Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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 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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, June 7, 2023

AI Summary. Analysts estimate that if inflation is brought down without a recession, the Federal Reserve's policy rate will stabilize nearer 3–3.25% than the 2.5% longer-run median projection of Federal Reserve officials. Projected shifts in government debt and demographics imply a roughly 0.5 percentage point net increase in the neutral rate over the next decade.

David Mericle and Manuel Abecasis Goldman Sachs
Date Posted:

David Mericle and Manuel Abecasis argue that the FFR will likely settle in a range of 3-3.25% going forward, higher than the FOMC’s 2.5% median projection, driven by increased demand for investment and government debt over the next decade.

Is the neutral interest rate higher than policymakers project?

Core argument: The authors' best guess is that the federal funds rate eventually stabilizes closer to 3–3.25% than to the FOMC's 2.5% median longer-run dot, provided the Fed solves the inflation problem without a recession.

Our best guess is that if the Fed solves the inflation problem without a recession, the funds rate will eventually stabilize closer to 3-3.25% than to the FOMC’s 2.5% median longer run dot. We expect a slightly higher r* both because our analysis of factors that influence r* suggests a more limited decline, and because we put some weight on the long-run advanced economy average of a roughly 1% real short-term rate and on the higher average rate seen for quite a while after the last inflation surge. Projected changes in factors such as government debt and demographics imply a net increase of about 0.5pp over the next decade, and larger increases are possible if artificial intelligence or the green energy transition boost investment demand.

Takeaways by Macro Roundup® AI

  1. The authors' best guess is that the federal funds rate eventually stabilizes closer to 3–3.25% than to the FOMC's 2.5% median longer-run dot, provided the Fed solves the inflation problem without a recession.
  2. The authors attribute their higher neutral rate estimate to analysis suggesting a more limited decline in r*, plus weight on the roughly 1% long-run average real short-term rate in advanced economies and the higher average rate after the last inflation surge.
  3. Projected changes in factors such as government debt and demographics imply a net increase of about 0.5pp over the next decade, with larger increases possible if artificial intelligence or the green energy transition boost investment demand.

Related Articles:

  • The Fed and the Secular Decline in Interest Rates — The authors find that the long-run decline in US Treasury yields since 1980 is fully accounted for by movements in a narrow window around Federal Reserve policy meetings, while yield changes outside that window prove transitory. They suggest the Federal Reserve conveys information to markets about the long-run level of interest rates.

AI Summary. The number of US single-establishment firms relocating across state lines roughly doubled to 6,384 over the period studied, with the migrant share of all firms rising from 0.07% to 0.12%. In-migration consistently exceeded out-migration in the South, while out-migration exceeded in-migration in the Northeast and Midwest.

Akbar Sadeghi, Kevin Cooksey, and Anthony Colavito Bureau of Labor Statistics
Date Posted:

A new analysis from @BLS_gov finds firms in the professional, scientific, and technical services industry sector have been increasingly moving across state lines. In 2021 migration for this sector was 390% of its 1994 levels vs. 145% for all firms.

How many US firms move across state lines, and where?

Core argument: A total of 6,384 firms moved across U.S. state borders in 2021, almost twice the number in 1994, with the migrant share of the total firm population rising from 0.07% to 0.12% over that period.

We measured the annual number of single establishments and their employment and wages for those firms that moved across states and regions from 1994 to 2021. We found that in 2021, a total of 6,384 firms moved across state borders, almost twice the number than in 1994. As a percentage of the total firm population, the migrant share rose from 0.07%to 0.12% during this period. In 2020, more than 30% of migrant firms were in the professional, scientific, and technical services sector. Data show that the number of migrant firms generally grows in expansionary periods and declines or shows less growth during economic downturns. However, in the 2020 COVID-19 pandemic-induced recession, the number of migrant firms rose sharply. Although migrant firms move in and out of every state and region, data from 1994 to 2021 show that in-migration in the South has been consistently higher than out-migration. In the Northeast and Midwest regions, out-migration exceeded in-migration. In the West, in-migrations and out-migrations were generally in balance.

