Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, April 28, 2023

AI Summary. The Employment Cost Index shows private wages and compensation rising at annual rates of roughly 4.7%–5.1%, higher than any point in the previous cycle, supporting the argument that wage growth is not slowing and that the measured slowdown in average hourly earnings reflected shifts in workforce composition. Real wages and salaries remain 5% below their pre-pandemic trend.

Jason Furman @jasonfurman
Date Posted:

The Employment Cost Index is consistent with annualized 4% PCE inflation. Real wages are now 5% below their pre-pandemic trend. @Jasonfurman

Is wage growth slowing, or was the apparent slowdown a composition effect?

Core argument: The Employment Cost Index rose at a 4.7% annual rate over the last six months, which Jason Furman says is consistent with 4.0% PCE inflation and weighs in on the side of the argument that wage growth is not slowing.

The Employment Cost Index weighs in on the side of the argument that wage growth is not slowing--suggesting that the average hourly earnings slowdown was a spurious result of composition. Over the last six months, ECI went up at a 4.7% annual rate, consistent with 4.0% PCE inflation. The previous showed private wages excluding incentive occupations, probably the best measure. All the measures consistent. At an annual rate over the last 3 months: Private comp +4.7%; Private wages +4.9%; Private wages ex incentive+ 5.1%. All are higher than any time in the last cycle. This leaves real wages and salaries 5 percent below their pre-pandemic trend.

Takeaways by Macro Roundup® AI

  1. The Employment Cost Index rose at a 4.7% annual rate over the last six months, which Jason Furman says is consistent with 4.0% PCE inflation and weighs in on the side of the argument that wage growth is not slowing.
  2. Over the last three months at an annual rate, private compensation rose 4.7%, private wages 4.9%, and private wages excluding incentive occupations 5.1%, all higher than any time in the last cycle.
  3. Jason Furman suggests the average hourly earnings slowdown was a spurious result of composition, and that real wages and salaries remain 5% below their pre-pandemic trend.

AI Summary. The value of European stock market listings fell to its lowest level in a decade, with a single €75bn carmaker listing in Frankfurt accounting for 60% of the total raised. US outperformance in listing numbers and valuations reflects Silicon Valley's technology scene and ultra-loose monetary policy that pushed cash into equities.

Katie Martin and Nikou Asgari Financial Times
Date Posted:

In a survey of capital markets in the past two decades, @ft concludes that Europe has failed to take share from American capital markets. European firms that list in the US have raised 4x more money than American firms that list in Europe.

Why are European stock markets falling behind the US?

Core argument: The value of European stock listings in 2022 fell to its lowest level in a decade, with Porsche's €75bn Frankfurt listing alone accounting for 60 per cent of the total amount raised, according to Dealogic data.

The value of European listings in 2022 dropped to its lowest point in a decade, according to Dealogic data. Just one deal — the €75bn listing of carmaker Porsche in Frankfurt — accounted for 60 per cent of the total amount raised. In the UK, newly listed companies raised 90 per cent less in 2022 than the heights of 2021, with just 45 companies listing in London, according to LSE data. Only six of those raised more than £100mn of new money. The massive outperformance of the US in recent years — both in terms of listing numbers and in the valuations that companies there can command — was a product of the two factors: the technology scene in Silicon Valley, and the ultra-loose monetary policy that drove cash into riskier assets such as equities.

Takeaways by Macro Roundup® AI

  1. The value of European stock listings in 2022 fell to its lowest level in a decade, with Porsche's €75bn Frankfurt listing alone accounting for 60 per cent of the total amount raised, according to Dealogic data.
  2. Newly listed UK companies raised 90 per cent less in 2022 than at the 2021 peak, with just 45 companies listing in London and only six raising more than £100mn of new money, according to LSE data.
  3. US outperformance in both listing numbers and the valuations companies there command was a product of two factors: Silicon Valley's technology scene and ultra-loose monetary policy that drove cash into riskier assets such as equities.

