the first month in the quarter with that growth rate representing annualized growth in July over the second quarter average; manufacturing output on the same basis is up at a 2.6% annual rate. All the sector growth rates are positive as well QTD except for intermediate goods.

Percentile queue standings rank current growth rates among past historic growth rates (back to 2007) and on this basis, overall production growth has a 63.3 percentile rank, manufacturing has a 60.1 percentile rank, consumer goods IP is extremely strong with a 98.2 percentile rank, pushed ahead by nondurables that have a 98-percentile rank. Consumer IP growth is held back somewhat by consumer durables that have only a 45.9 percentile ranking, below its median for the previous period. Intermediate goods and capital goods also have below-median rankings (rankings below 50%) at the 43.6 percentile for intermediate goods and 42.2 percentile for capital goods. Still, none of the sectors is particularly weak; being at the 42nd percentile or better means that the shortfall from the median is not extreme and the weighted average for overall production and for manufacturing still stands in its 60th percentile or better.

As we look down the column to look at country-specific manufacturing readings, we find that there are only 4 of 13 reporting monetary union members with manufacturing output below its median in July. And those countries are Finland, the Netherlands, Luxembourg, and Greece, all moderate to small-sized economies.

On balance, the performance the monetary union output in July is quite solid. And these readings are joined by an August reading for IP in the United States that showed a surprising positive turn on the month. It's too soon to say that conditions globally are improving faster or more than had been expected; however, there is a whiff of that in the air despite some sour readings on job growth in the United States.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 15 2025
EMU Trade Surplus Expands But Stays on Lower Trend Pace
In the wake of U.S. tariff implementation, we, of course, look for evidence of the impact of that action on global trade performance. In the July trade report for the EMU, there is little direct evidence of a draconian impact on trade in the EMU that coincides with changes in U.S. trade policy. Of course, the EMU picture is of the external trade of that community with the world and not just the United States. But such dire predictions had been made of the impact of U.S. tariff policy that it is very worthwhile to note that such cataclysm has not appeared. Has there been some trade impact? Certainly! Has there been some increases in uncertainty? Yes. But nothing has brought global trade to a screeching halt. In fact, the Baltic Dry goods index shows a rise in trade volumes since early 2025. The current level is comparable to or higher than 2024 and last persistently stronger in 2022.

The euro area trade surplus at 5.3bln euros is higher in July than in June but is much weaker than its 3-month, 6-month, and 12-month averages. In round numbers, the 3-month average is €8bln, the 6-month average is €15bln and the 12-month average is €13bln. So, July runs at less than half the pace of the 12-month average. That may be evidence of U.S. tariff impact.

The overall balance sees disproportionately large-looking effect because it is smaller…smaller than what? Well, the manufacturing surplus is at 27bln euros in July, up by 3bln euros from June, about 3bln euros below the 3-month average of 30bln euros and about 8bln euros below the 12-month average. An eight billion drop on a level of 35bln seems smaller than and eight billion euro drop on 13 bln…but eight billion euros are eight billion euros- but that is only 2.2% of total exports. How we view relativity is important. Is that the draconian U.S. tariff impact?

The nonmanufacturing deficit in the EMU is almost unchanged by month or on any average (at minus 22bln euros).

Growth rates for manufacturing exports show contraction and a worsening trend from 12-months to 6-months to 3-months. This is not so for nonmanufacturing exports that log a strong double-digit rise over three months. EMU manufacturing imports show very steady slow growth with modest decay… not so for nonmanufacturing imports that log strong double-digit gains over three months.

Country level trends By country, German exports show growth rate erosion, French exports show acceleration, Italy shows a slowdown but at a still-strong double-digit pace for three months. Finland, Portugal, and Belgium show exports in a state of decline or weakness- mostly decline. The United Kingdom, not an EU member, shows an erratic trend but with 3-month export growth in double digits. There is some export weakness here to be sure but nothing that looks very severe.

On the import side, German imports melt down to a 3-month low annualized pace of +0.1%. French imports speed up to a 6.6% pace over 3 months. The U.K. looks at positive- if irregular- import growth.
by:Robert Brusca
|in:Economy in Brief
Japan| Sep 11 2025
Japan’s PPI Plods Ahead
Japan’s PPI data reveal that not all the inflation measures are flashing danger or warning signals. Japan's preferred CPI gauge that excludes energy & fresh food, for example, is one of the hottest gauges of inflation. It happens to be the gauge that the Bank of Japan emphasizes the most and so it has put policy somewhat on edge worried about inflation.

However, the other Japanese metrics are not showing the same degree of inflation that that one is showing. The PPI from Japan was up by 0.2% for the second month in a row in August after falling by 0.2% in June – a very restrained performance. The 12-month inflation rate is 2.7% that falls to 1.1% over six months, then to 0.6% over three months – all at annual rates. For all of manufacturing, the PPI is up by 1.6% over 12 months, flat over six months and then back up to 1.3% over three months; none of these are particularly troubling inflation gauges although I recognize that the PPI is not the CPI and this is not the target of monetary policy.

