Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…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
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, January 25, 2024

AI Summary. A recommended Federal Reserve path calls for interest-rate cuts at every other meeting, four cuts over the year, with more aggressive cuts if serious recession fears emerge (25% chance) and increases of up to 0.5 percentage points if core inflation is on track to exceed 3% (15% chance).

Jason Furman American Enterprise Institute
Date Posted:

In comments at @AEI @jasonfurman argues “Much to my surprise and delight, we have landed softly” and suggests a reduction in the FFR by ~ 140bps this year.

How should the Fed set interest rates this year?

Core argument: The author's modal case calls for Federal Reserve rate cuts at every other meeting beginning in March, totaling four cuts for the year.

My recommendation. Modal case for the economic outlook: Cut rates every other meeting starting in March—so four rate cuts for the year. Serious recession fears emerge (25% chance): Cut rates more aggressively. Core PCE inflation on track to rise above a 3% pace (15% chance): Raise rates by up to 50 basis points. Mean reduction in FFR:~140 basis points (more than December SEP but less than market expectation).

Takeaways by Macro Roundup® AI

  1. The author's modal case calls for Federal Reserve rate cuts at every other meeting beginning in March, totaling four cuts for the year.
  2. The author assigns a 25% chance to serious recession fears emerging, which would warrant more aggressive rate cuts, and a 15% chance that core PCE inflation tracks above a 3% pace, which would warrant raising rates by up to 50 basis points.
  3. The author's mean expected reduction in the federal funds rate is roughly 140 basis points, more than the December Summary of Economic Projections but less than market expectations.

Related Articles:

  • Macro Outlook 2024: The Hard Part Is Over — Goldman Sachs projects limited recession risk, holding a 15% US recession probability, and expects tailwinds to global growth including strong real household income growth, a smaller drag from monetary and fiscal tightening, recovering manufacturing, and central banks more willing to cut rates if growth slows. It projects core inflation falling to 2–2½%.
  • The Big Picture: Back to the Future — The secular backdrop has shifted from disinflationary to more inflationary, with interest rates no longer near zero and real rates no longer negative. Household balance sheets are as healthy as they have been in 20 years, leaving room to borrow, while the public sector is as indebted as it has ever been.
  • The Grind Ahead — Higher short-term and long-term interest rates are flowing through to credit and interest costs, which the authors expect to produce "the grind" — a gradual decline in growth and in the health of corporate and household balance sheets — as a dominant driver of economies and markets over the next 12–18 months.

AI Summary. Central bank influence on interest rates is strongest at the shortest maturities and decays at longer ones, so long-term rates are better understood through the Fisher decomposition of a nominal rate into expected inflation plus an expected real rate. Assuming the expected real rate converges on real economic growth yields an "intrinsic risk-free rate" estimated as inflation plus real growth.

Aswath Damodaran Musings on Markets
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.@AswathDamodaran estimates the Intrinsic Risk-Free Rate, which he defines as inflation plus real growth, in the post-pandemic period (2021-2023) is at 8.86%, up from 3.13% during the post-crisis period (2009-2020).

Do inflation and real growth explain long-term interest rates?

Core argument: Damodaran argues that even if the Federal Reserve strongly influences interest rates, that influence is strongest at the shortest maturities and decays as maturities lengthen.

Even if you are a believer that the Fed has a strong influence on rates, that effect is strongest on the shortest term rates and decays as you get to longer maturities. To understand what causes long term interest rates to move, I went back to my interest rate basics, and in particular, the Fisher equation breakdown of a nominal interest rate (like the US ten-year treasury rate) into expected inflation and an expected real interest rate: Nominal Interest Rate = Expected Inflation + Expected real interest rate. If you are willing to assume that the expected real interest rate should converge on the growth rate in the real economy in the long term, you can estimate what I call an intrinsic risk free rate: Intrinsic Risk Free Rate = Expected Inflation + Expected real growth rate in economy. I take first shot at estimating this intrinsic risk free rate, by adding the actual inflation rate each year to the real GDP growth rate in that year, for the US.

