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

Global| Apr 29 2025
Money Growth Rates Lean Against Slowdown Hypothesis
Money growth trends and the major money center economies are not showing any clear indication toward economic weakness despite widespread pessimism on the part of economists and market prognosticators.

Money growth is accelerating as its growth speeds up over one year compared to its growth over either two or three years in the EMU, the United States, and the United Kingdom. Credit growth in the EMU also speeds up on this sequence- not usually a slowdown signal. The lone exception here is Japan where its fight against deflation is finally won and morphed into an inflation problem that the Bank of Japan is fighting with its usual gradualism. Japan’s money supply growth slows over two years compared to three years and over one year compared to two years. However, back in Europe, credit growth in the EMU is showing acceleration on this timeline. Japan is the only ‘slowdown signal.’

We can also peruse the growth rates for real money balances. The EMU, the U.S., and the U.K. show that ‘real money balance’ growth picks up for two-years compared to three-years and accelerates again over one year compared to two-years. Acceleration is in train as real money balance growth transitions from a shrinking profile to positive growth rates in these three countries. Japan is an exception here as it still logs all negative growth rates and these do get progressively weaker (-1.2% over three years to -1.5% over two years to -2.8% over one year).

Shorter terms trends (for the skeptical) Within the one-year horizons (12-month to 6-month to 3-month), the annualized nominal growth rate in the EMU weaken from 3.4% over 12 months to 2.0% over three months, but real balance growth is nearly unchanged at 1.1% over 12 months compared to 0.9% over three months annualized. Real credit on these time sequences accelerates in the EMU. U.S. real M2 growth generally accelerates from 12-months to 3-months. The same is true for the U.K. but not as steadily. Japan’s progress shows growth rate declines but not getting progressively weaker.

Through all of this, nominal oil prices are steadily falling. While the pace of decline lets up over two years, the 3-year and 12-month growth rates are nearly identical.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Apr 28 2025
U.K. Distributive Trades Survey: Weakness Lingers and Is Mixed
Retailing and Wholesaling continue to show wear and tear The United Kingdom’s distributive trades survey has four parts. There's a survey of retailing and a separate survey of wholesaling. Then for each one of these surveys, there's a module that addresses current conditions and another one that addresses expected conditions.

Current Conditions vs. Expectations for the distributive trades In this month's report, the current conditions assessments improved in retailing but were mixed for wholesaling. Expectations in retailing and wholesaling were also mixed as to month-to-month changes, but the levels of the responses remained quite weak.

The Specifics Current Retailing- Retail sales compared to a year ago improved sharply to a -8 reading in April compared to a draconian -41 in March. Orders compared to a year ago improved at a reading of -24 in April from -38 in March. Sales for the time of year improved to -31 from -36. Sales compared to a year ago have a below median 29.2 percentile standing, while orders compared to a year ago have a 16.9 percentile standing and sales evaluated for the time of year have a 12.3 percentile standing. In each case, the reading from April is below its median reading of the last 24 years. These readings as a collection are weak readings.

Expected Retailing- The expected results for retailing in the survey show mixed results. The reading for sales compared to a year ago at -33 in May is slightly weaker than -30 in April. Orders compared to a year ago improved to -29 in May from -41 in April. But the survey shows a deterioration in sales for the time of year at -38 in May compared to -35 in April. The rankings for these readings range between the 10.5 percentile and 4.2 percentile, range marking them as all extremely weak readings in their historic queue of standings.

Current Wholesaling- Wholesaling also generally shows slippage in April. Sales compared to a year ago fell to -33 in April from in -29 in March, while orders compared to a year ago improved to -32 from March’s -38. Sales for the time of year, which post a reading of -31 in April compared to a reading of -20 in March, demonstrated slippage again. The rankings for these readings range from 4.2 to 9.2 in percentile standing terms.

