Author Archives: Menzie Chinn

CES Preliminary Benchmark Revision: NFP

Down 501K in March.  Private NFP down 514K.

Figure 1: Nonfarm payroll employment, July 2019 release (blue), stochastic trend 2014-2016 (red), and March preliminary benchmark revision (August 21, 2019), all on log scale. Light green shading denotes Trump administration. Source: BLS via FRED, BLS, and author’s calculations.

Back-of-the-Envelope Calculation of Trump Induced Dollar Appreciation

 


Figure 1: Log real value of US dollar against a broad basket of currencies (blue, left scale), and global Economic Policy Uncertainty (red, right scale). Light orange shading denotes post election, orange shading denotes Trump administration. Source: Federal Reserve Board, policyuncertainty.com, and author’s calculations.

Suppose you thought a hybrid real interest differential/Taylor fundamentals model worked for explaining the real trade weighted dollar. One might estimate over the 2001Q3-2019Q1 period the following:

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A History of Trade Policy Retaliation: Soybeans Edition

As the date of the resolution of the US-China trade dispute drifts further and further — perhaps past the 2020 elections according to Mr. Trump — it behooves us to look at what soybean futures contracts for September 2019 indicated as of Trump’s announcement of Section 301 action against China ($10.30 bushel on 3/22/2018) vs $8.67 today (Sept. 2019 is the front month future for soybeans now).

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Does the Safe-Haven Aspect of the US Explain Declining Treasury Rates

That’s what reader Ed Hanson surmises:

Why are long term interest rate coming down. There is one obvious answer. The world sees the US as the safest and best place to invest with their bond holdings because of rigorous US economy brought on by the Trump administration with its tax and reduced regulation policy. Perhaps it is this circumstance of inversion that means it is not indicating recession, at least for the US.

Just glance at today’s Economist for an alternative interpretation:

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Key Business Cycle Indicators, August 15th

Figure 1: Nonfarm payroll employment (blue), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink bold), all log normalized to 2019M01=0.  Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (7/25 release), and author’s calculations.