Takeaways by Macro Roundup® AI

  1. Damodaran argues that even if the Federal Reserve strongly influences interest rates, that influence is strongest at the shortest maturities and decays as maturities lengthen.
  2. Using the Fisher equation, Damodaran decomposes nominal rates such as the US ten-year Treasury rate into expected inflation plus an expected real interest rate.
  3. Assuming the expected real rate converges on real economic growth in the long term, Damodaran estimates an intrinsic risk-free rate for the US by adding each year's actual inflation rate to that year's real GDP growth rate.

Related Articles:

  • The Big Picture: Back to the Future — The secular backdrop has shifted from disinflationary to more inflationary, with interest rates no longer near zero and real rates no longer negative. Household balance sheets are as healthy as they have been in 20 years, leaving room to borrow, while the public sector is as indebted as it has ever been.
  • 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.
  • 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. Bank of America consumer auto loan data show the electric vehicle share of new auto loan originations levelling off, with the plateau concentrated among older generations. Citing affordability, limited model choice, and range anxiety as likely reasons for sluggish mass-market adoption, the bank has revised down its US electric vehicle volume and market-share forecasts through 2030.

David Tinsley and Taylor Bowley Bank of America
Date Posted:

Based on auto loan origination data showing slower EV sales, @BankofAmerica has revised its forecast of the EV penetration rate to just over 30% by 2030.

Is electric vehicle adoption levelling off among older buyers?

Core argument: Bank of America consumer auto loan origination data indicate the EV share of new auto loans levelling off, with the plateau concentrated among Gen X, Boomers, and Traditionalists rather than younger generations.

Bank of America consumer auto loan origination data appears to confirm the picture of a levelling off in the share of new loans for EVs. When we split the data by generations, we find that it is mainly the older generations (Gen X, Boomers, and Traditionalists) where the share of EVs in new auto originations appears to have stopped rising, for now at least. Softer EV demand has led BofA Global Research to revise down its volume forecasts for EVs and their overall share of the overall US market out to 2030. A lack of affordability, limited choice, and 'range anxiety' are likely key reasons for the relatively sluggish mass market EV adoption. But we remain optimistic: hybrid vehicles are bridging some of the gap to full EV transition, while the choice and affordability of EVs should improve from here.

Takeaways by Macro Roundup® AI

  1. Bank of America consumer auto loan origination data indicate the EV share of new auto loans levelling off, with the plateau concentrated among Gen X, Boomers, and Traditionalists rather than younger generations.
  2. BofA Global Research revised down its EV volume forecasts and projected EV share of the overall US market out to 2030 on softer EV demand.
  3. BofA cites a lack of affordability, limited choice, and range anxiety as likely reasons for sluggish mass market EV adoption, while expecting hybrids to bridge part of the gap and EV choice and affordability to improve.

Related Articles:

  • Toyota Nears Mass Production of Solid-State Batteries — Toyota says it is close to producing next-generation solid-state batteries at the same rate as existing electric-vehicle batteries, which would allow mass production by 2027 or 2028. The carmaker expects solid-state-powered cars to travel 1,200km on a charge, more than twice its current electric vehicles, and charge in 10 minutes or less.
  • EU To Launch Anti-Subsidy Probe into Chinese Electric Vehicles — The European Union is opening an anti-subsidy investigation into Chinese electric vehicles it says are distorting the EU market, one of its largest trade cases. Manufacturers found in breach of trade rules could face punitive tariffs, as the EU seeks to avoid a repeat of the insolvencies in its solar panel industry caused by cheap Chinese imports.
  • G.M. and Other Automakers Will Build 30,000 Electric Vehicle Chargers — Seven automakers—BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis—will invest at least $1bn in a joint venture to build 30,000 fast electric-vehicle chargers in the US and Canada, nearly doubling the roughly 32,000 fast chargers in the US. The chargers will accommodate both Tesla's connector standard and the one used by most other carmakers.

AI Summary. Using county-level data on opioid deaths, shipments, friendship links and distance, the authors estimate large spillovers in opioid use and deaths across areas, with a shock raising deaths by 1 in one county causing 0.38 to 0.76 additional deaths elsewhere. They estimate such spillovers account for 84–92% of opioid deaths and are the main reason the epidemic has persisted.

