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The U.S. trade deficit widened sharply in March from February 2015, increasing by 43.1%, after the ending of a labor dispute at West coast ports. The deficit widened to $51.37 billion. This is more than expected from a strong dollar. This could make 1st quarter GDP figures show a contraction for the U.S. economy. Products imported from China were up 32%, compared with March 2014. Exports were up only 0.9%. Experts estimate GDP contraction of 0.4%- 0.5% for the 1st quarter 2015. In 2014 a similiar situation happened but growth was up for the rest of the year and experts see this happening again in 2015.

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Total household debt in Thailand at $306 billion in the second quarter of 2014, or 80% of GDP, is twice what it was in 2010. A assistant governor of the central bank expects sharp decline in spending rates. Low water level in dams is likely to affect the agricultural economy. The slowdown in China is lowering Thai exports. The result is a sharply slowing economy with growth expected at 1.5% for 2014.

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Ireland and Portugal both have debt to GDP ratios of more than 100%. Still Ireland is better positioned to weather the eurozone crisis. Foreign investment attracted by low taxes and an educated labor force gives Ireland signficant advantages to return to growth. Citigroup forecasts show a 5.5% decline in GDP for Portugal in 2012, and large probabilities that the deficit will overshoot. Ireland expects 0.5% growth in 2012. Ireland's exports are 60% of GDP, compared to 24% for Portugal. Yields on Portuguese bonds due 2020 are at 13%, compared to less than 7% for Ireland. But funding Portugal through the end of 2015 is expected to cost 40 billion euros, according to Capital Economics estimates, or only 0.4% of eurozone GDP, making the problem in Portugal very manageable for the EU.

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This Washington Post analysis of the Republican tax bill gives an exceptional view of the bill's impact and provisions. This is the first major change to the tax laws since 1986. The size of the bill is $1.5 trillion, with the Joint Committe on Taxation projection that the bill will increase tax revenues over a decade by $500 billion, meaning that it will cost $1 trillion being added to the deficit. What the bill does: 1. It offers a permanent tax cut to corporations by reducing the corporate tax rate to 21 percent from 35 percent. Industries benefiting the most are mining, real estate, technology, manufacturing. 2. The individual tax cuts expire in 2025. They are skewed to disproportionately help highest income Americans, much less lower income Americans and much more highest income Americans compared to high income Americans. In this sense it is skewed in a an unusual way to the highest earning Americans- a sort of Trump effect in place. The top 1% get a tax break of $51,140 in 2019, middle income people earning about $100,000 get about $1000 a year in 2019, tax payers earning around $50,000 about $380, and those earning less than $25,000 about $60 a year in 2019. Taxpayers earning about 150,000 get about $2000 a year tax cut. (Tax Policy Center) 3. The basic assumption is that tax cuts are revenue neutral if there is economic growth and most of that growth comes from corporations investing in growth. The problem as Greg Ip points out in the Wall Street Journal is that countries trying thsi approach in the past such as Britain have not seen such growth materialize. Corporate profits are the highest in 15 years as percentage of GDP, according to Vanguard founder Bogle, and are now 20% of GDP compared 11% in 1980. If corporations did not invest with this level of profits how much additional investment is going to happen, ask critics, especially as demand drives growth and wages are not boosted under this plan.  4.  Because the bill's changes to current law makes it likely that 13 million less Americans will be insured over a decade- from fewer people signing up for Medicaid and on exchanges for Affordable Care Act- it will hurt lower income Americans. Skewing at both ends of the income spectrum of this type is rare in American history particularly in the twentieth century after the Depression of the 1930's, and poses risks for social cohesion, making it unpopular with most Americans. A CBS News poll taken Dec 3-5 shows 53% of all Americans opposed, only 35% support the tax bill just passed in Congress.  5. Then why did Republicans do this? Republicans needed a legislative success after failure to repeal the Obama Affordable Care law. This pressure led to passage with Republicans probably aware that this is temporary tax reform requiring a real effort by both parties working together after the midterm elections in 2018 and as the presidential election approaches in 2019.    ...

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The central bank of China, People's Bank of China, cut its benchmark one year deposit rate by 0.25% in Nov 2014 to 2.75%, and reduced the one year lending rate by 0.4% to 5.6%. Banks will be allowed to offer interest rate on deposits of 120% of the benchmark instead of 110% previously. Experts say the effect on GDP is small. The cut helps large firms reduce debt pressures. China is going through a phase of slowing growth.

