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


Monday, July 20, 2026

AI Summary. Demand for frontier artificial intelligence models exceeds supply because computing capacity is scarce, allowing chip suppliers and their customers to resell compute at high margins. The author argues alarm over Chinese models is overblown, expecting the inference market to grow faster than training costs so labs can thrive at lower prices.

Ben Thompson Stratechery
Date Posted:

US AI labs look pricier than Chinese rivals right now — but that’s due to a transitory compute shortage, not a gap in the underlying cost structure. Once US compute scales up, the apparent gap will disappear.

Can AI labs thrive at lower prices as inference demand grows?

Core argument: Demand for frontier AI models exceeds supply because compute is scarce, allowing Nvidia to earn very large margins while its customers, such as SpaceXAI, resell compute at high margins to buyers like Anthropic.

Right now demand exceeds supply for frontier models, and supply is limited by a lack of compute. This computer shortage doesn't just mean that a compute supplier like Nvidia makes very large margins, but also that Nvidia's customers, like SpaceXAI, can turn around and resell compute at high margins as well to a company like Anthropic. Anthropic, meanwhile, can pay the markup because they can sell tokens with a higher markup still. I think the reaction to Kimi and Chinese models generally is pretty over-blown, at least from an economic perspective. As long as training consumed more GPUs than inference, it was critical to maximize inference revenue to help fund the next training run, which meant charging very high prices for inference. Going forward, however, I expect the inference market to grow much faster than training costs, which means they really can make it up in volume... frontier labs should have more confidence that they can not just survive but thrive with lower prices (once they have sufficient compute).

Takeaways by Macro Roundup® AI

  1. Demand for frontier AI models exceeds supply because compute is scarce, allowing Nvidia to earn very large margins while its customers, such as SpaceXAI, resell compute at high margins to buyers like Anthropic.
  2. Anthropic can absorb compute markups because it sells tokens at a still higher markup.
  3. The reaction to Kimi and Chinese models is overblown from an economic perspective, since the inference market is expected to grow much faster than training costs, letting frontier labs thrive at lower prices once they have sufficient compute.

Related Articles:

  • China’s Moonshot Unveils AI Model That Narrows Gap With US Firms — Chinese startup Moonshot priced its latest AI model at roughly the same level as Anthropic's Sonnet, a premium over other Chinese models, and said it has 2.8tn parameters and a 1m token context window. Artificial Analysis ranked the model ahead of Anthropic's Opus 4.8 on some frontier benchmarks, the first Chinese open-weight model to do so.
  • Semiquincententacles — Leading artificial-intelligence labs are moving to usage-based token pricing on a cost-plus basis that includes total ownership costs, pushing token prices higher and giving some enterprises reason to migrate to cheaper open models. Frontier models remain necessary for cybersecurity, distillation training, agents, and scientific discovery, where maximum performance is required.
  • Why .400 Hitters Disappeared — and What It Means for AI — Artificial intelligence models' capability gains are shrinking in percentage terms, falling from about 15% relative to the baseline early on to roughly 10% for the same absolute increment, narrowing the gap between frontier and good-enough models. The author argues this points to a commoditizing market where price, not minor model differences, becomes the main differentiator, pressuring frontier firms' margins.

AI Summary. Using 5.1m product listings from Sears catalogs, the authors construct a quality-adjusted price index implying much lower goods inflation for 1900–1990 than standard deflators, with real goods consumption growing 39x rather than 10.3x. They estimate faster growth before World War II (5.4% a year, 1900–1939) than after (4.2%, 1946–1980).

Verónica Bäcker-Peral and Benjamin Wittenbrink Massachusetts Institute of Technology
Date Posted:
Is Database:
Database
Is Important:
Important

Using 5.1mm Sears catalog listings and LLM-based hedonic estimation, this study finds real goods consumption grew 39-fold from 1900 to 1990, not 10.3-fold as official data imply, with the largest mismeasurement concentrated before WWII.

