Archive for February 2021

The Friday File: This Valentine’s Day, spending is expected to reach a whopping $27.4 billion, way up from $20.7 billion last year, and $19.6 billion in 2019. Clearly a case of pent-up pandemic demand. The average amount spent is expected to be $196.31, with men averaging $291.15 and women $106.22. A record 27% of celebrants…

The combination of the $900 billion support package signed by President Trump in December, the virtual certainty of another $1.9 trillion Democratic aid package, the probability of a large infrastructure/stimulus bill in February, and the Fed’s desire to keep rates artificially low, along with increased household spending due to high savings rates from prolonged pent-up…

The number of help-wanted ads is now 0.7% higher than its pre-pandemic level a year ago. During the worst of the pandemic, the difference was -39%. Relatedly, the number of job openings hit 6.646 million in 12/20, exceeding the 6.552 million in 12/19, also the first time the Y-o-Y difference has been positive since Sars-Cov-2.…

Had the current minimum wage of $7.25/hour increased annually by the rate of inflation it would now be $9/hour. Since the minimum wage was adopted in 1938, its inflation-adjusted value peaked in 1968 when it became $1.60/hour, about $12 today. Raising it to $15/hour would lift 900,000 out of poverty, give raises to up to…

The labor market may, emphasis on “may”, be turning a corner! After deteriorating noticeably in December and early January, the number of workers filing for first-time unemployment claims, a proxy for layoffs, eased for the third straight week to a still staggeringly high 779,000, their best level since November but four times their pre-pandemic rate.…

The Friday File: Super Bowl LV will be Tom Brady’s 10th, Stephen Gotkowski and Mike Lodish follow with six appearances each, 15 players have appeared in five SBs. Expanding the comparison to include franchises, only the Patriots, with 11 appearances, have topped Brady. The Broncos, Cowboys and Steelers follow with eight. The Dolphins, Giants, Packers,…

When a call option (which allows you to buy a stock at a fixed price for a fixed period) on, say, GameStop is purchased, another party must sell it. Rather than selling a naked call, the counter party (most often a market maker) will usually buy the underlying stock as a (delta) hedge. Thus, heavy…

President Biden’s proposal to raise the minimum wage to $15/hour will have quite unequal effects. In high-cost states like DC, MA, CT, WA, NY, and MD where $15/hour is roughly 65% of the median wage, the impacts will be much less than in MS, AR, WV, and LA where it is minimally 90% of the…

Eurozone GDP fell 0.7% in 20Q4. While less severe than the contraction in spring 2020, this means eurozone GDP is 5.1% smaller than a year ago, compared to US GDP which is down just 2.5% compared to 19Q4. Worse, while US GDP is expected to grow in 21Q1, albeit feebly, eurozone GDP is expected to…

Comparing total state employment in 12/19 to 12/20, the best performers are Utah and Alaska, each with a gain of 1%. Idaho and Kansas follow with no change. Arkansas, Indiana, Montana, South Dakota, Tennessee, and Wyoming have each seen employment decline of 1%. At the other extreme, California, Iowa, and Illinois have lost 8% of…