Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, May 2, 2025

AI Summary. U.S. firms in industries targeted for encouragement by China's Five-Year Plans show significant declines in employment, investment, and output beginning a year after a plan's release, with plant closures following a year later. The authors find firms with existing operations upstream or downstream of encouraged industries, or able to offshore into them, fare better.

Xiao Cen, Vyacheslav Fos and Wei Jiang National Bureau of Economic Research
Date Posted:

A year after a Chinese “5 Year Plan,” employment, investment, and output of US establishments in industries designated by China for increased subsidies begin to drop significantly, followed by plant closures.

How do U.S. firms withstand foreign industrial policy targeting their industries?

Core argument: U.S. firms in industries "encouraged" by China's 10th–13th Five-Year Plans (2001–2016) showed significant declines in employment, investment, and output beginning one year after a Plan's release, with plant closures following a year later.

The global economic disruption on U.S. firms studied in this paper originated from China’s [10th to 13th] Five-Year Plans that came into effect [btw] 2001 and 2016. U.S. markets did not appear to anticipate the imminent shocks and treated [US] firms [those operating in industries “encouraged” in a Plan] did not show any slowdown in job postings up to the year of a Plan. In treated firms (compared to controls) employment, investment, and output begin to drop significantly one year after the release of the Plans, and plant closures follow another year later. U.S. firms that are in the upstream (or downstream) of the Plan-encouraged industries become perhaps unintended beneficiaries of industrial policies in China. Treated firms with preexisting segments in these “beneficiary industries” are in a more favorable position due to the positive spillover effects. Indeed, multisegment treated firms increase investment and employment in the beneficiary industries and experience fewer plant closures. Similarly, firms in “offshorable” industries are able to set up operations in China in the encouraged industries so that they could even become direct beneficiaries of China’s industrial policies.`

Takeaways by Macro Roundup® AI

  1. U.S. firms in industries "encouraged" by China's 10th–13th Five-Year Plans (2001–2016) showed significant declines in employment, investment, and output beginning one year after a Plan's release, with plant closures following a year later.
  2. U.S. markets did not appear to anticipate the shocks from China's Five-Year Plans, and treated firms showed no slowdown in job postings up to the year of a Plan.
  3. U.S. firms upstream or downstream of Plan-encouraged industries emerge as possibly unintended beneficiaries of China's industrial policies, and multisegment treated firms with preexisting segments in those beneficiary industries raised investment and employment there while experiencing fewer plant closures.

Related Articles:

  • Will China Take Over the Global Auto Industry? — The global auto market has historically been regional, with most cars sold in a region also built there. Overcapacity in China's internal combustion sector, expanding electric-vehicle capacity, ample state bank credit, and a weaker yuan could concentrate global auto production in China absent restrictions such as the US 100% tariff on Chinese electric vehicles.
  • US Efforts to Contain Xi’s Push for Tech Supremacy Are Faltering — Research by Bloomberg Economics and Bloomberg Intelligence finds that of 13 key technologies tracked, China has reached global leadership in five and is catching up in seven others, with clear leads in electric vehicles, automotive software and lithium battery technology. China still struggles to develop manufacturing processes for advanced semiconductors, the main focus of US export controls.
  • Which Country Should Design U.S. Industrial Policy? — Manufacturing is 15% of global GDP but 11% of U.S. GDP versus 19% in Germany, 21% in South Korea, 26% in mainland China, and 34% in Taiwan, according to World Bank data. The author argues this gap stems from trade and industrial policies in surplus economies that effectively force households to subsidize manufacturing, drawing global manufacturers toward the largest subsidies.

AI Summary. US manufacturing output has risen over four decades even as factory jobs declined, with America ranking first among major economies in value added per worker — estimated at nearly 7x China's — and second to China in share of global manufacturing output. Over a fifth of US manufactured exports are research-intensive goods.

Tej Parikh Financial Times
Date Posted:

Relative to 2000, American manufacturing production has moved up the value chain. @tejparikh90 finds the US “ceded the top spot….by outsourcing lower wage jobs,” leaving US manufacturing productivity almost 7x that of China.

Is US manufacturing still strong despite falling factory employment?

Core argument: US manufacturing ranks first among major economies in value added per worker, estimated at almost seven times China's level, while ranking second only to China in share of global manufacturing output.

