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


Friday, May 9, 2025

AI Summary. According to Zeki Data, the top 15 US artificial intelligence companies recruited 500,000 software engineers at a rate of up to 3,000 a month, but their net monthly hiring rate has fallen to zero. The article argues these firms expect AI agents to perform many of the same tasks.

John Thornhill Financial Times
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The top AI firms had been hiring software engineers at the rate of ~ 3k a month but their “net monthly hiring rate has dropped to zero.” @johnthornhillft speculates that firms believe they are close to AI that “could write software as well as any human.”

Have top AI companies stopped net hiring of software engineers?

Core argument: According to Zeki Data, the top 15 US AI companies hired software engineers at a rate of up to 3,000 a month, recruiting 500,000 in total between 2011 and 2024.

The big AI companies seem to think they are close to AGI [defined as "an autonomous coding agent that could write software as well as any human"]. One giveaway is reflected in their own hiring practices. According to Zeki Data, the top 15 US AI companies had been frantically hiring software engineers at a rate of up to 3,000 a month, recruiting a total of 500,000 between 2011 and 2024. But lately their net monthly hiring rate has dropped to zero as these companies anticipate that AI agents can perform many of the same tasks.

Takeaways by Macro Roundup® AI

  1. According to Zeki Data, the top 15 US AI companies hired software engineers at a rate of up to 3,000 a month, recruiting 500,000 in total between 2011 and 2024.
  2. Net monthly hiring at the top 15 US AI companies has dropped to zero as these companies anticipate that AI agents can perform many of the same tasks.
  3. Big AI companies appear to believe they are close to artificial general intelligence, defined as an autonomous coding agent that could write software as well as any human, with their own hiring practices as one giveaway.

Related Articles:

  • SWE-Lancer: Can Frontier LLMs Earn $1 Million from Real-World Freelance Software Engineering? — SWE-Lancer is a benchmark of over 1,400 real freelance software engineering tasks worth $1m in actual payouts, spanning $50 bug fixes to $32,000 feature builds plus managerial choices between technical proposals. Evaluations find leading AI models still cannot solve the majority of the tasks.
  • Why Hasn’t AI Taken Your Job Yet? — An analysis of US employment data finds that occupations flagged as highly exposed to automation — including accounting clerks, insurance underwriters, travel agents and legal secretaries — have stayed within their usual employment ranges, while writers and software developers show employment falling away from trend. Both occupations involve linear, self-contained tasks and high freelancing rates.
  • The Rapid Adoption of Generative AI — A nationally representative U.S. survey found 39% of people aged 18-64 used generative AI, with more than 24% of workers using it in the prior week and nearly one in nine using it every workday. The authors estimate 0.5-3.5% of U.S. work hours are currently assisted by generative AI.

AI Summary. Labor force participation for Americans 55 and older remains almost two percentage points below pre-pandemic levels, while participation for youth, prime-age women, and prime-age men has recovered or exceeded earlier levels. Participation among 55–64 year-olds in the US has been overtaken by the OECD average and Europe.

Nicholas Eberstadt American Enterprise Institute
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After rising 10pp from 1993–2019, the Labor Force Participation Rate of the US 55+ population has fallen 2pp since 2019. The LFPR of the US 55–64 cohort is now below that of the EU, down from a 20pp lead in 2000.

Have older Americans failed to rejoin the workforce while other groups recovered?

Core argument: Labor force participation rates for Americans aged 55 and over remain almost two percentage points below pre-pandemic levels in early 2025, after rising more than 10 percentage points between 1993 and 2019.

