Is California in Recession? (Part XII)

November coincident indices from the Philadelphia Fed are out. Time to re-evaluate this assessment from a year ago in Political Calculations that California was in recession. Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from […]

How I Freaked Myself Out: Economic Crisis Management Teams, 2009 vs. 2019

In the wake of the pre-holiday meltdown in the financial markets, I thought for a few minutes about who would be doing crisis management, especially after SecTreas Mnuchin’s ham-fisted attempt to calm the markets. My musings did not calm my nerves. Consider the January 2009 team and the (likely, barring further dismissals) January 2019 team, […]

“Top US Economist Stephen Moore: … Powell Should Resign”

Look no further for the source of Mr. Trump’s economic proclivities. The entire article title: “Top US Economist Stephen Moore: Time for New Pilot at the Fed – Jerome Powell’s Policies Are Disastrous – Powell Should Resign” (12/19): The Fed has been way too tight. They made a major blunder three months ago with raising […]

Is California in Recession? (Part XI)

November employment figures are out. Time to re-evaluate this assessment from a year ago in Political Calculations that California was in recession. Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from the U.S. Bureau of […]

Comey, Cohn, Sessions,… Powell?

From Bloomberg, tonight: President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses, according to four people familiar with the matter. Advisers close to Trump aren’t convinced he would move against Powell and are hoping […]

Stephen Moore Lies Again

CNN should dump him as a “economic analyst” — he’s nothing more than a propagandist. Yesterday, on CNN, Mr. Moore stated unequivocally: “…we’ve got the strongest economy we’ve had in 20 years.” I thought Mr. Moore was referring to unemployment rates, until I read his 2015 Washington Times op-ed casting doubt on the unemployment rate […]

When Will Trump Deliver on the Trade War: Soybeans

Stock market meltdown, government closure, coup d’etat at DoJ, announced exit from Syria, maybe-exit from Afghanistan, tanks on the Russia-Ukraine border, DPRK still developing nukes, and Mattis departs. But at least we’re winning the trade war, right? Source:, accessed 12/21/2018 So, despite the “truce”, soy prices have not recovered measurably. From China’s return, […]

Year in Review, 2018: Readers’ Suggestions?

Last year’s review was subtitled “Fighting against the Normalization of Lying”, with entries on Stephen Moore’s estrangement from the truth, Ironman’s misunderstanding of consumer surplus, and Donald Trump’s confusion over debt vs deficits, among others. Put in suggestions for this year (preferably from the Econbrowser archives or comments); some candidates: the oil embargo of 1967 , recession […]

On Recession: Hassett, Prediction Markets, and Markets

From NewsMax: Council of Economic Advisers Kevin Hassett said he is willing to bet, based on the economy and indicators, that there will not be a recession any time soon, even though the markets have fluctuated a great deal this year. “The U.S. economy is booming,” Hassett told Fox News’ “America’s Newsroom.” “We got data on Friday […]

Recreational Vehicle Sales as Recession Indicator

Some casual observers have noted the predictive power of recreational vehicle (RV) sales. Over the past six months of reported data, five have shown lower sales than corresponding months in 2017. Figure 1: Total monthly RV shipments vs. last year. Source: RVIA. A longer term perspective yields some insight into the predictive power of RV […]

Imminent Yield Curve Inversions?

Around the world, some 10 year-3 month government bond yield spreads are shrinking. Figure 1 shows ten spreads as of 4/18/2018 and 12/14/2018. Figure 1: Ten year – three month government bond spreads as of April 18 (blue bar) and as of December 14 (red bar), in percentage points. China three month rate is CHIBOR, […]

Guest Contribution: “The Lesson from George H.W. Bush’s Tax Reversal”

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. A shorter version appeared in Project Syndicate on December 10th. When President George H.W. Bush was laid to rest earlier this month, the remembrances appropriately […]

Farm PPI and Prospects for the Farm Sector

The PPI for farm products was released yesterday. Figure 1: PPI for farm products, 1982=100. Light orange shading denotes Trump Administration. Source: BLS.  Farm commodity prices have been depressed by trade retaliation spurred by US tariffs imposed under Section 232 and Section 301, as well as the strong dollar associated with expansionary fiscal policy. Farm […]

