• slow_4

    Lower Level

    Since 1947 real GDP growth has averaged 3.26%/year. Since 1/1/10 it’s averaged 2.3%. Economists think that some of the decline will persist for a while because of both slower productivity gains and population growth. Therefore, the neutral Federal Funds rate, the rate that’s neither expansionary nor … [Read More...]

  • TR007241

    Wonky Wages

    Seattle’s decision to boost its minimum wage to $15/hour, the highest anywhere, is bad policy. Unlike a rise in the federal minimum wage which affects all employers, this increase only applies inside the city. Thus, employers in low-wage industries in Seattle will be at a distinct financial … [Read More...]

  • The newspaper  GOOD NEWS  and coffee

    Nice News!

    On Monday we learned that existing home sales in May jumped 4.9% to a rate of 4.89 million/year, the best pace since last October. Better yet, yesterday we learned that new home sales jumped from a rate of 433,000/year in April to 504,000/year in May, the best activity level since 5/08 and that … [Read More...]

  • euro

    Mediocre Monetary Meddling

    Rather than using a cannon, last week the ECB used a popgun. By reducing the rate it charges banks on loans and by charging banks on deposits held at the central bank, the ECB hopes to spur lending. It won’t happen. Separately, it’s also finally injecting liquidity into the banking system. What … [Read More...]

  • percentage-dice

    Rotten Returns

    Why are rates so low? Let me count the reasons: flight to quality due to rising geopolitical risk, the Fed’s promise to keep short-term rates low for a long time, Japan’s massive monetary stimulus, the ECB’s decision to start printing money, weaker than expected US growth, no evidence of commodity … [Read More...]


Auto Advance


After peaking at 3.03 trillion vehicle miles travelled (VMT) during the 12 months ending 11/2007, VMT hit a cyclical low of 2.94 trillion miles during the 12 months ending 11/2011. Finally, VMT hit a record 3.05 trillion during the 12 months ending 1/2015, taking 85 months to surpass the previous … [Read more...]


Mediocre Moving


The number of Americans who moved in 2013 was 35.7 million, 11.5% of the population. Since record keeping began in 1948, the percentage of movers has steadily declined from about 20% to just 11.5% today. However, because of population growth due to the Boomers, the number of movers steadily rose … [Read more...]


Collecting Crude


US crude oil inventories are at 29 days, their highest level since 1985, and are at 60% of storage capacity vs. 48% a year ago. In Cushing, OK (the delivery point for WTI futures contracts) inventories are at 77% of capacity at 54.4 million barrels. That was 100% of capacity as recently as 2011, but … [Read more...]


Hot Haul

Gardner Theft

The Friday File: 25 years ago Wednesday, $500 million in paintings were stolen from the Gardner Museum in Boston, making it the greatest art heist. Other spectacular ones include the pilfering of the Mona Lisa from the Louvre in 1911 (recovered in 1913) and the purloining of Munch’s The Scream in … [Read more...]


Energy Expenditures


With the recent sharp decline in energy prices, the percentage of household spending devoted to energy in Q4/14 was 4.9%, its lowest level since Q1/09. The last time it was below 5% for an entire year was 2003. The lowest quarterly percentage this century was 3.97% in Q1/02, while the highest was … [Read more...]


Backtracking Bank


In today’s press conference Fed Chairwoman Yellen told us the Fed might raise rates as soon as June, but then quickly backtracked playing the markets masterfully. She cited the strengthening dollar as hurting manufacturing and weakening inflationary trends. Moreover, while the Fed expects the … [Read more...]


Halting Housing

Bldg permit

While housing starts were positively rotten last month, weather was a key factor. That said, permits are much less weather sensitive than starts, with a very small margin of error. While overall permits were up 4%, single-family permit activity was down 6.2% and is at its lowest level since 5/14. … [Read more...]


Burgeoning Buck


While the strength of the US dollar was for a long time the result of central bank policy in the US, the dollar is now, to at least some extent, a determinant of Fed policy. Because the surging dollar is dampening inflation, hurting exports, lowering corporate profits, and will probably harm … [Read more...]


March Madness

March madness

The Friday File: While the NCAA college basketball tournament may or may not cost the economy money in lost worker productivity and sales, the sure losers are the 99% of Division I college players that don’t make the NBA. They work for a “benevolent” monopolist that strictly prohibits the players … [Read more...]


Tough Transit


After WWII, public transit use peaked at 23 billion unique trips, meaning that 20% of the US population took public transit twice a day. Public transit usage then quickly declined, hitting a low of 6.6 billion unique trips in 1972. In 2014 ridership probably hit 10.8 billion trips, which, while the … [Read more...]