Publications

The Wall Street Journal reports that productivity growth has become increasingly concentrated within the top 5% of firms in developed nations while growth has stagnated for the bottom 95% of firms. Many of the firms enjoying strong productivity growth are large, multinational firms that can exploit economies of scale and have significant revenue streams, allowing them to better shoulder the cost of major investments. WSJ

The Wall Street Journal reports that according to a recent survey, economists expect the unemployment rate to drop to a 50-year low of 3.6% by 2019. Many surveyed economists predict that recent tax cuts and increased federal spending will strengthen demand, which should provide a boost to hiring throughout this year and into 2019. WSJ

The Wall Street Journal reports that the U.S. unveiled tariffs on another $200 billion in Chinese imports, targeting products ranging from fish to luggage. Though China will likely retaliate against this latest round of tariffs, China imports less than $200 billion from the U.S., making a tit-for-tat retaliation difficult. WSJ

According to the Wall Street Journal, stronger economic momentum has convinced some Federal Reserve officials to get on board with a faster rate hike schedule. Though some Fed officials previously advocated for a slower pace of rate hikes to avoid stifling growth, building inflationary pressures have pushed officials to consider compressing the rate hike schedule in order to prevent the economy from overheating. WSJ

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated there were 6.7 million job openings at the end of April, an all-time high.  Hires rose to 5.6 million while the quits rate was unchanged at 2.3%.  BLS Report

According to the Wall Street Journal, economists at the Federal Reserve Bank of San Francisco claim that recent tax cuts may stimulate the economy less than previously anticipated. The Tax Cuts and Jobs Act was passed when the economy was already running hot, and research suggests that fiscal stimulus can provide a better boost to economic activity when there is more slack in the economy. WSJ

Greg Ip from the Wall Street Journal writes that recently-imposed tariffs will likely hurt exporters even more than importers. U.S. tariffs will decrease demand for foreign goods and services, which will in turn deprive trading partners of money to buy U.S. exports, especially when foreign retaliatory tariffs make U.S. exports more expensive. WSJ

The Wall Street Journal reports that a flattening yield curve has pushed some Fed officials to question whether the Fed should slow its current rate hike schedule to avoid an inverted yield curve – which has historically signaled an imminent recession. Last week, the yield curve fell to its lowest level since 2007, and further narrowing in the yield curve could compel the Fed to raise rates just once more in 2018 rather than the two additional rate hikes currently planned. WSJ