AI Summary. Apple and Microsoft's combined weighting in the S&P 500 index reached a record 14%, and adding Alphabet, Amazon, Meta and Nvidia brings nearly a quarter of every dollar invested in the index into just six companies. Apple and Microsoft together added more than $1tn in market value, nearly half the index's gains.

Subrat Patnaik Bloomberg
Date Posted:

Apple and Microsoft now make up 14% of the S&P 500 after adding $1T of combined market value since the start of the year. Including Alphabet, Amazon, Meta and Nvidia, 25% of the S&P 500 is in 6 firms.

Have big tech companies reached a record share of the index?

Core argument: Apple and Microsoft's combined weighting in the S&P 500 jumped to a record 14% after strong earnings from Microsoft and others fueled a rally in technology stocks.

Apple Inc. and Microsoft Corp. have never held more sway over the S&P 500 Index. The world’s two most-valuable companies saw their combined weightings in the benchmark jump to a record 14% this week after strong earnings reports from Microsoft and others fueled a rally in technology stocks. When you include Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Nvidia Corp, nearly a quarter of every dollar put into the S&P 500 is now split between just six names. Apple and Microsoft alone have added more than $1 trillion in combined market value in 2023, nearly half of the gains for the entire S&P 500.

Takeaways by Macro Roundup® AI

  1. Apple and Microsoft's combined weighting in the S&P 500 jumped to a record 14% after strong earnings from Microsoft and others fueled a rally in technology stocks.
  2. Apple, Microsoft, Alphabet, Amazon.com, Meta Platforms and Nvidia together account for nearly a quarter of every dollar put into the S&P 500.
  3. Apple and Microsoft alone added more than $1 trillion in combined market value in 2023, nearly half of the gains for the entire S&P 500.

AI Summary. Germany is in early-stage talks to restrict exports to China of chemicals used to manufacture semiconductors, supplied by Merck and BASF. Officials weighing the measure are aware it could damage business ties with China, Germany's largest trading partner.

Michael Nienaber, Jenny Leonard and Kamil Kowalcze Bloomberg
Date Posted:

Germany may join the American export controls on China and limit the export of chemicals used to manufacture semiconductors. China is Germany’s largest trading partner. @markets

Is Germany weighing export limits on chip chemicals to China?

Core argument: Germany is in talks to limit exports to China of chemicals used to manufacture semiconductors, as Berlin steps up efforts to reduce its economic exposure to China.

Germany is in talks to limit the export of chemicals to China that are used to manufacture semiconductors as Berlin steps up efforts to reduce its economic exposure to the Asian nation. While Germany does not have advanced chip-making technologies, Merck and BASF provide firms around the world with critical chemicals required for making semiconductors. Merck’s products or services are found in almost every single chip in the world, while BASF is a market leader in Europe and Asia, home to the world’s most important contract chipmakers including Taiwan Semiconductor Manufacturing Co. Without supplies from Merck and BASF, China could face more challenges in developing advanced chip technologies and even its capabilities to make semiconductors could be affected. Talks within the ruling coalition on such export controls are still at an early stage and officials are aware that any such decision could damage business ties with China, which has become Germany’s largest trading partner, the people said.

Takeaways by Macro Roundup® AI

  1. Germany is in talks to limit exports to China of chemicals used to manufacture semiconductors, as Berlin steps up efforts to reduce its economic exposure to China.
  2. Merck's products or services are found in almost every chip in the world and BASF is a market leader in Europe and Asia, home to contract chipmakers including Taiwan Semiconductor Manufacturing Co.; without their supplies, China could face more challenges developing advanced chip technologies.
  3. Talks on such export controls within Germany's ruling coalition remain at an early stage, and officials are aware that any decision could damage business ties with China, which has become Germany's largest trading partner.

AI Summary. The authors estimate that uncapping federal graduate student borrowing increased previously constrained students' borrowing and shifted their debt from private to federal sources, but had no effect on graduate enrollment, the racial and gender composition of entering students, human capital accumulation, or later earnings. They find the resulting increase in federal loans significantly raised program prices.

