Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
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  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
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  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, August 14, 2025

AI Summary. Google, Amazon, Microsoft and Meta are projected to spend more than $400bn on data centres in 2026, following more than $350bn this year. Morgan Stanley analysts estimate global data centre spending will approach $3tn through 2029, of which about $1.4tn comes from Big Tech capital expenditure, leaving roughly $1.5tn to be financed by investors and developers.

Tabby Kinder Financial Times
Date Posted:

Hyperscalers’ generative AI revenues were just $45B in 2024, according to a MS analysis which predicts revenues will exceed $1T by 2028. Hyperscalers’ cashflows will fund ~50% of the $2.9T projected AI buildout.

How much of the AI data centre buildout needs outside financing?

Core argument: Google, Amazon, Microsoft and Meta will spend more than $400bn on data centres in 2026, on top of more than $350bn this year, as generative AI's computing demands shift hyperscalers away from the self-funded model that historically covered such spending.

Google, Amazon, Microsoft and Meta will spend more than $400bn on data centres in 2026 — on top of more than $350bn this year. Historically, most of the spending by the “hyperscalers” — Amazon Web Services, Microsoft Azure and Google Cloud — building data centres for their cloud services businesses was self-funded. But the scale of computing power needed for generative AI is changing that. While internal cash flows largely covered costs of up to $200bn last year, costs are projected to double this year and increase further next. Hyperscalers’ generative AI revenues were just $45bn last year, according to Morgan Stanley analysts — although they predicted revenues would exceed $1tn by 2028. Between now and 2029, however, global spending on data centres will hit almost $3tn, according to Morgan Stanley analysts. Of that, just $1.4tn is forecast to come from capital expenditure by Big Tech groups, leaving a mammoth $1.5tn of financing required from investors and developers.

Takeaways by Macro Roundup® AI

  1. Google, Amazon, Microsoft and Meta will spend more than $400bn on data centres in 2026, on top of more than $350bn this year, as generative AI's computing demands shift hyperscalers away from the self-funded model that historically covered such spending.
  2. Morgan Stanley analysts project global data centre spending of almost $3tn between now and 2029, of which just $1.4tn is forecast to come from Big Tech capital expenditure, leaving $1.5tn to be financed by investors and developers.
  3. Hyperscalers' generative AI revenues were $45bn last year, according to Morgan Stanley analysts, who predicted those revenues would exceed $1tn by 2028.

Related Articles:

  • The Kanye/Data Center Crossover — Data center capital spending differs from fiber and railroad investment because most of the cost sits in processors that are replaced every 3-4 years rather than in long-lived shells, power, and cooling connections. That short replacement cycle requires returns high enough to exceed a risk-adjusted cost of capital of 12-14% before the hardware must be replaced.
  • Back to Our Regularly Scheduled Programming — The four largest US hyperscalers spent $440bn on capital expenditure and research in 2024, with $596bn projected for 2025, a 35% increase, leaving large gaps between AI spending and AI revenues. These firms account for more than half of all capital expenditure growth in the US equity market.
  • The AI Boom’s Hidden Risk to the Economy — Net income at Alphabet, Amazon, Meta and Microsoft rose 73% to $91bn in a quarter two years on, while their combined free cash flow fell 30% to $40bn, as heavy AI investment absorbs cash these firms once recycled into financial markets. That spare cash previously helped hold down long-term interest rates despite large federal deficits.

AI Summary. U.S. manufacturing employment and establishments grew 5% and 19% over the past decade, to 12.6m workers and 401,000 establishments, after declining through most of the prior 60 years as the economy shifted toward services. Food manufacturing accounted for about half the employment gain, and Florida and Texas jointly explained 32%.

Ricardo Marto and Hoang Le Federal Reserve Bank of St. Louis
Date Posted:
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A St. Louis Fed analysis finds that US manufacturing employment hit bottom just after the trough of the Great Recession. Half of the rise in the sector’s employment btw 2014 and 2024 was in food manufacturing.

Is U.S. manufacturing employment growing again after decades of decline?

Core argument: U.S. manufacturing employment grew 5% over the past decade to 12.6 million people while the number of manufacturing establishments rose 19% to 401,000, following decades of decline as the economy shifted toward services.

