• Heading Home

    In 1965, the US home ownership rate was 63% and rose to 65.6% in 1980. Home ownership then fell and held steady at about 64% from 1984 through 1994, when it began a meteoric rise and peaked at 69.4% in 2004. It’s since collapsed and is now 63.5%, where it was last in 1967. Demographics aside, home … [Read More...]

  • Meaty Measurement

    The Friday File: Assuming exchange rates and prices eventually adjust to make the same item equally priced everywhere, the Big Mac Index was developed. In Switzerland, a Big Mac is a whopping $6.82, its currency is hopelessly overvalued. In Russia, $1.88. Putin, clearly a meaty monetary master. … [Read More...]

  • Expensive Entitlements

    In FY 2014, Medicare, Medicaid and other healthcare programs accounted for 25% of federal government spending, Social Security was 24%, welfare and other entitlements claimed 11%, and interest on the debt was 7%. That leaves 33% for discretionary spending. But defense was 17%, leaving just 16% of … [Read More...]

  • Spending Splurge

    Household spending should remain healthy for four reasons. First, household net worth hit a record $84.9 trillion in Q1/15, up $1.6 trillion from Q4/14 and the ratio of household net worth/personal disposable income (PDI) is at its highest level since Q3/07. Second, household debt service as a … [Read More...]

  • Inefficient Income

    The US corporate tax rate of 35% is the highest in the world. In Germany it’s 16%, Canada 15% and Ireland 12.5%. Worse, it raises little money. In 2014, US pre-tax corporate profits were $2 trillion. 35% of that would be $700 billion. But due to loopholes and fancy accounting, the corporate income … [Read More...]


Solid Spending

 After declining 0.25% in December, 0.68% in January, and 0.23% in February, inflation-adjusted retail sales jumped 0.62% in March and are now, solidly back at trend growth. Moreover, because those months are volatile, looking at Y-o-Y growth is preferable. Y-o-Y real retail sales growth troughed in … [Read more...]


Winning Work

 April’s employment numbers were good. The unemployment rate fell to 3.9%, its best rate since 12/00, and the broadest measure of unemployment fell to 7.8%, best since 12/01. Yet wage growth was unchanged from earlier months, easing fears of inflation. And, that’s surprisingly good because job … [Read more...]


Dizzying Deadlines

 The US has set a mid-May deadline to complete NAFTA negotiations with Mexico and Canada. On 5/22, $50 billion in tariffs can be imposed on Chinese imports, and on 6/1, steel and aluminum tariffs will be levied on the EU if they are not again delayed. Add the May 12th Iran nuclear decision and … [Read more...]


Thoroughbred Triumph

 The Friday File: American Pharoah, the 2015 winner of the 141st running of the Kentucky Derby, the first Triple Crown winner since Affirmed in 1978, and one of only 12 such winners, is popular. The now six-year-old stallion has impregnated well over 100 mares at a fee last reported to be … [Read more...]


Fed Finesse

 While the Fed didn’t raise rates in the meeting that concluded yesterday, the big news is the Fed won’t overreact (which means raise rates much faster) if inflation modestly exceeds 2%. That is, the Fed remains on track to raise rates two, or more likely three, more times this year unless inflation … [Read more...]


More Mergers

 The government argues consumers will be hurt by an AT&T/Time Warner merger because competition will decline as AT&T will exercise monopoly control over content such as HBO, CNN, Turner, etc. Is the government kidding? Almost half of Americans get their news from social media, online … [Read more...]


Increasing Inflation

 Despite being on its heels for ages, inflation is strengthening. Y-o-Y economy-wide inflation ticked up to 1.85% in 18Q1, a hairsbreadth away from its four-year peak of 1.96% registered in 17Q1. In addition, it’s meaningfully declined only once since 15Q3. Relatedly, total Y-o-Y employee … [Read more...]


Pleasant Performance

 Real GDP in 18Q1 grew at an annualized rate of 2.3%, beating expectations of 2%. This was the best Q1 growth since 2015 and keeps us on track for growth of at least 2.75% in 2018. It slid from 2.9% in 17Q4 due to post-hurricane declines in car purchases and home repairs. Growth was buoyed by … [Read more...]


Economy looks great, but housing inventory too low, economist tells Richmond-area home builders

Economist Elliot Eisenberg stood on a chair to drive home a point while giving a presentation to a crowd of about 500 people at the Home Building Association of Richmond's economic forecast meeting, held at the Hilton Richmond Hotel and Spa/Short Pump on Thursday, Feb. 1, 2018. … [Read more...]


Costly Childbirth

 The Friday File: Earlier this week, the Duchess of Cambridge gave birth to a baby boy who is fifth in line to the British throne. The cost for the royal birth, in the top-notch Lindo Wing of St. Mary’s Hospital including the Deluxe room package - a shade under $8,000. Think it’s expensive? In the … [Read more...]