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

Canada| Nov 17 2025
Canadian CPI Trends Show Little Change
Inflation around the world appears to be rather similarly behaved Canada is a very close trading partner of the United States and so we might expect that there would be a little more connection between the prices in Canada and in the US and possibly we can learn something about the upcoming US CPI report by looking at the just-released Canadian CPI report.

Canadian inflation is highly correlated with inflation in the US. The US and Canadian CPI's have a correlation of 0.97 on annual percentage changes. Canada's CPIx measure has a correlation with the US headline CPI of 0.94 and the Canadian core inflation rate has the correlation with US core inflation rate of 0.94. All of these measured against year over year inflation. Clearly with a good deal of trade and a long common border prices in the US and Canada have a chance to mix it up and affect one another and create some degree of homogeneity. However, none of that is really perfect. Despite the strong correlation between headline inflation and core inflation between the US and Canada, Canada's core CPI and the US core CPI have a correlation based on month-to-month changes of less than 0.2 Using an R-squared metric.

Well, it might be somewhat comforting to look at Canadian inflation, and I think it's giving some guidance for the US. That would only be true over a long period of time, but it probably doesn't provide much guidance for us in terms of what we can expect from the month-to-month changes.

While Canada's correlation with US inflation is high it's correlation with inflation in Japan it's only 0.33: only 1/3 of the variants in these two indicators is in common. In terms of the Euro-Area the correlation is less than -0.1, which tells us the correlation is negative and extremely small and of course not statistically significant.

The Canadian CPIx measure shows inflation pretty flat at around 2.6% over 3 months and over 12 months. Canada's 6-mo CPI measure accelerates from 2.2% over 12-months to a 2.6% annual rate over 6-months to a 3% pace over three months. US inflation on these horizons essentially replicates what's presented by Canada's CPI X based on existing data. However, the R-squared association between the three month annualized percent change in the Canadian CPI versus the US CPI shows that they share about half of the same variation with an R-squared of about 0.5. And on this comparison Canada’s and US’ recent inflation trends appear to be highly similar.

The Bank of Canada looks at inflation using several different metrics and it also looks at inflation relative to a range unlike the US, leading to a much more measured discussion of what inflation is and how it's performing.

The decision by the Fed in the US to stick with a simple point forecast at this point is something that probably cannot be changed, at least not until the central bank is able to show that it can hit that target consistently. Even so, the Fed has not showed a great appetite for trying to express inflation in terms of a target band. However, when the Fed changed its framework agreement it did adopt something called flexible average inflation targeting (FAIT) which never really described for us or explained what it was and it has a set that approach aside I think to the pleasure of most economists.

There continues to be buzzing and differences of opinion over what the inflation target should be in the US. However, the international standard has been set at 2 per cent and at this point adopting a number different than that doesn't seem to make a lot of sense. Adopting 2% with some flexibility might make some sense but, of course, the Fed is already doing that as it's allowed a 4 1/2-year overshoot of its inflation target as it continues to cut rates. This decision, however, does not amount to a change in the Fed’s inflation targeting but rather to a set of decisions that appears to be losing the Federal Reserve credibility. Meanwhile, the Bank of Canada, operating with the range and having had much the same kind of access that the Fed has had in hitting and missing its inflation target midpoint, has emerged from this period with its credibility largely intact.
by:Robert Brusca
|in:Economy in Brief
Europe| Nov 14 2025
EMU GDP Ticks High a Bit Faster
The European Monetary Union released an uneventful GDP report with GDP rising by 0.2% quarter-to-quarter in 2025 Q3 compared to an increase of 0.1% quarter-to-quarter in the second quarter of 2015.

At an annual rate, overall GDP rises at a 0.9% pace in the third quarter, up from 0.5% in the second quarter; that acceleration masks a deceleration in the year-over-year growth as Q3 growth is at 1.4% year-over-year compared to an increase of 1.5% year-over-year in the second quarter.

The table shows eight early-reporting monetary union members and among these eight only two of them show GDP slowing in the third quarter compared to the second quarter on quarter-to-quarter changes. Ireland slows to -0.4% after gaining by 0.9% in the second quarter. Spain’s annual rate in the third quarter falls to 2.6% compared to a 3% pace in the second quarter.

