The pre-benchmarked establishment survey suggests declining employment in key industrial states of Michigan, Pennsylvania and Wisconsin. Using the methodology I used to inferring the national establishment survey, can we anticipate the revision to manufacturing in these states?
That’s the title of an October 2019 International Finance Discussion Paper (Fed) by Shaghil Ahmed, Ricardo Correa, Daniel A. Dias, Nils Gornemann, Jasper Hoek, Anil Jain, Edith Liu, and Anna Wong, which has taken on heightened relevance given current events. From the abstract:
Some pictures to envision the impact of covid-19: (1) lots of US int’l trade goes by air, (2) and US sensitivity to disruption to air freight from China, by sector.
Today we are fortunate to present a guest contribution written by By Laurent Ferrara (SKEMA Business School, Paris, and Director of International Institute of Forecasters), Luca Metelli (Banca d’Italia), Filippo Natoli (Banca d’Italia) and Daniele Siena (Banque de France). The views presented represent those of the authors, and not necessarily those of the institutions the authors are affilliated with.
As has been noted, the Administration’s forecast is about a percentage point higher than CBO’s. This seems like a large economic difference; as I’m teaching econometrics this semester, how does this seem in terms of statistical significance. Figure 1 below summarizes.
Those are two characteristics of gold … and of Judy Shelton’s economics. From Deutsche Bank today (Luzzetti & Hooper):
Down, down, down.
The data from the Quarterly Census of Employment and Wages (QCEW) suggests to me that employment in June 2019 (last available QCEW data) is 505 thousand lower than estimated (although possibly as little as 111 thousand, as large as 899 thousand, using a 95% prediction interval).
I’m interviewed on Wisconsin Public Radio today, in the wake of declining Wisconsin exports.
Figure 1: Wisconsin goods exports to world (blue, left scale), to China (red, right scale), in bn 2012$. Nominal values deflated using national goods exports deflator. Section 232 and 301 actions shaded gray. Source: ITA TradeStats, accessed 2/7/2020, export deflator from BEA, 2019Q4 advance release, and author’s calculations.
My colleague Jon Pevehouse speaks on WPR about the Phase 1 deal.
Interesting reading on Wisconsin and the trade war (a little out of date), from the Wisconsin Legislative Reference Bureau. Some stats state-by-state from TariffsHurt.
The January numbers are out. March 2019 levels revised down 514 thousands, vs. 501 in preliminary. December numbers revised down 422 thousands. My guess based on December estimates and the March 2019 preliminary benchmark (see this post), the actual reported numbers for December were higher by 79 thousand.