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InternationalEconomicTrends May 2010 Economic Growth and the Global Savings Glut E 19 53 19 56 19 59 19 62 19 65 19 68 19 71 19 74 19 77 19 80 19 83 19 86 19 89 19 92 19 95 19 98 20 01 20 04 merging countries are generally expected to have low only makes people save more excessively than they would othersavings rates and high investment rates. Citizens of such wise, but their saving rate also increases with income growth. Thus, economic theory predicts that fast growth can lead to countries are not expected to save a lot because their high saving rates if people lack financial institutions that allow incomes are rising rapidly; why should they save a lot—forgoing them to borrow. This prediction is consistent with empirical evicurrent consumption—when they will be much richer soon? dence. For example, the average household saving rate in China Similarly, emerging countries—where capital is scarce—will in the past 30 years has increased as income has grown and is tend to invest heavily because the returns to additional capital currently around 30 percent, despite low interest rates (see the are high. A combination of a low savings rate and a high investchart). China’s financial system has not yet caught up with its ment rate means that emerging markets would tend to borrow to economic growth. Japan in the 1960-70s and South Korea in the import capital goods, thereby running current account deficits 1980-90s experienced similarly high saving rates during their and capital account surpluses. On the other hand, rich countries fast-growth periods. would have lower investment, higher savings, and large current The underdeveloped financial systems of emerging countries account surpluses. have restricted their citizens’ ability to borrow against future In fact, however, the opposite is occurring: Many emerging income, limited their investment opportunities, and diverted their countries, particularly China, save a great deal and run current savings toward developed countries. These global savings/ account surpluses, while the United States saves very little and investment imbalances are likely to persist until emerging counruns current account deficits. As a result, capital flows from tries develop sophisticated financial and banking systems. where it is scarce—in the emerging markets—to where it is —Yi Wen relatively plentiful—in the developed world. Carroll, Christopher D., Overland, Judy and Weil, David N. “Saving and Growth What causes this seemingly counterintuitive flow of capital? with Habit Formation.” American Economic Review, June 2000, 90(3), pp. 341-55. One reason is that emerging economies save a great deal despite— Friedman, Milton. A Theory of the Consumption Function. Princeton, NJ: or perhaps because of—their fast income growth. Empirical Princeton University Press, 1957. evidence suggests that high growth leads to high saving, rather Wen, Yi. “Saving and Growth under Borrowing Constraints: Explaining the than vice versa (see, e.g., Carroll, Overland, and Weil, 2000). ‘High Saving Rate’ Puzzle.” Working Paper No. 2009-045B, Federal Reserve The idea that high income growth induces high savings rather Bank of St. Louis, revised October 2009; http://research.stlouisfed.org/wp/2009/2009-045.pdf. than decreases them seems to contradict Friedman’s (1957) permanent income hypothesis (PIH). The PIH argues that people like “smooth” consumption; they Household Saving Rate and Income Growth (China, 1953-2004) don’t like to starve in one period and gorge in another. Interest Rate and Income Growth Therefore, if they can borrow and lend, their consumpHousehold Saving Rate (10-year moving average) tion is determined by their lifetime average income, 0.10 0.45 not just current income. Thus, people who expect higher Household Saving Ratio 0.09 0.40 income in the future should borrow against that future 3-Month Deposit Rate 0.08 0.35 income, or at least not save as much. But in reality, Long-Term Income Growth 0.07 0.30 people (especially those in emerging markets) often 0.06 0.25 save a lot despite expectations of higher income in 0.05 the future. 0.20 0.04 A key reason for this apparent contradiction is 0.15 0.03 that the PIH assumes that people can borrow freely 0.10 0.02 to consume future income when their current income 0.05 0.01 is low. Wen (2009) shows that when people are subject 0.00 0.00 to borrowing constraints, their marginal propensity to –0.05 –0.01 save increases with income because they must accumulate money for emergencies—called “precautionary SOURCE: Wen (2009). saving”—rather than being able to borrow money for such contingencies. That is, the inability to borrow not Views expressed do not necessarily reflect official positions of the Federal Reserve System. research.stlouisfed.org Contents Page 3 Reference Tables 5 Canada 11 Euro Area 16 France 20 Germany 24 Italy 28 Japan 34 United Kingdom 40 United States 46 Notes and Sources Conventions used in this publication: 1. Charts and tables contain data that were current through April 2010. Unless otherwise indicated, data are quarterly. 2. The percent change refers to the percent change from the same period in the previous year. For example, the percent change in x between quarter t – 4 and the current quarter t is: [(xt /x t – 4)–1] ×100. 3. All data with significant seasonal patterns are adjusted accordingly. We welcome your comments addressed to: Editor, International Economic Trends Research Division Federal Reserve Bank of St. Louis P.O. Box 442 St. Louis, MO 63166-0442 or to: stlsIET@stls.frb.org International Economic Trends is published by the Research Division of the Federal Reserve Bank of St. Louis; the annual edition is published in July. Visit the Research Division’s website at research.stlouisfed.org/publications/iet to download the quarterly issue of this publication or register for e-mail notification updates. For more information on data in this publication, please call (314) 444-8590. International Economic Trends Reference Tables Real Gross Domestic Product Percent change from year ago Canada Euro Area France Germany Italy Japan United Kingdom United States 07.1 1.82 3.45 2.55 3.77 2.32 3.31 2.44 1.42 07.2 2.56 2.71 1.85 2.58 1.83 2.36 2.71 1.86 07.3 2.99 2.68 2.49 2.47 1.41 1.87 2.69 2.74 07.4 2.76 2.16 2.13 1.58 -0.03 1.72 2.40 2.53 08.1 1.69 2.14 1.84 2.86 0.16 1.14 2.41 2.04 08.2 0.70 1.41 08.3 0.27 0.37 08.4 -0.97 -1.89 09.1 -2.54 -5.03 1.03 1.96 -0.62 -0.21 1.67 1.60 0.12 0.83 -1.58 -1.34 0.24 0.03 -1.67 -1.77 -3.43 -6.70 -6.26 -8.40 -5.33 -3.30 08.2 5.74 3.72 08.3 5.97 2.60 08.4 0.77 0.43 3.55 3.42 2.59 -1.55 4.60 3.58 2.56 2.24 0.77 -2.49 2.84 2.59 0.75 0.16 -0.77 -3.89 1.13 0.07 -5.24 -3.31 -8.04 -3.86 -1.36 -3.24 -4.33 -2.10 -1.86 09.2 -3.47 -4.86 -2.74 09.3 -3.35 -4.07 09.4 -1.22 -2.16 -5.76 -6.11 -5.98 -5.90 -3.83 -2.31 -4.78 -4.81 -4.92 -5.29 -2.64 -0.27 -2.38 -2.99 -1.40 -3.13 0.06 09.2 -6.91 -3.82 09.3 -6.62 -3.18 09.4 -0.76 -1.77 -1.78 -4.47 -4.55 -6.60 -4.95 -2.39 -1.82 -2.93 -2.55 -5.60 -3.59 -2.09 -0.17 -1.35 -1.81 -4.29 -1.67 0.74 10.1 . 