Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 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
  • “…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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “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 must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, September 17, 2025

AI Summary. An analysis of Federal Reserve data found the top 10% of US earners accounted for 49.2% of total consumer spending, up from 48.5% the prior quarter and the highest share in data going back to 1989. Spending by the bottom 80%, those making under roughly $175,000, has merely kept pace with inflation.

Jonnelle Marte Bloomberg
Date Posted:
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Mark Zandi finds Americans in the top 10% of the income distribution accounted for 49.2% of consumer spending in Q2, the highest level since 1989.

Are top earners accounting for a record share of consumer spending?

Core argument: The top 10% of US earners accounted for 49.2% of total consumer spending in the second quarter, up from 48.5% in the first quarter and the highest share in data going back to 1989, according to Mark Zandi's analysis of Federal Reserve data.

Consumers in the top 10% of the income distribution accounted for 49.2% of total spending in the second quarter, up from 48.5% in the first quarter, reaching the highest level in data going back to 1989, according to an analysis of Federal Reserve data by Mark Zandi, chief economist for Moody’s Analytics. In contrast, the bottom 80% of the income distribution, or consumers making less than roughly $175,000 a year, have seen their spending merely keep pace with inflation since the pandemic.

Takeaways by Macro Roundup® AI

  1. The top 10% of US earners accounted for 49.2% of total consumer spending in the second quarter, up from 48.5% in the first quarter and the highest share in data going back to 1989, according to Mark Zandi's analysis of Federal Reserve data.
  2. Consumers in the bottom 80% of the income distribution, making less than roughly $175,000 a year, have seen their spending merely keep pace with inflation since the pandemic, according to Moody's Analytics chief economist Mark Zandi.

Related Articles:

  • The U.S. Economy Depends More Than Ever on Rich People — Moody's Analytics estimates the top 10% of earners account for 49.7% of all U.S. consumer spending, a record in data going back to 1989, up from about 36% three decades ago, with their spending alone equal to almost one-third of gross domestic product.
  • To Understand America Today, Study the Zero-Sum Mindset — Younger generations in the United States and other rich countries hold more zero-sum views than older ones, a pattern researchers link to growing up amid slower economic growth and lower mobility. People who have surpassed their parents, or whose families rose over generations, are less likely to think in zero-sum terms.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.

AI Summary. Bank of America data show wage and salary growth for the bottom third of U.S. earners slowed to 0.9% year over year, the smallest gain since 2016, while the top third grew 3.6%, the most since November 2021. Spending growth diverged similarly, at 0.3% for low-income and 2.2% for higher-income households.

Jeanne Whalen Wall Street Journal
Date Posted:

Bank of America data show that while the bottom 1/3 of American households’ after-tax income grew faster than that of the top 2/3rds in 2023–2024, the top 1/3 has outpaced lower-income earners since the start of this year.

Are wage and spending gains diverging between low- and high-income Americans?

Core argument: Annual wage and salary growth for the bottom third of U.S. earners fell to 0.9% in August, the smallest gain since 2016, while the top third grew 3.6%, the most since November 2021, per Bank of America data.

For much of the past few years, wages for the bottom third of U.S. earners grew at a faster rate than for the top third, Bank of America data show. But since the start of the year, top earners have pulled far ahead. In August, annual wage and salary growth fell to 0.9% for the bottom third, the smallest gain since 2016, the Bank of America data show. The top third saw growth of 3.6% year over year, the most since November 2021. That divergence was echoed in year-over-year spending growth in August, with household spending rising just 0.3% for the low-income group and 2.2% for higher-income households.

Takeaways by Macro Roundup® AI

  1. Annual wage and salary growth for the bottom third of U.S. earners fell to 0.9% in August, the smallest gain since 2016, while the top third grew 3.6%, the most since November 2021, per Bank of America data.
  2. Bank of America data show wages for the bottom third of U.S. earners grew faster than for the top third for much of the past few years, but top earners have pulled far ahead since the start of the year.
  3. Year-over-year household spending growth in August was 0.3% for low-income households versus 2.2% for higher-income households, according to Bank of America data.