US manufacturing output has actually risen over the past four decades, even as factory jobs have declined. American industry is more productive today. It makes higher-value products at higher wages with fewer workers (and more robots). In fact, measured by value added per worker, US manufacturing ranks first among the major economies (estimated to be almost seven times that of China). Over one-fifth of US manufactured exports are products with high research and development intensity, such as advanced tech and aerospace products. The US ranks second only behind China in its share of overall global manufacturing output. By most measures, America is already “a manufacturing superpower”. It ceded the top spot in part by outsourcing lower wage jobs and shifting into higher value added economic activities: services, research and development, and advanced manufacturing. This has allowed incomes, jobs and the economy to grow.

Takeaways by Macro Roundup® AI

  1. US manufacturing ranks first among major economies in value added per worker, estimated at almost seven times China's level, while ranking second only to China in share of global manufacturing output.
  2. US manufacturing output has risen over the past four decades even as factory jobs declined, with industry making higher-value products at higher wages using fewer workers and more robots.
  3. Over one-fifth of US manufactured exports are products with high research and development intensity, such as advanced tech and aerospace, and the shift into services, R&D, and advanced manufacturing has allowed incomes, jobs, and the economy to grow.

Related Articles:

  • America Is Missing The New Labor Economy – Robotics Part 1 — Building an identical robotic arm in the US costs about 2.2x more than in China, and US-labeled components still depend heavily on Chinese parts and materials with no scalable alternative. The author argues China is the only country positioned to capture full-scale intelligent robotic automation, which would let it outcompete the US across production.
  • The Mysterious Slowdown in U.S. Manufacturing Productivity — US manufacturing labor productivity growth slowed broadly after the Great Recession, with the four largest firms in each industry averaging –0.5% growth from 2010 to 2022 versus 3.7% from 1987 to 2007, and smaller follower firms showing an identical 4.2 percentage-point decline. The authors find the slowdown spans all industries and firm sizes.
  • The R&D Puzzle in U.S. Manufacturing Productivity Growth — Research and development spending in U.S. manufacturing has been rising relative to output and hours worked while productivity has been flat, which suggests the ability of research and development to boost productivity growth has been declining.

AI Summary. US Treasury data show China cut its official holdings of US Treasuries by more than 27% to $759bn, a faster decline than the preceding period, while raising holdings of higher-yielding agency bonds issued by government-sponsored entities such as Fannie Mae. Analysts argue China's true Treasury holdings may be higher, masked by intermediary custodians.

Cheng Leng, Sun Yu and Joe Leahy Financial Times
Date Posted:

China’s real holdings of Treasuries are likely both higher than the reported totals and ~ stable relative to 2012, given China’s use of intermediary custodians such as Euroclear in Belgium and Clearstream in Luxembourg to mask direct ownership.

Is China shifting from US Treasuries into higher-yielding agency bonds?

Core argument: China cut its official US Treasury holdings by more than 27% to $759bn between January 2022 and December 2024, according to US Treasury data, outpacing the 17% decline recorded between 2015 and 2022.

Between January 2022 and December 2024, China cut its official Treasury holdings by more than 27% to $759bn, US Treasury department data shows, far outpacing the 17% decline between 2015 and 2022. One strategy has been to increase holdings in so-called agency bonds issued by government-sponsored entities such as Fannie Mae. These offer similar credit ratings to Treasuries, but slightly higher yields. Between 2018 and early 2020, China’s holdings of US agency bonds rose 60% to $261bn. “Clearly, agencies are the obvious substitute in the US market for Treasuries,” says Brad Setser, a senior fellow at the Council on Foreign Relations. “[Safe’s] general interest in agencies is well known, more so than most major central banks.” Setser and others argue that China’s real holdings of Treasuries could still be considerably higher than the reported totals, given its use of intermediary custodians such as Euroclear in Belgium and Clearstream in Luxembourg to mask direct ownership. Even so, the overall long-term Treasury position has gradually declined in recent years, they say.

Takeaways by Macro Roundup® AI

  1. China cut its official US Treasury holdings by more than 27% to $759bn between January 2022 and December 2024, according to US Treasury data, outpacing the 17% decline recorded between 2015 and 2022.
  2. China's holdings of US agency bonds issued by government-sponsored entities such as Fannie Mae rose 60% to $261bn between 2018 and early 2020, securities that carry credit ratings similar to Treasuries but slightly higher yields.
  3. Brad Setser of the Council on Foreign Relations and others argue China's actual Treasury holdings could be considerably higher than reported, given its use of intermediary custodians such as Euroclear in Belgium and Clearstream in Luxembourg.

