Introducing

Robert Brusca

Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

Publications by Robert Brusca

Global| Oct 01 2025
Global MFG PMIs Mostly Erode in September but by Small Amounts; It’s Really a Nothing-Burger of Economic Change
Manufacturing PMIs in September worsened for all the countries in the sample except for China and South Korea. The diffusion calculation was 11% in September but that compares to 83% in August and 55% in July; in past months improvement was much more common. Comparing the sequential results of 12-months to 6-months to 3-months, the median over 12 months is 49.2, over 6 months it's 48.8, and over 3 months it's 49.3. These are not compelling numbers in any direction and they show that output in manufacturing is simply hovering in a very slightly contractive position to 12-months ago.

The diffusion calculations that compare 3-months to 6-months, 6-months to 12-months across countries are steady at 66.7%. All those horizons regularly show improvement for two-thirds of the reporting countries over each of those horizons.

The queue rankings, however, indicate there's still a great deal of weakness with ten of the reporting countries having PMI readings since January 2021 that are below their respective medians. Output is above the respective medians for eight countries.

The bottom of the table presents statistics grouped in different ways a grouping of developed countries, the BRICs, other Asia. On that basis, there's really not much discrimination except that the BRIC countries show average readings that for the most part are above 50; other comparisons for the most part are below 50. The statistics, though, clustered around 50. The global medians call PMI values below 50 while the global averages coalesce at readings slightly above 50. And while these are differences, there's not much distinction between these differences.

In addition, we know that the queue rankings show a great deal of weakness in the current percentile standings which also leaves us with the conclusion that manufacturing is not particularly robust.

There are five countries or areas showing sequential improvement from 12-month to six-month to three-month averages and there are five of them showing sequential weakening on the same time horizon. In both cases, the transitions are small.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 29 2025
EU Indexes Firm Slightly on the Month for EMU
The European Monetary Union indexes for September showed slight uptick to 95.5 from 95.3 in August. However, at 95.5 the September reading was still below the July reading of 95.8, but it was above the June reading of 94.2. EU sentiment indexes have been moving sideways since the end of 2022 without much trend.

All the components except for construction rank and roughly their respective 20th to 30th percentiles of their historic queues of data. The exception is construction, where the sector has a 74.6 percentile standing and retailing with a nearly 46-percentile standing, leaving it marginally below its median. However, the industrial sector ranking is at its 26-percentile, services rank at their 27th percentile and consumer confidence is at its 20th percentile. On the whole that’s a collection of quite weak readings: one firm, one marginal and three weak.

Compared to January 2020 before COVID struck, all the sectors and the aggregate index are lower by about 8 to 10 points over the five-and-one-half-year period. The exception is the industrial sector, which is lower by only five points.

National sentiment monthly showed eight declines in September, compared to seven declines in August and only five month-to-month declines in July.

The sector rankings for large country industrial sentiment shows they're all ranking below 50% except for Spain. Spain also has the only above 50-percentiel standing for consumer confidence at a strong 96.5 percentile. Retailing has two of the large economies ranking above 50%: Italy and Spain. No service sector readings for the large economies are even close to neutral. Construction, however, ranks above the 50% mark in three of four large economics and in France, where it falls short and has a ranking that is still at its 45th percentile. Weakness is broadly shared across EMU sectors for the large and small alike.

The services sector weakness in the EMU is quite important because it's a job producing sector. It’s no coincidence that consumer confidence and services in the EMU have the lowest standings. The outlook for the monetary union is going to depend a lot on how the forces of inflation develop as well as how the war in Ukraine develops. In the meantime, U.S. budget politics could rile markets, and we are told that China is trying to dazzle the Trump Administration with a trade deal if it backs off support of Taiwan independence. Both of these are potentially global market moving events that are in flux.
by:Robert Brusca
|in:Economy in Brief
Italy| Sep 26 2025
Italy’s Confidence Creeps Higher
The chart shows that within the big picture Italian confidence both business and consumer confidence has been relatively steady in recent months for about a year. The consumer reading has had some volatility but no trend. Technically in the current month business confidence is unchanged, and consumer confidence has moved up a couple of tenths of a point on the index of consumer confidence. The index is higher by 0.7% over three months and lower by 1.5% over 12 months. When ranked on data back to late-1997, the current index ranks in a 68.7 percentile of its queue of data, placing it in the top one-third of confidence values over that period. It’s a reasonably firm reading and a high reading by most standards among European countries at this time.

