Global Economic Intersection - News Blog

Do Big Cities Help College Graduates Find Better Jobs?

admin — Mon, 20 May 2013 12:59:12 +0000

by Jaison R. Abel and Richard Deitz - Liberty Street Economics, Federal Reserve Bank of New York

Although the unemployment rate of workers with a college degree has remained well below average since the Great Recession, there is growing concern that college graduates are increasingly underemployed—that is, working in a job that does not require a college degree or the skills acquired through their chosen field of study.

Economic Growth in Foreign Regions and U.S. Export Growth

admin — Mon, 20 May 2013 02:47:05 +0000

by Jun Nie and Lisa Taylor, Federal Reserve Bank of Kansas City

Export growth is an important source of aggregate growth in the U.S. economy. Indeed the importance of exports in contributing to U.S. economic growth has risen steadily over the past three decades, with exports nearly doubling as a share of GDP. Export growth has been championed in recent years as a key driver for the country’s ongoing economic recovery.

But exports of goods and services produced in the United States depend crucially on foreign demand. When foreign economic growth is low, foreign demand tends to be weak as people have less income to purchase U.S. goods and services. In this way, lower foreign growth may lead to less growth in U.S. exports.

Infographic of the Day: Best and Worst States for Business by Tax Laws

Gary — Mon, 20 May 2013 02:29:10 +0000

So many variables play into determining where to set up shop for a small business, and how favorable local government is to business surely warrants consideration.

In this infographic, we break down the best and worst states to do business in based on the Tax Foundation’s 2011 Business Tax Climate Index. Of course, many, many other factors serve important roles in influencing the location for a small business (e.g. population density, local culture, climate, etc.), so while tax law draws attention, it’s certainly not the deciding factor.

Monetary Policy Week: Cuts Continue

Archidev Ghosh — Sun, 19 May 2013 23:07:00 +0000

Monetary Policy Week in Review – May 18, 2013: Israel, Turkey, Serbia cut, five hold as BOJ easing reverberates

by Peter Nielsen, Central Bank News

This week eight central banks took policy decisions with three banks cutting rates (Israel, Serbia and Turkey) and five leaving rates on hold (Indonesia, Iceland, Russia, Latvia and Chile) as the Bank of Japan’s (BOJ) monetary easing continues to impact monetary policy decisions worldwide.

This week’s rate reduction by Israel and Turkey brings it to a total of five rate cuts in reaction to the BOJ’s new phase of monetary easing, which has lead to a drop in the value of the yen and raised fears of an accelerated influx of capital into higher-yielding currencies, threatening to create asset bubbles.

Prior to this week’s cuts, Australia and Korea had cut rates, specifically mentioning foreign exchange as part of their reasoning, while Turkey has now cut rates twice since the BOJ's announcement on April 4, in both cases pointing to strong capital inflows.

What We Read Today 19 May 2013

Admin — Sun, 19 May 2013 19:40:48 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list has two articles that might indicate a market top from two authors who are postulating just the opposite ........ and the last article says the House of Representatives may have just passed an act that will effectively eliminate the debt ceiling. But then the author posted another article the next day which says what Congress has done is ambiguous.

Documentary of the Week: Math of Cities and Corporations

Admin — Sun, 19 May 2013 06:19:01 +0000

Documentary of the Week (17 1/2 minutes)

This week we have a Ted Talk about the mathematics of scaling for cities and corporations. Trained as a theoretical physicist, Geoffrey West has turned his analytical mind toward the inner workings of more concrete things, like ... animals. In a paper for Science in 1997, he and his team uncovered what he sees as a surprisingly universal law of biology — the way in which heart rate, size and energy consumption are related, consistently, across most living animals. (Though not all animals: “There are always going to be people who say, ‘What about the crayfish?’ " he says. “Well, what about it? Every fundamental law has exceptions. But you still need the law or else all you have is observations that don’t make sense.")

[Watch video after the Read more >> jump.]

Up to 20% of U.S. Children May Have a Mental Disorder

Admin — Sun, 19 May 2013 05:19:02 +0000

Econintersect: The CDC (Centers for Disease Control and Prevention) has released a report that finds the number of children in the U.S. with mental disorders has been growing between 1994 and 2011. In any given year between 13% and 20% of U.S. children experience a mental disorder. The treament costs are estimated at $247 billion annually. The new report just released by the CDC covers data fromm 2005-2011.

