Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…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
  • “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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, May 29, 2024

AI Summary. Survey data show 6.30% of US workers who switched to remote work after the pandemic moved states, compared with 3.58% of those who kept commuting, and plausibly exogenous changes in employer remote-work policies predict both higher remote work and higher interstate migration. Remote workers staying with the same employer are more likely to move states.

Alexander Bick, Adam Blandin, Karel Mertens, et al. Federal Reserve Bank of St. Louis Working Papers
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The rise in the work-from-home share accounts for more than half of the rise in overall interstate migration since 2019, and states with greater WFH opportunities experienced more out-migration.

Does remote work increase interstate migration?

Core argument: In the Real-Time Population Survey, 6.30% of workers who switched to work from home after Covid moved states since February 2020, compared with 3.58% of workers who commuted both before and after Covid.

In the American Community Survey (ACS), annual interstate migration [AIM] among adults ages 18-64 fell from 2.75% in 2005 to 2.23% in 2010. AIM rose from 2.40% in 2019 to 2.66% in 2022. Data from the Real-Time Population Survey (RPS) provide micro evidence that access to WFH increases interstate migration. [Fig. 4 shows] that 6.30% of workers who switched to WFH post-Covid moved states since February 2020, [compared to] 3.58% of workers who commuted both pre- and post-Covid. A potential concern [is]that the pandemic increased the desire to move across states and a large share of these moves involve WFH, but WFH itself was not necessary for those moves to happen [and thus not causal]. Using novel questions in the RPS - whether workers who commuted prior to the pandemic did so due to job characteristics, personal preferences, or employer requirements, and whether employer WFH policies had changed since 2020 - we find that plausibly exogenous changes in employer WFH policies predict higher rates of WFH and higher rates of interstate migration. Finally, consistent with the interpretation that WFH reduces the benefit of living near a workplace, we find that (i) among workers who remain with their pre-pandemic employer, WFH workers are more likely to move states, and (ii) among workers who move states WFH workers are less likely to change employers.

Takeaways by Macro Roundup® AI

  1. In the Real-Time Population Survey, 6.30% of workers who switched to work from home after Covid moved states since February 2020, compared with 3.58% of workers who commuted both before and after Covid.
  2. Annual interstate migration among U.S. adults ages 18–64 in the American Community Survey fell from 2.75% in 2005 to 2.23% in 2010, then rose from 2.40% in 2019 to 2.66% in 2022.
  3. Plausibly exogenous changes in employer work-from-home policies predict higher rates of work from home and higher rates of interstate migration; among workers staying with pre-pandemic employers, those working from home are more likely to move states.

Related Articles:

  • Working From Density — Within the same metropolitan-area income quartile, denser neighborhoods have a higher share of jobs that can be done remotely. The authors argue this pattern suggests increased telework raises willingness to pay for housing in high-density places, where leisure amenities and nonwork social interaction are more available.
  • Remote Work Is Less Common Than We Thought — New Bureau of Labor Statistics estimates show hybrid remote work is substantially less common than other surveys indicated, while fully remote work matches other estimates at about one in ten workers, making fully remote slightly more common than hybrid. Nearly one in five college-educated workers are fully remote, and nearly 40% of advanced-degree holders work hybrid or fully remote.
  • Remote Work, Three Years Later — Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.

AI Summary. Financial conditions are significantly easier than when the Federal Reserve began raising interest rates, with the S&P 500's market value up $9tn since the Fed shifted to discussing cuts — a household windfall equal to about 50% of annual consumer spending. Easy financial conditions and continued fiscal support are offsetting rate hikes.

Torsten Sløk Apollo
Date Posted:

Torsten Sløk @apolloglobal makes the case for the “Fed Cut Reflexivity Paradox: The more the Fed insists that the next move in interest rates is a cut, the more financial conditions will ease, making it more difficult for the Fed to cut.”

Are easy financial conditions and fiscal support offsetting rate hikes?

Core argument: Since the Fed's November 2023 pivot from discussing hikes to discussing cuts, S&P 500 market cap has risen $9 trillion, a household windfall equal to about 50% of 2023 consumer spending of $19 trillion.

Financial conditions are significantly easier than when the Fed started raising interest rates in March 2022. The stock market is being boosted by more than strong earnings and the prospects of AI lifting future GDP growth. Since the Fed pivot in November 2023, when the FOMC started talking about cuts instead of hikes, the S&P 500 market cap is up $9 trillion. For comparison, consumer spending in 2023 was $19 trillion. In other words, in a few months, the household sector has experienced a windfall gain corresponding to about 50% of last year’s consumer spending! Combined with continued easy fiscal policy via the Chips Act, the Inflation Reduction Act, and the Infrastructure Act, it is not surprising that employment growth and inflation have been reaccelerating in 2024. In short, why is the economy still so strong? Because fiscal policy is still a significant tailwind to the economy, and easy financial conditions have been offsetting Fed hikes.

