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

United Kingdom| Dec 19 2025
CBI’s Distributive Trades Survey Weakens Sharply in December
The new UK Confederation of British Industry (CBI) survey on the distributive trades sector shows a sharp weakening of an already weak survey for December and for the outlook into January of 2026.

The month-to-month deterioration from November was widespread across metrics for retailing as well as for wholesaling for the current month as well as for the outlook. The monthly degradation is without exception across the board - omitting the inventory metric which is a different animal in any event since inventory building is sometimes involuntary.

The Retail survey Current conditions: In December, the retail survey for sales compared to a year ago, orders compared to year ago, and sales for the time of year (a seasonal adjustment metric), all worsened month-to-month. The November readings were weak and in December sales compared to a year-ago worsened by 12 points, Orders compared to a year ago worsened by 17 points month-to-month and sales for the time of year worsened by 11 points. These metrics for December are below their respective 12-month average by 6 to 13 points, as well for these categories. The rankings tell a stark story, year-on-year sales have been lower only 5.3% of the time, Year-on-year orders have been weaker only 5.6% of the time, while time of the year sales have been lower only 13% of the time. These are all extremely low-ranking metrics.

Expected Conditions: In January expected conditions have weakened month-to-month by amounts ranging from 33 points to 16 points depending on the metric. And sales and orders compared to a year ago as well as sales for the time of year each are weaker than their respective 12-month average readings by amounts ranging from 4 points to 23 points. The rankings on expectations are even worse than for the current metrics. Expected sales compared to a year ago rank lower less than 1% of the time, the same is true of orders. While sales for the time of year have been weaker 7.7 percent of the time.

Wholesale survey The rankings for wholesaling are even lower than for retailing across the current and expected metrics. The month-to-month degradation for the current readings ranges from 7 points to 17 points weaker while the reading degradation monthly ranges from 5 points to 16 points. Wholesale sales and orders compared to a year ago and sales for the time of year each rank below the 5% mark. The expectations for January shows expectations for the three categories each are at a 2.5 percentile standing or lower.

Summing up The distributive trades survey has all but crashed and burned in December. Over the last 26 years the average of the three current metrics’ rankings has been lower only 18 times. The average outlook ranking for the month ahead has been weaker only 5 times in the last 26 years (over 313 months). On a relative basis the expected sales/orders performance is more depressed than the Current results for January. The pooled rankings show current ranking over the past 26-years weaker only 5.8 percent of the time with expectations lower only 1.6 percent of the time. These are very weak metrics. It is surprising that the BOE is walking on eggshells to cut rates with mixed support for rate cuts amid such weakness. There is already a GDP decline in the monthly data for October. UK and inflation is still too high, but it is breaking lower at a relatively fast pace. Will the UK be the first economy down after Covid?
by:Robert Brusca
|in:Economy in Brief
Belgium| Dec 18 2025
Belgian Consumer Confidence - On the Rise, but Weaker Month-to-Month
Belgian consumer confidence has been on the rise since early this year, however, in December the index has taken a step backwards with a reading of -1 compared to a November reading of +2 and then an October reading of zero. The confidence indicator, on data back to 1991 has a ranking in its 78.5 percentile, marking it as a reasonably strong reading on confidence compared to its values over that period. On the whole the trend is still solid, the month’s step-back is small.

The Economic Situation Economic situation for the next 12 months is weaker in December on a reading of -28 compared to -26 in November. The assessment of the previous 12-months is weaker in December at -42 compared to a reading of -38 in November. The outlook is weaker and the recent legacy is assessed as being slightly weaker as well, than it was in November. The assessment of the economic situation for the next 12 months is weak at a 9.7 percentile standing and the assessment of the previous 12 months is also weak at a 23.4 percentile standing.

Price Trends Price trends are seen as higher over the next 12-months at a reading of 38 compared to 27 in November. The backward-looking assessment of price trends also has them stronger in December than in November at a reading of 58 compared to 56 in November. Both of these price trend assessments are high with the outlook reading at its 94th percentile and the backward-looking assessment in its 81st percentile. Price expectations hit their low mid 2023-late 2023 and have been on the rise steadily ever since. The price metric of ‘12-months ahead’ was at zero in April of 2024 but climbed to +19 by February 2025 and currently sits at a level of 38. Price expectations are well in gear to the upside in Belgium despite relative price stability in the Euro-Area.

Unemployment Concerns about unemployment elevated slightly in December to -9 from -10 in November but these are significant readings compared to, say, the 12-month-ago reading which is at a level of +32. The sense of backtracking here is extremely weak. The sense of progress on the part of survey respondents becoming more confident about the future is clearly the prevalent feature here. The December reading for unemployment in fact has only a 2.5 percentile standing, indicating extremely weak concerns about the prospects of unemployment ahead despite the minor month-to-month step-back.

