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, November 21, 2024

AI Summary. Federal government net interest costs have nearly tripled from $345bn in fiscal 2020 and $352bn in 2021, rising by more than $100bn in 2022, more than $175bn in 2023, and $223bn in 2024. The increase followed Federal Reserve interest rate hikes and roughly $6tn of additional debt accumulated from COVID-19 relief measures.

Marc Goldwein Committee for a Responsible Federal Budget
Date Posted:

The Federal government’s net interest costs increased 285% over the last decade to $882B in the fiscal year ending September of 2024, reflecting both increased rates and the $6T increase in debt from covid relief measures. @MarcGoldwein

Have federal interest costs nearly tripled since rate hikes and COVID borrowing?

Core argument: Federal interest costs have nearly tripled since 2020, when interest totaled $345 billion, followed by $352 billion in FY 2021 amid the very low rates of the COVID-19 pandemic.

Over the past few years, interest costs borne by the federal government have risen dramatically. While interest totaled $345 billion in FY 2020 and $352 billion in 2021, when interest rates were very low due to the COVID-19 pandemic, that changed in 2022 when the Federal Reserve began raising interest rates, and we had accumulated an additional $6 trillion of debt from COVID relief measures. After rising by more than $100 billion between 2021 and 2022 and then by more than $175 billion between 2022 and 2023, net interest costs jumped $223 billion in 2024.

Takeaways by Macro Roundup® AI

  1. Federal interest costs have nearly tripled since 2020, when interest totaled $345 billion, followed by $352 billion in FY 2021 amid the very low rates of the COVID-19 pandemic.
  2. Net interest costs rose by more than $100 billion between 2021 and 2022, more than $175 billion between 2022 and 2023, and jumped $223 billion in 2024.
  3. The rise in federal interest costs began in 2022, when the Federal Reserve started raising interest rates and an additional $6 trillion of debt had accumulated from COVID relief measures.

Related Articles:

  • Larry Summers and Bob Rubin Join Our CIOs to Discuss the Surprising Economic Cycle — Adopting the Simpson-Bowles fiscal consolidation when interest rates were at zero would have risked excessive disinflation, since long rates had no room to fall to provide an offsetting expansionary impulse. After the large run-up in debt and rise in real interest rates, the developing fiscal situation risks inflationary pressure, Treasury market disruption, or crowding out of private investment.
  • 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.
  • Long-Term Interest Rates, Fiscal Policy, And The Term Premium — US fiscal policy is on an unsustainable path, with potential market flashpoints including a sovereign credit downgrade, weak Treasury auctions, a term premium that has been trending higher, and a weaker dollar if growth slows. A debt crisis is unlikely; gradually higher long-term interest rates and a steeper yield curve are more likely.

AI Summary. A study of more than 37,000 US banks from 1865 to 2023 finds that most bank failures follow a gradual, multi-year deterioration in solvency, as credit losses erode income and capital before a run or a supervisory closure. The authors reject runs on otherwise solvent banks as a plausible cause for at least 80% of failures before deposit insurance.

Sergio Correia, Stephan Luck, and Emil Verner Federal Reserve Bank of New York
Date Posted:

A study covering most US commercial banks from 1865 – 2023 finds that 80% of pre-FDIC bank failures resulted from “rising asset losses” and “deteriorating solvency,” not mere bank runs.

Do bank failures result from gradual solvency deterioration rather than runs?

Core argument: Drawing on more than 37,000 U.S. banks from 1865 to 2023, the authors reject bank runs as a plausible cause of failure for at least 80% of pre-FDIC failures, concluding runs on otherwise solvent banks were not a common cause.

This paper studies failing banks using data on more than 37,000 banks from the United States spanning 1865-2023. Our findings suggest that most bank failures are the result of a deterioration of a bank’s solvency - [which] is typically gradual and takes place over several years. The realization of credit risk reduces income and erodes capital buffers. The erosion of a bank’s profitability and capitalization ultimately results either in a bank run or a supervisory decision to close the bank, the former being more common in the historical data. Both depositors and supervisors seem to be slow to react to information about fundamentals, making bank failures highly predictable. [Though] our empirical approach does not allow us to identify the exact cause of failure, our evidence allows us to reject bank runs as a plausible cause of bank failure for a robust majority of at least 80% of pre-FDIC failures. Hence bank runs on otherwise solvent banks are not a plausible common cause of bank failures for most bank failures in the history of the U.S.

