Laurent Ferrara asks what’s the probability of a US recession in 12 months if one augments an utterly standard 10yr-3mo term structure model with US economic policy uncertainty (EPU) as measured by Baker, Bloom and Davis…

Seldom do we see such market moving data.

You should start looking at the state level household employment series; (the unemployment rate is calculated using this variable). Here is Wisconsin’s, as of today’s release.

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Elevated on the first, up then down on the second.

That’s the title of a new paper by Andy Rose:

A country’s exports rise when its leadership is approved by other countries. I show this using a standard gravity model of bilateral exports, a panel of data from 2006 through 2017, and an annual Gallup survey which asks people in up to 157 countries whether they approve of the job performance of the leadership of China, Germany, Russia, the United Kingdom and the United States. Holding other things constant, a country’s exports are higher if its leadership is approved by the importer; ‘soft power’ promotes exports. The soft power effect is statistically and economically significant; a one percent increase in leadership approval raises exports by around two-thirds of a percent. This effect is reasonably robust, and different measures of soft power deliver similar results. I conservatively estimate that the >20 percentage point decline in foreign approval of American leadership between 2016 (the final year of Obama’s presidency) and 2017 (Trump’s first year) lowered American exports by at least $3 billion.

Ungated version here.

Mr. Trump considers redirecting funds committed to rebuilding Puerto Rico toward the building of the Wall. From WaPo:

as of 10PM Eastern:

It’s striking. GDP correlates with oil in recent years, but not always, so why didn’t the magic of Jindalnomics work?

Brat to Liberty University…