The U.S. manufacturing sector has declined for most of the past 60 years as the economy has shifted toward service industries. Starting in 2014, manufacturing employment has been slowly recovering, pushed by an upswing in the number of manufacturing establishments. Over the past decade, manufacturing employment and establishments grew 5% and 19%, respectively, to 12.6 million people and to 401,000 establishments. About half of the sector’s increase in employment over the past 10 years was driven by the food manufacturing subindustry. That subindustry also contributed the most to the increase in manufacturing establishments during this period. In terms of geography, Florida and Texas were the engines of the revival, jointly explaining 32% of the increase in manufacturing employment and 25% of the rise in manufacturing establishments.

Takeaways by Macro Roundup® AI

  1. U.S. manufacturing employment grew 5% over the past decade to 12.6 million people while the number of manufacturing establishments rose 19% to 401,000, following decades of decline as the economy shifted toward services.
  2. The food manufacturing subindustry drove about half of the increase in U.S. manufacturing employment over the past 10 years and contributed the most to the rise in manufacturing establishments.
  3. Florida and Texas jointly account for 32% of the increase in U.S. manufacturing employment and 25% of the rise in manufacturing establishments over the past decade.

Related Articles:

  • What Would It Take to Bring Back US Manufacturing? Part 1: America’s Structural Headwinds — The US imports roughly 40% of the goods it consumes, directly and through imported inputs, with labor-intensive goods like apparel almost entirely imported. The authors argue America's main comparative disadvantage is its cost of production, driven mainly by labor costs, with real estate costs and a strong dollar also contributing.
  • Why Is Manufacturing Productivity Growth So Low? — Manufacturing productivity growth fell behind other sectors after computer and semiconductor manufacturing productivity, which had grown at roughly 15% and 11% a year, decelerated substantially. The authors also present suggestive evidence that quality improvements are missed in price measures, estimating manufacturing productivity growth is understated by 0.8 percentage points, including 1.7 points for durable goods.
  • 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.

AI Summary. Drawing on over 100 million household records, the authors trace US homeownership from 47% in 1900 to a 69% peak and 65% today, arguing the major gains came from making mortgages cheaper and more accessible rather than building more homes. Homes now cost nearly 6x median household income versus 3x in the 1990s.

Aziz Sunderji Home Economics
Date Posted:

At 65%, the US homeownership rate is 4pp under the 2004 peak but on par with its 1995 level. Sunderji argues that as credit expansion “reaches its limits, the prospects for maintaining even current ownership rates are growing increasingly uncertain.”

Has cheaper credit, not homebuilding, driven a century of homeownership gains?

Core argument: Drawing on over 100 million household records from census microdata and quarterly housing surveys, the authors trace U.S. homeownership from 47% in 1900 to a 2004 peak of 69% and 65% today.

Using over 100 million household records from census microdata and quarterly housing surveys, we trace American homeownership from 47% in 1900 to its peak of 69% in 2004, and back down to 65% today. The major jumps in homeownership have come not from building more homes, but from financial engineering—making mortgages cheaper and more accessible to marginal borrowers. Recent data shows renewed weakness. Mortgage rates have spiked. Homes now cost nearly six times median household income versus three times in the 1990s. First-time buyers average 36 years old, up from 29 in 1981. Student debt delays down payment accumulation. Home prices have outpaced wage growth by nearly 2:1 since 2000.The century-long expansion of American homeownership was achieved almost entirely through financial engineering—making it easier to borrow rather than cheaper to build. As that lever reaches its limits, the prospects for maintaining even current ownership rates are growing increasingly uncertain.

Takeaways by Macro Roundup® AI

  1. Drawing on over 100 million household records from census microdata and quarterly housing surveys, the authors trace U.S. homeownership from 47% in 1900 to a 2004 peak of 69% and 65% today.
  2. The authors argue that the major jumps in homeownership came from financial engineering — cheaper, more accessible mortgages for marginal borrowers — rather than from building more homes.
  3. Homes cost nearly six times median household income versus three times in the 1990s, home prices have outpaced wage growth by nearly 2:1 since 2000, and first-time buyers average 36 years old, up from 29 in 1981.