Assessments of the overall situation over the last 12 months improved to net survey reading of -62 in September from -67 in August. That reading has a 63.6 percentile standing.

Assessing the overall situation for the next 12 months ahead, there's another improvement to -20 in September from -24 in August; however, this is a much weaker reading, residing in a 10.7 percentile of its historic queue of data. So, while the overall situation has been relatively firm and the overall confidence reading is firm, the outlook for the next 12 months has some ominous undercurrents to it. Unemployment expectations have increased slightly to a -3 reading from -4. That index in September has a 27.5 percentile standing, a relatively low standing overall but still a little high to be really comfortable from a consumer confidence standpoint. Household budget assessments improved slightly to +24 from +23, which has a very strong standing in its 88th percentile.

The household financial situation, looking ahead, improves slightly; over the last 12 months it deteriorated slightly. The backward-looking measure has a 67.8 percentile standard while the forward-looking measure has a 12.2 percentile standard, once again, raising those concerns about what the future is going to hold.

The current assessment for household savings slipped slightly to a reading of 49 in September from 52 in August; the future reading is steady at -6 in September. The current reading has a 34.9 percentile standing; the future reading has the 97-percentile standing. This higher reading for the future is not necessarily good news as responses to savings are typically correlated negatively with responses about intentions to spend and are often associated with concerns about the future. However, the direct question about the environment for making major purchases showed a slight improvement to -29 in September from -30 in August and produced a standing in a 66.9 percentile, a top one third reading. For now, the consumer in Italy is still undaunted and holds relatively firm view of the environment for spending. The business environment assessment was unchanged month-to-month but overall has a much weaker standing.

The businesses assessment is only in the 24.5 percentile of its historic queue of data marking the responses as a bottom 25 percentile response which is not reassuring.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Sep 25 2025
U.K. Distributive Trades: Mixed with a Worsened Outlook
The Confederation of British Industry report shows some improvement and deterioration in the same month; retailing improves while wholesale survey worsens sharply. The look-ahead to October for retailing weakens sharply while there was mixed performance in the outlook for wholesaling. The report doesn't do much to clarify the outlook.

Current Sales: Current sales compared to a year ago improved to -29 in September from -32 in August. Orders compared to a year ago also improved to -36 from -40. These improvements still leave the monthly reading levels worse than their respective 12-month averages although sales at the time of year are significantly better than their 12-month average. The queue percentile standings for these metrics of sales are all weak, the only element in the report that is strong, or firm is for the stock to sales comparison, and that is usually a negative indicator.

Sales Expectations: The expectations in October for sales dropped sharply to a -36 reading from -16 in September, orders dropped to -38 from -32 in September while sales ‘for the time of year’ plunged to -43 from -20. Each one of these readings is weaker than its 12-month average. Historic standings are even weaker than for the current sales and orders metrics, with sales for a year ago with a 4.9 percentile standing and sales ‘for the time of year’ at an even weaker 1.4 percentile standing, rarely ever weaker. The current vs. the outlook signals are crossed.

Current Wholesaling: Worse performance in the current readings while the outlook for the next month is mixed marks the overview of the wholesale trade arm of the distributive sales report. Sales adjusted for the time of year and orders and sales compared to a year ago all deteriorate. Each one of these readings is not only weak month-to-month but each is weaker than its respective 12-month average. And the queue rankings are all in the lower tenth percentile range.

Wholesaling Expectations: The outlook shows mixed performance for sales compared to a year ago, improving to -22 in October from -26 in September; orders deteriorated to -41 from -38 in September. Sales ‘for the time of year’ barely ticked weaker in October. Readings are weaker than their respective 12-month averages as well, except for year-ago sales. The percentile standings for the three categories range from a ‘high’ percentile standing at its 14th percentile for sales compared to a year ago, while the other two metrics show rankings that are below their 5th percentiles in their historic queue of values – an extremely weak showing.