Related Articles:

  • Income in the United States: 2024 — U.S. median household income was $83,730, not statistically different from the prior year's $82,690, according to Census Bureau estimates. Across most demographic subgroups, median household income was higher or not statistically different from the prior year, with the exception of Black households, which saw a decline.
  • The Era of Big Raises for Low-Paid Workers Is Over — Wage growth for the bottom quarter of US earners was 3.7%, around the lowest since 2017, versus 4.7% for the top quarter, according to the Federal Reserve Bank of Atlanta. Bank of America customer data show after-tax pay up 1.6% year-over-year for the bottom third of households versus 2.9% for the top third.
  • The Unexpected Compression: Competition at Work in the Low Wage Labor Market — Labor market tightness produced an unexpected compression in the US wage distribution, with disproportionate wage growth at the bottom reducing the college wage premium and reversing nearly 40% of the rise in 90-10 wage inequality since 1980. The authors attribute this in part to increased competition for low-wage workers.

AI Summary. Using the Panel Study of Income Dynamics, the authors estimate that parental income during middle childhood and adolescence has a significantly stronger influence on a child's future income than parental income in early childhood. The income advantage of being raised in a two-parent household is modest in early childhood but pronounced in middle childhood and adolescence, peaking around age 17.

Yoosoon Chang, Steven Durlauf, Bo Hu, and Joon Park National Bureau of Economic Research
Date Posted:
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Chang et al find that in the PSID, higher parental income and living in an intact family during middle childhood and adolescence are more predictive of favorable child outcomes than income and family structure during early childhood.

Does parental income matter more in adolescence than early childhood?

Core argument: Parental income during middle childhood and adolescence exerts a significantly stronger influence on a child's latent permanent income in the Panel Study of Income Dynamics than parental income during early childhood, contrasting with the early childhood development literature.

[The two panels] capture the age-specific effects of parental income and family structure, respectively, on a child’s latent permanent income in the Panel Study of Income Dynamics [PSID]. Parental income during middle childhood and adolescence exerts a significantly stronger influence on a child’s future income than parental income during early childhood, a finding [that] contrasts with the early childhood development literature. The sensitivity of adult outcomes to adolescent incomes suggests that the uses of this income have distinct effects from early childhood investment. One reason why this finding is credible is that incomes in later childhood and adolescence influence the schools and neighborhoods, determinants that are not operational for younger years. Children raised in two-parent households tend to achieve higher adult income status than those raised in single-parent households. While this advantage is relatively modest during early childhood, it becomes pronounced in middle childhood and adolescence, peaking during the late high school years at around age 17. [Editor’s note: This may reflect the likelihood that a family that is still intact when the child is 17 was more functional throughout].

Takeaways by Macro Roundup® AI

  1. Parental income during middle childhood and adolescence exerts a significantly stronger influence on a child's latent permanent income in the Panel Study of Income Dynamics than parental income during early childhood, contrasting with the early childhood development literature.
  2. Children raised in two-parent households tend to reach higher adult income status than those raised in single-parent households, an advantage that is modest in early childhood but pronounced in middle childhood and adolescence, peaking around age 17.
  3. The sensitivity of adult outcomes to adolescent parental income suggests that this income has uses distinct from early childhood investment, since later-childhood income influences schools and neighborhoods, determinants not operational in younger years.

Related Articles:

  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Across the 1978 to 1992 birth cohorts, adult household incomes fell for white children raised in low-income families and rose for those raised in high-income families, increasing the intergenerational persistence of income ranks among white children by 28%. Over the same cohorts, adult incomes rose for Black children at all parental income levels.
  • Intergenerational Mobility in American History: Accounting for Race and Measurement Error — Accounting for Black families, who historical studies routinely drop, and for measurement error in fathers' economic status can double estimates of intergenerational persistence in linked United States census data from 1850 to 1940. The author argues historical mobility was lower than previously estimated, implying greater equality of opportunity today than in the past.
  • The Inheritance Of Social Status: England, 1600 to 2022 — Using a genealogical database of 422,374 English people with rarer surnames, the authors find social status persists strongly even among distant relatives, with status correlations declining by a constant factor of 0.79 per step in the lineage across all status measures and eras studied. The authors argue this constancy suggests social interventions have modest effects.