Related Articles:

  • Inflation Adjusted House Prices 2.0% Below 2022 Peak — Inflation-adjusted US house prices are 2.0% below their 2022 peak. An affordability index built from median income, a 15% down payment, a 2% allowance for property taxes, insurance and maintenance, and 30-year fixed mortgage rates shows the monthly payment on the same house rose 101% over four years, with prices up 29% and mortgage rates at 6.82%.
  • Why Are Young Adults in the English-Speaking World So Unhappy? — The share of young adults regularly experiencing stress and anger has risen sharply in the US, Canada, UK, Ireland, Australia and New Zealand while remaining largely stable elsewhere in the West. Real house prices since 1995 are up 85% in the US and over 200% in the other five countries.
  • Rapidly Growing Treasury Supply Crowding Out Other Types of Credit Growth — Roughly half of all fixed income issuance coming to market over the past year has been US Treasuries, meaning investors must allocate a growing share of dollars to financing the government. The argument is that lower government debt would free up more funds for consumer borrowing and business investment.

AI Summary. Shelter, about 35% of the consumer price index, responds to market rents with a lag because of long-term leases, smoothing at lease renewal, and measurement using six-month rent changes. The authors' model reproduces the lagged, dampened response of shelter inflation to swings in market-rent inflation.

Laurence Ball and Kyung Woong Koh National Bureau of Economic Research
Date Posted:
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Shelter inflation lags changes in overall CPI due to the delayed adjustment of market rents. This dynamic explains “the lagged and dampened responses of shelter inflation to the post-pandemic surge and then retreat of market-rent inflation.”

Why does shelter inflation lag changes in market rents?

Core argument: The shelter component carries a weight of about 35% in the CPI and is determined primarily by tenant rents paid and imputed rents for owner-occupied housing, responding with a substantial lag to market rents.

The shelter component of the consumer price index has a weight of about 35% in the CPI. It is determined primarily by rents for dwellings, both actual rents paid by tenants and imputed rents for owner-occupied housing. It is well-known that the CPI shelter index responds with a substantial time lag to movements in “market rents.” [Our] model incorporates three reasons [for this lag]: long-term leases, smoothing of rents when leases are renewed, and the measurement of shelter inflation with six-month rent changes. We incorporate these lags in a model of shelter inflation and compare the model to monthly data since 2015, using the Zillow Observed Rent Index to measure market rents, [which] is a monthly index and begins in January 2015. The model captures the lagged and dampened responses of shelter inflation to the post-pandemic surge and then retreat of market-rent inflation. As this paper is completed, the level of market-rent inflation has been steady for two years and CPI shelter inflation is converging to that level. The next time market-rent inflation changes significantly, CPI shelter will again respond with a lag.

Takeaways by Macro Roundup® AI

  1. The shelter component carries a weight of about 35% in the CPI and is determined primarily by tenant rents paid and imputed rents for owner-occupied housing, responding with a substantial lag to market rents.
  2. The authors attribute the lag between market rents and CPI shelter inflation to three factors: long-term leases, smoothing of rents at lease renewal, and measurement of shelter inflation using six-month rent changes.
  3. Using the Zillow Observed Rent Index for market rents in monthly data since 2015, the model captures the lagged and dampened response of shelter inflation to the post-pandemic surge and retreat in market-rent inflation.

Related Articles:

  • When Is Shelter Services Inflation Coming Down? — A gap between housing demand and supply emerged after the COVID-19 pandemic that has likely put upward pressure on rents. Leading indicators including units under construction, the gap between completed units and net household formation, and market rents on new leases tend to foreshadow shelter inflation by about a year, and suggest it will keep declining toward more traditional levels.
  • Creating Shortages — Shelter inflation remains higher than before the pandemic and accounts for much of the remaining inflation, with reduced housing construction attributed to higher financing costs. Tighter bank lending standards have stalled construction loans while high mortgage rates keep prospective buyers in the rental market, adding upward pressure on rents.
  • Disentangling Rent Index Differences: Data, Methods, and Scope — Housing costs make up 32% of the Consumer Price Index, so measured inflation depends heavily on rent measurement. The authors find most of the gap between the official U.S. rent index and private measures reflects scope: rent increases for all tenants versus only new tenants, whose rents rose far faster.

AI Summary. The share of US high school seniors describing themselves as "very happy" peaked at 24.8% and remained around 24.4% before falling to 11.4% at its low, recovering only to 12.7%, well below the 17.9% recorded before the pandemic. The decline coincided with smartphones and social media becoming pervasive.

Jean Twenge Generation Tech
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According to a long-running survey, the number of high school seniors reporting they were “very happy” fell from 24.8% in 2007 to 17.9% in 2019 and 12.7% in 2023. Jean Twenge cautions, “The constant pressure of social media [is] a trap of unhappiness.”