1.10 1.45 0.81 1.26 . . 2.42 Nominal Gross Domestic Product Percent change from year ago Canada Euro Area France Germany Italy Japan United Kingdom United States 07.1 4.46 5.93 5.14 5.55 4.66 2.70 5.52 4.64 07.2 6.09 5.25 4.50 4.56 4.04 1.89 6.10 4.87 07.3 5.77 5.22 5.11 4.58 4.29 1.10 5.39 5.40 07.4 6.56 4.62 4.50 3.58 3.17 0.55 5.03 5.34 08.1 5.33 4.33 4.33 4.21 2.88 0.00 5.52 4.19 09.1 -3.80 -3.29 -1.71 07.3 2.11 1.88 1.34 2.18 1.69 -0.17 1.76 2.35 07.4 2.41 2.89 2.54 3.07 2.58 0.52 2.08 4.01 08.1 1.83 3.37 3.31 3.07 3.28 1.01 2.40 4.16 08.2 2.33 3.63 3.68 3.02 3.77 1.36 3.37 4.30 08.3 3.43 3.85 08.4 1.89 2.30 09.1 1.28 0.96 09.2 0.03 0.17 09.3 -0.86 -0.37 09.4 0.78 0.42 3.64 3.27 4.07 2.14 4.81 5.27 2.03 1.68 2.89 1.02 3.87 1.56 0.69 0.78 1.35 -0.11 3.02 -0.16 -0.25 0.25 0.86 -0.99 2.12 -0.97 -0.45 -0.43 0.13 -2.26 1.46 -1.60 0.42 0.34 0.73 -2.04 2.09 1.46 07.3 2.29 1.88 1.68 1.58 1.55 0.31 0.89 0.96 07.4 2.42 1.71 1.83 1.66 0.95 0.24 0.70 0.43 08.1 2.08 1.52 1.40 1.62 0.57 0.09 0.87 0.07 08.2 1.89 1.12 0.88 1.48 0.13 -0.43 0.67 0.09 08.3 1.37 0.48 08.4 0.75 -0.15 09.1 -1.25 -1.26 09.2 -1.79 -1.79 09.3 -1.83 -2.05 09.4 -1.47 . 10.1 0.43 . 0.21 1.38 -0.88 -0.58 -0.08 -0.48 -0.88 1.09 -1.11 -2.50 0.06 -2.72 -0.77 -1.16 -1.54 -2.19 0.44 -2.04 -0.76 -1.92 -3.19 . -0.24 -2.96 -1.77 -2.75 -4.06 . -0.37 -3.13 -1.88 -2.15 -4.02 . . . . . -2.09 07.3 6.00 7.43 8.20 8.27 6.20 3.77 5.27 4.63 07.4 5.97 7.33 7.90 8.03 6.30 3.87 5.07 4.80 08.1 5.93 7.23 7.63 7.63 6.53 3.90 5.13 4.97 08.2 6.07 7.37 7.67 7.37 6.80 3.97 5.27 5.30 08.3 6.13 7.60 08.4 6.50 8.00 09.1 7.80 8.80 09.2 8.40 9.30 09.3 8.53 9.67 09.4 8.40 9.87 7.83 7.13 6.73 4.03 5.83 6.03 8.20 7.10 7.00 4.07 6.30 6.97 8.90 7.30 7.37 4.47 9.40 7.60 7.50 5.13 7.70 9.27 9.70 7.57 7.80 5.43 7.80 9.63 9.97 7.50 8.20 5.23 7.73 10.03 10.1 . . . . . . . 9.70 Consumer Price Index Percent change from year ago Canada Euro Area France Germany Italy Japan United Kingdom United States 07.2 2.14 1.87 1.24 1.96 1.84 -0.06 2.57 2.67 Employment Percent change from year ago Canada Euro Area France Germany Italy Japan United Kingdom United States 07.2 1.99 1.71 1.71 1.65 0.53 0.90 0.44 1.26 -2.07 -2.61 -3.82 Unemployment Rate Percent Canada* Euro Area* France* Germany* Italy* Japan* United Kingdom* United States* 07.2 6.03 7.50 8.50 8.47 6.00 3.77 5.33 4.50 7.03 8.17 * Copyright , 2010, Organisation for Economic Cooperation and Development, OECD Main Economic Indicators (www.oecd.org). Research Division Federal Reserve Bank of St. Louis 3 International Economic Trends Reference Tables Reserve Money Percent change from year ago Canada Japan United Kingdom United States 07.2 07.3 07.4 08.1 08.2 08.3 08.4 09.1 09.2 09.3 09.4 10.1 5.44 -4.32 4.31 1.62 5.65 0.89 4.86 2.11 4.85 0.41 5.57 1.81 2.88 -0.25 6.45 1.18 3.66 0.18 6.05 1.11 2.43 1.14 5.42 1.98 6.76 67.57 7.45 6.67 8.14 94.22 12.94 6.19 8.65 105.24 11.67 4.82 8.77 95.70 9.02 5.25 6.92 40.65 . 1.95 5.60 25.62 07.2 07.3 07.4 08.1 08.2 08.3 08.4 09.1 09.2 09.3 09.4 10.1 9.39 6.58 -0.26 7.29 7.62 10.29 6.61 -0.33 7.45 10.10 7.10 3.80 0.62 6.67 12.56 7.43 2.80 -0.24 6.69 15.09 8.04 1.58 -0.46 6.46 16.12 7.87 1.46 -0.35 5.40 13.54 12.36 3.74 -1.04 4.60 11.64 12.65 7.38 -0.01 4.17 12.14 12.73 10.35 0.60 3.58 10.09 13.95 13.26 0.86 4.44 13.18 12.71 1.25 5.83 6.58 . . . . 0.96 07.2 07.3 07.4 08.1 08.2 08.3 08.4 09.1 09.2 09.3 09.4 10.1 7.94 11.15 1.76 13.00 6.45 8.17 11.14 6.44 11.62 2.06 11.89 6.26 7.35 10.78 2.23 11.55 6.77 8.50 10.26 2.17 12.50 8.59 1.80 15.71 8.50 14.50 6.05 2.22 14.45 4.22 10.71 6.71 8.45 9.75 2.20 10.87 6.36 14.37 1.99 2.97 10.50 7.81 10.94 -0.71 3.23 5.67 5.14 . . . . 2.03 5.38 4.76 Narrow Money Percent change from year ago Canada Euro Area Japan United Kingdom United States 9.24 Broad Money Percent change from year ago Canada Euro Area Japan United Kingdom United States 1.75 13.02 6.65 16.87 9.58 2.48 12.10 8.68 Short-Term Interest Rates Percent Canada* Euro Area Japan* United Kingdom* United States 07.2 07.3 07.4 08.1 08.2 08.3 08.4 09.1 09.2 09.3 09.4 10.1 4.52 4.07 0.60 5.72 5.32 5.11 4.50 0.73 6.30 5.42 4.79 4.73 0.76 6.31 5.02 3.57 4.48 0.75 5.69 3.23 3.16 4.86 0.71 5.86 2.76 3.29 4.98 0.74 5.81 3.06 2.32 4.21 1.06 2.01 0.56 2.06 1.08 0.57 1.31 0.34 1.33 0.62 0.40 0.87 0.27 0.82 0.30 0.38 0.72 0.23 0.59 0.22 0.39 0.66 0.20 0.60 0.21 0.78 4.60 2.82 * Copyright , 2010, Organisation for Economic Cooperation and Development, OECD Main Economic Indicators (www.oecd.org). Long-Term Interest Rates Percent Canada* Euro Area France* Germany* Italy* Japan United Kingdom* United States 07.2 07.3 07.4 08.1 08.2 08.3 08.4 09.1 09.2 09.3 09.4 10.1 4.36 4.41 4.48 4.46 4.44 4.17 3.75 4.14 3.66 4.51 4.47 3.62 4.57 4.48 4.26 4.90 1.52 4.78 4.38 3.38 4.05 3.90 3.50 4.66 1.43 4.15 3.90 2.89 3.90 3.64 3.07 4.54 1.28 3.54 3.55 3.20 3.97 3.79 3.32 4.46 1.45 3.58 4.05 3.42 3.79 3.63 3.30 4.19 1.35 3.73 4.16 3.42 3.67 3.53 3.19 4.06 1.32 3.74 4.10 3.48 . . 3.18 4.02 1.33 4.06 4.32 4.39 4.33 4.54 1.75 5.21 5.03 4.34 4.64 1.73 5.18 4.98 4.34 4.33 4.19 4.53 1.57 4.79 4.59 4.08 3.93 4.38 1.40 4.52 4.25 4.25 4.78 1.62 4.91 4.46 * Copyright , 2010, Organisation for Economic Cooperation and Development, OECD Main Economic Indicators (www.oecd.org). Research Division 4 Federal Reserve Bank of St. Louis International Economic Trends Canada Real GDP Employment Percent change from year ago Percent change from year ago 3 4 2 2 1 0 0 -2 -1 -4 -2 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 Consumer Price Index Unemployment Rate Percent change from year ago Percent 2008 09 2009 10 2010 11 9 4 3 8 2 7 1 6 0 5 -1 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 Real Hourly Earnings Current Account Balance Percent change from year ago Percent of GDP 8 4 4 2 0 0 -4 -2 -8 09 2009 10 2010 11 -4 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division Federal Reserve Bank of St. Louis 5 International Economic Trends Canada Reserve Money Interest Rates Percent change from year ago Percent 15 