Major Household purchase environment The environment for making major household purchases deteriorates slightly in December at -15 compared to -13 in November. This only puts the index back to where it was in October. The response to the question, ‘is it favorable to buy at present’ is unchanged from its November value at -19 and it has been stuck there for three months in a row. The outlook to make major household purchases in the next 12-months logs a weaker reading at -15 than its 12-month value of -13but is stronger than its 12-month level of -18. The reading for the ‘favorable to buy at present’ question, however, is weaker at a -19 compared to -14, logged 12-months ago. The environment for making a household purchase over the next 12-months has a 55.6 percentile ranking which is above its median, however, the assessment of ‘favorable to buy at present’ has only a 20th percentile standing significantly below its median reading (median readings occur at a ranking of 50%)..

The Financial situation The financial situation for the next 12-months is assessed weaker at -3 in December, compared to zero in November; it compares to a - 2 in October. The assessment 12-months ago was also -2 so this is a very minor deterioration comparing the financial situation of households with the last 12-months produces another deterioration at -8 in December compared to -6 in November and that compares to 12-months ago at -5 another deterioration. However, the backward-looking assessment has a 52-percentile standing which is above its median while the outlook reading of -3 has a 23-percentile standing which puts it in the lower quarter of all expectations on data back to 1991. The current situation is appraised at 20 a step-back from November and October levels as well as from 12-months ago. But the current appraisal also has a queue standing in its 65.7 percentile which has a comfortable margin above its median reading. Households clearly have concerns about their financial situation even though their outlook for making household purchases is above median and their concerns about unemployment are low. Currently, conditions appear to be construed as solid.

Savings Household savings over the next 12-months are weaker in December at a reading of 20 compared to 26 in November; they are closer to their 12-month ago reading of 21. December is still a relatively high reading, in any event, with a 91-percentile standing. The question, ‘is it favorable to save at present’ is unchanged in November compared to December at a reading of -28 although it is weaker than it was 12-months ago and the percentile standing at its 78th percentile, again, a firm reading for this metric.

Summing up - assessment The consumer confidence reading from the Belgian National Bank this month shows a slight set back month-to-month, however, there is a significant an improvement that has been underway that is quite clear from the chart. The concerns that consumers have seemed to be about their financial situation haven't translated into concerns about unemployment or their willingness to make major household purchases, with unemployment concerns very low and their willingness to make household purchases for the period ahead at essentially normal levels. Still, there is more concern about inflation that is percolating, which is interesting considering that overall inflation has been relatively stable and muted in the European monetary area.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Dec 17 2025
U.K. Inflation Moderates Open Door for BOE Rate Cut
U.K. inflation has moderated in November, posting a 0.1% drop on the HICP, a 0.1% gain in the CPI-H headline measure as well as a 0.1% gain in the CPI-H core (excluding energy, food, alcohol, and tobacco). The sequential trend in core inflation points lower and is eroding but continues to run over the 2% mark set as a target by the Bank of England for overall inflation (over 12 months). The headline is excessive as well but also eroding.

Sequentially the CPI-H gains 3.5% over 12 months, slows to a 2.8% annual rate over six months and then dips to 1.4% annual rate over three months. The CPI-H core rises by 3.6% over 12 months, ticks down to a 3.0% pace over six months, and then runs at a 2.4% annualized pace over three months.

The trend for the CPI core, and for the headline, both are quite good and would be completely consistent with the Bank of England cutting rates, a move that is widely expected – although the 12-month pace for each is excessive.

Not only is inflation showing signs of falling into the Bank of England's target zone, but the economy has been weak although the unemployment rate currently is only hovering around the 4% mark. Still, recent economic data have been weak, and the recent monthly GDP report posted a negative reading, further unsettling the outlook. The October monthly GDP change was estimated at -0.1% while the year-over-year increase in GDP in October produced a gain of just 1.1%. These metrics have put the U.K. economy on recession watch at a time when there has been a sharp revision in the budget process that will be much more constrictive. A sharp pullback in the manufacturing of motor vehicles is blamed for the sudden weakness in GDP in October. The three-month drop in GDP is the first such drop since December 2023.

Meanwhile, the headline and the core inflation statistics are progressing. The table calculates breadth statistics on how widespread inflation acceleration has been and we see that it has not been prevalent (over 50%) in September or November, although breadth did touch the 58% mark in October. Sequentially, inflation acceleration has been tamed: over 12 months (when it is neutral), six months, and three months. Over 12 months, inflation accelerated in only 50% of the categories. And inflation according to the CPI headline and in the core over six months continues to show deceleration to accompany narrowing breadth - only 8.3%. That reading indicates that there was more inflation deceleration than acceleration by a wide margin over six months. At 50%, inflation acceleration and deceleration forces are balanced. Readings below 50% indicate relatively more deceleration, and that is now the more common condition. Inflation acceleration is extremely rare across categories over six months and three months.
by:Robert Brusca
|in:Economy in Brief
Europe| Dec 15 2025
S&P Flash PMIs Weaken in December
The Standard & Poor’s PMI data seem to have taken a fork in the road in December as the previous strong trend toward improving has been reversed in December. Out of 24 sector changes across eight different countries (or economic regions), there are only 6 sectors that show improvement month-to-month in December. This is a sharp contrast to November when 10 sectors showed improvement and to October when 20 of 24 sectors showed improvement. The worm has turned, but is it a lasting turn or not?