Takeaways by Macro Roundup® AI

  1. Since the Fed's November 2023 pivot from discussing hikes to discussing cuts, S&P 500 market cap has risen $9 trillion, a household windfall equal to about 50% of 2023 consumer spending of $19 trillion.
  2. Financial conditions are significantly easier than when the Fed began raising rates in March 2022, offsetting the Fed's hikes as employment growth and inflation reaccelerate in 2024.
  3. Fiscal policy remains a significant tailwind to the economy through the Chips Act, the Inflation Reduction Act, and the Infrastructure Act.

Related Articles:

  • Global Views: A Global Perspective on Monetary Easing — US growth is projected to slow to about 2.2% from 4.1%, close to potential given the boost to labor force growth from recent immigration, while growth in other advanced G10 economies is projected to pick up from about -0.4% to +1.2%. Core inflation estimates point to two Federal Reserve rate cuts, with timing sensitive to incoming data.
  • How Fast Can the Fed Ease? The Private Sector Response to Easier Conditions Will Be a Key Factor — US households have reduced debt over the past 20 years, leaving room to borrow more if incentives improve, while companies that issued debt at low rates hold large liquidity and healthy balance sheets. That gives businesses capacity to raise investment, and business surveys indicate capital-spending sentiment is already improving.
  • 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.

AI Summary. Africa's population is forecast to exceed that of all of today's high-income countries plus China by 2060, while age structures elsewhere are inverting. In South Korea, males aged 50-54 make up 4.3% of the population versus 1.5% for those aged 0-4, with similar inversions in China and, more slowly, India.

Martin Wolf Financial Times
Date Posted:

According to UN projections, by 2060 Sub-Saharan Africa will have 24.4% of the global population, almost as large as the combined total of today’s high-income countries (12.6%) and China (12%).

How is the global distribution of population by age shifting?

Core argument: In South Korea, males aged 50–54 make up 4.3% of the population while those aged 0–4 account for just 1.5%, inverting the traditional population pyramid.

The population of Africa is forecast to be larger than that of all today’s high-income countries, plus China by 2060. Familiar population pyramids, with the largest numbers at the youngest ages, are inverting. In South Korea, for example, males aged 50-54 are 4.3% of the population, while those aged 0-4 are a mere 1.5% of it. Similar inversions are occurring elsewhere, notably including China and even, albeit more slowly, in India.

Takeaways by Macro Roundup® AI

  1. In South Korea, males aged 50–54 make up 4.3% of the population while those aged 0–4 account for just 1.5%, inverting the traditional population pyramid.
  2. Africa's population is forecast to exceed the combined population of all of today's high-income countries plus China by 2060.
  3. Population pyramid inversions similar to South Korea's are occurring elsewhere, notably in China and, more slowly, in India.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • The World Is Becoming More African — United Nations forecasts project Africans will rise from 8% of the world's people in 1950 to one-quarter by 2100, with the continent holding the world's largest workforce within a decade. McKinsey & Company estimates Africa's per-person economic growth has averaged 1% annually since 1990, against India's 5% and China's 9%.
  • Europe Hopes Barbed Wire Will Keep Migrants Out. It Won’t — The total length of border fences in the European Union grew from 315km to 2,163km over roughly a decade, yet unauthorised crossings made up just 0.13% of all external crossings into the EU. Most migrants arrive via the Mediterranean rather than the Balkans or the eastern land border.

AI Summary. The Congressional Budget Office projects that if federal debt stays at 99% of GDP, average income per person would rise from about $84,400 to $128,600 over three decades, but reaches only $123,200 if debt climbs to 166% of GDP. Higher debt is projected to crowd out private investment.

CRFB Staff Committee for a Responsible Federal Budget
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Under the CBO’s “Rising Debt” scenario, real GDP per person in 2054 would be almost $15,000 lower than the “Stable Debt” scenario, due to higher debt levels crowding out private investment and slowing growth. @MarcGoldwein

How much does rising federal debt slow income growth?

Core argument: CBO projects average income, measured by GNP per person, will rise from about $84,400 this year to $128,600 in thirty years if debt stays stable at 99% of GDP, an inflation-adjusted gain above $44,000.

