Menzie Chinn

Madison

Contributor at Freelance

Professor of Public Affairs and Economics, University of Wisconsin, and Blogger at Econbrowser. All views are my own.

Articles

Q1 Stall Speed? Tracking and Betting on GDP Growth, Retail Sales Composition

1 week ago | investing.com | Menzie Chinn

at essentially zero growth. and (control) surprise downside. Figure 1: (bold black), WSJ January survey mean (blue), WSJ April survey mean (tan), GDPNow of 4/16 (sky blue square), Goldman Sachs tracking forecast of 4/16 (inverted purple triangle), Kalshi forecast of 4/16 (red *), all in billions Ch.2017$ SAAR. Source: BEA 2024 Q4 3rd release, WSJ survey. That being said, net exports are providing an outsized negative contribution in an accounting sense to Q1 GDP (-2.86 ppts q/q AR).
“What soaring uncertainty means for the U.S. economy”

1 week ago | econbrowser.com | Menzie Chinn

From Cui, NBC:President Donald Trump’s tariff agenda has thrown the financial world for a loop for much of the past month. The on-again, off-again trade escalation with other nations — most notably China — has upended markets with investors fleeing U.S. stocks in search of more stable ground. And as experts and business leaders say the lack of clarity around the tariffs is every bit a challenge as the levies themselves, data shows economic uncertainty is the highest it has been in years.
Dollar Dominance No More?

1 week ago | econbrowser.com | Menzie Chinn

Steve Kamin in the FT, Goodman in the NYT, Krugman on substack, FT Editorial Board write on how Trump policy erraticism on erosion of the dollar as a safe asset/exorbitant privilege. Kamin deploys regressions to support his conclusions:In the wake of President Trump’s initial salvo of broad-based tariffs, on 2 April, stock prices plunged, volatility as measured by the VIX index soared, and Treasury yields shot up substantially.
WSJ Survey of Economists - April 2025

1 week ago | econbrowser.com | Menzie Chinn

The GDP outlook is down markedly. I was insufficiently pessimistic (relative to WSJ survey respondents) regarding the GDP outlook. Figure 1: GDP (bold black), WSJ January survey mean (blue), WSJ April survey mean (tan), GDPNow of 4/9 (sky blue square), Chinn forecast for FT-Booth March survey (red square), all in billions Ch.2017$ SAAR. Source: BEA 2024Q4 3rd release, WSJ surveys. There is a wide range of outcomes predicted for Q3 and Q4, in terms of output levels.
What a Difference Two Weeks Makes: NABE Economists on the “Liberation Day” Effect

1 week ago | econbrowser.com | Menzie Chinn

From NABE two days ago, responses pre- and post-“Liberation Day”:From the NABE statement:The initial April 2025 NABE Outlook presents the consensus macroeconomic forecast of a panel of 41 professional forecasters. The initial survey, covering the outlook for 2025 and 2026, was conducted March 18-25, 2025.
Expectations Continue to Fall Off a Cliff

1 week ago | econbrowser.com | Menzie Chinn

NY Fed future financial situation “better off” revised up, but continues decline. Figure 1: U.Michigan expectations index (blue), and NY “better off” aggregate (tan), both demeaned and standardized (2013M06-2025M02). Source: U.Michigan, NY Fed, and author’s calculations.
Michigan Economic Sentiment Signals Recession-Level Weakness

1 week ago | investing.com | Menzie Chinn

The of 50.8 is below the 73.4 average reading over NBER peak-to-trough recession dates (1990M01-2025M03):Figure 1: University of Michigan Consumer Sentiment (blue, left scale), and Conference Board (tan, right scale). NBER defined peak-to-trough recession dates shaded gray. (Source: U.Michigan, Conference Board, NBER.)The same is not true for the Conference Board’s Consumer Confidence measure, at least for March at 92.9 (recession average is 75).
Is the Michigan Economic Sentiment Index at Recession Levels? Answer: Yes!

1 week ago | econbrowser.com | Menzie Chinn

The current reading of 50.8 is below the 73.4 average reading over NBER peak-to-trough recessions dates (1990M01-2025M03):Figure 1: University of Michigan Consumer Sentiment (blue, left scale), and Conference Board Consumer Confidence (tan, right scale). NBER defined peak-to-trough recession dates shaded gray. Source: U.Michigan, Conference Board, NBER. The same is not true for the Conference Board’s Consumer Confidence measure, at least for March at 92.9 (recession average is 75).
Economic Policy Uncertainty Hits Record High

1 week ago | econbrowser.com | Menzie Chinn

Even if likely to be revised, it’s still remarkable. VIX down as high yield credit spread rises. And here’s a picture of credit risk spread for high yield corporate bonds over the same period (BofA):
Trump Blinks (For Now)

1 week ago | econbrowser.com | Menzie Chinn

From Bloomberg:President Donald Trump’s administration exempted smartphones, computers and other electronics from its so-called reciprocal tariffs, representing a major reprieve for global technology manufacturers including Apple Inc. and Nvidia Corp. even if it proves a temporary one.