Today we are fortunate to present a guest contribution written by Robert Dekle, Professor of Economics at USC.
Nowcasts
Two-thirds of the way through Q3.
Figure 1: Reported GDP (black), Atlanta Fed GDPNow (green), IHS Markit (green), NY Fed nowcast (red), CBO August projection (blue). Source: BEA 2020Q2 2nd release, GDPNow, IHS Markit, NY Fed, and author’s calculations.
How Great Are Things for Wisconsin’s Farmers?
It was surprising to me to see a Wisconsin farmer singing the praises of Mr. Trump’s policies. From WPR:
Business Cycle Indicators, September 4th
With today’s employment situation release, here’s a picture of five indicators tracked by the NBER’s Business Cycle Dating Committee (BCDC):
Trade Deficit Surges During the Recession
The trade balance hit -$63.6 billion (monthly, seasonally adjusted) in July. The trade balance has been deteriorating since the recession began, in contrast to what usually happens — an improvement in the trade balance, as imports decline with a decline in domestic economic activity.
August Private Payrolls
ADP released its August numbers, showing slow growth.
Business Cycle Indicators, September 1st
IHM/Markit (aka Macroeconomic Advisers) releases July GDP:
Covid-19 Fatality Projections
Reader Bruce Hall speculates:
It appears that the “second wave” has about peaked. Even the inflated measure of cases (versus April/May testing process) is declining. Hospitalizations for the “expendables” are declining although still the vast majority of deaths.
Maybe. The concept of local maxima/minima might be useful to keep in mind.
Inflation Sensitivity to Gaps and Shortfalls
Suppose maximal output evolves as a line between peaks in output, as discussed in this post updating the Delong-Summers approach. The is the “slack” thus defined (red line) a clearer determinant of inflation than the traditional output gap (black line)?
The Net International Investment Position of the US
Since 2016Q4, the Net International Inestment Position of the US has become more negative.