Looking at year-over-year growth rates, there are decelerations that are much more common. In fact, there are accelerations in only three of the countries: Belgium, France, and Portugal. Belgium’s GDP growth in the third quarter moves up to 1.1% from 1% in the second quarter, growth in France is at 0.9% in the third quarter compared to 0.7% in the second, while Portugal logs an increase of 2.4% compared to 1.8% year-over-year gain in the second quarter.

Looking at growth in terms of the four largest EMU economies versus the rest, large economy growth notched 0.9% in the third quarter in terms of quarter-to-quarter changes compared to 0.4% in the second quarter. Euro area growth for the large economies was unchanged 0.8% in the third quarter; in fact, it has grown by 0.8% year-over-year in the first quarter, second quarter, and third quarter of 2025. The rest of the monetary union shows growth accelerating in the third quarter to 1.1% from 0.7% in the second quarter. However, the year-over-year growth rate for the rest of the monetary union drops down to 2.8% in the third quarter from 3.4% in the second quarter and that compares to 3.8% in the first quarter.

The median growth rate, which is the growth rate among these eight countries and is unweighted, rises to 1.4% in the third quarter from 1% in the second quarter while the year-over-year growth rate has a median of 1.1% compared to 1.3% in the second quarter.

The quarter-to-quarter growth rates favor slightly the smaller countries in terms of the growth rate being logged although both large and small countries show a stepup in growth from the second quarter to the third quarter. Year-over-year growth rates also show much stronger growth in the rest of the monetary union compared to the four largest EMU economies on a consistent basis in fact for each of the four quarterly year-over-year growth rates in the table.

The rankings of growth give us some idea why we face these statistics, since three of the four largest monetary union economies log growth rates that are below their respective median growth rates since the late 1990s. Only three countries have growth rates above their medians on this timeline; those are Ireland, Portugal, and Spain. Germany, the largest monetary union economy, has a 30.4 percentile ranking for its year-on-year growth rate, France has a 28.3 percentile ranking, and Italy has a 35.9 percentile ranking.

The numbers posted today are in line with preliminary results and what markets had expected. Growth in the euro area continues to be positive and to move ahead. The signs in this report are that there's more progress than regress quarter-to-quarter although the progress remains slow, it's also relatively broad. This is a positive report but not a glowing report.
by:Robert Brusca
|in:Economy in Brief
Europe| Nov 13 2025
EMU Industrial Output Advances in September
Industrial output in the European Monetary Union in September advanced by 0.2% after falling by 1.1% in August and rising by 0.7% in July. Output of consumer goods fell in the month with overall consumer goods output falling by 2.5% and a 0.5% reduction in consumer durables output and a 2.6% reduction in the output of consumer nondurable goods. However, intermediate goods output grew by 0.3% and capital goods output rose by 0.3% in September. Output fell broadly across each of these sectors and subsectors in August but then it rose in all of them in July. Output metrics have been through a bit of turbulence over the last three months.

Sequential Growth Performance Sequential calculations showing annual rates of growth over 12 months, six months and three months reveal some weakening in output and then some diminishing of that trend. Overall output rises by 1.4% over 12 months. Then output falls at a 4.9% annual rate over six months and that reduction in its cut to -0.8% over three months. Manufacturing follows that same pattern. Consumer goods output also follows that pattern, but durables and nondurables output of consumer goods are on the same wavelength with the only difference that consumer durables output also falls over 12 months. Intermediate goods output rises by 0.3% over 12 months, falls at a 3.3% rate over six months, and then rises at a 2.3% annual rate over three months. Capital goods output is up by 1.5% over 12 months, falls at a 2.9% annual rate for six months, and then is flat over three months. The sector results show a good deal of chaos in terms of trying to pin down a trend.

Quarter-to-Date Quarter-to-date that now show results for the full third quarter on this preliminary note, reveal output eroding by 0.1% at an annual rate; manufacturing output falling at a 0.4% annual rate, with an increase in consumer goods at a 1% annual rate, created totally by an increase of 1.5% consumer nondurable goods output. Intermediate goods and capital goods both show output declines in the just-ended quarter.

Rankings/Standings The percentile standings show that consumer durable goods output is below its median at a 39.9 percentile standing. Intermediate and capital goods output also are both below their medians (below 50%) but a 45-percentile standing for intermediate goods and a 46.8 percentile standing for capital goods prevail. However, these are not tremendously weak values; they're just slightly below their median rates of increase since the median rate of increase occurs at a ranking of 50%.