Guest Contribution: “Monetary Policy under Data Uncertainty”

Today, we are pleased to present a guest contribution by Saiah Lee, Ph.D. candidate in economics at UW Madison. Central banks make monetary policy decisions based on noisy and incomplete real-time data, and reliance on inaccurate data may yield suboptimal policy decisions. In my new paper, Monetary Policy under Data Uncertainty: Interest-Rate Smoothing from a […]

History, Facts, All that Jazz

Bruce Hall writes: …the oil “shortage” crises in the U.S. was pretty much a political phenomenon of the West supporting Israel during the 1967 war (which party was in power then?) and being boycotted by the Arab countries. For the love of …, in this age of the internet, can’t people spend a 10 seconds […]

Individual 1 Provides More Event Study Data

Here is a time series of PredictIt’s odds for a government closure per OMB at noon, 24 December 2018. Red line at WH meeting. Figure 1: Market odds of government closure on noon December 24, 2018. Source: PredictIt, accessed 3:18PM Central.

Jeffrey Frankel: “Gopinath follows Obstfeld at the IMF, in a great tradition”

Maury Obstfeld this month completes his exemplary term as Chief Economist at the International Monetary Fund. His departing economic outlook foresees slowing growth in the world economy in 2019 and 2020. Gita Gopinath, my Harvard colleague, will take up the position in the new year.  (Technically the title is Economic Counsellor and Director of the […]

Is California in Recession? (Part X)

Back nearly a year ago, Political Calculations asked if California was in recession. Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from the U.S. Bureau of Economic Analysis. [text as accessed on 12/27/2017] The release […]

Wisconsin GDP ex-Madison ex-Milwaukee

Robin Vos has suggested Wisconsin would be much more Republican (hence “better”) without Madison and Milwaukee. I wondered what an ex-Madison and ex-Milwaukee Wisconsin economic output would look like. Here’s the picture. Figure 1: GDP associated with Madison and Milwaukee (blue) and with rest-of-Wisconsin (red), in millions of dollars. Source: BEA and author’s calculations. Nearly […]

The 1990-91 Recession

The NBER BCDC memo and the data. Final, revised data regarding the lead-up to peak, and after: Figure 1: Nonfarm payroll employment (blue), industrial production (red), real manufacturing and trade sales (green), and real personal income ex.-transfers (black), all in logs normalized to 1989M07=0. Dashed line at 1989M07. NBER defined recession dates shaded gray. Source: […]

14 Months, 8 Months, 16 Months

That’s the amount of time between 10 year-3 month yield curve inversions and the beginning of the subsequent NBER-dated recession (these are the three recessions in the Great Moderation period). This is shown in Figure 1. Figure 1: 10 year-3 month Treasury yield spread (red), and 10 year-2 year spread (blue), %. December observations are […]

Up, Up and Away

Economic Policy Uncertainty, 5 December 2018: Figure 1: US Economic Policy Uncertainty Daily Index, accessed 12/5/2018. Source: via FRED.

Scott Walker’s Parting Gift to Wisconsin

A shrinking economy. Figure 1: Coincident index for Minnesota (blue), for Wisconsin (red), and implied levels according to leading indices (triangles). Source: Philadelphia Fed October releases and author’s calculations.

Wisconsin in Washington (the College Fed Challenge)

The University of Wisconsin’s Department of Economics was represented at the Federal Reserve System’s national Fed Challenge competition, this last Thursday. Wisconsin participated, after prevailing in the Chicago region’s competition. The team with Fed Chair Jerome Powell From the release. Yale University won the 15th annual national College Fed Challenge on Thursday, a competition that […]

US Gets China to Agree to What It Was Going to Do Anyway

From NYT: In a significant concession, Mr. Trump will postpone a plan to raise tariffs on $200 billion worth of Chinese goods to 25 percent, from 10 percent, on Jan. 1. The Chinese agreed to an unspecified increase in their purchases of American industrial, energy and agricultural products, which Beijing hit with retaliatory tariffs after […]