The sequential data look at changes in the hard data (that's data through November) over three months, six months, and 12 months. They show a strongly weighted preponderance of sectors that are better, getting stronger, rather than getting weaker. Over three months, 9 of 24 sector readings get weaker compared to six-months. Over six months, every single sector gets stronger compared to 12-months. Over 12 months, 19 sectors get stronger compared to 12-months ago. Monthly data show that this impressive string of improving sectors shows that progress began to slow down in November and kicked into reverse in December.

As of December, the United Kingdom, which is a struggling economy, is the only reporting unit to show a stronger composite, stronger manufacturing, and stronger services. Apart from the U.K.’s strength, there's stronger manufacturing month-to-month reported in France, Japan, and Australia. And that's the end of month-to-month improvements in December. In November, there is a triple improvement in Japan with manufacturing, services, and the composite strengthening month-to-month. There are isolated sector improvements in manufacturing in Australia and in the U.K. There were also improvements for services in India as well as in services and in the composite index for France and in the European monetary union. Still, these are only 10 of 24 sectors in November.

The previous strong trend movement higher has left most of the readings as of December above their medians on data back to January 2021. Among the 24 headline and sector calculations, only six of them show standings below their 50th percentile since January 2021, which puts them below their historic median for that period. The service sector is below the 50% mark in the United Kingdom, Japan, and the United States, while the overall composite is below the 50% mark in the U.S. and in India, with India showing a below median manufacturing rating as well and the U.S. showing below 50% in services. The weaker U.S. data is a new and interesting feature with U.S. job data for November just reported and looking a bit stronger, despite a rise in the unemployment rate. The December S&P survey data, on the other hand, hint that such an improving trend may not last.
by:Robert Brusca
|in:Economy in Brief
Japan| Dec 15 2025
Japan’s Tankan Ticks Higher for Large Manufacturers
Tankan overview: Japan's Tankan report is an important quarterly assessment and outlook of the Japanese economy. Historically, the performance of manufacturers is considered to be the bellwether in this survey for performance of the economy. In the fourth quarter of 2025, the manufacturing index moved up to 15 from 14 in the third quarter. This compares to a value of 12 in the first quarter and a four-quarter average of 13.5. Since late-2006, the manufacturing index has averaged 5.3, marking the performance in 2025 as a substantial improvement from the long period where Japan struggled with deflation. On dated back to 2003, the manufacturing index has a standing in the queue of data in its 70.8 percentile, a reasonably firm reading.

Nonmanufacturers: The index for nonmanufacturers logged a reading of 34 in the fourth quarter compared to 34 in the third quarter and a reading of 35 in the first quarter of 2025; the one-year average for nonmanufacturers is 34.3, marking that sector as little changed over the course of the year. Nonmanufacturing in the fourth quarter has an index standing at its 97.8 percentile, marking it as an extremely high standing on data back to late-2003.

Nonmanufacturing details: Readings across the nonmanufacturing sector are above their respective one-year averages for all subsectors except transportation where the fourth quarter index backs down to 27 from an average of 30.5 and for restaurants & hotels that back down to a reading of 25 from an average of 39.3. The queue percentile standings for the subsectors show a good deal of strength with construction at a 98.9 percentile standing, services for businesses also at a 98.9 percentile standing, transportation - despite the back off from the average - is at a 94.4 percentile standing, and real estate and wholesaling are at 93.3 percentile standings on data back to 2003.

The Tankan outlook- The survey also produces an outlook. For large manufacturers for the first quarter of 2026, the outlook metric moves up to 15 from what had been 12 for the fourth quarter of 2025. The outlook for nonmanufacturers is flat month-to-month at 28, the same as in the fourth quarter. The outlook for manufacturing has a queue standing in its 78.7 percentile on data back to 2003, while nonmanufacturing has a standing for the outlook reading at its 98.9 percentile marking these outlooks as quite good.

The BOJ is watching- This is a survey the Bank of Japan will be looking at and assessing what policy should do and how strong the economy appears to be. On these data, the economy would appear to be firm, the outlook would appear to be solid, and if the Bank of Japan were to decide to pay more attention to inflation, the economy would seem to be in a position to absorb a rate hike without much difficulty.

Other-sized enterprises- Manufacturing: The survey also produces results for medium-sized and small-sized firms, as well as outlooks for medium-sized and small-sized firms (that are not presented in the table). The fourth quarter assessments of performance, however, show improvements for manufacturing in both medium- and small-sized enterprises; they also show rankings of medium-sized firms in manufacturing in their 85th percentile, the same as for small sized enterprises.

Nonmanufacturing: Nonmanufacturing for medium- and small-sized enterprises show improvements in the fourth quarter results and also demonstrates high rankings of those readings for those respective sectors.