6 10-Year Government Bonds 5 12 | | | | 4 9 3 6 2 3 1 90-Day Prime Corporate Paper 0 0 06 2006 07 2007 08 2008 09 2009 10 2010 11 M1B 2006 06 07 2007 08 2008 09 2009 10 2010 11 Exchange Rate and Inflation Differential Percent change from year ago Percent C$/US$ 1.35 15 17.4 Foreign/US Inflation Differential (right scale) 12 1.25 8.7 | | | | 9 1.15 0.0 6 -8.7 1.05 3 Exchange Rate (left scale) 0 0.95 06 2006 07 2007 08 2008 09 2009 10 2010 -17.4 2006 11 M2 2007 2008 2009 2010 Real Effective Exchange Rate Percent change from year ago Index 2005 = 100 130 15 12 120 9 110 6 100 3 0 90 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 6 Federal Reserve Bank of St. Louis International Economic Trends Canada GDP Percent change from year ago 12 Nominal 8 4 0 Real -4 -8 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Industrial Production Percent change from year ago 15 10 5 0 -5 -10 -15 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Retail Sales Percent change from year ago 20 15 10 5 0 -5 -10 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Capacity Utilization Percent 90 85 80 75 70 65 60 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division Federal Reserve Bank of St. Louis 7 International Economic Trends Canada Real Hourly Earnings and Output per Worker Percent change from year ago 9 Hourly Earnings 6 3 0 Output per Worker -3 -6 -9 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 6 14 Employment (left scale) 3 11 0 8 Unemployment Rate (right scale) -3 5 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 12 Producer Price Index 8 4 0 | Consumer Price Index -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 4 102 0 92 82 -4 Gross Debt (right scale) -8 72 Budget Balance (left scale) 62 -12 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Research Division 8 Federal Reserve Bank of St. Louis International Economic Trends Canada International Trade - Goods and Services Percent of GDP 50 Exports 40 Imports 30 20 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Current Account Balance Percent of GDP 6 3 0 -3 -6 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Foreign Exchange Reserves Billions of US$ 50 40 30 20 10 0 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Real Effective Exchange Rate Index 2005 = 100 125 115 105 95 85 75 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division Federal Reserve Bank of St. Louis 9 International Economic Trends Canada Reserve Money Percent change from year ago 30 20 10 0 -10 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Monetary Aggregates Percent change from year ago 20 M1B 15 10 5 0 M2 -5 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Interest Rates Percent 10 10-Year Government Bonds 8 6 4 2 90-Day Prime Corporate Paper 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - Toronto Stock Exchange 2005 = 100 150 120 90 60 30 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division 10 Federal Reserve Bank of St. Louis International Economic Trends Euro Area Real GDP Employment Percent change from year ago Percent change from year ago 4 2 2 1 0 0 -2 -1 -4 -2 -6 -3 06 2006 07 2007 08 2008 09 2009 10 2010 11 Consumer Price Index 06 2006 07 2007 08 2008 09 2009 10 2010 11 Unemployment Rate Percent change from year ago Percent 10.0 4 9.5 3 9.0 2 8.5 1 8.0 0 7.5 7.0 -1 06 2006 07 2007 08 2008 09 2009 10 2010 11 Real Hourly Earnings 06 2006 07 2007 08 2008 09 2009 10 2010 11 Current Account Balance Percent change from year ago Percent of GDP 1.0 5 0.5 4 0.0 3 -0.5 2 -1.0 1 -1.5 0 -2.0 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division Federal Reserve Bank of St. Louis 11 International Economic Trends Euro Area M1 Interest Rates Percent change from year ago Percent 18 6 15 5 12 4 9 3 6 2 3 1 Weighted Average of 10-Year Government Bonds | | 90-Day Deposits 0 0 06 2006 07 2007 08 2008 09 2009 10 2010 11 M3 06 2006 2007 07 08 2008 09 2009 10 2010 11 Exchange Rate and Inflation Differential Percent change from year ago Euro/US$ Percent 6 0.88 12 Foreign/US Inflation Differential (right scale) 9 0.83 0 6 0.78 -6 3 0.73 -12 Exchange Rate (left scale) 0 -18 0.68 -3 0.63 06 2006 07 2007 08 2008 09 2009 10 2010 Stock Exchange Index - Dow Jones EURO STOXX -24 2006 11 2007 2008 2009 2010 Real Effective Exchange Rate SM 2005 = 100 Index 2005 = 100 115 150 130 110 110 105 90 100 70 50 95 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 12 Federal Reserve Bank of St. Louis International Economic Trends Euro Area GDP Percent change from year ago 9 6 Nominal 3 0 Real -3 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 -20 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 6 3 0 -3 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 90 85 80 75 70 65 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 13 International Economic Trends Euro Area Real Hourly Earnings and Output per Worker Percent change from year ago 6 Hourly Earnings 4 2 0 Output per Worker -2 -4 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 3 12 Employment (left scale) 2 11 1 10 0 9 -1 8 Unemployment Rate (right scale) -2 7 -3 6 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 8 Producer Price Index 4 Consumer Price Index 0 -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data 4 Percent of GDP, annual data 90 Gross Debt (right scale) 2 80 0 70 -2 60 50 -4 Budget Balance (left scale) -6 40 -8 30 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Research Division 14 Federal Reserve Bank of St. Louis International Economic Trends Euro Area International Trade - Goods Percent of GDP 20 18 16 14 Exports 12 Imports 10 8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Real Effective Exchange Rate Index 2005 = 100 120 110 100 90 80 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Monetary Aggregates Percent change from year ago 20 15 M1 10 5 M3 0 -5 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Interest Rates Percent 12 9 Weighted Average of 10-Year Government Bonds 6 90-Day Deposits 3 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 15 International Economic Trends France Real GDP Employment Percent change from year ago Percent change from year ago 4 2 1 2 0 0 -1 -2 -2 -3 -4 06 2006 07 2007 08 2008 09 2009 10 2010 11 Consumer Price Index 06 2006 07 2007 08 2008 09 2009 10 2010 11 Unemployment Rate Percent change from year ago Percent 4 10.0 3 9.5 2 9.0 1 8.5 0 8.0 7.5 -1 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 Real Hourly Earnings Current Account Balance Percent change from year ago Percent of GDP 4 09 