This year, CBO estimates average income, as measured by GNP per person, will total about $84,400. Assuming debt remains stable at 99% of GDP over the next three decades, CBO projects average income will grow by more than $44,000 (when adjusted for inflation), to $128,600. However, rising national debt will stifle this growth. Under CBO’s current law baseline, where debt is projected to rise to 166% of GDP by FY 2054, CBO projects income will grow by less than $39,000, to $123,200 per person. In other words, income growth would slow by about 12%. This is the result of crowding out, whereby a higher national debt reduces private investment and slows income growth. With additional debt, income growth would slow further. For example, CBO constructs an alternative scenario where revenue and certain spending returns to historical averages and, as a result, debt rises to 294% of GDP by FY 2054. Under that scenario, we estimate per person income would grow by less than $30,000 over thirty years, to about $114,100. In other words, income growth would slow by about one-third relative to if debt was stable.

Takeaways by Macro Roundup® AI

  1. CBO projects average income, measured by GNP per person, will rise from about $84,400 this year to $128,600 in thirty years if debt stays stable at 99% of GDP, an inflation-adjusted gain above $44,000.
  2. Under CBO's current-law baseline, with debt rising to 166% of GDP by FY 2054, income per person would grow by less than $39,000 to $123,200, slowing income growth about 12% versus stable debt.
  3. In an alternative scenario where revenue and certain spending return to historical averages and debt reaches 294% of GDP by FY 2054, per-person income would grow by less than $30,000 to about $114,100, roughly one-third slower growth than under stable debt.

Related Articles:

  • The Budget and Economic Outlook: 2024 to 2034 — The Congressional Budget Office projects the federal budget deficit will grow from $1.6tn to $2.6tn over a decade, rising from 5.6% to 6.1% of gross domestic product. That end-point is well above the 3.7% average of the past 50 years, as outlays are projected to rise faster than revenues over most of the period.
  • The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budget — The Congressional Budget Office projects that if private investment were more sensitive to federal deficits, debt held by the public would exceed 250% of GDP and real national income per person would be 18% ($21,300) lower than its baseline, with the average interest rate on federal debt 2pp higher.
  • 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.

AI Summary. China's leadership has ordered that providing "high-quality full employment" be an economic priority, with youth unemployment running at nearly three times the overall rate. Unemployment among 16-24 year-olds, excluding students, stood at 14.7% against an urban unemployment rate of 5%.

Joe Leahy Financial Times
Date Posted:

About 12mm graduates are set to enter China’s workforce this year. A revamped youth unemployment level excluding students was 14.7% in April, vs. 5% for the overall Chinese urban workforce.

Is China making youth employment a top economic priority?

Core argument: China's unemployment rate for those aged 16–24, excluding students, was 14.7% in April, down from 15.3% a month earlier but far above the urban unemployment rate of 5%.

A year after telling young people in China struggling to get a job that they should “eat bitterness,” or endure hardship, Xi Jinping has changed his tune as the world’s second-largest economy struggles to return to full health. With youth unemployment still running at nearly three times the overall rate, China’s president sounded a more sympathetic note on Tuesday, ordering the Communist party’s politburo leadership group to make the provision of “high-quality full employment” an economic priority. China’s unemployment rate for those aged 16-24 was running at more than 21% in June last year, when the National Bureau of Statistics suddenly stopped reporting the figures, citing the need to improve the methodology. The government started releasing figures for youth unemployment again in December, but excluded students. The figure came in at 14.7% in April, down from 15.3% a month earlier but still much higher than the urban unemployment rate of 5%.

Takeaways by Macro Roundup® AI

  1. China's unemployment rate for those aged 16–24, excluding students, was 14.7% in April, down from 15.3% a month earlier but far above the urban unemployment rate of 5%.
  2. Xi Jinping ordered the Communist party's politburo to make "high-quality full employment" an economic priority, a shift from his earlier advice that young people should "eat bitterness," or endure hardship.
  3. China's National Bureau of Statistics stopped reporting youth unemployment in June last year, when the rate exceeded 21%, citing the need to improve methodology, and resumed publication in December while excluding students.

Related Articles:

  • China Stops Reporting Youth Unemployment as Economic Pressures Mount — China has said it will stop publishing youth unemployment data, which reached 21.3% and was omitted from a subsequent broader data release, alongside other data pointing to weakness in its economic recovery.
  • Why Has Youth Unemployment Risen So Much in China? — Young workers aged 15-24 are particularly vulnerable when economic growth slows, and China's youth unemployment rate does not appear to be an outlier relative to its income level among global peers. Mismatches between the skills graduates acquire in higher education and those employers demand may add to labor market frictions.
  • China’s Defeated Youth — Urban Chinese unemployment among those aged 16 to 24 has run above 20%, about double the pre-pandemic level for that age group, with over 70% of unemployed youth in one year calculated to be graduates. Sentiment analysis of social media indicates the mood of young Chinese is growing darker.