LFPRs for the 55+ group rose by over 10 percentage points between 1993 and 2019. [Yet] in early 2025 LFPRs for the 55+ population remain stubbornly stuck almost two percentage points below the pre-pandemic level. The faltering trends for older workers stand in contrast to those for the rest of the US labor force. LFPRs for US youth (the 15–24s) are higher today than before the pandemic. LFPRs for prime age women (the 25–54 group) are higher today than ever before. Even for the notoriously troubled prime age male contingent, LFPRs for early 2025 look to be back up to pre-pandemic levels. Older workers remain the troubling exception to the general post-pandemic recovery of the US labor force. The drop-off in older workers appears to account for the entirety of the current workforce shortfall [close to 2 ml]—and then some. In the critical 55–64 cohort—a group that may or may not be in the workforce—US LFPRs have just been overtaken by the OECD. At the turn of the century, America enjoyed a 10-point edge here. Even more stunning, the US has now fallen behind Europe in workforce participation for its 55–64, sacrificing the over 20-point lead it enjoyed in the year 2000.

Takeaways by Macro Roundup® AI

  1. Labor force participation rates for Americans aged 55 and over remain almost two percentage points below pre-pandemic levels in early 2025, after rising more than 10 percentage points between 1993 and 2019.
  2. The drop-off in older workers appears to account for the entirety of the US workforce shortfall of close to 2 million—and then some—while participation for youth aged 15–24, prime-age women, and prime-age men has returned to or exceeded pre-pandemic levels.
  3. US labor force participation for the 55–64 cohort has been overtaken by the OECD, erasing a 10-point edge held at the turn of the century, and now trails Europe, sacrificing a lead of over 20 points in 2000.

Related Articles:

  • To Retire or Keep Working after a Pandemic? — Workers age 55 and older have not reversed the decline in labor force participation that began with the COVID-19 pandemic, unlike other age groups, amounting to roughly 2m workers by some estimates. The shortfall is concentrated among those without a college degree, while college-educated older workers' participation returned to its pre-pandemic trend.
  • Pandemic Labor Force Participation and Net Worth Fluctuations — Applying the pre-pandemic peak labor force participation rate to the adult population implies about 3.73m "missing workers" and 3.27m "excess retirees" in the US economy. The authors estimate that wealth effects on retirement decisions among those aged 55 and over account for over 50% of the aggregate participation decline and more than 80% of excess retirements.
  • Thoughts and Comments on Demographic Aging and Shrinking — As an arithmetic matter, the greying of societies is driven much more by smaller families than by longer lives, which the author attributes to a withering away of the family. Demographic simulations project that by 2040 couples in their 60s in China will likely have at least one living parent to care for, and many will have two or three.

AI Summary. Banks provide a smaller share of corporate credit than before the financial crisis, with bank lending falling from about 27% of total non-financial corporate debt to about 20%.

Torsten Sløk Apollo
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Torsten Sløk shows that banks are playing a smaller role as a provider of credit. Bank lending declined from ~27% of total non-financial corporate debt prior to the crisis to ~20% today.

Are banks providing a smaller share of corporate credit?

Core argument: Bank lending has fallen from roughly 27% of total non-financial corporate debt before the financial crisis to about 20% today, according to Torsten Sløk.

[Torsten Slok] will be giving a presentation on “The Growing Role of Private Credit” today at the Hoover Institution during a conference celebrating John Taylor and the Taylor role.

Takeaways by Macro Roundup® AI

  1. Bank lending has fallen from roughly 27% of total non-financial corporate debt before the financial crisis to about 20% today, according to Torsten Sløk.
  2. Torsten Sløk argues that banks are playing a smaller role as providers of credit.
  3. Torsten Sløk is presenting "The Growing Role of Private Credit" at the Hoover Institution during a conference celebrating John Taylor and the Taylor rule.

Related Articles:

  • Has Private Credit Broken the High-Yield Spread Signal? — The high-yield bond market has stayed at about $1.4tn while private credit assets have grown to as much as $2tn, and the highest-rated BB portion of the high-yield index has risen from 41% to 51%. Private markets have shifted riskier borrowers out of high yield, making that index safer.
  • The Secular Decline of Bank Balance Sheet Lending — Traditional bank balance sheet lending has declined as a share of credit intermediation, with credit increasingly channeled through arms-length transactions such as securitization. A structural model attributes falling lending shares to lower securitization costs, savers' behavior driving bank balance sheet size, and implicit bank costs and subsidies shaping balance sheet composition.
  • Private Credit: Characteristics and Risks — Private credit loans are negotiated bilaterally outside traditional regulatory requirements and are illiquid because no secondary market exists, leaving investors expected to hold them to maturity or face steep losses if they need to exit. Scarce data on this growing form of nonbank lending makes assessing its risks difficult.

