Have U.S. tariffs on Steel and Aluminium imports really increased domestic production?

We wrote about the economics behind the 25% tariff on Steel imports and 10% tariff on Aluminium imports to the United States earlier this year. One of the main justifications of the tariffs were that they will increase domestic production. Some statistics released earlier this week provide an answer to whether the tariffs have really increased domestic production.

Continue reading “Have U.S. tariffs on Steel and Aluminium imports really increased domestic production?”

Germany accounts for almost all the intra European Union current account surplus plus the European Union posts a record external current account surplus with the U.S.

Sixteen members of the European Union recorded current account surpluses, eleven current account deficits and one was in current account balance in the second quarter of 2018 for the total (intra-EU plus extra-EU) current account balances of the European Union (EU28) Member States.

The highest surpluses were observed in Germany (+€63.8 bn), the Netherlands (+€16.8 bn), Italy (+€10.5 bn), Ireland (+€10.2 bn) and Denmark (+€3.6), and the largest deficits in the United Kingdom (-€20.7 bn), Romania (-€2.6 bn) and Belgium (-€2.4 bn).

EU current account balance member states Q2 2018
Source: Eurostat

Continue reading “Germany accounts for almost all the intra European Union current account surplus plus the European Union posts a record external current account surplus with the U.S.”

Are rising benchmark interest rates in the United States having any impact on mortgage or saving interest rates?

The Federal Reserve increased the target for the bank’s benchmark rate by 0.25% (to a range of 2% to 2.25%) last week, the eighth rate rise since 2015. Are rising interest rates really having any impact on mortgage or saving rates?

Continue reading “Are rising benchmark interest rates in the United States having any impact on mortgage or saving interest rates?”

Those three U.S. recession indicators – how near or far are those from being invoked? September 2018 edition

We wrote about three slightly different U.S. recession indicators that have been predictive of the past few recessions and have been tracking how near or far are those from being invoked, here’s where we are in September 2018,

Continue reading “Those three U.S. recession indicators – how near or far are those from being invoked? September 2018 edition”

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.

Continue reading “Are major exporter countries to the United States really manipulating their currency to boost exports?”

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

Continue reading “The Service sector increasingly dominates the U.S. labour market”

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

Continue reading “Here’s why wages aren’t rising despite record employment and labour shortages”

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

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