Monday May 21, 2012
The Census ACS survey is under threat.
In the early stages of the Depression, policymakers were flying blind. But at least they recognized the need for better data, and took action. All business people know that when there is a problem, a key first step is to measure the problem. That is why I've been a strong supporter of trying to improve data collection on the number of households, vacant housing units, foreclosures and more.
But unfortunately some people want to eliminate a key source of data ...
How can we not all agree on the importance of something like this?
Friday May 18, 2012
A private spaceship owned by a company called SpaceX is scheduled to blast off from Cape Canaveral in Florida early Saturday morning.
If all goes well, the unmanned capsule will rocket up on a mission to deliver food and other supplies to the International Space Station, becoming the first commercial spacecraft to visit the outpost.
The highly anticipated mission could mark the beginning of what some say could be a new era in spaceflight, with private companies operating taxi services that could start taking people to orbit in just a few years.
Monday May 7, 2012
The declining size of the labor force is beginning to look like a permanent feature of the economy.
And from Felix Salmon:
For demographic reasons — the retirement of the baby boomers — the labor force participation rate is naturally going to fall over the next decade. But go back just one year, to March 2011, and look at the official CBO projection of the labor force participation rate. The CBO saw a rate of 64.6% in 2012 — a full percentage point higher than we're at right now. The participation rate wasn't expected to fall to today's level of 63.6% until 2017.
Tuesday May 1, 2012
Rising rents will likely be a growing contributor to inflation pressures.
According to the Commerce Department, the median U.S. rent was $721 per month in the first quarter, up 5.6% from year-earlier levels.
[ via ]
Tuesday April 24, 2012
Can space please be the next big thing finally?
Between SpaceX's rendezvous with the ISS next month and today's announcement by Planetary Resources to mine asteroids and build space "gas stations," one might get the impression that the future is nearly here.
Wednesday April 4, 2012
Apartment vacancy rates are falling while rents are on the rise.
The vacancy rate fell to 4.9 percent in the first quarter from 6.2 percent a year earlier, the New York-based property-research company said in a report today. It was only the third time since Reis began gathering the data 31 years ago that the rate was less than 5 percent.
When vacancies drop below 5 percent, "effective rents tend to spike as landlords perceive that tight market conditions allow for greater pricing power," Reis said in the report.
Tuesday April 3, 2012
What an export driven US economy looks like.
The more the world relies on smart machines, the more domestic wage rates become irrelevant for export prowess. That will help the wealthier countries, most of all America. ... The less manufacturing has to do with labor costs and relative wage levels, the greater the comparative advantage of the United States.
Friday March 23, 2012
America is becoming more energy independent.
National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020.
The mini energy boom is creating a lot of jobs too.
Thursday March 15, 2012
A study of housing seasonality featuring our housing inventory numbers.
March marks the start of the housing season. Prices peak in May, sales in June, and inventories in July. In colder regions, seasonal swings are bigger, and the market peaks later.
Wednesday March 14, 2012
There seems to be something in the air. Within the last day or so, three ex-employees have written about why their feelings have changed about three formerly beloved companies.
Friday March 9, 2012
Remember that rising home prices are not an unambiguous good.
The bursting of the housing bubble presents us with a good opportunity to re-examine the proposition that expensive houses are a good thing. Expensive land is, of course, a benefit to those who own it. But scarce -- and therefore expensive -- houses are a barrier to opportunity. In an economy where tradeable production can take place overseas, or increasingly be done by machines, access to the high-wage, high-productivity labor markets of America's richest cities is more important than ever.
The implication here is that higher home prices and rents prevent more people from living in highly productive economic regions (be it North Dakota or Manhattan). Home affordability is a benefit to the economy in the long run. Matt's book The Rent Is Too Damn High covers this topic in more detail.
Friday March 2, 2012
Tuition rises as states cut money for higher education.
It is this cumulative public divestment — and not extravagances like climbing walls or recreational centers advertised on a few elite campuses — that is primarily responsible for skyrocketing tuitions at state institutions, which enroll three out of every four college students.
Colleges have found ways to hold costs per student relatively steady. Since 1985, the average amount that public institutions spend on teaching each full-time student over the course of a year has barely budged, hovering around an inflation-adjusted $10,000, according to a State Higher Education Executive Officers report. But in the same period, the share of instruction costs paid for by actual tuition — not the sticker price, but the amount students actually pay after financial aid — has nearly doubled, to 40 percent from 23 percent.