Summing up: On balance, it's a solid Tankan report for Japan's economy and should provide reassurance to the Bank of Japan and to the current government that the economy is on solid footing as each looks at the situation and tries to assess the best policy options.
by:Robert Brusca
|in:Economy in Brief
Sweden| Dec 11 2025
The Curious Case of Swedish Inflation
Sweden’s inflation rate has developed into a very interesting oddity as headline inflation as measured by the harmonized index of consumer prices (HICP), that is used in Europe, has come to diverge sharply from the Swedish national rate of inflation measured by its national CPI. The HICP inflation rate is 2.2% over the last 12 months; Sweden’s national rate is up by only 0.2%. If we rank each of these two inflation rates on data back to 2001, the rank of the HICP is in its 72.2 percentile while the rank of the national CPI is in only its 19.4 percentile, the lower one-fifth of its historic range of national inflation rates. These two rankings occur over the same periods and so there's nothing about the periodicity that's responsible for this; there's simply very different performance over the recent span.

About measuring inflation The HICP was adopted in Europe once the monetary union was formed and the countries of Europe were not able to get together to decide how to treat housing costs, which are important element in the CPI. They had entered into CPIs in different countries in different ways at that point. In the United States, inflation statistics are often criticized because of the way the housing component fits into them. Housing has such a large weight in the U.S. inflation measure. U.S. housing costs consider the cost of running the house in terms of taxes and utility costs; they look at the rental equivalent values, and they also have an owner imputed rent for people who live in their own homes. Of course, owner equivalent rent is a made-up number; it's completely imputed. Because a lot of European mortgages are short-term and they reprice when the central bank changes its rate, it’s very important to be careful how interest rates are treated in the housing cost indexes in Europe. The central bank did not want to be in a position where it would be raising interest rates to fight inflation and causing inflation to be higher because they were raising the mortgage interest rates on homes and causing the cost of housing to go up. For this reason, the HICP measures do not include housing costs. As we can see in the Swedish details for this month, housing and fuel costs are down 3.1% year-over-year. If we look at the ranking of housing costs for year-over-year growth, we see that they rank in the lower 6.4 percentile and are one of the most important factors in driving the national CPI lower and, of course, that metric is absent from the HICP.

Inflation is always rife with controversy: All of this is simply just another way to point out that inflation, while we measure it and talk about it, it's a controversial subject. How we measure it does matter. However, for monetary policy purposes, if we construct a measure that is reasonable and if we follow it consistently over the years, it should give us good signals and a good way to measure inflation and engage monetary policy. Yet, very clearly, if there are two competing gauges, it could become a real problem to jump from one to the other because they track different circumstances.

The current state of Swedish inflation: Swedish inflation in November fell by 0.3% month-to-month after rising by 0.5% in October and falling by 0.1% in September. The diffusion, or breadth, of inflation acceleration was only 33.3% in November. It jumped up to 55.6% in October, but it had been lower in September at 33%. Looking at Swedish inflation over 12-month, 6-month, and 3-month periods, the HICP goes from 2.2% over 12 months to an annualized pace of 5.7% over 6 months and then back down to 0.5% over 3 months. The national CPI has the same sort of topography but different growth rates with the CPI up by only 0.2% over 12 months, accelerating to 1.5% over 6 months and then declining at a -0.9% annual rate over 3 months. Inflation diffusion over 3 months in the national index is only 11.1%, over 6 months it jumps up to 66.7%, and over 12 months it's at 44.4% which is below 50% marking inflation as having more deceleration than acceleration.

Controlled inflation: On balance, Swedish inflation appears to be under control using either method. The ranking for inflation by category shows high inflation for food & nonalcoholic beverages, education, other goods & services, and medical care. However, inflation is below its median pace and bears low rankings for clothing & footwear, housing, fuel & lighting, recreation & culture, and transportation. Inflation is always somewhat mixed across sectors. That’s another thing that makes it hard to pin down exactly what inflation is, because people who consume different baskets of goods are going to experience different inflation rates. However, Sweden appears to have its inflation situation under control whichever metric you look at. The chart makes it clear that after its spike during COVID, inflation has come back down to a reasonable long-term pace that appears to be close to something that the central bank would find acceptable. The recent rise in HICP inflation seems to be unwinding and year-over-pace is down to a moderate 2.2%.
by:Robert Brusca
|in:Economy in Brief
Sweden| Dec 10 2025
Sweden’s Industrial Production Falls in October
Swedish IP turns up sour in October: Industrial production in Sweden fell 5.7% in October, a relatively large decline, but it comes in a period when industrial production has been unusually volatile. Going back to July, industrial production fell month-to-month by 7.8%, then rose by 5.6% in August, rose again by 4.3% in September, and now fell by 5.7% in October. These month-to-month figures show a great deal of volatility in this series for industrial production excluding construction. The performance for overall manufacturing production is similarly volatile. The components in the table show that vehicle production, intermediate goods production, investment goods production, and the production of consumer nondurables all demonstrate the same kinds of monthly volatility.

