Archive for September 2024

Last week, the Bureau of Economic Analysis revised economic dating back to 2019. The data now show savings rates not at 2.9% but a decent 4.8%, and real disposable income was upwardly revised by a huge $600 billion and is now just $400 billion below pre-Covid trend. This explains the remarkable staying power of consumer…

The Friday File: American Lael Wilcox recently cycled around the world in 108 days, besting the previous record of 124 set in 2018. With oceans inconveniently covering most of the Earth, circumnavigation means cycling at least 18,000 miles in the same direction, finishing where you started (in her case Chicago), never drafting behind anyone, and…

The Conference Board’s consumer confidence index sank a whopping 6.9 points in August, its biggest one-month decline since 8/21, when inflation was beginning its dreadful climb. This time, the concern is labor markets. 18.3% of respondents consider “jobs hard to get” the highest percentage since 2017, while the percentage reporting “jobs easy to get” was…

Inflation fundamentals are stellar. Strip out lagging rents, and the remaining 93% of the CPI has slowed to a 1.7% Y-o-Y rate and is down to a 1% Y-o-Y rate over the six months to August. Moreover, the CPI on an HICP (harmonized) basis, placing the index on the same footing as Europe, came in…

August existing home sales came in at a seasonally adjusted annualized rate of 3.86 million. This is down 2.5% M-o-M, 4.2% Y-o-Y, and marks the 36th straight month of year-over-year sales declines. August is the third straight month of sub-4 million sales, a level rarely seen. Sales are scraping all-time lows. With inventory at 4.2…

The Friday File: Yesterday, Shohei Ohtani became the first baseball player ever to hit at least 50 home runs and steal 50 bases in one season. Only six players (including Ohtani) are in the 40/40 club. Ohtani has stellar power, just good speed, but makes up for it with astounding base stealing strategy. He is…

While corporate profit growth has, of late, been strong, only one-third of the growth has come from rising revenues. Corporate profits are being primarily driven by intense cost-cutting. We know this because unit labor cost growth has been zero Y-o-Y, and real personal disposable income growth has been rising by less than 1% Y-o-Y since…

In a move largely unexpected just days ago, the Fed cut the Fed funds rate by 50bps! This is an overt acknowledgement that the inflation battle is over, and that rising unemployment is now public enemy #1. While the Fed should have cut earlier, that doesn’t detract from this gutsy call. Fed policymakers expect rates…

What is both amazing and absolutely terrifying about the current housing market is how unaffordable it is. The combination of ever rising prices and stubbornly high rates has reduced first-time housing affordability to its worst level since the mid-1980s. But back then rates were almost 13%, double what they are now, which tells you all…