Still, for Japan, it's reassuring to see that inflation is not simply running wild. In fact, when viewed in several different ways, it's actually rather controlled.

Viewing inflation in Japan and the context of trends in the United States and then the European monetary Union, we find that the broad pressure inflation is concentrated in the U.S. although it may not be tariff-related. In Europe, inflation is broadly controlled. The U.S. is showing the most pressure and of course it has the strongest economy, and it also has an ongoing problem with tariffs that are putting some extra measure of pressure on prices. The U.S. PPI generates a very strong inflation rate over three months - and even an elevated 12-month reading of 3.5%. However, we don't see anything like that coming out of the European Monetary Union where year-over-year inflation is barely positive even though over the most recent three months inflation has accelerated to a 2.2% annualized rate. That's still a relatively subdued rate.

In Japan, the ordinary CPI and the core show relatively subdued inflation over the last year. The headline CPI is 3.1% over 12 months, but it dives under 2% over six months and to a 2.2% pace over three months. Japan's core is only 1.6% over 12 months and its annual rates are under 2% for six months as well as for three months. The inflation situation in Japan, particularly for producer prices, seems to be in pretty good shape with the quarter-to-date inflation rate for the PPI at 0.6% and for all of manufacturing at 0.8%. With oil prices remaining moderate, the outlook for inflation to remain in this more moderate range is still good, and Japan continues to have weak growth; demand should not be putting pressure on inflation. The Bank of Japan should be relatively happy with Japan's producer price number, the domestic corporate goods price index for August.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 10 2025
Euro Area IP Tends to Weaken in July
Industrial output in the European Monetary Union predominantly fell in July as 14 early reporting monetary union or economic union members demonstrated that 8 of them logged a decline in industrial production in July. Sticking to only monetary union members there were declines in eight of the 12 reporting countries – a poor month for EMU members.

For the full group of 14, the median change was a decline of 1% in July after logging a median increase of 0.2% in June and a median decline of 0.7% in May. Sequential results show a median increase over 12 months of 1.4% for this full group, a median increase of 4.5% using annual rate data over six months, followed by a 3-month annual rate median decline of 1.4%.

Over three months among the 14 reporting countries, 8 show increases; however, 6 show declines and the declines that are logged are all large, starting with the decline of 21% at an annual rate in Luxembourg, 13.4% in Finland, a decline of 10.8% in Portugal, a decline of 8.3% in Malta, a decline of 4.9% in the Netherlands, and a decline of 4.3% in Ireland. The countries with declines over three months are experiencing very significant and sharp declines.

Looking at the full slate of countries over three months, only 33.3% are showing output accelerations. That compares to 6-months when only 30.8% show output accelerations; however, over 12 months compared to 12-months ago, two-thirds show output acceleration. Acceleration is fairly broad-based when compared to a year ago, but over shorter horizons there's clearly more of a slowing in progress and less uniformity.

This is early in the third quarter; industrial production data show six countries already indicating quarter-to-date output declines in Q3.

Interestingly, the queue rankings data executed on year-over-year growth rates have become much firmer and stronger. There are only 4 reporting countries in the table with year-over-year growth rates ranked below the 50th percentile: Finland, the Netherlands, Greece, and Luxembourg. The average of the median ranks is at the 64th percentile mark, a nearly top one-third standing. Germany, France and Italy have standings well into their respective 60th percentiles– for Germany, in the 70th percentile. IP growth in manufacturing is scoring out at a more resilient performance level despite the drift into recently weaker growth rates. This will be a trend worth watching.
by:Robert Brusca
|in:Economy in Brief
France| Sep 09 2025
French IP Is Expanding But Had a Tough Month
The end of summer is turning out to be a difficult time for France even though industrial output is in a seemingly solid trend. Output in June rose by 3.5%, it did that after a weak May when output fell by 1.1% and now in July output is falling by 1.6%. By itself, the manufacturing trend is simply not that worrisome, but it is built upon somewhat more convoluted trends with July’s drop. Add this complication to a political environment that is quite difficult as in real time, in September, France's government is being dissolved, the Prime Minister is being dismissed, and President Macron is under pressure. There is a decidedly split and fractured legislature to deal with as he is going to have to appoint yet another prime minister, the second lost government in less than a year. Macron continues to resist calling elections or stepping down himself.

