Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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


Monday, May 22, 2023

AI Summary. The Federal Reserve puts American households' net worth at nearly $140tn, an average of over $400,000 per person and over $1m per household of 2.5 people. Estimates of median wealth per adult in current US dollars across 170 countries and places allow this record to be compared with America's Cold War treaty allies in Europe and Asia.

Nicholas Eberstadt American Enterprise Institute
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Nicholas Eberstadt @AEI argues that America’s seemingly dominant post-Cold War economic performance is clouded by the poor performance of the wealth trajectory of the median American.

How does American household wealth compare with that of allied democracies?

Core argument: The Federal Reserve puts U.S. household net worth at nearly $140 trillion at the end of 2022, an average of over $400,000 per person and over $1 million per household for a 2.5-person home.

Overall, post–Cold War America has been fantastically successful in wealth creation. By the reckoning of the Federal Reserve, the net worth of American households amounted to nearly $140 trillion at the end of 2022: an average of over $400,000 per person and over a million dollars per household (for a 2.5 person home).  America’s struggle for mass prosperity can also be placed in international perspective, thanks to the path-breaking research for the Credit Suisse Global Wealth Databook. Those estimates are still a work in progress for poorer societies, but they look fairly reliable for most affluent Western democracies. The Global Wealth Databook offers estimates for “median wealth per adult” in current US dollars for the years 2000–2021 for 170 countries and places.  Figures 2 and 3 show US estimated median wealth per adult for 2000–2021 in relation to America’s Cold War treaty allies in Europe and Asia.

Takeaways by Macro Roundup® AI

  1. The Federal Reserve puts U.S. household net worth at nearly $140 trillion at the end of 2022, an average of over $400,000 per person and over $1 million per household for a 2.5-person home.
  2. The Credit Suisse Global Wealth Databook estimates median wealth per adult in current U.S. dollars for 170 countries and places over 2000–2021, figures still a work in progress for poorer societies but fairly reliable for most affluent Western democracies.
  3. U.S. estimated median wealth per adult for 2000–2021 is set against that of America's Cold War treaty allies in Europe and Asia.

AI Summary. In a calibrated model, a one percentage point rise in real interest rates has only modest effects on credit spreads and output when the economy starts in a tranquil period, but produces much larger responses when the economy begins close to the financially unstable region. The authors attribute the difference to a financial accelerator mechanism.

Ozge Akinci, Gianluca Benigno, Marco Del Negro, Ethan Nourbash, and Albert Queralto Federal Reserve Bank of New York
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.@NewYorkFed defines a new metric, the financial stability interest rate r**, which is the rate above which the financial sector tends to see vicious cycle selling and therefore breaks down.

Does financial vulnerability amplify how interest rate increases hit output?

Core argument: In the authors' calibrated model, a one percentage point increase in real interest rates has only modest effects on output and credit spreads during a tranquil period, when r** sits nearly 1.5 percentage points above r before the shock.

The chart below shows the responses of credit spreads and output to a one percentage point increase in real interest rates in our calibrated model. The blue solid lines display the responses when the economy is in a tranquil period (r** is almost 1.5 percentage points above r before the shock hits). The one percentage point shock is by construction not large enough to push the economy into the crisis region, with the r**–r gap staying positive throughout. As a consequence, the shock has only modest effects on output and spreads. The red dashed lines display the responses when the economy is much closer to the financially unstable region (r** is only 0.5 percentage points above r before the shock). In this case, the increase in interest rates is enough for the financial accelerator mechanism to kick in, and the response of both spreads and output to the shock is much larger.

Takeaways by Macro Roundup® AI

  1. In the authors' calibrated model, a one percentage point increase in real interest rates has only modest effects on output and credit spreads during a tranquil period, when r** sits nearly 1.5 percentage points above r before the shock.
  2. When r** begins only 0.5 percentage points above r, the same one percentage point rate shock sets off the financial accelerator mechanism, and the responses of both credit spreads and output are much larger.
  3. The one percentage point shock is constructed so that it does not push the tranquil economy into the crisis region, with the r**–r gap staying positive throughout.