AI Summary. Hedged investments into US bonds and equities are outstripping unhedged holdings for the first time in four years, according to Deutsche Bank analysis, with about 80% of roughly $7bn flowing into foreign-domiciled US equity exchange traded funds over three months done on a hedged basis, up from about 20%. Falling US interest rates have made such currency hedges cheaper.

Ian Smith and Emily Herbert Financial Times
Date Posted:

Hedged investment into US bonds and equities overtook unhedged holdings according to a Deutsche Bank analysis, as international investors seek to manage potential further depreciation of the dollar.

Are foreign investors increasingly hedging their US asset holdings against dollar swings?

Core argument: About 80% of the roughly $7bn that flowed into foreign-domiciled US equity ETFs over the past three months was on a hedged basis, up from about 20% at the start of the year, according to Deutsche Bank analysis.

Hedged investments into US bonds and equities are outstripping unhedged holdings for the first time in four years, according to Deutsche Bank analysis, after a sharp move since Trump’s election last November. Around 80% of the roughly $7bn of money that has flowed into foreign-domiciled US equity exchange traded funds over the past three months has been on a hedged basis, according to Deutsche’s analysis. That figure was about 20% at the start of the year. A typical way to hedge against dollar weakness is through derivatives such as currency forwards that lock in a future exchange rate. These contracts reflect differences in short-term interest rates and falling US rates have made the hedges cheaper.

Takeaways by Macro Roundup® AI

  1. About 80% of the roughly $7bn that flowed into foreign-domiciled US equity ETFs over the past three months was on a hedged basis, up from about 20% at the start of the year, according to Deutsche Bank analysis.
  2. Hedged investments into US bonds and equities are exceeding unhedged holdings for the first time in four years, according to Deutsche Bank analysis, after a sharp move since Trump's election.
  3. Falling US rates have made currency forwards, which lock in a future exchange rate and reflect differences in short-term interest rates, cheaper as a hedge against dollar weakness.

Related Articles:

  • American Unexceptionalism — The S&P 500 has outperformed other developed-market equities by a cumulative 150% over the past fifteen years, but the authors attribute about 80% of that gap to a strengthening dollar and expanding relative valuations rather than fundamentals such as dividends, buybacks, and organic growth. U.S. valuations sit around the 90th percentile on price-to-earnings measures.
  • Are Foreigners Selling US Assets (Part II) — Proprietary flow tracking shows foreign bond flows into US assets, an outlier low in one month, have substantially normalized, suggesting an allocation shift away from dollar assets may have peaked. The authors argue traditional fundamentals, such as the US business cycle and Federal Reserve policy, will matter more for any further dollar weakness.
  • Asia’s $7.5 Trillion Bet on US Assets Is Suddenly Unravelling — Asia's 11 largest economies have accumulated $7.5tn in US stocks and bonds, but their annual capital flows into the US fell to $68bn, equal to just 11% of their trade surpluses with the US. Their major currencies, including the yen and yuan, trade on average 57% below exchange rates adjusted for living-cost differences.

AI Summary. China's internet regulator has ordered the country's largest technology companies, including ByteDance and Alibaba, to halt testing and orders of Nvidia's RTX Pro 6000D artificial intelligence chip designed for the Chinese market, part of Beijing's push to build up domestic chipmaking and compete with the US.

Zijing Wu, Cheng Leng, and Tim Bradshaw Financial Times
Date Posted:

Chinese regulators have banned domestic firms from further purchases of Nvidia’s RTX Pro 6000D chip, the chip Nvidia produced expressly for China, as Beijing pressures Chinese tech companies to replace Western imports with domestic technology.

Is China barring its tech giants from buying US AI chips?

Core argument: The Cyberspace Administration of China ordered major Chinese technology companies, including ByteDance and Alibaba, to halt testing and orders of Nvidia's RTX Pro 6000D, a product Nvidia tailored for the Chinese market, according to three people with knowledge of the matter.

