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


Thursday, August 31, 2023

AI Summary. The US capital-output ratio remains close to its postwar average and the real return to capital has stayed roughly constant near 6%, at 5.84% in the 2000s and 6.42% in the 2010s. Market-based real returns averaged 5.52% from 1950-1989 versus 6.95% from 1990-2019, a rise rather than the decline a capital glut implies.

Alan Auerbach and Larry Kotlikoff Economics Matters
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Alan Auerbach @Kotlikoff argue that the global savings glut was a “myth.” The market return on capital, which would show a decline if there were a capital glut, increased in the 2000s and 2010s.

Is there evidence of a US capital glut?

Core argument: The marginal product of US capital rose from 5.84% in the 2000s to 6.42% in the 2010s, and the US capital-output ratio remains close to its postwar average.

There has been no major increase in the US capital-output ratio, nor has there been a major decline in the US marginal product of capital – the economy’s real return to capital. The US capital-output ratio remains close to its postwar average and capital’s real return has remained roughly constant -- around 6%. During the 2000s the marginal product of U.S. capital (MPK) was a healthy 5.84%. In the 2010s it was even higher at 6.42%. The market return to capital would show a decline if there were a capital glut and investors expected lower rates of return, It shows no such decline. The market return to capital’s real return averaged 5.52% between 1950 and 1989. Btw 1990 and 2019 it averaged 6.95. Hence, the broadest market-based real return data shows a rise, not a fall in returns in the recent decades during which capital has allegedly been in vast oversupply. The real return to US wealth between 2010 and 2019 averaged 8.25% – the highest average return of any postwar decade.

Takeaways by Macro Roundup® AI

  1. The marginal product of US capital rose from 5.84% in the 2000s to 6.42% in the 2010s, and the US capital-output ratio remains close to its postwar average.
  2. The market-based real return to US capital averaged 5.52% between 1950 and 1989 and 6.95% between 1990 and 2019, a rise rather than the decline a capital glut would produce.
  3. The real return to US wealth averaged 8.25% between 2010 and 2019, the highest average return of any postwar decade.

Related Articles:

  • In Search of Safe Havens: The Trust Deficit and Risk-free Investments! — Plotting US Treasury bond rates against a crude fundamental risk-free rate—actual inflation plus real GDP growth—undercuts the argument that central banks set interest rates. Central banks can nudge rates at the margin but cannot override the fundamentals of inflation and real growth.
  • Summers and Blanchard Debate the Future of Interest Rates — With expected inflation near 2.5%, a real interest rate of 1.5% to 2%, and some risk and term premium, short-term interest rates would average around 4%, one argument in a debate on the future of interest rates holds. If traditional spreads reassert themselves, longer-term rates would run about 1 percentage point higher, near 5%.

AI Summary. The labor force participation rate for prime-age women, those aged 25 to 54, has exceeded its all-time high, reaching 77.8%. The authors find prime-age women contributed most to the rebound in overall labor force participation, with women whose youngest child is under age five driving the upward trajectory.

Lauren Bauer and Sarah Yu Wang Brookings Institution
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The labor force participation rate for prime-age women (ages 25-54) is at an all-time high 77.8%, driven by mothers whose youngest child is under 5 years old. @laurenlbauer

Are prime-age women driving the rebound in labor force participation?

Core argument: Prime-age women, those aged 25–54, reached a labor force participation rate of 77.8% in the most recent jobs report, having exceeded their all-time high since February 2023.

Since February 2023, the labor force participation rate for prime-age women––those between the ages of 25 and 54––has exceeded its all-time high. As of the most recent jobs report, prime-age women had a labor force participation rate of 77.8%. We find that those who have contributed most to the rebound in overall labor force participation in April and May of 2023, three years after the nadir of pandemic-era participation, are in fact prime-age women. Moreover, among prime-age women and indeed among all groups, women whose youngest child is under the age of five are powering the pack’s upward trajectory.

Takeaways by Macro Roundup® AI

  1. Prime-age women, those aged 25–54, reached a labor force participation rate of 77.8% in the most recent jobs report, having exceeded their all-time high since February 2023.
  2. Prime-age women contributed most to the rebound in overall labor force participation in April and May of 2023, three years after the pandemic-era participation low.
  3. Among prime-age women and among all groups, women whose youngest child is under the age of five are driving the upward trajectory in participation.

