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

Germany| Feb 06 2026
German IP Reveals Chaotic Trends
With the December report, Germany’s production and some of the early European industrial production data reveal a good deal of chaos in terms of the embedded trends. On the month, German industrial production fell by 1.9%, with consumer goods output up by 0.5%, capital goods output falling by 5.3%, and intermediate goods output falling by 1.2%. Among the early reporters in the monetary union—France, Spain, and Portugal—only Spain showed an increase in manufacturing IP in December; however, Spanish industrial production is notoriously volatile.

Broader IP trends in Germany and elsewhere in Europe As for other early industrial production reporters, both Sweden and Norway showed strong-to-solid gains in December and each of them showed two-months of gains in a row. Beyond that, sequential growth rates from 12-months to six-months to three-months show accelerating growth in German consumer goods output against decelerating growth for intermediate goods. Real manufacturing output and real sales show mixed results- no clear trends; however, real manufacturing orders in Germany are off the map strong.

German manufacturing/industrial Surveys German industrial surveys from the IFO for manufacturing shows persistent weakening as well as for IFO manufacturing expectations, and in the EU Commission industrial index in the last three months. More broadly, Germany shows some modest but ongoing step up all of these based on average levels from 12-months to six-months to three-months for IFO expectations and the EU Commission industrial readings with mixed results for other survey readings.

IP trends in Europe For the early reporting EMU members France, Spain, and Portugal, who report industrial production trends, each show mixed monthly trends against ongoing decelerations for manufacturing output over the broader sequential periods (12-month, to 6-month, to 3-month). However, for other Europe, Sweden and Norway, manufacturing trends are steadily accelerating on this broader timeline.

A feeling of ‘Deja- What?’ These combinations of opposed trends mixed with a lack of trends leave us with this sense of confusion about what's going on in manufacturing. For Germany, the extreme strength in orders is reassuring since orders should be forward-looking rather than backward-looking or even contemporaneous. But orders can also be a fickle series and so we'll have to watch it to see if the trends for German orders hold up.

Current quarter-What’s been happening now In addition, current quarter growth for Germany actually looks quite good with industrial production up 3.7% at an annual rate in the current quarter, led by output increases in manufacturing against a decline in the intermediate goods output. Real orders in the quarter are surging at a 44% growth rate, while real sales in manufacturing only had a 0.1% uptick at an annual rate. The industrial indicators for Germany in the quarter show weakness or flatness with the only exception being IFO manufacturing expectations that advanced by a small amount. The three EMU members who report industrial production data show positive growth in the just-completed quarter except for Portugal where industrial production is falling at a 2.9% rate in the fourth quarter. Sweden and Norway, European countries but not monetary union members, show a strong 22% annual rate gain in Sweden against the 3% annual rate decline in Norway.
by:Robert Brusca
|in:Economy in Brief
Germany| Feb 05 2026
German Orders Gain Pace- Clear Uptrend
German real orders in December adjusted for inflation rose strongly again, gaining 7.8% month-to-month after rising 5.7% month-to-month in November. Foreign orders were up by 5.6% in December compared to 5.2% in November. Domestic orders surged by 10.7% in December after rising 6.4% in November and 10% in October.

Real sales Real sales were mixed in December with overall sales falling 1.4% month-to-month mostly on weakness in capital goods sales.

Broad categorical acceleration Many flows are accelerating this month. Sequential growth rates show acceleration. Total real orders accelerate from a year ago, to the current year, to six-months, and to three-months. Sales growth rates for consumer goods, consumer nondurables, and intermediate goods all show accelerations in gear. The exceptions are foreign orders that are not as strong over six months compared to their 12-month growth. And on the sales side, consumer durables sales and capital goods sales are weak.

Quarter-to-quarter Quarterly annualized growth is complete for Q4 with this report. Foreign orders are the ‘weak flow’ expanding at a 13.6% annual rate – certainly not a weak growth rate. But domestic real orders are up at an astounding 101.9% annual rate. The net impact on the total real orders growth is to lift it to a pace of 44.1%.

Order ranking is very strong The table provides two rankings: one based on the level of variables and the other based on its year-on-year growth. The rankings this month for real orders overall, foreign, and domestic orders all reside in their top 80th to 90th percentiles- extremely strong based on level or growth. Sales do not follow suit. This gives us some reason to suspect that there is some lumpiness involved in the manufacturing data as distinct from strength. That will be something to watch. Overall mining and manufacturing sales growth is essentially at its historic median at a rank of 49.8. However, capital goods, intermediate goods and manufacturing sales all have rankings at or above their medians - as high as a 61-percentile standing for capital goods.