David Cutler and Travis Donahoe National Bureau of Economic Research
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The spread of information about drugs from person to person, and the ease and safety of acquiring drugs account for 84-92% of the rise in opioid deaths between 1990-2018, and drive the persistence of the epidemic. @Cutler_econ @travis_donahoe

How much do spillovers across areas explain opioid deaths?

Core argument: The authors estimate that cross-county spillovers explain 84–92% of opioid deaths from 1990 to 2018 and are the main reason deaths kept rising for so long.

We focus the bulk of our explanation on a theory: that demand increases endogenously due to spillovers in demand for opioids across people. [Here] spillovers are dynamics such as the spread of information about the substances, and ease and safety in ability to acquire the substances. We test for spillovers using county-level data on opioid deaths from 1991–2018 and opioid shipments from 2006–2009, combined with data on friendships and distance between counties. Estimating a model with addiction and spatial spillovers, we find large spillovers in opioid use and deaths across areas. A shock that increases opioid death rates by 1 in an index county causes 0.38 to 0.76 more deaths in other counties because of spillovers. Because opioids are addictive, this leads to even more deaths and spillovers in future years. In some specifications, these effects are large enough to generate a continuously increasing epidemic without any ongoing changes in demand or supply. We estimate spillovers explain 84 to 92% of opioid deaths from 1990 to 2018 and are the main reason deaths have increased for so long. In our preferred models, spillovers explain most opioid deaths since 1990 and are the main reason the epidemic has not burned out.

Takeaways by Macro Roundup® AI

  1. The authors estimate that cross-county spillovers explain 84–92% of opioid deaths from 1990 to 2018 and are the main reason deaths kept rising for so long.
  2. A shock raising opioid death rates by 1 in an index county causes 0.38 to 0.76 additional deaths in other counties through spillovers, with addiction compounding deaths and spillovers in later years.
  3. Testing with county-level opioid deaths from 1991–2018, opioid shipments from 2006–2009, and data on friendships and distance between counties, the authors find some specifications generate a continuously increasing epidemic without ongoing changes in demand or supply.

Related Articles:

  • The Rise in American Pain: The Importance of the Great Recession — The authors find that the rise in reported pain among Americans was almost entirely concentrated in the 2007–2010 recession period rather than following a smooth upward trend, with the disproportionate increase among the less educated also occurring primarily then. The authors state they find this jump difficult to explain.
  • Importing the Opioid Crisis? International Trade and Fentanyl Overdoses — A study using U.S. mortality and import data finds a positive state-level association between imports per resident and drug overdose death rates, driven by fentanyl and accounting for an estimated 15,000–20,000 deaths per year. The authors estimate that 10% higher imports per resident is associated with an 8.1% higher fentanyl death rate.
  • Democracy and the Opioid Epidemic — Using US commuting zone data and the concentration of early prescription opioid marketing in cancer pain markets, the authors estimate that exposure to the opioid epidemic substantially increased the Republican vote share in congressional and presidential elections, with a one standard deviation rise in initial cancer mortality corresponding to 13.8 percentage points.

AI Summary. Pew survey data indicate about 28% of U.S. adults are religiously unaffiliated, identifying as atheist, agnostic, or "nothing in particular." Most of these adults believe in God or a higher power, rarely attend religious services, say religion does some harm while many also see some good, and reject the idea that science can explain everything.

Gregory Smith, Patricia Tevington, Justin Nortey, Michael Rotolo, Asta Kallo and Becka Alper Pew Research Center
Date Posted:

28% of American adults are religiously unaffiliated, describing themselves as atheist, agnostic or “nothing in particular” up from 16% in 2007. @pewresearch

Do religiously unaffiliated Americans still believe in a higher power?

Core argument: About 28% of U.S. adults are religiously unaffiliated, describing themselves as atheists, agnostics, or "nothing in particular," according to Pew survey data.

About 28% of U.S. adults are religiously unaffiliated, describing themselves as atheists, agnostics, or “nothing in particular” when asked about their religion. Pew's survey data shows: Most “nones” believe in God or another higher power. But very few go to religious services regularly. Most say religion does some harm, but many also think it does some good. They are not uniformly anti-religious. Most “nones” reject the idea that science can explain everything. But they express more positive views of science than religiously affiliated Americans do.