Does quality-adjusted pricing show faster goods consumption growth before the war?

Core argument: Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.

Measuring real GDP growth requires distinguishing changes in prices from changes in product quality... systematic quality adjustment. price indexes are unavailable for much of the twentieth century. We construct a new quality-adjusted price index using 5.1 million product listings from Sears catalogs, 1900–1990. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators between 1900 and 1990, real goods consumption grew by a factor of 39 using our index,compared with a factor of 10.3 using standard goods deflators. Figure 5 shows our estimates of the cost-of-living index for consumer goods in the solid red line. The dashed black line shows average cumulated price changes for the same sample of consumer goods. The gap.is largest before World War II, reversing the conventional view that goods consumption growth was slower before 1945 than in the post-war decades.As Gordon puts it, 'the history of price changes from 1914 to 1947 [is] the black hole where little is known.' This paper sheds light on that black hole. We estimate average annual real goods consumption growth of 5.4% for 1900-1939 and 4.2% for 1946-1980... the era of fastest growth was in the prewar, not postwar, contrary to conventional estimates.

Takeaways by Macro Roundup® AI

  1. Using a quality-adjusted price index built from 5.1 million Sears catalog listings, the authors estimate real goods consumption grew by a factor of 39 between 1900 and 1990, compared with a factor of 10.3 using standard goods deflators.
  2. The authors estimate average annual real goods consumption growth of 5.4% for 1900–1939 and 4.2% for 1946–1980, implying the fastest growth came in the prewar rather than postwar era, contrary to conventional estimates.
  3. The new cost-of-living index implies substantially lower goods inflation than conventional deflators, with the gap largest before World War II, a period Gordon describes as "the black hole where little is known.".

Related Articles:

  • European vs. U.S. Economic Performance: An Update — Productivity growth from 2000-2019 was higher in the US than in western Europe, but almost half the gap disappears when information and communications technology is excluded, even though tech was 9.2% of US output versus 5.4% in the EU. The author estimates this difference in industrial mix accounts for roughly 40% of the overall productivity growth gap.
  • Is The Great Stagnation Actually Just a ‘So-So’ Stagnation? — Long-running U.S. tests show population average reading scores moved from 255 to 256 out of 500 and math from 266 to 271, despite educational attainment rising more than three years. The author argues that if added schooling has not raised productivity, measured total factor productivity growth has been understated, shrinking the apparent "Great Stagnation" by about a third.

AI Summary. The "excess CAPE yield" — the gap between cyclically adjusted earnings yields on stocks and inflation-adjusted Treasury bond yields — stands at 1.4%, far below its long-run average of 4.7%. Historically, a low excess yield has been associated with poor subsequent 10-year excess returns on stocks, though it does not reliably predict an imminent crash.

Martin Wolf Financial Times
Date Posted:

US equities account for 55% of the value of global stock markets. Shiller’s excess Cape yield implies US stocks will return 1.4% over the next 10 years, well under their long-term mean of 4.7%.

Does a low excess earnings yield signal poor stock returns ahead?

Core argument: Shiller's excess CAPE yield stood at 1.4% in July 2026, far below its long-run average of 4.7%, a level indicating stocks are expensive relative to inflation-adjusted Treasury yields.

[Shiller's] "excess Cape yield” measures the difference between the inverted Cape ratio — or cyclically adjusted aggregate earnings per share — and inflation-adjusted yields on Treasury bonds. When stocks are expensive, the excess yield is low. When stocks are cheap, the excess yield is high. Crucially, when the excess yield is low, the subsequent 10-year excess returns on stocks have normally been poor. The excess yield is a mere 1.4% in July 2026, far below its long-run average of 4.7%. With stocks this expensive, the chances of healthy future returns must, again, be relatively low. Cape is far from a perfect predictor of an imminent crash: if it were, it would not be; well-informed investors would then not allow markets to reach extreme positions in the first place, and so crashes would be far less likely.