Expected Wholesaling- Turning to expectations, sales compared to a year ago nudged lower to -26 in May from -25 in April. Orders compared to a year ago improved nicely to a reading of -28 in May compared to -38 in April; expected sales for the time of year slipped to -28 from April’s -27. Several of these are small stumbles month-to-month. But these readings range from a low percentile standing of 7.7 percentile to a high standing at a 12.6 percentile – all weak metrics.
by:Robert Brusca
|in:Economy in Brief
France| Apr 24 2025
French Household Sentiment Marks Time
Household confidence in France has steadied after along climb up from an historically weak level. Still, confidence has only a 36.5 percentile standing.

Living standards show mixed changes this month. Standards compared to the past 12 months are a bit better month-to-month, while looking ahead, they are weaker and fall by 3 survey points.

However, unemployment expectations have moved sharply higher for the month, rising to 51 in April from 47 in March, to a very high percentile standing at the 70.4 percentile mark.

Price developments are moderating with weaker readings compared to 12 months ago. The percentile standings for prices, however, are modest, below the 50-percentile mark, showing these are below median readings both looking backward and looking ahead.

The savings environment has worsened both on backward-looking and forward-looking savings responses. And the rankings for these environments are both very high.

The saving environments dove-tails with a spending environment that did improve on the month, remains weak, and has a ranking at its 34th percentile. The environment is very favorable to save and not very favorable to spend.

The financial situation is little-changed in the month either looking-forward or looking-backward. That is a rather odd result, given the uncertainty over tariffs; but then maybe when policy causes uncertainty viewpoints freeze. On a month-to-month comparison, we see stronger financial situation ranking looking back 12-months that has an above median percentile standing at 65.4; but looking ahead there is a below median standing at the 44.2 percentile.

The table also presents two columns tracking the economic shock from before Covid to before the Russian invasion of Ukraine and secondly from that point to date. What this shows generally is that at the time of the invasion, most of the survey items had improved upon their pre-Covid readings. One exception is that unemployment concerns were still further elevated. But then from pre-invasion forward, most readings are substantially weaker. But in comparison, the change in unemployment is strikingly higher.

On balance, France’s household responses seem to exhibit some stickiness that may be a product of uncertainly. The overall readings remain weak.
by:Robert Brusca
|in:Economy in Brief
Denmark| Apr 22 2025
Danish Confidence Drops to 2-Year Low; Inflation Concerns Remain Elevated
Danish confidence slipped to -17 in April from -15.5 in March, continuing a slide that extends back to late-2023. The weakness accelerated in late-2024 especially with the conclusion of the U.S. elections.

On data back to late 1995, the consumer confidence indicator for Denmark ranks in its lower 3.7 percentile. Confidence has been higher than this most of the time over this period.

The financial situation over the past 12 months ranked at a weak 7.3 percentile standing, but for the next 12 months an even weaker 1.4 percentile reading is in place. The existence of U.S. tariffs and pushback for Europe to carry more of its own defense burden seem to be adversely impacting Danish sentiment. There may also be some anxiety stemming from President Trump’s stated desire to have Greenland, a semi-autonomous Danish territory, become part of the United States.

The general economy has a confidence ranking at its 13.8 percentile over the last 12 months, but that drops to an all-time low ranking of zero for the next 12 months. All these respondents backed down in April compared to their March readings. The ‘expected’ financial conditions response fell by the most.

In sharp contrast, consumer prices for the last 12 months carried a 92.7 percentile standing; for the next 12 months, that pushes back up to the 98.6 percentile. Meanwhile, unemployment concerns, while ticking lower, have a standing at their 84.6 percentile higher since 1995 less than 16% of the time.

The environmental readings show the favorability of the time to purchase or save for the next or last 12 months (four metrics) all generate readings below their respective median (below a standing of 50%. The time to purchase readings are the weakest in this group.

However, the general financial situation for households currently holds above its historic standing at a reading with a 54.5 percentile standing. But that reading eroded last month.
by:Robert Brusca
|in:Economy in Brief
Germany| Apr 17 2025
German PPI Dives But Core Rate Advances
Germany’s PPI in March fell by 0.7%; this is for the headline series excluding construction. The quasi-core PPI, excluding energy, rose by 0.2% in March. The headline series shows a number of months with the inflation rate negative, that is, with the price level falling, while the PPI excluding energy its flat in January with a 0.2% increase in February and in March. The stellar performance of the headline owes to weakness in oil prices.