Country Performance for Manufacturing We're revisiting the country data much of which has already been released. Out of 13 monetary union members in the table only 5 show output declines in September and none of the four largest economies log a decline in output in September. However, seven countries had logged declines in August, and six had logged declines in July.

Countries Sequentially Turning to sequential data annual growth rates over 12 months, six months, and three months, there are declines in six countries over three months, in seven countries over six months but in only four countries over 12 months. The country's logging output declines over 12 months include Germany, Finland, Luxembourg, and Malta.

Quarter-to-Date On a quarter-to-date to date basis, there are five countries that log output declines in the third quarter. They are Germany, Finland, Portugal, Luxembourg, and Malta.

Country Standings The queue percentile standings show five countries with output increasing at a pace below its median pace since 2007. The average of the median standings across countries is a reading of 63.8% and that's the same as the standing for output in the whole euro area. While the performance of output is still somewhat irregular, conditions appear to be solidifying and risks to the downside appear to be diminishing. Conditions remain somewhat touch and go. The European Central Bank is in a waiting mode; it has not turned off its easing cycle. In the United States, it's unclear whether the Fed is going to continue the easing cycle or not. The government shutdown in the U.S. makes U.S. policy options more complicated although the outlook for growth in the United States in 2026 with new fiscal provisions in force and a rebound out of the government shutdown appear to be quite good. However, globally inflation is still largely excessive and central banks are definitely running out of room to become more stimulative.
by:Robert Brusca
|in:Economy in Brief
Global| Nov 12 2025
Global Money Supplies Deliver Growth-Rate Plateau
Global money supply growth boomed during COVID. Then growth ‘busted,’ decelerating sharply with the United States, the United Kingdom, and the European Monetary Union all showing monetary contraction to some degree throughout 2023. The only country to buck this trend was Japan which had a more modest boost in money supply during COVID and then more modest growth rates that decelerated and continued to gravitate toward near zero growth, until recently, when Japanese money supply started to accelerate very slightly.

Euro Area Recent trends show nominal money growth in the euro area decelerating slightly from a 2.5% growth rate over 12 months to growth rates around 2% or a bit lower over three months and six months. Monetary union private credit has also decelerated from a growth rate of 2.4% over 12 months to 1.7% over six months and to a 1.3% annual rate over three-months.

United States, United Kingdom, and Japan Nominal money supply growth in the U.S. remains fairly steady, growing 4.5% over 12 months and an annual rate of 5 to 5.4% over three months and six months. The U.K. nominal money supply growth is 3.5% over 12 months, 2.8% at an annual rate over six months and 3.6% at an annual rate over three months. Japan's M2 plus CDs has been stepping up its growth from 1.6% over 12 months to a 2% pace over six months to 4% at an annual rate over three months. Nominal money supply growth is mostly fluctuating between steady and stronger across these monetary center countries.

Real balances in EMU Real money balances, however, are looking significantly weaker. In the European monetary Union, real M2 grows 0.3% over 12 months and then its growth rate slips to -0.6% at an annual rate over both three months and six months. Private credit in the euro area rises by 0.1% over 12 months, declines by 0.5% at an annual rate over six months, and declines at a 1.3% annual rate over three months. Real credit is weakening.

More real balances In the U.S., real money supply growth is fluctuating, growing at 1.4% over 12 months, stepping up to 2.3% over six months and back to a 1.4% annual rate over three months. U.K. real money balances are simply shrinking at a -0.6% annual rate over 12 months and a -0.7% annual rate over three months. In Japan, real money balances are actually accelerating; real money growth is -1.3% over 12 months, which rises to plus 0.4% over six months with an annual rate of 2.9% at an annual rate over three months.
by:Robert Brusca
|in:Economy in Brief
Global| Nov 11 2025
ZEW Expectations Weaken Mildly
Macroeconomic expectations in the ZEW survey backtracked slightly in Germany while improving slightly in the United States in November. The economic situation improved slightly in the euro area and Germany while backtracking in the United States. That's the assessments of the current economic situation and expectations for Germany or the EMU that are moving in different directions in the U.S. and in Germany or in the U.S. vs. the European Monetary Union in November.