Takeaways by Macro Roundup® AI

  1. A total of 6,384 firms moved across U.S. state borders in 2021, almost twice the number in 1994, with the migrant share of the total firm population rising from 0.07% to 0.12% over that period.
  2. More than 30% of migrant firms in 2020 were in the professional, scientific, and technical services sector, and the number of migrant firms rose sharply during the 2020 COVID-19 pandemic-induced recession, counter to the usual pattern of growth in expansions and declines in downturns.
  3. From 1994 to 2021, in-migration of firms in the South consistently exceeded out-migration, while out-migration exceeded in-migration in the Northeast and Midwest, and the two were generally in balance in the West.

AI Summary. Goldman Sachs economists estimate that if inflation is brought down without a recession, the federal funds rate will stabilize near 3–3.25% rather than the Federal Reserve's 2.5% longer-run median projection. At that neutral rate, 30-year fixed mortgage rates would sit in the low-to-mid 6% range, around 6.45% with a 4.45% 10-year Treasury yield.

Bill McBride Calculated Risk
Date Posted:

.@calculatedrisk notes a Goldman Sachs forecast that the FFR will stabilize around 3-3.25% and argues this implies 30-year mortgage rates will remain in the recent 6-7% range.

Will a higher neutral rate keep mortgage rates in the mid-6% range?

Core argument: Goldman Sachs economists estimate the federal funds rate will eventually stabilize closer to 3–3.25% than to the FOMC's 2.5% median longer-run dot, if the Fed solves the inflation problem without a recession.

Goldman Sachs economists argued the neutral rate will likely be higher than the Fed currently expects. "Our best guess is that if the Fed solves the inflation problem without a recession, the funds rate will eventually stabilize closer to 3-3.25% than to the FOMC’s 2.5% median longer run dot." If the neutral rate is in the range Goldman economists expect, then the 30-year fixed mortgage rate will be in the low to mid 6% range. With a 3.25% Fed Funds rate, a 4.45% 10-year yield, we’d expect 30-year mortgage rates around 6.45%. This is close to the recent range! Note that with this neutral rate, the 10-year yield would likely increase even as the Fed lowers the Fed Funds rate.

Takeaways by Macro Roundup® AI

  1. Goldman Sachs economists estimate the federal funds rate will eventually stabilize closer to 3–3.25% than to the FOMC's 2.5% median longer-run dot, if the Fed solves the inflation problem without a recession.
  2. With a 3.25% fed funds rate and a 4.45% 10-year Treasury yield, 30-year fixed mortgage rates would be expected around 6.45%, close to the recent range.
  3. Under the higher neutral rate Goldman Sachs economists expect, the 10-year Treasury yield would likely increase even as the Fed lowers the fed funds rate.

Related Articles:

  • What Have We Learned About the Neutral Rate? — Analysts estimate that if inflation is brought down without a recession, the Federal Reserve's policy rate will stabilize nearer 3–3.25% than the 2.5% longer-run median projection of Federal Reserve officials. Projected shifts in government debt and demographics imply a roughly 0.5 percentage point net increase in the neutral rate over the next decade.

AI Summary. The US became the absorber of global trade surpluses because of its large consumer markets and safe, liquid, profitable asset markets. The author argues the end of dollar dominance would mean not merely a switch to another trade currency but the end of large, persistent trade and capital imbalances and of mercantilist surplus policies.

Michael Pettis Financial Times
Date Posted:

.@michaelxpettis argues that the end of dollar dominance would mean an end of the entire global trading system and mercantilist policies that allow surplus countries to become competitive at the expense of foreign manufacturers and domestic demand.

.@michaelxpettis argues that the end of dollar dominance would mean an end of the entire global trading system and...

Would the end of dollar dominance end persistent global trade imbalances?

Core argument: The end of dollar dominance would mean the end of the anglophone economies' willingness and ability to absorb up to 70–80% of global trade surpluses, not merely a shift in which currency denominates trade.

