About that trade deficit report

Not sure anyone would want to be the White House messenger who had to tell the boss that the US set a trade deficit record in 2018.  The general public probably found this news surprising, given the multiple-front tariff wars going on.

Economists did not find the record deficit to be surprising at all.  The US economy has been growing more rapidly, meaning everyone has greater spending capacity.  Some of that spending is going to be for imports.

At the same time, Europe and China are slowing down, putting a damper on exports.  Put the two together and, voila, fewer exports + more imports = larger trade deficit.

Economic aspects of daylight savings time

Ready to spring forward tonight at 2 a.m.?  Today's WP reports that Congress is considering a bill called the Sunshine Protection Act that would have us observe daylight savings time for the entire year.  Supporters of the bill cite public health studies showing spikes in depression, heart attacks and sleep disorders immediately following time changes.

Economic research also is influencing the debate.  A 2015 study found that crime decreased in the spring with later sunsets (and was not offset by more crime in the morning).  Another study found that there were no energy savings resulting from daylight savings time in the summer.  Daylight savings time reduces demand for lighting, but these savings have dissipated as lights have become more energy efficient.  Also, workers come home earlier than they would have under standard time and run the air conditioning more.

I am not sure how the politics on daylight savings sort out; to my knowledge no one has yet asked Alexandria Ocasio-Cortez her opinion.

Which employment number should we believe?

Today's headline story: payroll employment increased by only 20,000 in February.  Some in the financial press have taken this as a sign that the recovery is slowing down.  Others say the numbers are off because of the recovery from the federal shutdown.

The feds track employment with two different series and they do not always tell the same story, as this WSJ piece from yesterday explains.  It turns out that the household survey of employment showed a gain of 255,000 jobs in February and a drop in the unemployment rate from 4.0 to 3.8 percent.  The household survey has been showing slower employment growth than the payroll survey over the last six months but it now appears to be catching up.

The Fed could start raising interest rates sooner if the employment numbers grow at 300k per month. Today's report indicates that the Fed will keep its powder dry for a little bit longer.