Aggregate Wisconsin Employment Stabilizes, High Contact Services Decline

DWD data released yesterday indicates nonfarm payroll employment broke their two month decline. Private employment rose as well, while manufacturing versus accommodation/food services trend diverged. State and local government employment continued their decline. Figure 1: Nonfarm payroll employment from December release (black), forecast from June 2020 Economic Outlook (teal), from November 2020 Economic Outlook (red), […]

Farm Income during the Trade War

Farm income rose – but income from selling farm products fell. Were it not for direct farm support, income would’ve fallen. Figure 1: Contributions to change in farm income from cash receipts from sales (blue bar), from direct government support (brown bar), and from all other components (green bar). Source: USDA, data of 12/2/2020. Nearly […]

“Will Joe Biden’s fiscal stimulus overheat the American economy?”

That’s the title of a new article in the Economist: There are three main reasons to suspect overheating might be on the cards: emerging evidence that the downturn may prove temporary; generous stimulus; and the Federal Reserve’s monetary-policy strategy. The article recounts the calculation of what is needed to fill the output gap, and the […]

In Memory

With the Washington Monument in the background, President-elect Joe Biden with his wife Jill Biden and Vice President-elect Kamala Harris with her husband Doug Emhoff listen as Yolanda Adams sings “Hallelujah” during a COVID-19 memorial, with lights placed around the Lincoln Memorial Reflecting Pool, Tuesday, Jan. 19, 2021, in Washington. (AP Photo/Evan Vucci) Source: NPR

Treasury Secretary Designate Yellen on the Dollar

From Reuters today: “The value of the U.S. dollar and other currencies should be determined by markets. Markets adjust to reflect variations in economic performance and generally facilitate adjustments in the global economy”, Yellen will say, if asked about the incoming administration’s dollar policy, according to the report. Just because the US takes no action […]

“Is a Dollar Crash Coming?”

That’s the title of a symposium in The International Economy, with Anders Åslund, Scott K.H. Bessent, Lorenzo Bini Smaghi, Jill Carlson, Stephen G. Cecchetti, Menzie D. Chinn, Lorenzo Codogno, Tim Congdon, Marek Dabrowski, Mohamed A. El-Erian, Heiner Flassbeck, Takeshi Fujimaki, Joseph E. Gagnon, James K. Galbraith, James E. Glassman, Michael Hüther, Richard Jerram, Gary N. […]

Economic Report of the President, 2021

Is out, here. The policy inclusive forecast from CEA, as compared to the official forecast in the FY2021 budget proposal, and the WSJ January survey: Figure 3: GDP as reported in 2020Q3 3rd release (black), Administration FY2021 forecast (and MSR) (red square), WSJ January survey mean (blue circle), all in billions Ch.2012$, SAAR, on log scale. […]

Guest Contribution: “The Impact of COVID-19 on Emerging Financial Markets”

Today, we are pleased to present a guest contribution by Steven Kamin (AEI), formerly Director of the Division of International Finance at the Federal Reserve Board. The views presented represent those of the authors, and not necessarily those of the institutions the authors are affiliated with. The eruption of the Covid-19 pandemic early last year […]

The Outlook: WSJ January Survey

Upgrades in forecasted growth rates,  largely due to expectations of widespread vaccinations. Figure 1: GDP as reported in 2020Q3 3rd release (black), WSJ April survey (tan), June survey (green), August survey (red), October survey (pink), December survey (blue), January (orange), all in billions Ch.2012$, SAAR, all on log scale. Source: BEA, various vintages, WSJ survey, […]

Interpreting Spreads

Here is a graph of two spreads oft-cited: (1) a term spread, the 10 year-3 month spread, and (2) a spread between a nominal rate and a real rate, the 10 year Treasury yield and 10 year TIPS yield, commonly interpreted as the inflation breakeven. (I leave the credit spread for another post.) Figure 1: […]

“Richard Cooper, cutting-edge economist”

That’s from the title of a Harvard Gazette article today: Most economists live in the world of theory, using careful calculations to predict the future. But Richard N. Cooper believed theory couldn’t tell the whole story when it came to solving real-world problems, particularly when they involve the whole world — which he amply demonstrated […]

Winning (per Trump Dictionary)! US-China Trade

Chad Bown, US-China Phase 1 Tracker: No matter how you look at it – use data on China’s imports or US exports – through November, China purchased only slightly more than half of the US goods Trump pledged it would buy over all of 2020 under his Phase One deal.  