Absorbing foreign demand means exporting domestic savings, and because of its huge domestic consumer markets and safe, profitable, and liquid asset markets, the obvious choice was the US. Probably because of the exigencies of the cold war, Washington encouraged them to do so. Only later did this choice congeal into an economic ideology that saw unfettered capital flows as a way to strengthen the power of American finance. This is why the end of dollar dominance doesn’t mean a global trading system that simply and non-disruptively shifts from denominating trade in dollars to denominating it in some other currency. It means instead the end of the current global trading system — I.e., the end of the willingness and ability of the anglophone economies to absorb up to 70-80% of global trade surpluses, the end of large, persistent trade and capital flow imbalances, and, above all, the end of mercantilist policies that allow surplus countries to become competitive at the expense of foreign manufacturers and domestic demand.

Takeaways by Macro Roundup® AI

  1. The end of dollar dominance would mean the end of the anglophone economies' willingness and ability to absorb up to 70–80% of global trade surpluses, not merely a shift in which currency denominates trade.
  2. The US became the obvious absorber of foreign demand because of its huge domestic consumer markets and its safe, profitable, and liquid asset markets, and absorbing foreign demand means exporting domestic savings.
  3. Washington encouraged foreign economies to export savings to the US, probably because of the exigencies of the cold war, and only later did that choice congeal into an ideology treating unfettered capital flows as a way to strengthen American finance.

AI Summary. Germany's labor supply is projected to shrink by 3m people, or 7%, over the next decade unless retirees are replaced by migrants, requiring about 400,000 newcomers a year just to hold steady. The offsetting trends of large-scale immigration and rising female employment are now fading as baby boomers retire.

Alexander Weber and Andre Tartar Bloomberg
Date Posted:

Germany’s workforce is on pace to shrink by 7%, or 3 million workers over the next decade.

Is a shrinking labor supply putting Germany's growth at risk?

Core argument: Germany's labor supply is projected to shrink by 3 million people, or 7%, over the next decade unless retiring Germans are replaced by a significant influx of migrants.

Over the next decade, the labor supply will shrink by 3 million people, or 7%, unless retiring Germans are replaced by a significant influx of migrants. Just to stay flat, the country needs 400,000 newcomers a year. While this figure has been reached at various points in the past, migration to Germany has been boosted by refugees coming from countries including Syria and Ukraine. And after the experience of those years, voters are skeptical of promises that migration can boost growth. That was the claim back in 2015 but only around half of the refugees who arrived during that wave had found work five years later. The working-age population in Germany actually peaked at the end of the last century, but the country has managed to stave off demographic decline for some time thanks to the arrival of millions of immigrants and the rising number of women going to work. But both trends are now fading just as the post World War II baby-boomers are retiring.

Takeaways by Macro Roundup® AI

  1. Germany's labor supply is projected to shrink by 3 million people, or 7%, over the next decade unless retiring Germans are replaced by a significant influx of migrants.
  2. Germany needs 400,000 newcomers a year just to keep its labor supply flat, a figure reached at various points in the past when migration was boosted by refugees from countries including Syria and Ukraine.
  3. Only about half of the refugees who arrived in Germany during the 2015 wave had found work five years later, and voters are skeptical of promises that migration can boost growth.

AI Summary. US manufacturing construction spending has more than doubled over the past year and risen as a share of gross domestic product, a surge attributed to two laws: the Inflation Reduction Act, whose core is green energy subsidies, and the CHIPS Act, which promotes domestic semiconductor production.

Paul Krugman Krugman Wonks Out
Date Posted:

.@paulkrugman points to manufacturing investment driven by the Inflation Reduction and CHIPS acts and argues that these policies are “exceeding even the most optimistic expectations.”

Are industrial subsidies driving the surge in manufacturing construction spending?

Core argument: U.S. manufacturing construction spending has more than doubled over the past year, a surge better gauged as a share of GDP than in raw dollars, with the 2023 figure taken as April spending against first-quarter GDP.