China’s internet regulator has banned the country’s biggest technology companies from buying Nvidia’s artificial intelligence chips, as Beijing steps up efforts to boost its domestic industry and compete with the US. The Cyberspace Administration of China (CAC) told companies, including ByteDance and Alibaba, this week to end their testing and orders of the RTX Pro 6000D, Nvidia’s tailor-made product for the country, according to three people with knowledge of the matter. Several companies had indicated they would order tens of thousands of the RTX Pro 6000D, and had started testing and verification work with Nvidia’s server suppliers, the people said. After receiving the CAC order, the companies told their suppliers to stop the work, the people added.

Takeaways by Macro Roundup® AI

  1. The Cyberspace Administration of China ordered major Chinese technology companies, including ByteDance and Alibaba, to halt testing and orders of Nvidia's RTX Pro 6000D, a product Nvidia tailored for the Chinese market, according to three people with knowledge of the matter.
  2. Several Chinese companies had indicated they would order tens of thousands of RTX Pro 6000D chips and had begun testing and verification with Nvidia's server suppliers before telling those suppliers to stop the work.
  3. China's ban on purchases of Nvidia's artificial intelligence chips accompanies Beijing's stepped-up efforts to boost its domestic industry and compete with the US.

Related Articles:

  • China Seeks To Triple Output Of AI Chips In Race With The US — China is preparing three new fabrication plants dedicated to producing Huawei's artificial intelligence processors, and people familiar with the effort say their combined capacity, once fully ramped up, could exceed current output from comparable lines at SMIC, China's leading chipmaker. Huawei denies having plans to launch its own fabrication plants.
  • China Has Its Own Concerns About Nvidia H20 Chips — China's leaders cite security concerns, including suspicion of hidden back doors in US-designed chips, as a rationale for their drive toward chip self-sufficiency. The dilemma extends beyond chips: US intelligence reportedly found extra modems on Chinese-made port cranes, and the US has banned Chinese components from connected auto systems.
  • China Intensifies Push to ‘Delete America’ From Its Technology — A Chinese government directive requires state-owned companies in finance, energy, and other sectors to replace foreign software in their information technology systems by 2027, part of a broader push to remove U.S. technology. Hardware makers were targeted first, with Dell, IBM, and Cisco equipment gradually replaced by Chinese products.

Thursday, September 18, 2025

AI Summary. Average US retail electricity prices have risen about 35% since 2020, while average wholesale electricity costs have nearly doubled, with wholesale prices far more volatile. Wholesale location marginal prices consist of energy generation costs (typically 80–90% of the total), transmission congestion, and transmission losses, with a price spike partly driven by a large rise in natural gas prices.

Brian Potter Construction Physics
Date Posted:

Since 2020, average electricity prices in the US have risen by ~35%, driven by a near doubling of wholesale prices, in turn due to a sharp rise in natural gas prices, demand surges in locales with constrained capacity, and transmission congestion costs.

How have wholesale electricity prices moved relative to retail prices?

Core argument: Average wholesale electricity costs in the US have nearly doubled since 2020, while average consumer electricity prices have risen around 35%, with wholesale prices following a roughly parallel trend but with much greater volatility.

Since 2020, average electricity prices in the US have increased by around 35%. Broadly, the trend in wholesale prices seems to roughly parallel the trend we see in consumer electricity prices [but with much greater volatility]. Average wholesale electricity costs have nearly doubled since 2020. The location marginal price [LMP] is typically made up of three separate components: energy, congestion, and losses [in the transmission system, generally small]. Energy is the portion of the LMP that comes from actually generating the electricity. It’s how much will be paid to add one additional megawatt-hour to the grid. and more often than not will make the largest fraction of the LMP (80-90%). The huge price spike around 2022 [e.g.] seems to be driven in part by an enormous rise in natural gas prices. Congestion is the portion that comes from transmission congestion. Transmission lines can only carry so much electricity, and when lines reach their capacity there may not be a path from a given source of generation to a given source of electricity demand. The congestion portion of LMP reflects the costs incurred by having to buy more expensive electricity than would be required if there were no transmission constraints