USDA Speaks

From Quarterly Agricultural Export Forecast, released yesterday. Fiscal year (October/September) 2019 agricultural exports are projected at $141.5 billion, down $1.9 billion from fiscal year 2018 and $3.0 billion from the August 2018 forecast, largely due to decreases in soybeans and cotton. Soybean export volumes are down because of declining Chinese purchases from the United States […]

“Failed tax-cut experiment in Kansas should guide national leaders”

That’s the title of an oped by Heather Boushey in The Hill. There’s not much to disagree with in the article, but I think one graph of Kansas employment would’ve really driven home the conclusion. Figure 1: Nonfarm payroll employment in Missouri (blue) and in Kansas (red), both in logs 2011M01=0. Orange shading pertains to […]

Guest Contribution: “Trade War is Not a Reason to Ease Money”

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. A shorter version appeared in Project Syndicate on November 26th. We are in a trade war, with no sign of peace breaking out anytime soon. […]

So…Tired…of…Winning (Trade Deficit Edition)

I’m using Mr. Trump’s definition. Trade deficit overall (NIPA definition) and bilateral with China both increasing. Note that not much progress is apparent even if normalizing by GDP. Figure 2: US net exports (blue), and US-China goods trade balance (red), both as a share of GDP. Net exports NIPA definition, SAAR. US-China is difference of […]

Fourth National Climate Assessment

Despite the Trump Administration’s best attempts to bury this report, you should read it. Some people will dismiss the output of a government interagency report. The National Academies of Science, Engineering and Medicine Review notes: The Committee was impressed by the accuracy of information and thorough discussion of the predominant aspects of climate change and […]

Introducing DBnomics

Researchers have long relied upon the St. Louis Fed’s FRED and ALFRED databases for (primarily) US series. Now, Banque de France, CEPREMAP and France Stratégie have launched a new free database of international macro data, DBnomics. Figure: Eurostoxx 50 index.Source: DBnomics. DBnomics brings together data from 45 providers with a graphic interface, and should make […]

When Can We Stop Winning? Midwest Ag Edition

“I’ve never seen things this bad,” Altom said. “I know several farmers who hired lawyers, to see if they can sue over the [soybean and corn storage] pricing and fees issues.” That’s from a Reuters article entitled Harvesting in a trade war: U.S. crops rot as storage costs soar published today. Thanks, Trump. And to […]

“Who is Paying for the Trade War with China?”

That’s the title of a new report published by a consortium of European academic institutes, and written by Benedikt Zoller-Rydzek and Gabriel Felbermayr. I don’t have a problem with the analysis, which is mostly straightforward. It’s just a problem with the title. The paper is really a quantitative analysis of the incidence of the Trump […]

Wisconsin GDP Surge Revised Away

New figures released by the BEA, incorporating annual benchmark revisions, indicate Wisconsin has been growing more slowly than previously thought; Q/q growth in 2018Q2 was ranked 48th in the Union. This outcome is illustrated in the following map. Further, note the substantial downward revisions in the level of GDP over the last three and a […]

Wisconsin Employment Declines, Previous Revised Down

Figures released by DWD suggest a slowdown in Wisconsin. Figure 1: Wisconsin nonfarm payroll employment, from August release (green), September release (red), and October release (blue). BLS and DWD. In addition, Minnesota has (again) essentially caught up with Wisconsin in employment. Figure 2: Minnesota nonfarm payroll employment (blue) and Wisconsin (red). BLS and DWD, DEED. […]

Odds on a Trade Truce: Soybean Edition

The gap between US and Brazil soybean prices is (finally) shrinking: Source: CNBC. CNBC notes: “Narrowing US-Brazil soybean price differentials imply greater market optimism on the potential for a Trump-Xi trade deal or at least a de-escalation of US-Sino trade tensions in advance of the G20. This positive sentiment stands somewhat in contrast to other […]

Always Learning: They Make 300 Feet White Bags

For soybeans, among other things. Source: Bloomberg. Notes: 300-foot plastic bags sit filled with soybeans and corn. Photographer: Daniel Acker/Bloomberg End-of-September stocks. Source: Bloomberg. Note: The end-of-year salvation through higher prices has not materialized yet, at least in futures. Thanks, Trump!