Related Articles:

AI Summary. Automakers have announced more than $110bn in electric-vehicle investments in the US, with about half directed to Southern states and most of the remainder to Great Lakes states including Michigan, Ohio and Indiana. Great Lakes auto employment, though still nearly double the South's, has fallen 34% over two decades to 382,000 workers.

Nora Eckert Wall Street Journal
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Since 2018, auto manufacturers have announced at least $110 billion of EV-related domestic investment, about half in Southern states, driven by lower labor and energy costs. Unionizing southern auto workers is a priority for the UAW.

Is electric-vehicle investment shifting auto manufacturing to the South?

Core argument: Auto companies have announced more than $110 billion in EV-related U.S. investments since 2018, with about half destined for Southern states and most of the remainder for Great Lakes states including Michigan, Ohio and Indiana, according to the Center for Automotive Research.

Auto companies have announced more than $110 billion in EV-related investments in the U.S. since 2018, with about half that sum destined for Southern states, according to the Center for Automotive Research. The rest is mostly planned for states in the Great Lakes region, including Michigan, Ohio and Indiana. Auto employment in the Great Lakes region, while still nearly double that of southern states, has slid 34% in the last two decades to 382,000 workers as of 2021, according to the Economic Policy Institute. Full-time unionized jobs in the industry currently range between $18 to $32 an hour. There is no guarantee the [southern] Ford plants will be unionized, and the company has said this decision is up to its workers. The United Auto Workers union is currently in talks with the Detroit automakers and is prioritizing organizing these joint-venture battery plants.

Takeaways by Macro Roundup® AI

  1. Auto companies have announced more than $110 billion in EV-related U.S. investments since 2018, with about half destined for Southern states and most of the remainder for Great Lakes states including Michigan, Ohio and Indiana, according to the Center for Automotive Research.
  2. Auto employment in the Great Lakes region fell 34% over the last two decades to 382,000 workers as of 2021, though it remains nearly double that of Southern states, according to the Economic Policy Institute.
  3. Full-time unionized auto jobs pay between $18 and $32 an hour, and the United Auto Workers, in talks with the Detroit automakers, is prioritizing organizing joint-venture battery plants, while Ford says unionization at its Southern plants is up to its workers.

Related Articles:

  • Auto Union Boss Wants 46% Raise, 32-Hour Work Week in ‘War’ Against Detroit Carmakers — The United Auto Workers union has demanded a 46% raise, a return to traditional pensions, and a 32-hour work week from the three Detroit automakers. The companies say meeting those demands would raise labor costs by $80bn and lift total pay and benefit expenses to more than $150 an hour from about $64.
  • Republican Districts Dominate US Clean Technology Investment Boom — A Financial Times analysis found that more than 80% of pledged investment in large-scale clean energy and semiconductor manufacturing is destined for Republican congressional districts. The analysis attributes this partly to those districts' available land and cheap labor, and to state-level tax breaks and subsidies in states such as Georgia and Ohio.
  • Small Towns Chase America’s $3 Trillion Climate Gold Rush — About $1tn in US federal tax incentives and loans for green energy is drawing a flood of corporate investment into rural counties and reshaping local economies. Estimates of the total private and public spending driven over the next decade range from several hundred billion dollars to roughly $3tn.

AI Summary. South Korea's fertility rate fell to 0.78 from 0.81, the lowest among wealthy OECD countries where the average is 1.58, and no other OECD member is below 1. Its population has been declining as deaths exceed births, and military conscripts are expected to shrink by nearly half over two decades.

Dasl Yoon and Timothy Martin Wall Street Journal
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Despite spending at least $210 billion since 2006 to encourage marriage and children, South Korea’s fertility rate fell from 0.81 in 2021 to 0.78 last year, falling further to 0.70 in the April-to-June quarter.

Despite spending at least $210 billion since 2006 to encourage marriage and children, South Korea’s fertility rate...

Do cash payments to parents raise a falling birthrate?

Core argument: South Korea's fertility rate fell to 0.78 from 0.81 in 2021, and slid further to 0.70 in the April-to-June quarter, despite cash payouts to parents.

South Korea’s fertility rate slumped to 0.78 last year, from 0.81 in 2021. The slide has worsened in recent months, falling to 0.70 in the April-to-June quarter. Since 2013, the country of 52 million has reported the lowest fertility rate among wealthy members of the OECD—where the average fertility rate stands at 1.58. No other OECD member has a fertility rate below 1. South Korea’s population began declining in 2020, with the number of deaths overtaking total births. Its military conscripts are expected to shrink by nearly half over the next two decades. The military has started to deploy more unmanned combat aircraft and increase the number of women serving. The country’s total student enrollment has shrunk for 18 years straight.