AI Summary. A proposal under consideration would let the top US income tax rate revert from 37% to the pre-2017 level of 39.6% for individuals earning $2.5mn or more, with the revenue used to fund middle- and working-class tax cuts and protect Medicaid, the health program for low-income households.

James Politi Financial Times
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Trump again signaled openness to raising the tax rate on earnings over $2.5mm to the pre-TCJA rate of 39.6%. “Republicans should probably not do it, but I’m OK if they do!!!”

Should the top income tax rate rise to fund middle-class cuts?

Core argument: Trump is considering letting the top income tax rate revert from 37% to the pre-2017 level of 39.6% for individuals earning $2.5mn or more, according to a person familiar with his thinking.

Trump’s proposal would mark a major break from the traditional Republican low-tax approach to high earners — and drew criticism from some rightwing groups who said it was more akin to a Democratic policy. “The president is considering allowing the rate on individuals making $2.5mn or more to revert from 37% to the pre-2017 39.6%. This will help pay for massive middle- and working-class tax cuts, and protect Medicaid,” the person familiar with Trump’s thinking said, referring to the government healthcare plan for low-income households.

Takeaways by Macro Roundup® AI

  1. Trump is considering letting the top income tax rate revert from 37% to the pre-2017 level of 39.6% for individuals earning $2.5mn or more, according to a person familiar with his thinking.
  2. The person familiar with Trump's thinking said the higher top rate would help pay for middle- and working-class tax cuts and protect Medicaid, the government healthcare plan for low-income households.
  3. Trump's proposal marks a break from the traditional Republican low-tax approach to high earners and drew criticism from some rightwing groups who said it was more akin to a Democratic policy.

Related Articles:

  • Trump Says Millionaire Tax Would Push Wealthy to Leave the US — The US president argued that a higher tax rate on millionaires would be disruptive because wealthy people would leave the country, citing other countries that have lost high earners after similar moves. The remarks push back on discussions among some Republican lawmakers about a new 40% bracket for those earning $1m or more to help fund an economic package.
  • Taxing Top Wealth: Migration Responses and Their Aggregate Economic Implications — Swedish data show that when a wealth-taxed entrepreneur emigrates, employment at their businesses falls 33%, value-added 34%, tax payments 50%, and investment 21%, but 60% of closed firms are absorbed by other domestic companies. The authors estimate aggregate effects on employment and investment are small.
  • Behavioral Responses to State Income Taxation of High Earners: Evidence from California — A California ballot measure raising top marginal income tax rates by up to 3 percentage points prompted an additional 0.8% of the affected tax base to leave the state, with an estimated income elasticity of 2.5–3.2 for high earners who stayed. The authors estimate these responses eroded 45.2% of windfall revenues within one year and 60.9% within two.

Monday, May 12, 2025

AI Summary. An analysis of 8,300 large firms accounting for two-thirds of gross value added in Germany, the UK, and the US finds that fewer than 100 firms generated about two-thirds of positive labor productivity gains in each country. A still smaller group of 55 firms accounted for 50–65% of the firm-level productivity drag.

Jan Mischke, Chris Bradley, Olivia White, Guillaume Dagorret, et al. McKinsey
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A McKinsey analysis finds btw 2011–2019, 5% of American firms drove ~80% of real gross value added per worker gains. The US sample had 3x the number of leading firms relative to “stragglers” than did Germany and the UK who were almost at par.

How concentrated are national productivity gains among a few firms?

Core argument: Fewer than 100 firms out of a sample of 8,300 large companies — dubbed Standouts — accounted for roughly two-thirds of positive productivity gains in each of Germany, the UK, and the US.