2009 10 2010 11 2 1 3 0 -1 2 -2 -3 1 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 16 Federal Reserve Bank of St. Louis International Economic Trends France GDP Percent change from year ago 9 6 Nominal 3 0 Real -3 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 -20 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 6 4 2 0 -2 -4 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 90 85 80 75 70 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 17 International Economic Trends France Real Hourly Earnings and Output per Worker Percent change from year ago 6 Hourly Earnings 4 2 0 Output per Worker -2 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 4 14 2 12 0 10 8 -2 Employment (left scale) Unemployment Rate (right scale) 6 -4 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 8 Producer Price Index Consumer Price Index 4 0 -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 3 90 Gross Debt (right scale) 80 0 70 -3 60 Budget Balance (left scale) -6 50 40 -9 30 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Research Division 18 Federal Reserve Bank of St. Louis International Economic Trends France International Trade - Goods and Services Percent of GDP 35 30 Exports 25 Imports 20 15 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Current Account Balance Percent of GDP 4 2 0 -2 -4 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Foreign Exchange Reserves Billions of US$ 50 40 30 20 10 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - SBF 250 2005 = 100 150 125 100 75 50 25 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 19 International Economic Trends Germany Real GDP Employment Percent change from year ago Percent change from year ago 2.0 6 4 1.5 2 1.0 0 0.5 -2 0.0 -4 -0.5 -6 -8 -1.0 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 Consumer Price Index Unemployment Rate Percent change from year ago Percent 2008 09 2009 10 2010 11 11 4 3 10 2 9 1 8 0 -1 7 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 Real Hourly Earnings Current Account Balance Percent change from year ago Percent of GDP 4 9 3 6 2 3 1 0 0 09 2009 10 2010 11 -3 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 20 Federal Reserve Bank of St. Louis International Economic Trends Germany GDP Percent change from year ago 12 8 Nominal 4 0 Real -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 -20 -25 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 4 2 0 -2 -4 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 90 85 80 75 70 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 21 International Economic Trends Germany Real Hourly Earnings and Output per Worker Percent change from year ago 9 6 Hourly Earnings 3 0 Output per Worker -3 -6 -9 93 93 94 95 94 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 4 11 Unemployment Rate (right scale) 9 2 0 7 Employment (left scale) -2 5 3 -4 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 9 6 Consumer Price Index 3 | | 0 Producer Price Index -3 -6 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 8 4 0 100 Gross Debt (right scale) 80 Budget Balance (left scale) 60 -4 40 -8 20 0 -12 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 The actual value for budget balance in 2008 is 0.0%. Research Division 22 Federal Reserve Bank of St. Louis International Economic Trends Germany International Trade - Goods and Services Percent of GDP 50 45 Exports 40 35 30 Imports 25 20 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Current Account Balance Percent of GDP 10 5 0 -5 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Foreign Exchange Reserves Billions of US$ 125 100 75 50 25 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - CDAX 2005 = 100 180 150 120 90 60 30 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 23 International Economic Trends Italy Real GDP Employment Percent change from year ago Percent change from year ago 3 4 2 2 1 0 0 -2 -1 -4 -2 -6 -3 -8 -4 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 Consumer Price Index Unemployment Rate Percent change from year ago Percent 2008 09 2009 10 2010 11 9 5 4 8 3 7 2 6 1 0 5 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 Real Hourly Earnings Current Account Balance Percent change from year ago Percent of GDP 5 09 2009 10 2010 11 1 0 4 -1 3 -2 -3 2 -4 -5 1 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 24 Federal Reserve Bank of St. Louis International Economic Trends Italy GDP Percent change from year ago 10 Nominal 5 0 Real -5 -10 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 -20 -25 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 6 3 0 -3 -6 -9 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 84 80 76 72 68 64 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 25 International Economic Trends Italy Real Hourly Earnings and Output per Worker Percent change from year ago 8 Hourly Earnings 4 0 Output per Worker -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 4 14 2 12 0 10 8 -2 Employment (left scale) -4 Unemployment Rate (right scale) 6 -6 4 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 8 Producer Price Index 4 Consumer Price Index 0 -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 0 140 120 -4 Gross Debt (right scale) -8 100 Budget Balance (left scale) 80 -12 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Research Division 26 Federal Reserve Bank of St. Louis International Economic Trends Italy International Trade - Goods and Services Percent of GDP 35 30 Exports 25 Imports 20 15 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Current Account Balance Percent of GDP 4 2 0 -2 -4 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Foreign Exchange Reserves Billions of US$ 80 60 40 20 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - Milan Stock Exchange 2005 = 100 150 125 100 75 50 25 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 27 International Economic Trends Japan Real GDP Employment Percent change from year ago Percent change from year ago 4 1 2 0 0 -2 -1 -4 -6 -2 -8 -10 -3 05 2005 06 2006 07 2007 08 2008 09 2009 10 Consumer Price Index 05 2005 06 2006 07 2007 08 2008 09 2009 10 Unemployment Rate Percent change from year ago Percent 3 5.5 2 5.0 1 4.5 0 4.0 -1 3.5 -2 -3 3.0 05 2005 06 2006 07 2007 08 2008 09 2009 10 05 2005 06 2006 07 2007 Real Monthly Earnings Current Account Balance Percent change from year ago Percent of GDP 2 6 0 5 -2 4 -4 3 -6 2 -8 1 -10 08 2008 09 2009 10 0 05 2005 06 2006 07 2007 08 2008 09 2009 10 05 2005 06 2006 07 2007 08 2008 09 2009 10 Research