AI Summary. Foreign-born workers made up 18.1% of the U.S. labor force, up from 17.4% a year earlier and the highest share in 27 years of Labor Department records. The number of immigrants working or looking for work rose by 1.8m, or 6.3%, to 29.8m.

Gabriel Rubin and Rosie Ettenheim Wall Street Journal
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Foreign-born worker’s share of the US labor force is at its highest level in 27 years with persons born outside the US making up 18.1% of the US workforce. Foreign-born black, white and Asian workers earned more than their native-born counterparts.

Has the immigrant share of the labor force hit a record?

Core argument: Foreign-born workers made up 18.1% of the U.S. labor force in 2022, up from 17.4% the prior year and the highest share in Labor Department data back to 1996.

Foreign-born workers’ share of the U.S. labor force rose last year to the highest level in 27 years of records, as labor demand surged, and the pandemic faded. People born outside the U.S. made up 18.1% of the overall labor force, up from 17.4% the prior year and the highest level in data back to 1996, the Labor Department said in its annual report on foreign-born workers. The number of immigrants in the labor force—those working or actively looking for jobs—rose by 1.8 million, or 6.3%, to 29.8 million in 2022.

Takeaways by Macro Roundup® AI

  1. Foreign-born workers made up 18.1% of the U.S. labor force in 2022, up from 17.4% the prior year and the highest share in Labor Department data back to 1996.
  2. The number of immigrants working or actively looking for work rose by 1.8 million, or 6.3%, to 29.8 million in 2022, according to the Labor Department's annual report on foreign-born workers.

AI Summary. United Nations population figures for India exceed India's own census counts, which put the population at 1.03bn in 2001 and 1.21bn in 2011 versus UN figures of 1.08bn and 1.26bn. India's National Family Health Survey also reported a fertility rate of 1.99, below the UN's 2.1 estimate.

Yi Fuxian Project Syndicate
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.@fuxianyi argues that UN population projections overstate both China and India’s current and projected populations.

Are UN population estimates for India too high?

Core argument: India's census counted 1.03 billion people in 2001 and 1.21 billion in 2011, while the UN's 2022 World Population Prospects put those years at 1.08 billion and 1.26 billion, roughly 50 million higher in each case.

In April, the United Nations estimated that India had overtaken China as the world’s most populous country. While the announcement received a great deal of media attention, India’s 2024 census will likely reveal that the UN’s projections have been vastly overestimated. According to India’s most recent census data, the country’s population stood at 1.03 billion in 2001 and 1.21 billion in 2011. The UN’s 2022 World Population Prospects (WPP) report, however, put these figures at 1.08 billion and 1.26 billion, respectively. Moreover, India’s National Family Health Survey indicated a fertility rate of 1.99 in 2017-19, in contrast to the WPP’s estimate of 2.1.

Takeaways by Macro Roundup® AI

  1. India's census counted 1.03 billion people in 2001 and 1.21 billion in 2011, while the UN's 2022 World Population Prospects put those years at 1.08 billion and 1.26 billion, roughly 50 million higher in each case.
  2. India's National Family Health Survey indicated a fertility rate of 1.99 in 2017-19, below the World Population Prospects estimate of 2.1.
  3. The United Nations estimated in April that India had overtaken China as the world's most populous country, though India's 2024 census will likely show the UN's projections to be vastly overestimated.

AI Summary. Arizona, California, and Nevada agreed to cut their withdrawals from the drought-strained Colorado River by about 13% of total lower-basin water use, with the federal government paying roughly $1.2bn to irrigation districts, cities, and Native American tribes that temporarily use less. The reductions are likely to require significant residential and agricultural water restrictions.

Christopher Flavelle New York Times
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Arizona, California, and Nevada have reached a three-year deal that will reduce water use from the Colorado River by ~13% through 2026.

Can federal payments persuade states to cut their river water use?

Core argument: Arizona, California, and Nevada agreed to reductions amounting to about 13 percent of total water use in the lower Colorado Basin, among the most aggressive ever experienced in the region.

