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Tag Archives: Economic Growth

Manufacturing Peak?

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. Now, trade does not weigh on manufacturing equally. Durables are particularly worrisome — and here the drop (in production) is more pronounced than in manufacturing overall. Figure 2:...

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Assessing the Business Cycle, Mid-May 2019

Several key series look like they have peaked; nowcasts indicate slowing growth. Forward looking indicators look “iffy”. Figure 1: Nonfarm payroll employment (blue), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2018M12=0.  Source: BLS, Federal Reserve, BEA, via FRED, Macroeconomic Advisers (5/3 release), and author’s calculations. Several...

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March Monthly GDP Growth at 0.1%

That’s from Macroeconomic Advisers today. Turns out a bunch of monthly indicators have recently been released, including today’s employment report. Here are some key ones followed by NBER’s Business Cycle Dating Committee (BCDC). Figure 1: Nonfarm payroll employment (blue), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2018M12=0.  Source: BLS,...

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Crazy Things People Write

Reader Zi Zi writes: Higher short rate actually precedes better [US GDP] growth (not lower): GBP3M I … don’t … think…so. Figure 1: Libor 3 month based on British pound (dark blue, left scale), four quarter growth rate of US real GDP (red, right scale), both in %. NBER defined recession dates. Source: IBA, BEA via FRED, NBER, and author’s calculations. Granger causality (2 lags) test fails to reject US growth rate causes Libor; rejects Libor causes US growth rate.

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Guest Contribution: “Global Growth Forecasts Shift Downward—What’s Behind the Numbers and Why It Matters”

Today, we are pleased to present a guest contribution written by Enrique Martínez-García (Senior Reserach Economist and Policy Advisor, Federal Reserve Bank of Dallas). The views expressed here are those solely of the author and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System. He acknowledges the contributions of Valerie Grossman, Michael Morris, Amro Shohoud, and Mark A. Wynne in preparing these comments. The expectations of near-term global...

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Inversion!

Of the 10yr-3mo spread. Source: Bloomberg. For context, see what has happened each time an inversion of 10yr-3mo has occurred. Figure 1: 10 year-3 month Treasury term spread (blue), 10 year-2 year Treasury term spread (red), March 2019 observations for 3/22 noon, all in %. Three month rate is secondary market. NBER defined recession dates shaded gray. Source: Federal Reserve via FRED, Reuters, NBER and author’s calculations.  For the implications, see Chinn and Kucko (2015). See also Klein...

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The Administration’s GDP Forecast, Compared

The President’s budget document included a table (S-9) including GDP forecasts (q4/q4). How much of an outlier are these forecasts? I let readers decide. Figure 1: GDP as reported (black), Administration forecast (red squares), CBO January forecast (blue) and forecast from ARIMA(1,1,1) estimated over post-recession period, with plus/minus one standard error, all in bn.Ch.2012$ SAAR Source: BEA initial 2018Q4 release, President’s budget, CBO Budget and Economic Outlook January 2019, and...

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Evaluating City Economic Performance

So a recent caller, okay not so recent, since this goes back to last year. The last time I was on the radio there was a caller that wanted to know about grading Grand Forks’ economic performance. Now I am not shying away from that topic, but there are some important subtleties and considerations I had not fully developed at the start of the process. In any grading process there is the set of candidates for grades. We cannot give a grade without some agreed upon standards or...

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Guest Contribution: “What are the drivers of TFP growth? An empirical assessment “

Today, we are pleased to present a guest contribution written by Iván Kataryniuk (Banco de España) and Jaime Martínez-Martín (European Central Bank) summarizing their chapter in the book International Macroeconomics in the wake of the Global Financial Crisis edited by L. Ferrara, I. Hernando and D. Marconi. The views expressed here are those solely of the author and do not reflect those of their respective institutions. Total Factor Productivity (TFP) is the residual obtained after...

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Guest Contribution: “Trade War is Not a Reason to Ease Money”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A appeared in Project Syndicate on November 26th. We are in a trade war, with no sign of peace breaking out anytime soon. By now the disruption to trade looks to be extensive enough to factor negatively into forecasts for economic growth. Does that mean that the Fed should change its...

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