Related Articles:

  • Are Foreigners Selling US Assets? — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.
  • China’s Holdings of US Treasuries Fall to Lowest Level Since 2009 — Chinese investors' holdings of US government debt fell by $57bn to $759bn, the lowest level since 2009 according to US Treasury data, which excludes Chinese-owned Treasuries held in accounts in other countries. The reported decline was likely exaggerated by assets shifting to securities depositaries in Belgium and Luxembourg.
  • Foreign Ownership of US Equities, Treasuries, and US Credit — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.

AI Summary. Inflation-adjusted US house prices stand 0.8% below their 2022 peak, according to an affordability index built from median income, a 15% down payment, the Case-Shiller National Index, and 30-year fixed mortgage rates. With prices up 36% over four years and rates at 6.84%, the monthly payment on the same house rose 117%.

Bill McBride Calculated Risk
Date Posted:

Real house prices are now just 0.8% below the 2022 peak and 12% above the 2006 peak. With house prices up 36% over four years, affordability remains at levels last seen in the early 1980s when 30-year mortgage rates were over 14%. @calculatedrisk

How far have inflation-adjusted house prices fallen from their peak?

Core argument: Inflation-adjusted U.S. house prices stand 0.8% below their 2022 peak, based on the Case-Shiller National Index, seasonally adjusted.

I’ve put together my own affordability index [using] median income from the Census Bureau (estimated 2024 and 2025), assumed a 15% down payment, and used a 2% estimate for property taxes, insurance and maintenance. This is probably low for high property tax states like New Jersey and Texas, and too high for lower property tax states. For house prices, I used the Case-Shiller National Index, Seasonally Adjusted (SA). Also, for the down payment - there wasn’t a significant difference between 15% and 20%. For mortgage rates, I used the Freddie Mac PMMS (30-year fixed rates). So here is what the index looks like (lower is more affordable). The monthly payment for the same house, with house prices up 36% over four years and mortgage rates at 6.84% in February 2025, would be $3,566 - an increase of 117%! More than double for the same house.

Takeaways by Macro Roundup® AI

  1. Inflation-adjusted U.S. house prices stand 0.8% below their 2022 peak, based on the Case-Shiller National Index, seasonally adjusted.
  2. The monthly payment on the same house reached $3,566 in February 2025, a 117% increase, as house prices rose 36% over four years and the Freddie Mac 30-year fixed mortgage rate stood at 6.84%.
  3. The affordability index combines Census Bureau median income (2024 and 2025 estimated), a 15% down payment, and a 2% estimate for property taxes, insurance and maintenance, which is probably low for high property tax states such as New Jersey and Texas.

Related Articles:

  • The Price of Housing in the United States — Real housing price appreciation in the United States has varied widely across regions, with West Coast cities rising earlier while prices in other regions remained comparable in real terms to decades earlier. The authors find essentially no relationship between real price growth and zoning restrictiveness in the earliest period studied, and progressively steeper gradients in later periods.
  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • Fannie and Freddie May Foment Another Crisis — Fannie Mae and Freddie Mac back more than 60% of new mortgages, up from roughly 45% before the 2008 financial crisis, and hold a $7.5tn loan portfolio; including Federal Housing Administration and Veterans Affairs loans, the government backs nearly 85% of the mortgage market. The Federal Reserve owns $2.2tn in mortgage-backed securities.

AI Summary. US nonfarm payrolls rose 177,000 in a month, with downward revisions to the prior two months, while the unemployment rate held at 4.2% and labor force participation ticked up to 62.6%. Economists largely expect layoffs to pick up as economic uncertainty halts expansion plans, with United Parcel Service planning 20,000 job cuts.

Augusta Saraiva Bloomberg
Date Posted:

US nonfarm payrolls increased 177,000 in April, suggesting uncertainty has yet to impact hiring at scale. Prime age labor force participation rose to 83.6%, only slightly below its most recent peak of 83.9% last summer. Unemployment remained unchanged.

Is the labor market holding steady despite economic uncertainty?

Core argument: US nonfarm payrolls rose 177,000 last month, with the prior two months' gains revised lower, while the unemployment rate held at 4.2%, according to Bureau of Labor Statistics data.

Nonfarm payrolls increased 177,000 last month after the prior two months’ advances were revised lower, according to Bureau of Labor Statistics data out Friday. The unemployment rate was unchanged at 4.2%. The participation rate — the share of the population that is working or looking for work — ticked up to 62.6% in April. The rate for those between the ages of 25 and 54, also known as prime-age workers, rose to the highest level in seven months. Economists largely expect layoffs to pick up in the coming months as economic uncertainty puts a halt on expansion plans. United Parcel Service expects to cut 20,000 jobs as it anticipates weaker demand for online shopping. Others including Volvo Group and Cleveland-Cliffs are also moving to shed positions.

