Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, October 1, 2024

AI Summary. US production of oil, gas, and natural gas liquids rose under the Biden administration, with federal policy relying mainly on subsidies and incentives for renewable power, carbon capture, green hydrogen, battery storage, and electric vehicles that may total $1–3tn by the end of the decade. The renewable share of US final energy consumption is 8%, up from 4% in 2010.

Michael Cembalest J.P. Morgan
Date Posted:

Michael Cembalest @JPMorgan notes that the residential electricity price in CA is >3.5x that of China/India; TX is 2x. US electrical prices have risen vs China and India as renewables’ share of final energy consumption has grown to 8% from 4% in 2010.

How much have renewable energy subsidies bought in energy share?

Core argument: The Biden/Harris energy approach has been more carrot than stick: incentives and subsidies for renewable power, carbon capture, green hydrogen, battery storage, and EV adoption may reach $1–$3 trillion by the end of the decade.

The two candidates differ on energy policy, although to be clear, US production of oil, gas, and natural gas liquids rose under the Biden administration. Some analysts point to a decline in drilling permits on Federal land under Biden, but that’s a pretty marginal issue at a time of all-time highs in US production. Rather than restrain oil & gas, the Biden/Harris approach has been much more carrot than stick: the true cost of energy bill incentives and subsidies for renewable power, carbon capture, green hydrogen, battery storage, and EV adoption may reach $1 - $3 trillion by the end of the decade. These costs are showing up in rising electricity prices, particularly when measured against places where energy-intensive production is outsourced to (China/India). And even though the journey to greater electrification of energy consumption has only just begun, the highest inflation category in the PPI report since 2020: transmission and transformer equipment. A progress marker: the renewable share of US final energy consumption is 8%, up from 4% in 2010.

Takeaways by Macro Roundup® AI

  1. The Biden/Harris energy approach has been more carrot than stick: incentives and subsidies for renewable power, carbon capture, green hydrogen, battery storage, and EV adoption may reach $1–$3 trillion by the end of the decade.
  2. US production of oil, gas, and natural gas liquids rose under the Biden administration to all-time highs, which some analysts weigh against a decline in drilling permits on federal land.
  3. The renewable share of US final energy consumption stands at 8%, up from 4% in 2010, while transmission and transformer equipment is the highest-inflation category in the PPI report since 2020.

Related Articles:

  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • Three Mile Island’s Nuclear Plant to Reopen, Help Power Microsoft’s AI Centers — Constellation Energy will spend about $1.6bn to restart the undamaged reactor at Pennsylvania's Three Mile Island nuclear plant, which closed in 2019, and has signed a 20-year agreement to sell the power to Microsoft. The deal reflects the scale of round-the-clock carbon-free electricity sought for artificial intelligence data centers.
  • 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. A single search on a generative AI platform such as ChatGPT can use at least 10x the energy of a Google search, and the Electric Power Research Institute estimates data centers could consume as much as 9% of U.S. electricity by 2030. Goldman Sachs estimates about 47 gigawatts of new generation capacity will be needed to meet that demand growth.

Jennifer Hiller Wall Street Journal
Date Posted:

Data centers used 26% of Virginia’s total power consumption in 2023; nationwide data centers could use 9% of US electricity by 2030 according to the Electric Power Research Institute.

How much new electricity generation will AI data centers require?

Core argument: Data centers could consume as much as 9% of U.S. electricity by 2030, according to the Electric Power Research Institute.

AI is a fast-growing source of spending by tech companies that say they are on the cusp of the biggest boom since the internet, with implications for national security and the economy. But a search on a generative AI platform such as ChatGPT can use at least 10 times the amount of energy as a Google search. Data centers could use as much as 9% of U.S. electricity by 2030, according to the Electric Power Research Institute. Goldman Sachs estimates around 47 gigawatts of new power generation capacity will be required to support U.S. data center power demand growth through 2030.