Takeaways by Macro Roundup® AI

  1. Drawing on more than 37,000 U.S. banks from 1865 to 2023, the authors reject bank runs as a plausible cause of failure for at least 80% of pre-FDIC failures, concluding runs on otherwise solvent banks were not a common cause.
  2. Most bank failures follow a gradual deterioration of solvency over several years, as the realization of credit risk reduces income and erodes capital buffers before a bank run or a supervisory closure.
  3. Depositors and supervisors appear slow to react to information about bank fundamentals, making bank failures highly predictable, with runs more common than supervisory closures in the historical data.

Related Articles:

  • Deposit Insurance, Uninsured Depositors, and Liquidity Risk During Panics — Commercial banks located near a post office that accepted federally insured deposits were more likely to close during the Great Depression, and this effect weakened sharply after deposit insurance was extended to commercial banks. The authors interpret this as a competitive liquidity effect arising from incomplete insurance coverage.
  • The Puzzling Persistence of Financial Crisis — Financial crises are costly, with average declines of 5.5% of real GDP and median fiscal costs of 16% of real GDP to resolve distressed banks. The authors identify four categories of causal factors: politically motivated risk subsidies such as government support for housing credit, shifts in investor risk preferences, investor learning, and fraud.
  • Credit Allocation and Macroeconomic Fluctuations — Credit expansions disproportionately channel credit to non-tradable sector firms and households, and the authors find that the sectoral allocation of credit predicts future GDP paths and the likelihood of systemic banking crises. Credit growth to non-tradable industries predicts boom-bust output patterns and elevated financial fragility, while credit to tradable industries is associated with higher future productivity growth.

AI Summary. The gap in the absolute number of births between states voting Democratic and those voting Republican has narrowed by 38%, from about 475,000 to roughly 294,000 births. The author argues that the economies and family-friendly cultures of Republican-voting states give them a fertility-rate advantage that, if current trends hold, could produce more total births within 15 years.

Brad Wilcox and Michael Pugh Deseret News
Date Posted:

The birth gap between blue and red states (based on 2020 results) has fallen by 38% since 2015, from 475k to 294k births in 2023. Red states’ family-friendly cultures and economies may lead to higher absolute births in the next 15 years. @BradWilcoxIFS

Are Republican-voting states closing the birth gap with Democratic-voting states?

Core argument: The gap in absolute births between states voting Democratic and Republican in the past presidential election fell 38%, from about 475,000 births in 2015 to roughly 294,000 in 2023.

The gap [in absolute number of births] between blue and red state has fallen by 38% since 2015. The birth gap between the states that voted Republican and Democratic in the past presidential election has fallen from about 475,000 births in 2015 to approximately 294,000 births in 2023. This is a testament to a dynamic where the economies and family friendly cultures in red states are not only giving them an advantage in their fertility rates but, if current trends hold, in absolute births in the next 15 years.

Takeaways by Macro Roundup® AI

  1. The gap in absolute births between states voting Democratic and Republican in the past presidential election fell 38%, from about 475,000 births in 2015 to roughly 294,000 in 2023.
  2. The author attributes the narrowing birth gap to economies and family-friendly cultures in red states, which give those states an advantage in fertility rates.
  3. The author projects that, if current trends hold, red states will gain an advantage in absolute births over blue states within the next 15 years.

Related Articles:

  • Young Families Have Continued Leaving Big Cities Post-Pandemic — Large urban counties have continued to lose population of young children even as their overall population growth resumed, driven by immigration. Birth rates in large urban counties have declined twice as fast as in rural counties over the past decade, and the number of children under five fell in 58% of all US counties.
  • 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.
  • The Age of Depopulation: Surviving a World Gone Gray — The United States remains the main outlier among developed countries resisting depopulation, with fertility of just over 1.6 births per woman — high for a rich country but below the 2.1 replacement threshold — plus steady immigration. The Census Bureau projects the U.S. population will peak around 2080 and decline continuously thereafter.

