Macro Roundup

Mark Perry breaks down state migration data for 2020 but state level economic policy, “…Since 1977 United Van Lines “has annually tracked migration patterns on a state-by-state basis. The 2020 study is based on household moves handled by United within the 48 contiguous states and Washington, D.C. and ranks states based on the inbound and outbound percentages of total moves in each state.”The top ten inbound and top ten outbound states in 2020 are displayed in the table above….”

Mark Perry, "United Van Lines’ top 10 inbound vs. top 10 outbound US states in 2020: How do they compare on a variety of measures?," American Enterprise Institute, January 8, 2021, https://www.aei.org/carpe-diem/united-van-lines-top-10-inbound-vs-top-10-outbound-us-states-in-2020-how-do-they-compare-on-a-variety-of-measures/

Asians and Whites make up 79% of NYC “Gifted and Talented students“..Overall, 40.6 percent of all kids in the nation’s largest school system are Hispanic, followed by blacks at 25.5 percent,Asians at 16.2 percent, and whites at 15.1 percent…. Asian students make up the largest proportion of enrollees. They account for 43 percent of Gifted and Talented students — followed by whites at 36 percent, Hispanics at 8 percent, and African-Americans at 6 percent….”

Selim Algar, "NYC DOE will scrap Gifted and Talented test after this year,"New York Post, January 12, 2021, https://nypost.com/2021/01/12/nyc-doe-to-scrap-gifted-and-talented-test-after-this-year/

Brooking’s Frey looks at new census numbers and finds that this past decade was likely a record low for American population growth, “…The new estimates indicate that over the period from July 1, 2019 to July 1, 2020, the nation grew by just 0.35%. This is the lowest annual growth rate since at least 1900. The new data also shows that when the 2020 census numbers are announced, the 2010-to-2020 decade growth rate could be the lowest in any decade since the first census was conducted in 1790….Figure 1 depicts annual U.S. population growth rates from 1900-01 to 2019-20. The most recent growth rate of 0.35% is the lowest of any single year since the beginning of the twentieth century, and likely for most of the nation’s history….”

William Frey, "The 2010s saw the lowest population growth in U.S. history, new census estimates show," Brookings Institution, December 22, 2020, https://www.brookings.edu/blog/the-avenue/2020/12/22/the-2010s-saw-the-lowest-population-growth-in-u-s-history-new-census-estimates-show/
The 2010s saw the lowest population growth in U.S. history, new census estimates show

Newly released Census Bureau population estimates through mid-year 2020 reveal record lows in U.S. population growth, both annually and for the 2010-to-2020 decade. While these estimates are done independently from the yet-to-be released 2020 decennial census, they provide the most recent preview of what that census may show for the population totals of the nation and individual states, as well as for congressional reapportionment.

The new estimates indicate that over the period from July 1, 2019 to July 1, 2020, the nation grew by just 0.35%. This is the lowest annual growth rate since at least 1900. The new data also shows that when the 2020 census numbers are announced, the 2010-to-2020 decade growth rate could be the lowest in any decade since the first census was conducted in 1790.

These statistics paint a portrait of a nation that is experiencing unprecedented growth stagnation, even before the COVID-19 pandemic hit. The exceptionally low growth rate from 2019 to 2020 reflects the pandemic’s impact over part of that year. The new statistics also provide estimates of state-level population growth between 2010 and 2020.

Finally, this data permits an educated estimate of how members of the House of Representatives could be reapportioned across states as a result of the 2020 census. Consistent with earlier prognostications, it shows that California could lose a House seat for the first time in the state’s history.

THE LOWEST ANNUAL POPULATION GROWTH SINCE AT LEAST 1900

Figure 1 depicts annual U.S. population growth rates from 1900-01 to 2019-20. The most recent growth rate of 0.35% is the lowest of any single year since the beginning of the twentieth century, and likely for most of the nation’s history.

Over this period, the nation’s growth experienced ups and downs during wars, economic upheavals, and immigration waves. This includes a dip to below 0.5% during the 1918 Spanish flu pandemic and rises to almost 2% during the post-World War II “baby boom.” After sagging to annual levels closer to 1% during the 1970s and 1980s, there was uptick in the 1990s as a consequence of higher immigration.

Part of last year’s sharp decline can be attributed to the COVID-19 pandemic, which brought with it more deaths and further restrictions in immigration. Among states, 16 lost population in 2019-20 including California for the first time, and 34 showed lower growth or greater declines than in the previous year (downloadable Table B).

THE LOWEST DECADE GROWTH IN U.S. HISTORY

The new statistics permit an estimate of the U.S. population on Census Day (April 1, 2020) to have been 329.2 million people. If that turns out to be the case, the decade growth rate between 2010 and 2020 will be the lowest decade growth in U.S. history.