Arizona, California, and Nevada have agreed to take less water from the drought-strained Colorado River, a breakthrough agreement that, for now, keeps the river from falling so low that it would jeopardize water supply for major Western cities like Phoenix and Los Angeles as well as for some of America’s most productive farmland. The agreement, announced Monday, calls for the federal government to pay about $1.2 billion to irrigation districts, cities and Native American tribes in the three states if they temporarily use less water. The states have also agreed to make additional cuts beyond that amount to generate the total reductions needed to protect the collapse of the river. Taken together, those reductions would amount to about 13 percent of the total water use in the lower Colorado Basin — among the most aggressive ever experienced in the region, and likely to require significant water restrictions for residential and agricultural uses.

Takeaways by Macro Roundup® AI

  1. Arizona, California, and Nevada agreed to reductions amounting to about 13 percent of total water use in the lower Colorado Basin, among the most aggressive ever experienced in the region.
  2. The federal government will pay about $1.2 billion to irrigation districts, cities, and Native American tribes across the three states if they temporarily use less water, with the states agreeing to additional cuts beyond that amount.
  3. The agreement, for now, keeps the Colorado River from falling so low that it would jeopardize water supplies for Phoenix, Los Angeles, and some of America's most productive farmland, and is likely to require significant residential and agricultural water restrictions.

AI Summary. Average inflation-adjusted transfer payments to the lowest-income 20% of US households have grown from $9,677 to $45,389, while the share of prime working-age adults in that group who worked fell from 68% to 36%. Congressional Budget Office estimates put discretionary spending 10% higher in real terms than pre-pandemic projections, with nondefense outlays up 18.8% and defense down 0.28%.

Phil Gramm and Mike Solon Wall Street Journal
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Phil Gramm and Mike Solon argue that even if the House GOP’s budget proposal was enacted in whole, inflation-adjusted discretionary spending would still be 2.4% greater than the CBO’s 2020 projection.

Phil Gramm and Mike Solon argue that even if the House GOP’s budget proposal was enacted in whole, inflation-adjusted...

Have rising transfer payments coincided with less work among low-income adults?

Core argument: Average inflation-adjusted transfer payments to households in the bottom 20% rose from $9,677 in 1967 to $45,389, while the share of prime working-age adults in that bottom quintile who worked fell from 68% to 36%.

Since 1967, average inflation-adjusted transfer payments to low-income households—the bottom 20%—have grown from $9,677 to $45,389. During that same period, the percentage of prime working-age adults in the bottom 20% of income earners who actually worked collapsed from 68% to 36%. Before the pandemic, the Congressional Budget Office in January 2020 projected that total discretionary outlays in fiscal 2024 would grow to $1.549 trillion—which, adjusted for higher inflation, amounted to $1.694 trillion. The most recent CBO estimate projects that fiscal 2024 discretionary spending will clock in at $1.864 trillion—a 10% real increase from the pre-pandemic estimate. Nondefense outlays have risen 18.8% over the same period, while defense outlays have fallen 0.28% in after-inflation dollars. This growth in nondefense discretionary spending is the post-pandemic bow wave that Mr. McCarthy’s debt-limit plan seeks to mitigate. Even if the House GOP’s proposed reductions in discretionary-spending growth took effect, total discretionary spending would still be 2.4% more in inflation-adjusted dollars than the CBO’s 2020 projection for fiscal 2024.

Takeaways by Macro Roundup® AI

  1. Average inflation-adjusted transfer payments to households in the bottom 20% rose from $9,677 in 1967 to $45,389, while the share of prime working-age adults in that bottom quintile who worked fell from 68% to 36%.
  2. The Congressional Budget Office's most recent estimate projects fiscal 2024 discretionary spending at $1.864 trillion, a 10% real increase over the $1.694 trillion inflation-adjusted equivalent of its January 2020 projection of $1.549 trillion.
  3. Nondefense outlays have risen 18.8% in after-inflation dollars while defense outlays have fallen 0.28%, and even with the House GOP's proposed reductions, total discretionary spending would remain 2.4% above the CBO's 2020 projection for fiscal 2024.