Sandra Black, Lesley Turner and Jeffrey Dennings Working Paper
Date Posted:
Is Database:
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New research shows that a major increase in federal student loan funding that started in 2006 had the effect of dramatically increasing tuition without improving either inclusion or the future earnings of graduates. @JeffDenning @Econ_Sandy @AEI

Does uncapping graduate student loans expand access or just raise tuition?

Core argument: The 2006 Graduate PLUS program, which essentially uncapped federal borrowing for graduate programs, increased previously constrained students' borrowing and shifted their loan composition from private to federal debt, according to the authors.

In 2006, the federal government essentially uncapped student borrowing for graduate programs with the introduction of the Graduate PLUS loan program. We find that access to additional federal loans increased previously constrained students’ borrowing and shifted the composition of their loans from private to federal debt. However, the increase in borrowing limits had no effect on graduate student enrollment or the racial and gender composition of entering graduate students. We find little evidence of short or longer-run effects on the human capital accumulation of students who were or would have been constrained by federal borrowing limits in the absence of Grad PLUS, even though cumulative debt significantly increased for these students when they gained access to Grad PLUS loans. This suggests that access to additional liquidity did not constrain graduate student borrowers’ human capital investments prior to the implementation of Grad PLUS. We also find little evidence of an impact on later earnings, consistent with no change in human capital accumulation. Where we do see effects is on program prices. Grad PLUS-driven increases in federal student loans significantly increased program prices.

Takeaways by Macro Roundup® AI

  1. The 2006 Graduate PLUS program, which essentially uncapped federal borrowing for graduate programs, increased previously constrained students' borrowing and shifted their loan composition from private to federal debt, according to the authors.
  2. The authors find no effect of higher federal borrowing limits on graduate enrollment or the racial and gender composition of entering graduate students, and little evidence of short- or longer-run effects on human capital accumulation or later earnings.
  3. Grad PLUS-driven increases in federal student loans significantly increased graduate program prices, the authors find, even as cumulative debt rose for students who would otherwise have been constrained by federal borrowing limits.

AI Summary. AI may allow important businesses to operate with very few employees, illustrated by an estimate of about 375 staff at OpenAI versus more than 60,000 at Meta. The author argues such firms would place a premium on talent selection and high pay, and would have less need to go public, raising the importance of venture capital.

Tyler Cowen Bloomberg
Date Posted:

.@tylercowen argues that the diffusion of AI will enable important companies to run with a small number of employees managing automated AI-based systems.

.@tylercowen argues that the diffusion of AI will enable important companies to run with a small number of employees...

Will AI shrink major companies to a few hundred employees?

Core argument: OpenAI, producer of ChatGPT — described as the most rapidly growing consumer technology product in history — has roughly 375 employees by one recent estimate, against more than 60,000 at Meta even after layoffs.

Consider ChatGPT, which has been described as the most rapidly growing consumer technology product in history. It is produced by OpenAI, headquartered in San Francisco. By one recent estimate the company has about 375 employees. By contrast, Meta, even after some layoffs, currently has more than 60,000. OpenAI will make more hires. Still, it may be time to reset expectations for what a major tech company looks like. Important businesses with a small number of employees will need to hire exactly the right people to oversee the larger automated and AI-managed superstructures. Talent selection will rise in importance as a skill, and the people in these smaller units will command very high compensation. Investing will evolve as well, with Americans less likely to own businesses in their stock portfolios. If businesses become smaller overall, they will not have the same need to go public to raise capital for expansion. They will be privately held. Venture capital will rise in importance, but since most solo investors face SEC restrictions on making venture investments, they will have to put their money elsewhere.

Takeaways by Macro Roundup® AI

  1. OpenAI, producer of ChatGPT — described as the most rapidly growing consumer technology product in history — has roughly 375 employees by one recent estimate, against more than 60,000 at Meta even after layoffs.
  2. Important businesses with few employees will need to hire exactly the right people to oversee larger automated and AI-managed superstructures, raising talent selection's value as a skill and commanding very high compensation.
  3. Smaller businesses may have less need to go public to raise expansion capital and would stay privately held, raising venture capital's importance while SEC restrictions keep most solo investors out of venture investing.