AI Summary. About two-thirds of U.S. crop-farm workers are foreign-born and 42% lack legal authorization to work, according to a Labor Department report, with immigrant labor concentrated in jobs such as picking fruit, applying pesticides, operating machinery, and slaughtering livestock. Agriculture trade groups are lobbying for expanded use of temporary work visas.

Patrick Thomas Wall Street Journal
Date Posted:

2/3 of US crop farm workers are foreign-born and 42% aren’t legally authorized to work in the country. Agriculture trade groups are seeking an expansion of temporary work visas to limit the impact of changes in immigration enforcement.

Does US food production depend on immigrant workers?

Core argument: About two-thirds of U.S. crop-farm workers are foreign-born and 42% are not legally authorized to work in the country, according to a Labor Department report.

America’s food-supply chain relies on a predominantly immigrant workforce for some of its most challenging jobs, such as picking fruit, applying pesticides on crops, operating machinery and slaughtering livestock. About two-thirds of U.S. crop-farm workers are foreign-born, and 42% aren’t legally authorized to work in the country, according to a Labor Department report. Agriculture trade groups are lobbying the incoming administration for the expanded use of temporary work visas. Some farms and meatpackers are forging deeper ties with recruiters who can ensure a steady labor supply.

Takeaways by Macro Roundup® AI

  1. About two-thirds of U.S. crop-farm workers are foreign-born and 42% are not legally authorized to work in the country, according to a Labor Department report.
  2. America's food-supply chain depends on a predominantly immigrant workforce for jobs including picking fruit, applying pesticides, operating machinery and slaughtering livestock.
  3. Agriculture trade groups are lobbying the incoming administration for expanded use of temporary work visas, while some farms and meatpackers forge deeper ties with recruiters who can ensure a steady labor supply.

Related Articles:

  • How Immigration Remade the U.S. Labor Force — The Congressional Budget Office estimates more than 9m people have migrated on net to the U.S. in recent years, nearly matching the prior decade's total and lifting population growth to almost 1.2% a year. Fewer than 30% are lawful permanent residents; without immigration, growth would be 0.2%.
  • 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.

AI Summary. Mexico's 2020 decree cutting car import tariffs from 20% to 0% has been followed by a surge of Chinese vehicles, with China shipping close to 500,000 cars to Mexico this year and displacing the United States as Mexico's top supplier. One in three new cars sold in Mexico this year will be built in China, up from 4% in 2020.

Michael Dunne Mexico News Daily
Date Posted:

1/3 of new cars sold in Mexico in 2024 were built in China up from 4% in 2020. China exported 500,000 cars to Mexico in 2024. @dunne_insights hat tip to @Brad_Setser

Have tariff cuts made China Mexico's top car supplier?

Core argument: One of every three new cars sold in Mexico this year will be built in China, up from 4% in 2020.

Back in 2020, Mexico decided to open the door wider to imports from China. A decree dropped import tariffs on cars from 20% to 0%. The idea was to give some Mexican car buyers access to low-cost electric vehicles (EVs). A tsunami of Chinese cars and trucks is pouring into Mexico — and flying out of showrooms. The P.R.C. will ship close to 500,000 vehicles to Mexico this year. China has blown past the United States to become Mexico’s number one supplier of cars. One of every three new cars sold in Mexico this year will be built in China. That’s up from just 4% in 2020.

Takeaways by Macro Roundup® AI

  1. One of every three new cars sold in Mexico this year will be built in China, up from 4% in 2020.
  2. China will ship close to 500,000 vehicles to Mexico this year, passing the United States as Mexico's number one supplier of cars.
  3. A 2020 Mexican decree cut import tariffs on cars from 20% to 0%, intended to give some Mexican buyers access to low-cost electric vehicles.

Related Articles:

  • EU to Impose Tariffs Up to 45% on Chinese Electric Vehicles — The European Union voted to impose tariffs of up to 45% on electric vehicles made in China, lasting five years, with China vowing to protect its companies. Chinese-made electric cars rose from around 3% to more than 20% of EU electric vehicle sales over three years, with Chinese brands accounting for about 8%.
  • 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.
  • Brazil, India, and Mexico are Taking on China’s Exports — 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.

