From a fascinating paper by Oli Coibion, Yuriy Gorodnichenko and Michael Weber, “The Upcoming Trump Tariffs: What Americans Expect and How They Are Responding“: As the Trump inauguration looms, the prospect of new tariffs on our trading partners grows ever nearer. What do Americans expect that Trump will do with these tariffs and what effects ..read more

That’s my name for Trump’s 10% universal tariffs plan augmented with additional 60% on Chinese imports. h/t to Torsten Slok for the CBO letter. I show implied effects on PCE deflator inflation, and GDP relative to January 2025 CBO projection. Figure 1: PCE deflator (bold black), CBO January projection (light blue line), CBO implied PCE ..read more

A reader sends me a missive with this line, and (among others) a picture of manufacturing employment. I reproduce (on an annual basis) this series back to 1960 in the figure below. Employment in manufacturing did take a plunge in 2001. I didn’t know it was going to take quite the plunge it did, but ..read more

CBO released its ten year outlook today. Continued but decelerating growth, slightly less optimistic than Administration, noticeably less than the IMF, and FT-Booth survey. Figure 1: GDP reported (bold black), CBO (tan), Administration (light blue square), IMF (pink), FT-Booth survey (red triangle), Survey of Professional Forecasters (green line), GDPNow of 1/17 (blue +), all in ..read more

Industrial and manufacturing production (+0.9% m/m vs. +0.3% consensus; +0.6% m/m vs. +0.2% consensus), retail sales (control) surprise on the upside. First, indicators followed by the NBER BCDC: Figure 1: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary benchmark (bold blue), civilian employment (orange), industrial production (red), personal income excluding current transfers in ..read more

From the Economic Report of the President, 2025, forecast finalized 7 November 2024. Figure 1: GDP (bold black), Administration (light blue square), SPF median (green), GDPNow of 1/16 (blue inverted triangle), all in bn.Ch.2017$ SAAR. Nowcast level calculated by iterating on relevant Q3 GDP level. A CSource: BEA 2023Q3 3rd release, Philadelphia Fed, FT-Booth macroeconomists ..read more

Are you teaching international economics in the spring? Or just want to learn more about the field? Consider adopting/purchasing this new textbook, by myself and Douglas Irwin (available now in digital format, January 31st in hardcopy from Cambridge University Press). Endorsements from Avinash Dixit, Barry Eichengreen, and Jeffrey Frankel: “At a time when globalization is under threat everywhere, a ..read more

Heritage Foundation’s EJ Antoni shared this graph of the CPI level: Aside from including the pandemic era price level, I thought about what happened to real wages. These have risen faster post 2022M07. Figure 1: CPI deflated average hourly earnings (black), and 2017M01-2019M12 trend (red), and 2022M07-2024M12 trend (light blue), in 2023$. Stochastic trends estimated on ..read more

Headline up, core down.   Figure 1: Instantaneous inflation per Eeckhout (2023) for CPI (blue) chained CPI (lilac), PCE deflator (green), PCE deflator market prices (brown), PPI (red) and HICP (pink). HICP adjusted by author using X-13. Source: BLS, BEA via FRED, BLS, and author’s calculations. And for core measures. Figure 2: Instantaneous inflation per ..read more

Heritage Foundation’s EJ Antoni has been describing the gap between the establishment NFP series and the CPS employment series as the basis for evidence of mismeasurement of employment by the CES. Goldman Sachs notes today (Peng, “Revised Immigration Estimates Will Close Much of the Payroll-Household Employment Growth Gap in January”) that new Census estimates of ..read more