The American labor market remained very strong in the first quarter with job growth of 1.7% in January-March (over the same 2023 period) and a labor force rise at a similar pace. Non-Farm Payroll numbers were up 2.3% in the first semester and 1.9% in March. The unemployment rate averaged 3.8% in the first three months, and for those over 20 years of age, 3.3%. Employment in the 20-24 year-old age cohort rose 6.9%, whereas 25-54 year old saw an increase of 1.6%. The labor force participation ratio has remained above 70% for 26 straight months ..read more

The American economy grew 2.5% in 2023, well above the previous year’s 2.0% and even with the 2019 and 2017 numbers. 2023 was also a tenth of a point above the pre-covid 10 year average. Private consumption led the charge (+2.2%),spearheaded by higher volumes of durable goods purchases. Capital investment, however, was a drag on growth, falling 1.2% due to a stunning g 10.7% drop in residential construction. Exports were up 2.7% but imports fell 1.7%. Remarkably, inflation (as measured by the headline CPI) fell by nearly half (from 8.0% in 2022 to 4.1% last year) while unemployment held st ..read more

Lai Ching-te of Taiwan’s ruling Democratic Progressive Party (DPP) won Saturday’s presidential election with an estimated 40% of the vote, topping the Nationalist Party (Kuomintang, KMT)’s Hou Yu-ih (33.5%) and the Taiwan People’s Party’s Ko Wen-je (26.5%). The win gives the DPP an unprecedented third consecutive term in office. The vote was largely split between the more populous eastern half of the island (including the cities of Kaohsiung, Taichung, and Tainan) backing Lai and the mountainous west backing Hou. The Legislative Yuan is divided as well, with the two main opposition parties pos ..read more

The American labor force grew 1.7% in 2023, more than three times as fast as the overall population (+0.5%) and well above the body of people over the age of 19 and not incarcerated or otherwise incapable of work (+1.1%). The 2.83 million additional workers dwarfs the 138,300 rise in people not in the workforce, and was slightly above the 2.75 million expansion of civilian employment. Non-farm payroll rose by 3.55 million, or 2.3%. The three-year rolling average increase (+3.2% p.a.) is the highest since 1977-79. That helped hold the unemployment rate to 3.64% (and for the fussy, U-6 was 6.9 ..read more

In late December, China’s National People’s Congress (NPC; the highest legislative body) dismissed from its ranks nine senior military officers. They are largely related to the on-going purge of the Rocket Force (previously known as the Second Artillery Corps) and Equipment Development Department (the old General Armaments Department), but also include the commander of the southern third of the navy. Unlike in the old days when people disappeared overnight, the process now appears to be much more regulated. Removal from office is documented at each stage of the process. General Li Yuchao, comm ..read more

The Congressional Budget Office periodically updates its economic forecast to ensure that its projections reflect recent economic developments and current law. CBO will publish its budget and economic projections for 2024 to 2034 early next year in its annual Budget and Economic Outlook. This report provides details about CBO’s most recent projections of the economy through 2025, which reflect economic developments as of December 5, 2023 . CBO develops its economic projections so that they fall in the middle of the range of likely outcomes under current law. Those projections are hig ..read more

In 2023’s third quarter, US GDP grew at its fastest pace, year-on-year, since Q1 2022. The 2.9% pace was half a point faster than in the second quarter, and when measured quarter-to-quarter on an annualized basis, the +4.9% pace was the best since the COVID bounce-back. The domestic guns were all firing in this first look at the July-September numbers. Consumption picked up half a point over the April-June period, and investment turned positive for the first time in a year. Both exports and imports faded, compared to a year earlier, but the latter fell faster (-1.4%) than did sales abroad ..read more

China’s statistical authorities announced that the economy grew 4.9% YoY in the third quarter, down from 6.3% in Q-1 and 4.5% in the first period of the year. In an indication of data reliability, inflation has averaged just 0.4% YoY this year whereas the money supply (M2) rose 11.6%. The renminbi has fallen 6.1% against the greenback this year, and 8.9% on a real broad effective exchange rate basis. In the first nine months of the year exports are off 5.7%, imports are down by 7.5%, and the trade balance is flat, at US$630.4 billion ..read more

The federal budget deficit was $1.7 trillion in fiscal year 2023, the Congressional Budget Office estimates—$0.3 trillion more than the shortfall recorded during fiscal year 2022. Revenues fell by an estimated $455 billion (or 9 percent). Revenues were smaller than in fiscal year 2022, particularly for nonwitheld income taxes and remittances to the Treasury from the Federal Reserve. Outlays declined by an estimated $141 billion (or 2 percent). Outlays were boosted at the end of 2022 and 2023 because October 1 (the first day of fiscal years 2023 and 2024, respectively) fell on a weekend. As a r ..read more

Probably yes. We face what is likely a pause in Fed interest rate hikes, as the state of the economy is looking pretty good. The unemployment rate has been 4% or less throughout 2023. Inflation (CPI) has been below 5% for six straight months. The current account balance has improved for six straight quarters, and the federal fiscal deficit in 2022 was half as large as in 2020. And, real economic growth (GDP), positive since the dawn of the Biden Administration, is holding up better than expected, which is why interest rate rises have persisted this long. However, there are two key immediate th ..read more