Progressive inflation calculations on the PPI headline shows a decline of 0.2% over 12 months, a decline at a 0.9% annual rate over six months and a decline at a 4.9% annual rate over three months. These are progressively improving inflation dynamics; in fact, inflation that might be alarmingly weak under other circumstances. However, the PPI excluding energy is up by 1.5% over 12 months, up at a 1.2% annual rate over six months and up at a 1.4% annual rate over three months. These are clearly moderate increases in inflation and the quasi-core rate for the PPI has clearly stabilized.

In the first quarter, the German PPI inflation rate is falling at a 2.1% annual rate as the PPI excluding energy is rising at a 1.1% annual rate.

PPI components are not seasonally adjusted and are a little bit less interesting because of that. But the patterns for consumer goods, investment goods, and intermediate goods in the PPI show that all of them have stronger three-month annualized growth rates than 12-month growth rates, the opposite signal that we get from the headline which is seasonally adjusted.

Of course, monetary policy focuses much more on CPI prices than PPI prices; on that basis, the German CPI is up 2.2% year-over-year compared to a CPI ex-energy that's up at a 2.7% annual rate. Inflation presented on a CPI basis is much hotter than it is on a PPI basis and that's not surprising because the PPI is focused on the goods sector and production in Germany while the services sector has a much higher inflation rate and an inflation rate that tends to be more stubborn to change.

The table also chronicles the impact of Brent oil where prices fell by 3.5% in March after falling 3.8% in February. Over three months Brent is falling at a 4.6% annual rate which is a stronger decline than a 1.3% annual rate drop over six months, but year-over-year the Brent price is still down by 14.6%, and that larger, longer-lasting decline is probably still working its way through the pipeline into German prices.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Apr 16 2025
U.K. Industrial Production Steps Up in February
Industrial output in the United Kingdom jumped in February, rising 2.2% compared to January. In January output fell by 0.9% while in December output increased by 0.7%. The February gain is large enough to turn some of the trends higher by itself: the 3-month trend is sharply higher after a gain like this, but the 6-month and year-over-year gains are only moderately higher, but again, they are pointing higher instead of lower.

Sequential and sector growth rates Sequential growth rates for industrial output show progressive improvement from a 0.3% annual rate over 12 months to 1.2% annual rate over six months to an outsized 8.2% annual rate over three months.

Sector gains for manufacturing show increases across the board in February with consumer durable goods output rising 8.6% month-to-month. Capital goods output rose 3.8% month-to-month. These gains were a reversal of widespread and generally smaller declines in January whereas in December there was an output decline for consumer durable goods but increases in all the other categories. As a result of these gyrations and past trends, consumer durables output is sequentially accelerating from an 8.5% growth rate over 12 months toward a 20.2% annual rate over three months; consumer nondurables also sequentially accelerate from 2.1% over 12 months to a 10.5% annual rate over three months. Intermediate goods are an exception; the year-over-year decline in output yields to an even a deeper pace of decline over six months but then a moderate revival emerges with a net gain over three months. Capital goods output has a strong accelerating trend with a gain of 0.5% over 12 months, an annual rate gain of 3.3% over six months and an annualized rate of 12.9% over three months. The trends and the breadth of output increases in the industrial sector for the United Kingdom is impressive but can it last?

Industry detail for several key industries: food distribution, textiles & leather, motor vehicles & trailers, mining & quarrying, and utilities show more irregularity. Output of textiles & leather is progressively and strongly accelerating. Motor vehicles & trailers dig themselves out of a hole with output falling 10.1% over 12 months, but it’s really improving to grow with a 3.5% annual rate over three months. Mining & quarrying shows declines in output over all horizons, but that's still an accelerating trend as the rate of decline slows over each sequential period. Food & tobacco show no clear trend although its 3-month growth rate is higher than its 12-month growth rate. Utilities output also shows strong acceleration, starting with a 1.2% gain over 12 months, rising at a 4.5% annual rate over six months and progressing to a 14.7% annual rate over three months.