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Germany's export oriented economy and its export oriented companies are struggling in 2021 with broken supply chains and high energy prices. This report in the WSJ looks at how Germany needs to rebuild its economy in a different way. German industrial output was 9% below its 2015 level in August, compared to 2% for the eurozone as a whole, according to EU's statistics agency. Italy's growth was 5% over the same period. There is a redirection underway to bring more production back home after years of outsourcing and outshoring. Other changes taking place are the policies being put in place for net zero emissions by 2050, and the targets for 2030 that would make this possible. This also changes prospects for Germany's large auto industry. By 2030 30-50% of all cars will have to be electric cars. About 30% of Germany's industrial output and exports are tied to overseas demand, 4 times that in the US. From 2003 when competitive overhauls took place under chancellors including Mr. Schroeder, German industrial growth was sustained by demand from China. Now with China looking to internal demand following global tensions on trade, sales of some companies are looking flat instead of sustained year over year growth. What will happen now? Here is what the likely new chancellor from the Social Democrats has to say about the overhaul of the German economy and industry- "It will be the biggest industrial modernization project that Germany has carried out probably for over 100 years, and it will really help our economy." The SDP and Greens that together share the same ideas for rebuilding Germany around infrastructure and climate change and upward mobility, badly neglected in the Merkel years, plan big investments. Big investments are to be made in climate protection, high speed internet, education, research and infrastructure. Germany's net investment rate has been around 0.5% of economic output since 2000, compared to 1% for Italy and 1.5% for the US, according to the World Bank. This WSJ report even says net public investment has fallen below zero as existing assets depreciate. To achieve this transition Germany has identified several problems. One is the delays in investment projects that cost German companies 55 billion euros a year, about half the money invested in research and development, according to Germany's statistics agency. Germany was thought to be an industrial powerhouse but the quality of work in projects and delays so apparent in the Berlin Brandenburg airport infrastructure project clearly shows a decline over the past two decades. This will need to be fixed. Other problems are in getting more workers as Germany faces a shortage of workers for factories to 2030.     ...

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In this exceptional report of the housing market in Roanoke, Virgina, Neil Irwin talks to builders, home buyers, renters and young people. San Francisco and Washington D.C. are the exception in housing markets- hundreds of America's midsize cities like Roanoke are seeing smaller rates of household formation leading to a decline in demand for single family homes and fewer homes being built. This accounts for a large part of the smaller growth in U.S. GDP. There are he points out about 2.3 million missing households as a result of a significant change in home buying patterns that is reducing demand for new construction of single family homes. During the period 2001-2006, before the 2008 global financial crisis, the rate of new U.S. household formation was about 1.35 million annually. This dropped to 569,000 in 2007-2013, as the effects of the crisis were felt in a deep recession. One result is more young people are postponing buying a house and living with their parents. Faced with large student debt- the total U.S. student debt passed $1 trillion for the first time recently- purchases of homes are becoming more dfficult. Of 18-34 year olds 27% lived with their parents before 2006, according to Labor Department data. This went up to 31% following the recession. Lack of good jobs is another factor. In 2014 March only 63% of 18-24 year olds had jobs. Even young people older than 24 with jobs felt it necessary to save money by living with their parents. More retirees too are moving into apartments....

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Greece shows the first sign of returning to positive economic growth after years of decline leading to a drop in GDP of about 25% since 2008. The Greek economy contracted by 2.6% in the 4th quarter of 2013 compared to the 3rd quarter, according to Hellenic Statistical Authority. For 2013 the economy contraced by 3.7% instead of an estimated 4%. Growth is expected to be flat in 2014 or growth of 0.6%. For the first time manufacturing and retail sales are showing signs of growing and new car registrations increased in Jan. 2014. Finance ministry data show Greece's budget with a surplus of 691 million euros in 2013, compared with a deficit of 3.46 billion euros in 2012, before debt payments. The figure is higher at 812 million euros when money from the EU coming in for public works is added. Unemployment remains high at 28%.

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Experts compare the performance of two states with thriving economies California and Texas, but run by governors who are different, one passionately liberal Democrat and the other passionately conservative Republican. The Texas economy is slowing following the drop in oil prices. The Dallas Fed has lowered the forecast for growth in Texas to 0.5%-1% from the 1.5% rate projection. This compares with a growth rate of 3.4% in 2014. During the economic downturn following the financial crisis of 2008, Texas was lucky to have laws that prevented the kind of housing bubble that happened in California. It also benefitted from high oil prices. California has recovered from the worst effects of the crisis with unemployment dropping from 12% in 2011 to 6.3% in 2015, and half million jobs added in the last 12 months. Many of the jobs are in the higher paying tech sector. Critics point to the weakness in education and lower paying jobs in Texas. Texas has diversified ite economy since the 1980's, with about 13% of the state's GDP from the oil and gas industry in 2015 compared to 19% in the earler period. ...

