Trade Deficit Raises Questions About Strategy
Trade deficit could lead to downward revision of fourth quarter GDP. Reuters: "The government reported last week that G.D.P. expanded at a 2.6 percent annual rate, with trade estimated to have subtracted 1.02 percentage points from growth. 'This brings considerable downside risks to G.D.P. revisions, likely shaving 0.3 percentage point,' said Gennadiy Goldberg, an economist at TD Securities ..."
Rep. Paul Ryan delivers speech urging Republicans to back Obama on fast-track. WSJ: "'When the U.S. sits down at the negotiating table, every country at that table has to be able to trust us,' he said. '... if our trading partners don’t trust the administration—if they think it will make commitments that Congress will undo later—they won’t make concessions. Why run the risk for no reason?' But that’s not meant as ceding authority to the administration, he said. 'I am not saying to enhance our leverage we have to enhance the administration’s power—far from it,' Mr. Ryan said."
Ryan ignores new trade deficit data. Politico: "Lori Wallach, head of Public Citizen’s Public Trade Watch ... zeroed in on the record $25.1 billion U.S. trade deficit with South Korea, saying that proved a free trade pact with that country that Congress approved in 2011 has not delivered the export boom that supporters expected ... Ryan did not discuss the trade report in his speech and seemed to cherry-pick other statistics to highlight the benefits of the trade deal ..."
HuffPost questions whether TPP could contain China: "...the credibility of Obama's pitch hinges on a difficult and unlikely diplomatic effort: reforming the economic and political structures of several smaller Asian nations -- in particular, Vietnam ... if TPP forces Vietnam and other Asian countries to improve workers' rights, that could put political pressure for reforms on the Chinese government. On the other hand, a weak deal with Vietnam would not rein in China's economic might; it could further empower the larger nation."
Republican Stalemate Threatens Homeland Security
Congress "skipping town" despite stalemate over immigration and funding Homeland Security. Politico: "[Senate Democrats] filibustered the House bill on Thursday for the third time this week. Now Senate Republicans argue they’ve done all they can. It’s time, they say, for the House to send something else over ... But House Speaker John Boehner sees a different solution: the Senate putting together its own proposal to undo the jam ... they both plan to be in recess the entire week of Feb. 16."
"Shutdown grows more likely," reports The Hill: "Of the more than 230,000 employees who work for DHS, the vast majority — around 200,000 — would continue to work, but without paychecks [which] could deal a blow to department morale ... A shutdown would also keep the department from hiring and training new employees, which would prevent the government from filling vacancies."
Strong Jobs Report Could Spark Higher Interest Rates
Jobs and wage gains in monthly jobs report. BLS: "The labor force participation rate rose by 0.2 percentage point to 62.9 percent ... Total nonfarm payroll employment rose by 257,000 in January ... After incorporating revisions for November and December ... monthly job gains averaged 336,000 over the past 3 months ... average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75."
Could prod Fed to tighten. WSJ: "The Federal Reserve is closely monitoring the labor market as it debates when and how quickly to raise short-term interest rates ... A long-awaited pickup in wages could signal the labor market is nearing full health and nudge the Fed toward a mid-year liftoff."