France has been called out by the markets for the size of its government sector and its debt as Macron’s earlier tax cuts produced fiscal deficits not growth. French deficits continue to push up bond yields toward levels being paid by Italy. The U.K. is also under pressure for its substantial indebtedness and its inability to get control of its economy and generate growth. None of these are new trends and certainly not foreign to anyone in the United States where large fiscal deficits, concerns about future fiscal deficits, and President Trump's own concern about deficits as exhibited by his attempt to try to push interest rates down to reduce the interest cost of the debt. This has pushed the fiscal budgeting process into the mainstream of making monetary policy creating a clash over central bank independence in the United States- with reverberations abroad.

The best way to keep debt or the size of the government sector from becoming a problem is to control it and none of these governments seem to have been able to do that. A country that is going to rely on debt and increasing indebtedness is pushing the day of reckoning out on the future generations. That becomes increasingly unpalatable as population growth has been slowing. Slowing population growth and rising debt levels are an extremely bad combination and yet we see these as real international trends.

In France, the one-year trend for industrial production in manufacturing is still relatively solid at 1.5% growth over 12 months, stepping up to 4.5% at an annual rate over six months and up to 8.2% annualized over three months. On the face of these figures, if they hold up, the progression for growth is pretty good. However, when we see what produces these results in the table, which is a sharp drop in May and July, with a sharper increase sandwiched in between, we are left wondering whether the sequential trend is going to hold up at all. Consumer durable goods output trends are one of the reasons that that output trend in manufacturing is so strong with positive growth in May, June and July; the sector logs 12-month growth of 3.7%, 6-month growth at 9.2% at an annualized rate, and 3-month growth at a stunning 17% annual rate. That would seem to be a lot of strength to carry the day, but consumer nondurables output trends point in the opposite direction with -0.6% over 12 months, a -1.2% annual rate decline over six months and then -5.7% at an annual rate over three months. The capital goods sector sides with growth with a 4% rate over 12 months and an 8.5% pace over six months and that largely holds up at 8.1% over three months. However, the sequential growth rate for intermediate goods shows a drop in output of 0.8% over 12 months, a nice rebound with a 3.9% annual rate over six months and then the declining pace of 1% annualized over three months – a bit less coherence.

Transportation output in France is considerably stronger than the trends in motor vehicle registrations. Even though output in the auto sector continues to be quite firm to strong, registrations are weakening. That can’t be good.
by:Robert Brusca
|in:Economy in Brief
Germany| Sep 05 2025
German Factory Orders Plunge on Domestic Weakness
Germany's factory orders declined for the third straight month in July. Real new orders fell 2.9% month-on-month in July, against expectations for a small increase. The drop was sharper than a 0.2% decrease in June; foreign orders declined 3.1% in July, as orders from the euro area contracted 3.8%, and orders from outside the euro area fell by 2.8%. These metrics suggest that demand both inside and outside the euro area remains weak. Domestic orders dropped 2.5% in July, an exact offset to their gain in June. When ranked on growth rates over the last 30 years, all three sector growth rates are below their medians (below a ranking of 50%). However, when ranked on the real index number level, total orders rank at their 55.6 percentile, foreign orders rank at their 79.5 percentile and domestic orders rank at their 15.2 percentile. All-in-all it’s an unimpressive report.

Orders sequentially and QTD: Sequential trends are ambivalent but still clearly weak. Sequential growth rates do not show a clear acceleration/deceleration pattern. But for total, foreign and domestic real orders, both 3-month and 12-month growth rates are negative (one exception: foreign orders over 12 months). Domestic orders show negative growth over 6 months as well. Quarter-to-date growth rates are negative for all sectors.

Sales trends: Real sales are mixed in July, rising 0.9% overall on declines in two sectors: consumer durables and intermediate goods. Sector sales mostly maintain growth as manufacturing sales are positive based on growth rates over 12 months, 6 months, and 3 months. Consumer goods and intermediate goods sales show deceleration and ongoing contraction. Consumer durable goods and intermediate goods show QTD declines. On the manufacturing & mining to total, manufacturing and capital goods show index standings above their respective 50% on 30 years of data. That also shows above-median growth rates on annual data along with consumer goods and consumer nondurable goods.

Industrial confidence: Industrial confidence measures for Germany, France, Italy, and Spain, the four largest EMU members, show improved (but still net negative readings) in July compared to June. Over three months and six months, Germany and Italy show some improvement; France still shows steady deterioration. Spain shows improvement over 3 months and it is only slight improvement. The queue standings for the industrial reading over 30 years of data show Spain with an above-median reading in July. Germany and France are exceptionally weak and Italy has been weaker only 26% of the time based on the queue standing measure. Not only are German orders and demand weak and faltering but the broad EU Commission measures of industrial confidence show broadly weak readings for the largest economies in the EMU.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 04 2025
Monetary Union Retail Sales Ease as Vehicle Sales Pop
Retail sales volume in the euro area fell by 0.5% in July after rising by 0.6% in June. The three-month percent change is -0.8% at an annual rate; over six months real retail sales volumes are rising at a 1.6% annual rate and over 12 months they're rising at a 2.2% annual rate. The slowdown in retail sales volume growth has been steady from 12-months to 6-months to 3-months.