Takeaways by Macro Roundup® AI

  1. Data centers could consume as much as 9% of U.S. electricity by 2030, according to the Electric Power Research Institute.
  2. Goldman Sachs estimates roughly 47 gigawatts of new power generation capacity will be needed to support growth in U.S. data center electricity demand through 2030.
  3. A search on a generative AI platform such as ChatGPT can use at least 10 times the energy of a Google search, as tech companies raise AI spending they describe as the biggest boom since the internet.

Related Articles:

  • 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.
  • Business Spending Is Lining Up to Reinforce Growth — Around 70% of sectors are posting positive year-over-year profit growth, with big tech showing the largest acceleration in demand and profits but strength broadening across the economy. Companies are responding with rising capital spending growth and more optimistic investment plans, as firms typically add capacity with a slight lag after real demand picks up.
  • OpenAI Pitched White House on Unprecedented Data Center Buildout — OpenAI has pitched the White House on building 5 gigawatt data centers across US states, arguing the expansion is needed to develop more advanced artificial intelligence models and compete with China. Each such facility would use roughly the output of five nuclear reactors, enough to power almost 3m homes.

AI Summary. Research from the Economic Innovation Group finds that in 1970, fewer than 1% of US counties drew at least 25% of personal income from government safety-net and social programs, compared with 53% of counties by 2022, a shift the group associates with population aging.

Aaron Zitner, Jon Kamp, and Brian McGill Wall Street Journal
Date Posted:
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In the 2000 presidential election, of the 317 counties that received transfers equal to at least 25% of total personal income, 59% voted for the GOP candidate. In 2020, 88% of 1,986 counties voted GOP.

Are more US counties relying on government aid for income?

Core argument: Research by the bipartisan Economic Innovation Group finds that 53% of U.S. counties drew at least a quarter of personal income from government safety-net and social programs in 2022, up from fewer than 1% in 1970.

The country hasn’t always been this reliant on government support. In 1970, government safety-net money accounted for significant income in fewer than 1% of America's counties, new research by the bipartisan think tank Economic Innovation Group finds. As America’s population aged, more counties came to count on this government backing for a significant share of their total income. That is defined by EIG, the think tank, as those in which government safety-net and social programs account for 25% or more of personal income in the county. By 2022, 53%—more than half of all U.S counties—drew at least a quarter of their income from government aid.

Takeaways by Macro Roundup® AI

  1. Research by the bipartisan Economic Innovation Group finds that 53% of U.S. counties drew at least a quarter of personal income from government safety-net and social programs in 2022, up from fewer than 1% in 1970.
  2. The Economic Innovation Group defines a county as reliant when government safety-net and social programs account for 25% or more of its personal income.
  3. The Economic Innovation Group attributes the rising number of aid-reliant counties to the aging of America's population.

Related Articles:

  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
  • Economic Renaissance or Fleeting Recovery? Left-Behind Counties See Boom in Jobs and Businesses Amid Widening Divides — More than 1,000 US "left-behind" counties—home to 18% of the population and defined by lagging population and income growth—recorded their strongest three-year stretch of job and business creation since 2000, with jobs growing over 4x faster than in the preceding four years. Their share of national jobs nonetheless kept falling.
  • America Is Uniquely Ill-Suited To Handle a Falling Population — U.S. population growth slowed to about 7.4% in the decade to 2020, the slowest since the Great Depression, as the fertility rate fell from above the 2.1 needed for a stable population to 1.67. Because local and regional authorities levy 48% of all U.S. taxes—versus 20% in France and 6% in Britain—shrinking local revenue forces service cuts or tax rises.

AI Summary. US real interest rates of about 1.5% remain below pre-financial-crisis levels, with Federal Reserve Bank of St Louis estimates putting 1990s real rates above 2%. With the gap between real rates and the cyclically adjusted earnings yield very small, returns from US stocks are unlikely to come from further revaluation, making current valuations a bet on sustained supernormal profit growth.

Martin Wolf Financial Times
Date Posted:

Martin Wolf argues that interest rates are likely to rise further, implying that equity valuations are stretched, and can be rationalized only by “belief in the ability of earnings to grow at extremely high rates far into the future.”

Do today's stock valuations require a bet on sustained supernormal profit growth?

