Yesterday’s NYT noted “U.S. Growth and Employment Data Tell Different Stories”:
Measured by traditional yardsticks for growth, like gross domestic product, the American economy definitely looks weak. View it through the prism of hiring and employment, however, and the economy seems surprisingly strong.
From today’s updated World Economic Outlook update:
Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China’s rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.
According to the Energy Information Administration’s Monthly Energy Review database, world field production of crude oil in September was up 1.5 million barrels a day over the previous year. More than all of that came from a 440,000 b/d increase in the U.S., 550,000 b/d from Saudi Arabia, and 900,000 b/d from Iraq. If it had not been for the increased oil production from these three countries, world oil production would actually have been down almost 400,000 b/d over the last year.
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I’m not going to “pull an Ed Lazear” and declare “no”. But the current versions of indicators are not very supportive of a “yes” answer.
Since we’re talking recession [0], it’s of interest to see what market indicators are saying, for the US and for the world. First, the term spread for the US:
The portents from China are not good. There are ominously titled news articles aplenty; the WSJ asked in August if a global recession is brewing in China. Wonkblog asks How China could trigger a global crisis:
When China sneezes, the rest of the world might not catch a cold, but it does feel bad for a couple of days. The question, though, is whether China is sicker than it seems and how contagious that would be for the global economy.
From The Hill:
Instead of crediting Obama for any of the economic gains that have occurred in the last seven years, Ryan argued that the Fed’s policies pushed the recovery. He added that the central bank’s controversial efforts to drive down borrowing costs may have driven growth, but the benefits failed to spread to everyone.
As a new year gets under way [Nobel Laureate Robert] Shiller fears that advanced economies could be on the cusp of another stock market and property bubble that could end in tears….
“I’ve tried to inquire why we are having these booms right now at a time of so-called secular stagnation with low interest rates, and arrived at the thought that low interest rates are promoting these bubbles.”
From the NYT:
Donald J. Trump said he would favor a 45 percent tariff on Chinese exports to the United States, proposing the idea during a wide-ranging meeting with members of the editorial board of The New York Times.
As the CNY depreciates, just a quick note for perspective.