Why has the share of teens describing themselves as very happy fallen?

Core argument: The share of U.S. high school seniors describing themselves as "very happy" peaked at 24.8% in 2007 and was still 24.4% in 2012, before falling to 17.9% in 2019 and 11.4% in 2021, per Monitoring the Future.

Happiness has been measured in exactly the same way among high school seniors (17- and 18-year-olds) since 1976 in Monitoring the Future. The happiness item (“Taking all things together, how would you say things are these days – would you say you’re very happy, pretty happy, or not too happy these days?”) thus gives us the longest-running view of any indicator of psychological well-being among adolescents. By 2007, 24.8% of high school seniors said they were “very happy,” the highest ever recorded (before or since). Happiness stayed fairly high even through the years of the Great Recession (2007-09) and was at 24.4% as recently as 2012. That, as it turned out, was the end of an era. As smartphones and social media became pervasive in the 2010s, teen happiness plummeted. Teen happiness fell precipitously during the COVID years – only 11.4% of high school seniors described themselves as “very happy” in 2021. Coming out of the pandemic in 2023, that increased to 12.7%. But that is still much, much lower than the 17.9% of high school seniors who said they were “very happy” in 2019.

Takeaways by Macro Roundup® AI

  1. The share of U.S. high school seniors describing themselves as "very happy" peaked at 24.8% in 2007 and was still 24.4% in 2012, before falling to 17.9% in 2019 and 11.4% in 2021, per Monitoring the Future.
  2. Teen happiness stayed fairly high through the Great Recession of 2007–09 but fell in the 2010s as smartphones and social media became pervasive, according to Monitoring the Future.
  3. Monitoring the Future has asked high school seniors the identical happiness question since 1976, providing the longest-running indicator of adolescent psychological well-being, with the 2023 reading of 12.7% still well below 2019's 17.9%.

Related Articles:

  • The Troubling Decline In Conscientiousness — Survey data show adults in their twenties and thirties increasingly report being easily distracted, careless, less tenacious, and less likely to make and keep commitments, a decline in conscientiousness. The same data show rising neuroticism and lower sociability, with young adults — long the most extroverted group — now reporting the most introversion.
  • US College Students’ Well-Being — 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.
  • 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. In the United States, between one in four and one in three Black men eventually serve prison time, compared with one in seven Hispanic men and roughly one in fifteen non-Hispanic white men. In Denmark, about 9% of men of Danish origin and 27% of men of non-Western origin have a criminal conviction by age 24.

Inquisitive Bird Patterns In Humanity
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“There are still more criminals than you might expect.” 6.2% of white American men, 14.4% of hispanic men, and 26% of black men born in 1991 will have been imprisoned by the time they turn 50.

How large a share of men have criminal records?

Core argument: One in four to one in three black men in the United States eventually end up in prison, compared with one in seven Hispanic men and about one in fifteen non-Hispanic white men.

People don’t end up in prison for trivialities. Prison, as opposed to jail, is designed for long-term incarceration—prison sentences in the United States are rarely shorter than a year. Jails are where people are held while awaiting trial or sentence, or while serving short sentences. As the figure shows, one in four to one in three black men eventually end up in prison. The same is true for one in seven Hispanic men, and about one in fifteen (non-Hispanic) white men. If we consider all crimes under the Danish criminal code, which includes a larger number of offense types but still excludes minor traffic offenses, the number of criminals increases markedly. We also see large ethnic disparities. By age 24, about 9% of men of Danish origin and 27% of men of non-Western origin have been convicted under the criminal code. In summary, while it is certainly true that a large share of crime is committed by a small number of persistent offenders, there are still more criminals than you might expect.

Takeaways by Macro Roundup® AI

  1. One in four to one in three black men in the United States eventually end up in prison, compared with one in seven Hispanic men and about one in fifteen non-Hispanic white men.
  2. In Denmark, about 9% of men of Danish origin and 27% of men of non-Western origin have been convicted under the criminal code by age 24, a measure that excludes minor traffic offenses.
  3. U.S. prisons, unlike jails, are designed for long-term incarceration with sentences rarely shorter than a year, while jails hold people awaiting trial or sentence or serving short sentences.

