Archive for August 2024

The Friday File: Made an official holiday in 1894 by President Cleveland, Labor Day was created to honor American workers. Those workers are happiest in SD, where the unemployment rate is 2%. It’s 2.1% in VT, 2.2% in ND, 2.5% in NH, 2.6% in NE, and 2.7% in MS/VA. They’re less happy in DC where…

For the five years ending 1/20, the median down payment was 10% of the home purchase price. Since then, it’s almost steadily risen and is now 18.6%. Consequently, the down payment dollar amount has jumped from $30,000 pre-Covid to almost $70,000. Reasons for the rise include the rise in stock prices, the decline in first-time…

Over the last 50 years, has energy spending risen or declined? The answer is both! In 1970, inflation-adjusted US energy expenditures totaled about $500 billion, in 2022 they were $1.7 trillion, they more than tripled. On a per capita basis, expenditures rose from almost $2,500 to $5,200, they slightly more than doubled. However, as a…

During Powell’s recent Jackson Hole speech, he repeatedly said the labor market is weaker than pre-Covid, when Fed funds was 1.75%! Currently, markets are expecting a terminal Fed funds rate of 3.25%, with 100bps of cuts through December and another 100bps in CY2025. 3.25% seems improbably high, as the neutral rate is maximally 2.75%. By…

The latest 24Q3 GDP estimate from the Atlanta Fed is 2%, down from 2.9% a week ago. Similarly, the NY Fed sees 1.8%, down from 2.2%, and the St. Louis Fed sees 1.3% growth, down from 1.6%. Averaging the three suggests 24Q3 GDP growth will be a weak, non-inflationary, but non-recessionary 1.7%. It’s good Powell…

The Friday File: Starbucks’ Pumpkin Spice Latte debuted 21 years ago in 2003 in just 100 stores in Washington, DC and Vancouver, WA. It was so popular, in 2004 PSL was rolled out nationwide and October sales instantly jumped 25%. Interestingly, its release date has varied annually. This year it returned on 8/22, its earliest…

Seasonally adjusted annualized July housing sales came in at 3.95 million, the 35th straight month of Y-o-Y declines, and the fifth month of sub-4 million sales, a level historically rarely seen. Troublingly, 30-year rates are 81 basis points lower Y-o-Y and months of inventory is up 21% Y-o-Y, yet sales remain anemic. First-time buyers struggle…

For the year ending 3/24, estimated job growth has been preliminarily revised down by 818,000, bringing average job growth down from 242,000/month to 174,000/month. The revision is based on data from state unemployment insurance tax records, not low response rate monthly surveys. But this data doesn’t include illegal immigrants, and this data also gets revised.…

Gold recently surpassed $2,500/oz and has been rising rapidly since 10/22, when it traded at $1,650/oz. A major reason, central bank buying. From 1970-1988, cumulative net central bank gold purchases were roughly zero. From 1989-2009, banks were net sellers every year. Since 2010, they have been net buyers every year. Moreover, through 2020 net purchases…

Two recent papers show the detrimental effects of gambling. One reports that where gambling is legal, average credit scores drop 0.3% after four years, and where online betting is legal, they drop by 1% and bankruptcy filings rise 25%-30% within 3-4 years. Another paper shows that legalization boosts sports gambling, and such gambling does not…