AI Summary. New US tariffs on Chinese goods are designed to shield sectors supported by American semiconductor and clean-energy industrial policy, betting that trade restrictions give domestic manufacturers room to match China's supply chains. US battery shipments totaled $15.8bn against $23.9bn in net imports, so domestic capacity would have to grow much faster to replace Chinese imports.

Joseph Politano Apricitas Economics
Date Posted:

The recent Biden tariffs are largely designed to protect two sectors already boosted by recent US industrial policy: semiconductors and green energy manufacturing. @JosephPolitano

Can US manufacturers scale fast enough to replace Chinese imports behind tariffs?

Core argument: Real US battery production has risen more than 25% since the Inflation Reduction Act passed in late 2022, with sector employment up roughly 10% over the same period.

The tariffs were largely designed to protect the sectors boosted by America’s two major industrial policy bills—the CHIPS Act and Inflation Reduction Act—while guarding against the recent surge in Chinese net exports. Policymakers have gambled that American industry can quickly match the complexity and scale of China’s supply chain across a variety of key sectors and are hoping trade restrictions can give domestic manufacturers more room to catch up. So far, real US battery production has risen more than 25% since the passage of the IRA in late 2022, and employment in the sector is up roughly 10% over the same period. Yet that growth has still not been nearly enough to meet domestic demand—in 2023, US manufacturers’ battery shipments totaled $15.8B while net imports totaled $23.9B. The US has tens of billions in battery manufacturing capacity currently under construction, but America’s battery industry would still have to grow significantly faster just to replace current Chinese imports, let alone to meet increasing demand from rising cleantech deployment.

Takeaways by Macro Roundup® AI

  1. Real US battery production has risen more than 25% since the Inflation Reduction Act passed in late 2022, with sector employment up roughly 10% over the same period.
  2. US manufacturers' battery shipments totaled $15.8B in 2023 while net battery imports totaled $23.9B, leaving domestic output short of domestic demand.
  3. Biden's China tariffs were largely designed to protect sectors boosted by the CHIPS Act and Inflation Reduction Act while guarding against the recent surge in Chinese net exports, with policymakers hoping trade restrictions give domestic manufacturers room to catch up.

Related Articles:

  • Biden Accuses China of ‘Cheating’ on Trade, Imposes New Tariffs — The US is raising tariffs on Chinese semiconductors, batteries, solar cells, critical minerals, steel, aluminum, and electric vehicles, affecting a projected $18bn in current annual imports, while leaving prior tariffs in place. Semiconductor tariffs double from 25% to 50%, electric vehicle tariffs rise from 27.5% to 102.5%, and certain critical minerals and ship-to-shore cranes face new 25% rates.
  • China’s Plan to Reshape World Trade On Its Own Terms — Countries covered by China's free trade agreement network took about 38% of its merchandise exports, roughly $1.3tn out of some $3.43tn shipped worldwide over a 12-month period. That free trade footprint exceeds the total worldwide exports of the Netherlands or Japan, the world's fourth- and fifth-biggest exporters.
  • Can Trade Intervention Lead to Freer Trade? — China accounts for over 31% of global manufacturing but under 13% of global consumption, while the United States accounts for under 17% of manufacturing and nearly 27% of consumption. The author argues persistent surpluses reflect household subsidies to producers, and that the US could counter them with tariffs or taxes on capital inflows.

AI Summary. Bird flu was detected in an Iowa egg-laying flock of 4.2m birds, the largest US outbreak since 2022, in a state that produces nearly 12% of the country's layer hens according to the US Department of Agriculture. The virus has also been infecting dairy cows across the US.

Michael Hirtzer Bloomberg
Date Posted:

Bird flu was detected at an Iowa chicken farm; 4.2mm birds were affected in the largest bird flu outbreak in the US since 2022.

Is bird flu spreading again through US poultry and dairy herds?

Core argument: Bird flu was detected in an egg-laying flock of 4.2 million birds in Sioux County, Iowa, the largest US outbreak since more than 5 million birds were affected in Iowa's Osceola County in March 2022.