Takeaways by Macro Roundup® AI

  1. South Korea's fertility rate fell to 0.78 from 0.81 in 2021, and slid further to 0.70 in the April-to-June quarter, despite cash payouts to parents.
  2. South Korea, a country of 52 million, has reported the lowest fertility rate among wealthy OECD members since 2013, against an OECD average of 1.58, and no other OECD member has a rate below 1.
  3. South Korea's military conscripts are expected to shrink by nearly half over the next two decades, and its military has started deploying more unmanned combat aircraft and increasing the number of women serving.

Related Articles:

  • South Korea Again Smashes Own Record for World’s Lowest Fertility Rate in 2022 — South Korea's fertility rate fell to 0.78 babies per woman, the lowest among more than 260 nations tracked by the World Bank, with newborns declining to 249,000 against about 373,000 deaths. Statistics Korea projects the working-age population, which peaked at 37.3m, will fall by almost half by 2070.
  • The Great Global Baby Bust is Under Way — The number of countries with fertility rates below the 2.1 replacement level rose from 98 in 2010 to 124 in 2021, more than half of those with available data, and all 15 of the world's largest economies are below replacement. Fertility is now falling among less-educated women too.
  • How a Vast Demographic Shift Will Reshape the World — In East Asia and Europe, growing numbers of retirees will depend on a shrinking working-age population, and some Asian countries are aging before becoming rich — China hit its peak working-age population at 20% of US income levels at the same point, Vietnam at 14%.

AI Summary. Research documents a large increase in small campaign contributions of $200 or less, with the number of individual donors rising from 5.2mm in 2006 to 195mm in 2020. Candidates with strongly ideological profiles rank among the top recipients, drawing roughly 70% of their funds from small donors.

Thomas Edsall New York Times
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Ideologically driven donors of $200 or less are driving political polarization in the US, as small donors hold far more extreme views than those of the mean voter. @Edsall

Ideologically driven donors of $200 or less are driving political polarization in the US, as small donors hold far more...

Are small campaign donors fueling the rise of ideological candidates?

Core argument: The 2022 paper "Small Campaign Donors" documents individual campaign donors rising from 5.2 million in 2006 to 195 million in 2020, alongside an increase in contributions of $200 or less.

A 2022 paper, “Small Campaign Donors,” documents the striking increase in low-dollar ($200 or less) campaign contributions in recent years. The total number of individual donors grew from 5.2mm in 2006 to 195mm in 2020. The appeal of extreme candidates can be seen in the OpenSecrets listing of the top members of the House and Senate ranked by the percentage of contributions they have received from small donors in the 2021-22 election cycle: Bernie Sanders raised $38.3mm, of which 70%, came from small donors; Marjorie Taylor Greene raised $12.5mm, of which 68% came from small donors; and Alexandria Ocasio-Cortez raised $12.3mm, of which 68%, came from small donors. House Republicans who backed Trump and voted to reject the Electoral College count on Jan. 6 received an average of $140,000 in small contributions, while House Republicans who opposed Trump and voted to accept Biden’s victory received far less in small donations, an average of $40,000.

Takeaways by Macro Roundup® AI

  1. The 2022 paper "Small Campaign Donors" documents individual campaign donors rising from 5.2 million in 2006 to 195 million in 2020, alongside an increase in contributions of $200 or less.
  2. OpenSecrets data for the 2021-22 cycle show Bernie Sanders raised $38.3 million with 70% from small donors, Marjorie Taylor Greene $12.5 million with 68%, and Alexandria Ocasio-Cortez $12.3 million with 68%.
  3. House Republicans who voted to reject the Electoral College count on Jan. 6 received an average of $140,000 in small contributions, compared with an average of $40,000 for those who voted to accept Biden's victory.

Related Articles:

  • Is the Surge to the Left Among Young Voters a Trump Blip or the Real Deal? — Data from the Cooperative Election Study show millennials and Gen Z have voted increasingly for Democratic House candidates over time, contrary to the adage that voters grow more conservative as they age. One political scientist notes such generational shifts translate slowly into vote share and can be offset by Republican gains elsewhere.
  • What Happened In 2022 — 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.
  • Republican Gains in 2022 Midterms Driven Mostly by Turnout Advantage — A Pew Research Center analysis of verified voters finds that partisan differences in turnout, rather than voters switching parties, account for most Republican gains in House voting. 71% of Trump's 2020 voters turned out in the midterms versus 67% of Biden's, and just 6% crossed party lines.