Downside Employment Surprise and Business Cycle Indicators as of January 8th

Nonfarm payroll (NFP) employment down 100 thousand, contra +81 Bloomberg consensus, even worse than GS and DB. Figure 1: Change in nonfarm payroll employment, in thousands, s.a. (blue), Bloomberg consensus (light blue square), Goldman Sachs (red +), and Deutsche Bank (green triangle). Source: BLS, Bloomberg, Goldman Sachs, and Deutsche Bank all as of 1/7, and […]

Covid-19 Weekly Fatalities and Excess Fatalities as of 1/6

Weekly Covid-19 fatalities are falling according to CDC estimates, but those numbers are likely to be revised upward; going from last week’s release to this week’s, excess fatalities have been revised upward drastically. Unofficial estimates indicate a resumption of the upward movement in fatalities to a new peak (18690/week for week ending 1/2/2021, averaging 2670 […]

Private Nonfarm Payrolls in December

ADP at -123 thousand vs. expected +88 thousand. Figure 1: Private nonfarm payroll employment actual from BLS (black), Bloomberg consensus for December as of 1/6/2021 (teal square), and from ADP (red). Source: BLS, ADP via FRED, Bloomberg accessed 1/6/2021, and author’s calculations. While the Bloomberg consensus overestimated employment growth for November relative to ADP release, […]

Some Asset Market Reactions

Stock, currency and bond markets respond (up, up, yield up) on news of likely Democratic control of the Senate Figure 1: DJIA, as of noon CST, 1/6/2021. Source: Stock market jumps – suggesting expectations of higher present value of dividends (despite perhaps higher corporate taxes, see this post). Interestingly, the dollar jumps as well, […]

Business Cycle Indicators, January 4th

With the release of the IHS Markit (nee Macroeconomic Advisers) monthly GDP, key indicators tracked by NBER Business Cycle Dating Committee (BCDC) continue to show mixed behavior. Monthly GDP declined in November (joining personal income ex.-transfers in decline): Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 1/4/2021 (light blue square), […]

Observations on “Censorship”

An Econbrowser reader, defending the use of the term “China virus” instead of the Covid-19 term, writes: That would seem accurate. A China virus is not racist, it’s placist. Other places with epidemics (arguably all racist): Spanish flu, German measles, Lassa fever, West Nile virus, Rocky Mountain spotted fever, Lyme Disease (Connecticut), Ebola Fever, MERS […]

Wisconsin during the Trade War

The national trade deficit is larger than when Trump took office. We don’t know for sure the gap between Wisconsin goods exports and imports. We do know the gap between exports of goods originating in Wisconsin, and imports with destinations in Wisconsin, as recorded in the Customs data. Figure 1: Difference between exports of goods […]

Guest Contribution: “The Year 2020 in Three Phrases”

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 at Project Syndicate and The Guardian.  December 31, 2020 — Let us consider the past year through the lenses of three particular […]

Some Economic Data Release Conventions

When I first started working in the government, I was often confused by the many different ways in which economic data is reported. Now, thirty years into teaching economics – -particularly international economics – – I still have to help out my students when they venture outside of the safe world of textbooks to read […]

Protectionist High Water Mark?

“… the quick fix, of the “countervailing tariff,” “voluntary” restraints, and the like, will only mean higher prices for consumers in the short run, and greater distress in the long term. “Reciprocity” … notwithstanding, protectionism will only prove a temporary, and costly, palliative for inefficient industries, in a world populated by NICs, MICs and [Advanced […]

Wisconsin GDP in Q3

Recovery in Wisconsin has brought real GDP back to within 4% of peak levels. Figure 1: GDP in Wisconsin (red), Minnesota (blue) and US (black), all in Ch.2012$, SAAR, in logs 2019Q4=0. Source: BEA, and author’s calculations. To place the recovery in context, GDP at 299 billion Ch.2012$ in Q3 implies 12.6% growth in Q4 […]

“In Memory of Richard Cooper”

By Jeffrey Frankel, December 24, 2020. Richard N. Cooper (Dick), who passed away Wednesday evening at the age of 86, was always young for his age.  Jim Tobin once told me a story about the period when Dick was a senior staff economist at the President’s Council of Economic Advisers (1961-63).  He used to bring […]

Quick Primer on Stock Market vs. GDP

The stock market booms while GDP staggers along. Why? For the moment, let’s dispense with the Dow Jones, which has a big multinational component, and inspect a broader market capitalization — the Wilshire 5000 — and nominal GDP. Figure 1: Wilshire 5000 index, end of quarter month (left scale), and nominal GDP in billions$ SAAR […]

Treasury’s FX Report – Currency Manipulation versus Currency Misalignment

The Treasury’s semi-annual report designated Switzerland and Vietnam as currency manipulators. Without taking a definitive stand on currency manipulation, I do want to highlight where Vietnam (and Switzerland) stand if evaluated by the Big Mac Parity/Penn Effect: Figure 1: Log Big Mac dollar price in July 2020 plotted against log 2020 per capita income in […]

Debasing the Dollar? (Or Inflation Looming, Again?)

