Archive for January 2017

The Fed will leave interest rates unchanged at the meeting that ends tomorrow. And, I expect no rate rise in March. However, should the Fed raise rates then, it would imply that the Fed wants to raise rates more frequently than anticipated and not that it’s simply being preemptive. Relatedly, we must simultaneously estimate if…

Q4 GDP came in at 1.9% and CY2016 GDP growth was a weak 1.6%! While the details of each quarterly report change — this time household spending was up 2.5%, business investment rose a welcome 2.4%, while exports subtracted 1.7 percentage points from GDP — these results are in line with the 2.1% average growth…

The Friday File: While better quality jeans undoubtedly use better materials, fit better and are handmade, there’s a limit. At $4,000/pair, APO Jeans are the world’s 4th most expensive. At $10,000 a pair, Escade holds third place. In second, is Dussault Apparel Thrashed Denim at just $250,000 a pair, and in top spot are Secret…

In 2001, tobacco firms sold 413 billion cigarettes in the US and total revenue was $71 billion, or 17.2 cents/cigarette. By 2015, consumption had declined to 269 billion cigarettes, but due to rising prices and taxes, revenue had increased to $94 billion, or 34.9 cents/smoke. The most popular brand is Marlboro, with 40.2% of the…

After peaking at 40.8 million in 2007, the number of tax returns claiming the mortgage interest deduction has steadily fallen, and as of 2013, the latest year from which data is available, stands at just 33.3 million. Not surprisingly, the amount of mortgage interest paid also peaked in 2007 at $491 billion and is now…

In 2015, single-family starts totaled 713,000 and in 2016, 783,000, up 9.8%. Remaining housing starts fell from 395,000 to 385,000. Overall, starts rose from 1.108 million to 1.168 million. Multifamily has recovered, but single-family starts remain at recessionary lows 7.5 years into a recovery! Worse, labor and lots are in short supply and home prices…

With unemployment very low at 4.7%, substantial fiscal stimulus will simply drive up wages and inflation, forcing the Fed to increase rates prematurely. Thus, Trump and Congress should focus on expanding the economy’s productive capacity, not increasing household consumption. This means boosting labor productivity by encouraging corporate investment in plant and equipment, increasing R&D spending,…

The Friday File: The average cost of raising a baby born in 2015 through age 17 for a middle-income married-couple is $233,610. Housing is the costliest single item, accounting for 29% of all spending, followed by food at 18% and childcare/education at 6%. As expected, there are economies of scale with regards to kids. Compared…

Total undergraduate and graduate student enrollment in the US this past September was 19 million. Registration peaked in 2011 at 20.6 million. Matriculation at public four-year schools was 8.1 million, 5.7 million at public two-year schools, and 3.8 million at four-year private nonprofit schools. Attendance at four-year for-profit colleges stood at 970,000 down almost 700,000…

Healthcare spending totaled $3.2 trillion in 2015, up 5.8% from 2014, well above the rate of inflation, and now accounts for a dizzying 17.8% of GDP! However, it’s high-cost patients that drive these costs. The most expensive 1% of patients consume 21% of healthcare spending, the next 4% consume 28% of spending and the next…