Related Articles:

  • The Great Crime Paradox — Just over half of violent crime victims know the perpetrator and have been attacked before, and much of it occurs away from public view, while snatch theft is almost always committed in public by a stranger against a first-time victim. Shoplifting erodes the sense of public order through visible security measures and locked merchandise.
  • The Collapse of Broken-Windows Policing in New York City, Los Angeles, and Washington, DC, 2013–22 — Arrests for minor "broken-windows" offenses—counted as misdemeanors, violations, and infractions per 100,000 residents—fell 74% in New York, 77% in Washington, DC, and 81% in Los Angeles over the period studied, declining steadily in New York and Los Angeles.
  • Number of Young People Accused of Serious Crimes Surges in New York City — New York City Police Department figures show 4,858 major crimes with a minor accused or arrested in the most recent year, up 37% from 3,543 seven years earlier, with robberies and felony assaults continuing to rise. Police officials attribute the increase to a state law diverting most 16- and 17-year-old defendants from adult courts.

Friday, August 15, 2025

AI Summary. Median household incomes grew about 15% more in cities already in the top 10% than in cities initially in the bottom half, and house prices rose well above consumer price inflation, with especially large gains in major cities. The authors argue that when in-demand, higher-productivity cities lack the space and zoning to absorb migrants, housing costs there rise steeply.

Greg Howard and Jack Liebersohn Journal of Economic Perspectives
Date Posted:

Between 2000 and 2018, high-income cities had greater income growth, raising the relative demand for housing in them. Because these cities also face more geographic and regulatory obstacles to new housing, house prices and rents rose in the aggregate.

Does regional income divergence drive up national housing prices and rents?

Core argument: From 2000 to 2018, median household incomes rose about 15% more in cities already in the top 10% than in cities initially in the bottom half, while the FHFA house price index rose 31 percentage points more than the overall CPI.

From 2000 to 2018, median household incomes increased by about 15% more in cities that were already in the top 10% as compared to cities that were initially in the bottom half. [Over the same period] the FHFA house price index rose by 31 ppt more than the overall CPI. This housing price increase is unevenly distributed and driven in large part by the higher rate of housing price increases in major cities. Relative to CPI, house prices rose by 49 percentage points in New York, 96 percentage points in Seattle, 129 percentage points in Los Angeles, and 113 percentage points in Miami. To understand the link between regional inequality and average housing prices, we note that if a location experiences relatively higher productivity growth, then the associated rise in income will increase demand to migrate there. If there is a mismatch between the places where people increasingly want to live and places with the space and zoning policies to absorb population, then housing costs can increase a lot in the in-demand cities, while decreasing only a little elsewhere.

Takeaways by Macro Roundup® AI

  1. From 2000 to 2018, median household incomes rose about 15% more in cities already in the top 10% than in cities initially in the bottom half, while the FHFA house price index rose 31 percentage points more than the overall CPI.
  2. Relative to CPI from 2000 to 2018, house prices rose by 49 percentage points in New York, 96 in Seattle, 129 in Los Angeles, and 113 in Miami, with the national housing price increase driven largely by major cities.
  3. Higher relative productivity growth in a location raises incomes and demand to migrate there, and a mismatch with the space and zoning policies needed to absorb population can raise housing costs a lot in in-demand cities while lowering them only slightly elsewhere.

Related Articles:

  • Housing and the American Worker — Wages net of housing costs were once substantially higher in high-density areas than low-density areas for workers both with and without college education, but over the past half-century that urban wage premium has persisted only for college-educated workers, not for those with a high school degree or less.
  • The Determinants Of Declining Internal Migration — A 10% increase in wages where people live is associated with 3.5% less migration, while a 10% increase in destination wages is associated with 7.8% more migration; a 10% rise in destination home prices is associated with 2.6% less migration. The authors find wage responses alone would have raised migration rates, but housing-related factors more than offset them.
  • 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.

AI Summary. Alternative measures of underlying US consumer price inflation — including versions excluding food, energy, shelter, and used vehicles, trimmed-mean measures, "sticky-price" indexes, and individual service categories such as restaurant meals and haircuts — tell a similar story about inflation that differs from headline figures, a divergence attributed to housing costs.

Matt Klein The Overshoot
Date Posted:

The CPI for shelter – ⅓ of overall CPI – lags behind market rents. Thus, receding rent increases from the Covid period are creating the “illusion of disinflation,” while measures other than overall CPI imply stable or accelerating inflation in 2025.

Do alternative inflation measures tell a different story than headline figures?