Broader sequential growth rates settle down: Turning to sequential growth rates, conditions appeared to settle down to some extent, as industrial production excluding construction rises 6.6% over 12 months, at a slower of 5% annual rate over six months, then hops up to a 16.6% annual rate over three months. Manufacturing demonstrates the same growth slowdown and spurts over 12 months, six months, and three months. So does motor vehicle production, but with even greater extremes in the swings. The production of intermediate goods, on the other hand, shows steady acceleration. The investment goods sector shows growth over 12 months leading to a six-month slowdown and then a super spurt over three months that brings the growth rate to 50% annualized. Consumer nondurables output, on the other hand, shows a consistent slowdown from a 15.9% increase over 12 months to an 11.7% annual rate of increase over six months, to a decline of 1.7% at an annual rate over three months.

All are off their cycle peaks: All industrial production figures are well off of cycle peaks with motor vehicles the farthest off their cycle peak at just under 80% of their cycle peak, a standing similar for consumer nondurables. Overall industrial production excluding construction is only about 6 percentage points below its actual peak.

Quarter-to-date: The quarter to date industrial production excluding construction and the figure for overall manufacturing both showing annual rate declines between 7 and 10% at an annual rate. Motor vehicle production is making a modest recovery with a low single-digit growth rate. Intermediate goods are so far flat in the new quarter, with the investment goods output rising at a 22.1% annual rate and consumer nondurables output falling at a 37.2% annual rate. Once again, we see a great deal of volatility in these figures.

Current growth rate rankings over 24 years: However, taking an historic context, if we confine ourselves to looking at the year-over-year growth rates for Swedish industrial production, we find that overall production excluding construction has the growth rate with an 85.2 percentile standing. Manufacturing has an 84-percentile standing. Intermediate goods have a 71.5 percentile standing, with consumer nondurables having an 86-percentiles standing; investment goods have only a 63% standing. The production of motor vehicles has a 41.6% standing; it is the only category with a growth rate below its historic median.

Industrial order volumes The picture for order volume is volatility by month; however, on a sequential timeline from 12-months to six-months to three-months, order volume is accelerating. Domestic order volume is accelerating at an extremely rapid rate with orders at 23.8% year-over-year, a six-month growth rate of 43.9%, and a three-month growth rate of 116.4% annualized. Foreign orders also experience ongoing acceleration but to a much less extent, running from 4.5% over 12 months, to a 12.9% annual rate over six months, up to an 18.4% annualized pace over three months.

QTD and % of cycle highlights: Not surprisingly the orders growth rate is at a cycle high for domestic orders; the quarter-to-date total orders and domestic order growth are running at extremely strong rates. Foreign orders growth is at a negative 4.8% annualized for the first month in the new quarter.

Rankings: The ranking of the year-over-year growth rates finds total order volume at a 91.9% standing, domestic orders at a 99.3% standing, and foreign orders at a 62.1% standing, all of them above their historic medians by a wide margin.

Memo: Unemployment For comparison, we include the unemployment rate at the bottom of this table, and we see that Swedish unemployment continues to hover at an exceptionally high level. Ranked on data back to January 2021, the unemployment rate is at its top 2%. In fact, the October unemployment rate is the sixth highest monthly rate on this timeline. Despite what appears to be solid and even strong performance by the industrial sector, Swedish unemployment continues to linger at a level that is historically high for Sweden.
by:Robert Brusca
|in:Economy in Brief
Japan| Dec 09 2025
Japan’s Economy Watchers Index Backs Off
Japan's economy watchers index stepped back in November after making some strong strides in October. But the current index and the future index retained stronger values in November than in September even with the backtracking compared to October so that the October improvement actually continues to hold merit. However, there is no follow-through on the October gain.

In November, the current index declined in the headline as well as in six components, with only three components showing improvement month-to-month. The three showing improvement were retailing, services, and nonmanufacturers.

Over three months and point-to-point comparison, the headline improves and seven of nine components improve. Over six months, the headline improves and 8 of 9 components improve. However over 12 months, the headline barely ticks higher and only three components improve compared to 12 months ago.

The queue standing for the current index headline is that 60.9%, leaving it above its historic median. All the components have readings above their 50th percentile except for eating and drinking establishments, housing, manufacturing, and employment. Unfortunately, the employment standing at 26.9% is the weakest of the lot. And despite the breath and other categories, that's concerning.

The future index in November showed month-to-month declines across the board for the headline as well as for all of the components. In October there were increases across the board for the headline and all components while in September there were increases in the headline and all components except two with the lagging components being services and employment. Over three months the future headline increases and all the components increase except for housing. Over six months the future index increases and all the components increase. Over 12 months the future headline increases and all the components improve except for housing, manufacturers, and employment. The standing for the future index in November is at its 68.8 percentile and all the components have standings above their 50th percentile except housing and employment. All the components that have standings above the 50th percentile have standings that are pretty much at the 60th percentile or higher except for manufacturing with a rating of 55.7 percentile.

