Publications

According to the Financial Times, a new report shows that a U.S. withdrawal from NAFTA would harm U.S. equity markets and GDP growth but would not impact the trade deficit significantly. The report concludes that a withdrawal from NAFTA would reduce U.S. imports from Canada and Mexico, but U.S. exports would suffer a near-equal reduction, thus leaving the overall deficit unchanged. FT

The Wall Street Journal reports that a breakdown in negotiations over the future of the Deferred Action for Childhood Arrivals (“DACA”) program has greatly increased the chances that the government will shut down this Friday when its current funding expires. Congressional aides say that another short-term deal is the most likely outcome if any deal is agreed to, though negotiators are far from a deal at present. WSJ

The Wall Street Journal reports that in a recent survey, the vast majority of economists said that the U.S. is either close to or at full employment. While most economists see the labor market as tight, others point to subdued inflation and muted wage growth as evidence that there is still room for further tightening. WSJ

The Wall Street Journal reports that Canada has filed a complaint with the World Trade Organization (“WTO”) over the Trump administration’s use of tariffs on Canadian lumber producers. While lumber is not being addressed in ongoing NAFTA renegotiations, trade experts say that this complaint, which comes just weeks before the next round of NAFTA talks, could create even more tension among the negotiating parties. WSJ

According to the Wall Street Journal, a new paper by a University of Virginia economist argues that the recent surge in opioid overdose deaths in certain regions of the U.S. is not due to economic decline, but rather to cheap drug prices. The author argues that the correlation between economic decline and increased overdose deaths is spurious and that efforts to improve economic conditions in these areas are unlikely to result in significant drug mortality reductions. WSJ

Eric Morath of The Wall Street Journal writes that U.S. workers are not leaving their jobs — voluntarily or involuntarily — despite the historically tight labor market. Economists usually expect a low unemployment rate and rising worker scarcity to prompt individuals to leave their jobs for higher pay or better opportunities, though that is not occurring at present, as the quits rate is largely unchanged from a year ago. WSJ

According to The Wall Street Journal, a new World Bank report says that the global economy is operating at its full potential, and the large, negative output gap that developed after the recent recession has closed. The report also shows that while the global economy as a whole has closed its output gap, some economies, especially those of commodity exporters, continue to struggle. WSJ

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated there were 5.9 million job openings at the end of November, little changed from October.  Hires edged down to 5.5 million and the quits rate was unchanged at 2.2%.  BLS Report

According to the Wall Street Journal, some Federal Reserve officials have considered whether they should reevaluate the 2% inflation target. These proposals come as policymakers seek to expand the tools they use to combat economic downturns, and some argue a looser inflation target would allow for greater monetary policy flexibility. WSJ

The Wall Street Journal reports that federal energy regulators have ruled against an administration proposal that would help shore up coal-fired and nuclear power plants. The regulators ruled unanimously that the proposal was not necessary to improve the resiliency of the American electrical grid and that it would unfairly limit competition in electrical markets. WSJ