The Friday File: For the year ending 11/30/23, the most popular Wordle opening word was ADIEU, at slightly over 8% of all opening guesses. STARE is the next most popular at about 4.75%, followed by SLATE at 4.5%. AUDIO is next, followed closely by the word RAISE at almost 4% and 3.5% respectively. ARISE and CRANE are the 6th and 7th most popular opening gambits with both at almost 2%.

The Earth takes exactly 365.24219 days to rotate around the sun. Adding an extra day every four years makes the average length of a year 365.25 days, slightly too much. The Gregorian calendar eliminated leap days in years ending in 00 and that made the average year 365.24 days, a bit too short. The solution: add a leap day in years divisible by 400 which makes the average year 365.2425.

The current share of the S&P 500 market capitalization held by the largest five firms is a staggering 25%. Those firms are, in order of market capitalization, Microsoft, Apple, Alphabet, Amazon, and Nvidia. The last time the top five were collectively this large was the early 1970s. At that time the five firms in market capitalization order were IBM, AT&T, GM, Eastman Kodak, and Exxon. No firm is unassailable.

January existing home sales rose 3.1% M-o-M to a rate of 4 million, the best level since 4.03 million in 8/23, but sales fell 1.7% Y-o-Y. Despite high rates, home prices rose 5.1% in January Y-o-Y to $379,100, the highest January price ever. The best news, while still painfully low, inventory is up 3.1% Y-o-Y, and new listing rose Y-o-Y for the fourth straight month. The worst is probably over.

Based on 6/23 data, 19% of households used buy now, pay later (BNPL) loans in the past year. BNPL use peaks at 43% among households with credit scores below 620. Usage is also highest, at 41%, among households who had a credit application rejected, and 37% for those 30+ days delinquent during the past year. Even more worryingly, many are using BNPL to buy groceries. These are generally fragile households.

The Friday File: In 1960, the male marathon record was 135 minutes and the female record was 220 minutes. By 1980, the male record was 129 minutes while the female record was 150 minutes. Today the male record is 2:00:35 while the female record is 2:11:53, which would have been a male marathon record as recently as 1967. The time gap is 10% down from 61% in the 1960s.

U.S. firm markups over prices rose 11% between 1980 and 2015, but the reason is likely quite benign. The primary cause is the shift by consumers, who have become steadily wealthier, towards buying more services, which has allowed service providers to boost markups. That, in turn, has caused the service sector to grow as a percentage of the economy and thus overall markups as a percent of GDP to rise.

Immediately pre-Covid, the vacancy rate at U.S. shopping centers was 6.25%. The rate peaked in 12/20 at over 7% but has been declining since and is now 5.3%, the lowest level in probably decades. This is because consumers are again shopping in-person, and post-Housing Bust vacancy rates peaked in early 2010 at over 10%. As a result, new mall construction activity largely stopped. Rents are now 17% above 2019 levels.

While housing starts in January fell 15% M-o-M and almost 1% Y-o-Y, that misses the point entirely. Single-family starts slid 4.7% M-o-M but are up 22% Y-o-Y. By contrast, multifamily fell 36% M-o-M and 38% Y-o-Y. Similarly, single-family permits rose 1.6% M-o-M and 36% Y-o-Y, while multifamily permits fell 9% M-o-M and 27% Y-o-Y. Single-family activity is strong and growing while multifamily continues to rapidly contract.

The best current economic trend is rising labor productivity. After sinking from 22Q2-24Q2, it recently posted the best two quarters since mid-2010! Part of me is skeptical as job growth has recently been in education, leisure & hospitality, and healthcare, not sectors prone to productivity improvements. However, low unemployment, rising wages, and more digital tools, may be cajoling employers to redesign jobs. This will reduce inflation and boost living standards.