AI Summary. Manufacturing still accounts for 20% of German gross value added, nearly twice France's share, but industrial production peaked in 2018 and has since fallen faster than elsewhere in the European Union, especially in energy-intensive sectors such as steelmaking. The Bundesbank estimates US tariffs could reduce German GDP by a percentage point.

Economist Staff The Economist
Date Posted:

German industrial production in 2023 was 5% below its 2014 level. Manufacturing still accounts for 20% of German gross value added.

Why is German industrial production falling faster than the rest of Europe?

Core argument: Manufacturing still accounts for 20% of German gross value added, almost twice the share in France, even though German industrial production peaked in 2018 and has since fallen faster than elsewhere in the EU, especially in energy-intensive sectors such as steelmaking.

High energy prices are a common grumble among firms in a country where manufacturing still accounts for 20% of gross value added. That remains almost twice the figure for France, even though industrial production peaked in 2018 and has since sagged more quickly than elsewhere in the EU, especially in energy-intensive sectors such as steelmaking. As German exports to China have declined, America has partly stepped into the breach. Some firms have been able to exploit opportunities opened by America’s decoupling from Chinese tech; others have grown fat on the subsidy bonanza triggered by the Inflation Reduction Act. But Mr Trump threatens all that. Not only do tariffs loom—the Bundesbank thinks they could lop a percentage point off German gdp—but new American restrictions could hit German manufacturers that use Chinese inputs. They will also accelerate Chinese exporters’ hunt for alternative markets, including Europe.

Takeaways by Macro Roundup® AI

  1. Manufacturing still accounts for 20% of German gross value added, almost twice the share in France, even though German industrial production peaked in 2018 and has since fallen faster than elsewhere in the EU, especially in energy-intensive sectors such as steelmaking.
  2. The Bundesbank estimates that American tariffs could cut German GDP by one percentage point, while new American restrictions could hit German manufacturers that use Chinese inputs.
  3. As German exports to China have declined, America has partly filled the gap, with some German firms exploiting America's decoupling from Chinese tech and others benefiting from Inflation Reduction Act subsidies.

Related Articles:

  • Why Europe’s Car Crisis Is Mostly Made In China — Volkswagen, which has never closed a factory in its German heartland, is weighing shutting three plants and cutting worker pay by 10% after warning on profits twice in a year. China has overtaken Japan as the world's largest car exporter, with Chinese manufacturers building advanced electric cars at costs said to be 30% below European rivals'.
  • Europe is Pricing Itself Out of Existence — Europe paid 166.3% more for its primary energy mix than it would have using conventional sources, equal to 5.6% of GDP rather than 3.37%, which the author argues largely explains minimal European growth. European Union primary energy consumption has fallen 17.47% from its peak, with renewables at 16.6% of the mix and renewable electricity priced at 5x conventional.
  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.

AI Summary. The Republican presidential candidate added about 2.5m votes relative to the prior election, while the Democratic candidate received about 7m fewer votes than her party's previous nominee. An analysis found she failed to add voters in three of the seven swing states and in 80% of US counties.

Ashley Wu, Lazaro Gamio, Robert Gebeloff, Elena Shao and Michael Bender New York Times
Date Posted:

A NYT analysis finds that Trump won 2.5mm more votes than in 2020 and Harris won 7mm fewer votes than Biden in 2020. Overall turnout was down 2.65%.

Did the election turn on Democratic vote losses rather than Republican gains?

Core argument: Kamala Harris earned about 7 million fewer votes than Joseph R. Biden Jr. did in 2020, a decline as consequential to the outcome as Donald Trump's gains.

Donald Trump improved on his totals, adding about 2.5 million more votes than four years ago. But just as consequential to the outcome were Kamala Harris’s losses: She earned about 7 million fewer votes compared with Joseph R. Biden Jr.’s performance in 2020. Ms. Harris failed to find new voters in three of the seven swing states and in 80% of counties across the country, a New York Times analysis shows. In the places where she matched or exceeded Mr. Biden’s vote totals, she failed to match Mr. Trump’s gains.