Industrial confidence Industrial confidence for Germany, France, Italy and Spain (the EU’s big-four economies) show rankings based on these survey levels that are much lower at the 11th percentile for Germany, the 42nd and 36th percentiles, for France and Italy, respectively. Spain scores better with a 61.8 percentile standing on its industrial confidence measure.

On balance, there is now an accelerating profile that is broad in sales trends and especially strong order trends. Perhaps Europe, under the pressure to stimulate its miliary capabilities, has a core of demand to help drive output ahead more consistently. This is something to watch in the coming months.
by:Robert Brusca
|in:Economy in Brief
Global| Feb 04 2026
S&P Composite PMIs Creep Higher
Composite PMIs for January show fewer reporters weakening in January compared to December with only about 40% of the reporters getting weaker month-to-month. The sequential data weakening versus strengthening shows that over 12 months 43.5% of reporters weakened, over six months 26.1% weakened, while over three months 43.5% weakened indicating that over this period, and - in recent months as well - the broad sequential periods are showing improvement as the underlying trend for global composite activity.

In January, 5 of 25 reporters had PMIs below a diffusion reading of 50, indicating contraction, compared to none in December and two in November. Over three, six and 12 months, the number of outright contractions varies between 2 and 4 based on average data. The percentile standing for ranked data over the period back to January 2022 shows a 61.7 percentile standing for the average of all of them, and a 61.9 percentile standing for the pooled data median. There is a stronger 85.7 percentile queue standing for an average of the United States, the United Kingdom, and the European Monetary Union where conditions have been firming although slowly..

The queue percentile standings across these 25 reporters’ composite indexes show that nine of them have rankings below their medians on data back to January 2022. Among all 25 reporters, only in France has 12-month, 6-month and 3-month average PMI readings below 50 in each of those time segments. France also has readings below 50 for its composite diffusion in two of the last three months.

When we look at rankings over a period, we also are interested in knowing what the performance has been over that span where we're creating these rankings. On these data back to 2022, only 6 reporters have average readings below 50, indicating persistent contraction. For the composite that's below 50, those reporters are Germany, France, Zambia, Ghana, Egypt, and Kenya. Only Egypt at 48.9 has an average reading below 49. Clearly the sense of contraction across this set of countries is small, moderate, and short-lived. At the other end of the spectrum, there are readings of 55 or greater for Sweden, India, Saudi Arabia, and the UAE; Singapore logs a reading at 54.4 for diffusion value.

The average and median data show that the readings have very gradually been drifting higher; however it's definitely a very gradual phenomenon. Looking at smoothed data, 12-month averages show 10 countries with readings below their respective 12-month averages of 12-months ago. However, only six of these show a reading that's one diffusion point or more weaker than it was one year ago. The biggest step back is from Brazil with a 4.5-point step back; the next biggest is Russia with a 2.1-point step back and Russian of course is engaged in war. There is a step back of about one point reported by Spain, the U.K., the UAE, Singapore, and Qatar. On the same metric, step ups of two points or more include Germany, Sweden, Zambia, and Nigeria with step ups of one point or more in Kenya, Australia, Ireland, and the U.S.

Over the whole 4-year period, the average country was in contraction for 14 months, a bit more than one year, accounting for 28.6% of the time. Over the last 2 years, the average country was in a state of contraction for 5.2 months or 21% of the time. Over the last year, the average country was in contraction 2.2 months or 18% of the time. The time spent under contraction has steadily fallen across the group. Over four years, three countries dominate the contraction with France, Egypt, and Kenya in contraction more than half the time (Egypt 89% of the time; France 71% of the time). Over 2 years, only Egypt and France were contracting more than half the time (Egypt 79% of the time; France 91% of the time). In the past one year, five countries are in a contractive state more that 50% of the time (France<91%>, Egypt<75%,> Brazil<75%>, Russia<50%> and Hong Kong<50%>). France and Egypt have serious structural issues. Only Saudi Arabia and the UAE have experienced no contractions over these periods (Ireland comes close, Singapore comes close, too). The top three countries dominate the contraction profile; that is France, Egypt, and a roving member, accounting for 29% of the contractions over four years, 40% over two years and 53% over the last year. These are countries with structural issues.