Division 28 Federal Reserve Bank of St. Louis International Economic Trends Japan Adjusted Monetary Base Interest Rates Percent change from year ago Percent 15 2.0 10 5 1.5 10-Year Government Bonds 0 -5 1.0 -10 -15 0.5 3-Month CDs -20 -25 0.0 06 2006 07 2007 08 2008 09 2009 10 2010 11 M1 2006 06 07 2007 08 2008 09 2009 10 2010 11 Exchange Rate and Inflation Differential Percent change from year ago Yen/US$ 6 Percent 126.9 8.6 Foreign/US Inflation Differential (right scale) | | | 4 116.9 0.0 2 106.9 -8.6 0 96.9 -17.2 Exchange Rate (left scale) 86.9 -2 06 2006 07 2007 08 2008 09 2009 10 2010 -25.8 2006 11 M2 2007 2008 2009 2010 Real Effective Exchange Rate Percent change from year ago Index 2005 = 100 120 4 115 3 110 105 2 100 95 1 90 0 85 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division Federal Reserve Bank of St. Louis 29 International Economic Trends Japan GDP Percent change from year ago 5.0 Real 2.5 0.0 -2.5 Nominal -5.0 -7.5 -10.0 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Industrial Production Percent change from year ago 10 0 -10 -20 -30 -40 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Retail Sales Percent change from year ago 10 5 0 -5 -10 -15 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Capacity Utilization 2005 = 100 110 100 90 80 70 60 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division 30 Federal Reserve Bank of St. Louis International Economic Trends Japan Real Monthly Earnings and Output per Worker Percent change from year ago 6 Monthly Earnings Output per Worker 3 0 -3 -6 -9 -12 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Labor Force Indicators Percent change from year ago Percent 4 7 Unemployment Rate (right scale) 5 2 0 3 Employment (left scale) -2 1 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Inflation Percent change from year ago 8 Consumer Price Index 4 0 -4 Producer Price Index -8 -12 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 6 3 215 Budget Balance (left scale) 185 0 155 -3 125 -6 95 Gross Debt (right scale) -9 65 35 -12 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Research Division Federal Reserve Bank of St. Louis 31 International Economic Trends Japan International Trade - Goods and Services Percent of GDP 20 16 Exports 12 8 Imports 4 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Current Account Balance Percent of GDP 6 5 4 3 2 1 0 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Foreign Exchange Reserves Billions of US$ 1250 1000 750 500 250 0 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Real Effective Exchange Rate Index 2000 = 100 165 149 133 117 101 85 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division 32 Federal Reserve Bank of St. Louis International Economic Trends Japan Adjusted Monetary Base Percent change from year ago 40 30 20 10 0 -10 -20 -30 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Monetary Aggregates Percent change from year ago 40 30 20 M1 10 0 M2 -10 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Interest Rates Percent 6 5 4 10-Year Government Bonds 3 2 1 3-Month CDs 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - Tokyo Stock Exchange 2005 = 100 150 125 100 75 50 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 33 International Economic Trends United Kingdom Real GDP Employment Percent change from year ago Percent change from year ago 4 2 2 1 0 0 -2 -1 -4 -2 -6 -3 05 2005 06 2006 07 2007 08 2008 09 2009 10 Consumer Price Index 05 2005 06 2006 07 2007 08 2008 09 2009 10 Unemployment Rate Percent change from year ago Percent 5 8.0 7.5 4 7.0 3 6.5 6.0 2 5.5 1 5.0 0 4.5 05 2005 06 2006 07 2007 08 2008 09 2009 10 05 2005 06 2006 07 2007 Real Weekly Earnings Current Account Balance Percent change from year ago Percent of GDP 08 2008 09 2009 10 0 6 -1 5 -2 4 -3 3 -4 2 -5 -6 1 05 2005 06 2006 07 2007 08 2008 09 2009 10 05 2005 06 2006 07 2007 08 2008 09 2009 10 Research Division 34 Federal Reserve Bank of St. Louis International Economic Trends United Kingdom Notes and Coins in Circulation Interest Rates Percent change from year ago Percent 9 7 6 8 5 7 | | 4 6 10-Year Government Bonds 3 5 2 3-Month Interbank Loans 4 1 3 0 06 2006 07 2007 08 2008 09 2009 10 2010 11 M2 06 2006 07 2007 08 2008 09 2009 10 2010 11 Exchange Rate and Inflation Differential Percent change from year ago Pounds/US$ Percent 0.72 11 22.5 Exchange Rate (left scale) 0.67 15.0 9 0.62 7.5 Foreign/US Inflation Differential (right scale) 7 0.57 0.0 0.52 -7.5 5 3 0.47 06 2006 07 2007 08 2008 09 2009 10 2010 -15.0 2006 11 M4 2007 2008 2009 2010 Real Effective Exchange Rate Percent change from year ago Index 2005 = 100 110 18 15 100 12 90 9 80 6 3 70 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division Federal Reserve Bank of St. Louis 35 International Economic Trends United Kingdom GDP Percent change from year ago 8 Nominal 6 4 2 Real 0 -2 -4 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 10 5 0 -5 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 90 85 80 75 70 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division 36 Federal Reserve Bank of St. Louis International Economic Trends United Kingdom Real Weekly Earnings and Output per Worker Percent change from year ago 12 8 Weekly Earnings 4 0 Output per Worker -4 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Labor Force Indicators Percent change from year ago Percent 10 12 Unemployment Rate (right scale) 5 9 0 6 Employment (left scale) -5 3 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Inflation Percent change from year ago 15 10 Consumer Price Index 5 0 Producer Price Index -5 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 16 90 8 70 0 50 Gross Debt (right scale) -8 Budget Balance (left scale) 30 -16 10 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Research Division Federal Reserve Bank of St. Louis 37 International Economic Trends United Kingdom International Trade - Goods and Services Percent of GDP 38 34 Imports 30 26 Exports 22 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Current Account Balance Percent of GDP 2 0 -2 -4 -6 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Foreign Exchange Reserves Billions of US$ 50 40 30 20 10 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Real Effective Exchange Rate Index 2005 = 100 110 100 90 80 70 60 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division 38 Federal Reserve Bank of St. Louis International Economic Trends United Kingdom Notes and Coins in Circulation Percent change from year ago 12 10 8 6 4 2 