Inflation expectations backed off across the board easing slightly in the euro area, Germany, and also in the United States. While that happened, expectations for short-term interest rates became less focused on rate cuts in the euro area and slightly less tilted toward the expectation for rate cuts in the U.S. as well. Long-term rate expectations receded somewhat in both Germany and in the U.S. in November by small amounts. Stock market expectations picked up in the euro area, Germany, and the U.S., and in most cases, somewhat significantly.

The queue standings The queue standings are ranked standings of these various metrics, and they tell a clear story of how the ZEW experts see current conditions and policy tradeoffs. The euro area has an economic situation where the queue standing is at its 51st percentile, slightly above its historic median (on data since the early 1990s). However, Germany and the U.S. have very weak percentile standings with Germany in its 14.5 percentile and the U.S. in its 35th percentile. Macroeconomic expectations, however, find Germany at a solid 63.6 percentile while the U.S. is at a 23.3 percentile. ZEW experts are far more upbeat on prospects for German recovery right now than in the United States – and that seems odd to me with a lot of fiscal stimulus in train in the U.S. and tons of ‘AI’ investment.

Inflation expectations are high in the U.S. at an 85.5 percentile standing, well above the historic median, and clearly showing threatening conditions. This compares to a 30% queue standing for the euro area and Germany.

Short-term rate expectations are significantly below the median for both the euro area and the U.S. with the euro area at a 26.8 percentile and the U.S. at a 9.3 percentile standing. Long-term rate expectations have Germany at a 43-percentile and the U.S. at a more similar 35-percentile. Stock market expectations are fairly similar across the lot with the euro area at a 38-percentile standing, Germany at a 35-percentile standing and the U.S. at a 38-percentile standing.
by:Robert Brusca
|in:Economy in Brief
Europe| Nov 10 2025
Production in a Gradual Recovery in Europe Despite Recent Setbacks
Industrial production for the European Monetary Union (EMU) is not yet available for the union as a whole; however, a number of European countries have reported production, and they give us a good sense of what's happening. In September, among the 13 European countries that reported in the table, all but four of them showed increases in industrial production. Declines were posted in Ireland where production fell by 9.4% in one month, Luxembourg where it fell by 6.1%, Malta where it fell by 1.7%, and in Finland where it fell by 0.4%. In the remaining nine countries, production increased. The median increase for monetary union members in the table was a rise of 0.8% month-to-month. 45.5% of the reporters in the monetary union showed production acceleration.

In August, there were 5 European members with production decreasing. Among European Monetary Union members, the median was a decline of 0.5% with 46.2% of the reporters showing output accelerating on the month. July had been a much worse month with 8 reporting European countries showing declines and with the monetary union median showing a decline of 0.3% and only 38.5% of the reporting EMU members showing output accelerating month-to-month.

There has been gradual moderate improvement in these monthly statistics both in terms of improvement in the median and improvement in the breadth as output has accelerated, with a step back in August.

Looking at the sequential data that compare three-month results to six-month results to 12-month results, we see a median annualized increase of 2.9% for output across monetary union members over three months; that's up from 0.8% over six months and compares to a 2.1% increase for monetary union members over twelve months. The breadth of increase over the period is above 50% on all the horizons and it's fairly steady over three months and six months at about a 54-percentile standing.

September data conclude the results for the third quarter. In this quarter-to-date calculation, 6 of the 13 reporters in the table shows output declining in the third quarter. Monetary Union members generate a median increase of 0.3% in terms of annualized quarter-to-quarter industrial output changes. The pattern and the monthly data seem to be slightly stronger than what we see in the quarter-to-date.

The final column of the table presents the queue standings that calculate the positioning of the year-over-year growth rates across country-reporters among growth rates back to late-2007. Ranked among this cluster of growth rates, only five of the current year-over-year rates stand at levels that are below their median growth rate for the period. Countries with below median growth rates (below a standing of 50%) for industrial production growth are Austria, Germany, Finland, Luxembourg, and Malta. Among these, only one belongs to the four largest economies in the monetary union—Germany, which is also the largest of them. Germany has the standing only its 39th percentile. The unweighted median ranking for the group of monetary union economies is at 57.3%, above the 50% mark and therefore above the historic median.

