Archive for April 2016

The Friday File: With more efficient planes and low fuel costs, ultra-long flights are in. The longest flight in the world is 8,810 miles, takes 17 hours and 20 minutes, and is from Auckland to Dubai. The next longest is 8,569 miles from Dallas to Sydney and takes 16 hours and 50 minutes, followed by…

There are many problems with negative interest rates. First, small and medium-sized firms can’t borrow by issuing bonds; they borrow from banks and bank rates are much higher. Second, negative rates hurt bank balance sheets, hurting credit availability. Cheap money encourages investment in capital equipment, reducing labor demand. Retirees living on interest payments get squeezed,…

Of late, oil and equities have rallied, job growth has firmed, the dollar has weakened, credit conditions have improved, but growth has slowed. Financial markets peg the probability of a June Fed rate hike at just 19.6%. To give themselves a realistic option of raising rates in June the Fed had to boost that probability.…

While industrial production (one of four indicators used to determine recessions) has fallen six of the past seven months, it’s not flashing recession. Manufacturing, which comprises 78.48% of the index is down just 0.4% Y-o-Y. By contrast, mining and utilities each of which are 10.76% of the index, are down 12.9% and 7.7% Y-o-Y respectively…

While six central banks now charge private banks to hold deposits at the central bank (negative interest rates), the Federal Reserve doesn’t. However, after inflation, the rate the Fed pays banks on deposits has been negative since 10/09 except for most of the period 1/15-9/15. That is, CPI inflation has consistently been above what the…

The Friday file: Tonight millions of Jews will celebrate Passover and their exodus from slavery in Egypt 3,500 years ago. Part of the celebration entails placing unleavened bread, bitter herbs, and other items which allude to or are symbolic of the holiday, on a platter. Assuming all American Jews celebrate and share the platter with…

In 2015, suburban counties grew by almost 1% to 159 million people while urban counties grew by 0.8% to 77 million. In the last decade, cities grew faster than suburbs only once, in 2011. In 2014 and 2015 high-density and low-density suburbs again grew faster than cities as was the case prior to 2011. Population…

While inflation-adjusted median household income was $53,657 in 2014 up slightly from $51,086 in 1991 (and down from the 1999 peak of $57,843), not all households have fared equally over the past quarter century. Those headed by someone with an advanced degree earn 10% more, those with a Bachelor’s degree have seen no meaningful income…

Today’s housing data was mixed. There were slight upward adjustments to January and February and year-to-date housing starts are up 14.5%. But, Q1/15 was the worst quarter for housing starts last year. If starts remain on their current pace, the rest of 2016 will show no meaningful month-over-month gains. As for multifamily, it appears to…

While the economy may not be sparkling, labor market hiring is excellent! Last week first-time unemployment claims fell to 253,000, the lowest reading since 1973 and the 58th week in a row that initial jobless claims have been below 300,000, also the best streak since 1973. Moreover, the economy added an average of 209,000 jobs/month…