Archive for October 2016

While 16Q3 annualized GDP growth was 2.9%, a two-year high, it was primarily because of a swing in inventories, which is unlikely to be repeated, and a one-off rise in soybean exports. Conversely, consumer spending grew by 2.1%, down from 4.3% in 16Q2. YTD, GDP growth is averaging 1.7%, just shy of its weak long-term…

The Friday File: Five state currently allow for recreational marijuana; 20 more states permit medical use only. This election, voters in Arizona, California, Maine, Massachusetts and Nevada, states with a combined population of almost 60 million, will vote to allow recreational use, while voters in four states will weigh in on medical marijuana. If all…

While September’s new home sales rate came in below expectations at 593,000/year and August’s number was revised down to 575,000 from 609,000, sales are up 13% YTD. Moreover, the home ownership rate rose from 63.1% in 16Q1 to 63.4% in 16Q2, the largest quarterly gain in 12 years. Pending sales are up 2.4% Y-o-Y and…

Despite soaring student debt levels, the median borrower between 20 and 30 pays $203/month with the average payment $351/month, primarily because some students borrow large amounts for graduate school. These surprisingly low payments result because many borrowers take 20 and 25 years to repay their loans by enrolling in income-based repayment plans which cap payments…

While markets expect a Clinton victory on 11/8, they also feel a Democratic takeover of the Senate is a distinct possibility. What markets fear is the outside chance the Democrats also pick up the House! Either way, the Democrats are almost certain to lose the Senate in 2018 as Democrats have 25 seats to defend;…

The Friday File: Include all forms of gambling, in 2015 the total spent in the US was $104.1 billion, of which $20 billion was generated from state lotteries. As for casinos, $38.3 billion was wagered in commercial casinos and $29.3 billion in Indian casinos. Amazingly, Rhode Island depends most heavily on gambling revenues for the…

Despite starts declining for a second straight month, yesterday’s housing numbers were pretty good. Year-to-date starts are up 3.7%, with single-family starts up a solid 8.6% and at their best level since 2/16. While multifamily starts fell a staggering 38% in September, they are down just 5.6% year-to-date. Moreover, permits rose for the fifth time…

When low copay generic drugs face identical higher copay patent drugs, patients buy generics. If, however, the brand-name drug comes with a coupon reducing the copay below that of the generic drug copay, patent drug sales rise. Regrettably, the coupon doesn’t lower the amount paid by the insurer for the identical high-priced name-brand drug. Thus,…

Coal, natural gas and oil fueled the industrial revolution and continue to fuel economic growth, raising living standards and life expectancy. They also create societal costs in the form of air and water pollution, road congestion and more. Most of these costs are not borne by the users, causing too much energy to be consumed.…