Friday, September 1, 2023

AI Summary. Both household and payroll employment stand about 1.5mm above the Congressional Budget Office's pre-pandemic projections, and aggregate hours grew strongly alongside an uptick in average weekly hours. Average hourly earnings growth was the slowest in over a year and a half, a noisy and revision-prone series that is the report's biggest sign of cooling.

Jason Furman @jasonfurman
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.@jasonfurman believes today’s job report is consistent with “continued moderation in inflation” and doesn’t believe the Fed needs to hike another 25bps in September.

Is employment running above pre-pandemic projections while wage growth cools?

Core argument: Both household and payroll employment stand 1.5mm above CBO's pre-pandemic projections, according to Jason Furman, who notes that talk of "missing workers" persisted longer than the data justified.

Overall both household and payroll employment are 1.5mm higher than CBO's pre-pandemic projections. It doesn't feel that long ago that people were talking about missing workers (talking about it for longer than was justified by the data I might add). Pretty much the only thing that went in the direction of tighter was average weekly hours ticked up but this series is noisy because of rounding and measurement issues. As a result, aggregate hours grew strongly as well. Average hourly earnings growth was the slowest in over a year and a half. This is noisy, subject to revision, but even adjusting for that perhaps the biggest sign of cooling in this report.

Takeaways by Macro Roundup® AI

  1. Both household and payroll employment stand 1.5mm above CBO's pre-pandemic projections, according to Jason Furman, who notes that talk of "missing workers" persisted longer than the data justified.
  2. Average hourly earnings growth was the slowest in over a year and a half, which Furman calls perhaps the biggest sign of cooling in the report even allowing for noise and revisions.
  3. Average weekly hours ticked up, the only component moving toward tighter conditions, and aggregate hours grew strongly as a result, though Furman notes the hours series is noisy because of rounding and measurement issues.

Related Articles:

  • Has the Fed Tightened Enough? Guideposts to Consider — Wage growth of about 2.5% would be consistent with 2% inflation given low recent-trend productivity growth, but wage growth is running near 4.5%. On this view inflation is more likely to level out at its current rate than keep falling, pushing the Federal Reserve toward further tightening through rate rises or holding rates high.
  • Auto Union Boss Wants 46% Raise, 32-Hour Work Week in ‘War’ Against Detroit Carmakers — The United Auto Workers union has demanded a 46% raise, a return to traditional pensions, and a 32-hour work week from the three Detroit automakers. The companies say meeting those demands would raise labor costs by $80bn and lift total pay and benefit expenses to more than $150 an hour from about $64.
  • Unions’ Inflation Warning? — The share of people aged 16 and over working or looking for work fell when the pandemic hit and has only partly recovered, with population aging accounting for most of the remaining shortfall. That implies economic activity must run at a lower level to avoid persistent wage and price inflation.

AI Summary. Short-term interest rates are set at the discretion of the Federal Reserve's policy committee rather than by markets, and the Fed also tries to influence longer-term rates, sometimes by buying or selling bonds outright. The author argues central banks could conduct such trades directly instead of paying intermediaries, as the Bank of Japan does.

Matt Klein The Overshoot
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.@M_C_Klein argues that the Fed might need to follow the BOJ in controlling yield curves to manage the scale of debt issuances.

Should central banks trade bonds directly instead of paying intermediaries?

Core argument: Short-term interest rates are set at the discretion of the roughly 18 members of the FOMC rather than determined by markets in any normal sense, while Fed officials try to move longer-term rates, sometimes by buying or selling bonds outright.

[Short-term interest rates] are not “market-determined” in any normal sense, but chosen at the discretion of the ~18 members of the FOMC. Longer-term interest rates are not explicitly set by the Fed, but Fed officials try to make those rates go up or down when they think it is necessary to achieve their policy objectives, sometimes by buying or selling bonds outright. If the point of maintaining “market functioning” is to prevent spikes in yields that could hurt borrowers in the real economy while facilitating transactions of bonds for cash, central banks are already better-positioned to do those trades directly than anyone else. What would be the point of involving intermediaries, except to pay them for a service that could be provided in-house? This is effectively what the BOJ has been doing for years, laying out target ranges for yields at points on the curve, adjusting those ranges as needed, sometimes buying oodles of Japanese Government Bonds (JGBs), and often doing nothing.

