Mark Thoma comments on the impact of the likely dollar appreciation:
A stronger dollar will make imports cheaper for American consumers…The U.S. economy is now strengthening and approaching full employment, but it’s not quite there yet. So I expect the stronger dollar to have some employment effects, but I don’t expect them to be substantial…
From Donald J. Trump, March 14, 2016:
…under decades of failed leadership, the United States has gone from being the globe’s manufacturing powerhouse — the envy of the world — through a rapid deindustrialization…
Here are graphs of employment, industrial production, personal income ex.-transfers, manufacturing and trade sales, and real GDP (five indicators that the NBER Business Cycle Dating Committee has focused on in the past) depicting the state of the macroeconomy, given what we know today, and compared to eight years ago.
Today we are fortunate to have a guest contribution written by Zidong An (American University) and Prakash Loungani (IMF).
Brad DeLong reminds me of how badly Kansas is doing, when viewed from a longer perspective.
September employment figures confirm that the Kansas economy continues its decline, while Missouri continues to expand.
Updated 9/20 to reflect BLS state level employment data
The Kansas Department of Labor released some limited numbers regarding August labor market conditions today. These figures are consistent with an economic stall indicated in the Philadelphia Fed projections, discussed in this post.
Wisconsin DWD release here.
Here’s private nonfarm payroll employment relative to 2011M01.
Figure 1: Log private nonfarm payroll employment for US (black) and WI (red), seasonally adjusted, both normalized to 2011M01=0. Source: BLS, DWD, and author’s calculations.
Last December the Fed began what it thought at the time was a new cycle of tightening. Fed Chair Janet Yellen’s statements last week suggest the Fed still sees this plan as underway. A comparison with historical tightening cycles sheds some light on why so far the Fed hasn’t followed through.
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Bruce Hall says changing dynamics in Kansas have meant that a simple average difference (what I’ve called a individual state fixed effect) in Kansas-US unemployment rates is misleading — or more succinctly put, “the average obfuscates the trend”. So, I allowed a time trend and a square in time trend, in a regression over the 1976-2010 period (data series start in 1976; Brownback takes power in 2011). The t-stats on both coefficients are highly significant. Here is a picture of actual Kansas-US difference and the quadratic trend.
Figure 1: Kansas-US unemployment rate difference, in %, seasonally adjusted (blue), and quadratic fit (red), and 68% prediction interval (gray). NBER defined recession dates shaded gray. Out of sample period shaded green. Source: BLS, NBER, author’s calculations.