We apply the economic definition of labor productivity as real gross value added (GVA) per worker, which is very different from profitability or efficiency and includes the impact of employees moving across firms. We look at 8,300 large firms covering 2/3rds of GVA in Germany, the UK, and the US. Fewer than 100 firms in our sample of 8,300, a group that we have dubbed Standouts, accounted for about 2/3rds of the positive productivity gains in each of the countries. Standouts are defined as firms that added at least one basis point to their national sample’s productivity growth. The number of firms that were responsible for the largest drags (negative contributions of at least one basis point) on productivity growth—we call them Stragglers—was even smaller. Only 55 Stragglers accounted for 50 to 65% of the firm-level productivity drag in the three-country samples. In the US, 44 Standouts—5% of sample firms, accounting for 23% of employment share—generated 78% of positive productivity growth. And 14 Stragglers—2% of sample firms, accounting for 10% of employment—were responsible for 57% of negative growth.

Takeaways by Macro Roundup® AI

  1. Fewer than 100 firms out of a sample of 8,300 large companies — dubbed Standouts — accounted for roughly two-thirds of positive productivity gains in each of Germany, the UK, and the US.
  2. In the US, 44 Standouts, 5% of sample firms and 23% of employment, generated 78% of positive productivity growth, while 14 Stragglers, 2% of firms and 10% of employment, were responsible for 57% of negative growth.
  3. Measuring labor productivity as real gross value added per worker across 8,300 large firms covering two-thirds of GVA in Germany, the UK, and the US, just 55 Stragglers accounted for 50–65% of the firm-level productivity drag.

Related Articles:

  • 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.
  • Increasing Returns: Identifying Forms of Increasing Returns and What Drives Them — Within U.S. manufacturing, output at the 90th-percentile plant is nearly double that at the 10th percentile, a gap economists commonly attribute to differences in management talent. Superstar firms outspend rivals on intangible assets, and U.S. firms spend over $200bn a year on proprietary software that the authors argue enables economies of scale and product differentiation.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.

AI Summary. The dollar has risen on tariff reductions and fallen on tariff increases, a pattern the author calls unusual because tariffs on the rest of the world would be expected to strengthen the dollar. The author argues markets punished US policy volatility and that the dollar remains below the level implied by forward interest-rate differentials against other advanced economies.

Robin Brooks Robin Brooks Substack
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The de-escalation of the Trade War saw the $ gain 1.5% relative to its G10 peers. @robin_j_brooks cautions, “US tariffs are a negative shock on other countries, in response to which the Dollar should rise as a market offset. The opposite has happened.”

Why does the dollar fall when tariffs rise?

Core argument: The trade-weighted Dollar has rallied on tariff reductions and fell on prior tariff hikes, a pattern the author calls highly unusual since imposing tariffs on the rest of the world should have pushed the Dollar up.

The fact that the Dollar is rallying on tariff reductions - and that it fell on previous tariff hikes - is very unusual and worrying. The chart shows the trade-weighted Dollar (black line) against its G10 peers, i.e. against the currencies of other advanced economies like the Euro and the British Pound. It also shows the corresponding trade-weighted interest rate differential (blue line), where I am using the same trade weights in the Dollar index to calculate the rate differential. I am looking at the 2y2y forward interest differential, which you get by splitting out the second half of 4-year interest rates. Markets like this tenor because it gives a more forward-looking perspective on where interest rates are headed. Even with today’s rally, the Dollar has yet to close the gap with the 2y2y forward rate differential. The sharp fall in the Dollar after April 9 is significant. One week after announcing reciprocal tariffs, the US suspended them. In effect, the US looked like it was negotiating against itself and the sharp fall in the Dollar around that time looks like markets punished this policy volatility. All this is highly unusual. As I note above, the imposition of tariffs on the rest of the world should have seen the Dollar rise.

Takeaways by Macro Roundup® AI

  1. The trade-weighted Dollar has rallied on tariff reductions and fell on prior tariff hikes, a pattern the author calls highly unusual since imposing tariffs on the rest of the world should have pushed the Dollar up.
  2. Even after the rally, the Dollar has yet to close the gap with the 2y2y forward trade-weighted interest rate differential against G10 peers, which the author calculates using the same trade weights as the Dollar index.
  3. The Dollar fell sharply after April 9, when the US suspended the reciprocal tariffs it had announced a week earlier, which the author reads as markets punishing US policy volatility.