The industrial production data for the monetary union in September is somewhat encouraging but certainly not crystal clear. There continues to be a lot of weaknesses displayed in the data. While the aggregate ranking is above its historic median, it's not above it by very much and clearly the growth rates are still relatively weak. There still is not a clear trend of acceleration in the group. However, what's lacking in the data is any sign of real deterioration. There clearly is weakness across countries but not a sense of deterioration. The best news in the report may be that there's not any really bad news.
by:Robert Brusca
|in:Economy in Brief
Germany| Nov 07 2025
German Trade Surplus Shrinks Despite Strong Exports
The chart provides a good overview for German trade trend. The table breaks trade trends down by categories and provides growth rates on shorter horizons of 3 months, 6 months and 12 months. But the chart depicts the overarching trends well. It shows the German surplus being diminished on a gradual path and not altogether in a clear monotonic fashion. Export and import lines on the chart move mostly sideways (horizontal). The export line is below the import line since late last year. These two series plots on the right-hand scale and they depict growth rates (year-over-year). So sideways movements mean roughly steady growth. Exports have been growth steadily year-over-year at a weak pace that on occasion has been a decline in terms of their year-on-year value. Generally, the green line is in positive territory. The red import line has been stronger, indicating somewhat better, steadier import growth over the period.

While exports had a good September, export growth sequenced from 12-months to 6-months, to 3-months has been weakening. Imports also put in a strong September but are showing some erosion from 12-month to 6-months to 3-months in terms of annualized rates of growth. Still, import growth rates remain quite strong and consistent; the sense of erosion is clear but also moderate – it’s a moderate erosion in progress for imports.

Capital goods exports from Germany are improving- this observation is based on lagged data with a one-month lag built in. But consumer goods and vehicle exports are slowing and rather sharply- likely as a result of U.S. tariffs.

Import side trends, with the same lag, are not as clear cut. Capital goods imports are growing, and motor vehicle imports are improving and accelerating. Consumer goods imports have erratically slowed.

Real exports and imports on sequential lagged data show exports contracting on most horizons while imports generate consistent positive growth in real terms. There is a big difference in these two trends expressed in real terms.

On balance, German trade trends are shifting. The trade balance is gradually eroding. Change is in play.
by:Robert Brusca
|in:Economy in Brief
Europe| Oct 30 2025
EU Indexes Show Improvement in EMU in October; Index Last Higher in April 2023
The European monetary union’s index of sentiment created by the European Commission rose sharply in October to its highest level since April 2023. There were improvements in the three of the five sector indexes reported with only construction and services unchanged in October relative to their September values.

Despite the nice step-up in the indexes in October, they are still at relatively low values. Only two sectors, construction and retailing, have readings above their 50th percentiles with construction at a 77.5 percentile standing and retailing at a 51.5 percentile standing. The service sector has a low 27.5 percentile standing, consumer confidence is at a 24.3 percentile standing, and the industrial sector is at a 35.9 percentile. Data are ranked over observations back to 1990, where feasible.

‘Better’ is not always ‘good’ Clearly the euro area is not performing particularly well at this time. The rankings data make that especially clear. The service sector and the industrial sector are substantially below their historic medians. The median occurs at a queue (or rank) standing at the 50-percentile mark. Consumer confidence is in the lower 25-percentile of its range for this period; services are in their 27th percentile – a low ranking for such an important job creating sector.

The largest have the best October showing The four largest economies in the euro area lead the way in the month and on the broader trip to mediocrity. Germany, France, and Italy each rise by one percentage point or more in October. More broadly, Italy and Spain are the only two ‘large economies’ with percentile standings above their respective 50th percentiles: Spain is at a 55.3 percentile standing, Italy at a 50.9 percentile standing. The largest two economies in the monetary union, Germany and France, respectively, have standings at the 19th percentile for Germany in the 33rd percentile for France.

Granular performance of the Euro Area In October only one large economy backtracked compared to September and that's Spain; its hard decline of 0.9% came after its index rose by 2.9% in September. Among the remaining 14 economies, seven of them showed declines in October and seven of them showed increases. The pickup and performance for the monetary union in October is substantially on the back of the larger economies that are doing better while these smaller monetary union members are clearly mixed.

Standings In terms of standings, the smaller monetary union economies show 5 of 14 with standings above their 50th percentile. These are Portugal at 51.5%, Cyprus at 56.2%, Lithuania at 64.4%, Greece at 71.1%, and Malta at a strong 89.1%.

