Posts by Econ70

The IMF says in 2020 global GDP shrank by a staggering 4.3% (a decline only previously experienced during the Depression and both World Wars), or -$3.6 trillion. Before Covid-19 hit, the IMF expected 2020 global GDP to grow by 2.5%, or $2.1 trillion. The difference between what was expected to happen in 2020 and what…

Total US passenger vehicle sales in 2020 are expected to total 14.5 million, down from 17 million in 2019. Moreover, in 2020 car prices rose 5.1%, SUV prices rose 6.8%, and large SUVs rose a whopping 11.1%! Thus, the average price rose from $34,000 pre-pandemic to $38,000 in 11/20. Higher demand plays a part, scarcity…

US employers shed 140,000 jobs in December. Though the first employment losses since April, this doesn’t suggest an economy heading into recession. These losses were entirely lockdown based, with almost 500,000 losses in Leisure and Hospitality: the California lockdown probably cost 600,000 jobs. Elsewhere, job growth was surprisingly solid, and Congress’ pandemic aid relief will…

The Friday File: Original area codes had either a one or a zero for the second digit. States with one area code had a zero, states with more than one area code had a one. Codes were also designed for rotary phones. The bigger the city, the lower the non-middle numbers, resulting in faster dialing.…

While housing permits are running at 1.64 million/year, their best level since 9/06, the improvement is uneven. In the Northeast, permits are at 200,000/year and have been flat for decades. In the Midwest, permits are also at 200,000/year and have bounced between 200,000/year and 400,000/year since 1960. Out West, permits are 400,000/year, their midpoint since…

Despite better growth in the US than in almost all other developed nations, counterintuitively the US dollar continues declining in value. It is primarily because the Fed has promised to keep rates where they are for a long time, even if inflation worsens. Moreover, despite positive nominal rates here, real inflation-adjusted rates are already more…

Despite job growth stalling, household spending sliding, and Covid-19 spreading, economically speaking 2021 is shaping up well. Exceptionally expansive fiscal policy is/will be critical, as will the unprecedented promise of low rates for much longer from the Fed, which should really boost growth once Sars-Cov-2 is defeated. Moreover, firms are adopting new technologies en masse,…

Despite (finally!) passage of the $900 billion Covid-19 pandemic relief bill into law, 21Q1 GDP will rise by, at best, 2% because said aid has come late and the pandemic remains largely uncontrolled. But the aid will help as time goes on, interest rates remain at rock bottom levels, savings rates remain elevated, and vaccination…

I want to take this opportunity to thank you all for your continued interest in my daily economics blog. You all enrich my life in many ways, and I am deeply appreciative. I wish you and yours the best year ever in annualized, seasonally risk-adjusted terms. May it be a year of full employment, large…

The percentage of us that WFH will be much higher even after vaccinations and a return to the New Normal. This is because: there’s no longer any stigma, it’s working much better than was expected, IT investments to enable working from home have been made, others are doing it, and older and high-income workers will…