Takeaways by Macro Roundup® AI

  1. Average wholesale electricity costs in the US have nearly doubled since 2020, while average consumer electricity prices have risen around 35%, with wholesale prices following a roughly parallel trend but with much greater volatility.
  2. The location marginal price of electricity comprises energy, congestion, and transmission losses, with the energy component — the payment for adding one additional megawatt-hour to the grid — typically making up 80–90% of the total.
  3. The wholesale electricity price spike around 2022 appears driven in part by an enormous rise in natural gas prices, while the congestion component reflects the cost of buying more expensive power when transmission lines reach capacity.

Related Articles:

  • 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.
  • How A Power Shortage Could Short-Circuit Nvidia’s Rise — Analysts estimate Nvidia will sell roughly 6m Blackwell and 5.5m GB chips over a two-year span, and that if half are installed and run at capacity in America they would add 25GW to power demand. Bernstein projects a US shortfall of 17–62GW by 2030 depending on chip efficiency; Morgan Stanley puts the gap at 45GW by 2028.

AI Summary. Generative AI revenues are estimated to be doubling annually, compared with pre-crash revenue growth of 22% for railways before the 1873 bust and 16% for telecoms, which implied doubling times of three and four years. The authors project generative AI revenue could reach $100bn, covering about 25% of that year's capital spending.

Azeem Azhar and Nathan Warren Exponential View
Date Posted:

Azhar & Warren conclude that the AI buildout is a “demand-led, capital intensive boom,” not a bubble, given capex relative to GDP and revenue, revenue growth, and funding quality. If revenues grow at half their 2024 pace, they will reach $100B by 2026.

How does AI revenue growth compare with past infrastructure booms?

Core argument: GenAI revenues are estimated to grow about twofold this year, a doubling time of roughly one year, versus 22% growth for railways in 1873 (doubling in three years) and 16% for telecom in the late 1990s (just over four years).

The problem in the railroad and telecom booms was that revenues ran out of momentum. Investment expects a return. After the railway bubble burst in 1873, revenue declined by 3% year over year. Telecoms did slightly better, declining 0.5%. Before the crashes, revenue growth was hardly explosive. Railways in 1873 expanded 22% – enough to double in three years. Telecom in the late 1990s managed only 16%, a doubling time of just over four years. By contrast, genAI revenues are still accelerating. By our estimates, genAI revenues will grow about twofold this year. And this is likely a conservative forecast. Our revenue growth gauge is an exponential one. It measures revenue doubling time in years; that is, at current growth rates, how long does it take for sector revenue to double? Here, genAI sits squarely in the green, doubling every year. If genAI revenues were to grow at even half the pace of last year, then, on my conservative forecast, they would reach $100 billion by 2026, covering about 25% of that year’s capex.

Takeaways by Macro Roundup® AI

  1. GenAI revenues are estimated to grow about twofold this year, a doubling time of roughly one year, versus 22% growth for railways in 1873 (doubling in three years) and 16% for telecom in the late 1990s (just over four years).
  2. After the railway bubble burst in 1873, sector revenue declined 3% year over year, while telecom revenue declined 0.5% after its crash.
  3. Growing at even half of last year's pace, genAI revenues would reach $100 billion by 2026 on the author's conservative forecast, covering about 25% of that year's capex.

Related Articles:

  • Fair Shakes — Technology-sector capital spending has accounted for 35%–45% of US GDP growth over three quarters, implying that without it growth would be near 1% given weak consumption. Among S&P 500 companies, capital spending rose 24% and research and development 10%, but the median stock grew both by only 3%–4%.
  • Honey, AI Capex is Eating the Economy — Capital spending on AI data centers is around 20% of railroads' peak spending as a share of GDP and is rising quickly, having already surpassed the dot-com era peak in telecom investment. Unlike long-lived rail infrastructure, data centers are short-lived assets requiring frequent hardware replacement, and the capital is being reallocated from other sectors.
  • The Year-End Wake-Up: The ‘Chinese Sputnik’ That Demands Our Attention — Chinese AI company DeepSeek trained its Version 3 large language model for roughly $5.6m, about 100x cheaper than Meta's Llama 3, with performance comparable to Claude 3.5 Sonnet and interface access costing 12x less than Anthropic's. The author argues US chip export controls backfired by spurring leaner engineering, and that the gap between open-source and closed-source models is narrowing rapidly.