Summing up It is a good month statistically for the euro area. However, the gains are not widespread, and the sector performance is still mixed. But this is the strongest level for the EU sentiment index since April 2023, and that is something.
by:Robert Brusca
|in:Economy in Brief
Europe| Oct 28 2025
Composite PMIs Mostly Improve in October
An upswing appears to be underway with both manufacturing and services readings improving. The S&P PMI data for October covered eight different reporters, five of which improved in October compared to September. September had been an extremely weak set of readings; out of the 24 different categories (eight countries with three readings each), there were only five that improved in September compared to August. August had been a strong month. The survey clearly is showing some volatility over these past few months; however, in October we're seeing a fairly broad-based increase, with only nine of the 24 detailed categories that assess the composite, manufacturing, and services showing weaker performance compared to September. And of those comparisons across eight countries, 19 sectors and composite indexes had been weaker month-to-month in September compared to August.

Over three months the averaged composites are stronger compared to six-month average. Among all the reporters, only three of the 24 sectors and composite readings show weakness in three-months compared to six-months. Each of those weakening readings is for manufacturing. They involve weaker manufacturing in Japan, in Australia, and in the United States. Ten of 24 sectors and composite readings weaken over six months compared to 12-months. Only 7 detailed readings out of 24 weaken over 12 months compared to 12-months before based on comparing averages.

Queue percentile standings take the October values and rank them in a queue of data back to January 2021 expressing the standing in October as a percentile in that queue of readings. The average percentile standing for the composite indexes in October is at 55.6%. The average manufacturing sector’s queue standing at 52.2% while the average services rating is at 54.1%. In October, all of the readings averaged across the 8 reporters are above their medians for the period back to January 2021 compared across monthly data. That's not an exceptionally strong performance, but it's a solid performance. Among the reporting countries, only Japan, the United Kingdom, and France have composite standings that are below their medians (that is, they have ranked standings for their respective composites below their 50th percentile).

The average standing across the 8 reporters in October generally shows an improvement from September; September was weaker than August. With that, October values, while higher month-to-month, were lower than they were in August. For example, the overall composite in October moved up to 52.8 from 52.5 in September, but September had fallen from 53.9. Values in October are still below values in August. The same thing is true of services and manufacturing.

The average sequential data for 3-months, 6-months and 12-months, however, show steady improvement with composite readings rising from 51.8 for 12-months to 51.9 over six months and to 52.6 over three months. These calculations are performed only on hard data and are up to date through September. The October monthly reading for the composite, for manufacturing and for services are stronger for each of these readings in October compared to three-month averaged values ended in September paving the way for continued improvement ahead.

Overall, the sense of improvement here is slow. Compared to January 2021, the October readings are stronger for composite and for services but weaker for manufacturing; that sector is taking longer to recover. Still, recovery seems to be in gear; if that remains the case, central banks may have to rethink their programs of ongoing interest rate cuts.
by:Robert Brusca
|in:Economy in Brief
Finland| Oct 27 2025
Finland’s Consumer Confidence Backs Down for One Month
Consumer confidence in Finland slipped in October. The -7.6 reading was a slip from -6.6 in September, bringing it back to its August level of -7.6. The 12-month average for confidence is -7.9; the 12-month low is -9, so there hasn't been a lot of change in consumer confidence over the past year. Confidence currently is relatively firm compared to its recent range in its 12-month average even though it is slightly below that average. The queue ranking for the October level is at its 23.9 percentile, putting it in the lower quarter of its rank of data; one year ago, consumer confidence ranked in its 26th percentile. There's been a modest improvement in confidence over the past year. The rankings are executed over data back to 2002, a ranking over a period of roughly 23 years.

Macro and micro trends The microeconomic indicator for Finnish consumer confidence improved slightly in October, rising to 22.4 from September’s 21.8. At 22.4, it is slightly below its 12-month average, and it has a ranking of only its 11.2 percentile, which is a slippage compared to a 22-percentile standing one year ago. The macro indicator for consumer confidence slipped to -21.7 in October from -20.5 in September; it is slightly above its 12-month low at -23.3 and almost exactly on its 12-month average. The ranking for the macro indicator is in its 22nd percentile, nearly identical to what it was one year ago.