On balance, the composite PMI data are improving. On the chart the uptrend is visible, a definite tendency. These metrics are moving higher, but they are crawling at a very slow pace. It's encouraging that this improvement is also occurring in an environment in which inflation is improving or holding stable.
by:Robert Brusca
|in:Economy in Brief
Europe| Feb 03 2026
Inflation Tamed in France’s ‘Too-Early’ January Inflation Report
I have offered the table (below) as a presentation of French inflation statistics that is ‘too early’ largely because the report comes with a headline and without supporting detail. But the headline is too intriguing to wait for the details to emerge. To try to bridge that gap, I present the French detailed data for the CPI with the trends calculated based on a one-month lag. I also supplement that with the current report from Germany where the topical HICP reading for January is available, as it is for France. But Germany has also issued its domestic CPI data with detail. So, I present the domestic CPI trends without lag for Germany as a way to gain some better understanding about what's going on with inflation in the euro area and to gain perspective on France.

French-German comparisons; French results Of course, Germany is not France. We can't simply assume that the trends that we're seeing in Germany in January will translate through to France. But what we can do is notice what similarity/difference is there and point out that the sharp lowering of inflation in France is a French phenomenon and not a phenomenon that is shared by Germany. Therefore, the trend is not likely broadly applicable to the European Monetary Union. French inflation is running at only 0.4% over 12 months (!), annual rates of 0.2% over six months and three months; these are exceptionally low rates of inflation. In January, the French HICP index fell month-to-month by 0.1%.

German trends The German behavior is not really similar to this with the HICP at 2.1% over 12 months and then rising to annual rates of 2.8% over three months and six months, substantially similar to the sorts of numbers reported for headline inflation in the United States. The German domestic CPI reports slightly improving trends with annual inflation at 2.1%, six-month inflation at 2.1% at an annual rate, and at 1.6% over three months, inflation is tucked inside of the ECB 2% target over three months. The German CPI excluding energy - the early proxy that we have for the core rate - is at 2.4% over 12 months, 2.5% over six months and then drops to 2% annualized over three months. The month-to-month German data have been well behaved but not as weak as the monthly inflation numbers for the HICP headline monthly in France.

Different inflation in France and Germany; but a similar trend? So we have two bits of evidence here: one is that French inflation has really been behaving and it's quite weak. The other is that while German inflation is running at a higher pace and generally above the ECB target, there are also signs that German inflation is starting to come down over more recent periods.
by:Robert Brusca
|in:Economy in Brief
Global| Feb 02 2026
S&P MFG PMIs Power Ahead; PMIs Improve; U.S. ISM blasts a hole through MFG Pessimism
An unexpectedly happy New Year in manufacturing land It's a new year - and a fine new year it is, baby! S&P manufacturing PMIs are showing consistent and broad improvement on a monthly and sequential basis. In January, of the 18 early reporting countries only 5 showed worsening conditions. The median reading for the month moved to 50.8 in January from 50.1 in December and 49.0 in November. It's a slow-motion slog, but on the other hand, it is a steady up creep from November. The PMI's median is up by 1.8 points since November, which may be small potatoes, but it's still significant progress.

Over three months the median reading rises to 50.0, compared to a reading of 49.5 on average over six months and a reading of 49.0 on average over 12 months. These sequential readings are also showing slow but clear stepwise improvement.

Breadth In terms of breadth, in January 72.2% of the reporters showed month-to-month improvement, compared to 44% showing month-to-month improvement in December and 50% showing improvement in November. Yes, the recent performance has shown improvement versus deterioration, and in the two prior months, diffusion has been pretty close to a 50-50 proposition. Then, in January, the upside exploded to a 72.2 percentile reading. Sequential data show that over 12 months 38.9% of the reporters showed improvement compared to a year earlier; over six months 50% of the reporters showed improvement compared to performance over 12 months. Over three months there was improvement of 61.1% of the reporters compared to their six-month metrics.

Unexpected strength These are steady and consistent improving readings, with some explosive improvement in the most recent three-month or one-month periods. This report is really something that was quite unexpected since the trend has been flat, sitting in this position of minor contractive lethargy for quite some time.

Most reporters log readings that imply growth The percentile ranking data show that only six of the 18 countries—one third of reporters—have percentile readings below the 50th percentile, based on data going back to January 2022. 12 of the 18 reporters have percentile standings in the 70th percentile or higher, and 4 of 18 are in the 80th percentile range.