Deadly bird flu was detected in an egg-laying chicken flock in Iowa, affecting 4.2 million birds in the biggest US outbreak since 2022. The detection is the first since December in Iowa, which is the top US egg producer with nearly 12% of the country’s layer hens, according to US Department of Agriculture data. The findings come as the virus has been infecting dairy cows across the US. The Iowa Department of Agriculture and Land Stewardship said the site is in Sioux County, according to a statement Tuesday. It’s the worst outbreak since more than 5 million birds were affected at a farm in Iowa’s Osceola County in March 2022, when the virus was first spreading in the country. Prices for eggs surged to a record as tens of millions of birds were killed to slow the spread. The virus now has moved to dairy cattle as well, prompting dairy farmers to seek compensation for milk losses.

Takeaways by Macro Roundup® AI

  1. Bird flu was detected in an egg-laying flock of 4.2 million birds in Sioux County, Iowa, the largest US outbreak since more than 5 million birds were affected in Iowa's Osceola County in March 2022.
  2. Iowa is the top US egg producer with nearly 12% of the country's layer hens, according to USDA data, and the Sioux County case is the state's first detection since December.
  3. Egg prices surged to a record as tens of millions of birds were killed to slow the virus, which has since moved to dairy cattle, prompting dairy farmers to seek compensation for milk losses.

Related Articles:

  • Bird Flu Is Infecting More Mammals. What Does That Mean for Us? — The H5N1 bird flu strain now circulating globally has spread not only among farmed and wild birds but into many other animals, unlike earlier versions of the virus. Outbreaks in mink and in South American sea mammals suggest the virus most likely adapted to spread between mammals.
  • Bird Flu Outbreak in US Cows: Why Scientists Are Concerned — The H5N1 bird flu virus has been detected in cows from 16 herds across six US states, the first widespread outbreak in cattle after only sporadic prior infections with closely related flu viruses. One infected dairy worker is recovering, and the worker's viral variant carries a mutation linked to more efficient spread in mammals.
  • This May Be Our Last Chance to Halt Bird Flu in Humans and We Are Blowing It — An outbreak of H5N1 avian influenza in U.S. dairy cattle has spread to at least 33 herds across eight states with one confirmed human case, and Texas's agriculture commissioner suspects it began earlier and may have infected up to 40% of Texas Panhandle herds. An H5N1 expert argues containment becomes unlikely once around 10 human cases are detected.

Thursday, May 30, 2024

AI Summary. Spending on AI chips and data centers was a bit below $100bn in 2023, around 0.4% of US GDP, and the broader set of companies exposed to AI-related investment has not yet seen a major jump in sales. The authors argue the underlying dynamics point to a spending surge large enough to shape the business cycle.

Greg Jensen and Josh Moriarty Bridgewater Associates
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US AI-related capex was ~ $100B in 2023, about 0.4% of GDP. Bridgewater forecasts an investment arms race: “We see the makings of a surge in spending that could be large enough to shape the trajectory of the business cycle from here.”

Is AI investment large enough to shape the business cycle?

Core argument: Spending on AI chips and data centers was a bit below $100 billion in 2023, around 0.4% of US GDP, leaving AI-related capex a small share of the economy.

Historically, major technological transitions have fueled investment increases that were large enough to shape the overall business cycle. Today, AI-related capex is still a small share of the economy: spending on AI chips and data centers was a bit below $100 billion in 2023 (around 0.4% of US GDP). While chip company revenues have spiked (driven by NVIDIA), the broader ecosystem of companies exposed to AI-related investments has yet to see a major jump in sales since AI enthusiasm took off following ChatGPT’s November 2022 launch. Notwithstanding some pockets of froth, the classic boom dynamic of abundant capital chasing far-out returns has yet to take off: affected firms’ equity prices are mostly moving in line with near-term expected profits at reasonable or only slightly stretched multiples. But when we look at the underlying dynamics, we see the makings of a surge in spending that could be large enough to shape the trajectory of the business cycle from here.

Takeaways by Macro Roundup® AI

  1. Spending on AI chips and data centers was a bit below $100 billion in 2023, around 0.4% of US GDP, leaving AI-related capex a small share of the economy.
  2. Chip company revenues have spiked, driven by NVIDIA, but the broader ecosystem of firms exposed to AI-related investment has not seen a major jump in sales since ChatGPT's launch in November 2022.
  3. Equity prices of AI-exposed firms are mostly moving in line with near-term expected profits at reasonable or only slightly stretched multiples, and the classic boom dynamic of abundant capital chasing far-out returns has yet to take off.