Takeaways by Macro Roundup® AI

  1. Kamala Harris earned about 7 million fewer votes than Joseph R. Biden Jr. did in 2020, a decline as consequential to the outcome as Donald Trump's gains.
  2. Donald Trump added about 2.5 million more votes than he received four years earlier.
  3. Kamala Harris failed to find new voters in three of the seven swing states and in 80% of U.S. counties, and where she matched or exceeded Joseph R. Biden Jr.'s totals she did not match Donald Trump's gains, a New York Times analysis shows.

Related Articles:

  • How Trump Won In Maps and Charts — Election data show the Republican candidate improved on his prior presidential margin in nearly 90% of US counties, with rural turnout strong and urban support for the Democratic candidate falling short. Exit polls indicate Asian, Black, Hispanic, and white voters all shifted toward him, while the Democrat gained only among voters over 65 and white college-educated women.
  • The Demographic Detail of Donald Trump’s Victory — The foreign-born share of a county's population explains half the geographic variation in the electoral swing between the 2020 and 2024 US presidential elections, a stronger predictor than the white-working-class share was of earlier shifts. Because the level of the immigrant population aligns with voting patterns rather than its growth rate, the analysis suggests immigrants themselves changed their votes.
  • The Economic Geography Of The 2024 Elections — Counties where government transfer programs such as Social Security, Medicare, Medicaid, and unemployment insurance make up at least a quarter of personal income gave Trump 63% of the vote, while counties where transfers account for less than 15% gave Harris 56%. Transfers supplied 18% of total US personal income.

Friday, November 22, 2024

AI Summary. Passive funds hold about 50% of global equity mutual fund and exchange-traded fund assets, and roughly 60% of US equities. The authors argue that as active investors shift to passive strategies, fewer short sellers remain, raising large-cap volatility and putting upward pressure on large-cap prices.

Felix von Moltke and Torsten Sløk Apollo
Date Posted:

Torsten Sløk argues the rise of passive investing (~60% of US equity funds) has led to reduced shorting, increasing market volatility, reducing liquidity, and rising P/E ratios for large-cap stocks like the “Magnificent Seven.”

How does the shift to passive investing affect large-cap volatility and prices?

Core argument: Passive ownership of global equity mutual funds and ETFs stands at 50%, reaching 60% for US equities and close to 50% for non-domestic equities, with flows into passive equity growing at a measured pace since 2012.

We define a passive investor as one who always holds every security in the same manner as in the market [effectively] one who invests in index funds or passive ETFs. Using that definition, passive ownership of global equity mutual funds and ETFs is 50%. While the rate of flows into passive equity has grown at a measured pace since 2012, passive equity commands a sizable share of AUM - 60% for US equities, with non-domestic equities close to 50%. Passive investors are always long. If more active investors turn passive, then there will be fewer investors who are short, which again will increase the volatility of large cap stocks. Because large cap stocks have a bigger proportional impact on portfolios, the higher volatility of large cap stocks will put upward pressure on large cap stock prices. In short, when active investors turn passive, large cap stocks will benefit disproportionately. This dynamic can be observed in the price-to-earnings (P/E) ratios of large- and mega-cap stocks, which have been consistently high and growing, especially for the Magnificent Seven.

Takeaways by Macro Roundup® AI

  1. Passive ownership of global equity mutual funds and ETFs stands at 50%, reaching 60% for US equities and close to 50% for non-domestic equities, with flows into passive equity growing at a measured pace since 2012.
  2. The authors argue that because passive investors are always long, a shift from active to passive leaves fewer short investors and raises the volatility of large cap stocks.
  3. The authors argue that higher large cap volatility puts upward pressure on large cap prices, a dynamic they observe in the consistently high and growing P/E ratios of large- and mega-cap stocks, especially the Magnificent Seven.

Related Articles:

  • 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.
  • Updating Our Long-Term Return Forecast For US Equities to Incorporate the Current High Level of Market Concentration — The authors estimate the S&P 500 will deliver an annualized nominal total return of 3% over the next 10 years, roughly 1% in real terms, modeling long-term returns as a function of starting valuation, market concentration, frequency of economic contractions, corporate profitability, and interest rates. The index returned 13% annualized over the past decade, above its 11% long-term average.
  • 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.

AI Summary. The authors estimate that net international migration to the US was close to 3.5m in one year — about 200,000 above the Congressional Budget Office's estimate, driven largely by higher undocumented entries — and project roughly 2.9m the following year, about 400,000 below the Congressional Budget Office's projection.

