Global| Sep 10 2008French IP is Jumping but not for Joy
Summary
French IP made a surprise jump of 1.2% in July but only after a larger decline in June and in the wake of a plunge in May and so that the rise has not restored any momentum to the outlook. The sequential growth rates show a steady [...]
French IP made a surprise jump of 1.2% in July but only after a larger decline in June and in the wake of a plunge in May and so that the rise has not restored any momentum to the outlook. The sequential growth rates show a steady weakening in output across sectors with the overall output measure decelerating steadily from 12 months to 6 months to 3 months. The sector paths are a little more uneven than that with consumer goods output even showing an increase over three months. That sector also is posting a gain in the quarter-to-date calculations and it’s the only one to do so. That is largely because auto output is up in the quarter and was up very strongly in July (a 5.1% pace!).
On balance French measures of economic activity have held up well until just before mid-year. The EU has today downgraded the growth outlook for most European countries. It projects what are essentially recessions in Germany, Spain and the UK. However, Italy and France have escaped that list. But France is starting to feel the blow of weaker growth later than some of the others so the jury is still out on how weak France will be and how soon the weakness will manifest itself.
| French IP Excluding Construction | |||||||
|---|---|---|---|---|---|---|---|
| Saar except m/m | Jul-08 | Jun-08 | May-08 | 3-mo | 6-mo | 12-mo | Quarter-to-date |
| IP total | 1.2% | -0.6% | -3.0% | -9.5% | -3.8% | -2.0% | -1.5% |
| Consumer | 1.3% | 0.6% | -1.5% | 1.6% | -2.1% | -2.8% | 7.4% |
| Capital | 0.6% | -1.6% | -1.4% | -9.2% | 0.5% | -0.2% | -5.6% |
| Intermediate | 1.1% | -0.6% | -3.1% | -10.5% | -6.0% | -3.2% | -2.7% |
| Memo | |||||||
| Auto | 5.1% | -2.8% | -8.0% | -21.9% | -14.7% | -3.5% | 1.2% |
Robert Brusca
AuthorMore in Author Profile »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.
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