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 02 01 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Monetary Aggregates Percent change from year ago 20 15 M4 M2 10 5 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Interest Rates Percent 12 10-Year Government Bonds 9 3-Month Interbank Loans 6 3 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - Financial Times Stock Exchange 2005 = 100 150 125 100 75 50 25 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 39 International Economic Trends United States Real GDP Employment Percent change from year ago Percent change from year ago 4 3 2 1 0 -1 -2 -3 -5 -4 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 Consumer Price Index Unemployment Rate Percent change from year ago Percent 6 2008 09 2009 10 2010 11 11 10 4 9 8 2 7 6 0 5 -2 4 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 Real Hourly Earnings Current Account Balance Percent change from year ago Percent of GDP 09 2009 10 2010 11 0 4 -2 3 -4 2 -6 -8 1 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division 40 Federal Reserve Bank of St. Louis International Economic Trends United States Adjusted Monetary Base Interest Rates Percent change from year ago Percent 120 6 3-Month CDs 100 5 80 4 60 3 40 2 20 1 0 | | | Composite of Long-Term Government Bonds 0 06 2006 07 2007 08 2008 09 2009 10 2010 11 MZM 06 2006 07 2007 08 2008 09 2009 10 2010 11 Exchange Rate and Inflation Differential Percent change from year ago TWEX, March 1973 = 100 18 Percent 5.9 89.8 Foreign/US Inflation Differential (right scale) 15 84.8 0.0 79.8 -5.9 12 9 6 -11.8 74.8 Exchange Rate (left scale) 3 0 69.8 06 2006 07 2007 08 2008 09 2009 10 2010 -17.7 2006 11 M2 2007 2008 2009 2010 Real Effective Exchange Rate Percent change from year ago Index 2005 = 100 10 105 8 100 6 95 4 90 2 85 0 80 06 2006 07 2007 08 2008 09 2009 10 2010 11 06 2006 07 2007 08 2008 09 2009 10 2010 11 Research Division Federal Reserve Bank of St. Louis 41 International Economic Trends United States GDP Percent change from year ago 9 Nominal 6 3 Real 0 -3 -6 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Industrial Production Percent change from year ago 10 5 0 -5 -10 -15 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Retail Sales Percent change from year ago 10 5 0 -5 -10 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Capacity Utilization Percent 85 80 75 70 65 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division 42 Federal Reserve Bank of St. Louis International Economic Trends United States Real Hourly Earnings and Output per Worker Percent change from year ago 5 Hourly Earnings 4 3 2 1 0 Output per Worker -1 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Labor Force Indicators Percent change from year ago Percent 9 12 Unemployment Rate (right scale) 6 9 3 6 0 3 Employment (left scale) -3 0 -6 -3 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Inflation Percent change from year ago 12 8 Consumer Price Index 4 0 Producer Price Index -4 -8 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Gross Government Debt and Budget Balance Percent of GDP, annual data Percent of GDP, annual data 6 90 3 80 0 70 -3 60 Budget Balance (left scale) -6 50 Gross Debt (right scale) -9 40 30 -12 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Research Division Federal Reserve Bank of St. Louis 43 International Economic Trends United States International Trade - Goods and Services Percent of GDP 21 18 Imports 15 12 Exports 9 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Current Account Balance Percent of GDP 2 0 -2 -4 -6 -8 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Foreign Exchange Reserves Billions of US$ 60 50 40 30 20 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Real Effective Exchange Rate Index 2005 = 100 140 130 120 110 100 90 80 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 Research Division 44 Federal Reserve Bank of St. Louis International Economic Trends United States Adjusted Monetary Base Percent change from year ago 120 100 80 60 40 20 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Monetary Aggregates Percent change from year ago 25 20 MZM 15 10 5 M2 0 -5 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Interest Rates Percent 10 Composite of Long-Term Government Bonds 8 6 4 3-Month CDs 2 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Stock Exchange Index - New York Stock Exchange 2005 = 100 150 125 100 75 50 25 0 93 93 94 94 95 95 96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 Research Division Federal Reserve Bank of St. Louis 45 International Economic Trends Notes Euro-Area Data: Euro-area countries are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Slovakia, and Spain. Data series are break adjusted and include all euro area countries for the full sample, with these exceptions: Series for interest rates are not break adjusted. Euro-area interest rates prior to December 1998 are calculated on the basis of national government yields weighted by GDP. Starting in 1999, short-term rates are euro interbank offered rates. Long-term rates are calculated on the basis of national government bond yields weighted by the nominal outstanding amounts of government bonds in each maturity band. The euro/dollar exchange rate used in the chart on page 12 is a synthetic rate prior to January 1999. This is constructed by calculating a weighted average of the exchange rates of the euro-area countries, excluding Greece and Luxembourg, against the dollar. The weights are based on 1997 GDP shares. German Data: As a result of reunification, data for all of Germany are now incorporated in the statistical series. The starting periods for unified German data are listed below. Care should be exercised when interpreting the data around these break periods. Third quarter 1992: capacity utilization. First quarter 1993: stock exchange index. Third quarter 1993: employment. First quarter 1995: hourly earnings. Capacity Utilization covers the manufacturing sector for Canada, France, Japan, the United Kingdom, the United States, and the euro area; manufacturing excluding food, beverage, and tobacco for Germany; and mining and manufacturing for Italy. Consumer Price Index is for all items. The current index is based on goods and services consumed by all individuals for Canada; all multi-person households excluding those mainly engaged in agriculture, forestry, and fisheries for Japan; all households except pensioners dependent on state pension and high income households for the United