Mark Sobel at OMFIF discusses the likelihood of an new Plaza Accord to depreciate the dollar. Given one would need Euro area and Chinese agreement, the assessed likelihood is low A Mar-a-Lago Accord also would be inconsistent with Europe’s cyclical situation.…

EJ Antoni/Heritage writes: Another month, another record high for the number of gov’t employees Well, yes. Of course, population is also at a record high. So too is nominal GDP. What to do…what to do… maybe normalize? Maybe choose a longer…

EJ Antoni writes: Today’s employment data showed further gains in earnings, but cumulative price increases have still far outpaced earnings growth over the last 4 years. According to the Household Budget Index, it’s even worse when just considering prices for things…

From a X post today: There have been widening gaps between NFP and civilian employment in the recent, which he takes as evidence of serious overcounting of employment in the CES. It’s important to realize the CPS estimate of civilian employment…

Today, we’re pleased to present a guest contribution by Laurent Ferrara (Professor of Economics at Skema Business School, Paris and Chair of the French Business Cycle Dating Committee). Since President Macron announced the dissolution of the French Assemblée Nationale on Sunday 9…

Here are some key indicators followed by NBER’s BCDC, including employment for November (227K vs. 202K consensus, 194K vs. 160K consensus, for NFP, and private NFP respectively). Figure 1: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary benchmark (bold…

(Or, ” I have in my hand fifty-seven cases of individuals…”) At 3:44 into this video, this Ms. DiMartino Booth makes this assertion, claiming this is the reason we haven’t seen a recession in the data pre-election. She further argues that…

Here’re CDS swaps and spreads vis a vis Germany over the past year: The credit ratings have been stable for years…until today. Here’s S&P’s: Here’s the fiscal situation, as summarized by the budget balance as share of GDP. The six percent…

As I have observed before, the explanation for why we have not yet seen a recession’s onset in the data yet could be one of the following: (1) the model based on historical correlations is no longer applicable (DGP has changed),…

Open access until 21 January 2025 for the paper in JIMF, paper coauthored with Hiro Ito: We re-examine the determinants of current account balances (CAB) and the saving-investment nexus with focus on emerging market and developing economies (EMDEs). We are in…

Trend shifted down, but sensitivity up. Figure 1: Log of ratio of vehicle miles traveled to monthly GDP (000’s miles divided by bn.Ch.2017$ SAAR) (blue), and 2000-19 stochastic trend (red). NBER defined peak-to-trough recession dates shaded gray. Source: NHTSA via FRED,…

Here are key indicators followed by the NBER’s Business Cycle Dating Committee (top indicators employment and person income) plus monthly GDP from S&P (nee Macroeconomic Advisers nee IHS Markit): Figure 1: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary…

Consider the ruble/yuan exchange rate. Figure 1: Rubles per yuan, calculated using dollar rates (blue, log scale). Up is a depreciation of the ruble. Source: Pacific Exchange Services accessed 12/1/2024, and author’s calculations. The recovery in the ruble’s value after 11/27…

Reader Michael writes: …high income wage growth has grown much faster than medium and low income wage growth patterns. Here’s a stab at taking a look at the data. First wages: Figure 1: Year-on-Year growth rate in average hourly earnings from…

As measured by Baker, Bloom and Davis: Figure 1: EPU (news) for the US (blue), average value 1/20/2021-11/4/2024 (light blue line), average value 11/6/2024- (orange line). Source: policyuncertainty.com accessed 11/30/2024. And we haven’t even heard the word “bleach” yet!