These findings show that both the current and the future indexes are relatively strong with solid breadth. However, there's even stronger readings and breadth across the future index than for the current index. While the current index and the future index have stepped down relative to October, both show solid and strong momentum over three and six months; however, over 12 months the future index shows better momentum than the current index. This is interesting because Japan has recently installed a new Prime Minister and the Bank of Japan is being looked at more closely; it is beginning to more seriously consider rate hikes as inflation looks to be a more entrenched problem that the central bank is getting ready to turn its attention to.
by:Robert Brusca
|in:Economy in Brief
Germany| Dec 08 2025
German Output Scores Unexpectedly Strong Gains in October
German growth brought a surprise to the upside in October when industrial production rose by 1.8% after rising 1.1% in September and falling by 3.7% in August. German output saw gains of 2.1% in consumer goods output, 2.1% in capital goods output, and 0.6% in intermediate goods output on a month-to-month basis in October. Each of these categories saw output increase in the last two months in a row. However, for most of these sectors’ output declined and fell rather sharply in August.

As a result, of these monthly gyrations, we're staring at somewhat unusual and mixed trends. The monthly trends are encouraging. However, the sequential trends from 12-months, 6-months and 3-months show a steady deceleration in total industrial production growth, a steady deceleration in consumer goods production’s pace, a steady deceleration in the output of the capital goods sector as well, all of those contrasted to a mixed sequential performance with a strong three-month gain for intermediate goods output. The manufacturing sector as a whole, apart from total industrial production, also shows output on a decelerating path from 12-months to 6-months to 3-months. Near-term strength has not been able to override a negative overall trend.

Industrial orders are showing a mixed performance with some strength tagged on at the end over three months. Real manufacturing orders fall by 0.5% over 12 months. They fall by a slightly faster 0.9% annual rate over six months, but then they rise at a 13.3% annual rate over three months. The three-month pickup is reassuring, but it's still not strong enough to drive the year-over-year change into positive territory.

Real sales of manufactured goods are also weak, falling by 1.6% over 12 months, falling to a 6.8% annual rate over six months and then accelerating their drop to a 10.5% annual rate decline over three months. The decline in inflation-adjusted sales growth pace is a disturbing trend, and it mirrors the underlying decline in manufacturing output.

Industrial indicators from the ZEW group, the IFO, and the EU Commission send a somewhat mixed picture monthly. Three of these metrics the IFO manufacturing survey, IFO expectations and the EU Commission index improved in October although the ZEW current index fell relatively sharply in October compared to September. Sequentially the analysis changes with both of the IFO readings for manufacturing and for manufacturing expectations showing progressive improvement from 12-months to six-months to 3-months. However, for the ZEW current index and for the EU Commission survey, the patterns remain mixed although there is improvement in the sense that the 3-month readings are stronger than the 12-month readings.

Turning back to industrial output data, we have readings from five European economies, three of them are monetary union-even countries. Spain, Portugal, Sweden, and Norway, each show progressive improvement in industrial output as the expansion rate for output improves from 12-months to 6-months and from 6-months to 3-months. In France, output increases over 12 months, even steps up its growth pace over six months but then it logs a decline over three months.

Quarter-to-date all industrial output metrics are showing gains of sone sort for the German sectors and for the European economies. German real orders are rising strongly early in the new quarter while real sales are falling. As for the indicators, the ZEW current index is dropping in Q4 compared to Q3, but the other industrial metrics show gains.

For more perspective, the queue rankings of indicators are generally below their midpoints. However, German sector industrial production and the country-level production in manufacturing are generally showing year-on-year growth rate above their historic medians on data back to 2006. Exceptions are that capital goods output is below its median pace, while German total IP is above its median; the growth rate for Germany manufacturing is not. France, Spain, Sweden, and Norway show year-on-year growth above their historic median pace, but in Portugal the ranking is at its 47th percentile, slightly below its historic median.

The bottom line is that October is an upside-disturbing surprise. It dove-tails with the better performance from the Baltic dry goods index. But the longer-term trends in Germany are still negative, with output in the other European countries in the table is generally on an upswing. Germany is not out of the woods yet.
by:Robert Brusca
|in:Economy in Brief
Europe| Dec 05 2025
GDP in EMU Is Firmer Quarter-to-Quarter, But Slowing
Growth in the euro area came in a little bit stronger in the third quarter as growth is up 1.1% compared to 0.6% in the second quarter and 2.3% in the first quarter. These are annualized quarter-to-quarter results. Ranked on growth rate data back to 1997, the EMU 1.4% GDP growth rate has a 41.3 percentile standing which puts it below its median growth rate for this period.