AI Summary. US undergraduate enrollment in degree- or certificate-seeking programs fell from 17.3m to 14.1m, a drop of nearly 20%, but the declines were concentrated in lower-quality institutions. Enrollment changes are strongly associated with measured student outcomes such as completion rates, loan repayment, and post-enrollment earnings, with the worst-performing quintile losing nearly half its enrollment.

Preston Cooper American Enterprise Institute
Date Posted:
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Btw 2010 and 2023, enrollment at US colleges declined from 17.3mm to 14.1mm. 90% of the decline was driven by falling enrollment in the bottom two quintiles of schools. The top two quintile schools gained enrollment by 3% and 8%, respectively.

Are falling college enrollments concentrated in the worst-performing institutions?

Core argument: U.S. degree- or certificate-seeking undergraduate enrollment fell from 17.3 million in 2010 to 14.1 million in 2023, a drop of nearly 20%, with declines spread unevenly across institutions.

Between 2010 and 2023, the number of degree- or certificate-seeking undergraduates enrolled in America’s colleges and universities declined from 17.3 million to 14.1 million— a drop of nearly 20%. This report shows that the decline in college enrollment is not uniform across institutions. Some schools have seen far larger drops in enrollment, and others have enjoyed enrollment increases. These changes in enrollment are strongly associated with the college’s quality, as measured by quantifiable student outcomes such as completion rates, loan repayment rates, and earnings after enrollment. In the fall of 2010—the peak of US undergraduate enrollment—institutions in each of the five quintiles enrolled approximately 3.5 million students. But over the next 13 years, enrollment levels in each quintile diverged dramatically. Colleges in the worst quintile lost nearly half their undergraduate enrollment, which fell from 3.5 to 1.8 million between the fall of 2010 and the fall of 2023, the latest year of available data. Institutions in the second-worst quintile saw enrollment drop from 3.5 million to 2.2 million (a 36% drop), while enrollment in the middle quintile fell from 3.5 million to 2.6 million (a 26% drop).

Takeaways by Macro Roundup® AI

  1. U.S. degree- or certificate-seeking undergraduate enrollment fell from 17.3 million in 2010 to 14.1 million in 2023, a drop of nearly 20%, with declines spread unevenly across institutions.
  2. Colleges in the worst quintile by student outcomes lost nearly half their undergraduate enrollment, from 3.5 million in fall 2010 to 1.8 million in fall 2023, while the second-worst quintile fell 36% and the middle quintile 26%.
  3. The report finds enrollment changes strongly associated with college quality as measured by completion rates, loan repayment rates, and earnings after enrollment, with each of the five quintiles enrolling about 3.5 million students in fall 2010.

Related Articles:

  • Changes in the College Mobility Pipeline Since 1900 — Students from the bottom third of parental income now earn less than half the college enrollment wage premium of top-third students. The authors attribute this mainly to the rising relative value of research universities, lower-income students' diversion to community and for-profit colleges, and their shift from computer science and engineering into humanities.
  • Standardized Test Scores and Academic Performance at Ivy-Plus Colleges — An analysis of admissions and transcript records at Ivy-Plus colleges finds standardized test scores predict first-year college grades with a normalized slope 4x greater than high school grade point average, controlling for race, gender, and socioeconomic status. The authors find no evidence test scores underpredict college performance for students from less advantaged backgrounds.
  • Rising Graduate Joblessness Is Mainly Affecting Men. Will That Last? — The US unemployment rate for recent male graduates has risen from below 5% to 7% over the past year while the rate for recent female graduates is unchanged or slightly lower, leaving young male graduates jobless at the same rate as non-graduates. Entry-level coding employment, however, has rebounded.