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Argentina's government of president Alberto Fernandes is making a state takeover of Vicentin, a soyabean exporter which filed for bankruptcy in 2019 and is in ongoing court proceedings. Mr. Fernandes says he is doing this to rescue the century old agricultural firm to protect Vicentin workers, and 2600 farmers who sell crops to the company. Vicentin is Argentina's top exporter of soy meal and soy cooking oil. Mr. Fernandez says the company is a very important asset for the entire Argentine economy. Argentina's farm exports are its main source of earnings in dollars.  A drought in Argentina's farm sector in April 2018 led to a drop in export revenues and worsened Argentina's financial position leading to the 2020 default on Argentine debt. In 2018 the farm sector lost a third of its crop value and 1.5% of GDP. Growth in 2017 was 3% but declined to 1% in 2018. A number of other factors including overborrowing using dollar denominated debt led to the economic crisis in 2020 right in the middle of the pandemic in May 2020. Fernandez is a moderate compared to the previous Kirchner administrations and was elected in 2019 to get Argentina out of the debt crisis after confidence in president Mauricio Macri declined. Fernandez has tackled the coronavirus crisis with an early lockdown compared to neighboring Brazil which has not taken decisive action making Brazil the second largest after the U.S. in cases. This gives Argentina some room to tackle the debt crisis and negotiations with the IMF, lenders. ...

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Germany's growth rate for GDP in 2016 was 1.9% compared to 2015. This is the highest growth rate in half a decade, and better than 2015 when the growth in GDP was 1.7%. Fiscal surplus was 0.6% of GDP in 2016. Germany's Economics and Technology Ministry says the economy is improving because of the positive labor situation, rising incomes and consumer spending. Real estate boom is also helping growth, and also the state spending including on refugees accomodation. Exports have surged and the economy has recovered from the Brexit effect. Exports surged to 1.1 trillion euros in 11 months of 2016.

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Boudreaux and Bjork of the WSJ interview Mariano Rajoy, prime minister of Spain, in September 2013. Rajoy says he used to look at an app on the iPad hourly for changes in Spain's borrowing rates at the height of the banking crisis and found it a bit stressful. He hopes the current improvements in the economy will not stall the progress towards a closer union and setting up the financial architecture for the euro which puts the financial strength of the EU countries behind EU banks. Rajoy would like to see a banking union. He sees Spain's banking system not needing a bailout in 2014 and the changes having improved transparency, and capitalization of Spain's banking system. Other signs of improvement are increase in exports, a historic high in tourism revenues as a record is being set for the number of tourists visiting Spain in 2014, lower labor costs, and a current account deficit that reached 10% of GDP now in surplus.The 3rd quarter of 2013 brought an increase of 0.1% to 0.2% increase in GDP. If maintained this represents an annualized growth of 0.4% to 0.8% in GDP. GDP has declined 7.5% in the last 3 years. Rajoy expects GDP to go up 0.5% to 1% in 2014 and jobs being created but the progress only gradual. The government will consider further improvements for a flexible labor market. Increases in pension payments will not automatically be indexed to inflation for Spain's 9 million pensioners in 2014 as part of expected changes. Electricity rates will also not be indexed to inflation. Rajoy's main worry now is that there is a shortage of credit to increase household spending and the dire need for job creation....

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The Bank of Japan's Governor Haruhiko Kuroda announces a massive monetary stimulus in November 2014, with a 33% increase in asset purchases, including government bonds and also stocks and real estate funds. The move was intended to get the maximum possible impact with the Nikkei Averages up 5% and boosting global stock markets. It is designed to make an affort to achieve the target of 2% inflation in 2 years announced earlier by Governor Kuroda. Slowing consumer spending with the increase in the sales tax to 8% was expected to lower growth in GDP for fiscal 2014 ending in March to 0.5%. At the same time inflation which had reached 1.5% was decelerating to the 1% level in September 2014. Faced with this problem and confidence levels in Abenomics dropping below 50% in polls, the BOJ and the Welfare Ministry acted jointly to support the economy. BOJ move is supported by a shift in the portfolio of the Government Pension Investment Fund, which will reduce purchases of government bonds and shift to higher investment in Japanese and foreign stock markets. The Welfare Ministry said it would increase its share of assets in the $1.2 trillion Government Pension Investment Fund for Japanese and foreign stocks each by 10 percentage points. Kuroda has insisted he will act strongly to fight Japan's "deflationary mindset." The vote to take the action was 5 to 4....