With two months of data from the unfolding quarter in hand, manufacturing output is growing at a 3.2% annual rate in the U.K., led by consumer durables with output rising at 11.6% annual rate with intermediate goods as the weak category still falling at a 1.3% annual rate in the quarter to date. Among the five listed industries, all of them but one have output increases. In the unfolding quarter, the largest gains are in textile & leather and the only decline is in manufacturing and coring and that's only at a 0.4% annual rate.

This has generally been a weak period. For growth going back to January 2020 just before COVID started, also including the period of COVID, the invasion of Ukraine by Russia, and special issues for the U.K. because of Brexit, overall industrial production has actually declined by 5% over this span. All of the sectors show increases, however, except for intermediate goods which is the sector that drags down overall output because intermediate goods output falls 23.8% over the span.

The five individual industries listed all show declines over the period except for motor vehicles & trailers that show output is up by 16.1%; but output is down very hard for mining & quarrying nearly 42% lower than it was in January 2020, and utilities output is lower by nearly 26% over that same span.
by:Robert Brusca
|in:Economy in Brief
Global| Apr 15 2025
ZEW Experts Run Scared
The ZEW survey for April shows some stunning changes and deterioration. It's important to point out that this survey is a survey of German financial experts and Europeans are having a particularly difficult time with the U.S. policy and the threat of putting tariffs on them and globally. The extent to which ZEW expectations have been cut is generally excessive compared to the behavior in the U.S. and the behavior of financial markets although those have also been volatile and have shown a great deal of concern.

ZEW experts in April see the EMU economic situation eroding to a -50.9 reading from -45.2 in March, a minor step back. For Germany, there's an improvement to -81.2 in April from -87.6 in March. For the United States, there's an astonishing markdown in the economic situation from +6.7 in March to -23.9 in April. The U.S. reading had been as high as 42.6 in February; this is a remarkable change in the economic situation.

In three months, macroeconomics expectations in Germany have moved from a +51.6 in March to a -14 in April. In the United States, a reading of -48.7 in March has gone to -71.5 in April, the worst assessment on record.

Inflation expectations in the euro area deteriorate from +6 in March to -3.1 in April. For Germany, inflation expectations move from +7.9 in March to -5.0 in April. For the U.S., inflation expectations move in the opposite direction: they get higher moving from a 52.3 in March to 75.8 in April; this pushes them up to a 96.7 percentile standing and compares to a 27.7 percentile standing for Germany and a similar standing for the euro area. A lot of the analysis that we have seen has talked about relatively minor changes in inflation over the short one when the tariffs will push the price level up without any clear view of how much lasting inflation effect there might be. The ZEW experts take a very different view that the tariffs are going to wildly change the inflationary environment.

Short-term interest rate expectations fall in euro area to -60.8 in April from -56.1 in March. For the U.S., the expectations are little changed at a -22 reading.

Long-term interest rates move in different directions with the German long-term rate response moving from a 35.7 assessment in March to a 23.3 assessment in April; for the U.S., the March reading of 34.7 moves up significantly to 48.5 in April, a 52.6 percentile standing.

ZEW expectations for the stock market show a slight downgrade for Europe in April, an upgrade for Germany, and weaker conditions for the U.S. Comparing these levels to what they were looking for in February, the German level moves to 9.7 in April from -4.7 in February. The euro area moves to 6.4 from -0.8 in February. The U.S. outlook moves to -17.6 from +12.1 in February. The exchange rate moves sharply, too. The dollar is at a reading of -35.4 in April, down from -17.2 and March; that compares to a reading of +27.5 in February.
by:Robert Brusca
|in:Economy in Brief
Germany| Apr 11 2025
German Inflation Delights, But Remains Stubbornly High
German inflation was delightfully low in March, falling by 0.2% month-to-month after rising by only 0.1% month-to-month in both February and January. Over the last three months, the German HICP headline pace has fallen, and is contracting at a 0.3% annual rate, compared to climbing 2.6% at an annual rate over six months, and climbing 2.5% at an annual rate over 12 months. This excellent three-month performance, of course, is also embedded in the too-hot six-month and 12-month rates of change. It serves as evidence that, as delightful as the recent data have been, German inflation continues to run over the top of the target set by the ECB for the European Monetary Area.