AI Summary. Young voters aged 18–29 backed Democrats by 65%, and in heavily contested states turnout among those eligible in two consecutive elections rose 6%. Women voters, for whom abortion rights were often the top issue, favored Democrats in close races, while "MAGA" Republicans underperformed in contested Senate, gubernatorial, and congressional contests.

Yair Ghitza and Haris Aqeel Catalist
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In an analysis of the 2022 midterms using voter file data, @Catalist_US finds younger voters exceeded their 2018 turnout by 6% with 65% of voters 18-29 supporting Democrats.

Did young and women voters drive Democratic wins in contested races?

Core argument: Young voters in heavily contested states exceeded their 2018 turnout by 6% among those eligible in both elections, part of exceptional turnout levels among Gen Z and Millennial voters.

Gen Z and Millennial voters had exceptional levels of turnout, with young voters in heavily contested states exceeding their 2018 turnout by 6% among those who were eligible in both elections. Further, 65% of voters between the ages of 18 and 29 supported Democrats, cementing their role as a key part of a winning coalition for the party. While young voters were historically evenly split between the parties, they are increasingly voting for Democrats. Many young voters who showed up in 2018 and 2020 to elect Democrats continued to do the same in 2022. Extreme “MAGA” Republicans underperformed. Across heavily contested Senate, Gubernatorial, and Congressional races, voters penalized “MAGA” Republicans.  Women voters pushed Democrats over the top in heavily contested races, where abortion rights were often their top issue.

Takeaways by Macro Roundup® AI

  1. Young voters in heavily contested states exceeded their 2018 turnout by 6% among those eligible in both elections, part of exceptional turnout levels among Gen Z and Millennial voters.
  2. 65% of voters aged 18 to 29 supported Democrats, continuing a shift away from the historically even partisan split among young voters and cementing them as part of a winning Democratic coalition.
  3. Extreme "MAGA" Republicans underperformed across heavily contested Senate, gubernatorial, and congressional races, while women voters, who often ranked abortion rights as their top issue, pushed Democrats over the top in those contests.

Tuesday, May 23, 2023

AI Summary. The authors estimate that food and especially energy price shocks, along with increased demand for durable goods combined with supply-chain shortages, accounted for much of U.S. pandemic-era inflation, while the contribution of tight labor markets was small or negative early on. They estimate that tight labor-market conditions became an increasingly important, though not dominant, source of inflation over time.

Ben Bernanke and Olivier Blanchard Brookings Institution
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.@benbernanke and @ojblanchard1 argue that bringing the current inflationary episode to target implies an unemployment rate of 4.3%, up from 3.4% last month.

What drove pandemic-era inflation, supply shocks or tight labor markets?

Core argument: The authors' decomposition of U.S. inflation from 2020Q1 to 2023Q1 attributes much of the rise in overall inflation in late 2021 and the first half of 2022, and its decline in the second half of 2022, to energy price shocks, with food price shocks also contributing substantially.

Figure 12 shows the estimated sources of inflation from 2020Q1 to 2023Q1. For comparison, the continuous line shows actual inflation. (The inflation data are quarterly, at annualized rates, and thus more jagged than the annualized series we often see.)  Figure 12 yields several conclusions. First, the contributions of food [light blue] and (especially) energy [dark blue] price shocks to the pandemic-era inflation were large. Energy price shocks in particular account for much of the rise of overall inflation in late 2021 and the first half of 2022, and the for the decline in inflation in the second half of 2022. The large and extended contributions of commodity price shocks to inflation shown in Figure 12 are not inconsistent with our earlier finding that price shocks tend to have transitory effects on inflation, as both energy and food prices rose continuously over much of the period (see Figures 4 and 5), which our procedure interprets as a series of positive shocks. Second, the combination of increased demand for durables and shortages [yellow] associated with disrupted supply chains was the dominant source of inflation in 2021Q2, and the effects of supply chain problems, both direct and indirect, remained significant through the end of our sample period. Third, and importantly, the contribution to inflation of tight labor-market conditions [red] —the leading concern of many early critics of U.S. monetary and fiscal policies—was quite small early on, and indeed was negative in 2020 and early 2021 as labor markets suffered from the effects of the pandemic recession. However, over time, as the labor market has remained tight, the traditional Phillips curve effect has begun to assert itself, with the high vacancy-to-unemployment ratio becoming increasingly important, though by no means dominant, source of inflation.