Secretary Lew Sends Debt Limit Letter to Congress

Admin — Sun, 19 May 2013 04:27:15 +0000

Econintersect: Secretary of the Treasury Jacob (Jack) Lew has sent a letter to John Boehner, Speaker of the House of Representatives, detailing actions that will be taken in the interim until action is taken to increase the debt limit of the United States. The letter and the actions are pro forma, repeating what has transpired in the past when action was not prompt with regard to raising the limit. In the following, the press release by the Treasury Department is presented in full, as well as an Appendix which describes the "Extraordinary Measures". A substantial portion of the measures amount to simply postponing actions that would add to the national debt. Almost all of the approximately $260 billion in "headroom" will simply be booked as federal debt after the new limit is established.

Bernanke Tells Graduating Students to Adapt

admin — Sun, 19 May 2013 03:37:09 +0000

Econintersect: Chairman Ben S. Bernanke at the Bard College at Simon's Rock (Great Barrington, Massachusetts) told graduates of the importance of innovation, creativity and critical thinking on their futures. This is a speech readers should absorb, and forward to your children and grandchildren

The history of technological innovation and economic development teaches us that change is the only constant. During your working lives, you will have to reinvent yourselves many times. Success and satisfaction will not come from mastering a fixed body of knowledge but from constant adaptation and creativity in a rapidly changing world. Engaging with and applying new technologies will be a crucial part of that adaptation.

Infographic of the Day: What's the Cost of a Lost Laptop?

Gary — Sun, 19 May 2013 03:07:44 +0000

This modern, flat infographic presents a combination of data from the Ponemon Institute, offering a candid insight in to the true cost to employers of misplaced or stolen hardware.

What We Read Today 18 May 2013

Admin — Sat, 18 May 2013 20:03:25 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list has Felix Salmon asking if we have solved our fiscal problems........ and the last article is Bill Gross' admonition that, although the bond market has peaked, interest rates will not rise immediately.

Gallup: Minimum Required Income $58k for Family of Four

Admin — Sat, 18 May 2013 06:22:50 +0000

Econontersect: The minimum required income for a family of four averaged $58,000 in a national poll conducted in April by the Gallup organization. The poll covered more than 2,000 randomly selected adults (18 and older) from all 50 states and the District of Columbia. The results varied with region of the country, income of the respondent and whether the residence was rural, urban or suburban. A telling statistic reflecting upon the diversity of opinion is the significant difference between mean (average) of $58,000 and median (mid-point reponse), which was $50,000. That indicates the distribution of answers was not balanced, with a long tail of responses to higher incomes.

Infographic of the Day: How to Fix a Phone Dropped in the Toilet

Gary — Sat, 18 May 2013 03:33:31 +0000

As a nation of multi-taskers we use any moment that our hands are free to send a cheeky text or check the latest facebook updates, so we weren’t surprised when a recent polled revealed that 75% of people admitted to toilet tweeting, emailing and even making a cheeky call whilst sat on the loo. (Tweeting we get, but calling someone?!)

Horror stories of dropping your phone down the loo are increasingly common, with a slip of the hand being all it takes to see your shiny smartphone lying in the deep dark abyss of the toilet bowl. As inevitable is this is, we decided to delve deeper into how exactly your phone can survive this gloomy fate, with a handy info graphic revealing all the steps needed to recover a loo ridden device.

What We Read Today 17 May 2013

Admin — Fri, 17 May 2013 18:45:35 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list has Edward Harrison's discussion of Canadian house prices........ and the last article is about Brooklyn, NY police raiding a tomato patch assuming it to be pot.

10 May 2013 ECRI's Weekly Leading Index Growth Declines

admin — Fri, 17 May 2013 14:41:21 +0000

Current ECRI WLI Growth Index

Please read The U.S. Business Cycle in the Context of the Yo-Yo Years which is an update on ECRI's recession call. The readings improved again this week - and the current levels of the WLI are still within an improvement channel - and showing positive growth to come within the next six months. ECRI's inflation index has risen and is reported on below.