Related Articles:

  • Why Didn’t Tariffs Push up the U.S. Dollar? — The US dollar was exceptionally strong at a level implying an ever-shrinking export base and an ever-growing trade deficit, requiring continually larger foreign inflows at ever more inflated dollar and US equity valuations to sustain. Even after its recent slide, the dollar remains strong by almost all measures.
  • The Coming Asian FX ‘Avalanche’ — Investment firm Eurizon SLJ argues that Asian exporters have hoarded much of their trade surpluses in dollar deposits rather than repatriating them, creating an overhang the firm roughly estimates at $2.5tn in China plus more from Taiwan, Malaysia, and Korea, growing about $500bn a year. It predicts this raises the risk of a non-linear dollar sell-off.
  • 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.

AI Summary. The US Treasury says it is "implausible" that reciprocal tariffs on China fall below 10%, with a 34% rate serving as a ceiling. It also says some of the 20% surtax imposed on China over fentanyl could come off given strong engagement from Beijing on addressing that crisis.

Jenny Leonard Bloomberg
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The US and China are lowering tariffs to 30% and 10%, from 145% and 125%, respectively, for the next three months while Washington and Beijing work toward a broader agreement. Scott Bessent said the range of US tariffs on the PRC will fall btw 10–34%.

Will US tariffs on China stay between 10% and 34%?

Core argument: The US and China agreed to cut tariffs during a 90-day reprieve for talks, with Treasury Secretary Scott Bessent saying the April 2 reciprocal tariff level of 34%, set by the President, "would be a ceiling.".

Treasury Secretary Scott Bessent said it’s “implausible” that reciprocal tariffs on China go below 10%, but the April 2 level — set by the President at 34% — “would be a ceiling.” He also said that “we could see some amount of the fentanyl tariffs perhaps come off,” if there were “excellent engagement” from Beijing on solutions toward solving that crisis. Trump put a 20% surtax on China earlier this year over fentanyl concerns.

Takeaways by Macro Roundup® AI

  1. The US and China agreed to cut tariffs during a 90-day reprieve for talks, with Treasury Secretary Scott Bessent saying the April 2 reciprocal tariff level of 34%, set by the President, "would be a ceiling.".
  2. Bessent called it "implausible" that reciprocal tariffs on China fall below 10%.

Related Articles:

  • Help for the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States — The authors find that the combined effect of U.S.-China trade war import tariffs, retaliatory tariffs, and farm subsidies on employment in exposed U.S. locations was at best a wash and possibly mildly negative, while residents of tariff-protected areas became less likely to identify as Democrats and more likely to vote Republican.
  • Did Tariffs Make American Manufacturing Great? New Evidence from the Gilded Age — Using digitized industry-level US tariff data from 1870–1900 matched to state-level manufacturing census data for over 80 industries, the authors estimate that tariffs reduced labor productivity. They argue the results are consistent with weaker international competition allowing less efficient firms to survive, reduced incentives to innovate, and lobbying for protection misallocating resources.
  • Steel Productivity has Plummeted Since Trump’s 2018 Tariffs — Output per hour in the U.S. steel industry has fallen 32% since 2017, following the imposition of 25% tariffs on steel imports, while output per hour for the economy as a whole rose 15%. U.S. steel-using firms, which employ roughly 45x as many Americans as steel producers, pay about 75% more for steel than global competitors.

AI Summary. New U.S. tariffs act like a sudden corporate tax increase worth hundreds of billions, and with the dollar weakening and a global minimum tariff limiting substitution toward other suppliers, importing companies likely absorb much of the cost through higher input prices and lower sales volumes. Forward earnings estimates remain elevated, suggesting this hit is not priced in.

Joseph Wang Fed Guy Blog
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Noting elevated forward earnings, @FedGuy12 argues markets have not priced a hit to corporate profits due to tariffs. He argues the weakening dollar and the downtick in consumer sentiment mean firms have limited ability to pass on tariff related costs.

