MA’s Joel Prakken was quoted in the article, “Border tax debate pits theory against the real world” by David Nicklaus of the St. Louis Post-Dispatch (excerpts shown below). Businesses are scrambling to understand the border tax. Joel Prakken, senior managing director at Macroeconomic Advisers in Clayton, said clients had more questions about it than any other proposed policy change. “Very few people in the real world believe” the theory that the tax won’t affect imports or exports, Prakken said. “Currency traders don’t believe it, and businesses don’t believe it.” (click her for article)
Monthly GDP was essentially flat in December on the heels of a sharp, 1.0% increase in November. The December reading reflected positive contributions from domestic final sales (PCE and nonresidential fixed investment) and net exports that were essentially offset by a decline in nonfarm inventory investment from an unsustainable level in November. The level of GDP in December was 1.4% above the fourth quarter average at an annual rate. Implicit in our latest GDP tracking is a small decline in GDP in January followed by increases over February and March that average 0.2% per month (not annualized). Click here for more information on MA’s Monthly GDP measure.