Takeaways by Macro Roundup® AI

  1. US nonfarm payrolls rose 177,000 last month, with the prior two months' gains revised lower, while the unemployment rate held at 4.2%, according to Bureau of Labor Statistics data.
  2. The labor force participation rate ticked up to 62.6% in April, and the rate for prime-age workers aged 25 to 54 rose to its highest level in seven months.
  3. Economists largely expect layoffs to pick up in coming months as economic uncertainty halts expansion plans, with United Parcel Service expecting to cut 20,000 jobs on weaker online shopping demand and Volvo Group and Cleveland-Cliffs also moving to shed positions.

Related Articles:

  • Technological Disruption in the Labor Market — The authors measure US labor market structure since 1880 and find 1990–2017 less disruptive than any earlier period, because past changes from general-purpose technologies like steam and electricity were so profound. They identify four recent signs of accelerating change, including a 50%+ rise in science and technology employment share since 2010.
  • Something Alarming Is Happening To The Job Market — Young college graduates have almost always had a lower unemployment rate than the overall labor force over the past four decades, but that gap recently hit an all-time low. One interpretation is that firms are replacing young workers with machines, though the surge in productivity growth such a shift would imply is hard to find in the data.
  • America’s Young Men Are Falling Even Further Behind — Labor force participation among US men ages 25 to 34 has not grown in a decade, standing at 89%, which one analysis of Bureau of Labor Statistics data estimates is more than 700,000 fewer participants than at 2004 rates; women's participation in that age group is up 6 percentage points over 10 years, to 79%.

AI Summary. McDonald's reported US same-store sales fell 3.6% year on year, its largest drop since the height of the Covid-19 pandemic, driven mainly by lower customer numbers. The company said US fast-food industry visits by low-income consumers fell nearly 10%, with middle-income visits falling at a similar pace.

Gregory Meyer Financial Times
Date Posted:

McDonald’s reported that same-store sales in the US fell 3.6% y/y, which the firm attributed to consumer uncertainty.

Are low- and middle-income consumers pulling back on fast-food spending?

Core argument: McDonald's US same-store sales fell 3.6% year on year in the quarter ended March, its biggest drop since the height of the Covid-19 pandemic five years ago, driven mainly by lower customer numbers.

McDonald’s has posted its biggest drop in US sales since the height of the Covid-19 pandemic five years ago. Same-store sales in its home market fell 3.6% year on year in the quarter that ended in March, driven mainly by lower customer numbers, the world’s biggest burger chain said in results on Thursday. McDonald’s chief executive Chris Kempczinski said “consumers today are grappling with uncertainty.” US fast-food industry visits by low-income consumers fell nearly 10% in the first quarter, according to Kempczinski. Visits among middle-income consumers fell at a similar pace, suggesting broader economic concerns among consumers. “People are just being more judicious about cutting back on visits,” Kempczinski said, adding that some customers were having breakfast at home rather than at McDonald’s — or skipping that meal entirely.

Takeaways by Macro Roundup® AI

  1. McDonald's US same-store sales fell 3.6% year on year in the quarter ended March, its biggest drop since the height of the Covid-19 pandemic five years ago, driven mainly by lower customer numbers.
  2. US fast-food industry visits by low-income consumers fell nearly 10% in the first quarter, with middle-income consumer visits falling at a similar pace, according to McDonald's chief executive Chris Kempczinski.
  3. McDonald's chief executive Chris Kempczinski said consumers "are grappling with uncertainty" and "being more judicious about cutting back on visits," with some customers eating breakfast at home rather than at McDonald's or skipping the meal entirely.

Related Articles:

  • Consumer Confidence Is Weaker than During the 2008 Financial Crisis — The University of Michigan survey of consumers shows sentiment declining among households earning both above and below $100,000, job-loss worries at levels normally seen in recessions, a record-high share saying business conditions are worsening, falling income expectations, and rapidly rising inflation expectations. The concern is that weak sentiment spills over into weaker actual spending.
  • ‘This Mindless Flailing Creates Recessions’: Four Economists Dissect Trump’s Tariffs — Economists argue the tariffs will shrink the US trade deficit by making the country an unattractive destination for capital, since foreign capital inflows require a trade deficit. They warn the policies could mark a break for the dollar comparable to the Suez crisis for the British pound, portending higher borrowing costs, less investment and more stagnation.
  • Probability of VTRR 90% — The author estimates a 90% chance of a US recession triggered by an abrupt shift to very high tariffs, which importers must pay when goods arrive. Small businesses lacking the working capital to cover tariffs face canceled orders and bankruptcies, and account for more than 80% of US employment and capital spending.