Do tariffs act as a corporate tax hike markets haven't priced?

Core argument: The U.S. aggregate effective tariff rate stood at 3% before April, making Trump's tariffs a sizable increase equivalent to a sudden corporate tax hike that in aggregate would run into the hundreds of billions of dollars.

Trump’s tariffs are equivalent to a sudden corporate tax hike that in aggregate would be in the hundreds of billions. In theory, the impact on tariffs can be blunted by a strengthening currency and substitution towards non-tariffed countries. However, the dollar has been weakening and a global minimum tariff makes substitution less likely as it impacts all imports regardless of origin. This suggests that the importing company will bear the brunt of the tariffs through higher import costs and lower sales volumes. The U.S. aggregate effective tariff rate was just 3% before April, so the new tariffs are a sizable increase. The negative impact of tariffs on companies is potentially a sizable hit on profits, but more importantly an unknowably negative impact on profits. Many companies will not know how their costs will be impacted by tariffs until after an extended negotiation period. They will also not know how much of the increase they will be able to pass on to their consumers. This impact does not appear to be factored into forward earnings, which remain elevated. Earnings are just one input into stock prices and are sometimes not even very important, but the clear negative profit impact of tariffs does not seem to be in the price.

Takeaways by Macro Roundup® AI

  1. The U.S. aggregate effective tariff rate stood at 3% before April, making Trump's tariffs a sizable increase equivalent to a sudden corporate tax hike that in aggregate would run into the hundreds of billions of dollars.
  2. A weakening dollar and a global minimum tariff applying to all imports regardless of origin suggest importing companies will bear the brunt of the tariffs through higher import costs and lower sales volumes.
  3. Forward earnings remain elevated and do not appear to reflect the negative profit impact of tariffs, which many companies cannot size until after extended negotiations and until they learn how much cost they can pass to consumers.

Related Articles:

  • What’s Driving the Surge in U.S. Corporate Profits? — U.S. corporate profits reached $4tn, 2.3 percentage points higher as a share of national income than before the COVID-19 pandemic, an increase driven by domestic nonfinancial industries and offset mainly by declines in net interest and miscellaneous asset payments and in income of unincorporated businesses. Employee compensation's share edged down, and higher profits mostly went to shareholders through dividends.
  • End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns — The authors estimate that declining interest and corporate tax rates accounted for over 40% of real corporate profit growth from 1989 to 2019, while falling risk-free rates explain the entire expansion in price-to-earnings multiples. Real earnings before interest and taxes grew slightly more slowly than in 1962–1989, at 2.2% versus 2.4% per year.
  • 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.

AI Summary. Electricity has risen to 30% of China's final energy use while plateauing near 22% in Europe and the US, supported by a decades-long grid expansion and upgrade program projected to cost as much as $800bn by 2030. Chinese grid investment is forecast to grow about 5% annually through 2030, faster than projected economic growth.

Nassos Stylianou, Jana Tauschinski and Edward White Financial Times
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China is outpacing both the US and Europe in electrification. The US and Europe’s electrical consumption as a final share of energy seemingly plateaued at ~ 22% in 2015; since then China’s has surged to 30%.

How is China pulling ahead of the West in electrification?

Core argument: China's electricity share of final energy use has risen to 30%, while the US and Europe have plateaued at around 22%, after China already led both a decade ago.

Even a decade ago, China’s rate of electrification was ahead of Europe and the US. Since then, those rival economies have seen electricity as a final share of energy plateau at around 22%, while electrification in China has surged to 30%. The central pillar of China’s electrification plans is its decades-long plan to upgrade and expand China’s electricity grid. The country is forecast to spend as much as $800bn by 2030 upgrading the system’s hardware and software. Electricity infrastructure spending in many countries tracks economic growth. However, Ken Liu, head of China renewables, utilities and energy research at UBS, forecasts overall grid capex in China as high as 10% this year. Grid spending will continue at a compound annual growth rate of about 5% through to 2030, significantly faster than forecast economic growth “due to the trend of electrification”, he says.