The 2010s decade was one of fewer births, more deaths, and uneven immigration (downloadable Table C). Although immigration may have become unusually low due to recent federal restrictions that led to a decline in the noncitizen foreign-born population, low natural increase levels—fewer births, more deaths—will likely continue regardless of federal policy, as a result of the aging of the population. Some of this change can be attributed to lower fertility rates and the aging into adulthood of the last of the millennial population. However, census projections show older populations—especially those over age 65—will continue to display far higher rates of growth than youth.

A PREVIEW OF CONGRESSIONAL REAPPORTIONMENT

The constitutionally mandated purpose for taking the decennial census is to apportion members of the U.S. House of Representatives across states based on population. As a consequence, some states gain seats and some states lose them. While the Census Bureau is mandated to deliver these population totals to the president by December 31, various delays associated with this year’s pandemic and court cases will likely postpone delivery until sometime in January.

Still, it is possible to use the new state-level data (determined separately from 2020 census) to make educated estimates of which states will gain or lose congressional seats, as shown in Table 1 and downloadable Table D.

Ten states are projected to lose one seat each. The most noteworthy of these is California, which has never lost a House seat via reapportionment. Other states projected to lose seats are in the Midwest (Minnesota, Illinois, Michigan, and Ohio), the Northeast (Pennsylvania, New York, and Rhode Island) and slow-growing parts of the South (West Virginia and Alabama).

This reapportionment will also affect the Electoral College in future presidential elections. There are a mix of “red” and “blue” states among those gaining and losing seats. Thus, it is difficult to predict how these changes will benefit future Republican and Democratic presidential candidates, especially since Democrats seem to be making strides in growing, formerly Republican states in the West and the South.

THE DECADE AHEAD

These new census estimates reveal a nation grappling with demographic stagnation to a degree it has not experienced in quite some time. While COVID-19 has surely accentuated this in ways that will continue in the near term, population projections taken prior to the pandemic reveal that our long-term demographic future is characterized by only modest levels of natural increase (births minus deaths), and more pronounced aging. Meanwhile, youth and young adult working-age populations will grow modestly at best, leading to greater “age dependency” as the growing older population becomes dependent on younger workers.

Clearly, the nation’s overall growth—and especially that of its younger population—will depend on a return to healthy immigration levels, as immigrants and their children will become the greatest long-term source of youthful growth. As we rebound from the pandemic, serious attention needs to be given to the crucial role immigration will play in halting even further national growth declines, as well as immigrants’ vital contribution to America’s future economic and demographic viability.

Matthew Klein, "Why the Post-Pandemic Future Could Be Bright: Productivity Gains Could Be Here to Stay,"Barrons, January 8, 2021, https://www.barrons.com/articles/why-the-post-pandemic-future-could-be-bright-productivity-gains-51610143201

Why the Post-Pandemic Future Could Be Bright: Productivity Gains Could Be Here to Stay

The coronavirus has displaced tens of millions of workers, and forced thousands of businesses to close. But the virus has also encouraged rapid changes in the way we work and consume—and some of those changes could be both beneficial and long-lasting.

Once the virus is eradicated, higher productivity in retail, the reduction of long commutes by people working from home, and the conversion of offices and hotels to apartments could eventually make Americans better off than we were before. Some of the benefits could take years to materialize, but others are already here.

In fact, productivity has already grown at an 8% yearly rate since the pandemic began—the fastest pace of improvement since the 1960s. Output per hour worked tends to rise sharply during downturns as companies slash costs and the least efficient businesses are forced to close. Productivity grew more than 4% a year in 2002 and 2003 and by 6% in 2009, but just 2% each year from 2004 to 2007 and by only 1% each year from 2010 to 2019.

But there are reasons to think there are other, more positive forces at work this time around—and that the recent uptick could be durable even after society returns to normal. After all, productivity has kept rising even as many low-paid workers were rehired in sectors such as hospitality and retail. Spencer Hill, an economist at Goldman Sachs, thinks that “labor reallocation accounts for less than half” of the reported gains in productivity so far, which “argues against a rapid reversal of aggregate productivity next year” as the virus is eradicated.

Start by looking at how the virus has changed how Americans consume. It’s safer to buy goods online and have them delivered—or dropped off in the trunk of your car—than it is to go into a physical store. The desire for safety may pass once the virus is gone, but selling goods online is more efficient for many retailers, requiring fewer people and less expensive real estate to generate the same amount of turnover.

Since the pandemic began, the total real value of goods consumed has grown more than 7% while the number of people working in the goods distribution sector—retail, wholesale, truck transportation, warehousing, and delivery services—has dropped about 2.5%. Put another way, the amount of stuff Americans are able to buy from a given number of retail and logistics workers has jumped 10% in less than a year. That represents a dramatic acceleration of the long-running trend of Americans consuming more goods while employing fewer people in the distribution of those goods.