Bitcoin: US Government Freezes Account of Largest Exchange

Admin — Fri, 17 May 2013 04:16:35 +0000

Econintersect: This week the Department of Homeland Security (DHS) froze funds in the Dwolla account of Mt.Gox's U.S. unit, alleging that it had broken the law regarding money laundering. Dwolla is an online payments firm, similar to the more widely known PayPal. Mt. Gox is a Tokyo-based exchange that handles 80% of the global transactions of Bitcoins.

The specific changes that alleges the company and a subsidiary were conducting transactions "as part of an unlicensed money service business" that should have been registered with the Treasury's Financial Crimes Enforcement Network (FinCen).

Infographic of the Day: Is There Silicon Beyond the Valley?

Gary — Fri, 17 May 2013 04:12:38 +0000

California’s Silicon Valley is credited by many to be the epicenter of technology and innovation in the U.S., but as rental rates continue to climb in the area, startups are beginning to evaluate other states to call home.

Fed's Balance Sheet 15 May Continues Record Growth

admin — Fri, 17 May 2013 04:11:34 +0000

QE3 Purchases

Total Fed Balance Sheet

Fed's Balance Sheet is a record $3.311 trillion (up from the last week's record $3.281 trillion). The complete balance sheet data and graphical breakdown of the cumulative and weekly changes follows the "read more".

Half the World on Facebook

Admin — Thu, 16 May 2013 22:15:46 +0000

by Felix Richter, Statista.com

Facebook remains the world’s largest social network by a wide margin.

According to GlobalWebIndex, 51 percent of the world’s internet users were active on Facebook in the first quarter of 2013.

There are seven social media websites that are reaching 20% or more of the online world population. Three of the seven are located in China.

What We Read Today 16 May 2013

Admin — Thu, 16 May 2013 18:45:37 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list discusses why so few bankers have gone to jail........ and the last article asks why investors can't imagine a collapse of the bond market.

Week Ending 11 May 2013: Total Rail Traffic Again Improves

admin — Thu, 16 May 2013 16:53:22 +0000

Econintersect: Week 19 of 2013 ending 11 May shows same week total rail traffic improved according to data released by the Association of American Railroads (AAR):

Four week rolling average is improving (normal for this time of year);
13 week rolling average is improving ( normal for this time of year);
52 week rolling average is improving ( normal for this time of year);

11 May 2013 Unemployment Claims 4 Week Average Is Marginally Worse

admin — Thu, 16 May 2013 13:14:52 +0000

Blue Line 4 Week Average

The market was expecting 330,000 to 335,000 vs the 360,000 reported. The more important 4 week moving average is marginally worse, moving from 336,750 (reported last week) to 339,250. Econintersect does not view one week's bad numbers as a negative trend.

Implications of Fiscal Austerity for U.S. Monetary Policy

admin — Thu, 16 May 2013 13:01:37 +0000

by Eric S. Rosengren - President & Chief Executive Officer, Federal Reserve Bank of Boston

[Editor's Note: This speech was given at The Global Interdependence Center Central Banking Conference. Milan, Italy on May 16, 2013]

It is a great pleasure to be invited to participate in the Global Interdependence Center’s conference on central banking. This continues to be a period requiring unusual policy actions – even experimentation – at central banks around the world. So it is important to understand the forces affecting policymaking as well as the impact of the policies, both domestically and internationally.

Infographic of the Day: Alarming Facebook Misuse Stats

Gary — Thu, 16 May 2013 04:31:25 +0000

Facebook is booming and business has never been better for the social media giant. However, it’s proliferation in the last few years has resulted in some unintended and unwanted consequences. The alarming numbers on Facebook are on the rise and further climbing. Be it a teen or an employee – effort is needed to ensure that the damaging impact of Facebook is contained and curbed – this is where tools such as the Facebook spy come in.

Eurozone: Fifth Quarter of Contraction

Admin — Thu, 16 May 2013 04:21:47 +0000

Econintersect: The EU-17 (Eurozone) suffered the fifth consecutive quarter of negative GDP growth in Q1 2013. The wider Europe (EU-27) saw the fourth contraction in the past five quarters. The first quarter saw a much smaller contraction than for 4Q 2012. For the Eurozone the fifth quarter of contraction matched the length of the Great Recession. The depth of contraction has been much less than in the 2007-2009 event.