For motor vehicle registrations, the patterns are much choppier with an 11.5% increase in registrations in the EU in July after a drop of 4.6% in June, and a larger drop in May. Over 3 months monetary union motor vehicle registrations are falling at a 3.4% annual rate, after rising at an 8.7% annual rate over 6 months; over 12 months that gain is cut to a 5.9% annual rate. There's no clear trend here for motor vehicle registrations, except to note that over 3 months conditions are much weaker and that is mostly driven by June and May because July was quite strong. In the big picture, vehicle sales have been flat and moving sideways for quite some time in the monetary union- since COVID registrations are lower on balance by 10.5% even with the spike in sales in July.

Individual countries show quite different results. Germany is showing persistent deceleration in retail sales volume growth from 12-months to 6-months to 3-months, culminating in negative numbers for growth over 3 months and 6 months. For Denmark, a country that's not part of the single currency union, there's a hint of a slowdown with growth rates of 3.4% over 12 months and 3.6% over 6 months to give way to a 1.2% rate of increase annualized over 3 months. Both Sweden and Norway show real retail sales volumes in a slippage mode as growth rates ease over 6 months compared to 12 months and then ease again over 3 months compared to 6 months. For Sweden, the 3-month growth rate is a negative result at -5.7% at an annual rate.

In the quarter to date - and this is an early calculation since it's July - the monetary union is starting off with a negative growth rate of -1.2% at an annual rate for total retail sales volumes; this is affected strongly by a -6.5% annual rate reported by Germany, the largest economy and the euro area. There are positive growth rates on a quarter-to-date basis for the rest of the reporters in the table. The Netherlands logs a 21.9% annual rate increase; that strength has at least as much to do with the weak second quarter base as with surging sales in July.

Checking on the performance of sales back to January 2020 when COVID first appeared, total sales volume in the euro area are up 5.1% over that five-year span. Sweden logs no increase, Germany logs an increase of 2.1%, Norway logs an increase of 4.6%, with Denmark up by 4%. The strongest increases on this broad basis come from Spain with an 8.1% increase and the Netherlands with a 7.2% overall increase. Even so, for a five-year period, none of these growth rates are impressive. Clearly the European Monetary Union has been in a dead spot having a difficult time recovering from COVID, dealing with the war, and all of its displacement involving Russia and Ukraine, as well as the aftermath of the inflation from COVID, and what has been an ongoing restrictive monetary policy from the European Central Bank.
by:Robert Brusca
|in:Economy in Brief
Global| Sep 03 2025
S&P Composite PMIs Improve in August
The S&P composite PMIs in August have advanced broadly with only four of 25 reporters showing weaker conditions in August compared to July. In July 13 of these same reporters showed worsening conditions and in June 12 reporters showed worsening conditions. August is a marked turnaround for this survey. One caveat is that the U.S .data in this report continued to use the preliminary services estimate because the final U.S. estimate is not yet available.

Over three months compared to six months, 9 of 25 reporters show worsening conditions. Over six months compared to 12 months, 12 of 25 reporters showed worsening conditions. Over 12 months compared to a year ago, 15 reporters out of 25 showed worsening conditions. There has been a progression in terms of the breadth for reporting countries that are showing improvement in addition the overall average. It has improved slightly from 51.7 over 6 and 12 months to 51.9 over 3 months. The medians have improved from 51.1 over 12 months to 51.5 over 6 months to 51.6 over 3 months, a slightly clearer progression toward better results. Still, both of them are on fairly thin margins of improvement. However, June to August the averages and medians show a little bit more movement and a little more progression to better readings.

The statistic that is perhaps most encouraging is the one about the percentage of reporters that are weaker in August; only 16 were weaker compared to July; in July 52% were weaker compared to June, but in June 48% were weaker compared to May. Looking at the broader progressive period, 39.1% are weaker over 3 months, 52.2% are weaker over 6 months compared to 39.1% weaker over 12 months. The proportion of reporters weakening over these horizons is moderate on the order of 40% to 50%- tending to readings below 50%.

The queue percentile standings show only 8 reporters out of 25 have standings below their median since January 2021.

The chart on top depicts separately the services business activity index for the euro area versus the euro area manufacturing PMI. While the services readings have been relatively stable - perhaps trending slightly to weakness from earlier in the year - manufacturing PMIs have been improving consistently and strongly. At first it was thought that this was manufacturing activity that was ramping up to try to create output to export before U.S. tariffs went into effect, but since the tariff deadline has come and gone, manufacturing has continued to stay strong and to further strengthen. This is an unexpected and impressive trend.
by:Robert Brusca
|in:Economy in Brief