Takeaways by Macro Roundup® AI

  1. Shiller's excess CAPE yield stood at 1.4% in July 2026, far below its long-run average of 4.7%, a level indicating stocks are expensive relative to inflation-adjusted Treasury yields.
  2. The excess CAPE yield measures the gap between the inverted CAPE ratio and inflation-adjusted Treasury bond yields, and when it has been low, subsequent 10-year excess returns on stocks have normally been poor.
  3. CAPE is far from a perfect predictor of an imminent crash, since well-informed investors would otherwise not allow markets to reach extreme positions and crashes would be far less likely.

Related Articles:

  • US Stock Market To Stop Shrinking For First Time In 23 Years — Goldman Sachs estimates that net supply of US equity — new shares issued less shares removed by buybacks and take-privates — will be roughly flat in 2026 after being negative since 2003, with a larger influx expected in 2027 as lock-up periods on this year's initial public offerings expire.
  • Opportunities and Expectations: The Present Value of Growth Opportunities in Valuation — A stock's value can be split into steady-state value from current operations and the "present value of growth opportunities" from future value-creating investments, which has averaged 35% of the S&P 500's price historically. Lower shares of price attributed to growth opportunities have been associated with higher subsequent returns, most clearly at the extremes.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. The Bureau of Economic Analysis estimates total housing costs in the Miami–Fort Lauderdale–Palm Beach area are about 5% higher than in the New York metropolitan area, with southern Connecticut also cheaper than Miami. Miami's typical household income is about $1,000 below the national median, and average lawyer pay trails New York's by roughly $51,000.

Ben Steverman and Paulina Cachero Bloomberg
Date Posted:

South Florida’s consumer price index is up 36% relative to 2019, leaving Miami’s cost of living above that of New York. Wages have not kept pace; Miami metro area’s typical household income is ~ $1,000 less than the national median.

Is Miami still cheaper to live in than New York?

Core argument: Total housing costs in the Miami–Fort Lauderdale–Palm Beach metro area run about 5% higher than in New York and its suburbs, including New Jersey, according to the Bureau of Economic Analysis.

The total cost of housing in the Miami, Fort Lauderdale and Palm Beach metropolitan area is about 5% higher than in New York and its suburbs, which includes New Jersey, according to the Bureau of Economic Analysis. Southern Connecticut, where many hedge funds are located, is also now cheaper than Miami. Salaries largely aren’t keeping pace with costs. The Miami metro area’s typical household income is about $1,000 less than the national median, according to the latest US Census Bureau estimates. Even professionals make less in Miami than they do in New York City. The average lawyer in the New York City area earned about $51,000 more last year than one in Miami, BLS data show.

Takeaways by Macro Roundup® AI

  1. Total housing costs in the Miami–Fort Lauderdale–Palm Beach metro area run about 5% higher than in New York and its suburbs, including New Jersey, according to the Bureau of Economic Analysis.
  2. The Miami metro area's typical household income is about $1,000 below the national median, according to US Census Bureau estimates, as salaries largely fail to keep pace with costs.
  3. The average lawyer in the New York City area earned about $51,000 more last year than one in Miami, according to BLS data, and southern Connecticut, where many hedge funds are located, is now cheaper than Miami.

Related Articles:

  • Miami Got NYC’s Billionaires. Will It Get Their Businesses? — Miami has added investment banking and portfolio management jobs but has grown less than New York City, trailing Salt Lake City in banking growth and Atlanta in portfolio management growth. Measured by employment levels in both segments combined, South Florida ranks fifth among counties, behind Manhattan, Boston, Chicago, and Los Angeles.
  • Florida’s Population Boom Fizzles as High Costs Drive Away Middle Class — Florida's net domestic migration has slowed to a trickle as prime-working-age residents leave citing affordability and arrivals from other states decline. An influx of wealthy newcomers has helped drive up home prices, inflation in parts of the state outpaced the national average, home-insurance rates soared, and deaths began outnumbering births.
  • Miami Is Getting Much Richer. It’s Also Getting Smaller — People moving to Miami-Dade County from other states had average adjusted gross income of $178,000, more than double that of those leaving for other states, according to an analysis of Internal Revenue Service data. A residence-planning firm counts 38,800 millionaires in Miami, up 94% over a decade.