Summing up: Clearly the survey shows a mixed view of retail and a general worsening as well as a mixed-up picture between current performance vs. what is expected for next month. While there is little consistency in this survey in terms of monthly changes, what is crystal clear is that conditions - no matter where, or when, assessed - are very weak. Perhaps it is reports like this one that are keeping the Bank of England on hold instead of battling inflation with growth looking like it might give way at any moment.
by:Robert Brusca
|in:Economy in Brief
Germany| Sep 24 2025
IFO Survey Setback in Germany
The IFO climate survey deteriorated in September, falling to -15.6 from -15.1 in August. The wholesale reading showed a deterioration, as did manufacturing and then services. Construction and retailing improved slightly. The climate all-sector ranking is at its 20.7 percentile. Even weaker is the ranking for services at 7.9% and the ranking for manufacturing at 15.1%. Only the construction sector has a ranking above 50%, which places it above its median value. Wholesale and retailing both have rankings in the 21st percentile.

Current conditions in September fell to a diffusion reading of -4.7 from -3.1 in August. The slippage was in manufacturing, wholesaling, and services once again with construction improving slightly and retailing improving to -17.8 from -19.7. The queue standing rankings have the all-sector current index in its 10.8 percentile. The individual sectors all have a higher ranking than that. The lower overall ranking reflects the confluence of weak rankings across sectors that is unusual. Manufacturing has a 13-percentile standing, services have a 12-percentile standing, with retailing at a 41.7 percentile standing and once again construction has a standing above its 50th percentile at the 60.4 percentile mark.

The expectations’ all-sector index falls to -11.9 in September from -8.3 in August; that drop is troubling because this is a forward-looking metric not simply a current assessment. The rank standing for expectations is in its 19.7 percentile, about the same ranking as for climate and above the current all-sector ranking. Retailing logs a 13-percentile standing, services are at a 15-percentile standing, and wholesaling at a 19.9, nearly 20-percentile standing. Manufacturing is at a 26.9 percentile standing with construction at a 43-percentile standing. All the metrics are below their 50th percentile in expectations, marking all of them below their historic medians on data back to 1993.

There is a far-right hand column that also presents ranking statistics. These are rankings since February 2022 since the invasion of Ukraine by Russia. For expectations, we see that after the invasion rankings are currently showing a lot of uplift although ominously the services sector, which is the job creating sector has only a 56.8 percentile standing; that compares to the all-sector expectation standing at its 84th percentile. Looking at climate the all-sector index is at 54.5%. That is much stronger than on the full data set back to 1993. The 54.5 percentile standing is supported by strong readings out of construction and wholesaling vs. weak greetings from retailing and services. But these weak rankings are still stronger than for the full sample. Readings for September current conditions on this shorter period remain about the same as for the full sample – except that retailing and services are much weaker.

Overall, the September IFO is disappointing and weaker. The performance of expectations is disturbing. These are going to be developments to watch in the coming months especially to see if expectations make a recovery.
by:Robert Brusca
|in:Economy in Brief
Global| Sep 23 2025
Global PMI Weakness in September Despite Trending Progress
The S&P PMIs for September show more backtracking than they show progress, although over three months even in terms of up-to-date monthly data, the trends show uptrends (among 21 calculations of 3-month changes only three show setbacks). Weakening is shown in the service sector in the United States, India, and Australia while in the United Kingdom, France, Germany, and in the European Monetary Union (EMU) services sectors were getting stronger. In September, manufacturing weakened in the EMU, Germany, France, the United Kingdom, Australia, and India with only the U.S. showing improvement. Japan, a country that usually contributes to the early PMI flash survey, is not included this month in the early S&P release.