Strong showing in the U.S. a growth leader The breadth of this improvement is quite impressive. The table chronicles the S&P manufacturing PMIs. The chart plots these data for three regions but substitutes the U.S. ISM manufacturing reading freshly released today along-side the S&P readings. The U.S. ISM in January has simply exploded to the upside. That report’s headline snapped up to 52.6 in January from 47.9 in December; it was the strongest reading since the middle of 2022. The order diffusion reading jumped to 57.1, a month-to-month jump of nearly 10 points; the production diffusion rating rose by 5 points monthly; the prices-paid reading continued to snake higher; export and import ratings both rose relatively sharply. If the U.S. is a bellwether for how the rest of the world is going to perform, that bell is ringing loudly in January. The U.S. ISM standing evaluated on data back to 1996 gives an ISM queue standing at its 48.9 percentile – closing in on absolute normal.

Some U.S. detail… The U.S. weakness in imports would probably have something to do with tariffs. There also may be some negative spillovers that would affect exports, but exports would also depend more directly on activity overseas, which the PMI data from S&P suggests has begun to pick up. Employment, which showed an improvement on the month, is still lagging with a 31-percentile standing. However, the rest of the manufacturing readings are really quite solid, quite strong. And in terms of levels instead of rankings, all of the U.S. PMI readings are above their 50% mark in the ISM survey except for inventories and employment. Employment has a 48.1 percentile standing - not a terrible result, especially for a sector whose employment share has been dropping chronically for decades.
by:Robert Brusca
|in:Economy in Brief
Europe| Jan 30 2026
EMU GDP Steps Up on the Quarter
GDP in the European Monetary Union rose by 1.3% at an annual rate quarter-to-quarter in the fourth quarter of 2025. This is a step up from 1.1% in the third quarter and from 0.6% in the second quarter. Year-over-year growth in the monetary union slowed to 1.3% in the fourth quarter compared to 1.4% in the third quarter and 1.5% in the second quarter; however, GDP growth is holding up well, and the quarterly profile suggests that the current growth rate is solid.

Early-stage GDP reporters At this early stage, only seven countries have reported publicly GDP figures, and we see them in the table. Among them, the strongest growth rate in the fourth quarter is from Portugal at 3.2%, followed by Spain at 3.1%, and then the Netherlands at 2.1%; the weakest growth rate reported in the table is from France at 0.7% at an annual rate in Q4.

Quarterly acceleration/deceleration In the fourth quarter with GDP measured quarter to quarter, GDP has accelerated in the monetary union from 1.1% in Q3 to 1.3% in Q4. At the country level, there are accelerations in Germany, Italy, Portugal, and Spain; the Netherlands logs the same growth rate in Q3 as in Q4 at 2.1%. Belgium and France log slowdowns, with Belgian growth posting a 0.8% annual rate in Q4 compared to 1.0% in Q3 and with France at 0.7% in Q4 compared to 2.1% in Q3.

Year-on-year trends Year-over-year trends are different from this, however. On a year-over-year basis, the monetary union shows slightly slower growth at 1.3% in Q4 compared to 1.4% in Q3. Accelerating comparisons show Belgium, France, Germany, Italy, and the Netherlands all on rising growth rate profiles for year-on-year growth. Growth slows quarter-to-quarter in Portugal and in Spain.

Growth in historic context The year-on-year growth rate overall ranked on data back to 1997 shows only Italy and Portugal with rates of growth above their respective medians for the period (back to 1997). Italy's growth rate has a 55.4 percentile standing, the same as for Portugal. Spain’s 48.9 percentile standing places its growth rate near its median, while the other countries produce growth rates largely in the mid-30th to low 40th percentiles for this period.