AI Summary. Lockheed Martin plans to field a lower-cost Patriot missile, the PAC-3 Adapted Capability Effector, priced at less than half the roughly $4mn per-missile cost of its current PAC-3 MSE interceptors, developed and manufactured with US and European industry partners. The company cites soaring military demand for more cost-effective ways to counter drones.

Sylvia Pfeifer Financial Times
Date Posted:

Lockheed Martin is releasing a new version of the Patriot missile that is half the cost of the current system. The system is designed to be co-produced by European partners to create scale.

Can a lower-cost interceptor meet surging demand for drone defense?

Core argument: Lockheed Martin's planned PAC-3 Adapted Capability Effector (ACE) missile would cost less than half the roughly $4mn per-missile price of its current PAC-3 MSE interceptors, according to US Army budget documents.

Lockheed Martin plans to field a new, lower-cost model of the Patriot missile that can be deployed to battlefields at speed, as demand from militaries for more cost-effective ways to counter drones soars as a result of recent conflicts. The new PAC-3 Adapted Capability Effector (ACE) missile would cost less than half its current PAC-3 MSE interceptors that, according to US Army budget documents, cost about $4mn per missile. Lockheed said it planned to develop and manufacture the weapon together with US and European industry partners.

Takeaways by Macro Roundup® AI

  1. Lockheed Martin's planned PAC-3 Adapted Capability Effector (ACE) missile would cost less than half the roughly $4mn per-missile price of its current PAC-3 MSE interceptors, according to US Army budget documents.
  2. Lockheed Martin said it plans to develop and manufacture the lower-cost Patriot missile with US and European industry partners, fielding a model that can be deployed to battlefields at speed.
  3. Military demand for more cost-effective ways to counter drones is soaring as a result of recent conflicts.

Related Articles:

  • Is the Industrial Base on a Wartime Footing? A Progress Report — About 10,000 new firms have entered the US defense market in two years, and nontraditional companies received over $120bn in contract obligations in fiscal 2025, while munitions contract obligations have risen 330% since fiscal 2010. The Defense Department is signing large-scale multiyear munitions agreements and backing a rare earth supply chain outside Chinese control.
  • US Defence Groups To Meet Donald Trump As Missile Production Struggles — Research from PwC finds the five largest US defence contractors had a combined backlog of undelivered orders of $1.36tn, up 24% from the prior year, as Lockheed Martin, Northrop Grumman, Raytheon and L3Harris invest billions of dollars expanding manufacturing. The US government has signed framework agreements with four companies to produce more than 10,000 low-cost cruise missiles over three years.
  • Trump Invokes Cold War-Era Law to Boost Munitions Production — The U.S. has invoked the Defense Production Act to expand munitions output amid doubts that American weapons makers can meet increased demand. U.S. officials say more than 1,000 long-range Tomahawk missiles and 1,500–2,000 air-defense interceptors have been fired in the war with Iran, and replacing those stockpiles could take up to six years.

Tuesday, July 21, 2026

AI Summary. About 73m US households hold retirement accounts, mostly defined-contribution plans whose balances have risen $6.7tn, and 45m households account for nearly $15tn in annual outlays, close to 3x Germany's economy and 70% of China's GDP. This group's spending has sustained faster growth than comparably wealthy economies.

Jason Thomas Carlyle
Date Posted:
Is Database:
Database
Is Important:
Important

Citing the spending of the top 45mm US households, Jason Thomas argues that US economic growth could be characterized less as ‘k-shaped’ than “travelling at two speeds, one roughly the same rate as Europe’s and another that’s racing far ahead.”

Does retirement wealth explain why US spending outpaces peer economies?