Related Articles:

  • The AI Transition One Year Later: On Track, but Macro Impact Still Several Years Off — Investment in AI hardware is projected to rise substantially as a precursor to integrating AI into business processes, with the investment cycle estimated to peak at 2–2½% of GDP and early signs visible among AI-enabling companies. The authors estimate generative AI could raise developed-market labor productivity growth by 1.5pp annually over a 10-year adoption period, roughly 15% cumulatively.
  • Measuring Trends in AI — The United States led the world in private artificial intelligence investment with $67.2bn, roughly 8.7x China's $7.8bn and 17.8x the United Kingdom's $3.8bn. Cumulative private AI investment over the prior decade shows the same ranking: $335.2bn for the United States, $103.7bn for China, and $22.3bn for the United Kingdom.
  • Generational Growth AI, Data Centers and the Coming US Power Demand Surge — Data center power demand is projected to grow 15% annually through 2030, lifting data centers to 8% of US power demand from about 3% and raising overall US power demand growth to 2.4% a year versus roughly 0% over the prior decade.

AI Summary. Across cross-country survey data, the age pattern of reporting frequent unhappiness and depression reversed: one wave sloped upward with age while a later wave sloped downward, and women report more unhappiness. Young people with poorer mental health spend more daily time in front of a screen.

David Blanchflower, Alex Bryson, Anthony Lepinteur, et al. National Bureau of Economic Research
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European data from 2021 show that in contrast to the 2011 data, self-reported unhappiness and depression are highest among teens and decline sharply with age. @AlexanderBryson @D_Blanchflower

Has youth mental health declined worldwide, and is screen time related?

Core argument: In International Social Survey Program data, the share reporting they were often or very often unhappy and depressed over the past four weeks sloped upward with age in 2011 but downward with age in 2021, with the two lines crossing.

In both 2011 and 2021, International Social Survey Program (ISSP) surveys included a Health and Healthcare module, which included the same questions, and 7-step happiness question: If you were to consider your life in general these days, how happy or unhappy would you say you are, on the whole? Chart 1 reports the results of regressing the percentage who say that, over the past four weeks, they were often or very often unhappy and depressed on gender, plus a full set of age and country dummies for each of the two ISSP surveys, for 2011 and 2021. Remarkably, the two lines cross: that for 2011 slopes upwards in age, that for 2021 slopes down in age. The female variable is significantly positive which is a standard finding in the unhappiness literature. Young people with poorer mental health spend more time daily in front of a screen and within-person increases in poor mental health are correlated with spending more time in front of a screen.

Takeaways by Macro Roundup® AI

  1. In International Social Survey Program data, the share reporting they were often or very often unhappy and depressed over the past four weeks sloped upward with age in 2011 but downward with age in 2021, with the two lines crossing.
  2. The female variable is significantly positive in regressions of poor mental health on gender plus full sets of age and country dummies, a standard finding in the unhappiness literature.
  3. Young people with poorer mental health spend more time daily in front of a screen, and within-person increases in poor mental health are correlated with more screen time.

Related Articles:

AI Summary. Foreign direct investment into China fell to a 30-year low even as Chinese leaders launched an investment push in high-tech goods such as batteries and electric vehicles. Weak domestic demand for cars, chemicals, and steel has pushed Chinese goods into global markets, with average manufactured export prices down nearly 10% and export volumes near record levels.

Economist Staff The Economist
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Emerging economies are introducing import restrictions on Chinese goods, while accelerating a push for free trade elsewhere, as Chinese industrial production surges to 30% above January 2019 levels. @TheEconomist

Are weak domestic demand and falling export prices pushing Chinese goods abroad?

Core argument: The average price of China's manufactured exports fell by nearly 10% from 2022 to 2023, while its export volumes surged to near-record levels amid weak domestic demand for cars, chemicals, and steel.

Having struggled to compete with China’s industrial might, other emerging markets stood ready to benefit as their rival’s labor costs surged, and rising tensions between it and the West pushed firms to look for new factory locations. Last year foreign direct investment into China fell to a 30-year low. But China has started to fight back. To reverse an economic slowdown and cement its control over global supply chains, its leaders have launched an investment spree in high-tech goods, such as batteries, electric vehicles, and other green devices. Weak domestic demand for traditional products, such as cars, chemicals, and steel, means they are also flooding global markets. The average price of Chinese manufactured exports fell by nearly 10% from 2022 to 2023. China’s export volumes have surged to near-record levels.

Takeaways by Macro Roundup® AI

  1. The average price of China's manufactured exports fell by nearly 10% from 2022 to 2023, while its export volumes surged to near-record levels amid weak domestic demand for cars, chemicals, and steel.
  2. Foreign direct investment into China fell to a 30-year low, as surging labor costs and rising tensions with the West pushed firms to look for new factory locations, leaving emerging markets such as Brazil, India, and Mexico poised to benefit.
  3. China's leaders have launched an investment spree in high-tech goods including batteries, electric vehicles, and other green devices, aiming to reverse an economic slowdown and cement control over global supply chains.

