Category Archives: Econ

17/1/19: U.S. Imports Demand and Final Household Consumption

A great post from the Federal Reserve Bank of San Francisco blog ( showing estimates for total imports content of the U.S. household consumption, with a break down of imports content across domestic value additive activities and foreign activities.

Key results: “Our estimates show that nearly half the amount spent on goods and services made abroad stays in the United States, paying for the local component of the retail price of these goods. At the same time, imports of intermediate inputs make up about 5% of the cost of production of U.S. goods and services. Overall, about 11% of U.S. consumer spending can be traced to imported goods. This ratio has remained nearly unchanged in the past 15 years”.

Note: Top bars in both panels are computed directly from PCE and headline trade data. Bottom bars in both panels reflect authors’ adjustments to account for imported content of U.S. goods and U.S. content of imported goods.

The above shows that imports play far lesser role in the U.S. households' consumption than popular media and public opinion tend to believe. This, in part, explains why Trump tariffs war with China has had a very limited adverse impact on domestic demand in the U.S.

21/6/18: Weaker growth signals for the euro area

I have not updated Eurocoin dynamics and euro area growth forecasts for some time now, so here is the latests, from May data:

  • Eurocoin, leading growth indicator for the euro area, has fallen significantly from the local high of 0.96 in February (the highest growth forecast since June 2000) to 0.89 in March, followed by continued decline to 0.76 for April and 0.55 in May
  • May reading is the lowest since December 2016
  • Growth forecasts consistent with Eurocoin dynamics indicate that, assuming revised 1Q growth remains at 0.4 percent, 2Q 2018 growth is likely to come in somewhere in the range of 0.35-0.55 percent

Chart below shows improving outlook for HICP (inflation) over the last 12 months through May 2018, just as the economy beginning to slow down:

On balance, we now have three consecutive months of declining Eurocoin-implied forecasts for euro area growth. It will be interesting to see eurocoin print for June, coming up in about a week, as well as July (coming out prior to the Eurostat growth estimates for 2Q 2018).