Jobless Claims at Five-Decade Low

By Matt Stiles | | Topics: Economy & Finance

The number of Americans filing claims for unemployment benefits hasn’t been this low since Richard Nixon was president, according to new data from the U.S. Labor Department.

The figures suggest a tight labor market in which employers are retaining employees because there aren’t as many available qualified workers, Bloomberg reported:

Overall, the employment picture remains solid, with payrolls continuing to increase and the unemployment rate at the lowest since late 2000. Job growth will help sustain consumer spending, the biggest part of the economy.

Here’s a remix of Bloomberg’s chart, which game me an excuse to finally deploy something with “swoopy” annotation (thanks, Adam!):

Image courtesy @bytemarks via Creative Commons.

How China’s Economic Retaliation Hurt the South Korean Tourism Industry

By Matt Stiles | | Topics: Economy & Finance, Social Media

I wrote this week about the one-year anniversary of China’s economic retaliation against South Korea over the THAAD missile system, a defensive weapon designed to stop North Korea’s medium-range missiles.

China objects to it and has been flexing its economic muscle in protest, carrying out an aggressive campaign of economic retaliation that includes sending fewer tourists. In 2017, just over 4 million Chinese visited South Korea, down from roughly 8 million a year earlier after several years of steady growth.

These charts show the effect on the South Korean tourism industry, which has grown to depend heavily on China. This first example helps show China’s increasing share among all tourists who visit South Korea. In 2016, for example, nearly half of all visitors were Chinese — way up from a decade ago:

This chart reflects the annual total visitors by Chinese since 2000. Until last year, annual growth had average nearly 30%, even with the 2015 MERS outbreak in South Korea, which caused hundreds of thousands — likely millions — of Chinese to stay away. You can see how the figure dropped dramatically in 2017:

And, finally, we look at the monthly data, which spikes during peak summer months. The effect of MERS is again evident, as is the significant drop in tourists after the Chinese implemented travel restrictions last March:

Visualizing the Historical Relationship Between White, Black Unemployment Rates

By Matt Stiles | | Topics: Economy & Finance

President Trump was right last month when he bragged that black unemployment rate was at a historical low. The rate in December was 6.8 percent, the lowest it’s been since 1972 (though it ticked back up nearly a percentage point last month).

But the president’s statement excluded some important context about the historic movement of this rate by race and ethnicity. I’ve tried to explain in these graphics.

First, here are four rates — all groups, black, Hispanic and white — since Ronald Reagan was in office. The early 1980s, as you can see, were pretty rough. Things have gotten better, both in terms of the rate during recessions and recoveries, and all groups have improved together as a pattern since the Great Recession:

Whether you believe a president can have any short-term effect on unemployment or not, a key point is that these rates rise and fall together. They are quite strongly correlated. In about 90 percent of the months since 1980, for example, a relationship existed between movement in the white and black rates. This correlation is slightly less strong under Democratic presidents, for whatever reason:

Even though the black rate is relatively low today, it has historically been about 2-2.5 times higher than the white rate.

Image courtesy Wikimedia/U.S. National Archives and Records Administration.

Visualizing Income Equality in Major World Economies

By Matt Stiles | | Topics: Demographics, Economy & Finance, South Korea

Years after a global crisis, the world’s largest economies are again growing, The New York Times reported over the weekend.

Every major economy on earth is expanding at once, a synchronous wave of growth that is creating jobs, lifting fortunes and tempering fears of popular discontent.

A tweet on the subject prompted a friend to respond with a question about whether income inequality has grown — and that in turn prompted a quick exploration of data provided by the World Bank.

One of its many indicators is the GINI index, which measures income distribution by country and creates a score. A 0 score means absolute equality, and 100 represents absolute inequality.

These data, based on country-by-country surveys, are imperfect and incomplete, with most countries missing several years of data. The United States, for example, had only five annual estimates in the last two decades. South Korea, where I live now, had only four. Strangely, a few smaller countries had more complete data. Honduras had all but one year, for example.

Given these limits, I focused on the top-25 economies, some of which were missing scores. In these cases, I carried over the most-recent data to maintain a consistent, if imprecise, trend line.

The data are interesting in some cases. Here are the countries, listed in order of their gross national product rankings:

The Curious Case of South Korea’s Vanishing Washing Machine Exports

By Matt Stiles | | Topics: Economy & Finance, South Korea

The Trump administration last week announced that it planned to impose higher fees, known as tariffs, to countries that export washing machines and solar panels the United States.

The tariffs, prompted by complaints from American companies who feel disadvantaged by global trade, were applied across the world — even though they seem primarily aimed at two nations who dominate the market: China and South Korea.

That’s in part because both countries have moved their manufacturing around to avoid such duties. In South Korea’s case, the change in strategy by companies like LG and Samsung seems remarkably obvious in trade data — on washing machines, in particular.

A bit of background: The U.S. Census Bureau keeps detailed data on specific product exports, by country, to the United States. The data reflect the total export value by year and national origin — where the ships came from, essentially — not by companies’ home countries. So Samsung products made in China and exported from China look like Chinese exports.

This graphic shows one possible scenario for how the strategy played out. Washing machine exports from South Korea to the United States dropped dramatically, for example, after a complaint filed in late 2011 by Whirlpool, an American manufacturer. A year later, exports from China increased significantly (and have since fallen, perhaps reflecting other shifts in manufacturing locations, such as Southeast Asia, Mexico and/or the United States itself).