Under Biden, manufacturing construction, as some people put it, has gone parabolic, more than doubling just over the past year. Raw dollar figures can be misleading, especially when you’re looking at the long run; spending needs to be compared with the size of the economy as a whole. Here’s manufacturing construction as a % of G.D.P. over the past three decades (the number for 2023 is April spending as a % of first-quarter G.D.P.). There’s no real question about the causes of the surge. It’s being driven by two major pieces of legislation: the misleadingly named Inflation Reduction Act, whose actual core is subsidies for green energy, and the CHIPS Act (“creating helpful incentives to produce semiconductors” — call in the acronym police!), which is supposed to protect national security by promoting domestic production of, um, chips. It’s good news that the boom is happening, indeed exceeding even the most optimistic expectations.

Takeaways by Macro Roundup® AI

  1. U.S. manufacturing construction spending has more than doubled over the past year, a surge better gauged as a share of GDP than in raw dollars, with the 2023 figure taken as April spending against first-quarter GDP.
  2. The manufacturing construction boom is driven by two laws: the Inflation Reduction Act, whose core is green energy subsidies, and the CHIPS Act, intended to protect national security by promoting domestic semiconductor production.
  3. The manufacturing construction boom has exceeded even the most optimistic expectations.

Related Articles:

  • Factory Boom Sweeps US With Construction at Record $190 Billion — US manufacturers' construction spending has more than doubled over the past year to an annual rate of nearly $190bn, according to the Census Bureau. Manufacturing now makes up about 13% of all non-government construction, the highest share in a data series going back to the early 1990s.
  • Why Laws Meant to Create Jobs Can Be So Destructive for Our Cities — State audits and independent evaluations of corporate tax incentive programs have found poor targeting, weak oversight, and excessive costs that harmed rather than benefited local governments. Examples include $5.5bn in New York tax credits for a Micron facility and up to $1.75bn in Michigan incentives for a Ford electric vehicle plant.

AI Summary. China's electric vehicle industry grew from a niche industrial policy project into a large ecosystem of mostly private companies after Tesla was permitted to open a wholly owned factory in Shanghai, which industry analysts credit with spurring competitiveness among local makers.

Greg Ip Wall Street Journal
Date Posted:

China’s highly competitive and creative internal market has left its automakers well positioned vs. western firms in the global EV market. @greg_ip

How did foreign competition transform China's electric vehicle industry?

Core argument: China's EV sales remained weak until 2019, when Beijing let Tesla open a wholly-owned factory in Shanghai, a catalyst that Tu Le of Sino Auto Insights says boosted interest and raised the competitiveness of local Chinese automakers.

Sales of EVs remained weak until 2019, when China let Tesla open a wholly-owned factory in Shanghai. “It took this catalyst…to boost interest and increase the level of competitiveness of the local Chinese makers,” said Tu Le, managing director of Sino Auto Insights, a research service specializing in the Chinese auto industry. Back in 2011 Pony Ma, the founder of Tencent, explained what set Chinese capitalism apart from its American counterpart. “In America, when you bring an idea to market you usually have several months before competition pops up, allowing you to capture significant market share,” he said, according to Fast Company, a technology magazine. “In China, you can have hundreds of competitors within the first hours of going live. Ideas are not important in China—execution is.” Thanks to that competition and focus on execution, the EV industry went from a niche industrial policy project to a sprawling ecosystem of predominantly private companies. When Western auto executives flew in for April’s Shanghai auto show, “they saw a sea of Chinese brands,” said Le. “They hear the sounds of the door closing, sit inside and look at the quality of the materials, the fabric or the plastic on the console, that’s the other holy s— moment—they’ve caught up to us.”

Takeaways by Macro Roundup® AI

  1. China's EV sales remained weak until 2019, when Beijing let Tesla open a wholly-owned factory in Shanghai, a catalyst that Tu Le of Sino Auto Insights says boosted interest and raised the competitiveness of local Chinese automakers.
  2. Tencent founder Pony Ma said in 2011 that a product in China can face hundreds of competitors within hours of going live, versus several months of lead time in America, concluding that "ideas are not important in China—execution is.".
  3. China's EV industry went from a niche industrial policy project to a sprawling ecosystem of predominantly private companies, and Tu Le says Western executives at April's Shanghai auto show saw a sea of Chinese brands whose materials and build quality had caught up.

