Econ70

Despite significant policy uncertainty and slowing economic growth, equities are at record highs. Here’s why I think it’s happening. The stock market is increasingly uncorrelated with the economy due to the Magnificent Seven. The AI story has captivated investor’s imagination,…

The only reason employment data revisions are noticeably larger is due entirely to low response rates by surveyed businesses. Pre-Covid, response rates on the initial survey were 80%, now they’re below 60%. By the third wave, response rates are where…

In 25Q1, Amazon, Alphabet, Meta and Microsoft collectively spent $88 billion on equipment and property (data centers, semiconductors), primarily in pursuit of their AI goals. Their spending is rising rapidly. During 24Q1 it slightly exceeded $50 billion. Annualized 25Q1 spending…

July job growth rose just 73,000, but May/June were revised down 258,000! Average May/June/July job growth is a dismal 35,000/month, the worst three-month stretch since 6/20. Worse, unemployment rose to 4.2% despite the labor force falling by 35,000 and the…

The Friday File: Singer-song writer, and satirist extraordinaire Tom Lehrer has died at 97. He graduated Harvard with a BA in math at 18, taught at Harvard/MIT, worked at Los Alamos, and the NSA, but his greatest talent was writing…

25Q2 GDP growth jumped to 3% seasonally and inflation adjusted, up considerably from -0.5% in 25Q1. This puts 25H1 growth at 1.25%, down from 2.5% in 24H1. Importantly, final sales to private domestic purchasers, which strips out volatile trade, government…

Rigid Rates With equities at record highs, credit spreads super-tight, commodities near three-year highs, Bitcoin sky-high, first-time unemployment claims at a three-month low of 217K, the unemployment rate at just 4.1%, and car sales running at roughly 16 million/year, there…

Of all sectors of the US economy, AI seems poised to have more immediate impact on healthcare than probably any other. The combination of it being huge (17.6% of GDP), in possession of a uniquely high volume of unstructured data…

The Friday File: Zipf’s Law describes the relationship between the rank of a word and its frequency, namely that word frequency is inversely proportional to word rank. For example, the most common word will appear twice as often as the…

On one hand, the Fed sees short- to medium-term inflationary pressures building from a 1000% tariff increase, OBBBA fiscal stimulus, possibly rising wages due to manufacturing job onshoring, combined with the number of unemployed manufacturing workers available to work near…