Evgeniya Duzhak Federal Reserve Bank of San Francisco
Date Posted:

US net international migration was almost 3.5mm in 2023 and is on track to decline by ~ 500k to 3.0mm in 2024. Inflows are 3x the historical average. The inflow of undocumented immigrants rose throughout 2023, to a peak of ~ 1.1 mm in the 4th quarter.

Is net immigration running higher than official estimates and slowing faster?

Core argument: The authors estimate net international migration to the U.S. was close to 3.5 million in 2023, about 200,000 higher than the CBO's prior estimate, with the gap largely driven by higher numbers of undocumented immigrants.

We use the most recent data from the Department of Homeland Security through September 2024 to further update the number of undocumented immigrant entries and estimates of NIM in 2023 and 2024. We estimate that NIM in 2023 was close to 3.5 million, about 200,000 higher than previously estimated by the CBO. Furthermore, new data suggest that the sharp increase in NIM in 2023 may be subsiding more quickly than previously estimated by the CBO in January 2024. Incorporating this new data and projecting to the end of 2024 suggests that NIM levels in 2024 may be around 2.9 million, about 400,000 lower than the CBO’s projection. The increase in NIM compared with the CBO’s estimate for 2023 is largely driven by higher numbers of immigrants in the undocumented category. Figure 1 shows how the inflow of undocumented immigrants increased throughout 2023 to a peak of around 1.1 million in the fourth quarter.

Takeaways by Macro Roundup® AI

  1. The authors estimate net international migration to the U.S. was close to 3.5 million in 2023, about 200,000 higher than the CBO's prior estimate, with the gap largely driven by higher numbers of undocumented immigrants.
  2. Projecting Department of Homeland Security data through September 2024 to year-end, the authors estimate 2024 net international migration of around 2.9 million, about 400,000 below the CBO's January 2024 projection.
  3. Inflows of undocumented immigrants rose through 2023 to a peak of roughly 1.1 million in the fourth quarter, and new data suggest the 2023 surge in net international migration may be subsiding more quickly than the CBO estimated.

Related Articles:

  • 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.
  • Immigration and the Macroeconomy After 2024 — Projected net migration ranges from 3.7mm under a high-immigration policy scenario to negative 740,000 under a low-immigration scenario, implying four-year growth in the working-age civilian population of anywhere from 5mm to 15mm people. The authors project the resulting gap in annual US economic growth at roughly half a percentage point, or about $130bn.
  • 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.

AI Summary. In a randomized clinical trial, physicians given access to a large language model scored a median 76% on diagnostic reasoning cases versus 74% for those without it, a 2-percentage-point difference that was not statistically significant. A sensitivity analysis including incomplete cases produced the same 2-point difference.

Ethan Goh, Robert Gallo, and Jason Horn Journal of the American Medical Association
Date Posted:

In a randomized clinical trial of diagnostic reasoning, physicians using conventional resources scored 74%, while those using GPT-4 scored 76%. GPT-4 alone scored 16pp higher than the conventional resources group.

Does giving physicians a large language model improve diagnostic reasoning?

Core argument: Physicians randomized to use a large language model scored a median 76% (IQR, 66%-87%) per case on diagnostic reasoning versus 74% (IQR, 63%-84%) for controls, a difference of 2 percentage points (95% CI, −4 to 8; P = .60).

A total of 244 cases were completed by all participants (125 cases in LLM group, 119 cases in control group). The median number of completed cases per participant was 5 (IQR, 4-6). Analysis of the transcripts showed that 100% (22 of 22) of physicians randomized to use the LLM did so; 3 transcripts were lost due to technical issues and not included. The median score per case was 76% (IQR, 66%-87%) for the LLM group and 74% (IQR, 63%-84%) for the control group. The mixed-effects model showed a difference of 2 percentage points (95% CI, −4 to 8 percentage points; P = .60) between the LLM and control groups, as presented in Table 2. A sensitivity analysis including all cases, complete and incomplete, showed a similar result with a difference of 2 percentage points (95% CI, −4 to 8 percentage points; P = .50) between the LLM and control group.