Related Articles:

  • China’s Auto Export Wave Echoes Japan’s in the ’70s — The shift from petroleum-fueled internal combustion vehicles to electric vehicles moves resource leverage from Persian Gulf oil producers to critical minerals, with China holding more than half of global processing capacity for lithium, cobalt, and graphite and about a third for nickel. Chinese companies have spent $4.5bn acquiring stakes in nearly 20 lithium mines, mostly in Latin America and Africa.

AI Summary. The article argues that large AI companies, startups, and open-source AI should all be allowed to build and compete without regulatory capture or government-protected cartels justified by overstated claims of AI risk. It contends the private sector, scientific institutions, and governments should work together to secure Western AI dominance over China.

Marc Andreessen Marc Andreessen Substack
Date Posted:

.@pmarca argues that the panic around “harmful” AI is overstated but for one thing, “The single greatest risk of AI is that China wins global AI dominance and we – the United States and the West – do not.”

.@pmarca argues that the panic around “harmful” AI is overstated but for one thing, “The single greatest...

Should AI be left to compete freely rather than regulated into cartels?

Core argument: Andreessen contends big AI companies, startups, and open source AI should all be allowed to build and compete aggressively, without regulatory capture, without a government-protected cartel justified by incorrect claims of AI risk, and without government assistance for startups.

I propose a simple strategy for what to do about this – in fact, the same strategy President Ronald Reagan used to win the first Cold War with the Soviet Union. “We win, they lose.” Big AI companies should be allowed to build AI as fast and aggressively as they can – but not allowed to achieve regulatory capture, not allowed to establish a government-protect cartel that is insulated from market competition due to incorrect claims of AI risk. Startup AI companies should be allowed to build AI as fast and aggressively as they can. They should neither confront government-granted protection of big companies, nor should they receive government assistance. They should simply be allowed to compete. If and as startups don’t succeed, their presence in the market will also continuously motivate big companies to be their best – our economies and societies win either way. Open source AI should be allowed to freely proliferate and compete with both big AI companies and startups. Even when open source does not beat companies, its widespread availability is a boon to students all over the world who want to learn how to build and use AI to become part of the technological future. AI can be an incredibly powerful tool for solving problems, and we should embrace it as such. To prevent the risk of China achieving global AI dominance, we should use the full power of our private sector, our scientific establishment, and our governments in concert to drive American and Western AI to absolute global dominance, including ultimately inside China itself. We win, they lose. And that is how we use AI to save the world.

Takeaways by Macro Roundup® AI

  1. Andreessen contends big AI companies, startups, and open source AI should all be allowed to build and compete aggressively, without regulatory capture, without a government-protected cartel justified by incorrect claims of AI risk, and without government assistance for startups.
  2. Andreessen argues that open source AI's widespread availability benefits students worldwide learning to build and use AI even when it does not beat companies, and that competition from startups pushes big companies to be their best.

Thursday, June 8, 2023

AI Summary. The US Treasury is set to rebuild its depleted cash balance through heavy short-term borrowing, with JPMorgan estimating a need for $1.1tn in short-dated Treasury bill issuance. Analysts warn the volume of new issuance could push up government debt yields and draw cash out of bank deposits.

Kate Duguid Financial Times
Date Posted:

JP Morgan estimates that the US will need to borrow at least $1.1T in short-dated Treasury bills by the end of 2023. The deluge is expected to stress markets and raise yields.

JP Morgan estimates that the US will need to borrow at least $1.1T in short-dated Treasury bills by the end of 2023. The...

Will a surge in short-term government borrowing strain bank deposits?

Core argument: JPMorgan estimates the US Treasury will need to borrow $1.1tn in short-dated Treasury bills by the end of 2023, including $850bn in net bill issuance over the next four months.

Following the resolution of [the debt ceiling] dispute — which had previously prevented the US from increasing its borrowing — the Treasury department will seek to rebuild its cash balance, which last week hit its lowest level since 2017.   JPMorgan has estimated that Washington will need to borrow $1.1tn in short-dated Treasury bills by the end of 2023, with $850bn in net bill issuance over the next four months.  A principal concern voiced by analysts was that the sheer volume of new issuance would push up yields on government debt, sucking cash out of bank deposits.

