"'All that year-end optimism about a synchronized growth pickup in the advanced countries has been given the cold water treatment by recent data. Today we saw bigger-than-expected declines in industrial production out of the second- and third-biggest euro-zone economies and learned how a weak overseas is undermining the trade balances for exporting behemoths Taiwan and Japan.
Part of the problem is not only that growth might not be as strong as we’d hoped in the U.S. and in Europe, but that the nature of the recovery, such that it is, is more concentrated on domestic purchases. For instance, U.S. growth is not being accompanied by a resurgence in its trade deficit, which used to happen almost automatically. Meanwhile, the euro zone’s current-account surplus has grown as austerity in the peripheral countries has brought them in line with Germany as current-account-surplus producing economies. Demand is not being shared around, in other words, and that’s not good for the global economy as a whole''.
''FRANCE: December industrial production fell 0.3% on the month against expectations of a 0.1% decline.
ITALY: December industrial production fell 0.9% on the month and was down 0.7% on the year against expectations of unchanged and up 0.4% respectively.
JAPAN: The current-account surplus came in at 3.31 trillion yen (US $32.3 billion) for the full year, down 31.5% from a year earlier and the smallest under the existing method of calculation that began in 1985, as energy needs and growing domestic demand pushed up imports. On a monthly basis, the December current account was in deficit for a fourth straight month, with a shortfall of 638.6 billion yen.
TAIWAN: Exports unexpectedly fell in January, down 5.30% on-year, but the decline was attributed to the Lunar New Year holiday that began late in the month and not to weakness in Western demand''.
Source: WSJ Macro Horizons