Core argument: Alternative inflation gauges — the BLS CPI excluding food, energy, shelter, and used cars and trucks, the Cleveland Fed's trimmed measure, and the Atlanta Fed's sticky-price CPI excluding shelter — tell a similar story that differs from headline CPI figures.

The BLS publishes a version of the CPI that excludes food, energy, shelter (housing+hotels, mostly), and used cars and trucks. The Federal Reserve Bank of Cleveland has a measure that recalculates the monthly change in the CPI excluding the components with the largest price increases and largest price decreases. The Federal Reserve Bank of Atlanta divides the CPI into two groups based on whether prices change frequently or not. They also publish versions of their “sticky-price” CPI excluding shelter. Another approach is simply to focus on select components that ought to be representative of the broader whole, such as “full service meals and snacks”, or “personal care services” (mostly haircuts). Tellingly, all of these measures tend to tell a similar story regarding inflation over the past few years—and this story is very different from what the headline figures have been showing, thanks to the impact of housing.

Takeaways by Macro Roundup® AI

  1. Alternative inflation gauges — the BLS CPI excluding food, energy, shelter, and used cars and trucks, the Cleveland Fed's trimmed measure, and the Atlanta Fed's sticky-price CPI excluding shelter — tell a similar story that differs from headline CPI figures.
  2. The divergence between headline CPI figures and alternative inflation measures over the past few years is attributed to the impact of housing.
  3. Select components such as "full service meals and snacks" and "personal care services," mostly haircuts, tell a similar inflation story to the broader alternative measures.

Related Articles:

  • Market Rents and CPI Shelter Inflation — Shelter, about 35% of the consumer price index, responds to market rents with a lag because of long-term leases, smoothing at lease renewal, and measurement using six-month rent changes. The authors' model reproduces the lagged, dampened response of shelter inflation to swings in market-rent inflation.
  • Inflation, Trump, and the Fed — Nominal wage income is growing about 1–1.5 percentage points faster than before the pandemic, implying somewhat more inflation than in 2017–2019 if most of that extra income is spent and businesses cannot ramp up production. Cutting interest rates enough to reverse the budget deficit increase, without offsetting fiscal tightening, would be extraordinarily inflationary.
  • When Is Shelter Services Inflation Coming Down? — A gap between housing demand and supply emerged after the COVID-19 pandemic that has likely put upward pressure on rents. Leading indicators including units under construction, the gap between completed units and net household formation, and market rents on new leases tend to foreshadow shelter inflation by about a year, and suggest it will keep declining toward more traditional levels.

AI Summary. The share of Americans moving each year has declined from about 20% in the 1950s and '60s to 7.8% in 2023, the lowest since U.S. Census records began in 1948, with moves within the same county down roughly 47% over three decades. An aging population and the rise of two-earner households are among the contributing factors.

Konrad Putzier and Rachel Louise Ensign Wall Street Journal
Date Posted:

During the 1950s and ’60s, some 20% of Americans would typically move each year. In 2024, only 7.8% of Americans moved, the lowest rate logged since 1948. Aging, two-earner couples, and high housing costs are all factors stalling geographic mobility.

Why are fewer Americans moving for homes and jobs?

Core argument: Only 7.8% of Americans moved in 2023, the lowest rate since U.S. Census records began in 1948, down from 9.8% in 2019 and about 20% annually in the 1950s and '60s.

In the 1950s and ’60s, some 20% of Americans would typically move each year. The share of people moving has steadily slowed since then, in part because the U.S. population has aged, and older people tend to move less. More Americans also live in households with two earners, which makes uprooting more challenging. By 2019, the year before the Covid pandemic, 9.8% of Americans moved. During Covid, there was a well-publicized increase in people decamping farther away from work and deeper into the suburbs. That surge was brief. In 2023, only 7.8% of Americans moved, the lowest rate logged since U.S. Census records began in 1948. That figure held relatively steady in 2024, the most recent data available. The biggest drop: a roughly 47% decline among people moving within the same county over the past three decades, according to census data. Declining mobility is “a big deal in so many dimensions,” said Chang-Tai Hsieh, an economics professor at the University of Chicago. His research has previously found that expensive housing dissuaded so many workers from moving for better jobs that it weighed on U.S. gross domestic product. He believes that link, seen from 1964 to 2009, likely still holds true.