Worried about currency debasement? Do we find out anything from the nominal exchange rate? In a flexible price monetary model (sometimes called the monetarist model of the exchange rate), changes in the money supply should be immediately reflected in the exchange rate. Here’s a plot of the trade weighted US dollar in nominal terms, shown […]

Inflation Looming? Phillips Curve vs. Quantity Theory

Look at this: Figure 1: Ratio of M1 to real GDP (blue), of M2 to real GDP (brown), of M3 to real GDP (green), 1959Q1-2020Q3. Quarterly money data average of end of month data. Source: Federal Reserve via FRED, and BEA, 2020Q3 2nd release, and author’s calculations. Should I be worried about imminent inflation? The […]

Inflation Looming?

The Economist says unlikely. Surveys and market expectations concur. Figure 1: Year-on-year CPI inflation (bold black), WSJ December survey mean of year-on-year CPI inflation (teal), and 10 year expected inflation inferred from 10 year break-even (tan). Source: BLS and Treasury via FRED, WSJ December survey, and author’s calculations.  

Wisconsin Economic Outlook, November 2020

The Wisconsin Department of Revenue has released its Economic Outlook, dated November 22nd. The forecasts incorporate assumptions that include: “November IHS Markit forecast shows a slowing down of the economic recovery in the last quarter of 2020 and beginning of 2021. Several high-frequency indicators point to a further deceleration in October, but the forecast does […]

Where Are You?

I’m teaching “Macroeconomic Policy” for upper level undergrads this semester. Obviously, the interpretation and suggested conduct of policy depends on how you view the world, which is hard to contextualize simply. But I think annotating this graph works great — and you can ask yourself — “Where am I?” (The “You are here” addresses my […]


When the Biden economic team members were announced, I wondered if there was any pattern to discern in the locus of Republican attacks. As far as I can tell, it’s not expertise, it’s not ideological bent, it’s not what school you went to.  But here is a Venn diagram to help you identify what makes […]

Business Cycle Indicators as of December 1st

With the release of monthly GDP numbers, we have the following picture of some of the key indicators followed by NBER: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/25 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), […]

Guest Contribution: “You don’t miss international cooperation until it’s gone”

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 at Project Syndicate . As Joni Mitchell sang, “you don’t know what you’ve got ‘til it’s gone.”   Classroom education was often deemed boring by […]

The New Economic Team?

As of 11/29. Can you tell a difference? Necessarily incomplete, and preliminary, based upon this article from The Hill. Note that John Cornyn has indicated his objection to Tanden to OMB. All is summed up by Mnuchin to Yellen, Hasset to Rouse, Kudlow to Roger Ferguson or Brian Deese…

Business Cycle Indicators as of November 25th

With October personal income and September manufacturing and trade sales reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/25 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade […]

Business Cycle Indicators, November 17

With October industrial production  reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/17 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly […]

The Real Cost of Treasury Borrowing

Halfway through November, TIPS 10 year at -0.876% and ten year adjusted for median expected inflation (from November Survey of Professional Forecasters, released today) at -1.264%. Figure 1: Nominal ten year constant maturity Treasury yields (black line), CBO projection (green line), WSJ November survey mean yields (orange +), Survey of Professional Forecasters November survey mean […]

A Double Dip Recession – Odds Rising?

Baseline scenario is for continued — albeit moderating growth — at least according to the WSJ November survey. However, the reality of rapidly ascending Covid-19 caseload, hospitalization, and fatality rates may force a quick rethink. From The Hill today: A sharp spike in COVID-19 cases across the U.S. is threatening the economic recovery and increasing […]

Transition Teams – Economics

TPM has the list of transition team members. Below I reproduce those involving in economics. Consumer Financial Protection Bureau Name Most Recent Employment Source of Funding Leandra English, Team Lead State of New York, Department of Financial Services Volunteer Manny Alvarez California Department of Financial Protection & Innovation Volunteer Bill Bynum Hope Enterprise Corporation Volunteer David Mayorga […]

Manufacturing Employment, Hours and Output and the Trade War, Pre-Covid-19

Can we settle on a verdict on whether the trade war saved manufacturing? One way is to examine how the manufacturing sector fared. FIgure 1: Manufacturing employment (black), aggregate hours (red), of production and nonsupervisory workers; manufacturing production (teal), all in logs, 2018M06=0. Light orange denotes Section 301 tariffs in effect. Peak manufacturing is December […]

The Trade Balance Today, and Near Future

If we wanted to reduce the trade deficit — let’s say because we wanted to increase aggregate demand and hence employment, rather than some atavistic belief the deficits are bad — then we will probably need to convincingly deal with the pandemic. Remember, the trade deficit (in NIPA terms) is now bigger than it was […]

Covid-19 Is Still Here: Implications for Employment

A reminder that it’s still possible to save tens of thousands of lives, with a return to competence and science in the waning days of the Trump administration (it goes without saying management would improve immeasurably in the Biden-Harris administration). Covid-19 hospitalizations are soaring. Seven day rolling average of deaths is at 970, showing a […]