Publications

Josh Zumbrun of the Wall Street Journal writes that the recent weakness of the U.S. dollar may be the stimulus that the American economy needs to break out from persistently slow growth. The dollar, which has lost roughly 8% of its value since the beginning of the year, will likely provide a boost to exports and manufacturing output in the United States. WSJ

The Washington Post reports that the Trump administration will launch an investigation into Chinese intellectual property violations that could result in harsh trade penalties. While many U.S. businesses assert that Chinese companies steal intellectual property or employ unfair technology-sharing agreements, some believe this investigation could be a move to force China to take a tougher stance against North Korea. WaPo

Former Treasury Secretary Lawrence Summers argues that the next chairperson of the Federal Reserve will face a number of economic, financial, and political challenges. Summers states that in the event of a recession, still-low interest rates will leave little room for rate cuts, meaning monetary policy will offer limited stimulus. FT

Robert J. Samuelson of the Washington Post contends that despite continued innovation and technological development, U.S. economic growth has been subdued because older, more mature firms are struggling to increase profitability. Samuelson argues that as profits have become concentrated in an ever-smaller group of firms, investment has lagged and dynamism has fallen, holding back economic growth. WaPo

According to the Wall Street Journal’s monthly survey of forecasters, economists see a 22% chance that the U.S. government will shut down at the end of September. Economists also see a 17% chance that the Treasury will, at least temporarily, halt Social Security or government payroll payments to manage funding concerns. WSJ

Laura Saunders of the Wall Street Journal reports that the number of Americans penalized for underpaying estimated taxes rose nearly 40% between 2010 and 2015. Puzzling many experts, the average estimated-tax penalty over the same period has decreased, falling from about $210 to $130 over the five-year period. WSJ

The Wall Street Journal reports that most surveyed economists expect the Federal Reserve to begin unwinding its balance sheet at its next meeting in September, and to raise interest rates again in December. Although economists expect a rate hike in December, financial markets imply a less than 50% chance that the Fed will increase interest rates then. WSJ

According to the Wall Street Journal, wells in Texas’ Permian Basin are producing more gas and natural gas liquids than expected. Companies operating in the area have begun to worry that oil production may be tapering off due to the elevated levels of gas output, though some investors say oil volumes have shown no signs of declining so the gas is purely additive. WSJ

Landon Thomas Jr. of the New York Times writes that despite the near-record calm in financial markets, there are signs that investors are becoming more cautious. Thomas points to strong gains in the price of gold this year as geopolitical tensions have escalated around the globe, driving some investors away from equities. NYT

The Wall Street Journal reports that U.S. department stores observed continued declines in sales in the second quarter, though at a slower pace than expected. While some major U.S. department stores have invested in e-commerce to combat lower foot traffic, the initiatives have not been enough to counter falling demand. WSJ

The Wall Street Journal reports that the U.S. labor department issued over 160,000 temporary work visas in the first nine months of fiscal year 2017, up 20% from the same period a year before. As labor markets have tightened and crackdowns on illegal immigration have escalated, industries such as landscaping and agriculture have seen significant upticks in legal, temporary workers. WSJ
 
Greg Ip of the Wall Street Journal writes that technological innovation that makes goods and services cheaper will heighten demand for those products, likely increasing jobs on net. Ip argues that while employment in some industries will suffer as a result of new technology like artificial intelligence, employment in other industries will benefit from new-found demand. WSJ

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely watched measure of labor market health, indicated there were 6.2 million job openings at the end of June, the highest reading since the series began in 2000.  Hires edged down to 5.4 million and the quits rate was little changed at 2.1%.  BLS Report
 
According to the Wall Street Journal, many so-called “gig economy” firms are struggling to attract workers in the face of multi-decade low unemployment and competition for scarce labor. Workers are reportedly leaving part-time jobs in the gig economy for full-time jobs that offer more constant and better pay, driving gig economy firms to expand benefits. WSJ
 
The Wall Street Journal reports that despite a darkening outlook for the brick-and-mortar retail industry, the top mall operators in the U.S. are reporting surprisingly strong financial results. Mall operators are focusing on filling empty retail space with restaurants and entertainment options to generate more foot traffic as consumers increasingly seek diverse retail experiences. WSJ
 
According to the Organization for Economic Cooperation and Development (“OECD”), the U.S. is heading towards steady economic growth, albeit at a slower pace than in the past. An unexpected acceleration in eurozone growth and solid expansion in China have driven a rebound in global trade flows, supporting stronger global growth in 2017. WSJ