In 1989, the Fed’s last rate hike was in 6/89 and 13 months later a recession began. In 2000, the lag between the Fed’s last hike and the recession was 10 months. In 2006, the lag was 18 months. And in 2018, the lag was 14 months. The median and mean are both about 14 months. This time, the last hike was in 7/23, suggesting a fall recession.

U.S. employers added a very strong 303,000 net jobs in March, the best level since 5/23, and there were upward revisions to January and February of 22,000. Better yet, the workweek rose, the labor force participation rate increased from 62.5% to 62.7%, and wage growth slid from 4.28% in February to 4.14% in March. Strong employment growth and high and rising equity prices mean no June Fed rate cut.

The Friday File: To watch Iowa’s Caitlin Clark is to watch, by far, the greatest women’s college basketball player ever. She’s an inspiring and sublime generational talent whose scoring, passing, and rebounding ability defy words. In her most recent Elite Eight victory over LSU, she contributed directly to 80% of Iowa’s field goals, mind-numbing! Her season and career are record-shattering. Her next game is tonight at 9:30pm; watch it.

Compared to the 2006 Housing Boom peak, home prices are currently 71% higher. However, after accounting for inflation, home prices are just 10% higher. Thought of slightly differently, nominal home prices are exactly double what they were in 2004. That works out to a compound annual growth rate of 3.6%. While housing prices went crazy during Covid, over the long run price increases have been rather pedestrian.

On 4/3/24, a drawing for a $1.09 billion Powerball jackpot will occur, the fifth largest. While the chances of winning are one in 292 million, Americans spent over $100 billion in 2022 buying lotto tickets and it’s mostly the poor. In the poorest 1% of zip codes, the average adult spends about $600/year or 5% of income, versus $150/year or 0.15% of income in the wealthiest 1%. Talk about regressive.

The economy continues to pleasantly surprise, to wit, 24Q1 GDP growth is being revised up, and thus rate cuts keep getting delayed. What’s going on? Several things. The rise in home prices and equities is slightly boosting consumer spending. Second, immigration is meaningfully higher than we think. Income to undocumented workers is not reported, hurting weak GDI, but their spending is, boosting strong GDP. Lastly, labor productivity is strong.

In a move hailed as genius, the Disney Corporation is beginning to plan and break ground for a new theme park called Econoworld. It aims to combine the magic of Disney with the unbridled excitement of macroeconomics and piggyback on the growing profile of macroeconomics. Like EPCOT, there’ll be various areas devoted to, in this case, the Fed, currency, equities, banking, international trade, insurance, and more. Happy April Fool’s Day.=!

The Friday File: This past Wednesday, former senator Joseph Lieberman died; he was 82. His political career began in the Connecticut state house in 1970. In 1988, won election to the US Senate, becoming the first Orthodox Jew in the chamber. He then became the first Jewish candidate on a national ticket of a major political party when VP Al Gore selected him to be his running mate in 2000.

The FTC is challenging Kroger’s acquisition of Albertson’s. The FTC claims Walmart/Target aren’t supermarkets, that Sprouts/Whole Foods are premium stores, that Dollar stores are limited, and that Aldi/Lidl are “limited assortment stores.” FTC thus claims this merger of the top two chains will reduce competition and raise prices. Hogwash! Walmart’s share is 28.3%, Kroger/Albertson will be 16.5%. Force targeted divestures to strong competitors wherever Kroger’s and Albertson’s are both present.

The accidental destruction of the critical Francis Scott Key Bridge has rendered the Port of Baltimore unusable indefinitely. The Port is the 11th largest by container imports with 559,000/year 20-foot equivalent units. LA/Long Beach is tops at 8.2 million, then NY/NJ at 4 million, and Savannah at 2.4 million. Supply chains will manage, Baltimore will suffer. The Port directly employs 15,300 and generates $3.3 billion in personal income.