Takeaways by Macro Roundup® AI

  1. JPMorgan estimates the US Treasury will need to borrow $1.1tn in short-dated Treasury bills by the end of 2023, including $850bn in net bill issuance over the next four months.
  2. The Treasury will move to rebuild a cash balance that fell to its lowest level since 2017, following resolution of the debt ceiling dispute that had prevented the US from increasing its borrowing.
  3. Analysts' principal concern is that the volume of new issuance will push up yields on government debt, sucking cash out of bank deposits.

AI Summary. Rising gross domestic product has been more than offset by falling gross domestic income, so by current measures the US economy appears to have contracted in four of the last five quarters even as payroll employment and real personal income have kept rising. Either the job market will crack or output measures will catch up with it.

Justin Fox Bloomberg
Date Posted:

US GDP has contracted in four out of the last five quarters, but labor markets remain robust. @foxjust argues “This can’t go on forever. At some point either the job market will crack or other economic measures will begin to catch up with it.”

Can employment keep rising while output measures show contraction?

Core argument: Rising GDP over the past two quarters has been more than offset by falling gross domestic income, leaving the US economy appearing to have contracted in four of the last five quarters as the measures now stand, before revisions.

During the past two quarters rising GDP has been more than offset by falling GDI. As the measures stand now (there are many revisions to come), the US economy appears to have contracted in four of the last five quarters. Meanwhile, payroll employment has grown and grown. Last spring, three of the five indicators were dropping but employment and industrial production were quite strong. Late last year, industrial production fell sharply, but other indicators were mixed. Payroll employment has continued to rise throughout, joined in recent months by the other “most reliable” indicator, real personal income. The jobful recession-that-isn’t-quite-a-recession continues. This can’t go on forever. At some point either the job market will crack or other economic measures such as GDP and GDI will begin to catch up with it.

Takeaways by Macro Roundup® AI

  1. Rising GDP over the past two quarters has been more than offset by falling gross domestic income, leaving the US economy appearing to have contracted in four of the last five quarters as the measures now stand, before revisions.
  2. Payroll employment has grown throughout this stretch of apparent contraction, joined in recent months by real personal income, the other indicator described as "most reliable.".
  3. The divergence cannot persist indefinitely: either the job market will crack or measures such as GDP and GDI will begin to catch up with employment.

AI Summary. Citi projects labor shortages, permitting challenges and other constraints will push lithium prices up as much as 40% and copper prices up 50%. Seasonally adjusted mining industry employment has shrunk by nearly 39% since 1990 as power generators moved away from coal, according to the Bureau of Labor Statistics.

Hardika Singh and David Uberti Wall Street Journal
Date Posted:

A labor shortage in the mining sector is expected to slow firms’ abilities to expand production in the face of higher demand. Citi Group forecasts lithium prices will be up 40% by the end of the year and copper up 50% by 2025.

Will mining labor shortages push lithium and copper prices higher?

Core argument: Citi forecasts lithium prices rising as much as 40% by year's end, driven by labor shortages, permitting challenges and other issues facing miners.

Citi expects labor shortages, permitting challenges and other issues will propel lithium prices higher by as much as 40% by year’s end. It forecasts copper will jump 50% by 2025, noting that it is less vulnerable than some other metals to recent innovations for electric-vehicle batteries. The overall industry’s seasonally adjusted head count shrank by nearly 39% since 1990 as power generators turned away from coal, according to the Bureau of Labor Statistics. Colleges and universities have struggled to rebuild the depleted talent pipeline. “The problem is that talent isn’t lying around waiting to be paid more—there just isn’t enough of it,” said Andrea Brickey, an associate professor of mining engineering and management at the South Dakota School of Mines & Technology.

Takeaways by Macro Roundup® AI

  1. Citi forecasts lithium prices rising as much as 40% by year's end, driven by labor shortages, permitting challenges and other issues facing miners.
  2. Citi projects copper will jump 50% by 2025, noting copper is less vulnerable than some other metals to recent innovations for electric-vehicle batteries.
  3. Mining industry seasonally adjusted head count shrank by nearly 39% since 1990 as power generators turned away from coal, according to the Bureau of Labor Statistics, and colleges and universities have struggled to rebuild the depleted talent pipeline.

