The Coalition for a Prosperous America and the Blue Collar Dollar Institute have developed a measure of currency misalignment, reported in their Currency Misalignment Monitor (August issue here). I thought it of interest to compare their estimates of currency overvaluation with those reported by the IMF in its External Sector Report (July). Here’s a chart for the currencies they focused in on in August.
Author Archives: Menzie Chinn
Business Cycle Indicators, with New Employment Numbers
Continued, albeit slowing, employment growth yields the following picture of key variables followed by the NBER’s Business Cycle Dating Committee (plus monthly GDP, and GDPNow).
Why I Think Private Employment Grew Through April (and Maybe Through July)
Private nonfarm payroll (NFP) employment slightly undershot consensus (172K vs. 179K). There’s been some discussion of how it’s likely that private nonfarm payroll growth is overstated in the CES, possibly due to distortions associated with the firm birth/death model. Here, I compare the official series against some other measures that are not susceptible to this critique.
Is It Safe? Considering the End of the Recession Call
Apologies to Laurence Olivier in “Marathon Man”. Derek Thomson of the Atlantic describes “How the Recession Doomers Got the U.S. Economy so Wrong”. Personally, I don’t think we should take the recession scenario off the table, despite the recent spate of good data. First, term spread models implied a downturn/recession in the 4th quarter of 2023 (using a 50% threshold), and we’re still in the 3rd quarter. Second, these data are going to be revised — and GDP in particular will be heavily revised.
Whose Side Are You Rooting For?
A reader writes:
It’s a stealth counteroffensive! Nothing in the US media…a sea change from the heretofore triumphalist “Ukraine is Winning” narrative.
But there is plenty in the Russian media: “Ukraine suffers heavy losses in failed offensive – Moscow”
https://www.rt.com/news/561971-ukraine-offensive-casualties-report/Gotta keep sifting and winnowing to find the truth…
Inflation Breakevens and Expected Inflation: 5, 10, 30 Year Horizons
Beware the risk and liquidity premia, when inferring inflation expectations from breakevens.
Business Cycle Indicators, at the Beginning of August
Consensus July employment growth at 200K, June GDPNow rises 0.5% m/m, and GDPNow at 3.9% q/q AR.
The Sensitivity of Economic Sentiment to Partisan Affiliation
One of the puzzles of current times is why overall assessments of the economy have not risen in accord with actual developments (say, as summarized by the Misery Index), and relatedly why those gains have not redounded to the incumbent president’s approval ratings (discussion here). I don’t have answers, but I have some observations.
Private NFP in July
ADP surprises (again) on the upside (324K vs. 189K Bloomberg consensus). I’m not sure we should take too much from that development.
A Wisconsin Senator in the Conspiracy
Specifically, Senator Ron Johnson’s role: