Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a 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 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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…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
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, November 20, 2025

AI Summary. Mexico is now both the largest buyer of U.S. exports and the largest source of U.S. imports, with U.S. goods exports to Mexico at $226.4bn versus $225.6bn to Canada and imports from Mexico totaling $354.9bn. Mexico's growth, including its middle class, has increased demand for U.S. goods among its more than 130 million people.

James Wagner New York Times
Date Posted:

Mexico has overtaken Canada as the largest buyer of American goods. In 2023 Mexico outpaced China to become the largest foreign seller of goods to the US.

Has Mexico become the top buyer and supplier of U.S. goods?

Core argument: Mexico bought $226.4 billion of the $1.4 trillion in goods the U.S. exported from January to August, ahead of Canada's $225.6 billion, according to Commerce Department data.

Mexico and the United States share what is considered the busiest land border in the world. As Mexico has grown, particularly its middle class, the country of over 130 million people has hungered for more U.S. goods. From January to August, the new [Commerce Department data] showed, the U.S. exported $1.4 trillion worth of goods, with $225.6 billion heading to Canada and $226.4 billion to Mexico. (In 2024, the United States exported $349.4 billion to Canada and $334 billion to Mexico.) So far this year, U.S. data show that its imports from Mexico have totaled $354.9 billion — up from the same period in 2024 — followed by imports from Canada and China.

Takeaways by Macro Roundup® AI

  1. Mexico bought $226.4 billion of the $1.4 trillion in goods the U.S. exported from January to August, ahead of Canada's $225.6 billion, according to Commerce Department data.
  2. U.S. imports from Mexico totaled $354.9 billion so far this year, up from the same period in 2024 and ahead of imports from Canada and China.
  3. In 2024 the U.S. exported $349.4 billion to Canada and $334 billion to Mexico, while Mexico's growth and expanding middle class in a country of over 130 million people have fed demand for U.S. goods.

Related Articles:

  • China Launches Sweeping Probe Into Mexican Tariffs As Trade War Widens — China has opened an investigation into Mexico's tariffs and trade restrictions on Chinese exports, including a proposed 50% tariff on Chinese cars and levies on about 1,400 products from countries lacking a trade deal with Mexico. China's commerce ministry says the measures would seriously damage Chinese companies' trade and investment interests.
  • China Delays Approval of BYD’s Mexico Plant Amid Fears Tech Could Leak to US — China's commerce ministry has withheld the approval that domestic automakers need to manufacture abroad, holding up BYD's planned Mexican car plant, which the company said would create 10,000 jobs and build 150,000 vehicles a year. Officials are concerned that Mexico's proximity to the US could give Mexico, and possibly the US, access to BYD's advanced technology and knowhow.
  • The City Where Mexico’s Nearshoring Hype is Becoming Reality — Mexico became the United States' largest trading partner, ahead of Canada, as it won a bigger share of ground lost by China, and investors identify it as among the countries best placed to benefit from geopolitical shifts. Skeptics note that record foreign direct investment of $32.9bn over nine months mostly reflects reinvested profits rather than new projects.

AI Summary. Asia's foreign-exchange reserves have risen to almost $8tn across the region's 11 largest monetary authorities, giving central banks from Tokyo to Mumbai substantial capacity to defend their currencies. The buildup has been aided by a decline in the dollar and a rally in gold prices.

Subhadip Sircar Bloomberg
Date Posted:
Is Database:
Database

Asia’s foreign-exchange reserves have risen $400B this year to ~$8T. The increase has been in part driven by this year’s decline in the dollar and rally in gold prices.

Have Asian central banks built enough reserves to defend their currencies?

Core argument: Asia's 11 largest monetary authorities hold foreign-exchange reserves of close to $8 trillion, according to data compiled by Bloomberg, giving authorities from Tokyo to Mumbai ammunition to step up defense of their currencies.

Asia’s foreign-exchange reserves have surged to almost $8 trillion, providing the authorities from Tokyo to Mumbai with ample ammunition if they need to step up defending their currencies. The major central banks in the region have added more than $400 billion to their reserves this year, with 11 of the largest monetary authorities now having a stockpile of close to $8 trillion, according to data compiled by Bloomberg. The increase has been helped by this year’s decline in the dollar and rally in gold prices.

Takeaways by Macro Roundup® AI

  1. Asia's 11 largest monetary authorities hold foreign-exchange reserves of close to $8 trillion, according to data compiled by Bloomberg, giving authorities from Tokyo to Mumbai ammunition to step up defense of their currencies.
  2. Asia's major central banks have added more than $400 billion to their reserves this year, an increase helped by the dollar's decline and the rally in gold prices.

Related Articles:

  • China’s “Anti-Involution” Campaign: Global Implications — China's economy has slowed as domestic investment stagnates and consumer spending stays weak, with the shortfall partly offset by rising net exports. The author argues these internal problems are being passed to the rest of the world, since export values are rising about 6% a year while import values are down 2.2%.
  • China’s Massive Surplus Is Everywhere (Yet The IMF Still Has Trouble Seeing It Clearly) — China's manufactured goods surplus exceeds $2tn in its own customs data, about 10.5% of Chinese GDP and over 2% of world GDP, far exceeding the combined peak surpluses of Germany and Japan. The author argues the International Monetary Fund understates this by relying solely on reported current account balances, which have not similarly jumped.
  • How to Fix Free Trade — The article proposes a new global customs union open to countries that agree to keep their current account balances with the union within a narrow band, with variable tariffs or capital-flow taxes applied to nonmembers. It argues gains from trade are largest when trade flows are reciprocal and sustainable.

AI Summary. In interviews with 1,000 adults in Memphis, Tulsa, and New Orleans who self-identified as having grown up poor, the authors found human capital was the strongest predictor of escaping poverty, followed by noncognitive skills such as resilience, self-esteem, and conscientiousness. Trusted adults in childhood, early police encounters, mental health, and adverse experiences also mattered.

Roland Fryer Wall Street Journal
Date Posted:

Roland Fryer reports on his research that found educational attainment, followed by traits like resilience, self-esteem and conscientiousness were the strongest predictors of intergenerational mobility in the US.

What best predicts escaping childhood poverty?

Core argument: Researchers recruited 1,000 adults in Memphis, Tulsa and New Orleans—cities with higher-than-average poverty rates—who self-identified as having grown up poor; by their 40s some had exited poverty but most had not.

Our work complemented Mr. Chetty’s. His was wide: data on an astonishing number of Americans, but with limited information about each person. Ours was deep: data on a much smaller group of Americans, but with detailed information about each person. From Memphis, Tulsa and New Orleans—cities with higher-than-average poverty rates—we recruited 1,000 adults who self-identified as having grown up poor. By the time we met them in their 40s, some had exited poverty, but most hadn’t. Each took part in a three-hour interview about childhood health, parental income, home environment, lifetime traumas, neighborhood safety, psychological skills, beliefs and current income. The goal was to understand which childhood experiences were most correlated with mobility. We found that human capital was the strongest predictor of mobility. The second most important predictor was noncognitive skills—traits like resilience, self-esteem and conscientiousness. Other factors also mattered: the number of trusted adults in one’s childhood, early encounters with police, mental health and adverse experiences.

Takeaways by Macro Roundup® AI

  1. Researchers recruited 1,000 adults in Memphis, Tulsa and New Orleans—cities with higher-than-average poverty rates—who self-identified as having grown up poor; by their 40s some had exited poverty but most had not.
  2. Human capital was the strongest predictor of income mobility in the study, followed by noncognitive skills such as resilience, self-esteem and conscientiousness.
  3. Three-hour interviews covering childhood health, parental income, home environment, trauma and neighborhood safety also identified the number of trusted adults in childhood, early encounters with police, mental health and adverse experiences as factors in mobility.

Related Articles:

  • Getting Beneath the Veil of Intergenerational Mobility: Evidence from Three Cities — Using a new descriptive statistical method, the authors find that education is the strongest correlate of intergenerational income mobility, with resilience a statistically indistinguishable close second. Half of the significant correlates are psychological skills, including self-esteem, self-control, locus of control, and grit, alongside mental health problems, youth trouble with police, adverse childhood experiences, and trusted adult relationships.
  • 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.
  • ZIP Code Is Destiny? Turns Out That’s Bunk — The authors argue that research crediting neighborhoods with causing better child outcomes confuses causation with parental self-sorting, since more affluent, better-educated, and more stable families tend to move to good neighborhoods before their children are born. Their analysis of Danish population data found the same sorting pattern as in the United States.

AI Summary. Using a new descriptive statistical method, the authors find that education is the strongest correlate of intergenerational income mobility, with resilience a statistically indistinguishable close second. Half of the significant correlates are psychological skills, including self-esteem, self-control, locus of control, and grit, alongside mental health problems, youth trouble with police, adverse childhood experiences, and trusted adult relationships.

Oren Danieli, Tanaya Devi and Roland Fryer Tel Aviv University
Date Posted:
Is Database:
Database

A data-driven method to select cost-effective policy interventions, applied to survey responses of ~1,000 people reared in poverty in 3 US cities, confirms the primacy of education, but finds an ~= role for childhood determinants of noncognitive skills.

What factors correlate most strongly with intergenerational income mobility?

Core argument: Using non-parametric estimation, the authors find education is the most important correlate of intergenerational income mobility, with resilience — the ability to bounce back from stressful situations — a close and statistically indistinguishable second.

We develop a new descriptive statistical method to assist the design of future experiments, whose goal is to improve some outcome variable. Most descriptive methods ignore the potential difficulty of changing the covariates in an intervention. Our method uses information from the joint distribution of the covariates, and instead of recommending experiments that would extrapolate into cases rarely seen in the data, it focuses on the way in which the outcome variable (in our case, escaping poverty) is higher in real life. Panel A in Figure 3 shows, using non-parametric estimation methods, that the most important correlate of income mobility is education. A close second– and statistically indistinguishable– is resilience: the ability to bounce back from stressful situations,measured by responses to questions such as “It does not take me long to recover from a stressful event.” Half of the significant correlates of intergenerational income mobility are psychological skills: resilience, Big 5 [personality traits from psychological test], self-esteem, self control, locus of control and grit. Mental health problems are also significant in this specification, [as are] whether the respondent was ever in trouble with the police in their youth, had adverse childhood experiences, and the existence of adult relationships they trusted.

Takeaways by Macro Roundup® AI

  1. Using non-parametric estimation, the authors find education is the most important correlate of intergenerational income mobility, with resilience — the ability to bounce back from stressful situations — a close and statistically indistinguishable second.
  2. Half of the significant correlates of intergenerational income mobility are psychological skills: resilience, the Big 5 personality traits, self-esteem, self-control, locus of control, and grit.
  3. Mental health problems, youth trouble with the police, adverse childhood experiences, and the existence of trusted adult relationships are also significant in the authors' specification.

Related Articles:

  • The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated — Using an alternative cost-of-living adjustment, the typical 40-year-old's pre-tax family income rose 52% between 1979 and 2019, or 73% adjusting for family size, versus 15% under the methods behind widely cited mobility estimates. Absolute mobility is down 20 percentage points since 1979 but stood at 72% in 2023.
  • The Misguided War On The SAT — The National Assessment of Educational Progress, a nationwide test of elementary and middle school students with no test-prep industry around it, shows racial and economic gaps closely resembling those on the SAT and ACT. Researchers argue this indicates college admissions tests measure underlying learning, making score disparities a symptom rather than a cause of inequality.
  • 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.

AI Summary. Secular identity has plateaued among young men while continuing to rise among young women, with 43% of young women now religiously unaffiliated versus 33% a decade earlier and almost no change among young men. The share of young women calling religion personally important fell from 82% to 57%, a steeper decline than among young men.

Daniel Cox American Storylines
Date Posted:

Historically, American women have had higher levels of religiosity than men. Between 2014 and 2024, however, the share of women 18–24 who identify as religiously unaffiliated rose 10pp to 43%, ~on par with their male peers’ 41%.

Is secularization still rising among young women but not young men?

Core argument: The share of young women identifying as religiously unaffiliated rose from 33% in 2014 to 43% in 2024, while young men showed almost no change over the same period.

While secular identity has plateaued among young men, it continues to rise among young women. From 2014 to 2024, young women became far less religious: 43% identify as religiously unaffiliated today compared to 33% a decade earlier. Young men showed almost no change over the same time period. Young women show a pronounced decline in the importance of religion in their lives. In 2007, 82% of young women said religion was somewhat or very important to them personally. That dropped to 57% by 2024 (a 25-point decline). Young men have experienced a dramatic decline as well, but not quite as steep. It’s difficult to see how America can experience a religious revival without the participation of young women.

Takeaways by Macro Roundup® AI

  1. The share of young women identifying as religiously unaffiliated rose from 33% in 2014 to 43% in 2024, while young men showed almost no change over the same period.
  2. The share of young women saying religion was somewhat or very important to them personally fell from 82% in 2007 to 57% in 2024, a 25-point decline; young men declined dramatically but less steeply.
  3. Secular identity has plateaued among young men while continuing to rise among young women, and it is difficult to see how America can experience a religious revival without the participation of young women.

Related Articles:

  • Decline of Christianity in the U.S. Has Slowed, May Have Leveled Off — Survey data show 62% of U.S. adults identify as Christian, a 16-point decline from earlier readings, with Protestants at 40% and Catholics at 19%. Religiously unaffiliated adults — atheists, agnostics, and those saying "nothing in particular" — account for 29% of the population.
  • Is America’s Religious Decline Responsible for Falling Birthrates? — In the United States, falling birth rates have accompanied a decline in religious participation, with the share of Americans attending worship services weekly falling from 42% to 30% over 20 years, according to Gallup. Survey data show 68% of Americans in their mid-70s or older attended weekly services in childhood, versus 48% of those in their early 20s.
  • Most U.S. Parents Pass Along Their Religion and Politics to Their Children — Survey data show most U.S. teens share their parents' politics and religion: 81% of Republican or Republican-leaning parents had teens identifying the same way, as did 89% of Democratic or Democratic-leaning parents. Similar alignment held for religion, with 82% of Protestant parents, 81% of Catholic parents, and 86% of religiously unaffiliated parents having teens who identified likewise.

AI Summary. Chinese state television is airing a prime-time historical drama that portrays Communist Party agents in Taiwan after 1949 as martyrs for "unification," part of domestic messaging around Taiwan reunification. People briefed on the matter say state-owned drama troupes are receiving approval only for war-themed plays, with other genres rejected.

Lingling Wei Wall Street Journal
Date Posted:

Chinese state television is broadcasting a new historical drama promoting “unification” of China and Taiwan, and “state-owned drama troupes are receiving approval only for war-themed plays…while other genres are being rejected.”

Is China using state media to prepare citizens for Taiwan pressure?

Core argument: China's state television is filling its prime-time slot with "The Silent Honor," a historical drama lionizing Communist Party agents who operated in Taiwan after the Nationalists fled there in 1949, framing their espionage and execution as martyrdom for "unification.".

Mao Zedong once said that China must wield both the pen and the gun against its adversaries. With its so-called pen, China’s state television is preparing the domestic Chinese population for a new phase of pressure against Taiwan. Its prime-time slot is filled with a new historical drama, “The Silent Honor,” which lionizes Communist Party agents operating in Taiwan after the Nationalists fled to the island in 1949 following their loss of the civil war to Mao’s forces. The series frames the agents’ espionage—and eventual execution—as martyrdom for the cause of “unification.” In a parallel move suggesting a top-down mandate to reorient cultural output toward national struggle, state-owned drama troupes are receiving approval only for war-themed plays, said people briefed on the matter, while other genres are being rejected. This domestic messaging is an intensification of an already amped-up atmosphere of Taiwan reunification rhetoric in China. And it is being matched by the gun.

Takeaways by Macro Roundup® AI

  1. China's state television is filling its prime-time slot with "The Silent Honor," a historical drama lionizing Communist Party agents who operated in Taiwan after the Nationalists fled there in 1949, framing their espionage and execution as martyrdom for "unification.".
  2. State-owned drama troupes are receiving approval only for war-themed plays while other genres are rejected, according to people briefed on the matter, a pattern suggesting a top-down mandate to reorient cultural output toward national struggle.
  3. China's domestic messaging intensifies an already amped-up atmosphere of Taiwan reunification rhetoric, recalling Mao Zedong's dictum that China must wield both the pen and the gun against its adversaries.

Related Articles:

  • China’s Secret Stockpiles Have Been A Great Success—So Far — A data firm estimates China's observable oil stocks reached a record 1.2bn barrels, triple the size of America's reserves, with storage capacity of 2bn barrels only 58% full and traders expecting stockpiling to continue. Analysts also note metal imports have soared even as China's metal-consuming industries have slumped.
  • Xi Jinping’s Purge Of Military Officers Raises Doubts About China’s Readiness For War — The heads of all but one of China's five regional military commands are unaccounted for, under investigation, or fired, and commanders of the navy and ground force have been targeted following those of the rocket force. Heads of several departments under the Central Military Commission have disappeared from public view, and scores of political commissars have been ousted or investigated.
  • Xi Jinping Says He Is Preparing China for War — China's leadership has emphasized war readiness, announcing a 7.2% increase in the defense budget—which has doubled over the past decade—and plans to reduce dependence on foreign grain imports. China has also opened National Defense Mobilization recruitment offices across the country, while cities in Fujian Province opposite Taiwan build or upgrade air-raid shelters.

Friday, November 21, 2025

AI Summary. Survey data show that among renters with net worth below $300,000, 4–6% say always giving their best effort at work is "not important," roughly twice the 2–3% rate among homeowners at all net worth levels; renters with net worth above $300,000 resemble homeowners. The authors argue that abandoning the aspiration of homeownership may reduce the value of additional work effort.

Seung Hyeong Lee and Younggeun Yoo Social Science Research Network
Date Posted:

Renters with net worth < $300,000 are 2x as likely to report that “always giving my best effort at work” is “not important” than either renters with > $300,000 or homeowners.

Do renters with lower net worth report putting less effort into work?

Core argument: Renters with net worth below $300,000 report low work effort at 4–6% in MRI-Simmons psychographic data, nearly twice the 2–3% rate among homeowners, which stays flat across all net worth levels.

Once that aspiration [homeownership] is abandoned, the marginal utility of additional labor may decline, leading to a re-optimization of work effort by renters. Figure 6 reports the share of respondents who chose “not important” for the MRI-Simmons psychographic questions that ask the importance of “always giving my best effort” at work. While standard labor market outcomes such as hours worked or employment status may fail to capture effort margins (for instance, a full-time worker who is still formally employed may reduce discretionary effort - commonly referred to as “quiet quitting” - without any observable change in hours), this measure serves as a useful proxy for changing attitudes toward work. Among homeowners, the proportion reporting low work effort remains low and relatively flat at 2–3% across all net worth levels. Among renters with net worth above $300,000 - those still plausibly on track to purchase a home - the proportions are similar or even slightly lower, possibly reflecting stronger motivation to work toward eventual homeownership. However, among renters with net worth below $300,000, the share reporting low work effort increases to 4-6%, nearly twice the rate observed among homeowners.

Takeaways by Macro Roundup® AI

  1. Renters with net worth below $300,000 report low work effort at 4–6% in MRI-Simmons psychographic data, nearly twice the 2–3% rate among homeowners, which stays flat across all net worth levels.
  2. Renters with net worth above $300,000, those still plausibly on track to buy a home, report low work effort at rates similar to or slightly below homeowners, possibly reflecting stronger motivation to work toward eventual homeownership.
  3. Once the aspiration of homeownership is abandoned, the marginal utility of additional labor may decline, prompting renters to re-optimize work effort through margins such as "quiet quitting" that hours worked and employment status may fail to capture.