The conventionally used CPI-U is in the middle of the pack. Figure 1: CPI-urban (bold black), CPI-wage earners and clerical (purple), CPI for 2nd income quintile (pink), chained CPI (tan), HICP (light blue), Everyday Price Index (EPI) (green), all not seasonally…

A retrospective: Figure 1: Wisconsin manufacturing employment, 000’s, s.a. (blue, left scale), Wisconsin manufactured exports in mn.2000$ (tan, right scale). Wisconsin nominal exports seasonally adjusted using geometric moving average, deflated using goods export price deflator. Source: BLS, Census, and author’s calculations.…

I’m taking the WSJ’s word for it, from the article “Russia’s War Economy Shows New Cracks After the Ruble Plunges”. The Russian economy, surprisingly resilient through two-plus years of war and sanctions, has suddenly begun to show serious strains. The ruble…

GDP, GDO, GDP+: Figure 1: GDP (blue), GDO (tan), GDP+ (green), all in bn.Ch.2017$ SAAR. GDP+ scaled to equal GDP at 2019Q4. Source: BEA, Philadelphia Fed, author’s calculations. Note that none of these series evidences two consecutive quarters of negative growth…

A comparison between CPI, chained CPI, PCE price index, and HICP deflation: Figure 1: Average hourly earnings, CPI deflated (blue), chained CPI deflated (green), PCE price index – market based deflated (tan), and HICP deflated (red), all in 2019$. Chained CPI,…

Forty years ago, I was working for Bob Crandall as an RA at Brookings, on how much the voluntary export restraints (VERs) added to the costs of a typical Japanese imported car. He found that number to be about $820 (a…

From Politico: The ruble tumbled on Wednesday to its lowest level in over two years, as a mix of low oil prices, new sanctions against Russian businesses and burgeoning government spending on its war effort put ever-greater strain on the Russian…

President-elect Trump has mentioned a 25% tariff on Mexico and Canada. Time to think about how this would affect Wisconsin, a state that voted for Mr. Trump. Source: ITA. Source: ITA. Wisconsin imported $1.6bn from Mexico, $0.8bn from Canada in 2023.…

With the core PCE deflator, we have these measures of what’s happening to core. Figure 1: Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), services supercore (light green), PPI core (red), and PCE core (green), per Eeckhout (2023),…

One of the last snapshots of the Biden economy show real consumption and personal income rising, with consumption rising 0.6% (vs. consensus of 0.3%), and faster than inflation. Here are some key indicators followed by the NBER’s Business Cycle Dating Committee.…

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. An earlier version appeared at Project Syndicate and the Guardian. Nov. 24, 2024…

A self test (a follow up to this post): If the dollar appreciates exogenously, do export and import prices (in US currency terms) tend to fall, holding all else constant? If tariffs on imports are raised, do import prices tend to…

“Trumpflation” Risks Likely Overstated by Lance Roberts via Zerohedge: The question is whether policies being considered by the next Presidential administration will lead to “Trumpflation” or not. … Current ThinkingMany mainstream economists and analysts believe President Trump’s economic policies could trigger “Trumpflation.” The…

The percentage change is less than that for the CES estimate. Does this mean there are a lot fewer people employed that indicated by the official series (e.g. here)? Here’s data from 2023M06 onward: Figure 1: Change in total covered employment…

Locking up the butter in Russia (CNN). Official inflation in October was 0.8% m/m (annualize that and it’s about 10%. That’s the official inflation rate. The ex post rate is around 11% then. Taking the CBR’s expected inflation rate of 13.4%…

Since the incoming administration has indicated the deportations will start on day one, I thought it of use to consider the sectoral impacts of a policy of mass deportation (aside from macro based ones as discussed here). First, I consider two…

Today, we are pleased to present a guest contribution written by Joshua Aizenman (University of Southern California) and Jamel Saadaoui (Université Paris 8-Vincennes). This post is based on the  paper of the same title. The outcome of the 2024 US presidential election has…

Including HICP and nowcasted PCE deflator. Figure 1: Instantaneous inflation per Eeckhout (2023) for CPI (blue), chained CPI (red), HICP (green), PCE deflater (bold black), PCE market-facing deflator (pink). Chained CPI and HICP seasonally adjusted by author using X-13. PCE deflator…

Daniel Lacalle via Zerohedge writes Professors EJ Antony and Peter St Onge recently published an excellent study, “Recession Since 2022: US Economic Income and Output Have Fallen Overall for Four Years,” through the Brownstone Institute. It perfectly summarizes why Americans have…