Takeaways by Macro Roundup® AI

  1. Physicians randomized to use a large language model scored a median 76% (IQR, 66%-87%) per case on diagnostic reasoning versus 74% (IQR, 63%-84%) for controls, a difference of 2 percentage points (95% CI, −4 to 8; P = .60).
  2. A sensitivity analysis including complete and incomplete cases showed a similar 2-percentage-point difference between the large language model and control groups (95% CI, −4 to 8; P = .50).
  3. All 22 physicians randomized to the large language model used it, with 244 cases completed across groups (125 in the LLM group, 119 in the control group) and a median of 5 cases per participant (IQR, 4-6).

Related Articles:

  • AI-Enabled Electrocardiography Alert Intervention and All-Cause Mortality: a Pragmatic Randomized Clinical Trial — In a randomized trial of 15,965 hospitalized patients, an artificial-intelligence electrocardiogram system that flagged patients predicted to be at high risk of death and sent warning messages to physicians was associated with lower 90-day all-cause mortality, 3.6% in the intervention group versus 4.3% in the control group.
  • Assessing the Implications of a Productivity Miracle — If artificial intelligence can perform economically valuable cognitive tasks at very low marginal cost, consumers would buy far more of the cheapened goods and spend the savings in other categories, expanding activity and employment in sectors facing new demand. Where supply is inherently limited, such as real estate, those savings could bid up prices and produce inflation.

AI Summary. The US federal government employs 4.3mm people — 3mm civilians and 1.3mm active-duty military — with about 2.4mm civilian jobs outside the Postal Service. Those non-Postal civilian workers account for 1.5% of nonfarm payroll employment, down from over 3% in the 1950s and 1960s, while state and local government jobs make up nearly 13%.

Justin Fox Bloomberg
Date Posted:

There are 4.3mm Federal employees, 3mm civilian, and 1.3mm active duty military. Excluding postal service workers, civilian federal workers make up 1.5% of nonfarm payroll employment, down from 2% in the early 1990s. @foxjust

How large is the federal workforce relative to total US employment?

Core argument: Non-Postal Service civilian federal employment stood at 2,395,900 as of October, according to the US Bureau of Labor Statistics, out of 4.3mm total federal employees comprising 3mm civilians and 1.3mm active-duty military.

There are 4.3mm federal government employees — 3mm civilians and 1.3mm active-duty military. It’s non-Postal Service civilian jobs that the prospective Trump administration seems to have in its crosshairs, and there were 2,395,900 of those as of October, according to the US Bureau of Labor Statistics. This number has grown over the past 25 years, including an increase of 76,300 during Trump’s first term, but the growth followed sharp declines in the mid-1990s. Current non-Postal Service federal employment is slightly higher than in the late 1980s and early 1990s. Include the Postal Service, and it’s slightly lower. Civilian federal workers (Postal Service excluded) now make up just 1.5% of nonfarm payroll employment, down from more than 3% in the 1950s and 1960s and more than 2% through the early 1990s. State and local government jobs together make up almost 13% of nonfarm payroll

Takeaways by Macro Roundup® AI

  1. Non-Postal Service civilian federal employment stood at 2,395,900 as of October, according to the US Bureau of Labor Statistics, out of 4.3mm total federal employees comprising 3mm civilians and 1.3mm active-duty military.
  2. Non-Postal Service federal employment has grown over the past 25 years, including an increase of 76,300 during Trump's first term, but that growth followed sharp declines in the mid-1990s, leaving the level slightly above that of the late 1980s and early 1990s.
  3. Civilian federal workers excluding the Postal Service make up 1.5% of nonfarm payroll employment, down from more than 3% in the 1950s and 1960s, while state and local government jobs together account for almost 13%.

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AI Summary. Four Democratic Senate candidates won in states that Trump flipped from Democratic to Republican, an outcome that has occurred only twice between 2004 and 2020, since the party winning a flipped state almost always wins its concurrent Senate race. Ticket-splitting, voters who backed Trump but left the rest of the ballot blank, and minor third-party Senate votes all contributed.

Nate Moore The Liberal Patriot
Date Posted:

.@NateMoore1287 notes that Democrats retained Senate seats in 4 out of the 5 swing states Trump flipped in 2024. While it’s hard to disentangle ticket-splitting from an undervote, this raises questions about the sustainability of Trump’s 2024 coalition.