Takeaways by Macro Roundup® AI

  1. About 28% of U.S. adults are religiously unaffiliated, describing themselves as atheists, agnostics, or "nothing in particular," according to Pew survey data.
  2. Most religious "nones" believe in God or another higher power, yet very few attend religious services regularly, Pew's data shows.
  3. Most "nones" say religion does some harm while many also say it does some good, and most reject the idea that science can explain everything even as they view science more positively than religiously affiliated Americans do.

Friday, January 26, 2024

AI Summary. Gallup data show women aged 18–30 in the US are 30 percentage points more liberal than young men, a gap that opened in six years, with similar divides in Germany (30 points), the UK (25 points), South Korea and China. In South Korea, marriage rates have plummeted and births fell to 0.78 per woman, the world's lowest.

John Burn Murdoch Financial Times
Date Posted:
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.@jburnmurdoch highlights a growing ideological gap between women and men under the age of 30: US women are now 30 percentage points more liberal than their male counterparts, with similar gaps in Germany and the UK.

Are young men and women diverging ideologically across major economies?

Core argument: Gallup data show US women aged 18–30 are 30 percentage points more liberal than men of the same age, a gap that opened in six years after decades in which the sexes were spread roughly equally across liberal and conservative views.

In the US, Gallup data shows that after decades where the sexes were each spread roughly equally across liberal and conservative world views, women aged 18 to 30 are now 30 percentage points more liberal than their male contemporaries. That gap took just six years to open up. Germany also now shows a 30-point gap between increasingly conservative young men and progressive female contemporaries, and in the UK the gap is 25 points. Outside the West, there are even more stark divisions. In South Korea, there is now a yawning chasm between young men and women, and it’s a similar situation in China. Korea’s is an extreme situation, but it serves as a warning to other countries of what can happen when young men and women part ways. Its society is riven in two. Its marriage rate has plummeted, and birth rate has fallen precipitously, dropping to 0.78 births per woman in 2022, the lowest of any country in the world.

Takeaways by Macro Roundup® AI

  1. Gallup data show US women aged 18–30 are 30 percentage points more liberal than men of the same age, a gap that opened in six years after decades in which the sexes were spread roughly equally across liberal and conservative views.
  2. Germany shows a 30-point ideological gap between increasingly conservative young men and progressive young women, the UK gap is 25 points, and divisions outside the West are starker still in South Korea and China.
  3. South Korea's marriage rate has plummeted and its birth rate fell to 0.78 births per woman in 2022, the lowest of any country, in a society riven in two between young men and women.

Related Articles:

AI Summary. The US halted approval of new licenses to export liquefied natural gas pending review of how shipments affect climate change, the economy, and national security. The pause affects more than a dozen proposals awaiting review at the Energy Department and is likely to disrupt plans for billions of dollars in projects.

Ari Natter, Jennifer A Dlouhy, and Ruth Liao Bloomberg
Date Posted:

The Biden administration “paused” the approval of new LNG licenses pending a new review process to account for climate change concerns, a move that will benefit foreign LNG producers.

Does halting new gas export licenses disrupt billions in planned projects?

Core argument: The Biden administration halted approval of new licenses to export US liquefied natural gas while it examines how the shipments affect climate change, the economy, and national security, a moratorium likely to disrupt plans for billions of dollars in projects.

The Biden administration halted the approval of new licenses to export US liquefied natural gas while it scrutinizes how the shipments affect climate change, the economy, and national security — a moratorium likely to disrupt plans for billions of dollars in projects. The pause could have implications for more than a dozen proposals now awaiting review at the Energy Department, including ventures planned in Louisiana by Commonwealth LNG and Energy Transfer LP.

Takeaways by Macro Roundup® AI

  1. The Biden administration halted approval of new licenses to export US liquefied natural gas while it examines how the shipments affect climate change, the economy, and national security, a moratorium likely to disrupt plans for billions of dollars in projects.
  2. The pause could affect more than a dozen LNG export proposals awaiting review at the Energy Department, including ventures planned in Louisiana by Commonwealth LNG and Energy Transfer LP.

