Are major exporter countries to the United States really manipulating their currency to boost exports?

The Euro Area, China, Canada, Mexico and Japan together account for over 70% of U.S. trade. Have these countries (including the Euro Area group of countries) manipulated their currencies to boost exports? In this century (2000 onwards) the Chinese Yuan, the Canadian Dollar and the Euro have appreciated against the dollar. The Japanese Yen has been largely unchanged against the U.S. dollar since the start of this century and only the Mexican Peso has weakened against the dollar.

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UK Trade Statistics for trade by each product (and split by EU and non-EU trade) plus interactive tool for trade by each country

We will be publishing a number of statistics for the United Kingdom (and the European Union) over the next few days in the run up to a major piece we will be publishing on the real economics of Brexit. In the meanwhile, here are trade statistics for trade by each product for the United Kingdom for 2017 (the latest full year of data available) sourced from the Office for National Statistics.

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Are foreign companies really acquiring UK companies at a record pace due to a weak pound?

Have inward mergers and acquisitions (foreign companies acquiring UK companies) really soared in the United Kingdom due to a weak pound? The answer is no. The Office for National Statistics (ONS) publishes numbers for inward, outward and domestic mergers and acquisitions and it doesn’t appear either have really changed pace despite a weaker pound.

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The Service sector increasingly dominates the U.S. labour market

The private service sector in the United States now accounts for over 71% of all jobs given the growth in entertainment, tourism, healthcare and educational services. The exponential growth of the internet and people buying more experiences (like travelling or eating out) rather than buying goods means the goods-producing industries (like construction, manufacturing and mining) have seen a decline in jobs and now contribute less than 14% of all jobs. Government jobs have contributed around 15% consistently to the overall labour market over the past 50 years.

US goods services government jobs

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Here’s why wages aren’t rising despite record employment and labour shortages

Both the United Kingdom and the United States currently have record multi-year high levels of employment, yet wages haven’t kept up with inflation for the vast majority of people causing a real income squeeze. Although the U.S. recently reported the highest wage growth since the last recession most people don’t feel their wages are keeping up with rising prices. What is going on?

US wage increase annual until August 2018
Source: U.S. Bureau of Labor Statistics

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Currency carnage everywhere, here’s how every currency in the world has performed against the US dollar over the past year

What a difference six months makes, here’s the performance of the US dollar against each currency as of the 5th of September 2018,

USD 1-year change 20180905
USD 1-year change mapped (data as of 05-September-2018)

Notes: 1. We have excluded the performance of Angola, Sudan, Argentina, Turkey and Venezuela on the map because they are major outliers. They are included in the data set below. 2. Currency price data updated 05-September-2018

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Australian credit growth is slowing with Investor housing credit growth slowest ever, Broad Money Supply growth slowest since the last recession 26 years ago

Australian credit growth is slowing but outstanding debt remains at historically high levels. Housing credit growth, personal credit growth, investor housing credit growth and business credit growth are all slowing. But the rather surprising thing is broad money (M3) supply growing at a 12-month rate of just 1.9%, the slowest since 1992 when Australia faced eight consecutive quarters of declining economic growth.

Australia Broad Money M3 12-month growth rate until July 2018
Data Source: Reserve Bank Of Australia

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Do nations with balance of payments or trade surpluses really outperform those with deficits?

Does a balance of payment (or trade) surplus equate higher growth? Not necessarily, Australia which has had deficits for over forty years has grown faster than Germany which has had over forty years of surpluses. Does a current account surplus (i.e. exports greater than imports) mean a nation is doing better than other nations with current account deficits? The answer is no, what really matters is why the deficits exist.

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