Core argument: Balances in US defined-contribution retirement plans have risen by $6.7tn since the start of 2019, a 12.7% annually compounded gain, with roughly 73 million US households holding retirement accounts.

Roughly 73 million US households have retirement accounts (primarily defined-contribution plans like 401ks) that consist primarily of claims on businesses whose revenue growth and market values provide another hedge against inflation. Balances in defined contribution plans have increased by $6.7 trillion (+12.7%, annually compounded) since the start of 2019. US personal savings rates have fallen sharply over the past year (from 5.5% in April 2025 to 3% in May 2026) but that seems entirely rational. If your retirement balance is far above where you expected it to be, why not spend a bit more of your current income than previously intended? If we net across these overlapping cohorts and exclude recent first-time home purchases, we’re left with 45 million households that combine to account for nearly $15 trillion in annual outlays. That’s an extraordinary sum, equal to nearly 3x the size of the entire German economy and 70% of the GDP of China. And this third of the population has not only been insulated from the inflation shock but also exhibits the propensity to spend out of wealth and income to an extent that’s sustained a far higher rate of GDP growth than observed in economies with comparable living standards.

Takeaways by Macro Roundup® AI

  1. Balances in US defined-contribution retirement plans have risen by $6.7tn since the start of 2019, a 12.7% annually compounded gain, with roughly 73 million US households holding retirement accounts.
  2. Netting overlapping cohorts and excluding recent first-time home purchases leaves 45 million US households accounting for nearly $15tn in annual outlays, equal to nearly 3x the German economy and 70% of China's GDP.
  3. The US personal savings rate fell from 5.5% in April 2025 to 3% in May 2026, a decline the article argues is rational when retirement balances sit far above expectations.

Related Articles:

  • K-Shaped Economy? — Available spending data does not support the narrative of a bifurcated "K-shaped" consumer economy: surveys show households earning under $50,000 reported spending growth of 5%, versus 4.6% for those earning over $100,000. Government data show the top income decile's share of aggregate spending at 22.8%, down from 23.4% a year earlier.
  • The K-Shaped Economy’s Defining Statistic Has Some Problems — The widely cited estimate that the top 10% of US earners account for 45% of consumer spending comes from a method combining Federal Reserve survey and financial-accounts data. Its author says he is more confident in the trajectory—a significant, consistent rise in the top 10% and 20% shares over 30–35 years—than the level.
  • The Two Europes — The International Monetary Fund projects Eastern European economies will close much of the gap with US per capita GDP — Poland from 34% to 67%, Romania 27% to 60%, Lithuania 29% to 69% — while Western Europe slips, with France falling from 86% to 71% and Italy from 93% to 68%.

AI Summary. Using linked Danish administrative data, the authors estimate that starting GLP-1 treatment reduces long-term sickness leave by 0.95 percentage points, a 17.3% decline from a pre-treatment mean of 5.5%, with no statistically significant effects on employment or total income over four years. The reduced absence is valued at 1.3–1.5% of annual labor income per employed person.

N. Meltem Daysal, Camille Fredrickson, Ida Kristiansen, Mircea Trandafir, et al. National Bureau of Economic Research
Date Posted:

In Danish data, GLP-1 treatment reduced long-term sick leave meaningfully and persistently, generating fiscal savings of 1.3 to 1.5% of annual labor income per employed individual, even in the absence of detectable gains in employment or income.

Do weight-loss drugs reduce long-term sickness leave without raising employment or income?

Core argument: GLP-1 treatment reduces long-term sickness leave by 0.95 percentage points, a 17.3% decline relative to the pre-initiation mean of 5.5%, according to estimates from linked Danish administrative data and a matched stacked difference-in-differences design.