AI Summary. Higher defense spending accounted for about one-fifth of US economic growth in a recent quarter, contributing 21 basis points of a 1.1% annualized rise in gross domestic product, according to Commerce Department data. That marks a swing from an earlier stretch when falling defense outlays subtracted an average of 23 basis points from growth.

Matthew Boesler and Roxana Tiron Bloomberg
Date Posted:

Higher defense spending accounted for 20% of US economic growth in Q1 2023. @markets

Is rising defense spending propping up US economic growth?

Core argument: Higher US defense spending contributed 21 basis points of the 1.1% annualized GDP growth in the first quarter, about one-fifth of total growth, according to a Commerce Department report.

Higher defense spending accounted for about one-fifth of economic growth in the first quarter — 21 basis points out of the 1.1% annualized increase in GDP — a Commerce Department report showed. From the second quarter of 2022 to the first quarter of 2023, defense contributed an average of 13 basis points to GDP growth. That’s a sizeable swing from the previous five quarters when declining defense spending was slowing the economy down, with an average drag of 23 basis points over that period. 

Takeaways by Macro Roundup® AI

  1. Higher US defense spending contributed 21 basis points of the 1.1% annualized GDP growth in the first quarter, about one-fifth of total growth, according to a Commerce Department report.
  2. Defense spending added an average of 13 basis points to US GDP growth from the second quarter of 2022 through the first quarter of 2023, the Commerce Department report showed.
  3. In the preceding five quarters, declining US defense spending cut an average of 23 basis points from GDP growth, a sizeable swing from its subsequent positive contribution.

Monday, May 1, 2023

AI Summary. Managers account for 25–35% of the variance in store-level productivity in retail, about 50–70% of the explanatory power of store fixed effects. The authors estimate that moving a manager from the 10th to the 90th percentile raises productivity by 22–82%, equivalent to adding a fifth worker to a team of four.

Robert Metcalfe, Alexandre Sollaci and Chad Syverson National Bureau of Economic Research
Date Posted:
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Database

Using evidence from two large retailers @RDMetcalfe @ASollaci @ChadSyverson find that individual managers, outside of firm-wide management practices, explain 25-35% of variance in store level productivity.

How much do managers explain differences in retail store productivity?

Core argument: Managers explain 25–35% of the variance in store-level retail productivity, about 50–70% of the explanatory power of store fixed effects, according to the authors' estimates.

Overall, managers explain between 25 and 35% of the variance of store-level productivity, which is about 50-70% of the explanatory power of store fixed effects. In the four largest connected sets across both companies, moving a manager from the 10th percentile to the 90th percentile increases overall productivity by between 22% and 82%. On average, this implies an effect on output equivalent to adding a fifth employee to a team of four.  We estimate that replacing a manager at the bottom of the distribution by one at the top could increase a store’s productivity by at least 50%, and perhaps as much as doubling it, depending on the company and the relevant connected set. 

Takeaways by Macro Roundup® AI

  1. Managers explain 25–35% of the variance in store-level retail productivity, about 50–70% of the explanatory power of store fixed effects, according to the authors' estimates.
  2. Moving a manager from the 10th to the 90th percentile raises overall productivity by 22–82% across the four largest connected sets in both companies, equivalent on average to adding a fifth employee to a team of four.
  3. The authors estimate that replacing a manager at the bottom of the distribution with one at the top could raise a store's productivity by at least 50%, and perhaps double it, depending on company and connected set.

AI Summary. JPMorgan Chase agreed to acquire failed lender First Republic Bank in a government-led deal, taking on about $173bn of loans, $30bn of securities and $92bn in deposits. JPMorgan and the Federal Deposit Insurance Corporation agreed to share losses and any recoveries on First Republic's single-family and commercial loans.

Jennifer Surane, Hannah Levitt and Katanga Johnson Bloomberg
Date Posted:

JPM has acquired First Republic Bank. Commenting on recent banking instability in the aftermath of the SVB failure, Jamie Dimon said, “This is getting near the end of it.”