Monday, May 5, 2025

AI Summary. A study of US college students finds moderate-to-severe depression reported by 26% of students at one elite institution, 22% reporting moderate-to-severe anxiety and 10% contemplating suicide. Poorer mental health is associated with being female, little exercise, low grades, and financial aid; financial stress is associated with higher suicidal thoughts.

David Blanchflower and Bruce Sacerdote National Bureau of Economic Research
Date Posted:

Blanchflower and Sacerdote found that in 2021-2022, 10% of Dartmouth students reported suicidal ideation. Those reporting frequent financial stress were 8 ppts more likely to seriously contemplate suicide than those reporting no such stress.

How widespread is poor mental health among college students?

Core argument: At Dartmouth, 26% of students report moderate to severe depression, 22% report moderate to severe anxiety, and 10% say they contemplated suicide, even though Dartmouth ranks well compared with other institutions.

We study the determinants of poor mental health among students. We focus on elite and non-elite institutions and examine Dartmouth as a special case. Dartmouth ranks well compared to other institutions. However, around a quarter of Dartmouth students (26%) report they suffer from moderate to severe depression and 22% that they suffer from moderate, to severe, anxiety and 10% say they contemplated suicide. We find broad patterns in the data, that ill-being is higher among females, those who engage in little exercise, have low GPAs, are not athletes nor in academic clubs nor religious organizations, reside in fraternity housing or are on financial aid. Table 9 models the suicide ideation variable for Dartmouth and other universities. It is higher for those age 18-24 than for older groups and among women although that is not the case in non-elite institutions. Exercise and being a varsity athlete are associated with lower suicidal thoughts. A new result is the importance of concerns and stresses over financial situations which increases the probability of suicidal thoughts. The [financial] stress variables are highly significant, to such a degree that adding them in column 3 removes the (negative) significance of the Dartmouth variable.

Takeaways by Macro Roundup® AI

  1. At Dartmouth, 26% of students report moderate to severe depression, 22% report moderate to severe anxiety, and 10% say they contemplated suicide, even though Dartmouth ranks well compared with other institutions.
  2. Ill-being is higher among female students, those who exercise little, have low GPAs, are not athletes or members of academic clubs or religious organizations, live in fraternity housing, or receive financial aid.
  3. Concerns over financial situations increase the probability of suicidal thoughts, and adding these highly significant stress variables removes the negative significance of the Dartmouth variable, while exercise and being a varsity athlete are associated with lower suicidal thoughts.

Related Articles:

  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • The Girls Are Not Alright: Responses to Three Claims that the Youth Mental Health Crisis Is Exaggerated — U.S. Centers for Disease Control data on nonfatal self-harm show a 518% increase in hospitalizations following emergency department visits among girls aged 10–14, with a large rise also among girls aged 15–19. Because suicide deaths vary by sex and age, low suicide rates among teen girls do not mean teen girls are not struggling.
  • The Anti-Social Century — Americans spend less time with other people than in any period with reliable data back to 1965, with in-person socializing down more than 20% from 2003 to 2023 according to the Bureau of Labor Statistics' American Time Use Survey. Among unmarried men and people under 25, the decline exceeded 35%.

AI Summary. An analysis of Census Bureau data finds millennials working in technology and finance are more likely to reach their generation's top 5% of household incomes than baby boomers at similar ages, while doctors and lawyers are less likely. That top 5% earned over $300,000, versus more than $212,000 in 2023 dollars for boomers.

Joe Pinsker, Paul Overberg and Stephanie Stamm Wall Street Journal
Date Posted:
Is Database:
Database
Is Important:
Important

Between 1996 and 2018, pay growth in higher wage industries outpaced growth in lower wage industries; 5% of fields accounted for more than half the difference.

Which industries now propel young workers into their generation's top earners?

Core argument: The top 5% of millennial households by income earned more than $300,000 in 2023, versus more than $212,000 in 2023 dollars for comparable baby boomer households in 1990, according to a Wall Street Journal analysis of Census Bureau data archived by IPUMS.