Click on graph for larger image.

Japan: GDP Wakes Up

Admin — Thu, 16 May 2013 03:44:54 +0000

Econintersect: The Japanese economy has responded to the declining value of the yen resulting from the expansionary policies of the Abe government with a sharp rebound in GDP growth to 0.9% for the quarter and 3.5% year-over-year for the first quarter 2013 which ended in March. The major factors in the growth spurt were increased exports (as measured in yen), improved domestic consumption and increased government investment which was largely offset by a decline in private investment. The 3.5% growth was stronger than the 2.7% estimate provided by Bloomberg.

Many Tweets from a Few, Media Usage Expands

Admin — Thu, 16 May 2013 03:39:37 +0000

by Felix Richter, Statista.com

Researchers from the University of Illinois recently published a research paper on the geography of Twitter that contains some interesting data on general Twitter use. The data, provided by social media data vendor GNIP, reveals that Twitter usage is very concentrated, i.e. a small percentage of heavy users account for a large chunk of the Tweets that are sent.

What We Read Today 15 May 2013

Admin — Wed, 15 May 2013 21:10:56 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list has Yves Smith discussing the problems for consumers as corporate control of health care increases........ and the last article is about the destruction of a Mayan pyramid recycled for highway building material.

Nonfinancial Leverage NFCI Again Less Good w/e 10 May 2013

admin — Wed, 15 May 2013 14:23:03 +0000

The Nonfinancial leverage subindex of the National Financial Conditions Index increased slightly (less good) this week but still remains well in economic expansion territory. Econintersect focuses on non-financial tools to monitor the economy.

This index remains on a "less good" trend line, and is believed to be a good forward indicator a recession is coming. A value above zero is a recession warning.

How Are American Workers Dealing with the Payroll Tax Hike?

admin — Wed, 15 May 2013 12:31:45 +0000

by Basit Zafar, Max Livingston, and Wilbert van der Klaauw - Liberty Street Economics, New York Federal Reserve

The payroll tax cut, which was in place during all of 2011 and 2012, reduced Social Security and Medicare taxes withheld from workers’ paychecks by 2 percent. This tax cut affected nearly 155 million workers in the United States, and put an additional $1,000 a year in the pocket of an average household earning $50,000. As part of the “fiscal cliff” negotiations, Congress allowed the 2011-12 payroll tax cut to expire at the end of 2012, and the higher income that workers had grown accustomed to was gone. In this post, we explore the implications of the payroll tax increase for U.S. workers.

France: Triple Dip

Admin — Wed, 15 May 2013 07:30:39 +0000

Econintersect: France has dipped into its third recession in the wake of the Great Financial Crisis (GFC). The other "heavyweight" of the Eurozone, Germany, managed to swing back to almost imperceptible growth in the first quarter of 2013.

France saw its GDP shrink by 0.2% in the first quarter, matching the decline in the fourth quarter 2012. Taking the two quarters together, however, France has not seen as much contraction as Germany. The latter had fourth quarter GDP revised down to -0.7%. When that is combined with the first quarter +0.1%, the two quarters recorded a decline of 0.6%, larger than that for France (-0.4%).

Will Labor Force Participation Bounce Back?

admin — Wed, 15 May 2013 05:43:46 +0000

by Leila Bengali, Mary Daly, and Rob Valletta - FRBSF Economic Letter, Federal Reserve Bank of San Francisco

The most recent U.S. recession and recovery have been accompanied by a sharp decline in the labor force participation rate. The largest declines have occurred in states with the largest job losses. This suggests that some of the recent drop in the national labor force participation rate could be cyclical. Past recoveries show evidence of a similar cyclical relationship between changes in employment and participation, which could portend a moderation or reversal of the participation decline as the current recovery continues.

Will North America Cause 5-Year Global Energy Production Bubble?

Admin — Wed, 15 May 2013 05:26:10 +0000

Econintersect: The title of the press release from the International Energy Agency (IEA): "Supply shock from North American oil rippling through global markets". This press release (available below) announced the release of the annual Medium Term Oil Market Report for 2013. The report infers that the rapid expansion of North American oil and gas production will have as much of an impact on global markets as did the ascendancy of China as a major consumer for oil and gas over the last 15 years. Of course, the influence on stress and price movement in the market will be exactly in the opposite direction.