Sequential trends Over three months, we see broad strengthening across these reporting countries with Australia showing weakness across all three measures. India shows a composite weakening and a manufacturing weakening and France demonstrates manufacturing weakness. All the other 3-month metrics show strengthening. Using only the hard data and ignoring the up-to-date flash data that remained preliminary, there is still relatively broad strengthening over three months and six months. Over six months, the composite PMIs are strengthening everywhere except in Australia and in the United States with manufacturing improving broadly everywhere except in Australia, India, and in the U.K. Over 12 months, strengthening is also extremely broad with the United Kingdom an exception showing weakening on all three metrics- and with all the other metrics showing strengthening, except for services in Germany (17 out of 21 improve over 12 months).

Standings The queue percentile standing data show a proliferation of readings above the 50-percentile mark placing them above their medians on data back to January 2021; the exceptions are the U.K. with sub-median weakening in all three sectors and in the United States with a sub-par services readings but one that is barely below its median (at 49.1%!). France checks in with sub-median services and composite readings.

The outlook The chart at the top of this report makes a clear positive statement about the ongoing trend improvement. With the Federal Reserve in the U.S. having turned back to an easing cycle for interest rates even with inflation excessive, central banks may be ready to take a risk with stimulus. While inflation remains over target and may even be slightly accelerating, the pace of acceleration is very slight in the U.S. and largely the same conditions prevail globally. The current inflation overshoot faced by most central banks is modest; although in the case of the U.S., it has missed its inflation target for 4 1/2 years in a row-that should be worrisome but the Fed has pressed ahead with a rate cut and seems to favor even more.

The average results for the PMI readings sequentially for 12-months, 6-months and 3-months show steady improvement. The sequential readings are based on only hard data available through August. The more recent monthly data (far right hand column on changes) show June to September improvement for the composite index and for services averages with manufacturing slightly weaker.

The report on the month is slightly weaker, but the trending results are still encouraging. And if there is a new global easing cycle in train, growth will improve further even with the challenge of war remaining in place between Russia and Ukraine.
by:Robert Brusca
|in:Economy in Brief
Belgium| Sep 22 2025
Belgian Consumer Confidence Makes Modest Gain; On a Slow Improvement Track
This steady progression is underpinned by a six-month-ago reading of -10 and a 12-month-ago reading of -7. Belgium is an interesting mid-European economy. It is industrialized, it is middle-sized and it's in the middle of the monetary union itself.

When the performance of confidence in Belgium is compared with the European Monetary Union total, we find that there is an average correlation in confidence of 0.56 across seven key economies including the monetary union measure itself. Belgium has a 0.79 correlation with confidence in the Netherlands, 0.69 relationship with France and the 0.76 correlation with the EMU overall, so it's a reasonably consistent bellwether for what's going on in the monetary union. And the correlation is close to 0.5 with Italy and Portugal. Belgium's weakest correlation in the monetary union among these countries is 0.18 with Greece. This suggests to me is that Belgium is a country that's relatively plugged into the activity trend of the monetary union itself.

Belgium’s ranking for consumer confidence at 78.8% on data back to 1991; since January 2020, its consumer index is up by just 5 points, a very shallow gain for such a long period of time – but still a solid and firm ranking.

For the economic situation over the next 12 months, the reading has a ranking at its 17th percentile, substantial steep down from a 40th percentile standing of the past 12 months. That’s not a good sign.

Price trends are slightly elevated on a ranked basis but are falling month-to-month from July to August to September. However, sequentially since 12 months ago, they are on the rise- so the inflation picture is more complicated. Expected inflation (price trend) at a 69th percentile standing for the next 12 months, is down from what is now a 77.9 percentile standing over the previous 12 months.

However, unemployment expectations are mild and falling both short term and sequentially with a low 9 percentile queue standing. That is very good news.

The financial situation of households is little changed on both short- and long-term trends with modest near median ranking for the next- was well as the last-12-months.

The appraisal of the current situation is down a notch in the month and sequentially has eased a bit as well but stands with an 83.2 percentile ranking, one of the highest standings in the table.

Household standings have a high 94.4 percentile standing, the favorability to save at the 74.6 percentile mark.

