Econbrowser

Jared Bernstein, along with others, calculates the revenues needed to rationalize the AI capital investment in place and planned. Source: Callum Williams via J. Bernstein. As Bernstein recounts, this amount of revenue is unlikely to occur within a time frame financial markets are likely to tolerate (i.e., soon). A BPEA paper by Stijn Van Nieuwerburgh on the subject is here. And has been pointed out, financing for these expenditures has been migrating out to more exotic, less transparent, areas

Speaking at a rally in Nebraska (NYT), regarding the Iranians: “They could take out a city,” he said. “Let them take — Let them take out Los Angeles. Let them take out San Diego.” One could take this as just further random ruminations, but it strikes me that the president has in principle access to the entire output of the US intelligence community (even if he doesn’t seemingly heed the warnings). At a time when counterterrorism resources have been redirected to immigration control, or re

Employment downside surprise, +29K vs +89, with cumulative 81K downward revisions to previous two months. Taking into account early benchmark, it’s not changing the picture too much. Figure 1: NFP employment (bold blue), civilian employment with smoothed population controls (bold orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), and monthly GDP in Ch.2017$ (pink), GDP (blue

Using a plain vanilla term spread model (spread, short rate), what remains? From notes for tomorrow’s lecture. Figure 1: Estimated recession probabilities from probit on 10yr-3mo term spread, short rate over 1960-2018 (brown), over full sample (black). Red dashed line at 33%. NBER defined peak-to-trough recession dates shaded gray. Source: author’s calculations, NBER. Using a 33% threshold and the pre-2018 sample, the term spread catches every post-1960 recession (taking the pandem

Q2 GDP growth revised up 0.7 ppts, path of personal income ex-transfers up due to revised deflator. Here are the key indicators followed by the NBER’s Business Cycle Dating Committee: Figure 1: NFP employment (bold blue), civilian employment with smoothed population controls (bold orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), and monthly GDP in Ch.2017$ (pink), GDP (blue

From EIA: From Bloomberg today: The US ordered another release of oil from emergency reserves — and urged European nations to do likewise — as the Trump administration grapples with fuel prices that are surging less than two months before the midterm elections. The US will offer up to 40 million barrels from the Strategic Petroleum Reserve, according to a statement from the Department of Energy, in what will be the last of the nation’s 172-million-barrel contribution to the coordinated release

From the Gasoline and Diesel Fuel Update: A slight respite, but oil prices have risen again, so probably brief. Costs for trucking: Source: WSJ.

Conference Board index registers 81.9 vs consensus 89.2 (and previous 88.6). It’s currently three standard deviations below mean. Figure 1: U.Michigan Economic Sentiment, using Cummings Tedeschi adjustment (blue), Conference Board Confidence Index (brown), Gallup Confidence (green), all demeaned and divided by standard deviation 2021M01-2025m02. Red dashed line at “Liberation Day”, purple dashed line at US-Iran war. Source: U.Michigan, Gallup, Conference Board, Cummings and Tedeschi (202

As of today’s close: Figure 1: Change since 2/27 in ten year Treasury yields (blue), in ten year TIPS (red), in %. Source: Treasury. Yields all along the spectrum have risen since the start of the US-Iran war.   Figure 2: Treasury yields, %. Source: Treasury.  

Over 5.2%: Part of the reason?   Source: NABE Policy Survey, 28 Sep 26. Who would’a thunk a massive tax cut, open ended war, and slamming the economy with mass deportation, tariffs and uncertainty would result in this outcome?

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version was published in Project Syndicate.    September 28, 2026 — The American political system is broken.  We should ask how it got that way and should hope that the answer could contain a clue as to how it might get back on track. Of course, many factors are at play.   The long list

What did we think was happening back then, compared to what we know now? Figure 1: Nonresidential fixed investment from 2001Q1 advance release (blue), from 2026Q2 2nd release (black), both in logs, 1999Q1=0. NBER defined peak to trough recession dates shaded gray. Source: BEA, NBER. To compare annualized growth rates, in 2000Q1, nonresidential fixed investment was growing 19.1% according to the 2001Q1 advance vintage, but only 14.4% according to the latest vintage. Currently, 2026Q2 2nd releas

Rise in 10 year rates is mostly showing up in real rates, as proxied by TIPS. Figure 1: Change since 2/27/202 6 in ten year Treasury constant maturity yield (blue), on the run yield as of 2:30pm CT (light blue +), TIPS (red), all in %. Source: Treasury, and authors calculations.  

As share of total diesel+heating oil+gasoline consumption volume (a somewhat strange measure to me, but probably gets the idea across), from Nate Silver:

Letter released today: DoD’s Operational, Logistical, and Sustainment Costs. CBO estimates that as of August 1, 2026, the armed conflict with Iran has cost DoD approximately $38 billion. That amount reflects the costs of replacing expended munitions and equipment lost in battle, increased flying hours, other operations, and increased fuel costs. It also reflects that the initial, intense phase of the conflict lasted just over a month (less intense combat operations are still ongoing) and that r

Strangely, 9/14 diesel was not on FRED today, but it was on EIA. [as of 3:30pm CT] Here’s the entire picture. Figure 1: Regular gasoline (blue, left scale), diesel (red, left scale), both $/gallon; petroleum (Brent), $/bbl (black, right scale). Source: EIA. Diesel was $6.285/gallon yesterday.

Today, we’re fortunate to have Willem Thorbecke, Senior Fellow at Japan’s Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of RIETI, or any other institutions the author is affiliated with. Do exchange rates affect exports.  Traditional models assume that they do. The Mundell-Fleming model posits that firms price exports in their own currency. A depreciation of the

From NYMEX:  

The Houthis expand control of the Red Sea side of Yemen, threatening remaining Saudi oil exports — and yet prices fall. Source: Bloomberg. One explanation might be news regarding demand destruction, as reported  by the International Energy Agency. From Bloomberg: The agency said the hit to 2026 oil demand looks set to be on a comparable scale to the four largest shocks of the last 60 years, with the biggest impact falling on middle distillates like diesel, and feedstocks for petrochemi

Core CPI m/m came in at +0.3% vs. +0.2% consensus. Figure 1: Core CPI month-on-month inflation (blue), Bloomberg consensus (light blue square). Source: BLS. CME Fedwatch raised the odds of a 25 bps increase in the Fed funds rate from 72.4% to 86.5% (which is up from a week ago at 59.4%). Source: CME Fedwatch.