Large economy/small economy Comparing growth rates for the largest four economies to the rest of the monetary union, we have the large economies growing stronger quarter-to-quarter in the fourth quarter of 2025 at 1.4% compared to 1.2%; this is a reversal of the pattern that we saw in Q3 and Q2. In fact, the year over year growth rates show the four largest economies growing slower than the rest of the monetary union, for the last four quarters. In the fourth quarter, they have a 40.2 percentile standing on growth rates back to 1997 while the rest of the monetary union comes in very close to its median growth rate with a percentile standing at 48.9%. It doesn't appear that any particular part of the monetary union is doing especially well, but the smaller countries appear to be closer to normal than the larger countries where growth remains more significantly challenged than it has been over the last 30 years.
by:Robert Brusca
|in:Economy in Brief
Europe| Jan 29 2026
EU Commission Indexes for EMU Turn Higher
In January, we see an uptick in the EU Commission indexes that chronicle conditions in the European Monetary Union. The overall index is up smartly to 99.4 in January from 97.2 in December with improvement in four of the five subindexes with construction being unchanged month-to-month and for three months in a row; construction is also the strongest sector among the five by a long shot. The top line EMU reading was last this strong in January 2023, two years ago, on an isolated reading. It was last stronger for a string of period March 2021 through February 2022, in the heat of the post-Covid revival, averaging 111.6 on that span and reaching a monthly value as high as 119.9.

Rank standings rise and firm The overall EU Commission index has the queue percentile standing at its 46.7 percentile, very close to the 50% mark that establishes the median for the series among the five components. Retailing and construction are both above their respective 50% marks, with retailing at a 56-percentile standing and construction at an 81.9 percentile standing. The weakest reading is on consumer confidence at a 26.6 percentile standing, while services have a 43.5 percentile standing with the industrial sector at a 43.4 percentile standing. Both the services and industrial readings are climbing up closer to their respective medians but not quite there yet.

Largest economies show the clearest turns All four of the largest economies showed monthly increases in January with the largest increase a 6.1% month-to-month increase by France; the smallest was a 1.3% increase by Italy. While that's good news, it's also true that all four of those readings had declined in December compared to November. For the rest of the countries of the Monetary Union, eight of those 14 countries experienced month-to-month setbacks to their overall confidence readings in January, but only 3 of those 14 countries had experienced contractions in December and only 3 of them had experienced contractions in November; and, in November, only one of the four largest economies had experienced contraction.

Generally, positive developments are afoot Generally speaking, the trends are moving in a positive direction despite monthly volatility across the 18 early reporting countries; 9 of them show queue percentile standings above the 50th percentile, 2 of those are among the four largest economies, Italy and Spain. Quite clearly conditions within the monetary union remain mixed but the upward momentum and recent improvement is unmistakable.

Sector performance in largest EMU economies Among the four largest economies, the industrial sector has an above 50 percentile ranking in France and in Spain. Germany, and Italy are lagging behind. Construction has above 50-percentile standing in each of the four largest economies except France where its percentile standing is in its 42nd percentile. Spain does not report consumer confidence, retailing, and services numbers separately. Among the remaining big three countries, only Italy has readings above its 50-percentile mark and those are only in retailing and services. Consumer confidence continues to lag everywhere with the highest assessment among the BIG-4 economies in Germany with the 45.8 percentile standing and the lowest in France at a 20.4 percentile standing.

Tracking improvement The chart at the top shows that in broad terms we can see the improvement is relatively long lived for the BIG-3 economies and in EMU. We can be hopeful that there really is a trend of improvement that is taking hold. From mid-2025 or so onward, there are steady improvements in gear. Two of the BIG-3 economies are improving along with the EMU aggregate; only Germany tends to flatline on that timeline. The recent improvement in Germany is a relatively new feature in what otherwise looks like German stability. These trends now have some length, making the momentum seem more durable.
by:Robert Brusca
|in:Economy in Brief
Europe| Jan 27 2026
European Vehicle Registrations Show Some Life
European vehicle registrations rose 2% in December compared to November; year-over-year registrations are up by 4.5%. The three-month average in December is lower by 0.4% compared to where it was in November and the three-month average has a 12-month growth rate of 3.8% compared to the unadjusted rise of 4.5%.

The growth rate progression shows a 12-month growth rate of 4.5%, jumping up to a 19.5% annual rate over six months and falling back to a contraction of 4.8% at an annual rate over three months. However, the annualized growth rates calculated from three-month moving averages show a 12-month gain of 3.8%, a six-month gain of 8.1%, and the three-month gain of 10.8%. The 3-month smoothed data show that there is an ongoing acceleration in car registrations that is masked by volatility in the month-to-month numbers: the 10.8% growth rate over three months is quite a good sign if it can hold up and, of course, it's on the heels of 8.1% growth over six months.

Looking at the individual reporting countries Germany, France, Italy, Spain, and the United Kingdom, we see gains in registrations in December compared to November in three countries. In the U.K. registrations rise by 6.1% month-to-month, in Italy they rise by 4.2% month-to-month and in Germany they gain 1.8%; however, registrations fall on a month-to-month basis by 2.1% in Spain and by 1.5% in France.