Related Articles:

  • America’s Energy Export Boom — The US produces more crude oil than any other country and, counting total petroleum products, more than Saudi Arabia and Russia combined, with crude and natural gas output at record highs and gas production up 7% from its 2019 peak. Net US energy exports reached $70bn over 12 months despite falling oil and gas prices.
  • The Changing Nexus Between Commodity Prices and the Dollar: Causes and Implications — The shale boom turned the United States into a net exporter of natural gas and of oil, altering how commodity prices relate to US trade. Where higher oil prices were historically associated with a deterioration in US terms of trade, they now correspond to an improvement.
  • US Shale: The Marginal Supplier Matures — The responsiveness of US oil supply to prices has declined and is estimated to be much smaller for publicly traded producers than private ones, with a 10% price increase raising US liquids output by roughly 1%, or 200,000 barrels a day. That implies US supply would offset only about 20-25% of a geopolitical supply shock.

AI Summary. Border apprehensions and expulsions of unauthorized migrants have reached record levels, with nearly 250,000 crossings in a single month. The Pew Research Center estimates 10.5m unauthorized immigrants live in the US, roughly 3% of residents and 22% of the foreign-born population—the lowest shares since the 1990s.

Economist Staff The Economist
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.@TheEconomist notes that illegal immigration is as at a record under President Biden: nearly 250,000 crossed the border in November alone, compared to an average of 100,000/month in the 1980s through to the early 2000s.

Are record border crossings coinciding with decades-low unauthorized population shares?

Core argument: Nearly 250,000 undocumented migrants crossed the U.S. border in November alone, and record numbers of apprehensions and expulsions have occurred during Joe Biden's presidency, making him a clear outlier on border crossings.

Mr Biden is a clear outlier in terms of the number of undocumented, or illegal, migrants crossing the border. During his presidency there have been record numbers of apprehensions and expulsions at the border; nearly 250,000 people crossed in November alone. The Pew Research Centre reckons that there were 10.5m illegal immigrants in 2021, the latest year available. That is roughly the same as in 2017 and fewer than in any other year between 2005 and 2015. It also puts illegal migrants at roughly 3% of people living in America and 22% of the country’s foreign-born population—the lowest shares since the 1990s. This data does not include estimates since the latest wave of encounters at the border; some 600,000 people are thought to have slipped through undetected in 2023.

Takeaways by Macro Roundup® AI

  1. Nearly 250,000 undocumented migrants crossed the U.S. border in November alone, and record numbers of apprehensions and expulsions have occurred during Joe Biden's presidency, making him a clear outlier on border crossings.
  2. The Pew Research Centre estimates there were 10.5m illegal immigrants in the United States in 2021, roughly the same as in 2017 and fewer than in any year between 2005 and 2015.
  3. Pew reckons illegal migrants made up roughly 3% of people living in America and 22% of the foreign-born population, the lowest shares since the 1990s, excluding the estimated 600,000 thought to have slipped through undetected in 2023.

Related Articles:

  • What We Know About Unauthorized Immigrants Living In The U.S. — The Pew Research Center estimates the unauthorized immigrant population in the United States at 10.5m, below its peak of 12.2m and lower than every year from 2005 to 2015. That figure represents about 3% of the total U.S. population and 22% of the foreign-born population, shares among the lowest since the 1990s.
  • The Demographic Outlook: 2024 to 2054 — The Congressional Budget Office projects the US population will grow from 342mm in 2024 to 383mm in 2054, an average 0.4% a year — less than half the 0.9% pace of the prior five decades. Immigration accounts for about 70% of growth over the next decade and for all population growth beginning in 2040.
  • Ten Charts Compare Joe Biden’s Record With Donald Trump’s — Apprehensions at the southern border are the best available measure of illegal immigration into the US, though the figures are hard to interpret: they tend to rise when the economy is strong, and a pandemic-era public-health expulsion policy prompted repeat crossing attempts that partly explain a spike in encounters.

AI Summary. US utilities and grid operators have doubled their annual electricity demand forecasts for the next five years to about 1.5%, the highest rate since the 1990s, after decades of growth below 1%. Alongside data centers, the demand comes from roughly $465bn of announced semiconductor, electric-vehicle and battery factories, and old coal plants are staying online.