AI Summary. Full-time registered West Coast longshore workers earned an average of $197,514 excluding benefits, with clerks averaging $220,042 and foremen and walking bosses $306,291, according to the Pacific Maritime Association. The association also paid $100,534 per union registrant in benefits, including full insurance, a 401(k), and a pension capped at $95,460 a year.

Greg Miller Freighwaves
Date Posted:

Port operations on America’s west coast are being disrupted by labor activity. @freightwaves reports that full time dock workers have mean earnings that are 9% higher than dentists and just $5,600 less than airline pilots.

How much do West Coast dockworkers earn in pay and benefits?

Core argument: Full-time registered West Coast longshore workers earned an average of $197,514 in 2022 excluding benefits, according to the Pacific Maritime Association, with full time defined as 2,000 or more hours per year, or 38.4 hours per week.

Full-time registered longshore workers earned an average of $197,514 in 2022, not including benefits, according to the Pacific Maritime Association. Full time is defined as working 2,000 hours or more per year, or 38.4 hours per week. Clerks working full time earned an average of $220,042 and foremen and walking bosses averaged $306,291. The PMA also paid $100,534 per International Longshore and Warehouse Union registrant in benefits costs. Benefits include full insurance coverage, a 401(k) and a pension with a maximum yearly retirement benefit of $95,460.

Takeaways by Macro Roundup® AI

  1. Full-time registered West Coast longshore workers earned an average of $197,514 in 2022 excluding benefits, according to the Pacific Maritime Association, with full time defined as 2,000 or more hours per year, or 38.4 hours per week.
  2. Full-time clerks averaged $220,042 and foremen and walking bosses averaged $306,291, according to the Pacific Maritime Association.
  3. The Pacific Maritime Association paid $100,534 per International Longshore and Warehouse Union registrant in benefits costs, covering full insurance, a 401(k), and a pension with a maximum yearly retirement benefit of $95,460.

AI Summary. Analysts identify 14 S&P 500 firms with significant artificial intelligence exposure that together account for 73% of the stockmarket rally, with Nvidia alone a fifth as its market value rose from under $400bn to $925bn. The average price-to-earnings multiple of those firms leapt from 43 to 77.

Economist Staff The Economist
Date Posted:

Investor excitement in AI is a key factor in the recent stock market recovery. @The Economist reports that 73% of the S&P 500 rally since November 2022 has been driven by 14 firms with significant AI exposure.

Investor excitement in AI is a key factor in the recent stock market recovery. @The Economist reports that 73% of the...

How much of the stockmarket rally comes from AI-exposed firms?

Core argument: Nvidia's market capitalisation rose from under $400bn to $925bn since the end of November, accounting for a fifth of the stockmarket rally.

Analysts reckon that the S&P 500 has 14 firms with significant exposure to AI. These include well-known giants, such as Google and Microsoft, and lesser-known providers of underlying infrastructure, like Arista and NetApp, two data-centre companies. On its own, the price of Nvidia is responsible for an enormous slice of the stockmarket recovery. Since the end of November, the firm’s market capitalisation has soared from under $400bn to $925bn—accounting for a fifth of the rally. Add Nvidia’s surge to the growing market capitalisations of the 13 other firms with ai exposure and a remarkable 73% of the broader rally is explained. The boom in ai stocks has comfortably outstripped the wider tech rebound. The NASDAQ is up by a fifth since November, compared with a third for the most ai-exposed firms. In November the average price to current earnings multiple of an S&P 500 firm, excluding the 14 most exposed to ai, was around 27. As we went to press, the multiple had dipped to 26. Meanwhile, the average multiple of firms in our ai bucket had leapt from 43 to 77.

