Archive for December 2020

I want to take this opportunity to thank you all for your continued interest in my daily economics blog. You all enrich my life in many ways, and I am deeply appreciative. I wish you and yours the best year ever in annualized, seasonally risk-adjusted terms. May it be a year of full employment, large…

The percentage of us that WFH will be much higher even after vaccinations and a return to the New Normal. This is because: there’s no longer any stigma, it’s working much better than was expected, IT investments to enable working from home have been made, others are doing it, and older and high-income workers will…

President Trump’s proposal giving $2,000/adult and $600/child, up from $600/person subject to income limits will cost $300 billion extra. The House bill giving $2,000/person subject to identical income limits will cost $465 billion more. In 21Q1, the benefits will be minimal, the economy is at its maximal growth given social distancing. The added money will…

While the economy grew strongly through 10/20, growth is quickly decelerating. In November, personal income declined 1.1%, savings rates continued falling, and personal spending declined 0.4%, with spending on durables down 1.7%, nondurables down 0.6%, and services off 0.2%. Spending on every major category except groceries fell, including autos, furniture, recreational goods, clothing, and gas.…

Inflation, measured by the Christmas Price Index and based on purchasing each day’s items once in “The Twelve Days of Christmas,” fell a staggering 58.5% in 2020 to $16,168.40 from $38,993.59 in 2019. Why the huge price drop? Social distancing – Covid-19 laid up the nine ladies dancing, ten lords-a leaping, eleven pipers piping and…

All else equal, sloppily wrapped gifts cause recipients to respond more favorably to the gift; the more elegantly wrapped the gift, the higher the recipient expectations. But all’s not equal. When gifts come from acquaintances, recipients are more enthusiastic with neat wrapping. If from a friend, sloppy wrapping makes a better impression. Are you focusing…

Based on USPS data through 10/12/20, 150,000 persons have relocated from Manhattan and Brooklyn to more bucolic locations. Next, the 31,300 who left Chicago, 27,200 who exited San Francisco, 26,400 who departed LA, 15,500 who decamped from DC, and 14,900 that fled Houston. These are small percentages; 0.75% in NY, 0.33% in Chicago, 0.6% in…

The finally agreed upon $900 billion Covid-19 aid package will boost GDP by $600 billion. That is equal to the 2021 output gap that our economy will experience, so decent work. The unemployment assistance and limited aid to state and local governments will boost GDP dollar for dollar. Stimulus checks to households should be 80%…

The state that has had the most US presidents born in it is Virginia with eight. Right behind is Ohio with seven, New York has five and Massachusetts has four. No state has three presidents; five states have two, including New Jersey, North Carolina, Pennsylvania, Texas, and Vermont. Eight presidents have been born west of…

Congress is finally closing in on a $900 billion coronavirus relief package; not a moment too soon! Retail sales, while up slightly Y-o-Y, fell 1.1% from their October level, their second straight M-o-M decline. And, as of today, first-time claims for unemployment are up two weeks in a row, and four of the last five,…