Archive for October 2019

The IMF is predicting global growth to slump to just 3% in 2019, the weakest rate since the housing bust and down from 3.8% as recently as 2017. The major culprit, global trade, which will grow by just 1.1%; in 2017 it was 5.7%. US growth is expected to be 2.4% this year and 2.1%…

When raising the minimum wage two things are relevant. First, what percentage of impacted firms are exporters? They are much less able to raise prices to offset the increase as they compete in world markets. Second, what percentage of the median wage is the new minimum? The higher it is, the more the unemployment rate…

Prior to slapping tariffs on China, US tariff revenues were $3 billion/month. They’re now $7 billion/month; an increase of around $50 billion/year or 0.25% of GDP. Thus, GDP has been reduced by at least this much, and realistically much more because some purchases are simply not made and we’re importing from other nations at prices…

Earlier this morning, the Nobel Prize in Economics was awarded to a trio of economists, Abhijit Banerjee and his wife Esther Duflo (only the second woman to win an Economics Nobel and the youngest recipient ever at 46) both from MIT, and Michael Kremer of Harvard. They won the award for their experiment-based approach to…

The Friday File: On social media, 91% of survey respondents said they initially failed to recognize fraudulent advertisements as scams and proceeded to engage and 53% eventually lost money. On websites, things were slightly better; the percentages were 81% and 50% respectively. However, via voicemail, only 42% engaged and just 13% lost money, and for…

In 2012, California raised taxes by three percentage points on individuals with income above $500,000/year and couples with incomes greater than $1 million/year. The latest CA tax data shows that due to a combination of emigration of these wealthy households and behavioral changes in how income is recognized among the very high income, those earning…

In 2018, automakers sold 81.8 million vehicles and 4.2 million light commercial vehicles, down 400,000 from 2017, the best year ever. 2019 looks to be slightly weaker than 2018. The biggest market is China, with sales of 28.1 million vehicles. The US is a distant second at 17.3, followed by Japan at 5.2, India at…

Recessions tend to occur from sharp falls in auto sales, home construction, commercial construction, and corporate investment in plant and equipment. It’s because purchases of these items can generally be timed, unlike services, like healthcare. Importantly, unlike housing, which skyrocketed early in the last decade to crash in 2007, precipitating a recession, these four sectors…

The US economy added 136,000 jobs in September, bringing the six-month average down to 154,000 from 223,000 a year ago, and Y-o-Y wage growth eased to 2.9%, its worst showing since 7/18. Moreover, manufacturing employment shrank, confirming there’s trouble in that sector. But the unemployment rate hit 3.5%, its best level since 12/69, and there…

The Friday File: The world record for the number of stone skips in one throw is 88, set by American Kurt Steiner in 2013. The record he broke was 65 skips, set by Max Steiner (no relation). In Europe, where distance is what counts and where the stone must touch the water at least three…