This paper provides new evidence on the economic consequences of GLP-1 treatment using linked Danish administrative data and a matched stacked difference-in-differences design. Comparing early Ozempic initiators to observably similar patients who initiate four years later, we find that GLP-1 treatment reduces long-term sickness leave by 0.95 percentage points, corresponding to a 17.3% decline relative to the pre-initiation mean of 5.5% (Figure 2). This effect grows from roughly 0.8 percentage points in the first two post-initiation years to about 1.1 percentage points in years 3 and 4 (Figure 2) and is accompanied by declines in emergency department encounters and cardiovascular medication use, consistent with sustained treatment exposure and gradual improvements in underlying health. [There are no statistically significant or economically meaningful effects on employment or total income over four years.] Yet, even in their absence, GLP-1 treatment generates meaningful fiscal spillovers by reducing prolonged sickness absence, valued at 1.3–1.5% of annual labor income per employed individual. [The long-term sickness-leave results are robust across alternative specifications and comparison groups (Figure 3).]

Takeaways by Macro Roundup® AI

  1. GLP-1 treatment reduces long-term sickness leave by 0.95 percentage points, a 17.3% decline relative to the pre-initiation mean of 5.5%, according to estimates from linked Danish administrative data and a matched stacked difference-in-differences design.
  2. The estimated sickness-leave effect grows from roughly 0.8 percentage points in the first two post-initiation years to about 1.1 percentage points in years 3 and 4, alongside declines in emergency department encounters and cardiovascular medication use.
  3. GLP-1 treatment shows no statistically significant or economically meaningful effects on employment or total income over four years, while the reduction in prolonged sickness absence is valued at 1.3–1.5% of annual labor income per employed individual.

Related Articles:

  • National-Level and State-Level Prevalence of Overweight and Obesity Among Children, Adolescents, and Adults in the USA — An estimated 15.1m US children aged 5–14, 21.4m older adolescents aged 15–24, and 172m adults aged 25 and over had overweight or obesity, with adult prevalence highest in North Dakota for males (80.6%) and Mississippi for females (79.9%). Obesity prevalence among adolescents rose roughly 158–186% over three decades.
  • GLP-1–Induced Weight Loss and the Female Obesity Penalty — Women starting GLP-1 weight-loss treatment lose 1.4–2.5 BMI points, rising to 2.7–4.2 points after 1.5 years or more, and those who are single increase their probability of being married or cohabiting by 18.3 percentage points, with no change for women already partnered. Women not employed at the outset raise their employment rate by 13 percentage points.
  • Victoria’s Secret Hits Record High as Bra Strategy Resonates — Victoria's Secret shares hit a record high after the lingerie retailer beat earnings estimates and raised its annual net sales guidance to as much as $7.13bn. The company has posted four consecutive quarters of annual revenue growth, with its bras gaining market share among 18- to 44-year-olds and growth in both the under-$50,000 and over-$200,000 income categories.

AI Summary. Immigration from Asia and Latin America has been the chief driver of rising US diversity and the declining non-Hispanic White share of the population. Intermarriage across racial and ethnic lines is far more common among Hispanic and Asian Americans, and rising among Black and non-Hispanic White Americans, leaving more people outside single racial categories.

Justin Fox Bloomberg
Date Posted:
Is Database:
Database
Is Important:
Important

Less than half of Americans < 29 years old are non-Hispanic whites. As of 2020, 33.8mm Americans – 10.2% of the population – identify as being of two or more races, largely driven by intermarriage between whites and either Hispanics or Asian Americans.

Are immigration and intermarriage making single racial categories obsolete?

Core argument: Immigration from Asia and Latin America since the 1960s has been the chief driver of rising U.S. diversity and the declining non-Hispanic White share of the population.

The increase in immigration from Asia and Latin America since the 1960s has been the chief driver of the rise in diversity and decline in the non-Hispanic White share of the population. But those immigrants have been doing what generations of immigrants before them did and, well, becoming Americans. Marriages across racial and ethnic lines are much more prevalent among Hispanic and Asian Americans than Black or non-Hispanic White Americans, while intermarriage rates have been rising steadily for the latter two groups, too. As a result, a growing share of Americans just isn’t going to fit neatly into any single racial or ethnic category that the US government can come up with.