The tech and finance sectors are more likely to vault millennials into their generation’s top 5% of household incomes, compared with baby boomers at similar ages in 1990, according to a Wall Street Journal analysis of the latest Census Bureau data from 2023. Those ascendant industries have gained ground on doctors and lawyers. Millennials with those jobs are less likely to make it into their generation’s highest earners than their baby boomer counterparts were 35 years ago, according to the Journal’s analysis. The economy’s re-sorting has come with a big payoff. The top 5% of millennial households by income brought in more than $300,000 in 2023, according to the Journal’s analysis, which used census data archived by IPUMS at the University of Minnesota. Comparable boomer households in 1990 made more than $212,000 in 2023 dollars.

Takeaways by Macro Roundup® AI

  1. The top 5% of millennial households by income earned more than $300,000 in 2023, versus more than $212,000 in 2023 dollars for comparable baby boomer households in 1990, according to a Wall Street Journal analysis of Census Bureau data archived by IPUMS.
  2. Tech and finance jobs are more likely to place millennials in their generation's top 5% of household incomes than they were for baby boomers at similar ages in 1990, according to the Journal's analysis.
  3. Millennial doctors and lawyers are less likely to reach their generation's highest earners than their baby boomer counterparts were 35 years earlier, according to the Journal's analysis.

Related Articles:

  • Rising Top, Falling Bottom: Industries and Rising Wage Inequality — Rising earnings inequality is dominated by rising inequality between industries, with high-earning workers increasingly concentrated in high-earning industries and low-earning workers in low-earning ones. About 10% of 301 detailed industries account for almost all of the rising between-industry dispersion while employing less than 40% of workers.
  • Where Have All the Good Jobs Gone? Changes in the Geography of Work in the US, 1980-2021 — The authors define "good jobs" as those in industries paying a wage premium and find spatial convergence across US local labor markets: areas initially less specialized in good-job industries saw larger increases in that specialization. This convergence was most consequential for Black, Hispanic, and foreign-born workers, who were overrepresented in fast-converging Southern and Western cities.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. Taiwan's dollar surged as much as 5% in a day, its largest move since 1988, as traders speculated authorities might permit appreciation to help secure a trade deal with the US. Taiwan's central bank attributed the two-day appreciation partly to market chatter and urged against irresponsible speculation.

Betty Hou and Ruth Carson Bloomberg
Date Posted:

Taiwan’s dollar surged 5% against the US dollar on Monday. The Taiwan dollar has appreciated >10% against the dollar in the past month amid speculation that the central bank will allow significant appreciation as part of trade negotiations with the US.

Can trade deal speculation drive a currency's sharpest surge in decades?

Core argument: Taiwan's dollar rose as much as 5% on Monday, its largest surge since 1988, as traders speculated that authorities might permit appreciation to help secure a trade deal with the US.

Taiwan’s dollar surged the most since 1988 as traders speculated that authorities might allow it to appreciate to help reach a trade deal with the US. The local dollar rose as much as 5% on Monday. In an emergency press briefing late Monday, Taiwan’s central bank sought to quell speculation about the currency’s surge, saying that the wild, two-day appreciation was partially attributable to market chatter and urged against irresponsible speculation. The Taiwan dollar has advanced more than 10% [against the USD] over the past month.

Takeaways by Macro Roundup® AI

  1. Taiwan's dollar rose as much as 5% on Monday, its largest surge since 1988, as traders speculated that authorities might permit appreciation to help secure a trade deal with the US.
  2. Taiwan's central bank held an emergency press briefing late Monday, attributing the two-day appreciation partly to market chatter and urging against irresponsible speculation.
  3. The Taiwan dollar has advanced more than 10% against the US dollar over the past month.

Related Articles:

  • Are Foreigners Selling US Assets? — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.
  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
  • Too Many Dollars — Investors in South Korea and Japan may also exit dollar assets on fears that trade talks bring currency revaluation, as both resemble Taiwan in their U.S. trade and defense ties and have historically weak currencies. Japan allowed sharp appreciation under the 1985 Plaza Accord, which some scholars link to its subsequent decades of weakness.

AI Summary. Investors in South Korea and Japan may also exit dollar assets on fears that trade talks bring currency revaluation, as both resemble Taiwan in their U.S. trade and defense ties and have historically weak currencies. Japan allowed sharp appreciation under the 1985 Plaza Accord, which some scholars link to its subsequent decades of weakness.

Joseph Wang Fed Guy Blog
Date Posted:

The surge in the Taiwan $ vis-a-vis the US dollar will likely repeat itself with the yen and won as well, asserts @FedGuy12. “The structural depreciation of the dollar remains the primary macro force of the year.”