Takeaways by Macro Roundup® AI

  1. Short-term interest rates are set at the discretion of the roughly 18 members of the FOMC rather than determined by markets in any normal sense, while Fed officials try to move longer-term rates, sometimes by buying or selling bonds outright.
  2. If the purpose of preserving "market functioning" is to prevent yield spikes that could hurt real-economy borrowers while facilitating exchanges of bonds for cash, central banks are already better-positioned to execute those trades directly than anyone else.
  3. The Bank of Japan has for years laid out target ranges for yields at points on the curve, adjusted those ranges as needed, sometimes bought large volumes of Japanese Government Bonds, and often done nothing.

Related Articles:

  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.
  • 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. Hedge funds' short positions in 2-, 5-, and 10-year Treasury futures rose by $411bn, consistent with renewed use of the cash-futures basis trade, which pairs short futures with long cash Treasury positions financed in the repo market. The Federal Reserve identifies this highly leveraged trade as a financial stability vulnerability.

Daniel Barth, R. Jay Kahn and Robert Mann Federal Reserve Board
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Similar to 2019/early 2020, hedge funds are again arbing away differences between Treasury futures and cash prices in large size; unwinding of the “cash-futures trade” likely contributed to the March 2020 Treasury market instability.

Are hedge funds rebuilding leveraged Treasury basis trades?

Core argument: Hedge fund short Treasury futures positions in the 2-year, 5-year, and 10-year contracts rose by $411 billion between October 4, 2022 and May 9, 2023.

Hedge fund short futures positions in the 2-year, 5-year, and 10-year contracts rose by $411 billion between October 4th, 2022 and May 9th, 2023. Consistent with these empirical trends, spreads on the trade suggest it has been profitable at several points in recent months, without considering the value of options embedded in the trade (and whose value has likely increased as measures of Treasury market uncertainty have risen). The cash-futures basis trade is an arbitrage trade that involves a short Treasury futures position, a long Treasury cash position, and borrowing in the repo market to finance the trade and provide leverage. This trade presents a financial stability vulnerability because the trade is generally highly leveraged and is exposed to both changes in futures margins and changes in repo spreads. Hedge funds unwinding the cash-futures basis trade likely contributed to the March 2020 Treasury market instability.

Takeaways by Macro Roundup® AI

  1. Hedge fund short Treasury futures positions in the 2-year, 5-year, and 10-year contracts rose by $411 billion between October 4, 2022 and May 9, 2023.
  2. Spreads on the cash-futures basis trade — a short Treasury futures position paired with a long cash Treasury position financed in the repo market — suggest the trade has been profitable at several points, before counting the value of its embedded options.
  3. The cash-futures basis trade presents a financial stability vulnerability because it is generally highly leveraged and exposed to changes in futures margins and repo spreads, and hedge funds unwinding it likely contributed to the March 2020 Treasury market instability.

Related Articles:

  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • Who Has Been Buying U.S. Treasury Debt? — Net purchases of U.S. Treasury securities by the "households and nonprofits" category have soared, more than offsetting sales and redemptions by money market funds, the Federal Reserve, and banks; much of this buying likely reflects hedge funds. The composition of Treasury financing has shifted dramatically as bond prices fell.
  • A Beautiful Replenishment — Money market funds buying Treasury bills lets bank reserves be replenished as cash moves from the Federal Reserve's overnight reverse repo facility into the Treasury's account and back out through government spending. The author argues reserves should stay abundant, allowing the Federal Reserve's balance sheet runoff to continue about two more years.

AI Summary. The share of Americans saying the ideal family has three or more children rose to 44% from about one-third in the mid-1990s, while the share favoring two children fell to 51.7% from 62%, according to the University of Chicago's General Social Survey. This rise in stated ideal family size came as the actual number of births declined.

Josh Zumbrun Wall Street Journal
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According to surveys, Americans want larger families than they actually have. Ideal family size has changed very little since the mid-70s.

Do Americans want larger families than birthrates suggest?

Core argument: The share of Americans citing three or more children as the ideal family size rose to 44% in 2022, up from about one-third in the mid-1990s, according to the University of Chicago's General Social Survey.