Takeaways by Macro Roundup® AI

  1. Immigration from Asia and Latin America since the 1960s has been the chief driver of rising U.S. diversity and the declining non-Hispanic White share of the population.
  2. Intermarriage across racial and ethnic lines is much more prevalent among Hispanic and Asian Americans than among Black or non-Hispanic White Americans, though rates have been rising steadily for the latter two groups as well.
  3. A growing share of Americans does not fit neatly into any single racial or ethnic category the U.S. government defines, as recent immigrants follow earlier generations in becoming Americans.

Related Articles:

  • Do Adults Have the Skills They Need to Thrive in a Changing World? — An international assessment of adult skills describes numeracy proficiency levels ranging from counting objects and adding small whole numbers at the lowest level, to extracting information from tables and graphs and performing basic arithmetic with money and percentages at Level 1, up to analysing complex mathematical information and critically evaluating whether data support a claim at Level 5.
  • Do Past Wealth Gaps Explain Modern Inequality? Evidence From Immigration To The United States — Historical records indicate immigrants arriving in the United States around the turn of the twentieth century came with almost no wealth, and by 1920 nearly half of white adults were foreign-born or had foreign-born parents. Households of Southern or Eastern European ancestry, who arrived later with fewer resources, are on average wealthier than those of Northwestern European ancestry.
  • America’s Immigration Mess: An Illustrated Guide — Current Population Survey estimates indicate America's foreign-born population surpassed 50m for the first time and exceeded 15% of the national population, above the prior peak of 14.8% recorded in 1890. Mass immigration during that earlier wave was associated in contemporary opinion with widening income and wealth gaps and depressed wages for less-skilled native-born men, and sweeping national restrictions followed.

AI Summary. A monthly slowdown in U.S. consumer price inflation excluding energy is likely a fluke, reflecting a recurring post-pandemic pattern of summer slowdowns and unusually large price declines in a few categories such as motor vehicle insurance, phone bills, and jewelry. Wage growth and producer prices suggest underlying inflation running about 1–1.5 percentage points faster per year than before the pandemic.

Matt Klein The Overshoot
Date Posted:

US inflation seems to be slowing, but mostly due to transient effects, including seasonal fluctuations. Goods and services, both intermediate and final, continue to rise in price at an underlying rate of 1 to 1.5% of pre-pandemic levels, as do wages.

Does a monthly inflation slowdown signal genuine disinflation?

Core argument: Since the pandemic, price increases have run fastest in the first months of the year and then slowed temporarily every summer — in 2023, 2024, 2025, and to a lesser extent 2022.

Even sans the drop in prices of energy goods and services, the Consumer Price Index (CPI) was about the same in June as in May - seasonally-adjusted, the slowest pace of one-month inflation since Jan. 2021. While it would be tempting to conclude that the long-awaited disinflation has arrived, this is more likely a fluke. There are four basic reasons for skepticism: Since the pandemic, there has been a recurring seasonal pattern where price increases have been fastest in the first few months of the year, only for those spikes to be followed by temporary—and misleading—slowdowns in inflation every summer (in 2023, 2024, 2025, and to a lesser extent, 2022). Inflation ex-energy was depressed by extremely large and unusual price declines in a handful of odd categories (motor vehicle insurance, phone bills, and jewelry), while categories that have tended to be better barometers of underlying inflationary trends showed no meaningful deceleration. Data from the Producer Price Index (PPI) suggests that input costs, particularly for business services, are still rising rapidly. Most importantly, wage growth and the job market continue to be roughly consistent with underlying inflation being about 1-1.5pp faster per year than pre-pandemic.

Takeaways by Macro Roundup® AI

  1. Since the pandemic, price increases have run fastest in the first months of the year and then slowed temporarily every summer — in 2023, 2024, 2025, and to a lesser extent 2022.
  2. Wage growth and the job market remain roughly consistent with underlying inflation running about 1–1.5pp per year faster than pre-pandemic, while the Producer Price Index suggests input costs, particularly for business services, are still rising rapidly.