Takeaways by Macro Roundup® AI

  1. The authors' decomposition of U.S. inflation from 2020Q1 to 2023Q1 attributes much of the rise in overall inflation in late 2021 and the first half of 2022, and its decline in the second half of 2022, to energy price shocks, with food price shocks also contributing substantially.
  2. Increased demand for durables combined with shortages from disrupted supply chains was estimated as the dominant source of inflation in 2021Q2, and supply chain effects, both direct and indirect, remained significant through 2023Q1.
  3. Tight labor-market conditions contributed little to inflation early on and negatively in 2020 and early 2021, with the high vacancy-to-unemployment ratio becoming an increasingly important, though not dominant, source over time.

AI Summary. European stocks traded at a price-to-earnings multiple far below US stocks, a roughly 35% discount that remains large by historical standards. The author argues European outperformance has a ceiling because US companies generate higher returns on equity and on assets.

Michael Cembalest J.P. Morgan
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Michael Cembalest @jpmorgan argues investors no longer need to overweight the US and emerging markets relative to Europe and Japan.

Does Europe's valuation discount justify buying European stocks over US stocks?

Core argument: Europe's price-to-earnings multiple relative to the US fell to a post-2006 low by September 2022, a roughly 35% discount that the author argues compensated investors for taking European equity exposure.

By September 2022, Europe’s P/E multiple hit a post-2006 low relative to the US. While there were valid concerns at the time about Europe’s energy situation, rising inflation and exposure to a shuttered China, investors were receiving an enormous discount for taking European equity exposure, and I should have paid more attention to that. Europe’s outperformance is likely to have a ceiling since US companies generate higher returns on equity and higher returns on assets, as shown in the table. But everything has a price, and a 35% P/E discount was apparently it. As things stand now, the discount is still large from an historical perspective.

Takeaways by Macro Roundup® AI

  1. Europe's price-to-earnings multiple relative to the US fell to a post-2006 low by September 2022, a roughly 35% discount that the author argues compensated investors for taking European equity exposure.
  2. Concerns about Europe's energy situation, rising inflation, and exposure to a shuttered China were valid, yet coincided with a large valuation discount on European equities.
  3. The author argues Europe's outperformance is likely to have a ceiling because US companies generate higher returns on equity and assets, while Europe's P/E discount remains large by historical standards.

AI Summary. A widely forecast recession has not arrived because households are still drawing down excess savings built up from roughly $5tn of fiscal and $5tn of monetary expansion during Covid. The author argues that with inflation at 5%, the Federal Reserve will keep capital costs high, pressuring earnings and employment growth.

Torsten Sløk Apollo
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Torsten Sløk @apolloglobal argues that “it is taking longer to remove from the economy the $5T fiscal and $5T monetary expansion done during covid,” and expects a recession as households eventually run out of excess savings.

Why has the forecast recession not arrived yet?

Core argument: The $5trn fiscal and $5trn monetary expansion done during covid is taking longer to remove from the economy, which is why the recession forecast by consensus since October 2022 has not arrived.

The consensus has been forecasting negative growth since October 2022, and the recession has yet to arrive because it has taken longer to run down excess savings in the household sector, see chart below. Put differently, it is taking longer to remove from the economy the $5trn fiscal and $5trn monetary expansion done during covid. On the back of stronger-than-expected growth, the correction in stock markets and credit spreads has been relatively limited despite the rapid increase in short rates. With inflation still at 5%, far above the Fed’s 2% inflation target, the Fed will keep the costs of capital high, and the recession will come as households eventually run out of excess savings. The implication for markets is that the Fed will continue to put downward pressure on earnings growth and employment growth until they get what they want, namely lower inflation.