Related Articles:

  • US Median First-Time Homebuyer Age Now At Record-High of 40 — The median age of first-time homebuyers in the US has reached a record 40, up from 33 in 2021 and 29 when the National Association of Realtors survey began in 1981. High home prices and mortgage rates are delaying homeownership for millions of Americans.
  • 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.
  • 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.

AI Summary. Since the second half of 2023, four-quarter US productivity growth has averaged nearly 2.5%, well above the pre-pandemic trend of about 1% to 1.25%, supporting real GDP growth. It remains unclear whether this reflects a higher productivity regime fostered by rising AI use or a temporary post-pandemic reorganization surge.

Robert Valletta Federal Reserve Bank of San Francisco
Date Posted:

Since 2023:H2, 4-quarter productivity growth has averaged nearly 2.5%, well above the pre-pandemic trend of 1 to 1.25%. The question remains whether this is a new regime or “a temporary surge related to post-pandemic reorganization and consolidation.”

Is faster productivity growth a new regime or a temporary surge?

Core argument: Four-quarter US productivity growth has averaged nearly 2-1/2% since the second half of 2023, well above the pre-pandemic trend of about 1 to 1-1/4%, according to the San Francisco Fed.

[Real GDP] growth has been supported by solid productivity gains, which have been uneven since the end of the pandemic but on average well above the pre-pandemic trend of about 1 to 1-1/4%. Since the second half of 2023, four-quarter productivity growth has averaged nearly 2-1/2%. It is too early to know whether these gains reflect a new, higher productivity growth regime fostered by the rising use of AI and related technologies or a temporary surge related to reorganization and consolidation in the aftermath of the pandemic.

Takeaways by Macro Roundup® AI

  1. Four-quarter US productivity growth has averaged nearly 2-1/2% since the second half of 2023, well above the pre-pandemic trend of about 1 to 1-1/4%, according to the San Francisco Fed.
  2. The San Francisco Fed says real GDP growth has been supported by productivity gains that have been uneven since the end of the pandemic but on average well above the pre-pandemic trend.
  3. The San Francisco Fed says it is too early to know whether the productivity gains reflect a higher-growth regime fostered by rising use of AI and related technologies or a temporary surge tied to post-pandemic reorganization and consolidation.

Related Articles:

  • Concentrated Growth: The Role Of The IT Sector — Since 1988, total factor productivity in the information technology sector has risen about 178%, versus about 12% across all non-IT sectors combined, while aggregate productivity rose about 40%. The IT sector accounts for roughly 45% of cumulative aggregate productivity growth, once sectoral linkages to downstream industries are weighted in.
  • How America’s AI Boom Is Squeezing The Rest Of The Economy — About a sixth of America's 2% real GDP growth over the past year came from investment in computer and communications equipment and data centres, and one estimate puts the artificial intelligence boom's total contribution to growth at 40%. Average electricity bills rose 7%, attributed in part to data-centre demand, while housebuilding and non-AI business investment slumped and real consumption flatlined.
  • Productivity During and Since the Pandemic — Total factor productivity growth since early 2021 has run only slightly above its 2010–19 average, suggesting the 2020 productivity surge reflected cyclical dynamics layered on a continuation of the slow pre-pandemic trend. Productivity has since grown somewhat faster than the authors' analysis predicted, but remains well below the 1995–2004 pace.

AI Summary. Americans with at least a bachelor's degree make up a record 25% of the unemployed, over 1.9m workers aged 25 and up, according to US Bureau of Labor Statistics data going back to 1992. Their unemployment rate rose half a percentage point from a year earlier to 2.8%, while other education levels showed little increase.

Matthew Boesler Bloomberg
Date Posted:

25% of unemployed Americans have a college degree. Overall, degree holders had an unemployment rate of 2.8% in September, up 0.5pp y/y. 9.2% of all Americans 20–24 were unemployed in September, up 2.2pp y/y.

Are college graduates making up a record share of the unemployed?

Core argument: Americans aged 25 and over with at least a bachelor's degree made up 25% of total US unemployment in September, with more than 1.9 million unemployed — a ratio never reached before 2025 in data going back to 1992.

