US GDP has been revised down for the first quarter

The U.S. GDP growth for the first quarter was revised down sharply. In the first estimate, GDP growth was 0.1 % annualized rate. This figure dropped to -1% with the second estimate.
The change is important and implies a lower carryover for 2014. This latter was 1.2 % with the first estimate, it is now 0.9 %. With the same scenario for the rest of the year than before the revision, growth for 2014 can now be expected 0.3% lower. Continue reading

3 Charts to Characterise the German Labor Market

Employment continues to rise in Germany in April. However, the pace could  change in coming months, particularly with regard to the IFO survey and its correlation with the job annual change.
It is necessary to separate short-term and medium term issues.
In the short-term, two trends are noteworthy
In May the number of unemployed increased by 24,000. This is in contrast to the most recent developments as shown in the graph. Over a year, however, the number of unemployed continues to shrink. It is possible that in May, a random factor (holidays, … ) could have played negatively. Continue reading

In France, the rebound for household and business is long to come

Consumer confidence released this Tuesday, May 27 is stable at 85 which is 15 points below its historical average of 100 (by construction).
For several years now (summer 2008) the indicator remains below its historical average. Is this historical average still relevant to analyze consumers’ behavior or is there a break in the process? That’s a question. Moreover this change is concomitant with long inflection in the purchasing power per unit of consumption. In other words, is the French economy characterized by a new period of low growth, more limited gains for the purchasing power or is it just a long and difficult path but which ultimately only be temporary? In other words, should we define a “new normal» for the French economy? Continue reading

France and Germany : running at different speeds

Are the dynamics of the French economy really very different from Germany? Recent history has proven that this is the case. Since the low point of the recession in 2009, Germany has effectively outpaced France in terms of performance. The German economy has expanded by 2.2% on an annualized basis, whereas business in France has grown only half as fast, by 1.1%. However, the opposite was true at the beginning of the 2000s.
The two economies are on an equal footing, over a reference period starting with the launch of the euro in Q1 1999. From this date until Q1 2014, French GDP grew 22.7%, whereas Germany increased by 21.8%
France and Germany function according to a different logic however. They are therefore on divergent trajectories. In order to rekindle growth, France is obliged to draw on internal demand, whereas Germany can count either on domestic demand, or on its trade with the rest of the world. The difference between the two economies therefore lies in their growth drivers. Continue reading

ECB Survey on Lending – Good News from Companies

The quarterly survey of the ECB to banks is very rich. It shows the evolution of credit conditions with respect to businesses and households, the reasons for the observed changes, but also the dynamics of demand for credit.
It is this latter aspect that interested me most notably focusing on business. This allows a view from a different angle of companies’ cyclical situation. It gives new information compared to more traditional surveys from the European Commission or from Markit.
The main point is to see if the improvement seen in these standard surveys can also be perceived in this ECB survey. Is there a rising trend in demand for credit that could be consistent with stronger momentum in economic activity? Continue reading