How did Democratic Senate candidates win states the presidential nominee flipped?

Core argument: Four Democratic senators won in states Trump flipped from blue to red, an outcome that defies recent history in which the party flipping a presidential state almost always wins the concurrent Senate race.

Four Democrats won in states that Trump flipped from blue to red. Such a feat defies recent political history. When a presidential candidate flips a state, their party almost always wins the concurrent Senate race; e.g. Democrats won all Senate races in states that Biden flipped blue in 2020. Republicans did the same in 2016. In fact, between 2004 and 2020 such split outcomes have happened just twice—Democrat Joe Donnelly’s 2012 win in Indiana and Republican Judd Gregg’s 2004 victory in New Hampshire. How did Democrats eke out Senate wins in states that Trump flipped? Each certainly benefited from ticket-splitting. But Democratic success may also owe to the traditional “undervote”—voters who selected Trump and left the rest of their ballot blank. Others, meanwhile, voted for a minor third-party Senate candidate, effectively the same as an undervote. The undervote, of course, is difficult to disentangle from persuasion effects. What share of Trump-only voters will show up in the midterms? Can the GOP retain their first-time non-white voters? Realignment—or not—hangs in the balance.

Takeaways by Macro Roundup® AI

  1. Four Democratic senators won in states Trump flipped from blue to red, an outcome that defies recent history in which the party flipping a presidential state almost always wins the concurrent Senate race.
  2. Between 2004 and 2020, split presidential-Senate outcomes in flipped states occurred just twice: Democrat Joe Donnelly's 2012 win in Indiana and Republican Judd Gregg's 2004 victory in New Hampshire, while Democrats won every Senate race in states Biden flipped in 2020 and Republicans did the same in 2016.
  3. Democratic Senate wins may owe to ticket-splitting, to an "undervote" of voters who chose Trump and left the rest of the ballot blank, and to voters backing minor third-party Senate candidates, effects difficult to disentangle from persuasion.

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AI Summary. A serologic survey of 115 dairy workers in Michigan and Colorado found that 8 (7%) had evidence of recent infection with highly pathogenic H5 bird flu virus, all of whom reported milking cows or cleaning the milking parlor. Four of those infected recalled illness around the time cows were sick.

Alexandra Mellis, Joseph Coyle, Kristen Marshall et al. Centers for Disease Control and Prevention
Date Posted:

A @CDCgov serologic survey of dairy workers found 7% (8 of the 115) had serologic evidence of recent infection with the A(H5) bird flu virus. The virus may be widespread in human populations already.

Are dairy workers being infected with bird flu without detection?

Core argument: Among 115 dairy workers surveyed in Michigan and Colorado during June–August 2024, eight (7%; 95% CI = 3.6%–13.1%) had serologic evidence of recent infection with highly pathogenic avian influenza A(H5) virus.

During June–August 2024, CDC collaborated with the Michigan Department of Health and Human Services and the Colorado Department of Public Health and Environment to implement cross-sectional serologic surveys to ascertain the prevalence of recent infection with HPAI A(H5) virus among dairy workers. In both states, a convenience sample of persons who work in dairies was interviewed, and blood specimens were collected. Among 115 persons, eight (7%; 95% CI = 3.6% – 13.1%) had serologic evidence of recent infection with A(H5) virus; all reported milking cows or cleaning the milking parlor. Among persons with serologic evidence of infection, four recalled being ill around the time cows were ill; symptoms began before or within a few days of A(H5) virus detections among cows.

Takeaways by Macro Roundup® AI

  1. Among 115 dairy workers surveyed in Michigan and Colorado during June–August 2024, eight (7%; 95% CI = 3.6%–13.1%) had serologic evidence of recent infection with highly pathogenic avian influenza A(H5) virus.
  2. All eight dairy workers with serologic evidence of recent A(H5) infection reported milking cows or cleaning the milking parlor, according to CDC surveys conducted with Michigan and Colorado health agencies.
  3. Four of the workers with serologic evidence of A(H5) infection recalled illness around the time cows were ill, with symptoms beginning before or within a few days of A(H5) virus detections among cows.

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