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The slowing growth in China is reducing growth and depreciating the currencies of iron ore producing countries Brazil and Australia. China makes 50% of the world's steel and imports 1.2 billion tons of iron ore traded annually. Australia exports 80% of its iron ore to China valued at $67 billion in 2013. Brazil sends 50% of production to China. For the first time in 15 years China's steel use declined 0.3% to 500 million tons in the Jan-Aug. 2014 period. The mining companies have invested heavily in ports and railroads for expanded production. BHP CEO Mackenzie says the strategy is to maximize production because reducing production increases costs on a unit basis. The result is a decline in price from $135 a ton at the beginning of 2014 to $69.80 on Nov. 28, 2014. Prices could decline to the $50 range in 2015, according to Citigroup analysts, because of an estimated iron ore surplus of 300 million tons by 2018. As China expands recycling of older cars and washing machines to produce steel this will reduce future iron ore demand in China. JP Morgan forecast for Australia reduces GDP growth to 2.8% from 3.3% for 2015, and Brazil reduced its forecast for 2015 to 0.9% from 1.8%....

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Estimates of the contraction of the Iranian economy in 2012-2013 show GDP declines for 2012 and 2013. The IMF estimate of the economic contraction for fiscal year ending March 2013 was 6%. Former president Ahmadinejad's policies led to hyper inflation, a sharp depreciation of the currency rial, similiar to the situation in Venezuela under Chavez and Maduro. To get a sense of the the scale of the damage to the Iranian economy- a decline of 39% in vehicle production in 2012 with the lack of essental parts and decline in demand, oil production declining to about 700,000 barrels at one point in 2013 from over 2 million barrels in the period before 2012. This was a result of lack of access to needed technology and parts as sanctions began to take a toll, and because of the decline in exports from the enforcing of sanctions by 2013. By June 2014 the newly elected leader Rouhani had made economic recovery the to priority- inflation had been cut in half and the rial currency had recovered from the lows in 2012-2013, and oil production increased to 1.2 million barrels. The IMF forecast is for GDP growth of 2.35% for 2015. The auto maker Khodro Industrial Group is keen on increasing production and partnering again with Renault, which left the country with the sanctions. Iran's oil producing company estimate is that about 700,000 increase in production could be achieved quickly with the lifting of sanctions for oil technology and parts. Rouhani has put together a large group of business leaders inside Iran and overseas to improve Iran's image with investors and attract foreign investment....

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ECB president Draghi reiterated the ECB's committment for 2015 to support the eurozone economy to bring inflation to the 2.0% level. For the eurozone annualized inflation declined to 0.4% in Oct. 2014, and growth in GDP declined to 0.6% annualized rate in the 3rd quarter 2014. Financial markets responded favorably to Draghi's comments before the European parliament: "We need to remain alert to possible downside risks to our outlook on inflation, in particular against the backdrop of a weakening growth momentum and continued subdued monetary and credit dynamics." He added: " If necessary to further address risks of too prolonged a period of low inflation, the governing council is unanimous in its committment to using additional unconventional instruments within its mandate." To skeptics citing the low growth issues, Draghi said the monetary policy of the ECB has been "extraordinarily successful," pointing to the low bond yields for Spain, Italy and France. He emphasized "we need time for this monetary stimulus to go and carve its way through the economy."...

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Obe and Pfanner provide insights into the business sentiment about Abenomics in Toyota City, by interviewing Kawahara, owner of a kimono shop, Okuda of auto parts supplier Okuda Industry Co., Arai, president of Hotel Toyota Castle. Sentiment for Abenomics is not strong here after two quarters of economic contraction in 2014, and business sees problems such as higher import costs of imported energy with a weaker yen. Yet business people say there are no alternatives and the opposition DPJ has less to offer for renewing growth. Sentiment is shifting towards support for the LDP in Toyota City. Unemployment has dropped to 2.4% here in Toyota City with the huge improvement in global sales and profits of Toyota Motor. Nationally an Asahi newspaper poll shows the LDP taking 300 of 475 parliamentary seats in the snap election of Dec. 2014.