On balance The Belgian readings are solid and mostly upbeat. Inflation readings show concerns more than fear about what might be happening on the price front. On the whole, the response standings and trends are a positive signal for this country set in the belly of the European Union.
by:Robert Brusca
|in:Economy in Brief
Germany| Sep 19 2025
German PPI Shows Ongoing Release of Inflation Pressure
The German PPI report showed a drop of 0.5% in the August headline, continuing a string of inflation data on the producer price front that is laying a solid disinflationary trend for the German economy. The PPI rose by 0.1% in July and in June. Sequentially the PPI falls 2.2% over 12 months, falls at 3.9% annual rate over six months, and falls at a 1.3% annual rate over three months, an impressive record of inflation discipline at a time that consumer inflation has been running hot globally.

Germany's PPI excluding energy also fell in August, dropping by 0.2% on the month after being flat in July and rising 0.1% in June. The PPI excluding energy for Germany rises 0.8% over 12 months, rises at a 0.8% annual rate over six months, and falls at a 0.3% annual rate over three months. The inflation discipline extends past energy; it is not simply disciplined energy prices although that has been part of the story.

Sectoral German PPI data are not seasonally adjusted making their sequential patterns a little bit less dependable. However, sequentially German consumer prices show inflation has been dropping, the same is true for investment goods, whereas for intermediate goods, not only is inflation dropping but prices are dropping too; inflation is negative over 12 months, six months and three months with the 3-month drop in intermediate prices at a -3.4% annual rate.

The behavior of producer prices compares to modest results on the CPI front where, sequentially, the German CPI rose 2.3% over 12 months, at a 1.8% pace over six months, and then at a 2% pace over three months, all well-contained changes. The CPI excluding energy rose by 2.6% over 12 months, 2.5% over six months, and 2.4% over three months showing a very slight deceleration with inflation looking still very sticky at about 1/2 of a percentage point above what is the target pace set by the ECB for the European Monetary Union as a whole.
by:Robert Brusca
|in:Economy in Brief
Australia| Sep 18 2025
Australian Unemployment Steady and Low Despite a Broader Rising Trend
Unemployment in Australia in August remained low, standing at 4.2%, the level it dropped to in July. June brought a rise in unemployment to 4.3% after posting 4.1% in May. However, at 4.2% the unemployment rate in Australia is low, since about 2000 the unemployment rate has been lower only about 16% of the time.

The labor force participation rate in August fell to 66.8 from 67.0 where it had been for the previous several months. The participation rate, however, is high on historic comparison at about the 95th percentile; the participation from people ages 15 to 64 is even higher with a 97.7 percentile standing on the participation rate of 80.6%.

However, employment gains in Australia have been slowing. The year-over-year gain is 1.5%, over six months, employment speeded up, gaining a pace of 1.9% at an annual rate, but over three months the growth rate for employment has fallen to a sharply lower 0.6% annualized.

Australia's labor force fell by 0.5% in August after rising robustly in previous months. The labor force was rising by 1.6% over 12 months, at a 2.2% annual rate over six months and at a 1.3% annual rate over three months. There's been some variability in labor force growth, but it still seems to be relatively solid. The year-over-year growth rate, however, has a ranking only in its 33 percentiles historically back to the year 2000- a lower one-third standing.

In terms of the overall economy, retail sales have picked up; some of this is inflation. The growth rate for retail sales over three months is 7.1%; over 12 months it's 4.9%. Headline inflation grew by 2.8% over 12 months, but it's rising over three months at a stronger 4.2% annual rate. Inflation excluding volatile measures has been relatively stable over three months, six months, and 12 months. However, it picked up quite considerably in June, rising at a very rapid double-digit pace.