The country level sequential growth rates show a mixed picture in Germany where registrations are up 10.6% over 12 months and accelerate to 19.5% over six months but are declining at a 16.8% annual rate over three months. In France registrations rise by 3.6% at an annual rate over three months; however, they are stronger over six months and they then are contracting over 12 months. In Italy registrations are up by 2.5% over 12 months, the growth rate jumps to 25.4% at an annual rate over six months, but then, over three-months, registrations fall at a 1.8% annual rate. Spain also shows erratic performance with the decline of 2.9% over 12 months, a gain over six months and then a decline at a 12.4% annual rate over three months. And the U.K. registrations trends are deteriorating with a 3.7% gain over 12 months, a 4.8% annual rate drop over six months, and then over three months the annual rate plunges to -30.8%.

The reporters in the table show registrations weaker than they were in January 2020 just before the COVID virus struck; overall registrations are lower by 12.2%. Registrations are down by 13.3% in Italy, down about 10% in Germany and France, down by 5.7% in Spain, while the U.K. registrations are lower at just 1.5%
by:Robert Brusca
|in:Economy in Brief
Germany| Jan 26 2026
IFO Readings for Germany Mostly Waffle; Services Lag
Germany’s IFO readings in January show a bit more strength in the climate reading, nearly unchanged current conditions, and nearly unchanged expectations. These readings that tend toward small changes or unchanged readings are - and have been - characteristic of the IFO survey for most of 2025 where the various sector readings basically made some improvement through about the first quarter of the year and then pretty much flatlined for the rest of the year. Growth Dynamics in Germany have become fairly stagnant. The question is when something will occur that will light a fire under growth or, more unfortunately, send the economy back into a tailspin.

The climate readings on long-dated rankings are all weak with only one reading for construction above its 50th percentile and data back to 1993. However, on a shorter timeline looking at conditions just since February 2022 that marks the invasion of Ukraine, we have the climate reading at a 63.8 percentile standing, construction at an 89.4 percentile standing and wholesaling at a 72.3 percentile standing. Manufacturing also manages a positive standing at its 55.3 percentile.

Month-to-month in January, there are small changes afoot across the five sectors and all of them show some modest improvement except for services that backtrack slightly moving from a reading of -2.1 in December to -2.6 in January.

Current conditions show almost no change at all with a -4.8 reading in January compared to a -4.9 reading in December. Across sectors in January, there's about a two-point improvement in manufacturing, a small improvement in construction and more sizable improvement in wholesaling, a small improvement in retailing, and a step back for services.

For current conditions, the percentile standings on the long-view to 1993, again, show only construction with a reading above its 50th-percentile - that is, above its historic median - at 61.6%. The all-sector reading has only a 11.9 percentile standing which is quite weak and generally weaker than the individual sectors. That fact simply underpins the notion of how this coincident-weakness across all the sectors is unusual because the all-sector index has a weaker ranking than any of the individual industries or sectors on the long timeline. On the shorter timeline, construction, again, is at a 59.6 percentile reading, above its 50th percentile, wholesaling comes close at a 48.9 percentile, reading retailing is exceptionally weak at a 4.3 percentile reading, and services are at a 10.6 percentile rating also quite weak. The current index is dominated by weakness.

Expectations in January show a step back for the overall reading and that's based on weakness in services. There are nearly 3-points of improvement in manufacturing, unchanged readings in construction, a slight improvement in wholesaling, a sizeable 6-point improvement in retailing, and a weaker reading from services, which back off by half a point on the month. The percentile standings when data are ranked over the long period to 1993 show everything below the 50th percentile; all rankings are below their historic medians on that timeline. However, when compared to February 2022, marking the invasion of Ukraine, all of the readings are above their 50th percentile, generally in about the 80th or 90th percentiles, except for services that only manage a ranking in the 55th percentile.
by:Robert Brusca
|in:Economy in Brief
Global| Jan 23 2026
S&P Flash PMIs Rebound But Emit No Clear Signal
The S&P PMIs for January show flash readings that indicate broadly stronger conditions across the early reporters in this table. Exceptions are the European Monetary Union as a whole with its composite reading weaker and France with its composite reading weaker, but Germany, the United Kingdom, Japan, Australia, India, and the United States all have composite readings that are stronger month-to-month in January. With these eight countries, there are 24 readings in each period, three for each country: a composite, one for manufacturing, and one for services. Among these 24 readings, only five of them were weaker month-to-month in January. Of course, this follows a December when only 6 of the readings were stronger month-to-month.