JPM has acquired First Republic Bank. Commenting on recent banking instability in the aftermath of the SVB failure, Jamie...

Does a government-led sale of a failed lender stabilize the banking system?

Core argument: JPMorgan Chase acquired roughly $173 billion of First Republic's loans, $30 billion of securities and $92 billion in deposits in a government-led deal for the failed lender.

JPMorgan Chase & Co. agreed to acquire First Republic Bank in a government-led deal for the failed lender. “This is getting near the end of it, and hopefully this helps stabilize everything,” JPMorgan Chief Executive Officer Jamie Dimon said on a call with journalists Monday. Regional banks that reported first-quarter results in recent weeks “actually had some pretty good results,” the CEO said. “The American banking system is extraordinarily sound.” Dimon’s bank acquired about $173 billion of First Republic’s loans, $30 billion of securities and $92 billion in deposits. JPMorgan and the FDIC agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans, the agency said in a statement.

Takeaways by Macro Roundup® AI

  1. JPMorgan Chase acquired roughly $173 billion of First Republic's loans, $30 billion of securities and $92 billion in deposits in a government-led deal for the failed lender.
  2. JPMorgan and the FDIC agreed to share losses, as well as any recoveries, on First Republic's single-family and commercial loans, according to the agency.
  3. JPMorgan CEO Jamie Dimon said the deal is "getting near the end of it" and hopefully helps stabilize everything, adding that regional banks reporting first-quarter results had "some pretty good results" and the American banking system is "extraordinarily sound.".

AI Summary. Historically, the unemployment rate has fallen while the Federal Reserve raises interest rates, with a median of 14 months from the first rate hike until unemployment bottoms and begins rising. The author argues it typically takes 12 to 18 months for tighter policy to soften the labor market.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk @apolloglobal notes the median time from the start of the Fed’s hiking cycle until unemployment bottoms is 14 months. We are 13 months into the current hiking cycle.

How long does tighter monetary policy take to soften employment?

Core argument: The median time from the Fed's first rate hike until the unemployment rate bottoms and turns higher is 14 months historically, and softening the labor market usually takes 12 to 18 months.

The unemployment rate falls when the Fed hikes rates, see chart below. In fact, the declining unemployment rate is precisely the reason why the Fed is raising interest rates. And the chart below suggests that when the unemployment rate starts moving higher is when the Fed stops hiking. Looking back in history, the median time it takes from when the Fed starts hiking until the unemployment rate bottoms and moves higher is 14 months, and using this historical pattern as a guide, with the first Fed hike in March 2022, we should begin to see the unemployment rate increase within the next couple of months. The bottom line is that it usually takes 12 to 18 months for the Fed to soften the labor market, and today is no different.

Takeaways by Macro Roundup® AI

  1. The median time from the Fed's first rate hike until the unemployment rate bottoms and turns higher is 14 months historically, and softening the labor market usually takes 12 to 18 months.
  2. With the Fed's first hike in March 2022, the historical 14-month pattern suggests the unemployment rate should begin rising within the next couple of months.
  3. The unemployment rate falls when the Fed hikes rates, the declining unemployment rate is the reason the Fed raises rates, and the Fed stops hiking once unemployment starts moving higher.

AI Summary. US construction spending and employment have reached new records, boosted by government infrastructure outlays, a domestic manufacturing building wave, and apartment construction delayed earlier by high materials prices. Signs of slowdown are emerging: apartment building is expected to decline as current projects finish, regional bank troubles are curbing project financing, and home improvement spending is forecast to contract.

Ryan and Will Parker Wall Street Journal
Date Posted:

While there are signs of a slowdown, the tightening cycle hasn’t yet had much of an impact on construction spending and employment. @WSJ

Is a construction boom keeping spending and employment at records?

Core argument: U.S. construction spending and employment have risen to records this year, boosted by government infrastructure outlays, a domestic manufacturing renaissance, and a wave of apartment building delayed early in the pandemic by high materials prices such as lumber.

