Seasonal adjustment is one of the more obscure potential casualties of the pandemic recession. A well known problem with seasonal adjustment is that an outlier observation will lead the seasonal adjustment process to shift its belief about what is normal for that month. In cases like the coronavirus recession, this is undesirable because the unusual […]
News & Announcements Archive
A Lost Four Years, But Better Than Hoover
The United States may be on the verge of an unfortunate accomplishment rarely reached in the last century: a presidential four-year term in which real per capita GDP was lower when the term ended than when it began. The International Monetary Fund estimated this week that the real gross domestic product (GDP) of the United […]
A Tale of Two Sectors
The private sector added jobs in May almost everywhere in the United States. The public sector lost jobs, also almost everywhere. Those two trends seem likely to persist in the months to come, as states continue to allow more businesses to reopen – and as state and local governments see tax revenues remain at depressed […]
538 survey of macroeconomists
The 538 webpage, part of ABC news and originally set up by Nate Silver, has just done a survey of academic macroeconomic forecasters about the coronavirus recession. Allan Timmermann at UC San Diego and I helped them with this and the results were released this afternoon. The results point to a deep recession with a […]
Republican View of Economy: Getting Worse, But Still Better than Obama
Just how bad is the economic outlook? These days the answer seems to depend on the politics of the person being asked. The Bloomberg Consumer Comfort Index is released weekly, based on a poll that asks only three questions. Consumers are asked to rate the overall economy, the buying climate and their personal finances as […]
Beware of Seasonal Adjustment
By Kevin Heerdt and Jonathan H. Wright Economic data released by the government and other entities are being distorted by normally acceptable statistical methods. The extreme economic data that are coming out raise important issues of seasonal adjustment. Of course, there is no questioning the fact that the economic data are bad in an unprecedented […]
Votes, deaths and layoffs
There are 50 states, but only 13 where the 2016 presidential election was decided by a margin of less than eight percentage points. Six of them went for Hillary Clinton and seven for Donald Trump. It is likely that this year’s election will be largely decided in those states. So how are they faring in […]
Market Volatility
Get ready for another crazy month on Wall Street. Months like March tend to come in pairs, at least as far as volatility goes. Daily moves of 4% or more are usually rare for the S&P 500; there were only ten of them in the entire decade of 2010 through 2019. In March, there were […]
The best kind of stimulus
No sooner was the ink dry on the March 27 $2 trillion stimulus package than Washington began work on the next stimulus. This is the right thing to do. Deficit hawks who worry about the debt-GDP ratio should want it, because without further stimulus, the debt-GDP ratio will soar because of crumbling GDP. Both President […]
COVID-19 Data: Signal versus Noise
Two burning questions confront all of us: How big is our public health problem? How sharp is our economic retrenchment? We think that the toolkit of economic forecasters has something to offer on the scale of the public health problem. Ignore the frantic quotes focused on reported COVID-19 cases—the numbers are all but meaningless. Instead, […]
Embracing Distancing and Cushioning the Blow to the Economy
The global COVID-19 outbreak now sports exponential growth rates for cases and deaths on every continent save Antarctica. Students of the economy must add that we are also in the midst of an unprecedented blow to global output, income, and employment. In financial markets, the pace of decline for equity and corporate bond prices exceeds […]
Trump stocks
President Trump has frequently pointed to the performance of the stock market in praising his own performance, although not in the past week when markets worldwide came down with (fears of) the coronavirus. Even at the end of the market’s worst week since 2008, the S&P 500 has still risen at a compound rate of […]