The US economy functions differently in the information economy than it did in the industrial economy of prior generations. Jobs are different, money is made and concentrated differently, and social and policy dynamics are different. In many cases, the old ways of doing things are no longer valid. 

We have been looking at the relationship between labor productivity, wages, and unemployment - which has also changed. However, we noticed that the US has been using a model developed in the 1960s with 1940s data to predict unemployment which may not work anymore. Check out our analysis here.

Change abounds, as evidenced by data - economic nationalism in Germany, new trade statistics, melting glaciers, a US economic overview, and more.


New Blog Post:

Evaluating U.S. Unemployment Data 

An equation called “Okun’s Law”, which explains the relationship between rates of unemployment and GDP growth has held true for all U.S. economic downturns and recoveries since 1948. However, we discovered a major discrepancy for the recovery period after the Great Recession of 2008 where Okun’s Law fails to explain the drop in unemployment as reported by the U.S. government. This means the U.S. labor market might not be as strong as numbers suggest. Considering central banks use Okun to help determine monetary policy, this discrepancy could have major consequences.

Here’s a look at the current US labor market from Okun’s perspective, derived from our independent research.

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Data Brief - US Economy

The United States significantly influences the global economic situation by virtue of being the biggest economy in the world. The US economy is comprehensively covered by data and statistics from multiple government and private sources. We selected the most significant and up-to-date coverage and presented it in this data brief.​


Will US Sanctions Move the
Political Needle in Venezuela?

On January 28, 2019, the US announced the imposition of sanctions against Venezuela's state-owned oil company, PDVSA. This is a move to restrict socialist President Nicolas Maduro's flow of oil revenues and strengthen the hand of the opposition led by Juan Guaidó. The ultimate goals is to trigger new elections in Venezuela. The sanctions against PDVSA and other government companies are expected to come into force in April. Under the sanctions, companies can continue transactions, but all payments must be held in a "blocked account" that cannot be accessed by Maduro.

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Insights Around the Web

A draft of Germany’s new industrial strategy prioritizes domestic “industrial and technological sovereignty,” which signifies a shift away from Eurocentrism and globalism. Bloomberg

The US is more divided on national priorities than at any point in the past 20 years. They are shifting from differing views on the same issues to differing views on what the most important issues even are. Pew Research Center

Himalayan glaciers could melt by 2100 if global warming continues. Such a catastrophic melt would disrupt the flow of Asian rivers, which are a crucial resource for water and crops for billions of people in China, India, and six other countries. ICIMOD

Asian countries are likely to suffer most from protectionism if US and China fail to make progress on a trade deal by 1 March. UNCTAD

Digitalization of the economy creates new challenges for taxation and regulation. A recent OECD paper suggests an effective minimum tax on digital companies globally to prevent multinational companies from artificially shifting profits to no tax or very low tax locations. OECD 

New Data In Knoema
This dataset covers a broad range of development indicators with long historical time series. It focuses on Millennium Development Goals (MDGs) with more than 1000 indicators on demography, environment, government finance, national accounts, balance of payments, trade, financial statistics, exchange rates, and prices. Moreover, the dataset has been compiled in such a way that it allows cross country comparison and covers all major regions. The dataset ranges from 1960 to 2018.
This dataset presents current figures on the value of merchandise exports and imports disaggregated according to a country's primary trading partners. The integration of economies through trade has been one of the most important developments of the last century and has led to remarkable growth in trade among countries over the last century. At a time of geopolitical flux, the importance of trade relationships has become more significant. The dataset will help you understand trade relationships between countries and the impact of the trade war between the U.S. and China on trade direction. The dataset ranges from 1948 to 2018.
This index is a GDP-weighted average of national EPU indices for 20 countries. The index tracks uncertainty related to economic and political developments, with respect to both near term events such as uncertainty about the U.K. referendum vote for Brexit and the US/China trade war and long term concerns such as tension between North Korea and South Korea. The dataset will help you understand positive and negative economic and political developments around the world. The dataset ranges from 1976 to 2019.

Bret Boyd
CEO, Knoema

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