Some details In terms of the rankings, the Finnish consumer confidence survey is dominated by extremely low rankings. Most of them are lower 25th percentile or even lower; however, the index has some redeeming qualities. Among them is the fact that unemployment in Finland, although it deteriorated slightly in October to -30.1 from -27.8 in September, has only a 22.8% standing and it's lower than it was a year ago. People's perception of the personal threat of unemployment fell significantly in October to -17.1 from -12.5. in September; the ranking for that measure is in its 7.7 percentile, a very low ranking and is an improvement from the 17-percentile standing of one-year ago. Despite the weakness in the economy and the difficulties consumers are having in their assessments of confidence, they don't have any kind of fear and certainly not a growing fear of unemployment. That clearly is a silver lining in what we could regard as the dark cloud that dominates this report.

The assessment of the economy now slipped to -40.1 in October from -34 in September. The economy in 12 months is not assessed to be much different than it was a month ago and its ranking in October 2025 is substantially the same as it was one year ago (about a 30-percentiel standing). The assessment of consumer prices showed a slight reduction in inflation in October; however, the ranking of inflation is elevated at a 65.2 percentile standing that's above its historic median, but it's a substantial improvement from the 83-percentile standing of one-year ago.

The environmental assessments for the month of October showed a deterioration in the favorability the timed the purchase durables at a -16.6 reading in October compared to -12 in September. The favorability of saving was unchanged at -8.3 in September and October. The favorability of a time to raise a loan balance slipped to -29.4 in October from -25.3 in September; the household financial situation slipped slightly to 22.9 from 24; and the possibility to save over the next 12 months rose to 38.2 from 34.5. The rankings on these various metrics remained in the 12th or 13th percentiles for the purchasing, savings, and loan balance assessments. The household financial situation has a higher standing at a 27th percentile - still a nearly a bottom 25% standing. And the possibility to save over the next 12 months, while it improved in the month, has an 8-percentile standing.

Finland did not improve on the month; however, it shows trending toward better times and unemployment fears are low.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Oct 23 2025
UK CBI Industrial Orders Drop as Prospects Fade
Industrial orders in the United Kingdom fell to a reading of -38 in October from -27 in September this compares also to a level of -33 and August. The 12-months to 6-months to 3-month average progression shows steady deterioration for orders with the 12-month average at a -31 reading, compared to the October reading of -38. Dated back to 1991 the current orders reading ranks in the lower 8% of its historic queue of data, among the observations on that timeline marking this as an exceptionally weak reading on the month and, underpinning the notion, that growth in the UK is weakening and perhaps providing for the Bank of England a way to avoid raising rates in the face of what continues to be excessive inflation.

Export orders also slipped in the month to -46 compared to a reading of -32 in September and -33 in August. Export orders also have deteriorated steadily as the 12-month, the six-month, and the three-month averages are becoming sequentially weaker. Comparisons show the 612-month average at -33 to this month's -46 reading. The percentile standing for export orders is similarly weak to overall orders at a 7-percentile standing.

Looking ahead, the output volume for the next three months finds the index at -19, down from -14 in September and -13 in August. The sequential reading on this metric weakens as well from readings of -9 over 12-months to -12 over 6-months to -15 over 3 months. All that compares to the current October reading of -19. The deterioration there is clearly in place; the queue percentile standing of the October level is at 6%, marking it, once again, as exceptionally weak.

Looking at the prices over the next three months brings an unfortunate increase to 16 from 4 in September and 9 in August. However, the expected inflation results are not on the same deteriorating path as orders trend and expected output. Despite the monthly jump in October, the 12-month average of ‘expected inflation’ is 18, that's reduced to 16 over 6-months and further reduced to 10 over 3 months. The jump in October is a jump that is away from trend, and I suppose we will have to wait to see where it settles in. The trending results for inflation are somewhat more encouraging. The jump in October is quite discouraging although it does come against the background of weakening economic data which simply puts the central bank in a more difficult position to make a policy decision. Price expectations for 3-months ahead have a ranking in their 73rd percentile meaning that they have been stronger a little more than 25% of the time on data back to 1991.