Domestic CPI The domestic CPI that has a different weighting scheme shows inflation up by 0.2% in March and February, compared to a 0.1% gain in January. The inflation performance for the German domestic CPI is 2.2% over 12 months, 2.7% over six months and 1.7% over three months. It also behaves much better over three months than over six or 12 months; in fact, the 12-month gain in the domestic CPI is even closer to the ECB's desired outcome. Still, the German inflation rate continues to run hot except over three months. Looking at German inflation and its CPI excluding energy, which was up 0.3% in March, compared to 0.2% in February, and no gain in January. The inflation sequence for German domestic inflation excluding energy is 2.7% over 12 months, 2.7% over six months, and then down again to 1.7% over three months.

Germany displays improved and in fact acceptable inflation over the last three months; however, over a broader timeline, it still isn't good enough for the target that the ECB has for the EMU area. Still, if we look at diffusion statistics which assess the breadth of inflation acceleration across periods, we see the diffusion over 12 months is only 27%, over six months it's only 36%, and over three months it's only 36%. Diffusion at 50% would indicate acceleration and deceleration are balanced. But with diffusion below 50%, that's telling us that inflation is actually decelerating across more categories than it's accelerating. Germany displays impressive decelerating statistics across these categories for 12-months compared to 12-months ago, for 6-months compared to 12-months, and for 3-months compared to 6-months. The reality is that inflation continues to overshoot, that is simply the reality that inflation is stubborn in several important categories where it refuses to fall enough to register the desired result of 2% overall.

However, very clearly inflation in Germany is not running away. It is slightly excessive, and the overshoot depicted by the domestic headline at 2.2% would probably be acceptable in these times, but the overall 2.5% for the HICP and for the CPI excluding energy at 2.7% are still excessive.
by:Robert Brusca
|in:Economy in Brief
Europe| Apr 10 2025
European IP Still Mixed Across Early Reporters
The overall assessment of EMU-wide IP is not yet possible. But a slew of early reporters (eight in this table) along with two northern European countries have issued reports on manufacturing production in February. They are mixed in February with four up, and four down. January has five ups and three downs. December has five down and three up. So, the numbers cluster around 50-50 with some variation. The Northern European countries are showing monthly gains except for Norway in December.

The sequential trends showing growth rates over three months, six months, and 12 months, show three EMU nations with output falling and five increasing over three months, then four have output up and four down over six months. Over 12 months, five countries have output down and three with output up. The sequential growth rates do show a trend toward having more nations with expanding output. Germany, Finland, and Greece show decline on all three horizons. France shows output declines over six months and 12 months while Spain shows a decline only over 12 months. The northern European countries of Sweden and Norway log increases on all horizons.

From 12-months to 6-months to 3-months, the EMU median reading steadily progresses to a stronger reading. The median change at an annual rate is -0,7% over 12 months, -0.3% over six months and +3.0% over three months. Monthly data do not give a ‘clear look’ at trends. In December, the median output change on month-to-month data is -0.7%, which shifts sharpy to a gain of 0.9% in January. February saw the median also post an increase, a bit weaker than January at 0.3%. Still, it was an increase, and it was better than the December rate of -0.7%.
by:Robert Brusca
|in:Economy in Brief
Japan| Apr 09 2025
Japan’s Confidence Falls and Stays Low
Japan’s confidence is still weak and in a down cycle. Since reaching a sharp peak early in 2024, confidence continues to recede. All components are showing decline on all horizons from 12-months to 6-months to 3-months. This is an extremely uniform response.

Consumer confidence has a 15-percentile standing on data back to 2004. Components of the confidence index has standing that range from a standing at the 47.8% mark for the valuation of assets to a low at the 6.1 percentile mark for willingness to purchase durable goods.