Takeaways by Macro Roundup® AI

  1. Nvidia's market capitalisation rose from under $400bn to $925bn since the end of November, accounting for a fifth of the stockmarket rally.
  2. The 14 S&P 500 firms with significant AI exposure, including Google, Microsoft, Arista and NetApp, together explain 73% of the broader rally.
  3. The average price-to-current-earnings multiple of the AI-exposed S&P 500 firms leapt from 43 to 77, while the multiple for the other firms dipped from around 27 to 26.

AI Summary. China's productivity growth has slowed and its working-age population is shrinking, with the UN projecting a decline of more than 100m people aged 15-64 in the 2030s. Several forecasters project China's GDP will overtake America's sometime in the 2030s, while Capital Economics argues that if it does not, it may never happen.

Economist Staff The Economist
Date Posted:

Wall Street analysts and think tanks have reduced their estimates of future Chinese economic growth, pushing out the date when China will overtake the US. The Economist Intelligence Unit currently projects this will occur in 2039.

Will China's GDP overtake America's?

Core argument: The UN projects China's population aged 15–64 will decline by more than 100m in the 2030s, with China's workforce already shrinking and its productivity growth slowed.

Postponements of China’s date with economic destiny have cast some doubt on whether it will ever happen. The country’s productivity growth has slowed, and its demographics have turned. China’s workforce is already shrinking, a decline that will probably accelerate in future decades. The UN projects that China’s population aged 15-64 will decline by more than 100m in the 2030s. If China’s GDP does not overtake America’s by the middle of that decade, it may never do so, according to Capital Economics, a research firm. The OECD, the Lowy Institute, and the Centre for Economics and Business Research, project that China’s GDP will overtake America’s at some point in the 2030s. The Economist Intelligence Unit thinks it will happen in 2039. That prediction is strikingly close to Goldman Sachs’s original date [of 2041], set 20 years ago.

Takeaways by Macro Roundup® AI

  1. The UN projects China's population aged 15–64 will decline by more than 100m in the 2030s, with China's workforce already shrinking and its productivity growth slowed.
  2. Capital Economics argues that if China's GDP does not overtake America's by the middle of the 2030s, it may never do so.
  3. The OECD, the Lowy Institute, and the Centre for Economics and Business Research project China's GDP will overtake America's during the 2030s, while the Economist Intelligence Unit puts the date at 2039, close to Goldman Sachs's original 2041 estimate.

AI Summary. The US, Taiwan and Japan plan to share real-time data from naval reconnaissance drones, with Taiwan's four MQ-9B Sea Guardian drones integrated into the same system used by US forces in the region and Japan's Self-Defense Force. The arrangement would let the US and its allies view the same drone-gathered information simultaneously.

Kathrin Hille and Demetri Sevastopulo Financial Times
Date Posted:

The US, Japan, and Taiwan are integrating real time reconnaissance data, a critical step in developing a common operational picture in the event of war over Taiwan.

The US, Japan, and Taiwan are integrating real time reconnaissance data, a critical step in developing a common operational...

Will the US and its allies share real-time drone surveillance data?

Core argument: General Atomics is due to deliver four MQ-9B Sea Guardian reconnaissance drones to Taipei beginning in 2025, and Washington would allow the aircraft to be integrated into the same system used by US forces in the region and Japan's Self-Defense Force.

The US, Taiwan and Japan are to share real-time data from naval reconnaissance drones. US defence contractor General Atomics is due to deliver four MQ-9B Sea Guardian drones to Taipei beginning in 2025. Washington would allow the aircraft to be integrated into the same system that US forces in the region and the Japanese Self-Defense Force will use. This would allow the US and its allies and partners to observe the same information gathered simultaneously by the unmanned aerial vehicles — a set-up referred to as a common operational picture.

Takeaways by Macro Roundup® AI

  1. General Atomics is due to deliver four MQ-9B Sea Guardian reconnaissance drones to Taipei beginning in 2025, and Washington would allow the aircraft to be integrated into the same system used by US forces in the region and Japan's Self-Defense Force.
  2. The US, Taiwan and Japan are to share real-time data from naval reconnaissance drones, allowing the US and its allies and partners to observe the same information gathered simultaneously by the unmanned aerial vehicles, a set-up referred to as a common operational picture.