Core argument: US real interest rates stand at 1.5%, below the above-2% levels the Federal Reserve Bank of St Louis estimates for the 1990s in the US, leaving reasons to expect real rates to rise further.

Yet the recent rise in real rates has not brought real interest rates back to pre-financial crisis levels: today, they are 1.5% in the US. These are modest rates. Estimates by the Federal Reserve Bank of St Louis give real interest rates of above 2% in the 1990s in the US. We have some reasons to expect real rates to go even higher. After all, they are still not all that high. What we do know is that the margin between the real interest rate and the cyclically adjusted earnings yield is very small. It seems safe to argue that prospective returns from owning US stocks are unlikely to come to any large extent (if at all) from revaluations, given how highly valued they already are. Even the current valuations must depend on a belief in the ability of earnings to grow at extremely high rates far into the future, perhaps because existing (or prospective) monopolists will remain as profitable as today’s tech giants (now including Nvidia) have been. This is essentially a bet on the ability of today’s US capitalism to generate supernormal profits forever. The weakness of other markets is a bet on the opposite outcome.

Takeaways by Macro Roundup® AI

  1. US real interest rates stand at 1.5%, below the above-2% levels the Federal Reserve Bank of St Louis estimates for the 1990s in the US, leaving reasons to expect real rates to rise further.
  2. The margin between the US real interest rate and the cyclically adjusted earnings yield is very small, and prospective returns from owning US stocks are unlikely to come to any large extent from revaluations, given how highly valued they already are.
  3. Current US equity valuations depend on a belief that earnings can grow at extremely high rates far into the future, a bet that US capitalism generates supernormal profits forever, while the weakness of other markets bets on the opposite outcome.

Related Articles:

  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Stock Market Concentration — Over 2014–2023 the 10 largest U.S. stocks averaged 19% of market capitalization while generating 47% of total economic profit, and by 2023 they were 27% of market capitalization and 69% of economic profit. The S&P 500 returned above its average when concentration was rising and below it when concentration was falling.
  • Cost of Capital and Capital Allocation: Investment in the Era of “Easy Money” — The authors estimate that the weighted average cost of capital for Russell 3000 companies averaged 6.9% during the 2009-21 era of easy money versus 7.5% in the prior period, while the aggregate return on invested capital averaged 9.5% versus 9.2%. The resulting spread between returns and the cost of capital averaged 2.6 percentage points versus 1.7 points earlier.

AI Summary. If underlying services inflation holds near 2% a year and prior relationships reassert themselves, total yearly personal consumption inflation could settle near 3% rather than returning to 2%. That would carry implications for interest rate pricing, and traders assuming a reversion to pre-pandemic inflation norms may be surprised.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein notes that inflation is running ~ 1pp above the 2017-19 trend. He warns that “Traders pricing assets with implicit or explicit assumptions that inflation reverts to pre-pandemic norms may be in for an unwelcome surprise.”

Will inflation settle near 3% instead of returning to 2%?

Core argument: If supercore PCE inflation holds near 2% a year and prior relationships reassert themselves, total yearly PCE inflation might settle around 3% rather than returning to 2%.

If supercore PCE inflation remains stable at around 2% a year and if prior relationships reassert themselves, then total yearly PCE inflation might be expected to settle around 3%, instead of landing back at 2%. If 2.5%-3% is the new 1.5%-2%, more or less, that could have implications for interest rate pricing above and beyond Jerome Powell’s belief “that the neutral rate is probably significantly higher than it was [before the pandemic].”The bigger potential implication is what this all means for where things settle down in the years ahead. Traders pricing assets with implicit or explicit assumptions that inflation reverts to pre-pandemic norms may be in for an unwelcome surprise.

Takeaways by Macro Roundup® AI

  1. If supercore PCE inflation holds near 2% a year and prior relationships reassert themselves, total yearly PCE inflation might settle around 3% rather than returning to 2%.
  2. A shift to 2.5%–3% inflation in place of 1.5%–2% could carry implications for interest rate pricing beyond Jerome Powell's belief that the neutral rate is probably significantly higher than before the pandemic.
  3. Traders pricing assets on implicit or explicit assumptions that inflation reverts to pre-pandemic norms may be in for an unwelcome surprise.