Related Articles:

  • Pettis On China’s Export Strategy — China is shifting investment from its weakened property sector toward manufacturing, which already accounts for 27% of Chinese GDP versus 14% elsewhere and is constrained by weak demand rather than scarce capital. Since China holds about 18% of global GDP but 30% of global manufacturing, added output must be absorbed abroad absent higher consumption.
  • Brazil Launches China Anti-Dumping Probes After Imports Soar — Brazil's industry ministry has opened at least half a dozen investigations into alleged dumping of Chinese industrial products, spanning metal sheets, pre-painted steel, chemicals and tyres. Brazilian steelmakers have asked for tariffs of 9.6% to 25% on imported steel, as Brazil's steel and iron imports from China rose from $1.6bn to $2.7bn.
  • China’s Excess Savings Are A Danger — China's current account surplus of 4% of GDP is larger in global terms than its 2007 peak of 10%, because its share of the world economy at market prices rose from 6% to 17%. Sustaining that surplus would require China to fund deficits in smaller developing countries.

AI Summary. Comparing households by birth cohort in inflation-adjusted dollars, both Generation X (born 1965-1980) and millennials (born 1981-1996) held more debt than baby boomers (born 1946-1964). Generation X held the most mortgage debt, alongside the highest home values, while millennials held nearly 2x as much educational debt as Generation X.

Victoria Gregory and Kevin Bloodworth II Federal Reserve Bank of St. Louis
Date Posted:
Is Database:
Database

.@stlouisfed analysis finds Gen Xers had a higher median net worth at age 30 than Baby Boomers or Millennials, largely due to lower debt levels.

How do debt levels and types differ across generations?

Core argument: Millennials (born 1981–1996) held nearly twice as much educational debt as Generation X (1965–1980), in 2019 dollars.

We classify respondents as belonging to one of three birth cohorts: baby boom (1946-1964), Generation X (1965-1980) and millennial (1981-1996). All dollar values are converted to 2019 dollars. The patterns reveal a clear increase in debt holdings for more recent generations. Specifically, both Gen Xers and millennials held more debt than baby boomers. The reasons, though, are different. Gen Xers had the highest level of mortgage debt, consistent with the fact that they also had the highest level of home values. However, there are stark differences in educational debt: Millennials had nearly twice as much as Gen Xers. Thus, the level of debt holdings is what sets baby boomers apart from later generations; in contrast, the types of debt differentiate Gen Xers from millennials. We report the mean and the median (the net worth for which half the households are above it and half are below it) for each generation.

Takeaways by Macro Roundup® AI

  1. Millennials (born 1981–1996) held nearly twice as much educational debt as Generation X (1965–1980), in 2019 dollars.
  2. Both Generation X and millennial households held more debt than baby boomers (1946–1964), so the level of debt holdings separates baby boomers from later generations.
  3. Generation X had the highest level of mortgage debt of the three cohorts, consistent with also holding the highest home values.

Related Articles:

  • Has Intergenerational Progress Stalled? Income Growth Over Five Generations of Americans — Using post-tax, post-transfer income data, the authors find each of the past four US generations was better off than the prior one, with Millennials' real median household income at ages 36–40 18% above the previous generation's, versus 34% for the Silent Generation, 27% for Baby Boomers, and 16% for Generation X.
  • Young People Have a Lot More Wealth Than We Thought — Wealth data for young people comes from the Federal Reserve's quarterly Distributional Financial Accounts, which project forward results from the Survey of Consumer Finances conducted every three years. When newer survey results were released, young people turned out to hold considerably more wealth than the projections based on the prior survey had indicated.
  • Millennials and Older Gen Zers Made Significant Wealth Gains in 2022 — Older millennials' median wealth stood 37% above what a model based on all generations at the same age would predict — roughly $130,000 versus a predicted $95,000 at age 38 — a 46 percentage point swing from earlier years when they trailed expectations. Housing assets drove most of the growth.

AI Summary. States gained more than 31m newly eligible voters — people who moved from another state, turned 18, or became naturalized US citizens — with migration between states the largest factor, according to a Bloomberg News analysis of government and private data. In all seven swing states, newly registered voters outnumber the prior presidential margin of victory.

Andre Tartar, Elena Mejía and Gregory Korte Bloomberg
Date Posted:

A Bloomberg analysis finds that PA has 1.1mm new voters relative to 2020 while MI has 0.8mm and WI 0.5mm, more than the 2020 margin of victory in each state.

