Analysts say China’s economy is producing less than it could if labor and capital were fully employed. To close this gap in 2026, China’s economy would need to grow by more than 5.3 percent.—economist.com China’s Real GDP According to the National Bureau of Statistics of China, the country’s annual real GDP reached approximately 140 trillion … Continue reading China’s Output Gap
Category: Economics in the News-Macro
Federal Reserve Nominee Backs Reduction in Balance Sheet Size
The Federal Reserve nominee, Kevin Warsh, supports reducing the size of the Federal Reserve’s balance sheet. President Trump prefers lower interest rates to reduce the government’s cost of borrowing.—ft.com
Japanese Government Bond Purchases by the Bank of Japan
To end deflation, the Bank of Japan has for years been buying Japanese government bonds. As a result, after many years at zero or below, annual inflation has spent much of the past year above 3 percent. These bond purchases have also kept yields low and reduced the government’s cost of borrowing.—economist.com
Vietnam’s Infrastructure Push to Drive Economic Growth
Vietnam’s President Lam has launched large-scale infrastructure megaprojects to achieve a high rate of economic growth. These projects include a large stadium, major road construction along the Red River, and a motorway linking Vietnam to Cambodia. Older projects, such as a new international airport, are near completion.— economist.com
Chip Makers and the Prices of Consumer Electronics
SK Hynix, Samsung, and Micron, the top three makers of memory chips used in smartphones and PCs (called DRAM), have switched from producing DRAM to producing the more profitable chips used in data centers (called HBM). Prices of DRAM have risen sharply. Adding new capacity to produce DRAM will take about two years.—economist.com
Decrease in Business Inventories Slow Investment Growth
Investment growth slowed sharply in the third quarter in several high-income technology exporters and ASEAN economies due to weaker external demand. The downturn was largely driven by falling business inventories.—Asian Development Outlook
Cheaper Walmart Thanksgiving Meal
Walmart’s Thanksgiving meal contains 15 products, six fewer than 2024’s. Items like pecan pie and sweet potato are out, and quantities have decreased—for example, one can of cream of mushroom soup versus two last years. Walmart store brands replace a large proportion of name brands. The meal is 25% cheaper.—cnn.com
The Fed and the ECB Expected to Head in Opposite Directions
Investors have increased bets that interest rates in the Eurozone could rise next year even as the U.S. continues to lower borrowing costs, weakening the dollar. The hawkish shift has raised bond yields in Europe.—ft.com
Tourism in Thailand and the Strengthening Baht
Following the appreciation of baht by 4.5% so far this year, the Tourism Authority of Thailand projects that foreign tourist arrivals will decrease by around 6% this year.—nationalthailand.com
Women are Leaving the Workforce at Alarming Rates
Rising childcare costs and overwhelming work demands have forced many women, including executives, to leave their jobs to focus on family and self-care—a trend that risks stifling U.S. economic growth. An estimated 455,000 women left the workforce between January and August this year.—cnn.com