Takeaways by Macro Roundup® AI

  1. The $5trn fiscal and $5trn monetary expansion done during covid is taking longer to remove from the economy, which is why the recession forecast by consensus since October 2022 has not arrived.
  2. With inflation still at 5%, far above the Fed's 2% target, the Fed will keep the cost of capital high, and recession will come once households run out of excess savings.
  3. Stronger-than-expected growth has kept the correction in stock markets and credit spreads relatively limited despite the rapid increase in short rates, and the Fed will continue to pressure earnings and employment growth until inflation falls.

AI Summary. A Senate proposal would have the federal government borrow about $1.5tn over five years—at a federal borrowing rate of roughly 3.9%—and invest it in stocks, private equity, and other assets riskier than Treasury bonds for 75 years, borrowing meanwhile to cover Social Security shortfalls. A Wharton economist argues this is not meaningfully different from raising the capital gains tax.

Andrew Biggs National Review
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.@biggsag of @AEIecon argues that funding Social Security by borrowing $1.5T and investing in American equity markets is a well-motivated but bad idea that would be “not meaningfully different from simply increasing the capital gains tax.”

Is borrowing to invest in stocks different from raising capital gains taxes?

Core argument: Senator Bill Cassidy proposes the federal government borrow roughly $1.5 trillion over five years, at a current federal borrowing rate of about 3.9%, and reinvest it in stocks, private equity, hedge funds, or other instruments riskier than Treasuries but with higher expected returns.

Senator Bill Cassidy proposes that, over a five-year period, the federal government should borrow approximately $1.5 trillion. The current federal borrowing rate is roughly 3.9%. The federal government would reinvest those funds in stocks, private equity, hedge funds, or other instruments that are riskier than U.S. Treasury bonds but offer higher expected returns. The fund would hold its investments for 75 years, presumably building interest along the way. Until then, the federal government would borrow to cover Social Security’s funding shortfalls. After 75 years, the investment fund could, in theory at least, repay that borrowing. As Wharton School economist Kent Smetters has shown, Cassidy’s approach is not meaningfully different from simply increasing the capital gains tax: When the stock market goes up, the federal government takes a slice of the gains. Everything else is simply window dressing.

Takeaways by Macro Roundup® AI

  1. Senator Bill Cassidy proposes the federal government borrow roughly $1.5 trillion over five years, at a current federal borrowing rate of about 3.9%, and reinvest it in stocks, private equity, hedge funds, or other instruments riskier than Treasuries but with higher expected returns.
  2. Under Cassidy's plan, the fund would hold its investments for 75 years while the federal government borrows to cover Social Security's funding shortfalls, with the fund in theory repaying that borrowing afterward.
  3. Wharton School economist Kent Smetters argues that Cassidy's approach is not meaningfully different from raising the capital gains tax, since the federal government takes a slice of gains when the stock market rises.

AI Summary. Pew Research Center analysis of Census Bureau data finds 21-year-olds in the US are less likely than their counterparts four decades earlier to have a full-time job, be financially independent, live on their own, be married, or have a child. Among 21-year-olds, 39% worked full time versus 64% four decades earlier, and a quarter were financially independent versus 42%.

Richard Fry Pew Research Center
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Pew reports that 25-year-old Americans are lagging previous generations in terms of full-time work, financial independence, and marriage. @r_fry1

Are young adults reaching adulthood milestones later than four decades ago?

Core argument: 39% of U.S. 21-year-olds were working full time in 2021, down from 64% in 1980, according to a Pew Research Center analysis of Census Bureau data.

Young adults in the United States are reaching key life milestones later than they did 40 years ago, according to a new Pew Research Center analysis of Census Bureau data. Adults who are 21 are less likely than their predecessors four decades ago to have reached five frequently cited milestones of adulthood: having a full-time job, being financially independent, living on their own, getting married and having a child. By the time they are 25, however, today’s young adults are somewhat closer to their predecessors in 1980 on two of these milestones: having a full-time job and financial independence. In 2021, the most recent year with available data, 39% of 21-year-olds were working full time, compared with 64% in 1980. And only a quarter of people this age in 2021 were financially independent of their parents – meaning that their income was at least 150% of the poverty line – compared with 42% in 1980.