Americans with four-year college degrees now comprise a record 25% of total unemployment, underscoring a sharp slowdown in white-collar hiring this year. Government-shutdown delayed monthly figures published Thursday by the US Bureau of Labor Statistics showed the unemployment rate for bachelor’s degree-holders rose to 2.8% in September, up a half-percentage point from a year earlier. Other levels of education, by contrast, registered little or no increase over the same period. here were more than 1.9 million Americans aged 25 and over with at least a bachelor’s degree who were unemployed in September — one in four of the total number of unemployed. Before 2025, the ratio never reached such a high in data going back to 1992. Thursday’s BLS figures showed young Americans are bearing the brunt of the recent rise in joblessness. The unemployment rate for those between the ages of 20 and 24 was 9.2% in September, up 2.2 percentage points from a year earlier — an increase of a magnitude not seen historically outside recessions.

Takeaways by Macro Roundup® AI

  1. Americans aged 25 and over with at least a bachelor's degree made up 25% of total US unemployment in September, with more than 1.9 million unemployed — a ratio never reached before 2025 in data going back to 1992.
  2. The unemployment rate for bachelor's degree-holders rose to 2.8% in September, up half a percentage point from a year earlier, while other education levels registered little or no increase, according to the US Bureau of Labor Statistics.
  3. Unemployment among Americans aged 20 to 24 was 9.2% in September, up 2.2 percentage points from a year earlier, an increase of a magnitude not seen historically outside recessions.

Related Articles:

  • What the Graduate Unemployment Story Gets Wrong — Comparing recent graduates with others newly entering the labor market, rather than with all non-graduates of similar age, shows those without a degree are faring worse: US unemployment among recent college graduates is up 1.3 percentage points from its low, versus 2.4 points for recent entrants without a degree.
  • Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — Using payroll records covering millions of US workers, the authors find employment for workers aged 22–25 in occupations most exposed to artificial intelligence, such as software developers and customer service representatives, declined 6%, while employment for older workers in those occupations rose 6–9%. Employment in less-exposed occupations grew comparably across age groups.
  • Military Officer Quality in the All-Volunteer Force — The authors find a steady decline in U.S. Marine Corps officers' General Classification Test scores, which is statistically associated with the expansion of college attendance and explains 96% of the measured change. They also find a positive association between African American officers and mean test scores, arguing affirmative action has not lowered officer quality.

AI Summary. Consumer sentiment in the long-running University of Michigan survey is worse than during periods of roughly 9% inflation, double-digit unemployment after the financial crisis, and the 1980 recession, even though unemployment stands at 4.3% and inflation at 3%. The article argues people credit themselves for wage gains while blaming inflation for taking those gains away.

Paul Krugman Krugman Wonks Out
Date Posted:

Krugman blames anomalously low consumer sentiment partly on post-traumatic stress from the Covid inflation. “Even when wages rise faster than prices, people believe that they earned their wage increases, only to have their gains taken away by inflation.”

Why is consumer sentiment worse than during far weaker economies?

Core argument: The last pre-shutdown data showed U.S. unemployment at 4.3% and inflation at 3%, both decent by historical standards, yet consumer sentiment in the University of Michigan survey sits at a record low.

By conventional measures [the economy] isn’t doing badly enough to justify the extremely negative views Americans currently hold. The last economic numbers available (delivered before the shutdown) showed unemployment at 4.3% and inflation at 3%. These are both decent numbers from a historical perspective. Yet according to the long-running University of Michigan survey of consumer sentiment [see Chart], Americans have a worse view of the economy now than in mid-2022, when inflation hit around 9%; in the immediate aftermath of the financial crisis, when unemployment was in double digits; and in 1980, when the economy was in recession and had double-digit inflation. [After 1991] we all became accustomed to a low-inflation economy, with the 1970s a distant memory. But for a period of about two years in 2021-2023 the world saw a return to high inflation. Why do people hate inflation? The Biden years were marked by a period of unusually large increases in prices, but they were also marked by unusually large wage gains. Even when wages rise faster than prices, people believe that they earned their wage increases, only to have their gains taken away by inflation. Consumer sentiment is at a record low, and voters are angry at whoever holds the White House.

