Tag Archives: trade

As with all statistics, there are discrepancies that from time to time may obscure the meaning or validity of the particular estimate in question. For the vast majority of the time, any such uncertainties amount to very little. Overall, harmony among the major accounts reduces the signal noise from any one featuring a significant inconsistency. There are, of course, various economic areas where estimates are going to...

Summary: China’s trade concessions seem modest, but little discussion of US concessions. Reports suggest Trump is set to sign a new executive order to investigate trade practices in steel, aluminum, and maybe household appliances. Trade imbalances and floating currencies are not mutually exclusive. Last week’s meeting between the US and China’s Presidents did not produce much fireworks or headlines. The...

(draft of monthly column for Caixin) The election of Donald Trump as the 45th President of the United States surprised many people, even seasoned political observers and astute investors. He failed to win the popular vote but did carry the electoral college, which is how the US elects its chief executive. His victory is a bit of a Rorshcach test, where people project the issues that allowed Trump to succeed, with...

[unable to retrieve full-text content]New orders for durable goods (not including transportation orders) were up 1% year-over-year in February. That is less than the (revised) 4.4% growth in January, but as with all comparisons of February 2017 to February 2016 there will be some uncertainty surrounding the comparison to the leap year version.

New orders for durable goods (not including transportation orders) were up 1% year-over-year in February. That is less than the (revised) 4.4% growth in January, but as with all comparisons of February 2017 to February 2016 there will be some uncertainty surrounding the comparison to the leap year version. That would suggest that orders as well as shipments were somewhat better than they appear at least in in terms of...

US trade statistics dramatically improved in January 2017, though questions remain as to interpreting by how much. On the export side, US exports of goods rose 8.7% year-over-year (NSA). While that was the highest growth rate since 2012, there is part symmetry to account for some of it. Exports in the latter half of 2015 and for that first month of 2016 were contracting at double digit rates, the base effects of the...

Summary: Pity imports, they are misunderstood. Imports create jobs directly and indirectly. Restricting US imports would likely also curb exports. The mercantilist inclination by the Trump Administration makes it seem as if exports are good and create jobs and imports are bad and cost jobs.   This is simply not true.  This assessment is not based on newfangled thinking about trade.  Rather Adam Smith argued...

Investors are anxiously awaiting more details on the new US Administration’s economic policies and priorities.  Part of the challenge is that the cabinet represents a wide range of views and it is not clear where the informal power lies, or whose call is it.   In terms of economic policy, trade is being given priority.    It is seen as the key to the jobs and growth objectives. There have been two initiatives: formally...

On his blog, Dani Rodrik comments on NAFTA’s implications for US manufacturing and jobs. So here is the overall picture that these academic studies paint for the U.S.: NAFTA produced large changes in trade volumes, tiny efficiency gains overall, and some very significant impacts on adversely affected communities. … Mexico has been one of Latin America’s underperformers. So is Trump deluded on NAFTA’s overall impact on manufacturing jobs? Absolutely, yes. Was he able to capitalize on the...

Investors appreciate that a strong dollar can impact US growth through the net export component of GDP. The dollar’s appreciation can push up the price of exports and lower the cost of imports. The St. Louis Fed took a look at how the strong dollar from 2014 to the beginning of 2016 impacted the net export function of GDP. It is clear that a strong dollar in this period was associated with a drag on growth from net...