Will Asian investors flee dollar assets over currency revaluation fears?

Core argument: South Korea and Japan resemble Taiwan in their U.S. trade relationships, reliance on U.S. military support, and currencies trading at historically weak levels against the dollar, raising the prospect that investors there also flee dollar assets over trade-talk revaluation fears.

Investors in a couple other East Asian nations may also stampede out of dollar assets in fear of trade talk related revaluation. South Korea and Japan are similar to Taiwan in its trade relationship with the U.S. and reliance upon the U.S. for military support. They both also have currencies that are trading at historically weak levels against the dollar. The market appears to realize this and priced in significant strength in the Korean Won the same time the TWD strengthened. Strength is not as apparent in the Yen even though the Yen is trading around multi-decade lows against the dollar. Note that Japan allowed its currency to appreciate significantly against the dollar earlier under the 1985 Plaza Accord, which some scholars believe contributed to its subsequent decades long economic weakness.

Takeaways by Macro Roundup® AI

  1. South Korea and Japan resemble Taiwan in their U.S. trade relationships, reliance on U.S. military support, and currencies trading at historically weak levels against the dollar, raising the prospect that investors there also flee dollar assets over trade-talk revaluation fears.
  2. The market priced in significant Korean Won strength at the same time the Taiwan dollar strengthened, while comparable strength is not as apparent in the Yen despite it trading around multi-decade lows against the dollar.
  3. Japan allowed its currency to appreciate significantly against the dollar under the 1985 Plaza Accord, which some scholars believe contributed to its subsequent decades-long economic weakness.

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  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
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AI Summary. During an earlier period when the dollar fell about 40% against major peers, exports grew strongly, yet the US still lost roughly 3m manufacturing jobs, showing a weaker dollar is no cure-all. The author argues current policies may yield some bilateral business gains but leave consumers facing higher prices and interest rates.

Rebecca Patterson New York Times
Date Posted:

Between 2001-2008, the dollar lost ~ 40% of its value. Rebecca Patterson argues that while a weaker dollar today might help export competitiveness, inflation and interest rates will largely offset those gains.

Does a weaker dollar deliver broad economic gains?

Core argument: The dollar lost 40% against its major peers between mid-2001 and mid-2008, as Americans sold dollars to buy foreign equities and bonds, while strong global demand and a competitive currency drove robust U.S. export growth.

Between mid-2001 and mid-2008, the [USD] gradually lost 40% compared with its major peers. Americans, attracted by overseas investment opportunities, sold dollars to buy foreign equities and bonds. Strong global demand for American goods, coupled with a competitive currency, resulted in robust export growth. The economic benefits from that weak-dollar period were not evenly distributed. Export companies thrived, but America still lost around three million manufacturing jobs. History tells us that a softer dollar isn’t a panacea, and that it’s also important to understand why the currency is falling. The policy path being pursued today may result in some improved bilateral business opportunities. But those gains will be offset by damage, which will flow through to consumers and businesses, potentially for years to come, in the form of relatively higher prices and interest rates.

Takeaways by Macro Roundup® AI

  1. The dollar lost 40% against its major peers between mid-2001 and mid-2008, as Americans sold dollars to buy foreign equities and bonds, while strong global demand and a competitive currency drove robust U.S. export growth.
  2. Gains from that weak-dollar period were unevenly distributed: export companies thrived, yet the U.S. still lost around three million manufacturing jobs, suggesting a softer dollar is not a panacea.
  3. Today's policy path may yield some improved bilateral business opportunities, but those gains will be offset by damage reaching consumers and businesses as relatively higher prices and interest rates, potentially for years to come.

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  • The Dollar has Further to Fall — The author argues the dollar has considerably further to fall, noting Federal Reserve data show its real value nearly two standard deviations above its average since 1973, a level matched only twice before, each followed by depreciations of 25-30%. Financing the $1.1tn US current account deficit requires matching net capital inflows.
  • Are Foreigners Selling US Assets? — European and Japanese investors hold roughly 30% and 20% of their fixed income in foreign debt, versus under 10% for US investors, with US bonds making up about 15% of Eurozone and Japanese portfolios. Because foreign investors are less sticky than domestic ones, turmoil in US bond markets has greater potential to unsettle them.
  • Dollar Upheaval: This Time is Different — Standard interest-rate parity implies a 50 basis-point rise in U.S. long-term yields relative to European yields should appreciate the dollar about 5%, yet the dollar depreciated 3.6%, leaving an 8.6% gap. The authors argue investors have reduced their willingness to pay for the safety and liquidity of all dollar-denominated assets, not only U.S. Treasury securities.