Construction spending and employment have risen to new records this year, boosted by government outlays for infrastructure, a domestic manufacturing renaissance and a wave of apartment building that got off to a slow start during the pandemic when prices for building materials, such as lumber, were sky high. There are signs of slowdown, to be sure. Apartment construction is expected to decline once the latest batch of buildings is finished. Problems at regional banks are drying up financing for some projects. Spending on home improvement and repairs is forecast to decline over the next year, the first contraction since the depths of the foreclosure crisis in 2010, according to a closely watched barometer of the remodeling industry.

Takeaways by Macro Roundup® AI

  1. U.S. construction spending and employment have risen to records this year, boosted by government infrastructure outlays, a domestic manufacturing renaissance, and a wave of apartment building delayed early in the pandemic by high materials prices such as lumber.
  2. Apartment construction is expected to decline once the latest batch of buildings is completed, while problems at regional banks are drying up financing for some construction projects.
  3. Spending on home improvement and repairs is forecast to contract over the next year for the first time since the depths of the foreclosure crisis in 2010, according to a closely watched remodeling-industry barometer.

AI Summary. The article argues the US operates a low-wage/high-welfare labor model that benefits employers through lower wages and some consumers through lower prices, while costing taxpayers and the working poor. It contends cheap labor substitutes for labor-saving machinery and weakens incentives for technological innovation, noting 31m workers and their children received Earned Income Tax Credit benefits averaging $2,043, costing $63bn.

Michael Lind Wall Street Journal
Date Posted:

Michael Lind argues that the earned-income tax credit slows productivity growth by subsidizing low-wage employers who in turn don’t need to invest in automation.

Michael Lind argues that the earned-income tax credit slows productivity growth by subsidizing low-wage employers who in...

Does a low-wage, high-welfare labor model burden taxpayers and slow innovation?

Core argument: For the 2022 tax year, 31 million American workers and their children received an average of $2,043 in Earned Income Tax Credit benefits, costing taxpayers $63 billion — money the author argues employers could have paid in wages instead.

We can call the current American labor market system the low-wage/high-welfare model. It is a success from the perspective of employers who get to pay lower wages. It is also a success for some consumers, since lower wages mean lower prices. The losers include taxpayers, the working poor themselves and workers who are not poor but fear poverty. The low-wage model also saps the incentives for technological innovation, because cheap labor so often substitutes for labor-saving machinery. For the 2022 tax year, 31 million American workers and their children received an average of $2,043 in EITC benefits, for a cost to taxpayers of $63 billion. That is $63 billion in taxpayer money that could have been saved if employers had paid those workers a little more each month.

Takeaways by Macro Roundup® AI

  1. For the 2022 tax year, 31 million American workers and their children received an average of $2,043 in Earned Income Tax Credit benefits, costing taxpayers $63 billion — money the author argues employers could have paid in wages instead.
  2. The author characterizes the U.S. labor market as a low-wage/high-welfare model that benefits employers paying lower wages and consumers paying lower prices, while taxpayers, the working poor, and workers who fear poverty lose.
  3. The author argues the low-wage model saps incentives for technological innovation because cheap labor often substitutes for labor-saving machinery.

AI Summary. Inflation-adjusted wages for the lowest-earning 10% of US workers rose 6.4% and have returned to pre-pandemic levels, outpacing wage growth for top and middle earners, who have lost ground once price growth is taken into account.

Paul Kirkup Financial Times
Date Posted:
Is Database:
Database

Real hourly earnings for the bottom 10% earners rose by 6.4% between January 2020 and September 2022. Real hourly earnings for the top 10% and median earners were down in real terms.

Are low earners seeing faster real wage growth than top earners?

Core argument: Real hourly earnings for the lowest-paid US workers rose 6.4 percent between January 2020 and September 2022, returning the bottom 10 percent of the workforce to their pre-pandemic wage level.