The sequential readings, that we calculate only off hard data (which means that calculations are done from December backward) are still mixed. Substantially weaker conditions period-to-period are reported comparing three-months to six-months. Over three months, only nine of the 24 readings are stronger whereas over six months only one of the 24 readings is weaker when compared to the 12-month average. Over 12 months, the average is stronger than it was one-year ago in 15 of the 24 readings.

Only the United States and France have service sectors that are below their medians over this period back to 2022. Only France and India have composite readings that are below their respective medians over this period. But by comparison, there are very strong composite readings as well. There is a 91-percentile standing on the composite in Australia, an 87-percentile standing in Japan and the United Kingdom. The German composite has a 79-percentile standing.

The recent data have been running sporadically hot and cold, making it difficult to make sense out of what's happening. But broadly, it's clear that the PMIs in the European Monetary Union have been working their way higher and this is the general theme.

For the 8 reporters in the table back to January 2022, all of them except India show weaker manufacturing readings in January 2026 than what they showed in January 2022. But January 2022 was, of course, part of the COVID recovery move. Manufacturing in the European Monetary Union slipped from its high point over this period to its low point around mid-2023.
by:Robert Brusca
|in:Economy in Brief
Belgium| Jan 22 2026
Belgian Consumer Confidence Up and Strong; Fear of Unemployment at 35-Year Low! Is That Possible?
The National Bank of Belgium index for January 2026 rose to +4 from -1 in December, stronger than its November 2025 reading of +2. The survey value is exceptionally strong, lying in the top 6% of all observations back to 1991, even as the survey contains significant variations that range from strong to quite weak across its various components. What is most notable is that the index itself is extremely high-ranking; the current situation appraisal is also quite high-ranking; and, that the forecast for unemployment embedded in this survey is at a 35-year low. Considering current circumstances, against the events of the last 35 years, that's a rather remarkable finding especially considering the world situation.

The times, they are a changin’ was Dylan 50 years early? These have been remarkable times in a number of different ways with a clear transition from the circumstances of the post-war period under way. The solidarity of the NATO alliance is clearly in a situation in flux, revealed since Russia invaded Ukraine. Prior to that, the Europeans had resisted putting more money into the NATO pot as the United States had been frantically asking them while it funded most of the security umbrella. Now, in the wake of these new events, and with the changes to the global stage wrought by climate shifting, the U.S. finds Greenland to be a more important piece on the geopolitical chess board and wants to have more say there in order to protect its own flank as Arctic ice packs recede. This is after a period when NATO basically failed to engage in the front-line protections of its own doorstep that the U.S. had thought were necessary. Not surprisingly, the U.S. found that whole episode unsatisfactory and is now reluctant to give up control to NATO of what it regards as the protection of its own back door for the area around Greenland. But at last, Europe and the U.S. appear to have a deal or the makings of one, so, stay tuned. Maybe all civility is not lost.

Geopolitical shifts meld with economic issues to change the landscape Geopolitical shifts are part of the problem because geopolitics and economics help shape one another. And there has been a great deal of economic turmoil as well. The U.S., after reassessing the Post War order, is bringing back to life tariffs, in order to try to get economic leverage after running 33 consecutive years of current account deficits under what people want to call a free trade system. The U.S. finds itself with a still very overvalued dollar and in a situation where its current account deficits are poised to continue to run high and perhaps get higher. Economists say tariffs are not the solution, but maybe they ARE the wake-up call that will lead to a solution? Europeans have also shifted to embracing a larger and larger government sector and ever larger fiscal deficits and more fiscal debt while absorbing migrants. This is constraining its ability to have any kind of a flexible macroeconomic policy and is a severe problem already for the U.K. and France. And these changes are wreaking havoc with what has been a very solid post-war Atlantic alliance.