Not that it ever disappeared completely. But expect the EPU to rise as the tariffs start flying, and the deportations begin. Figure 1: Economic Policy Uncertainty (news based) (blue), and centered 7 day moving average (bold red). Trump administration shaded orange;…

Today we are pleased to present a guest contribution by Mark Copelovitch (Political Science and La Follette School, University of Wisconsin – Madison) and Michael Wagner (Journalism and Mass Communication, University of Wisconsin – Madison). Last week, John Burns-Murdoch of the…

NFP and private NFP up (although below recent peaks), while civilian employment rises. Figure 1: Wisconsin Nonfarm Payroll Employment (dark blue), Philadelphia Fed early benchmark for NFP (pink), Civilian Employment (tan), real wages and salaries, deflated by national chained CPI (light…

Following up on the examination of what the term spread predicts, here’s the slope coefficients for the term spread, in regressions augmented with short rate, from 1946-2023Q3 (GDP growth 1947-2024Q3). Figure 1: Regression coefficient of GDP growth lead 4 quarters on…

Industrial and manufacturing production down at consensus rate (-0.3% m/m for both). Core retail sales +0.1% vs. consensus +0.3% m/m. First up, series followed by the NBER’s Business Cycle Dating Committee (personal income and employment are key): Figure 1: Nonfarm Payroll…

It’s commonplace to correlate term spreads with future economic activity measured one way or thSo, while other. Recessions in the US do seem to be predictable on the basis of term spreads; but recessions are a binary variable insofar as the…

PPI and core PPI y/y slightly above consensus: Figure 1: Instantaneous inflation (T=12, a=4) for CPI (bold blue), PCE deflator (green), PCE market based deflator (brown), and HICP (light pink), PPI (red) per Eeckhout (2023). chartreuse dashed horizontal line at 2%…

Core up, but supercore down: Figure 1: Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), services supercore (light green), PPI core (red), and PCE core (green), per Eeckhout (2023), T=12, a=4. Source: BLS, BEA, Pawel Skrzypczynski,  and author’s calculations.

Consistent with expansionary fiscal policy plus tariffs hitting a non-passive Fed reaction function. Figure 1: TIPS constant maturity 5 year yield (blue), five year breakeven (Treasury minus TIPS) (red), both in %. Red dashed line at election. Source: Treasury via FRED.…

What else would one expect from expectations of expanded budget deficits, higher incipient inflation in the context of a Taylor rule reaction function, when the currency is safe have asset? From Bloomberg: “We see a good chance of substantial dollar strength…

Former Senator Toomey (Politico): “We have a recession coming. That’s what the response would be from a full-blown trade war that [Trump] would precipitate,” Toomey said, referring to the president-elect’s trade proposals. Those include tariffs of up to 20 percent on…

Answers: No. No. No. Figure 1: Net exports in bn.Ch.2017$ SAAR (blue, left scale), nominal as share of GDP (tan, right scale). NBER defined peak-to-trough recession dates shaded gray. Source: BEA, NBER, and author’s calculations. Not only did net exports fall…

Given the results of the election, and Mr. Trump’s statement that deportations will start immediately, there will be a need for facts. I recommend EconoFact’s Immigration page as a start for your analysis. In addition, McKibben, Hogan and Noland (2024) analyzed…

There was a noisy minority of analysts thinking we were in, or imminently in, recession (see a list here). It’ll be interesting to see how those views are revised. However, as I noted, while the data was not supportive of being…

Thet’s  Jeffrey Tucker in the Epoch Times via ZeroHedge. It’s a reasonable supposition that a recession will become obvious to all by next summer. It will then be declared by year’s end. The following year it could become backdated with data…

A reminder, so when next you hear about fiscal restraint. Figure 1: Debt held by the public as share of GDP (blue), and as share of potential GDP (red). NBER peak-to-trough recession dates shaded gray. Source: Treasury via FRED, CBO, NBER…