AI Summary. The Federal Reserve lowered its benchmark interest rate by 25 basis points to 4–4.25% and signaled that another cut is very likely at the following meeting. The authors expect two additional 25 basis point cuts, followed by two more the next year bringing the rate to 3–3.25%, a path slightly more dovish than market pricing.

David Mericle Goldman Sachs
Date Posted:

Yesterday’s 25bp cut leaves the Funds Rate at 4–4.25%. Goldman Sachs forecasts an additional two cuts in October and December 2025, followed by two cuts in 2026, leading to a terminal rate of 3.0–3.25%.

Are more interest rate cuts likely at upcoming meetings?

Core argument: The FOMC cut the federal funds rate by 25bp to 4-4.25% at its September meeting and signaled that another cut in October is very likely.

The FOMC lowered the funds rate by 25bp to 4-4.25% at its September meeting today and hinted that another rate cut is very likely in October. We continue to expect 25bp cuts in October and December—with a 50bp cut possible if the labor market weakens more than we expect—followed by two cuts next year to 3-3.25%. Our probability-weighted Fed path remains a bit more dovish than market pricing.

Takeaways by Macro Roundup® AI

  1. The FOMC cut the federal funds rate by 25bp to 4-4.25% at its September meeting and signaled that another cut in October is very likely.
  2. Goldman Sachs expects 25bp cuts in October and December, with a 50bp cut possible if the labor market weakens more than anticipated, followed by two cuts next year to 3-3.25%.
  3. Goldman Sachs's probability-weighted Fed path remains somewhat more dovish than market pricing.

Related Articles:

  • Too Early — Markets are pricing interest-rate cuts about 70bps deeper than Federal Reserve officials' own projections, an outcome the author argues is unlikely with core inflation stabilized near 3%, wage growth at 4% versus 3% before the pandemic, and unemployment at a historically low 4.3%.
  • A Big, Not-So-Beautiful Inflation Picture — Wage growth for the lowest-paid quartile of US workers has slowed to just above the headline inflation rate, consistent with the view that companies are holding onto staff while showing little interest in bidding up pay for lower-skilled workers. With inflation not tamed and tariffs yet to feed through to employment and production decisions, the risk ahead is stagflation.
  • The Rising Tide of Government Interest Costs — A model of forward interest rate curves, projected deficits, and debt maturity structures estimates that government interest spending on marketable debt will rise across G10 economies by an average of 0.5 percentage points of GDP by 2029, with France, Japan, and the United States facing the largest increases.

AI Summary. China's urban unemployment rate for 16- to 24-year-olds excluding students rose to 18.9% from 17.8%, the highest since the National Bureau of Statistics revised its calculation method for the series. A record 12.2m university students graduated into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education and skills.

Xinyi Wu South China Morning Post
Date Posted:

China’s youth unemployment (16–24) rose to 18.9% in August, its highest level since the measure was adjusted in 2023. The unemployment rate for workers 25–29 also increased to 7.2% in August, up from 6.9% in July.

Is China's youth unemployment rising as record graduates enter the job market?

Core argument: China's urban jobless rate for those aged 16–24 excluding students rose to 18.9% in August from 17.8% in July, the highest since the data set was revised in 2023, according to the National Bureau of Statistics.

China’s urban youth unemployment rate rose last month to the highest level since the data set was adjusted in 2023. The jobless rate for those aged 16 to 24, excluding students, rose to 18.9% in August from 17.8% in July, according to data released by the National Bureau of Statistics on Wednesday. After the jobless rate for the demographic rose to an all-time high of 21.3% in June 2023, Beijing suspended the monthly data release for five months before introducing a revised method of calculating it for December 2023. A record 12.2 million university students graduated this summer, with the majority of them joining a job market strained by deflationary pressures and external uncertainties. Many of them are struggling to find roles that match their education level and skills.