Kingdom; and all urban households for the United States. Data for the euro area, France, Germany, and Italy are based on the harmonized index of consumer prices. Current Account Balance is the sum of merchandise and service exports and income receipts on domestic assets abroad minus the sum of merchandise and service imports and income payments from foreign assets in the domestic economy plus net unilateral transfers. Real Earnings are based on hourly earnings in manufacturing for Canada, Germany, the United States, and the euro area; hourly earnings in manufacturing excluding construction for France, hourly earnings in industry for Italy; monthly earnings in manufacturing for Japan; and weekly earnings in manufacturing for the United Kingdom. German real earnings data prior to 2007 are not strictly comparable with the new figures: Before 2007, gross hourly earnings covered full-time wage earners only. Since the first quarter of 2007, the data refer to the index of gross hourly earnings (excluding extra payments) of full-time wage earners and salaried employees. The Exchange Rate for all countries except the United States is expressed as units of local currency per U.S. dollar. For the United States the trade-weighted exchange rate, TWEX, is used. This is a weighted average of the exchange value of the U.S. dollar relative to the major international currencies—the euro, Canadian dollar, Japanese yen, British pound, Swiss franc, Australian dollar, and Swedish kronor. Prior to 1999, the currencies of the euro-area countries (with the exception of Greece) are used instead of the euro. Real Effective Exchange Rate uses normalized unit labor costs in manufacturing. The weighting scheme used to construct the rates, for all except the euro area, is based on disaggregated data for trade among 21 industrial countries in manufactured goods for 2005. For the euro area the weights relate to the trade of the euro area with the other countries. The weights reflect the relative importance of a country’s trading partners in its direct bilateral trade relations and competition in third markets. Normalized unit labor costs in manufacturing are calculated by dividing an index of actual hourly compensation per worker by a five-year moving average index of output per man-hour. 46 Notes and Sources Employment data refer to civilian employment for Canada, Germany, Italy, Japan, and the United States; industrial employment for France; and total employment for the euro area and the United Kingdom. Foreign Exchange Reserve data are end of period. The dollar value of reserves may fluctuate as a result of changes in reserve holdings and/or changes in the value of the currencies held vis-à-vis the U.S. dollar. Government Budget Balance is the difference between general government current receipts and total outlays. Total outlays consist of current expenditures and net capital expenditures. Gross Government Debt incorporates all financial liabilities of the general government sector. The general government sector consolidates the accounts of the central, state, local, and social security sectors. Cumulative Inflation Differential is the cumulative change in the foreign consumer price index (CPI) over the change in the U.S. CPI, in percentage terms. The base period for the cumulative rate of change is taken to be the first period of the chart. For example, if the base period is 2002:Q1, then the cumulative inflation differential for Japan for 2006:Q3 is as follows: J ⎛ P2006 ⎞ Q3 J ⎜ ⎟ P2002 Q 1 inflationdifferential = 100 • ⎜ US − 1⎟ ⎜ P2006Q 3 ⎟ US ⎜ ⎟ P2002 ⎝ ⎠ Q1 J where P2006Q3 is the Japanese CPI in the third quarter of 2006. For the U.S. chart on page 41, foreign CPI is calculated as the weighted average of the CPIs of countries whose currencies are used in the major currency trade-weighted exchange rate index. Starting in 1999, the euro-area harmonized consumer price index is used for the euro area. Prior to 1999, the price levels for the individual euro area countries (excluding Greece and Luxembourg) are used. The cumulative inflation differential is shown because the theory of purchasing power parity states that exchange rate changes should be systematically positively related to this variable. Industrial Production measures the change in the volume of output in the mining, manufacturing, oil, electricity, gas, and water industries. The Short-Term Interest Rate table on page 4 uses the relevant 3-month interest rate shown in the country pages. The Long-Term Interest Rate table on page 4 uses the government bond rate. The government bond rate is a composite of yields on federal government bonds with maturities of more than 10 years for the United States; 10-year benchmark bonds for France; 7- to 15-year public sector bonds for Germany; 15- to 20-year government bonds through 1990 and 10-year government bonds starting in 1991 for Italy; and 10-year government bonds for Canada, the euro area, Japan, and the United Kingdom. The Reserve Money table on page 4 refers to the adjusted monetary base for Japan and the United States; reserve money for Canada; and M0 for the United Kingdom. Reserve Money is currency in circulation, deposits of the deposit money banks, and demand deposits of other residents (with the exception of the central government) with the monetary authority. Adjusted Monetary Base Japan: currency in circulation and current deposits at the Bank of Japan. United States: the sum of currency in circulation outside Federal Reserve banks and the U.S. Treasury, deposits of depository financial institutions at Federal Reserve banks, and an adjustment for the effects of changes in statutory reserve requirements on the quantity of base money held by depositories. Notes and Coins in Circulation United Kingdom: After reforming the rules governing bank reserves, the Bank of England discontinued its M0 series in May 2006 because the data would not be comparable to previous data. IET now presents a related series, “Notes and Coins in Circulation,” in place of M0. The Bank of England directs interested parties to “Publication of narrow money data: the implication of money market reform” in its Autumn 2005 Quarterly Bulletin (http://www.bankofengland.co.uk/publications/quarterlybulletin/qb050304.pdf). M1 Japan: cash, currency in circulation, and deposit money. Euro area: currency in circulation and overnight deposits. Research Division Federal Reserve Bank of St. Louis Notes and Sources M1B Canada: currency outside banks, chartered bank checkable