Takeaways by Macro Roundup® AI

  1. Only 7.8% of Americans moved in 2023, the lowest rate since U.S. Census records began in 1948, down from 9.8% in 2019 and about 20% annually in the 1950s and '60s.
  2. Moves within the same county fell roughly 47% over the past three decades, according to census data, the largest drop within the broader decline in U.S. mobility.
  3. Research by Chang-Tai Hsieh, an economics professor at the University of Chicago, found that expensive housing dissuaded enough workers from moving for better jobs to weigh on U.S. GDP from 1964 to 2009, a link he believes likely still holds.

Related Articles:

  • Where is Standard of Living the Highest? Local Prices and the Geography of Consumption — The authors estimate that geographical differences in cost of living are especially large for low-income US households, and that expensive cities offer college graduates a standard of living similar to affordable cities while offering less-educated households a lower one. A high school dropout household moving from the most affordable to the most expensive commuting zone would see consumption fall 18.5%.
  • Housing Constraints and Spatial Misallocation — The authors estimate that housing supply constraints in high-productivity cities such as New York and San Francisco misallocated labor and lowered aggregate US growth by 36% over 1964–2009. Relaxing supply in those cities to the median US city's level is estimated to have raised output 3.7%, or about $3,685 in additional average annual earnings.
  • Americans Are Still Adventurous. They Just Hate Moving — The share of Americans moving across state lines each year has stopped declining, and by a measure tracking where 30-somethings were born, interstate mobility never fell much. In 2022, 49% of US residents in their 30s were born outside their state of residence — slightly below 2010 but above any point in the 20th century.

AI Summary. Hedge fund Bridgewater exited positions in 16 Chinese stocks worth a combined $1.41bn and closed its indirect exposure through China-focused exchange-traded funds, according to its US regulatory filing. The firm shifted toward US mega-cap technology stocks, raising its stakes in Nvidia by 154%, Microsoft by 112%, Meta Platforms by 90% and Alphabet by 84%.

Yulu Ao South China Morning Post
Date Posted:

Bridgewater Associates sold all of its holdings in the 16 US-listed Chinese firms in which it held positions. Bridgewater rotated into the hyperscalers, increasing its Microsoft stake by 112% and its Nvidia stake by 154% to 4.61% of its portfolio.

Is a major hedge fund exiting Chinese stocks for US tech?

Core argument: Bridgewater exited positions in 16 Chinese stocks worth US$1.41 billion in total, according to its 13F filing with the US Securities and Exchange Commission.

The fund exited positions in 16 Chinese stocks, which were worth US$1.41 billion in total, according to its 13F filing with the US Securities and Exchange Commission. The exit came after Bridgewater made headlines in recent quarters by slashing its exposure to US equities and piling into Chinese names. The firm had sharply increased its bet on e-commerce leader Alibaba in the first quarter – boosting its stake by more than 3,360 per cent to US$748.4 million from US$21.6 million at the end of 2024. It also closed out its indirect exposure to Chinese equities by exiting exchange-traded funds such as the iShares MSCI China ETF and the iShares China Large-Cap ETF, the filing showed, suggesting a broader strategic reallocation away from China. Bridgewater pivoted towards US mega-cap technology stocks. It raised its stake in Nvidia by 154% to 4.61% of its portfolio, while also significantly increasing positions in Microsoft by 112%, Alphabet by 84% and Meta Platforms by 90%.

Takeaways by Macro Roundup® AI

  1. Bridgewater exited positions in 16 Chinese stocks worth US$1.41 billion in total, according to its 13F filing with the US Securities and Exchange Commission.
  2. Bridgewater's exit followed quarters in which it slashed US equity exposure and piled into Chinese names, including boosting its Alibaba stake by more than 3,360 per cent to US$748.4 million from US$21.6 million at the end of 2024.
  3. Bridgewater closed its indirect China exposure by exiting the iShares MSCI China ETF and iShares China Large-Cap ETF, while raising Nvidia by 154 per cent to 4.61 per cent of its portfolio, Microsoft by 112 per cent, Alphabet by 84 per cent and Meta Platforms by 90 per cent.

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AI Summary. Royalty receipts from intellectual property equal 0.07% of China's GDP versus 0.45% of South Korea's, but China's royalty-to-GDP ratio has grown considerably faster than that of advanced economies in recent years, narrowing the gap.