Australia's low and consistent unemployment rate is in step with what's going on internationally. Globally there is stability or some small backtracking on unemployment gains made since COVID. In the European Monetary Union, we're looking at unemployment rates consistently low over 12 months, 3 months, and 6 months at a historically low level. Japan's unemployment rates are consistent and low near historically low levels as well. In the United States and in the United Kingdom, unemployment rates are relatively stable. The U.K. shows some drift up in its unemployment rate. But both the U.S. and the U.K. have unemployment rates that have been lower only about 30% of the time.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Sep 17 2025
U.K. CPIH Inflation: Stable and Excessive
Inflation in the United Kingdom in August rose by 0.3% on the CPIH measure; excluding food, alcohol, energy, and tobacco (core), the increase was a milder 0.2%. Headline inflation in the U.K. runs at a 4.3% annual pace over three months; the core measure runs at a 3.6% annual rate pace, a bit weaker but still over the top of the U.K. 2% target.

Sequential trends: Sequential inflation in the U.K. is stubborn at 4.1% over 12 months, at a 3.9% annual rate over six months, and at 4.3% an annual rate over three months - a pace that is consistent, steady, and excessive. Core inflation runs at 4% over 12 months, edges down to a 3.6% annual rate over six months and stays at 3.6% over three months - still relatively steady and excessive but with a hint of progress.

Inflation monthly: In August among the 10 detailed categories, inflation accelerated in five of them, in July it also accelerated in five of them, and in June there was an acceleration in four of them. Diffusion calculations show that the tendency for inflation to accelerate across categories, the headline and core has been slightly below the 50% mark making inflation slightly disinflationary.

Sequential diffusion: Sequentially diffusion has been behaving better, with 12-month inflation higher than 12-month-ago inflation by a slight margin with the diffusion reading of 54.5%. However, over 6 months comparing inflation to 12-months across categories, diffusion is only 45.5%, and over 3 months comparing inflation to inflation over 6 months, the diffusion calculation steps down to 36.4%. When diffusion is above 50%, inflation is accelerating in more categories than it is decelerating; when it's below 50%, inflation is showing more deceleration than it is acceleration. These diffusion calculations are encouraging, although they are only indications of breadth not of importance because they just compare across categories and they are executed without weighting. The headline and the core measures bring weighting into play, and we see the impact of that by comparing those measures sequentially. Still, diffusion is an interesting measure on its own because it helps to show how widespread pressures are.

U.K. unemployment- At the same time, that inflation has been stubborn. The unemployment rate in the U.K. has gradually been creeping up. The U.K. claimant rate of unemployment, which is just a little bit more topical, has been slightly more stable sequentially than the overall unemployment rate and in June and July that rate of unemployment gauge edged slightly lower. However, it's a different concept than for overall unemployment although the two readings are similar in terms of their levels when ranked over the same. They're very different with the unemployment ranking through June 2025 at 34.5% while the June claimant unemployment rate ranking is high relative to its historic experience at its 75.3 percentile - much higher.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 16 2025
Finalized EMU IP Shows More Strength
The finalized version for EMU industrial production in the European Monetary Union in July showed that much better than preliminary data had suggested. Overall output rose 0.3% in July, but output in manufacturing on the month rose by 0.7%. Consumer goods output rose by 1.4% on the month with consumer durables output up by 1.1% and nondurables output up by 1.5%. Intermediate goods output rose by 0.5% with capital goods output rising by 1.3%. All of these are very solid numbers.

The median result for reporting European Monetary Union members had shown a decline of 0.6% for manufacturing output. And, of course, the problem with that is that it's a median among countries without weights being applied to account for size. Germany, for example, showed an increase in output in July of 2.2% in its manufacturing sector, France showed a decline of 1.6%, Italy showed an increase of 1.4%, with Spain showing a rise of 3.8%. That's three of the largest 4 monetary union members showing solid increases in output.

Sequential data showed that output is holding up quite nicely with growth 2.2% over 12 months, up 3.1% at an annual rate over six months and up by 2.5% in an annual rate over three months. For manufacturing, the results are roughly the same, with a 2.1% gain over 12 months, 3.5% annualized over six months and 2.4% annualized over three months.

The quarter-to-date numbers showed that output is developing nicely in the third quarter with overall output up at a 1.2% annual rate as of July, the first month in the quarter with that growth rate representing annualized growth in July over the second quarter average; manufacturing output on the same basis is up at a 2.6% annual rate. All the sector growth rates are positive as well QTD except for intermediate goods.