Takeaways by Macro Roundup® AI

  1. 39% of U.S. 21-year-olds were working full time in 2021, down from 64% in 1980, according to a Pew Research Center analysis of Census Bureau data.
  2. A quarter of 21-year-olds in 2021 were financially independent of their parents — defined as income of at least 150% of the poverty line — compared with 42% in 1980.
  3. Pew Research Center finds that 21-year-olds are less likely than their 1980 counterparts to have a full-time job, be financially independent, live on their own, be married or have a child, though by age 25 they are somewhat closer on employment and financial independence.

AI Summary. Japan has said it intends to restrict exports of 23 types of chipmaking equipment, aligning with US and Dutch export controls that could limit China's access to cutting-edge chips. Chinese industry executives who reviewed the draft rules say they could restrict China's semiconductor manufacturing more than US measures do.

Qianer Liu, Kana Inagaki and Anna Gross Financial Times
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Tokyo will impose export restrictions on 23 chipmaking equipment types in July, aligning with US and the Netherland but potentially going further than US sanctions, posing a greater challenge for China’s semiconductor production. @FT

Tokyo will impose export restrictions on 23 chipmaking equipment types in July, aligning with US and the Netherland but...

Do Japan's chipmaking export curbs restrict China more than US rules?

Core argument: Japan intends to restrict exports of 23 types of chipmaking equipment from July, aligning with the US and the Netherlands in export controls that could limit China's access to cutting-edge chips.

Tokyo has said it intends to put restrictions on exports of 23 types of crucial chipmaking equipment from July, as it aligns itself with the US and the Netherlands in implementing sweeping export controls that could limit China’s access to cutting-edge chips. However, Chinese industry executives who have examined the fine print of the intended rules say they could potentially go further than the US in restricting China’s ability to make semiconductors. “Japan’s export controls will be more disturbing to China than Washington’s sanctions last year,” said a Chinese chip factory executive, who did not wish to be named.

Takeaways by Macro Roundup® AI

  1. Japan intends to restrict exports of 23 types of chipmaking equipment from July, aligning with the US and the Netherlands in export controls that could limit China's access to cutting-edge chips.
  2. Chinese industry executives who have examined the fine print of the intended Japanese rules say the measures could go further than US controls in restricting China's ability to make semiconductors.
  3. An unnamed Chinese chip factory executive said Japan's export controls will be more disturbing to China than Washington's sanctions imposed last year.

AI Summary. China is not creating enough high-wage, high-skill jobs for its expanding pool of educated young people, many of whom hold higher job expectations than earlier generations. More than 28m college graduates entered the labor market over three years, about two-thirds of the new urban labor supply, and economists describe the resulting youth unemployment as structural rather than temporary.

Stella Yifan Xie Wall Street Journal
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Chinese youth unemployment (16-24) is running at 20.4% well above its pre-pandemic level of 13% as a record 11.6mm college students are poised to graduate this summer.

Is China's youth unemployment a structural mismatch rather than a temporary one?

Core argument: More than 28 million Chinese college graduates entered the labor market over the past three years, accounting for about two-thirds of the new urban labor supply, following a decade of significant expansion in higher education enrollment.

China isn’t creating enough of the high-wage, high-skill jobs that are sought after by its expanding base of educated young people, many of whom have loftier expectations than previous generations. China has significantly expanded high education enrollment during the past decade. In the past three years, more than 28 million college graduates entered the labor market, accounting for about two-thirds of the new urban labor supply. “China’s high youth unemployment rate is not transitory but structural,” said David Wang, chief China economist at Credit Suisse. “There is a mismatch in the skills the youth are trained to provide and the skills that existing jobs require.”

Takeaways by Macro Roundup® AI

  1. More than 28 million Chinese college graduates entered the labor market over the past three years, accounting for about two-thirds of the new urban labor supply, following a decade of significant expansion in higher education enrollment.
  2. David Wang, chief China economist at Credit Suisse, says China's high youth unemployment rate is structural rather than transitory, citing a mismatch between the skills young people are trained to provide and those existing jobs require.
  3. China is not creating enough high-wage, high-skill jobs for its expanding base of educated young people, many of whom hold loftier expectations than previous generations.