Related Articles:

  • Quo Vadis, r*? The Natural Rate Of Interest After The Pandemic — Estimates of the natural rate of interest across core advanced economies suggest it may have increased, though the estimates are widely dispersed and statistically uncertain. Low expected potential growth and rising longevity may weigh on the natural rate, while large fiscal deficits, age-related spending, and public investment needs for infrastructure, defense, and the green transition may push it up.
  • The Future Of r* — Long-run equilibrium interest rates are argued to stay low relative to recent decades' historical average but above pre-pandemic lows, implying rates only slightly below current levels, with a nominal neutral rate near 3.5% offered as illustration. Rising government debt, particularly in the US, is identified as the main risk to that view.
  • 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. Dockworkers at dozens of East Coast and Gulf Coast ports, represented by the International Longshoremen's Association's 45,000 members, launched a strike at cargo terminals handling more than half of US import and export volumes. Port employers raised their wage offer to a 50% increase over six years, up from 40%.

Paul Berger Wall Street Journal
Date Posted:

The East and Gulf Coast dockworkers union went on strike Tuesday morning, seeking a 77% pay raise over six years and an end to automation in American ports.

Are dockworkers striking at ports handling most US trade volumes?

Core argument: Members of the International Longshoremen's Association, which represents 45,000 dockworkers, walked off the job at midnight at dozens of East Coast and Gulf Coast ports handling more than half of U.S. import and export volumes, as their contract with port employers expired.

Dockworkers walked off their jobs at dozens of ports from Maine to Texas at midnight, launching a strike that threatens to rattle the American economy five weeks ahead of the presidential election. Members of the International Longshoremen’s Association, which represents 45,000 dockworkers at East Coast and Gulf Coast ports, began picketing early Tuesday at cargo terminals that handle more than half of American import and export volumes as the contract with port employers expired. Port employers, pressed by Biden administration officials to resolve the impasse, raised their offer on wages to a 50% increase over six years, from an earlier 40% increase, along with other improvements in benefits in the 24 hours before the strike deadline.

Takeaways by Macro Roundup® AI

  1. Members of the International Longshoremen's Association, which represents 45,000 dockworkers, walked off the job at midnight at dozens of East Coast and Gulf Coast ports handling more than half of U.S. import and export volumes, as their contract with port employers expired.
  2. Port employers raised their wage offer to a 50% increase over six years, up from an earlier 40% increase, along with other benefit improvements, in the 24 hours before the strike deadline.
  3. The strike threatens to rattle the American economy five weeks ahead of the presidential election, with Biden administration officials pressing port employers to resolve the impasse.

Related Articles:

  • Trends in Real Wage Growth among Union, Nonunion Workers — Wage changes for union and nonunion workers tend to move similarly over time, with union workers' nominal wage changes less volatile, and since 2002 both groups' wages increased at the same rate. When consumer prices grew faster than wages, real wage growth turned negative despite a strong labor market, then turned positive as inflation fell.
  • Union Voters Could Be Decisive in 2024 — A declining union share of the electorate and weaker Democratic performance among union households have made Michigan, Pennsylvania, and Wisconsin more competitive, with white voters without college degrees making up majorities of the electorate in all three states. Unionized white non-college voters were less likely to back Trump than their non-union counterparts.
  • Labor Market Conflict and the Decline of the Rust Belt — The authors argue that persistent labor market conflict in the Rust Belt's main industries lowered investment and productivity growth, shifting employment to the rest of the country, and estimate it accounts for roughly half the decline in the region's share of US manufacturing employment. Rising foreign competition plays a more modest quantitative role.

Wednesday, October 2, 2024

AI Summary. Using analyst earnings forecast errors and revisions, the authors construct firm-level "expectations-based returns" and find that predictable movements in non-rational expectations of earnings growth, rather than exotic risk factors, account for much of the cross-sectional return spreads in value, investment, size, and momentum. Growth stocks underperform on average because optimism about them falls more often than it rises.