AI Summary. China's nominal consumer spending per person has grown about 5.5% a year since late 2019, versus a pre-pandemic average of roughly 8.5%, leaving spending about 13.5% below the pre-pandemic trend while industrial production is 6-7% below trend. Weak domestic demand has left Chinese imports barely growing as extra production is sold abroad.

Matt Klein The Overshoot
Date Posted:

Growth in nominal Chinese consumer spending per capita has been 5.5% since late 2019, compared to 8.5% pre-pandemic, notes @M_C_Klein. “Chinese leaders have repeatedly failed to execute the necessary pivot” from exports to domestic consumption.

Is weak Chinese consumer spending keeping imports flat while exports grow?

Core argument: China's nominal consumer spending per person has grown 5.5% a year since the end of 2019, versus a pre-pandemic average of about 8.5%, leaving spending in the 12 months to March 2025 13.5% below pre-pandemic trend.

Since the end of 2019, nominal consumer spending per person in China has grown at a yearly average rate of 5.5%. That compares to a stable pre-pandemic average growth rate of about 8.5%. The result is that the amount spent in the 12 months ending March 2025 was 13.5% below what would have been expected given pre-pandemic trends. Industrial production is also below the pre-pandemic trend, but the shortfall is relatively smaller (6-7%) compared to the consumption indicators. One implication is that Chinese imports have barely grown over the past few years, thanks to weak domestic demand, while exports have been relatively more robust as extra production has been sold abroad.The gap was particularly pronounced for discretionary categories of consumer spending such as “education, culture, and entertainment” (22% below trend) and healthcare (29% below trend). By contrast, nominal spending on “food, alcohol, and tobacco” has grown in line with the pre-pandemic trend. Chinese leaders have repeatedly failed to execute a pivot [from exports to domestic consumption] despite it being both official policy and the consensus recommendation of China’s leading economists for years.

Takeaways by Macro Roundup® AI

  1. China's nominal consumer spending per person has grown 5.5% a year since the end of 2019, versus a pre-pandemic average of about 8.5%, leaving spending in the 12 months to March 2025 13.5% below pre-pandemic trend.
  2. China's industrial production sits 6–7% below its pre-pandemic trend, a smaller shortfall than consumption, and weak domestic demand has left Chinese imports barely growing while exports absorbed the extra production.
  3. China's spending on "education, culture, and entertainment" is 22% below pre-pandemic trend and healthcare 29% below, while nominal spending on "food, alcohol, and tobacco" has grown in line with that trend.

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AI Summary. The top US military commander in the Indo-Pacific said the United States would prevail in a conflict with China as it stands with current forces, citing American advantages in undersea, space, and counter-space capabilities. He warned that China is building weapons systems, including warships, at a much faster pace than the US.

Demetri Sevastopulo Financial Times
Date Posted:

The top American commander in the Indo-Pacific, Samuel Paparo, said “The United States will prevail in [a war over Taiwan] as it stands now.” However, he noted, “our trajectory on…really every force element that is salient is a bad trajectory.”

Is China's faster weapons buildup eroding America's military edge?

Core argument: Admiral Samuel Paparo said the United States would prevail in a conflict with the force it has now, citing US advantages in undersea capabilities, space, and counter-space weapons.

The top American military commander in the Indo-Pacific said “The United States will prevail in the conflict as it stands now, with the force that we have right now,” Admiral Samuel Paparo told the McCain Institute’s annual Sedona Forum in Arizona on Friday. Speaking one year after taking the helm at Indo-Pacific command, Paparo stressed that the US military had key advantages over China in undersea capabilities, as well as superior capabilities in space and weapons that counter space assets. But he warned that China was building weapons systems, including warships, at a much faster pace than the US. “Our trajectory on…really every force element that is salient is a bad trajectory,” Paparo said. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” he said.

Takeaways by Macro Roundup® AI

  1. Admiral Samuel Paparo said the United States would prevail in a conflict with the force it has now, citing US advantages in undersea capabilities, space, and counter-space weapons.
  2. Paparo warned that China is building weapons systems, including warships, at a much faster pace than the United States, and that the US trajectory on "really every force element that is salient is a bad trajectory.".
  3. Paparo identified the rate of change in the depth and breadth of Chinese military exercises as the one non-linear effect he has seen in the past year that keeps him up at night.

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