Takeaways by Macro Roundup® AI

  1. The last pre-shutdown data showed U.S. unemployment at 4.3% and inflation at 3%, both decent by historical standards, yet consumer sentiment in the University of Michigan survey sits at a record low.
  2. Americans hold a worse view of the economy than in mid-2022, when inflation hit around 9%, than in the immediate aftermath of the financial crisis, when unemployment was in double digits, and than in the 1980 recession with double-digit inflation.
  3. The Biden years combined unusually large price increases with unusually large wage gains, and even when wages rise faster than prices, people believe they earned their raises only to have the gains taken away by inflation.

Related Articles:

  • The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly — Variation in the University of Michigan consumer sentiment index that inflation and unemployment cannot explain is strongly correlated with growth in consumer borrowing costs, such as mortgage and car loan rates. The authors estimate that including interest payments and homeownership costs in the consumer price index would raise measured inflation from 3% to 9%.
  • Why Do We Dislike Inflation? — Survey evidence finds 80% of respondents believe prices rise faster than wages, though real weekly earnings for the median worker grew 1.7% between 2019 and 2023. About 40% think their nominal income would be higher had inflation been lower, and half expect wages to take over a year to catch up if inflation doubled.
  • 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. US prices for goods and services are 25% above 2020 levels, and 44% of middle-income respondents in the University of Michigan consumer sentiment survey said their finances were worse than a year earlier versus 23% who said better, with most citing higher prices. Retailers report middle-income customers pulling back on discretionary spending.

Rachel Louise Ensign and Rachel Wolfe Wall Street Journal
Date Posted:
Is Database:
Database

In September, 44% of middle-income Americans reported they were financially “worse off” than a year ago, while 23% said they were “better off,” ~ unchanged from last September, when 48% reported being “worse off” versus 24% who said “better off.”

Are higher prices leaving middle-income households feeling worse off?

Core argument: Costs for U.S. goods and services stand 25% above 2020 levels, and 44% of middle-income respondents to the University of Michigan consumer sentiment survey said their finances were worse than a year earlier versus 23% who said better, on a three-month average ending in September.

America’s middle class is weary. Costs for goods and services are 25% above where they were in 2020. The University of Michigan’s consumer sentiment survey showed that 44% of middle-income respondents said their financial situation was worse than it was a year ago, while 23% said it was better, based on a three-month average ending in September. Those who feel worse off overwhelmingly said it was because of higher prices. The frugality of the middle-class customer figures as a recurring theme in recent corporate earnings reports. Fast-food restaurant Wingstop said this month that middle-income diners have now joined lower-income ones in dialing back purchases. Target reported slumping sales and said customers are spending cautiously on discretionary items such as home decor and apparel. Walmart, meanwhile, posted strong sales as consumers from all income groups flocked to the retailer’s value.

Takeaways by Macro Roundup® AI

  1. Costs for U.S. goods and services stand 25% above 2020 levels, and 44% of middle-income respondents to the University of Michigan consumer sentiment survey said their finances were worse than a year earlier versus 23% who said better, on a three-month average ending in September.
  2. Middle-income respondents who felt worse off overwhelmingly attributed it to higher prices, and Wingstop reported that middle-income diners have joined lower-income ones in dialing back purchases.
  3. Target reported slumping sales and said customers are spending cautiously on discretionary items such as home decor and apparel, while Walmart posted strong sales as consumers across all income groups flocked to the retailer's value.

Related Articles:

  • Real Income Growth Shifts Down, Especially For The Young — Inflation-adjusted median income growth for 25–54-year-old workers declined and has hovered near decade lows, with a more marked slowdown among those aged 25–29. The authors suggest this may reflect a reduced pace of job-to-job transitions, seen in lower hiring and quit rates.
  • 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.
  • Jobless Growth — Labor demand growth may be too weak to keep pace with even modest labor supply growth: the labor market is somewhat weaker than before the pandemic, job growth has turned negative outside healthcare, and firms are focused on using AI to cut labor costs. Economists estimate most employment losses in routine manual occupations since the 1970s occurred during recessions.