Takeaways by Macro Roundup® AI

  1. China's electricity share of final energy use has risen to 30%, while the US and Europe have plateaued at around 22%, after China already led both a decade ago.
  2. China is forecast to spend as much as $800bn by 2030 upgrading its electricity grid's hardware and software, the central pillar of its decades-long electrification plans.
  3. Ken Liu, head of China renewables, utilities and energy research at UBS, forecasts China's overall grid capex growth as high as 10% this year and a compound annual growth rate of about 5% through 2030, faster than forecast economic growth.

Related Articles:

  • Economic Growth Now Depends on Electricity, Not Oil — Average annual electricity load growth reached 3% and is projected to continue at that rate for five years, with utilities raising expected peak demand for 2029 by 12%, or 101 gigawatts, driven by data centers, new factories, electric vehicles, heat pumps, and hydrogen production.
  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • Electricity 2025 — US electricity demand is projected to grow about 2% annually over 2025-2027, an upward revision from an earlier 1% forecast. A study commissioned by the US Department of Energy found data centre electricity use rose from about 60 TWh in 2014 to 176 TWh in 2023, and could reach 325-580 TWh by 2028.

AI Summary. China registered about 6.1m marriages in its most recent year, the lowest since public records began in 1986 and less than half the 2013 peak, with roughly 30% of 30-year-olds unmarried versus 15% a decade earlier. Births of 9.54m were the second-lowest since the People's Republic of China was founded in 1949.

Lucille Liu Bloomberg
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Marriages in China fell almost 21% y/y in 2024 to 6.1mm, the lowest tally since 1986, and less than half the 2013 peak. ~9.54mm babies were born last year, the second-lowest number of births since the founding of the PRC.

Are marriages and births in China falling to record lows?

Core argument: China registered 6.1 million marriages in 2024, according to the Ministry of Civil Affairs, the lowest since public records began in 1986 and less than half the 2013 peak, with the decline continuing into the following first quarter.

Some 6.1 million marriages were registered in 2024, according to the Ministry of Civil Affairs. That’s the lowest tally since public records began in 1986 and is less than half the peak reached in 2013. The decline continued in the first quarter of this year. About 30% of 30-year-olds were unmarried in 2023, compared with 15% a decade earlier, according to demographer He Yafu. Some 9.54 million babies were born in China last year, up slightly from 2023 — in part because the Year of the Dragon in the Chinese zodiac is considered lucky for having children. But it was still the second-lowest number of births since the founding of the People’s Republic of China in 1949.

Takeaways by Macro Roundup® AI

  1. China registered 6.1 million marriages in 2024, according to the Ministry of Civil Affairs, the lowest since public records began in 1986 and less than half the 2013 peak, with the decline continuing into the following first quarter.
  2. About 30% of Chinese 30-year-olds were unmarried in 2023, up from 15% a decade earlier, according to demographer He Yafu.
  3. China recorded 9.54 million births in 2024, up slightly from 2023 in part because the Year of the Dragon is considered lucky for having children, yet still the second-lowest total since the People's Republic was founded in 1949.

Related Articles:

  • The Power of Demography and the Fate of East Asia — East Asia's total population has peaked and is projected to decline for at least a generation, with the pace of decline likely accelerating each decade, while US population is projected to keep growing for decades. The author argues such sustained divergence can shift the global balance of power.
  • China Steps Up Campaign For Single People to Date, Marry and Give Birth — Local officials in China are calling married women in their 20s and early 30s to ask about family plans, urge prenatal check-ups, and offer subsidies for additional children, with one resident reporting an Rmb100,000 ($14,000) offer for a second child. State-run outlets have promoted claims that childbirth benefits maternal health.
  • East Asia’s Coming Population Collapse — United Nations projections show China's population falling 8%, Japan's 18%, South Korea's 12%, and Taiwan's 8% between 2020 and 2050, while the US population rises 12%. Working-age people per person over 65 are projected to drop to about 1.8 in China and 1.2 in Japan and South Korea.