Among the countries in the table that includes 16 European countries, Japan, as well as the European Monetary Union aggregate, only 6 countries have growth rates above their medians in 2025-Q3. One of them, Denmark, is not a monetary union member; it has a standing in its 90.2 percentile. Ireland has a rank standing in its 83.7 percentile. Portugal has a growth standing in its 66.3 percentile. Greece's growth rate is in its 60.9 percentile. Cyprus’ standing is in its 57.6 percentile. The median growth rate among reporting members has year-over-year growth at 2.0% and that's a 41.3 percentile standing.

Quarterly growth in the third quarter decelerates in four of the reporting monetary union countries. This is down from 9 decelerations in the second quarter. Growth also decelerates in the third quarter in six countries when measured on a year-over-year basis. Monetary union growth decelerates year-over-year as well.

There's not a particular pattern to the median growth rate, which was at 2.2% on the fourth quarter of 2024, slipped to 1.7% in 2025-Q1 and then to 1.6% in in 2025-Q2, and it has picked up to a 2% pace in the third quarter of 2025. The monetary union overall growth rate which is weighted for the size of the underlying economies, shows 1.3% growth in the fourth quarter of 2024, stepping up to 1.6% in the first quarter, remaining at 1.6% in the second quarter, and then slipping slightly to 1.4% in the third quarter of 2025.

Growth is favored in the smaller economies in the European Monetary Union as the four largest economies have a year-on-year growth rate that is below the growth rate for the rest of the European Monetary Union in each of the last four quarters. The year-over-year growth rate for the third quarter shows the largest four EMU economies are growing at a 0.9% year-over-year pace compared with 2.7% pace for the rest of the monetary union. This strength is also reflected in the growth standings with the four largest economies having a growth rate standing at their 37th percentile, compared to a 57.6 percentile for the rest of the monetary union.

We have no comparison for the United States right now because U.S. GDP has been delayed by the U.S. shutdown dynamics. But both Japan and Switzerland are logging relatively weak growth rates in the third quarter of 2025, with Japan at 1.1% year-over-year and Switzerland at 0.5%. Japan's growth rate is still a 50th percentile ranking while Switzerland's growth rate is a 13.6 percentile ranking against its historic results.

The growth rate for the monetary union is revised lightly higher than it was; still, it shows growth slowing quarter-to-quarter on an annualized basis. Only three of the monetary union reporting countries in the third quarter show quarterly growth actually falling; German growth is dead flat at zero. The overall monetary union growth rate is still quite moderate on a quarterly as well as annual basis. However, growth is still in train; inflation remains moderate. Growth in the monetary union is generally supported more by the smaller countries than by the large countries.
by:Robert Brusca
|in:Economy in Brief
Europe| Dec 04 2025
EMU Retail Sales Are Flat in October
European Monetary Union (EMU) retail sales in October were flat. Food & beverage sales rose by 0.3%. The profile on sales continues to be weak although from 12-months to six-months to three-months sales are still growing. However, the growth rates are decelerating sequentially. Total sales volumes grow by 1.5% over 12 months, advance at a 0.6% annual rate over six months, and gain at an even slower 0.4% annual rate over three months. Food & beverage volume spending rises by 1% over 12 months and at a 2.1% annual rate over three months after declining 0.4% over six months.

Quarter-to-date total euro area sales volumes are rising at a 0.4% rate while food volume is rising at a 1.9% annual rate. None of this is impressive.

Motor vehicles show healthier trends Motor vehicle sales have shown some life the last two months after falling 10.8% in August; they snapped back, rising by 11.3% in September and now, in October, there's a further 2.5% increase month-to-month. Over 12 months vehicle sales rise by 4.5%, over six months sales slow to a 1.8% annual rate, but then, over three months, they pick back up to grow strongly at a 7.4% annual rate. As a result of these gyrations, motor vehicle sales volumes are up at a 40.8% annual rate in the quarter-to-date, that's one-month into the fourth quarter.

Country level retail performance On a country-by-country basis, we have a smattering of results from Monetary Union members and other European reporters. In October, among the seven individual countries reporting, there are sales declines in three of them; in Germany sales fell by 0.3%, in Sweden they fell by 0.3%, and in the United Kingdom volumes fell by 1.1%. In addition, sales were flat in Spain in October and flat in Norway as well. Only Denmark and the Netherlands logged sales increases. Dutch sales rose 2.6% month-to-month while Danish sales rose by 0.9% month-to-month.

Sequential country sales patterns Sequentially, looking at annualized growth rates over 12 months, six months and three months, there are steady decelerations in two countries in the table: Germany and Norway. For Germany sales grow 0.9% over 12 months but move on to contract at a 1.7% annual rate over three months. For Norway sales rise by 3.4% over 12 months, then contract at a 1.2% annual rate over three months. There's a slight acceleration in sales in Denmark as sales grow 3.8% over 12 months, rise at 3.9% annual rate over six months, and then advance at a 5.4% annual rate over three months. However, the rest of the countries in the table produce unclear trends.