Views change But the changes that the U.S. has pushed on to the system from its geopolitical adventurism to its use of tariffs and other strong rhetorical comments have led economists to focus on the elevation of uncertainty in the economic system. Elevating uncertainty has an adverse impact on the economy and on growth. I mentioned this with the obvious caveat that this warning by economists seems to have been completely wrong. U.S. growth has turned out to be quite resilient and even strong. It is not the only adamant position that has proved to be wrong and malleable. Despite the reality of climate change, the view that once took carbon as the main and unequivocal climate change agent, itself is shifting. Opposition to carbon has dwindled, more as the U.S. is embracing nuclear power. Artificial intelligence is becoming a strong bet for stronger growth in the future, and this explains why there have been so many shifting views on energy since artificial intelligence requires massive amounts of energy and would make it impossible to make progress on carbon and to push ahead with the AI agenda at the same time. So, instead of delaying AI, the view on carbon had to go. So much for ‘science.’

Why are Belgians so satisfied? The finding that in Belgium consumer confidence has risen sharply in this environment and fears of unemployment are the lowest they've been in 35 years is another shocking development in this pantheon of incredible and shocking changes. As the above discussion points out, a lot is changing and NATO is at odds with the U.S., its lynchpin. Yet, there is no clear increase in uncertainty in Belgium, while they maybe more in Brussels.

The Belgian Survey: strong despite waffles Belgians do not read the economic situation over the next 12 months as that strong at a reading of -29 on the survey; it has weakened over the last few months, and the economic situation assessment is only at its 8.3 percentile, an extremely weak standing. Price trends are the opposite; they have eased somewhat in the recent months, but over the next 12 months the assessment still has a top 14-percentile evaluation. It is in this context that the unemployment forecast, which is the lowest in 35 years, emerges as surprising. The environment to make major household purchases over the next 12 months is only a mid-range at a 45.7 percentile standing. And people rate their financial situation over the next 12 months slightly better than at the end of last year but at only a 34.2 percentile standing. However, the appraisal of the current situation moved up sharply in January and has a 97.7 percentile standing, which is extremely strong.
by:Robert Brusca
|in:Economy in Brief
United Kingdom| Jan 21 2026
U.K. CBI Industrial Survey Flags Trouble Ahead
The CBI (Confederation of British Industry) Industrial Trends Survey showed slight improvement in orders in January 2026 as the survey reading rose to -30 on a net basis from -32 in December and -37 in November. However, the 12-month average of the order series is -31 and so the improvement compared to conditions that prevailed over the last 12 months is not significant.

Export orders, on the other hand, deteriorated to -30 in January from -27 in December although that reading was slightly better than the -31 print in November. Once again, the -30 reading for January is only slightly better than the 12-month average of -32.

Stock-building slowed in January at +3 compared to +8 in December and +16 in November. That, actually, could be good news suggesting that industries are getting control of their inventories at a time when sales have been weak.

Looking ahead for output volume over the next three months improved to -14 in January from -17 in December and -30 in November, a substantial pick up over this period. But the reading for January at -14 is still slightly more negative than the 12-month average of -11.

The unequivocally stronger reading in the table, unfortunately, is for prices with average prices over the next three months at a +29 net reading, up from +19 in December and up from +7 in November. The reading of +29 in January compares to a 12-month average of +18 indicating a significant pickup compared to conditions that prevailed over the last 12 months.

Evaluating these readings by ranking the queue standings of the net values and data back to 1992 shows total orders have a 20th percentile standing, export orders have a 28.4 percentile standing, while the stocks of finished goods have a 9.8 percentile standing, and expected output - despite its recent improvement - is quite weak with an 8.3 percentile standing. Average prices, on the other hand, are quite strong with a 91.7 percentile standing, indicating that the forces of inflation looking ahead are quite strong despite relatively weak demand and output conditions that are expected.

CBI data compared to annual growth rates in manufacturing and to the manufacturing PMI show rankings actually much better than the CBI survey. The manufacturing PMI has a 53.7 percentile standing that's only on data back over the last four years. The manufacturing production data have a 48.3 percentile standing, which is still very close to its 50-percentile standing, which would be its historic median. So, we have another case here of the accounting data being stronger than the survey data from the CBI. The strength in manufacturing industrial output does not compare favorably with the weakness portrayed in the CBI survey even though the manufacturing data are only up-to-date through November. The CBI data are up-to-date through January. And since CBI data generally show some stability or improvement from November to January, that data time mismatch with industrial production doesn't seem to be the reason for these readings being so vastly different. We’re going to have to keep an eye on other metrics for manufacturing to see which one of these surveys is giving us the best information.

For now, we don't know which of these series is the best and what we're looking at is a CBI series that is touting a great deal of economic weakness and portraying significant increases in prices over the next three months.
by:Robert Brusca
|in:Economy in Brief