The PMI industrial indicator is up to date through September; here we have a comparison of the manufacturing PMI to the CBI survey. The manufacturing PMI eased to 46.2 from 47 in September. The manufacturing PMI on averages over 12-months, 6-months and 3-months is without a clear trend and has been fluctuating. The manufacturing PMI on data back to 2021 has a 12-percentile standing. The clear message is that conditions in manufacturing in the UK are very weak as the CBI and PMI percentile standings agree. Combined with the CBI inflation outlook, it leaves the BOE in a difficult place.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Oct 22 2025
The Core Inflation Metric Looks Best for the UK
Inflation in the UK rose by 0.1% according to the CPI headline in September. This was a step down from the 0.3% increase in August. The core CPI-H (excluding, energy, food, alcohol, and tobacco) rose by 0.2% in September, the same as in August and in July. Sequentially the CPI-H rose 4.1% over 12-months, rose at a 3.8% annual rate over six-months, and rose at a 3.3% annual rate over 3-months for the headline CPI-H. That marks a clear decelerating pattern from 12-months to 6-months to 3-months. That same phenomenon is reproduced by the core, where the year-over-year inflation rate is 4% ,the 6-month annual rate drops to 3.5%, and the 3-month rate drops again to 2.7%.

This is good news for the UK. Inflation has been excessive for quite some time. The Headline and core metrics showed year-on-year gains of 2% or less last in July of 2021 a period of over four years. The chart at the top of this report shows the sequential inflation rate plotted for the core CPI-H. In plotting that I'm plotting the measure that looks the best because the headline CPI-H does not decline anywhere near as much as the core does. However, since the core is more permanent and less fickle in its trend it's probably the better way to look at inflation in the UK as well as at the progress being made and to think about the policy options.

The diffusion calculation by month which looks at the categories and looks at the percentage that are accelerating versus decelerating, shows only 9% of categories accelerating in September, 45% accelerated in August, and 45% accelerated in July. That means for the last three months the monthly categories were generally showing lower inflation across most categories than they had in the month before.

The table also replicates diffusion calculations for 12-months, 6-months, and 3-months; in each case diffusion is compared to the previous period on the table. 12-month inflation accelerates in 45% of the categories compared to a year-ago 6-month inflation accelerates in only 27% of the categories compared to the 12-month horizon while over 3-months only 18% of the categories accelerate compared to 6-months. Once again, these categories show us that inflation is decelerating broadly across these categories underpinning the sense of good news that we see in both the headline and in the core as each is showing inflation on a decelerating profile.

Meanwhile, on the unemployment front, the UK unemployment rate is mildly rising from a 4.1% rate 12-months ago to 4.4% 6-months ago to 4.7% 3- months ago. The most up-to-date reading on the unemployment rate is for July and that's a reading of 4.8%. The unemployment rate has clearly been creeping up and that 4.8% has about a 40th percentile standing in the queue of data on unemployment back to early 2000. The unemployment rate standing is still below its median however it's beginning to creep up. The claimant rate of unemployment is slightly more up-to-date as we have a figure as of August. Even though the claimant rate is lower than the unemployment rate, historically it has usually been lower so that the percentile ranking of that rate is actually much higher than for the overall unemployment rate at 71%. That is a bit more disturbing.

Still, if we rank inflation in the UK as of September the year over year inflation rate compared to where inflation has been since early 2000, that rate ranking continues to be a high. At the level of 4.1% year-over-year rate translates into 87 percentile standing while the 4% core rate translates into an 85-percentile standing. Only two categories and the CPI-H have standings below their 50th percentile; one is for furniture household equipment & maintenance and the other category is miscellaneous goods and services.

How we view inflation in the UK has a lot to do with which of the profiles we really want to look at to be the policy focus. If we insist on looking at year-over-year inflation the inflation is still too high and stubborn, however, if we look at the 3-month inflation rates, inflation is much lower and making much better progress toward the Bank of England's goals. Economic data have been weakening that's something that could push the Bank of England toward rate cuts even with the excessive inflation numbers that it's printing because it makes the economy seem to be slipping into a period of weakness. In that event, the BOE might expect that the period of weakness will do a lot of ‘the work’ in terms of getting the inflation rate lower.

This is going to be something to watch and the upcoming weeks not just as the Bank of England prepares for its next meeting but farther than that is it assesses whether it’s concerned about reducing inflation now or whether it thinks that growth is already on a reduction path that will allow it to shift gears and try to cushion the economy as it slows down. The Bank of England is facing a policy dilemma and it will bear watching to see which prong of the dilemma it chooses to emphasize
by:Robert Brusca
|in:Economy in Brief