Percentile queue standings rank current growth rates among past historic growth rates (back to 2007) and on this basis, overall production growth has a 63.3 percentile rank, manufacturing has a 60.1 percentile rank, consumer goods IP is extremely strong with a 98.2 percentile rank, pushed ahead by nondurables that have a 98-percentile rank. Consumer IP growth is held back somewhat by consumer durables that have only a 45.9 percentile ranking, below its median for the previous period. Intermediate goods and capital goods also have below-median rankings (rankings below 50%) at the 43.6 percentile for intermediate goods and 42.2 percentile for capital goods. Still, none of the sectors is particularly weak; being at the 42nd percentile or better means that the shortfall from the median is not extreme and the weighted average for overall production and for manufacturing still stands in its 60th percentile or better.

As we look down the column to look at country-specific manufacturing readings, we find that there are only 4 of 13 reporting monetary union members with manufacturing output below its median in July. And those countries are Finland, the Netherlands, Luxembourg, and Greece, all moderate to small-sized economies.

On balance, the performance the monetary union output in July is quite solid. And these readings are joined by an August reading for IP in the United States that showed a surprising positive turn on the month. It's too soon to say that conditions globally are improving faster or more than had been expected; however, there is a whiff of that in the air despite some sour readings on job growth in the United States.
by:Robert Brusca
|in:Economy in Brief
Europe| Sep 15 2025
EMU Trade Surplus Expands But Stays on Lower Trend Pace
In the wake of U.S. tariff implementation, we, of course, look for evidence of the impact of that action on global trade performance. In the July trade report for the EMU, there is little direct evidence of a draconian impact on trade in the EMU that coincides with changes in U.S. trade policy. Of course, the EMU picture is of the external trade of that community with the world and not just the United States. But such dire predictions had been made of the impact of U.S. tariff policy that it is very worthwhile to note that such cataclysm has not appeared. Has there been some trade impact? Certainly! Has there been some increases in uncertainty? Yes. But nothing has brought global trade to a screeching halt. In fact, the Baltic Dry goods index shows a rise in trade volumes since early 2025. The current level is comparable to or higher than 2024 and last persistently stronger in 2022.

The euro area trade surplus at 5.3bln euros is higher in July than in June but is much weaker than its 3-month, 6-month, and 12-month averages. In round numbers, the 3-month average is €8bln, the 6-month average is €15bln and the 12-month average is €13bln. So, July runs at less than half the pace of the 12-month average. That may be evidence of U.S. tariff impact.

The overall balance sees disproportionately large-looking effect because it is smaller…smaller than what? Well, the manufacturing surplus is at 27bln euros in July, up by 3bln euros from June, about 3bln euros below the 3-month average of 30bln euros and about 8bln euros below the 12-month average. An eight billion drop on a level of 35bln seems smaller than and eight billion euro drop on 13 bln…but eight billion euros are eight billion euros- but that is only 2.2% of total exports. How we view relativity is important. Is that the draconian U.S. tariff impact?

The nonmanufacturing deficit in the EMU is almost unchanged by month or on any average (at minus 22bln euros).

Growth rates for manufacturing exports show contraction and a worsening trend from 12-months to 6-months to 3-months. This is not so for nonmanufacturing exports that log a strong double-digit rise over three months. EMU manufacturing imports show very steady slow growth with modest decay… not so for nonmanufacturing imports that log strong double-digit gains over three months.

Country level trends By country, German exports show growth rate erosion, French exports show acceleration, Italy shows a slowdown but at a still-strong double-digit pace for three months. Finland, Portugal, and Belgium show exports in a state of decline or weakness- mostly decline. The United Kingdom, not an EU member, shows an erratic trend but with 3-month export growth in double digits. There is some export weakness here to be sure but nothing that looks very severe.

On the import side, German imports melt down to a 3-month low annualized pace of +0.1%. French imports speed up to a 6.6% pace over 3 months. The U.K. looks at positive- if irregular- import growth.
by:Robert Brusca
|in:Economy in Brief