Takeaways by Macro Roundup® AI

  1. China's urban jobless rate for those aged 16–24 excluding students rose to 18.9% in August from 17.8% in July, the highest since the data set was revised in 2023, according to the National Bureau of Statistics.
  2. After youth unemployment hit an all-time high of 21.3% in June 2023, Beijing suspended the monthly release for five months before adopting a revised calculation method beginning with December 2023 data.
  3. A record 12.2 million university students graduated in China this summer into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education level and skills.

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  • China is Suffering its Own ‘China Shock’ — Academic analysis of 12 labour-intensive Chinese manufacturing industries estimates average employment fell about 14%, or nearly 4mn jobs, between 2011 and 2019, with textile roles down 40%; a further analysis of the same sectors found 3.4mn more jobs lost through 2023. Researchers argue industrial upgrading and automation are cutting demand for lower-skilled workers and depressing their wages.
  • Xi Jinping Calls for Quality Jobs for Youth Instead of ‘Bitterness’ — China's leadership has ordered that providing "high-quality full employment" be an economic priority, with youth unemployment running at nearly three times the overall rate. Unemployment among 16-24 year-olds, excluding students, stood at 14.7% against an urban unemployment rate of 5%.

AI Summary. China classifies roughly 200m people as "flexible workers" without formal contracts, a group that makes up a quarter of the national workforce and two-fifths of the urban workforce. Unlike the West's service-focused gig economy, about 40m of these workers are paid by the day or week in factories, and semi-official estimates put 84m at online delivery and ride-hailing firms.

Economist Staff The Economist
Date Posted:

About ~200mm Chinese “flexible workers” without formal contracts account for ~25% of the overall workforce and 40% of the urban workforce.

How large is China's workforce without formal employment contracts?

Core argument: China's roughly 200m "flexible workers", a state category for those outside standard employment, lack formal contracts yet account for a quarter of the total workforce and two-fifths of it in cities.

[There are] 200m-odd people in China whom the state considers to be “flexible workers”, a broad category that includes all those who fall outside standard forms of employment. The group makes up what is called the “gig economy”. Its members do not have formal contracts, and yet they have become a crucial part of China’s labour supply, accounting for a quarter of the total workforce and two-fifths of it in cities. Unlike the West’s gig economy, which is almost entirely focused on services, roughly 40m of the make-or-break workers are paid by the day or week to work in factories. In China’s largest manufacturing complexes they can at times make up 80% of the workforce, according to a survey by Zhang Dandan of Peking University. Meanwhile, semi-official estimates suggest that 84m people work for online firms, delivering food and parcels or driving ride-share taxis. Many more are thought to do freelance internet marketing or work odd jobs in construction and restaurants.

Takeaways by Macro Roundup® AI

  1. China's roughly 200m "flexible workers", a state category for those outside standard employment, lack formal contracts yet account for a quarter of the total workforce and two-fifths of it in cities.
  2. Roughly 40m of China's gig workers are paid by the day or week to work in factories, and in the largest manufacturing complexes they can at times make up 80% of the workforce, according to a survey by Zhang Dandan of Peking University.
  3. Semi-official estimates suggest 84m people in China work for online firms, delivering food and parcels or driving ride-share taxis, with many more thought to do freelance internet marketing or odd jobs in construction and restaurants.

Related Articles:

  • Is It Me or the Economic System? Changing Evaluations of Inequality in China — Chinese survey respondents once cited lack of ability, lack of effort, and low education as the main explanations for poverty, with unequal opportunity ranking 5th and an unfair economic structure 9th. In a later survey, unequal opportunity ranked first and an unfair economic structure third, with education remaining second.
  • The ‘Invisible Wall’ Amplifying China’s Population Doom Loop — China's hukou household registration system restricts migrant workers' access to local services such as healthcare, education, and home purchases in major cities. While two-thirds of Chinese live in cities, only 48% hold urban residency rights, leaving roughly 250m people excluded from many urban benefits; rural disposable income is about $3,000 per capita versus over $7,000 in cities.
  • 2023 Letter — Rising numbers of Chinese nationals are being apprehended at the US-Mexico border, with US officers encountering around 1,000 in one month early in the year and nearly 5,000 by November. Most Chinese emigrants leave through legal means, going primarily to Singapore, Japan, and Thailand.