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The government of president Hollande in France added about 7 billion euros of new taxes after May 2012, and an additional 20 billion euros in the 2013 budget. Spending cuts totaled about half the tax increases. France's taxes are the highest of the major EU countries and there is concern that this may hinder the economic recovery. French businesses are cutting back on capital spending. Insee survey for April 2013 showed French manufacturing businesses planning cuts in investment of 4% for 2013. The government says spending cuts go up in 2014 to about two thirds of the deficit reduction and tax increases about 6 billion euros. France's statistics agency Insee says economic growth was 0.5% in the second quarter of 2013 compared to the prior quarter. The recovery was supported by consumer spending, with private capital investment lagging behind. This is about 1.9% growth in GDP on an annualized basis, according to J.P. Morgan.

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Northwestern University's Robert Gordon sees growth in the US economy dropping from 1.93 %- that it achieved in the period 1972-2007- to 1.5% from 2007 to 2027. At that rate of growth GDP per capita would increase by 35% in the next twenty years, compared to the 62% increase in the previous period. He says better educated workers would be needed to increase the growth rate. And he discounts the impact of the internet revolution as it has no magic quality, and he describes the present transformation technologically as a mere shift to smaller devices that is not changing productivity. He does not see another technological revolution like the internet boom. The coming retirement of baby boomers increases the number of retired people that wage earners would have to support, and there is no evidence of education levels increasing for the remaining workers. What this means is that it will be more difficult to fix large problems from carbon emission, energy to infrastructure improvement. Gordon arrived at these numbers by combining research on educational attainment, technological change, and workforce demographics for the USA, and running this data through models. Gordon has examined data going back to 1891 for the USA. This shows that the next twenty years will be the slowest growth in the nation's history, since George Washington assumed the Presidency....

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Both sides harden positions before the June 30th deadline for 1.5 billion euro repayment of debt to the IMF. Greece's prime minister Tsipras accuses the IMF of "criminal responsibility" for the pain of austerity programs in Greece. Eurozone leaders says Greece's default on its debt and exit from the eurozone is a possibility. The Economist points out that a Greek default and Greece's exit from the eurozone would be a mistake. It points out that this means repudiating debts of 317 billion euros, or about 180% of GDP. Yet the repayment is at low interest rates spread out over decades. Until the early 2020's interest rates are about 3% of GDP a year. In theory a devaluation would help exports, but Greece with its small trading position, may not see much benefit. The drop in nominal wages by 16% has not led to a surge in exports. The cost in terms of broken banks, sharp decline in savings, and collapse of confidence could be disastrous. The very people Syriza is trying to protect the poor and elderly, would be hit hardest, as the collapse in the currency would lead to a shift to a barter economy as in Argentina during its default crisis. For the European Union, the problem would not go away, as it would have to deal with a bigger problem of a failed state on the Aegean on the EU's southern flank. Syriza's gamble that this can be used to extract concessions by holding off till the last minute is failing, because it is leading Greece back to contraction after the small growth in 2014 under prime minister Samaras- with capital flight from the banks and investors leaving in a general fall in confidence. The management of the economy and negotiations by Syriza is now seen as incompetent and has jeopardized any difficult progress made....

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The Labor Department reports that the U.S. added 255,000 jobs in July 2016.Unemployment remained steady at 4.9%. Of the jobs added, 70,000 were in business and professional services, 43,000 in health care, 38,000 in government mostly in local education, 18,000 in financial services. Yet growth remains slow at 1.2%. Businesses are willing to hire new employees, but reluctant to make new investments in the prevailing uncertainty. Wage growth for average hourly earnings was about 2.6% for the year. Improvements in the jobs picture is likely to influence the U.S. presidential election.

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Voters overwhelmingly oppose the tax increase in 2015 taking the consumption tax from 8% to 10%. The Abe government plans to postpone the tax increase and call snap elections in December 2014. Two thirds of people surveyed said they did not see why new elections are needed. For prime minister Abe this is an effort to win a vote now rather than later when the opposition is weak. In 2012 elections Abe won 295 of 480 seats in the lower house of parliament. LDP party officials say even if this dropped by 20-30 seats it would be a win for Abe reaffirming that his economic policies are taking Japan in the right direction towards growth, and extending the length of his mandate. They point to growth in tourism, and the addition of 1 million new jobs. Further action to stimulate the economy would reduce unemployment further and end Japan's deflationary tendencies.