Then there is the rise in remote work necessitated by the pandemic. That’s not obviously a productivity booster for anyone with children at a time when schools are closed, but for many others, the absence of a commute saves an enormous amount of time and stress each day. Those gains would be widely shared once the virus is eradicated.

Before the pandemic, about 40% of Americans who didn’t work from home spent at least an hour commuting each day, with 10% spending at least two hours commuting back and forth. The share of Americans who worked from home full time was just 5.7% in 2019, although almost a quarter of American workers were working from home a few hours each day.

As of December, about 26% of full-time workers were doing their jobs from home to avoid the virus. Almost 60% of the workers in “business and financial operations occupations,” “computer and mathematical occupations,” “architecture and engineering occupations,” and “legal occupations” were working remotely.

The shift could free up valuable real estate currently used as office space. While it would initially be costly to convert buildings to needed housing, the longer-term gains could be substantial. Cost-conscious suburbanites might even choose to relocate to urban cores as apartment prices fall relative to wages and interest rates. Similarly, a permanent drop in business travel could free up buildings currently used as hotels for other uses.

These positive trends are occurring at a time when the private sector’s financial position is strong: the majority of Americans are richer than they were before the pandemic thanks to the rise in home values and stock prices, while businesses are flush with cash and earning record profits. Spending power is set to get a further boost thanks to the recently passed relief bill and the additional checks that will likely be distributed in the next few months, which should help lower the risk of permanent damage to workers and businesses.

Put it together, and the prospects for pandemic survivors could be better than what might have been reasonably expected at the end of 2019.

He flags one big trend, the acceleration of online shopping which has a surprising impact on productivity, “…selling goods online is more efficient for many retailers, requiring fewer people and less expensive real estate to generate the same amount of turnover. Since the pandemic began, the total real value of goods consumed has grown more than 7% while the number of people working in the goods distribution sector—retail, wholesale, truck transportation, warehousing, and delivery services—has dropped about 2.5%. Put another way, the amount of stuff Americans are able to buy from a given number of retail and logistics workers has jumped 10% in less than a year. That represents a dramatic acceleration of the long-running trend of Americans consuming more goods while employing fewer people in the distribution of those goods.Hill estimates that the changes in retail alone could boost America’s overall productivity growth rate by about 0.5 percentage point each year at least through 2022. For perspective, labor productivity rose just 1.4% each year on average from 2017 to 2019….”

Matt Klein stiches together some anecdotal evidence on the impact of pandemic on productivity, parallels your views on evolution, driven by extinction level events good factoid, "... In fact, productivity has already grown at an 8% yearly rate since the pandemic began—the fastest pace of improvement since the 1960s..”Granted those gains are inflated due to low skill workers leaving labor force.

Matthew Klein, "President Trump Leaves Office Next Week. Here’s What He Meant for the Economy,"Barrons, January 15, 2021, https://www.barrons.com/articles/a-review-of-trump-tax-cuts-trade-wars-and-a-spending-boom-51610724602

His comment on equity market performance, “…From the day Trump was elected until the day he lost to Joe Biden, the S&P 500 rose just over 12% annually. Only Bill Clinton and Calvin Coolidge presided over bigger market gains—and both of them left office near the tops of two of the most notorious equity bubbles ever. Making this even more impressive is that stock market valuations were already high before Trump won. Stocks were about three times as expensive relative to earnings in October 2016 as in July 1923, just before Coolidge took office. Stocks were similarly cheap when Ronald Reagan was elected in 1980. Stocks were 40% cheaper when Barack Obama was elected compared with when Trump won, and 20% cheaper when Clinton won. Only Herbert Hoover and George W. Bush were elected when stocks were trading at higher valuations….”

Great chart by Matt Klein showing the impact of Trump’s surprise win and GOP control of government’s impact on unleashing animal spirits, “…Perhaps the most important impact of Trump’s surprise victory was psychological.The prospect of a unified Republican federal government reset expectations of corporate executives, small-business owners, and many ordinary Americans. That showed up in asset prices—cyclically adjusted earnings multiples rose more than 25% in the year after Trump won—and in surveys. No one captured the shift in mood better than Ray Dalio, founder of hedge-fund firm Bridgewater Associates. On the eve of the election, Bridgewater’s research department warned that a Trump victory would cause markets to plunge because of the implications for trade policy and the rule of law. But one month later,Dalio was comparing Trump’s election to the transition from Mao Zedong to Deng Xiaoping in China, concluding that it “could have a much bigger impact on the U.S. economy than one would calculate on the basis of changes in tax and spending policies alone because it could ignite animal spirits.”…”