Most Americans still overwhelmingly stick to an ideal of two to three children. In fact, the share of people saying they want three or more children has risen as the actual number of children being born has dropped. By the mid-1990s, about one-third of Americans said the ideal family had three or more children. But since then, the share of respondents citing an ideal of three or more children has gradually climbed. Despite dipping briefly after the pandemic, that group rebounded again in 2022 to 44%, according to the General Social Survey, the more than 50-year-old survey of Americans’ social views conducted by the University of Chicago. Meanwhile, the share of people who say the ideal family consists of two children slipped to 51.7% in 2022 from 62% in 1998. On average, the ideal family is 2.5 children, which is up slightly from the 1990s but relatively little changed over the course of 50 years.

Takeaways by Macro Roundup® AI

  1. The share of Americans citing three or more children as the ideal family size rose to 44% in 2022, up from about one-third in the mid-1990s, according to the University of Chicago's General Social Survey.
  2. The share of Americans naming two children as the ideal fell to 51.7% in 2022 from 62% in 1998, according to the General Social Survey.
  3. Americans' average ideal family size is 2.5 children, up slightly from the 1990s but relatively little changed over 50 years, even as the actual number of children being born has dropped.

Related Articles:

  • Young Adults in the U.S. Are Reaching Key Life Milestones Later Than in the Past — 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%.
  • Immigrants & Their Kids Were 70% of U.S. Labor Force Growth Since 1995 — U.S. labor force data show immigrants accounted for 49% of labor force growth over roughly the past three decades and their children another 21%, together about 70% of an increase of nearly 32.8m workers. Immigrants rose from about 10% to 18% of the labor force, and immigrants plus their children from 18% to 29%.

AI Summary. U.S. companies have $600bn in corporate debt maturing this year, a total Goldman Sachs data show rising to more than $1tn a year from 2025 through 2028. Those debt loads, combined with higher financing costs, may cut into corporate profits, investor returns, innovation spending, and hiring, with some analysts expecting credit-rating downgrades.

Greg Ip, Joe Pinsker, Will Parker, Walden Siew, et al. Wall Street Journal
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American firms have $600 billion in debt maturing this year. Between 2025 and 2028 over $1 trillion of corporate debt matures each year.

Will rising corporate debt maturities squeeze profits, hiring, and credit ratings?

Core argument: U.S. companies have $600 billion of corporate debt maturing this year, a total Goldman Sachs data shows rising to more than $1 trillion annually from 2025 through 2028.

U.S. companies have $600 billion in corporate debt set to mature this year, a total that will grow to more than $1 trillion a year from 2025 until 2028. That stark data from Goldman Sachs points to a financial cliff that is coming for American corporations, which executives are trying to navigate by extending the dates their debts come due, refinancing borrowings or managing cash reserves. What’s at stake? The debt loads, coupled with the rising costs of new financing for companies, may cut into corporate profits, investor returns, spending on new ideas, hiring—and could lead to less-healthy balance sheets. Some analysts say there could be a swath of corporate credit-rating downgrades ahead.

Takeaways by Macro Roundup® AI

  1. U.S. companies have $600 billion of corporate debt maturing this year, a total Goldman Sachs data shows rising to more than $1 trillion annually from 2025 through 2028.
  2. Executives are navigating the approaching maturities by extending the dates their debts come due, refinancing borrowings and managing cash reserves.
  3. Debt loads combined with rising financing costs may cut into corporate profits, investor returns, spending on new ideas and hiring, and some analysts say a swath of corporate credit-rating downgrades could lie ahead.

Related Articles:

  • How Is the Corporate Bond Market Functioning as Interest Rates Increase? — The Investment Grade Corporate Bond Market Distress Index has risen only modestly during the current interest-rate tightening cycle and has recently trended sideways, with its peak not substantially above the level reached during the earlier 2015 tightening cycle.
  • Credit Normalization — Excluding Treasury securities, more than $30tn of debt securities are outstanding, and credit spreads, while wider than their 2021 lows, remain within historical ranges. The recent slight deterioration in credit-quality metrics and the rise in bankruptcy filings from historically low levels most likely reflect normalization rather than emerging financial distress.
  • A Default Cycle Has Started — Default rates on high-yield bonds and leveraged loans are rising as more companies default under a higher cost of capital, with the Federal Reserve signaling interest rates will stay at these levels for a couple of years. Tighter financing conditions are the channel through which monetary policy restrains the economy and capital markets.