In keeping with this weakness, the overall livelihood standing is at its 10.2 percentile.
by:Robert Brusca
|in:Economy in Brief
Japan| Apr 08 2025
Japan’s Economy Watchers – Conditions Sag
Japan’s Economy Watchers Index saw its current and future indexes fall and indicated contraction in March. We can only imagine the knock-on effects of impending U.S. tariffs on these perceptions and expectations in the months ahead.

As it stands, Japan’s economy watchers survey show month-to-month attitude deterioration in their diffusion responses up and down the line. For the current conditions survey, entries erode except for eating & drinking places, manufacturers, and services. For the future index, all the responses are weaker month-to-month except for housing, corporations, and manufacturers.

In terms of percentile standings on survey responses from March 2004 to date, only one category in the current or future services, current manufacturers, has a reading above the 50% mark making it the lone response above its historic median on this timeline. It achieves this ‘milestone’ with a diffusion reading of 47.8, that nonetheless indicates contraction. Manufacturers also have the highest diffusion ranking in the future survey but at the below median 46.2 percentile mark; the topical diffusion reading of 47.4 indicates ongoing contraction.
by:Robert Brusca
|in:Economy in Brief
Germany| Apr 04 2025
German Orders Fall
German orders came up flat in February after falling by 5.5% in January. It's been a turbulent period for orders. The January drop came after an increase of 5.6% in December, so orders have been chopping around the last few months and are not really going anywhere. Foreign orders rose 0.8% in February after falling 0.5% in January and being flat in December. Domestic orders fell 1.2% in February after falling by 12.1% in January but that had followed a 13.9% increase in December. Once again, there is a lot of volatility and little trend.

The trend path for orders looking at 12-month, 6-month, and 3-month growth shows not much stirring. Total order orders fall 0.2% over 12 months; they rise at a 2.7% annual rate over six months and then fall at a 0.9% annual rate over three months.

Foreign orders rose 0.1% over 12 months; they were up 1.9% at an annual rate over six months and they rose by 1.4% at an annual rate over three months. Foreign orders are showing some sustainable growth over three months and six months although they have very little to show for it over 12 months. Domestic orders fall by 0.9% over 12 months; they gain at a 3.5% annual rate over six months and then fall at a 4.3% annually over three months. Domestic orders display the same kind of volatility that we see in the headline overall and not the tendency toward creeping growth that we see looking at foreign orders. Moreover, the domestic series updates with a 3-month growth rate that's negative which is not encouraging. Real sales data show a small increase in February of 0.2% for manufacturing after falling 1.0% in January and rising 0.8% in December. The sequential growth rates hint at some improvement but not much with a 3% decline over 12 months, a 0.4% decline at an annual rate over six months and then a swing to positive growth at 0.4% at an annual rate over three months; this is creeping and good news, but it's very moderate growth.

Industrial confidence measures for Germany, France, Italy, and Spain the four largest economies in the European Monetary Union, show a modest improvement from January to February in Germany and in France, unchanged conditions in Italy, compared to some slight slippage in Spain. Viewed sequentially, the industrial confidence data don't show much movement from 12-months to 6-months to 3-months for these countries; Germany and France get slightly weaker; Italy and Spain have even smaller moves although they also get slightly weaker. The rankings on the levels of these industrial confidence measures in February give us rankings that are below the 50% mark, putting them below their median for all four countries. The reading for Germany is the lowest with 5.9 percentile standings; the others have rankings between the 20th and 40th percentile on that timeline.

The data on orders in real sales on a ranking basis we find overall orders and domestic orders are moderate-to-weak with an overall order of ranking in the 53rd percentile compared to a domestic ranking at the 25th percentile and foreign orders have a firm 71.5 percentile standing. These calculations are based on the levels of orders. Then expressed in terms of growth rates, these three orders metrics have rankings between their 36th and 40th percentiles putting them below their median growth rate for the period. Real sector sales, for manufacturing sales for example with a 48-percentile standing based upon the level of sales, logs a 19-percentile standing based upon the ranking of its year-over-year growth rate.
by:Robert Brusca
|in:Economy in Brief