Related Articles:

  • The Labor Market Explains Why Inflation Won’t Go Away — Unemployment has stayed at or below the Federal Reserve's estimated non-accelerating inflation rate of unemployment of under 4.5% for 57 months, tied for the longest such streak on record. The author argues this persistent labor market tightness is a key reason inflation has remained elevated and that keeping interest rates higher for longer is needed to reach the 2% target.
  • The U.S. Job Market is (Still) Inflationary — Prices for locally produced U.S. services are rising about 1–1.5 percentage points faster than in the years just before the pandemic, leaving underlying inflation as far from the Federal Reserve's goals as it was three years ago. Prices for manufacturing components and data-center-related loaded circuit boards have also risen.
  • Inflation and Debt — Congressional Budget Office long-term projections show sustained primary deficits of 2% of GDP driving the debt-to-GDP ratio steadily higher, a path the agency itself labels unsustainable. Closing a 2% of GDP fiscal gap is economically straightforward for a growing country at peace, but inflation or default would not resolve the problem, since prospective deficits still require continued borrowing.

AI Summary. Chinese regulators led by the Ministry of Commerce have consulted domestic artificial intelligence and chipmaking companies on limiting overseas transfer of model training data and foreign downloads of model weights, while still allowing overseas customers to access the models and services. Restrictions could also cover foreign acquisitions of strategic technology groups.

Zijing Wu and Ryan McMorrow Financial Times
Date Posted:

Chinese regulators are considering expanding and tightening export controls on Chinese AI models and semiconductor technologies.

Is China considering export controls on AI models and chips?

Core argument: China's Ministry of Commerce has consulted Alibaba, ByteDance, and Zhipu on limiting overseas transfer of key model-training data and foreign downloads of their model weights, while still permitting overseas customers to access the models and services, according to two people involved.

Regulators led by the Ministry of Commerce (MofCom) have been consulting leading domestic AI and chipmaking groups on how to prevent China’s advanced technologies and star start-ups from being acquired by the West, according to two people involved in the discussions. MofCom talked to AI companies including Alibaba, ByteDance, and Zhipu on limiting the transfer of key data for the training of their models overseas, as well as allowing their model weights to be downloaded by foreign users, the people said. China would still let overseas customers access the models and services, however. Potential restrictions could also be imposed on the overseas acquisition of strategic technology groups in areas such as agentic AI, the people said. This is mainly to address a loophole that Beijing believes has led to Meta’s $2bn acquisition of Manus, a deal that was subsequently ordered to be unwound by Chinese authorities.

Takeaways by Macro Roundup® AI

  1. China's Ministry of Commerce has consulted Alibaba, ByteDance, and Zhipu on limiting overseas transfer of key model-training data and foreign downloads of their model weights, while still permitting overseas customers to access the models and services, according to two people involved.
  2. Beijing is weighing restrictions on overseas acquisitions of strategic technology groups in areas such as agentic AI, mainly to close a loophole it believes enabled Meta's $2bn acquisition of Manus, a deal Chinese authorities ordered unwound.
  3. The Ministry of Commerce has led consultations with leading domestic AI and chipmaking groups aimed at preventing China's advanced technologies and star start-ups from being acquired by the West, according to two people involved in the discussions.

Related Articles:

  • China Weighs Limits on the AI Models American Companies Love — Chinese officials have discussed with domestic AI labs how to safeguard their most powerful models' proprietary technology, out of concern that sharing it could aid adversaries and be weaponized against China. Models from Chinese companies such as DeepSeek and Moonshot AI are widely used by US firms as a cheaper alternative to OpenAI and Anthropic.
  • Who’s Afraid of Chinese Models? — Demand for frontier artificial intelligence models exceeds supply because computing capacity is scarce, allowing chip suppliers and their customers to resell compute at high margins. The author argues alarm over Chinese models is overblown, expecting the inference market to grow faster than training costs so labs can thrive at lower prices.
  • China and the Future Of Science — China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.