deposits, less inter-bank checkable deposits. MZM United States: currency in circulation, travelers’ checks, total publicly-held checkable deposits minus cash items in the process of collection and Federal Reserve float, savings deposits, shares in retail money market mutual funds (funds with initial investments of less than $50,000), net of retirement accounts, and institutional money market mutual funds. M2 Canada: currency outside banks, chartered bank demand and notice deposits, chartered bank personal term deposits, adjustments to M2 (continuity adjustments and inter-bank demand and notice deposits). United Kingdom: currency in circulation and sterling retail deposits with the U.K. banks and building societies. United States: MZM less institutional money market mutual funds plus small denomination (less than $100,000) time deposits. M2 + CDs Japan: M1 plus private deposits, public deposits less demand deposits, and certificates of deposit. M3 Euro area: M1 plus deposits with a maturity up to 2 years, deposits redeemable at notice up to 3 months, repurchase agreements, money market funds, and debt securities up to 2 years. M4 United Kingdom: M2 plus wholesale deposits with the U.K. banks and building societies. Output Per Worker is the ratio of real GDP to employment. Producer Price Index covers manufacturing for Canada and the United Kingdom; and total industry for Japan and the United States. Data for the euro area, France, Germany, and Italy are based on the harmonized index of total industry excluding construction. Retail Sales are based on a volume index. The percent change in retail sales for the United States is based on the Standard Industrial Classification system through 1992 and the North American Industrial Classification System from 1993 on. Stock Exchange Index refers to all share prices except for the United Kingdom, which excludes financial firms. Unemployment Rate is the standardized unemployment rate. It is the percentage of the civilian labor force that is unemployed. The unemployed are all persons of working age who are without work, readily available for work, and actively seeking work. The standardized rate may differ from the national unemployment rate calculations. Sources Abbreviations Board of Governors of the Federal Reserve System (BOG) Bureau of Economic Analysis, U.S. Department of Commerce (BEA) Bureau of Labor Statistics, U.S. Department of Labor (BLS) International Monetary Fund, International Financial Statistics (IMF) Organization for Economic Cooperation and Development, Economic Outlook (OECD1) Main Economic Indicators (OECD2) National Accounts Quarterly (OECD3) Canada Bank of Canada: M1B and M2. BOG: exchange rate. IMF: foreign exchange reserves, merchandise and service trade, real effective exchange rate, and reserve money. OECD1: gross government debt and budget balance. OECD2: capacity utilization, consumer price index, current account balance, GDP, hourly earnings, industrial production, interest rates, producer price index, retail sales, stock exchange index, and unemployment rate. Statistics Canada: employment. Research Division Federal Reserve Bank of St. Louis International Economic Trends Euro Area European Central Bank: currrent account balance and employment . Eurostat: capacity utilization, consumer price index, GDP, interest rates, merchandise trade, producer price index, and retail sales. Haver Analytics: synthetic euro exchange rate. IMF: real effective exchange rate. OECD1: gross government debt and budget balance. OECD2: hourly earnings, industrial production, M1, M3, stock exchange index, and unemployment. France BOG: exchange rate. Eurostat: capacity utilization, consumer price index, and producer price index. IMF: foreign exchange reserves, merchandise and service trade, and real effective exchange rate. Institut National de la Statistique et des Etudes Economiques: employment. OECD1: gross government debt and budget balance. OECD2: current account balance, GDP, hourly earnings, industrial production, retail sales, interest rates, stock exchange index, and unemployment. Germany BOG: exchange rate. Bundesanstalt Fur Arbeit: employment. Eurostat: capacity utilization, consumer price index, and producer price index. IMF: foreign exchange reserves, merchandise and service trade, and real effective exchange rate. OECD1: gross government debt and budget balance. OECD2: current account balance, GDP, hourly earnings, industrial production, M1, M3, retail sales, interest rates, stock exchange index, and unemployment. Italy BOG: exchange rate. Eurostat: capacity utilization, consumer price index, and producer price index. IMF: foreign exchange reserves, merchandise and service trade, and real effective exchange rate. Instituto Nazionale di Statistica: employment. OECD1: gross government debt and budget balance. OECD2: current account balance, GDP, hourly earnings, industrial production, long-term interest rates, retail sales, stock exchange index, and unemployment. Japan Bank of Japan: adjusted monetary base and long-term interest rate. BOG: exchange rate. IMF: foreign exchange reserves, merchandise and service trade, and real effective exchange rate. OECD1: gross government debt and budget balance. OECD2: capacity utilization, consumer price index, current account balance, employment, GDP, hourly earnings, industrial production, M1, M2, producer price index, retail sales, short-term interest rate, stock exchange index, and unemployment. United Kingdom Bank of England: M2. BOG: exchange rate. IMF: foreign exchange reserves, merchandise and service trade, and real effective exchange rate. OECD1: gross government debt and budget balance. OECD2: capacity utilization, consumer price index, current account balance, GDP, industrial production, interest rates, M4, producer price index, retail sales, stock exchange index, unemployment, and weekly earnings. U.K. Office for National Statistics: employment and Notes and Coins in Circulation. United States BOG: capacity utilization, exchange rate, industrial production index, M2, and interest rates. BEA: GDP, current account balance, merchandise and service trade, and retail sales. BLS: employment, consumer price index, and producer price index. Federal Reserve Bank of St. Louis: adjusted monetary base and MZM. IMF: foreign exchange reserves and real effective exchange rate. OECD1: gross government debt and budget balance. OECD2: hourly earnings, stock exchange index, and unemployment. 47
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