François de Soyres, Ana Maria Santacreu and Ethan Hunt Federal Reserve Bank of St. Louis
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Royalty payments to Chinese firms as a percentage of GDP still trail other advanced economies, though Chinese royalty payments are growing faster than other countries’ in recent years. Royalty payments to China from ROW rose 5-fold btw 2015–2022.

Is China closing the gap with advanced economies in intellectual property earnings?

Core argument: Royalty receipts represented 0.07% of China's GDP versus 0.45% of South Korea's GDP, leaving China's royalty intensity behind top-tier economies.

When we scale royalty receipts by gross domestic product (GDP), a clearer picture emerges. The figure plots royalties received as a share of GDP for China and four advanced economies. China’s royalty intensity still trails the top-tier countries: Royalties represented 0.07% of China’s GDP versus 0.45% of South Korea’s GDP. However, China’s growth rate is considerably faster than those of advanced countries in recent years. To make this trajectory more visible, China’s series is plotted on a separate (right-hand) axis. This helps highlight the acceleration in royalty-to-GDP terms, without compressing the variation across advanced economies. Even if China has not yet reached parity, it is catching up quickly, and the gap is narrowing.

Takeaways by Macro Roundup® AI

  1. Royalty receipts represented 0.07% of China's GDP versus 0.45% of South Korea's GDP, leaving China's royalty intensity behind top-tier economies.
  2. China's royalty-to-GDP ratio has grown considerably faster than those of advanced countries in recent years, narrowing the gap without reaching parity.
  3. Plotting China's royalty-to-GDP series on a separate right-hand axis makes its acceleration visible without compressing the variation across the four advanced economies.

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AI Summary. China is warning foreign buyers of rare earths and derived products such as magnets that building large inventories will bring supply restrictions, and is limiting approved export volumes to prevent stockpiling, according to people familiar with the matter.

Joe Leahy and Ryan McMorrow Financial Times
Date Posted:

China is limiting rare earths export volumes to prevent foreign stockpiling of rare earths and downstream products such as magnets used in electric motors. Chinese exports of rare earths are down 38% y/y.

Is China blocking foreign buyers from stockpiling rare earths?

Core argument: China exported 3,188 tonnes of rare earth permanent magnets in June, more than double May's volume but down 38% from a year earlier, with exports in the three months to June about half year-earlier levels by volume.

Beijing is warning buyers they are at risk of greater supply restrictions if they stockpile rare earths and derived products such as magnets used in electric motors, according to two people familiar with the matter. China “is telling companies they cannot go out and build huge inventories in rare earths, or they will face shortages”, one of the people said. The other person said Chinese authorities were deliberately limiting approved export volumes to prevent foreign stockpiling. “This will be a leverage point from now on,” they said. China exported 3,188 tonnes of rare earth permanent magnets in June, more than double export volumes in May, but down 38% from a year earlier. In the three months to June — since Beijing enacted the trade restrictions — magnet exports were about half the level by volume in the same period last year.

Takeaways by Macro Roundup® AI

  1. China exported 3,188 tonnes of rare earth permanent magnets in June, more than double May's volume but down 38% from a year earlier, with exports in the three months to June about half year-earlier levels by volume.
  2. Beijing is warning buyers that building large rare earth inventories will bring greater supply restrictions and shortages, according to two people familiar with the matter.
  3. Chinese authorities are deliberately limiting approved export volumes to prevent foreign stockpiling, according to a person familiar with the matter, who said this "will be a leverage point from now on".

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  • China’s Weaponisation of Rare Earths is a New Kind of Trade War — China's export controls on rare earth materials and magnets threatened to halt production across the auto industry, the largest manufacturing sector in most advanced economies, and forced Washington to negotiate on tariffs. Despite China's well-known dominance of rare earth production, Western governments and companies have not developed alternative suppliers.
  • China Found World’s Pain Point on Trade – and Will Use It Again — China's export permitting system for rare earths and other critical minerals is detailed enough that Beijing is developing a granular understanding of where every kilogram it produces ends up and why. Bottlenecks emerged as China slowed approvals for magnets containing even minuscule amounts of seven rare earths, alongside limits on sales of the raw elements.
  • Pentagon to Take Stake in Rare-Earth Company, Challenging China’s Control — Under a deal with the largest U.S. rare earths miner, the Defense Department will take a 15% stake, commit billions of dollars to investment and output purchases, and guarantee a price floor for rare earth minerals and magnets. The agreement calls for a new magnet factory, expected online in 2028, at a scale far exceeding current U.S. magnet production.