Pedro Bordalo, Nicola Gennaioli, Rafael La Porta, and Andrei Shleifer National Bureau of Economic Research
Date Posted:

Shleifer et al find that “return spreads typically attributed to exotic risk factors are explained by predictable movements in non-rational expectations of firms’ earnings growth,” excessively bullish for growth stocks and bearish for value stocks.

Do errors in earnings expectations explain cross-sectional stock return spreads?

Core argument: The authors construct firm-level Expectations Based Returns from analyst forecast errors and revisions, shutting down cross-sectional differences in required returns, and find that variation in these returns accounts for a large share of return spreads in value, investment, size, and momentum factors.

We address the joint hypothesis problem [rational expectations conjunction with a model of risk] in cross-sectional asset pricing by using measured analyst expectations of earnings growth. We construct a firm-level measure of Expectations Based Returns(EBRs) that uses analyst forecast errors and revisions and shuts down any cross-sectional differences in required returns. We obtain three results. First, variation in EBRs accounts for alarge chunk of cross-sectional return spreads in value, investment, size, and momentum factors. Second, time variation in these spreads is predictable, and proxied by predictable time variation in EBRs. Third, firm characteristics typically viewed as capturing risk predict disappointment of expectations (and of EBRs). Overall, return spreads typically attributed to exoticrisk factors are explained by predictable movements in non-rational expectations of firms’ earnings growth. Growth stocks do worse when optimism for them drops relative to that for value stocks, and similarly for big stocks relative to small ones.Growth stocks do worse on average because such optimism happens more than its reverse, not because growth stocks are less risky.

Takeaways by Macro Roundup® AI

  1. The authors construct firm-level Expectations Based Returns from analyst forecast errors and revisions, shutting down cross-sectional differences in required returns, and find that variation in these returns accounts for a large share of return spreads in value, investment, size, and momentum factors.
  2. Time variation in value, investment, size, and momentum return spreads is predictable and proxied by predictable time variation in Expectations Based Returns, according to the authors.
  3. Firm characteristics typically viewed as capturing risk predict disappointment of earnings expectations, and the authors argue growth stocks underperform on average because declines in relative optimism toward them occur more often than the reverse, not because they are less risky.

Related Articles:

  • Long-Term Expectations and Aggregate Fluctuations — When stock analysts' forecasts of long-term earnings growth for S&P 500 firms are high by historical standards, their forecasts of short- and long-term profits are systematically disappointed later, according to the authors. The authors estimate that a 1 standard deviation rise in these long-term forecasts is followed by an investment boom that reverses two years later.
  • The Less-Efficient Market Hypothesis — Markets are never perfectly efficient because betting against other investors' errors carries risk, and the author argues social media, investor overconfidence, and gamified 24/7 trading have made markets meaningfully less efficient, with indexing and very low interest rates a smaller contributor. The recommended response is to adopt the longest possible investment time horizon.

AI Summary. American equities account for nearly 50% of global stock market capitalization, up from 30% in 2009.

Torsten Sløk Apollo
Date Posted:
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American equities make up 50% of the world’s market cap, up from 30% in 2009.

Has the US share of global stock market value grown sharply?

Core argument: American equities account for almost 50% of global stock market capitalization, up from 30% in 2009.

In 2009, the market cap of the US stock market was 30% of the global stock market cap. Today it is almost 50%.

Takeaways by Macro Roundup® AI

  1. American equities account for almost 50% of global stock market capitalization, up from 30% in 2009.

Related Articles:

  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • The Great Rotation (Part 2) — The US accounts for 63% of global stock market value but only 26% of global economic output, compared with about 40% of global GDP when its market share last exceeded 60%. The authors argue investors following global indexes are overpaying for US-generated income relative to that earlier period.

AI Summary. The U.S. immigrant population rose by about 1.6m to a record 47.8m, the largest single-year increase since 2000, according to a Pew Research Center analysis of U.S. Census Bureau data. Immigrants made up 14.3% of the total U.S. population, up from 4.7% in 1970 but below the 1890 record of 14.8%.