The Times’ story noted the South Korean companies’ concerns:

Samsung and LG described Whirlpool’s case as a protectionist grab designed to shut out products that American consumers find more attractive, and argued that such restrictions on their products would hurt consumers by raising prices.

The export change appears to be because South Korean washing machine companies moved their operations to China during 2013 — and later the the United States — perhaps in an effort to avoid the complaints or looming tariffs. Or because the change was good business for the companies.

Anyway, the data seems pretty obvious:

America Imports Lots of Stuff from China, Including Christmas Decorations

By Matt Stiles | | Topics: Economy & Finance

Last year, the United States imported more than $460 billion in goods — clothes, toys, gadgets, you name it — from China. Of course, our Christmas decorations were on that list, too.

Some $2.2 billion in fake trees, miniature lights and assorted ornaments came from the Middle Kingdom last year, according to the U.S. Census Bureau’s detailed trade database.

The Christmas trade in ornaments is big business. It skyrocketed in the mid-1990s (like all products from China) and dipped during the recession (like all products from China).

Here’s a simple chart:

Merry Christmas. 圣诞节快乐.

Visualizing South Korea’s Assailed Trade Relationship With The U.S.

By Matt Stiles | | Topics: Economy & Finance, Policy & Politics, South Korea

President Trump isn’t happy with the United States’ bilateral trade agreement with South Korea.

His main concern, it seems, is that the United States has suffered a “trade deficit”. That means South Korea — a key ally in East Asia on security issues, not just trade — has been exporting more goods to the United States than it has been importing.

In 2016, this deficit was about $23.2 billion.

That’s a big figure, but the United States has a big economy. In context, it’s not much.

Before we get to why that matters, here’s a look South Korea’s trade balances with the world’s largest economies last year. It had surpluses with China ($37.5 billion), its main export customer, Hong Kong ($31.2 billion) and the United States ($23.2 billion), among others.

It had trade deficits of its own with some economically powerful countries, by the way, most significantly Japan (-$21.3 billion), Germany (-12.4 billion) and Saudi Arabia (-$10 billion). Take a look:

It’s important to note that trade balances sometimes vary based on the products each country sells and each country’s relative slice of the global economy, not necessarily trade agreements in their early stages. (China is an exporting powerhouse that sells mass quantities of cheap goods to almost everyone. Saudi Arabia, on the other hand, sells pricey oil. The nature of that trade is already imbalanced).

It’s also critical to think about each country’s balance in the context of its overall trade with South Korea.

The United States has that $23 billion deficit, as Trump and others in the United States have noted recently. It imports about $66.4 billion from South Korea and exports about $43.2 billion. A key departure point is automobiles. (You don’t see many American cars on the roads here in Seoul, where I live). Regardless of why, the deficit represented about 21 percent of the overall trade in 2016.

That’s a significant (and growing) figure, but how does it compare relative to other countries?

When normalized, Egypt, Hong Kong, Turkey, Poland, India, Mexico, Belgium and Norway had more unbalanced trade relationships with South Korea than the United States did last year.

Here’s a look at South Korea’s various trade balances with the world’s largest economies, over time, as a percentage of each nation’s overall trade relationship. While South Korea enjoys a trade surplus with the United States, it’s relatively modest in the context of the overall volume — on par with Brazil, China and Thailand, for example.

I’m not saying Trump is wrong to worry about whether the United States has an equal trade relationship with this one trading partner. There’s just a piece of the picture, perhaps, missing from the discussion — even before you consider whether picking an economic fight with a regional security ally is smart policy right now.

[Image from Misaeng (season one, episode 11). It’s an old K-drama I’m just watching now.]

Four Decades of State Unemployment Rates, in Small Multiples, Part 2

By Matt Stiles | | Topics: Economy & Finance

I posted recently about how the state-by-state unemployment rate has changed during my lifetime. The result was a small multiples grid that put the states in context with one another.

Today I’ve created a new version aimed at identifying more precisely how each state has differed from the national unemployment rate during the last four decades. The lines show the percentage point difference — above (worst) or below (better) — from the national rate.

This view allows us easily to identify the most anomalous states in both directions (West Virginia, for example, had quite an unemployment spike during the 1980s; South Dakota, on the other hand, has never been worse than the national rate).

There’s plenty more to explore in this quick remix:

Four Decades of State Unemployment Rates, in Small Multiples

By Matt Stiles | | Topics: Economy & Finance

There’s good news this week in the monthly jobs report, the latest sign that the economy, however grudgingly, has healed from the financial crisis nine years ago:

The unemployment rate fell to 4.6 percent, the Labor Department said, from 4.9 percent. The last time it was this low was August 2007. That was the month, you may recall, when global money markets first froze up because of losses on United States mortgage-related bonds: early tremors of what would become a recession four months later and a global financial crisis nine months after that.

These things, of course, are cyclical. Here’s how the unemployment rate has changed, by state, during my lifetime:

See a full-screen version for a larger grid.

New Poverty Data Show Improving Economic Conditions in States

By Matt Stiles | | Topics: Economy & Finance

Economic conditions continue to improve in America’s states, with many showing significant declines in their poverty rates, according to new survey data released recently by the U.S. Census Bureau.

About 14.7 percent of the American population had incomes last year that were below their respective poverty levels, which vary depending on household size — a significant decline from 2014.