On a quarter-to-date basis, motor vehicles are surging, rising at a 40.8% annual rate, and providing the clearest notion of all being well. Country level retail sales excluding autos are growing most strongly in the Netherlands, at an 11.1% annual rate, followed by Denmark with a 6.7% annual rate and Spain at a 2.6% annual rate. Swedish QTD sales grow at a 1.5% annual rate, as sales volumes in Germany, the United Kingdom, and Norway show declines. U.K. sales fall at a 2.7% annual rate, German volumes fall at 1.5% annual rate, and Norwegian volumes fall at a 1.4% annual rate.

Results since January 2020 The COVID and post COVID period results to date have been marked by significant weakness. Retail sales since January of 2020 show total Euro-Area sales volumes are up by 5.7%, that's barely 1% per year. Food and beverage volumes are up by only 1% on a net basis. By country, the UK shows sales falling on balance by 3.7% on this five- and three-quarter-year horizon. Sales rise 1.7% in Sweden, 3.6% in Germany, and 4.1% in Norway. There are slightly more substantial sales in Denmark with a gain of 5.5%. The Netherlands show a net sales gain of 6.9%, and Spain logs a net rise of 9%. So, the Spanish numbers are quite solid. The Dutch and Danish numbers are moderate, and apart from that the other sales numbers are quite weak. These sales results span a period of 5 ¾ years and over such a period we would expect more substantial gains than what these countries are reporting now. Compounded a 1% per-year gain would results in a 5.9% increase in sales on this period. However, over this span vehicle sales are lower by 8.9%. That’s a substantial setback over such a period. Only two countries surpass that marker, and one other one comes close. The overall euro area number comes close (5.7%).

Summing up Retail sales numbers do not signal recession; however, they continue to point to very weak retail sales. Vehicle sales have picked up recently and have showed increases in all three horizons and that's certainly a bright spot and welcome after a long span of underperforming. Across the European Monetary Union, consumer confidence continues to lag and that weakness is reflected in the ongoing sluggishness in retail sales.
by:Robert Brusca
|in:Economy in Brief
Europe| Dec 02 2025
EMU Unemployment Holds Its Ground But There Is Erosion
Unemployment rate holds in October Unemployment in the European Monetary Union held at 6.4% in October. That's just a couple of ticks off its all-time low. Unemployment at 6% is also just a couple of ticks off its all-time low in the European Union, and unemployment in the EU also was unchanged in October from September.

A good October Conditions in Europe for unemployment remain extremely favorable although there are signs of pressure and the rate itself is slightly off of its all-time low. October, however, was a pretty good month for unemployment as the table gives us unemployment statistics for 12 monetary union members. Among those 12, only three had unemployment rates rise: Finland (from 9.6% to 10.3%), Belgium (from 6.3% to 6.4%), and Austria (from 5.6% to 5.8%). Outmatching the rising unemployment rates, we're falling unemployment rates in Italy, Luxembourg, Ireland, Greece, and Portugal. The raw number of unemployed in October in the EMU fell (while the raw number of unemployed rose slightly in the EU).

Not such good September and August results In September, month-to-month unemployment rates rose more broadly in seven countries while falling and only two countries. In August, unemployment rates rose in five countries while falling in only two countries. October was an unusually good month for the unemployment rate that fell much more broadly than rose across these 12 monetary union members. Also in August and September, the raw number of unemployed rose month-to-month in each month in both the EU and the EMU.

A more tempered sequential look Sequential changes in unemployment rates over three months, six months and 12 months show some backtracking and potentially unemployment unrest. Over three months unemployment rates rose in six countries and fell in only two countries. Over six months, the unemployment rates rose in eight countries and fell in four countries. Over 12 months unemployment rates rose in seven countries while falling in four countries. The number of unemployed rose period-to-period in each of these time segments in both the EU and the EMU. Sequentially, there has been more backtracking than there has been progress. But the unemployment rates are so low even holding the line is an exceptionally good performance.

Ranking the unemployment rates The ranking of the unemployment rate for the European Monetary Union as a whole is in its 5.8 percentile; it has been lower 5.8% of the time. The unemployment rate in the European Union has been lower about 7.4% of the time. Unemployment rates are above their respective medians (which means above a ranking of 50%) only in Austria, Finland, and Luxembourg among EMU members.

Inflation: still stubborn Just released data show some inflation stubbornness in the monetary union. Core inflation (Country level) continues to be stubborn above ECB target of 2%. We have core inflation data for some selected countries in the union, and we do not yet have core inflation measures for the monetary union as a whole.

Baltic dry goods index is on a run higher Still, there some good news in the offing; oil prices continue to slip which is good for the longer term outlook for inflation and the Baltic dry goods index is making a significant ongoing push higher; it's currently sitting at high the highest point we've seen in over a year. That should be a good sign for the outlook for manufacturing and for the goods sectors of these economies. It’s also good news for the development of unemployment rates. The Baltic dry goods index is an index of global shipping volume; its revival is a welcome event in the wake of the Trump tariffs.
by:Robert Brusca
|in:Economy in Brief