Archive for November 2020

World trade grew rapidly in the late 19th and early 20th centuries, and by 1913 trade was 13% of global GDP. It then collapsed to 5% by 1930, partly due to the rise of protectionism during the interwar years and stayed there until the mid-1940s. Tariffs then started falling and trade took off. By 1980,…

The Friday File: Between 3/1/20 and 8/8/20, households hunkered down and stockpiled food. Among canned vegetables and beans, mixed vegetable sales increased the most, 62.4% Y-o-Y to $94 million. Next, kidney beans with growth of 60.2% to $95 million, followed by peas that saw revenues jump 57.4% to $92 million, then chickpeas/garbanzos that bounced 57.1%…

If you are soon to gain a large inheritance, you will become more careful and less likely to be self-destructive. The arrival of a vaccine alters our behavior very similarly. When the vaccine is a distant hope, benefits are discounted, and incentives to self-protect are less likely. With it now right around the corner, incentives…

Assuming 4 million full-time working parents with school age children under the age of 14 who are unable find child-care and must quit their job, the resulting reduction in September-December GDP is probably 0.5%, and over an entire school year 1.25%. We are probably seeing evidence of this as the labor force participation rate for…

After being the first woman to lead the Fed since its inception in 1913, Janet Yellen is poised to now become the first female Treasury Secretary in its 231-year history. She will push for stricter bank regulations, fiscal help for households, and be tough on China. She is acceptable to Wall Street, respected by most…

The Friday File: The animated song “Baby Shark” by South Korea’s PinkFong is the most popular YouTube song ever with an amazing 7.1 billion views, about 1 view/person on the planet! In a close second is the song “Despacito” by Puerto Ricans Luis Fonsi and Daddy Yankee with 7.05 billion views. Coming in a distant…

From 1945 through 1980 there were eight recessions, never did it take longer than 24 months for employment to surpass its pre-recession peak. The 1982 recession was different, it took almost 30 months before the pre-recession peak was bettered. Each of the three subsequent recessions has taken increasingly long to recover, with it taking over…

US retail sales rose just 0.3% in October, their slowest pace since spring. This suggest that, at minimum, consumers are becoming more cautious and possibly that the recovery is slowing as job growth softens, virus cases rise, and government assistance peters out. Moreover, debit and credit card spending are down 4% Y-o-Y and consumer confidence,…

For the nine months ending 3/20, 14% of all homes purchased were priced at $500,000 or more. Between 4/20 and 6/20, that percentage jumped to 25%! Relatedly, since the start of Covid-19 home buyer median income is $110,800 compared to $94,400 for pre-pandemic purchasers. Not surprisingly, the percentage of first-time buyers was just 31% for…

Headline Y-o-Y Personal Consumption Expenditure inflation (PCE) is running at a benign 1.4%, and core PCE inflation, the Fed’s favorite inflation measure, is up a weak 1.5% Y-o-Y, and economy wide GDP inflation is just 1.2%. Relatedly, employment cost inflation has been steadily falling over the past several quarters, suggesting that Covid-19 is unsurprisingly lowering…