Saijel Kishan and Josh Saul Bloomberg
Date Posted:

A @BCG analysis argues that by 2030, data center electrical consumption will triple from 2022 levels to 7.5% of projected US electricity demand.

Is rising electricity demand keeping old coal plants online?

Core argument: US utilities and grid operators have doubled their annual electricity demand forecasts for the next five years to about 1.5%, according to Grid Strategies' analysis of regulatory filings, after decades of growth below 1% annually.

For decades, US electricity demand rose by less than 1% annually. But utilities and grid operators have doubled their annual forecasts for the next five years to about 1.5%, according to Grid Strategies, a consulting firm that based its analysis on regulatory filings. That’s the highest since the 1990s before the US stepped up efforts to make homes and businesses more energy efficient. Utilities are having to contend with other power hogs, besides data centers. There’s about $465 billion worth of semiconductor, EV and battery factories announced since Biden took office.

Takeaways by Macro Roundup® AI

  1. US utilities and grid operators have doubled their annual electricity demand forecasts for the next five years to about 1.5%, according to Grid Strategies' analysis of regulatory filings, after decades of growth below 1% annually.
  2. The 1.5% projected annual US electricity demand growth is the highest since the 1990s, before the US stepped up efforts to make homes and businesses more energy efficient.
  3. Beyond data centers, US utilities must contend with other power hogs, including about $465 billion worth of semiconductor, EV and battery factories announced since Biden took office.

Related Articles:

  • Top 10 Charts of 2023 — Goldman Sachs projects that artificial intelligence could drive a capital investment cycle reaching almost 2.5% of US GDP by 2032, up from 0.5% of GDP.
  • Elon Musk’s Latest Mission: Rev Up the Electricity Industry — U.S. electricity demand has grown at an average of 1% a year over the past 20 years, but McKinsey projects it will double by 2050 and PG&E expects a 70% rise over the next 20 years. Deloitte estimates the largest U.S. electric companies will together spend as much as $1.8tn by 2030.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.

AI Summary. Japan's foreign worker count reached about 2.05 million, the most on record, a 12.4% increase from a year earlier, according to the Labor Ministry. About three in five of the roughly 319,000 establishments employing non-Japanese staff have no more than 30 employees in total.

Erica Yokoyama and Momoka Yokoyama Bloomberg
Date Posted:

The number of foreign workers in Japan has tripled over the last decade; as of October 2023 there were over 2mm foreign workers in Japan, or 1.6% of the population.

Is Japan's foreign worker population growing to record levels?

Core argument: Japan's foreign worker count reached about 2.05 million as of October 2023, the most on record, according to the Labor Ministry.

The number of foreign workers in Japan reached about 2.05 million as of October 2023, the most on record, the Labor Ministry reported Friday. The number grew by 12.4% from a year earlier, an acceleration compared with recent years but slower than in some years prior to the pandemic. Friday’s report also showed that small businesses were more likely to rely on foreign staff. About three of five of the roughly 319,000 establishments that hire non-Japanese staff have no more than 30 employees in total.

Takeaways by Macro Roundup® AI

  1. Japan's foreign worker count reached about 2.05 million as of October 2023, the most on record, according to the Labor Ministry.
  2. Japan's foreign worker tally grew 12.4% from a year earlier, an acceleration compared with recent years but slower than in some pre-pandemic years.
  3. About three of five of the roughly 319,000 Japanese establishments employing non-Japanese staff have no more than 30 employees in total, with small businesses more likely to rely on foreign workers.

Related Articles:

  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.
  • More Than 40% of Japanese Women May Never Have Children — Japan's National Institute of Population and Social Security Research projects that up to 42% of Japanese women may never have children, with a midpoint estimate of one-third and a more optimistic scenario of a quarter of women born in 2005. The institute projects childlessness as high as 50% among men.
  • One in 10 Japanese Now Aged Over 80, Population Report Shows — People aged over 80 account for more than 10% of Japan's population for the first time, and those over 65 reached a record 29.1%, making Japan the world's oldest country by that measure. The overall population fell by about half a million to 124.4m and is projected to drop below 109m by 2045.