With trade volumes flat or trending down worldwide, what to make of US manufacturing?
Figure 1: Manufacturing employment (blue), aggregate hours of production and nonsupervisory workers (red) and production (teal), in logs 2019M01=0. Source: BLS, Federal Reserve via FRED, and author’s calculations.
…as well as threatening an all out trade war with Mexico. It’s purportedly to deal with the “migration crisis” on our Southern border. The “crisis” is illustrated below.
Source: Gzeromedia.
Update, 9:45PM Pacific: Several commenters have called for a wall. I suspect they would prefer machine gun posts, a few dozen tanks each mile, some antipersonnel mine fields, and a “shoot-to-kill” order from Trump to accompany the wall.
Here is some reasoned analysis of the southern Wall, from EconoFact.
Should the United States Build a Wall on the Mexican Border to Reduce Unauthorized Immigration?
Today, we’re fortunate to present a guest contribution written by Greg Nemet, Professor at the University of Wisconsin–Madison in the La Follette School of Public Affairs and the Nelson Institute’s Center for Sustainability and the Global Environment. He has also been a contributor to the Intergovernmental Panel on Climate Change and the Global Energy Assessment.
Different forward looking models show increasing likelihood of a recession. Most recent readings of key series highlighted by the NBER’s Business Cycle Dating Committee (BCDC) suggest a peak, although the critical indicator — nonfarm payroll employment — continues to rise, albeit slowly.
That’s the title of a forthcoming special section in the Journal of International Money and Finance. Here’s the introductory article to the special issue [link].
Disruptions to financial markets, elevated risk levels, and unconventional monetary policies pursued by central banks have altered the landscape of international finance. The near zero and negative interest rates in several key advanced economies, for instance, present a new environment for pricing financial assets and shock transmission. The ultra-accommodative policy stance has affected exchange rates via, for instance, its effects on expectations, capital flows and global liquidity. As a result, new challenges in modelling equilibrium exchange rates, assessing exchange rate misalignment, and evaluating their roles in re-balancing external imbalances, and shock transmission have arisen. Against this backdrop, a conference was convened to provide a platform for discussing recent advances in modelling exchange rates, from perspectives of both major and emerging market currencies. This special issue of the Journal of International Money and Finance consists of eight papers presented at a conference organized by Global Research Unit at Department of Economics and Finance, City University of Hong Kong, Bank for International Settlements, Asian Office, and Centre for Economic Policy Research, with advice from Nelson Mark, and held at City University of Hong Kong, May 18–19, 2017. The topics covered advances in empirical exchange rate modeling, the effect of news, risk and uncertainty on currency values, order flow and exchange rates, monetary policy and interest rate parity, and the behavior of the Renminbi duringthe post-crisis. We describe below the main take-aways from these papers. …
The entire article is here (ungated for 50 days). special issue [link]. Published online: Adler, Lama & Medina, Berg & Mark, Cao, Huang, Liu & MacDonald, Cheung, Chinn, Garcia Pascual & Zhang (ungated for 50 days), Cheung, Fatum & Yamamoto, Engel, Lee, Liu, Liu & Wu, Krohn & Moore, and McCauley & Shu.
In the wake of the discussion of Figure 1-6 in the ERP, I thought it might be useful for me to collect up questions about puzzling or misleading graphs/tables or conclusions in the Report.
The entire document is here.
I don’t think I have ever made a similar request. However, I don’t think I’ve ever seen a similar CEA “massage the message” in quite the same way. Even the G.W. Bush CEA (of which I was briefly a part of) did not make such blatantly misleading graphics as highlighted in this post.
Clarification (3PM): I’ll then compile the contributions with my comments in a new post.
What the heck? Here’s what the Trump-Hassett CEA reports in February.
Source: ERP, 2019, as edited by MDC (orange arrow).
[updated 6/3] Undervalued currencies as countervailable subsidies, tariffs on Mexico, flash mfg PMI drops, Drumpf again insists China pays US tariffs…so the yield curve inverts!
Figure 1: [Updated 6/3) Treasury 10yr-3mo spread (blue, left scale), 10yr-2yr (red, left scale), 5yr-3mo (teal, left scale), in %; 6/3 interest rates on-the-run at 1:30PM EST, and Economic Policy Uncertainty index (black, right scale). Source: Fed via FRED, US Treasury, and policyuncertainty.com, accessed 6/3/2019.
The gap between long-term and short-term interest rates has narrowed sharply over the last year and is now dipping into negative territory. Historically that’s often been a signal that slower economic growth or even an economic recession could lie ahead.
Gap between average interest rate on 10-year Treasury bond and 3-month Treasury bill during the last month of the quarter (1953:Q2 to 2019:Q1) and May 1-24 for 2019:Q2. NBER dates for U.S. recessions shown as shaded regions.