This is an important point worth reiterating. Public colleges and universities have traditionally received significant funding from the state. While these colleges and universities have done a fair job of keeping their costs from increasing over the years, the funding they receive from the state has been significantly reduced. The only way to make up this shortfall is to raise tuition.
Thursday March 1, 2012
Mortgage rates are low, but it's tougher to get approved.
Is this what traditional lending standards look like or are we overcompensating after a period of loose standards?
Federal Reserve Chair Ben Bernanke wondered as much during his testimony before the House financial services committee this morning. "There's a lot of concern about the tightness of mortgage standards, even when people qualify for GSEs," he said, referring to loans guaranteed by Fannie, Freddie and other government-sponsored enterprises.
Bernanke cited the Fed's recent white paper on housing that laid out the argument in greater detail, pointing out that tight standards have yet to unwind even for prime mortgages that are eligible for government guarantees. "The extraordinarily tight standards that currently prevail reflect, in part, obstacles that limit or prevent lending to creditworthy borrowers," the paper says. "Less than half of lenders are offering mortgages to borrowers with a FICO score of 620 and a down payment of 10 percent — even though these loans are within the GSE purchase parameters."
Wednesday February 29, 2012
If we look at all stocks available in the market and sort these on the basis of their historical volatility levels, lower-volatility stocks have generated higher returns than higher-volatility stocks. If we sort using beta, (a standard proxy for risk) rather than volatility, the low-beta stocks have historically generated substantially higher returns than their high-beta counterparts. The outperformance provided by selectively building a portfolio out of low-beta/low-volatility stocks is on the order of 2.0% per year, as compared to buying a portfolio in a market-cap weighted index such as the S&P 500 Index.
Sunday February 26, 2012
But what should our pursuit of innovation actually accomplish? By one definition, innovation is an important new product or process, deployed on a large scale and having a significant impact on society and the economy, that can do a job (as Mr. Kelly once put it) "better, or cheaper, or both." Regrettably, we now use the term to describe almost anything. It can describe a smartphone app or a social media tool; or it can describe the transistor or the blueprint for a cellphone system. The differences are immense. One type of innovation creates a handful of jobs and modest revenues; another, the type Mr. Kelly and his colleagues at Bell Labs repeatedly sought, creates millions of jobs and a long-lasting platform for society's wealth and well-being.
…
Adam Davidson on the lottery economy.
Increasing portions of the US economy appear to resemble the Hollywood winner takes all reward model. How do you manage a career with fewer safe bets employment-wise?
It's not clear what today's eager 23-year-old will do in 5 or 10 years when she decides that acting (or that accounting partnership) isn't going to work out after all. The best advice may be to accept that economic success in America will come as much from the labor lottery as from hard work and tenacity. The Oscars make clear that there is only so much room at the top. In a lottery-based economy, you need some luck, too; now, perhaps, more than ever. People should be prepared to enter a few different lotteries, because the new Plan B is just going to be another long shot in a different field.
[ via ]
Friday February 10, 2012
Francis Fukuyama interviews Peter Thiel.
I think the advanced economies of the world fundamentally grow through technological progress, and as their rate of progress slows, they will have less growth. This creates incredible pressures on our political systems. I think the political system at its core works when it crafts compromises in which most people benefit most of the time. When there's no growth, politics becomes a zero-sum game in which there's a loser for every winner. Most of the losers will come to suspect that the winners are involved in some kind of racket. So I think there's a close link between technological deceleration and increasing cynicism and pessimism about politics and economics.
I'm not always a fan of Thiel's arguments, but there are a lot of insightful comments in this interview.
[ via ]
Monday February 6, 2012
Calculated Risk is calling the bottom for housing. The evidence (including declining inventory and increasing home asking prices) supports his conclusions.
Friday February 3, 2012
The CES jobs figure of 243K jobs added last month was great, but the CPS jobs number (an alternative jobs measure by household survey) was up 847K 631K in January!
Update: As CR notes, this large one month delta is in part due to population estimate adjustments made annually. With the population adjustment applied to the CPS employment numbers, the more accurate 1 month delta is 631K. Funny that the BLS doesn't revise prior numbers as they do with other series.
Monday January 30, 2012
Private sector GDP growth has been slightly better than the headline number.
Over the last two years, the private sector grew at an average annual rate of 3.2 percent, while the government shrank at an annual rate of 1.4 percent.
The combined result has been economic growth of 2.3 percent.