John Gramlich and Jeffrey Passel Pew Research Center
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A @pewresearch analysis finds the immigrant population of the US increased by 1.6mm in 2023 to a record 47.8mm. Their 14.3% share of the population is approaching the 14.8% peak of 1890.

How large was the increase in the U.S. immigrant population?

Core argument: The U.S. immigrant population rose by roughly 1.6 million in 2023 to a record 47.8 million, up from 46.2 million in 2022, the largest single-year increase since 2000, according to a Pew Research Center analysis of U.S. Census Bureau data.

The number of immigrants living in the United States increased by roughly 1.6 million people in 2023. That marks the largest single-year increase in the nation’s immigrant population since 2000, according to a Pew Research Center analysis of recently published data from the U.S. Census Bureau. Overall, a record 47.8 million immigrants lived in the U.S. in 2023, up from 46.2 million in 2022. The nation’s immigrant population includes naturalized U.S. citizens, lawful permanent residents, and lawful temporary residents, as well as unauthorized immigrants. While the number of immigrants in the U.S. reached a new record high last year, their share of the population remained below the all-time peak. Immigrants accounted for 14.3% of the total U.S. population in 2023 – up roughly threefold from 4.7% in 1970, but still below the record high of 14.8% in 1890.

Takeaways by Macro Roundup® AI

  1. The U.S. immigrant population rose by roughly 1.6 million in 2023 to a record 47.8 million, up from 46.2 million in 2022, the largest single-year increase since 2000, according to a Pew Research Center analysis of U.S. Census Bureau data.
  2. Immigrants accounted for 14.3% of the total U.S. population in 2023, up roughly threefold from 4.7% in 1970 but below the record high of 14.8% in 1890.
  3. The U.S. immigrant population includes naturalized U.S. citizens, lawful permanent residents, lawful temporary residents, and unauthorized immigrants.

Related Articles:

  • Without Immigrants, US Working-Age Population Would Shrink — All net US employment growth since early 2020 has been among foreign-born workers, and without immigration the US working-age population would be shrinking — a pattern likely to persist for the rest of the decade. The jump in immigration appears to be enabling a soft landing that most economists had thought impossible.
  • The Cost of Illegal Immigration — The US foreign-born population rose by 6.6mm to 51.6mm over a roughly three-year span, lifting immigrants to 15.6% of the population, above the prior records of 14.8% in 1890 and 14.7% in 1910. The authors estimate about 13.7mm illegal immigrants now live in the US, a net increase of 3.7mm.
  • 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.

AI Summary. Using Austrian administrative data and variation in the share of women in fathers' workplaces as a source of divorce risk, the authors estimate that parental divorce has persistent, mostly negative effects on children. Boys show lower educational attainment, worse labor market outcomes and higher early mortality; girls show lower educational attainment and more teenage childbearing.

Wolfgang Frimmel, Martin Halla and Rudolf Winter-Ebmer Journal of Public Economics
Date Posted:

Parental divorce has persistent, and mostly negative effects on children. Both boys and girls have lower levels of educational attainment, while boys are more likely to die early, and girls are more likely to have children at an early age.

Does parental divorce cause lasting harm to children's outcomes?

Core argument: Using Austrian administrative data, the authors exploit idiosyncratic variation in gender balance in fathers' workplaces, finding that fathers who encounter more women in their relevant age–occupation group are more likely to divorce, conditional on the firm's overall female share and detailed industry affiliation.

Many papers report a negative association between parental divorce and child outcomes. To provide evidence whether this correlation is causal, we exploit idiosyncratic variation in the extent of gender balance in fathers’ workplaces [based on administrative data from Austria]. Fathers who encounter more women in their relevant age–occupation–group at work are more likely to divorce. This result is conditional on the overall proportion of female employees in a firm and on detailed industry affiliation. Parental divorce has persistent, and mostly negative effects on children that differ between boys and girls. Treated boys have lower levels of educational attainment, worse labor market outcomes and are more likely to die early. Treated girls also have lower levels of educational attainment, but they are also more likely to have children at an early age (especially in their teens). However, treated girls lose less in terms of employment. This could be a direct consequence of teenage motherhood, which initiates early entry into the labor market.