Which Observation Is Not Like the Others: US Inward FDI Again

Plotting nominal dollar value of inward FDI understates the collapse in inflows. Here is the ratio to GDP, and — considering how FDI covaries with the stock market’s level — the real S&P 500 (As I recall, working on this topic during the boom, the dollar’s strength was the other important factor — but […]

Inward US Bound FDI

There’s been a drastic fall-off in inbound FDI. Figure 1: Inward US bound FDI, in millions $ (blue), 2017$ (red). NBER defined recession dates shaded gray. Trump administration denoted by orange shading. Deflation using CPI-U. Source: OECD, NBER, and author’s calculations. The decline in inbound FDI is remarkable given the buoyant stock markets around the […]

Origins and Challenges of a Strong Dollar

That’s the title of an op-ed appearing in Nikkei newspaper (日本経済新聞): Chinn, as translated, in The Nihon Keizai Shinbun. Over the past four years, the US dollar has exhibited noticeable strength. The dollar appreciated 17% in inflation adjusted terms from mid-2014 to the eve of the election; upon the election of Donald J. Trump, the […]

Out of Sample Regression Prediction of Mass Shooting Fatalities

Does a Trump dummy “work”? Reader sam writes: i think you’re putting too much weight into too few observations. Some things to make your analysis more convincing 1) show the if predictive accuracy increased with a trump dummy OUT OF SAMPLE or 2) try placing the ‘trump dummy’ variable a few months before or a […]

Three Graphs and a Regression Equation

And we are less than one-third of the way through November. Cumulative casualties seem to be rising at a faster and faster pace. Figure 1: Cumulative mass shooting fatalities (dark red), non-fatal injured (pink), from 1982M08, through November 8, 2018.. Orange denotes 2017M01-2018M11, light orange 2016M11-2017M01. Source: Mother Jones, accessed 11/8/2018, and author’s calculations. The […]

Arkansas and Missouri Minimum Wage Increases Contextualized

Arkansas and Missouri voted to raise minimum wages. Time to worry? Here’s a graphical depiction of CPI-deflated minimum wage up to September, and into 2021. Figure 1: Minimum wage for Arkansas (blue), Missouri (red) and Minnesota (green), all in 2017$, calculated using CPI-U. Observations for 2018M10- use CPI forecasts from CBO, cubic interpolation from quarterly […]

“Inflation in Emerging and Developing Economies”

That’s the title of a new volume released today, edited by Jongrim Ha, M. Ayhan Kose, and Franziska Ohnsorge. Figure 3.1.B from Ha, Kose, Ohnsorge. Emerging market and developing economies, like advanced economies, have experienced a remarkable decline in inflation over the past half-century. Yet, research into this development has focused almost exclusively on advanced […]

Why Kobach Lost

This graph of Kansas employment during the Brownback years is suggestive. Figure 1: Kansas nonfarm payroll employment (dark blue) and civilian employment (pink), in thousands, s.a. Light green shading denotes Brownback administration; very light green shading denotes Colyer administration. Source: BLS, and author’s calculations. Compare Kansas against her neighbor Missouri to see how far Kansas […]

Time Series Evidence on the Minimum Wage Impact in Minnesota vs. Wisconsin

Is the partial derivative of fast food employment with respect to the minimum wage negative? Maybe, maybe not. Does a higher minimum wage decrease young adult employment? Maybe, maybe not. Does a higher minimum wage raise fast food restaurant prices? Not noticeably. These conclusions (reported in this working paper written by Louis Johnston and me) […]

US Goods Exports and Trade Policy Uncertainty

At a minimum, trade policy uncertainty has risen. Whether that has resulted in the stagnation in exports is an open question. Figure 1: Log ratio goods exports to GDP, both in Ch.2012$ (blue, left scale), and US trade policy categorical index (red, right scale). NBER defined recession dates shaded gray. Source: BEA 2018Q3 advance,, […]