Click on graphic for larger image.

Infographic of the Day: How the Hubble Space Telescope Works

Gary — Wed, 15 May 2013 04:49:40 +0000

Launched from space shuttle Discovery on April 24, 1990, the Hubble Space Telescope orbits at an altitude of about 350 miles (560 kilometers). The telescope is 43.5 feet (13.2 meters) long, weighs 24,500 pounds (11,110 kilograms) and cost $2.5 billion.

Hubble’s six cameras and sensors see visible, infrared and ultraviolet light. At the heart of Hubble is its 8-foot-diameter (2.4 meters) primary mirror. The Hubble telescope is named after the famed late astronomer Edwin Hubble, who has been lauded as the father of modern cosmology and determined the rate of the expansion of the universe.

What We Read Today 14 May 2013

Admin — Tue, 14 May 2013 20:23:03 +0000

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list discusses the smallest government spender since Eisenhower........ and the last article is about the poor (ineffective) performance of corporate directors.

April 2013 Small Business Optimism Index Rebounds Slightly

admin — Tue, 14 May 2013 12:27:43 +0000

Econintersect: The National Federation of Independent Business (NFIB)'s April 2013 monthly optimism index improved 2.6 to 92.1 - just above the recovery average of 90.7. In April’s report, four Index components rose, two fell and six were unchanged.

NFIB reports usually contain blasts directed at Washington by NFIB chief economist Bill Dunkelberg.

Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading. The sub-par recovery persists for the small business sector.

Philly Fed's Plosser: Using the Corridor When Exiting QE

admin — Tue, 14 May 2013 10:21:02 +0000

Econintersect: In a wide ranging speech on the economy and monetary policy, Charles I. Plosser, President and Chief Executive Officer, Federal Reserve Bank of Philadelphia stated:

In my preferred policy framework, the federal funds rate target would be set in a corridor above the interest rate paid on excess reserves and below the discount rate (also called the primary credit rate). This corridor system is similar to the system that the Fed used before the crisis and is similar to corridor systems used by other central banks around the world. In fact, the Riksbank sets its policy overnight rate in an interest-rate corridor between the deposit rate and the lending rate.

eBooks Account for 23% of U.S. Publisher Sales in 2012

Admin — Tue, 14 May 2013 06:09:03 +0000

Statista Chart of the Day - eBooks Account for 23% of U.S. Publisher Sales in 2012‏

by Felix Richter, Statista.com

Last week, TechCrunch reported that Microsoft is planning a $1 billion buyout of the digital arm of Nook Media, Barnes & Noble's eBook business that Microsoft is already partnering. The question that immediately followed was why Microsoft would be willing to pay so much money on an also-ran eReader business. The Nook eReader clearly lost to Amazon's Kindle line of readers in a market that is suffering from an ongoing shift to multi-purpose devices such as Apple's iPad.

Click on picture for larger image.

Infographic of the Day: NASA's Planet-Hunting Kepler Telescope Explained

Gary — Tue, 14 May 2013 04:01:23 +0000

The mission of NASA's Kepler Space Telescope is to identify and characterize Earth-size planets in the habitable zones of nearby stars. Data returned by the telescope will allow scientists to estimate the number and sizes of planets in alien solar systems, and help identify the types of stars that could harbor planets.

Launched in 2009, Kepler orbits the sun every 371 days. As it travels, Kepler keeps itself pointed at a single patch of sky. Sensors monitor the brightness of more than 150,000 stars simultaneously, looking for telltale drops in intensity that could indicate orbiting planets.

The telescope is 15.3 feet long (4.7 meters) and weighed 2,230 pounds (1,052 kilograms) on Earth. A United Launch Alliance Delta II rocket launched Kepler on March 7, 2009.

Week Ending 13 May 2013: 6.5 cent Gasoline Price Rise

Gary — Tue, 14 May 2013 00:51:40 +0000

Gasoline prices rose an average of 6.5 cents nationwide this past week (+8.0 cents since 29 April) - with the largest rise in the Midwest (7.0) followed by Rocky Mountain (+6.9) and the Gluf Coast (+6.5).

Average prices by region and a breakdown by grade follow after the "Read More".