Takeaways by Macro Roundup® AI

  1. Using Austrian administrative data, the authors exploit idiosyncratic variation in gender balance in fathers' workplaces, finding that fathers who encounter more women in their relevant age–occupation group are more likely to divorce, conditional on the firm's overall female share and detailed industry affiliation.
  2. Parental divorce has persistent and mostly negative effects on children, with treated boys showing lower educational attainment, worse labor market outcomes, and a higher likelihood of dying early.
  3. Treated girls also have lower educational attainment and are more likely to have children early, especially in their teens, but lose less in terms of employment, which the authors suggest could follow from teenage motherhood initiating early labor market entry.

Related Articles:

  • Fortunate Families? The Effects of Wealth on Marriage and Fertility — Using lottery winners, the authors estimate that wealth windfalls raise the short- and medium-run probability of marriage, an effect driven by male winners. The estimated average effect on marriage dissolution is not statistically distinguishable from zero, but for married women a 1M-SEK windfall nearly doubles the short-run divorce rate, with the effect fading over the long run.
  • Divorced Men for Trump — Survey data show 56% of divorced men report supporting Trump versus 42% of divorced women, the largest gender gap of any marital-status group. Married men and women report similar support levels (50% vs. 45%), while single men are somewhat more likely than single women to back Trump.
  • The Marriage Paradox: Understanding And Remedying The Paradoxical Place Of Marriage In America — The U.S. marriage rate has fallen more than 60% since 1970, from 85.9 to 30.5 marriages per 1,000 unmarried Americans aged 15 and older, and the share of adults who are married has dropped from 72% to about 50%. Demographers project roughly one in three young adults may never marry.

AI Summary. Universal tariffs would raise costs for US manufacturers by taxing imported raw materials and equipment, with capital goods making up 28% of US imports and industrial supplies and materials another 22%. Intel imports Dutch-made extreme ultraviolet lithography machines costing hundreds of millions of dollars each with no US alternatives, so tariffs would add tens of millions to reshoring chip production.

Joseph Politano Apricitas Economics
Date Posted:

.@JosephPolitano notes that half of US imports are capital goods and industrial supplies/materials, and argues that universal tariffs “would be borne primarily by American businesses and workers.”

Do universal tariffs raise costs for US manufacturers they aim to protect?

Core argument: Equipment and capital goods made up 28% of US imports last year and industrial supplies and materials another 22%, so universal tariffs would raise input costs for US manufacturers operating within specialized global supply chains.

Even for the industries that are supposed to benefit from protectionism, universal tariffs would end up having massive net negative impacts by driving up the costs of key imported raw materials and equipment. That represents an extremely large hit for US manufacturers, especially in today’s world of highly specialized global supply chains—equipment & capital goods represented 28% of US imports last year while industrial supplies & materials represented another 22%. Intel has bought several high-end Extreme Ultraviolet (EUV) lithography machines from Dutch semiconductor equipment giant ASML and is importing them to the US to help boost US chip production. Each of these units has a cost that numbers in the hundreds of millions of dollars and there are currently no US alternatives available, so Intel would have to pay tens of millions more to reshore US chip production if universal tariffs were implemented. Tariffs on imported lithography machines, construction equipment, steel, and much, much more would be borne primarily by American businesses and workers.

Takeaways by Macro Roundup® AI

  1. Equipment and capital goods made up 28% of US imports last year and industrial supplies and materials another 22%, so universal tariffs would raise input costs for US manufacturers operating within specialized global supply chains.
  2. Intel's high-end Extreme Ultraviolet lithography machines from ASML cost hundreds of millions of dollars each with no US alternatives available, so universal tariffs would add tens of millions to the cost of reshoring US chip production.
  3. Tariffs on imported lithography machines, construction equipment, steel, and other inputs would be borne primarily by American businesses and workers, with net negative impacts even for industries protectionism is meant to help.

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