Has the electorate changed enough to swing the next presidential election?

Core argument: States cumulatively added more than 31 million eligible voters since the last presidential election — people who moved from another state, turned 18, or became naturalized US citizens — nearly 1 million more than in the three years after the 2016 election, per Bloomberg News estimates.

States cumulatively welcomed more than 31 million eligible voters since Americans last voted for president, counting people who moved from a different state, turned 18, or became naturalized US citizens. That’s nearly one million more new potential voters than in the three years after the 2016 election, according to estimates from a Bloomberg News analysis of government and private data. Migration between states is by far the biggest factor affecting the broader electorate. In all seven swing states, there are more newly registered voters than the margin of victory in the last presidential election, according to an analysis by Catalist.

Takeaways by Macro Roundup® AI

  1. States cumulatively added more than 31 million eligible voters since the last presidential election — people who moved from another state, turned 18, or became naturalized US citizens — nearly 1 million more than in the three years after the 2016 election, per Bloomberg News estimates.
  2. Migration between states is by far the biggest factor affecting the broader US electorate, according to a Bloomberg News analysis of government and private data.
  3. In all seven swing states, newly registered voters outnumber the margin of victory in the last presidential election, according to an analysis by Catalist.

Related Articles:

  • The Shaky Foundation of Trump’s Lead: Disengaged Voters — Polling shows Trump's narrow national lead is built on gains among voters who pay little attention to politics, don't follow traditional news, and don't vote regularly, while Biden leads among those who voted in the prior presidential election. Almost all of Trump's gains have come from these less engaged voters.
  • Trump Leads in 5 Key States, as Young and Nonwhite Voters Express Discontent With Biden — Polling of registered voters showed Trump ahead of Biden in five of six battleground states — Michigan, Arizona, Nevada, Georgia and Pennsylvania — with Biden leading only in Wisconsin. Trump and Biden were essentially tied among voters aged 18-29 and Hispanic voters, groups that each gave Biden over 60% of their vote in 2020.
  • American Politics Is Undergoing A Racial Realignment — National election surveys and Gallup polling show the Democratic Party's advantage among Black, Latino, and Asian voters at its lowest level since 1960. The article argues this shift reflects fading civil rights-era ties, a weakening link between income and party choice, and non-white voters with long-held conservative views aligning their votes with those views.

AI Summary. A survey of young registered voters finds 54% backing Biden and 46% backing Trump, with 60% of young women supporting Biden while 52% of young men support Trump. Young men are more likely than young women to say the country has gone too far in giving women equal rights, 19% versus 9%.

Daniel Cox, Kyle Gray and Kelsey Eyre Hammond American Enterprise Institute
Date Posted:

New survey data show a deep gender gap among registered voters aged 18-29: 60% of young women would vote for Biden if the election were held today, relative to 48% of young men. @dcoxpolls

Do young men and young women differ sharply in voting preferences?

Core argument: Among young registered voters, 54% say they would back Biden and 46% Trump if the election were held today, a modest Biden advantage.

At this stage in the campaign, Biden has a modest advantage among young Americans who are registered to vote. 54% of young voters say if the election were held today, they would support Biden, and 46% say they would support Trump. Young men and young women demonstrate starkly different vote preferences. 60% of young female voters say they are voting for Biden, compared to 40% who are backing Trump. Young men are more evenly divided: 52% are backing Trump, and 48% support Biden. 19% of young men say the country has gone too far in giving women equal rights with men, compared to 9% of young women. 60% of young women say the country has not gone far enough to address gender inequality, a view that only 37% of young men share. Notably, young men’s views have changed significantly in the past few years. In 2017, less than half of today’s number of young men 8% said the country had gone too far in ensuring women have equal rights with men.

Takeaways by Macro Roundup® AI

  1. Among young registered voters, 54% say they would back Biden and 46% Trump if the election were held today, a modest Biden advantage.
  2. Young female voters favor Biden 60%–40%, while young men split 52% for Trump and 48% for Biden.
  3. 19% of young men say the country has gone too far in giving women equal rights with men, up from 8% in 2017, compared with 9% of young women.

Related Articles:

  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • A New Global Gender Divide Is Emerging — 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.
  • Why Young Men and Women are Drifting Apart — An analysis of polling from 20 rich countries found that a political gap between men and women aged 18-29 that was negligible two decades ago reached 0.75 points on a 1-10 liberal-conservative scale by 2020, roughly twice the gap between graduates and non-graduates. Young men were more conservative than young women in every large country examined.