America’s lowest-earning workers are enjoying higher wage growth than top earners, after taking into account the effects of the recent bout of high inflation. Since 2020, real wages for the bottom 10 percent of the workforce have returned to their pre-pandemic level. In contrast, top earners and those on average incomes have taken a substantial hit once the effect of price growth is taken into account.  Real hourly earnings for the lowest earners rose by 6.4 percent between January 2020 and September 2022.

Takeaways by Macro Roundup® AI

  1. Real hourly earnings for the lowest-paid US workers rose 6.4 percent between January 2020 and September 2022, returning the bottom 10 percent of the workforce to their pre-pandemic wage level.
  2. Top earners and workers on average incomes in the US have taken a substantial hit to real wages since 2020 once high inflation is taken into account.
  3. America's lowest earners have seen faster inflation-adjusted wage growth than top earners since 2020.

AI Summary. Berkshire Hathaway has compounded annual returns of nearly 20% since 1965, about twice the S&P 500's rate, but that period reflected low interest rates, low equity values, and ample opportunities. Investors now face lower returns amid higher interest rates and more competitors chasing bargains, according to the firm's vice-chairman.

Eric Platt and Harriet Agnew Financial Times
Date Posted:

Charlie Munger warns that investors should expect lower returns going forward. Adding he and Buffett were “creature[s] of a particular time and a perfect set of opportunities…[We lived in] a perfect period to be a common stock investor.”

Charlie Munger warns that investors should expect lower returns going forward. Adding he and Buffett were “creature[s] of a...

Will investors earn lower returns than in past decades?

Core argument: Berkshire Hathaway has compounded annual returns of nearly 20 percent since 1965, twice the rate of the S&P 500, and Charlie Munger said the firm was "a creature of a particular time and a perfect set of opportunities.".

Berkshire has generated compounded annual returns of nearly 20 percent, twice the rate of the benchmark S&P 500 stock index, since 1965. “We were a creature of a particular time and a perfect set of opportunities,” said Munger, adding that he had lived during “a perfect period to be a common stock investor”. He and Buffett had benefited “by and large [from] low interest rates, low equity values, ample opportunities”, he said. Munger warned that the golden age for investing was over, and investors would need to contend with a period of lower returns. “It’s gotten very tough to have anything like the returns that were obtained in the past,” he said, pointing to higher interest rates and a crowded field of investors chasing bargains and looking for companies with inefficiencies.

Takeaways by Macro Roundup® AI

  1. Berkshire Hathaway has compounded annual returns of nearly 20 percent since 1965, twice the rate of the S&P 500, and Charlie Munger said the firm was "a creature of a particular time and a perfect set of opportunities.".
  2. Munger said he and Warren Buffett benefited "by and large [from] low interest rates, low equity values, ample opportunities," in what he called "a perfect period to be a common stock investor.".
  3. Munger warned that the golden age for investing was over and that investors would contend with lower returns, pointing to higher interest rates and a crowded field of investors chasing bargains and companies with inefficiencies.

AI Summary. India is spending 1.7% of GDP on transport infrastructure this year, roughly twice the level in the United States and most European countries. The stated aim is to cut domestic logistics costs from about 14% of GDP to 8% by 2030.

Economist Staff The Economist
Date Posted:

In an effort to improve India’s growth trajectory, India’s government is making significant investments in railroad and highway infrastructure.

Is India outspending Western countries on transport infrastructure?

Core argument: India will spend 1.7% of GDP on transport infrastructure this year, roughly twice the level in America and most European countries.

India will spend 1.7% of GDP on transport infrastructure this year, around twice the level in America and most European countries. If such infrastructure were a central-government department, it would have the third-biggest budget after the finance and defence ministries. The stated aim of the splurge is to cut the cost of logistics within India from around 14% of GDP today to 8% by 2030.

Takeaways by Macro Roundup® AI

  1. India will spend 1.7% of GDP on transport infrastructure this year, roughly twice the level in America and most European countries.
  2. India's stated aim for the transport spending is to cut domestic logistics costs from around 14% of GDP today to 8% by 2030.
  3. India's transport infrastructure spending, were it a central-government department, would carry the third-biggest budget after the finance and defence ministries.