Archive for May 2017

April housing starts were OK. Single family starts were up 8.8% Y-o-Y, 7.4% YTD, and, somewhat surprisingly, have been flat since 10/16. Importantly, trends have emerged. Comparing 15Q1 – peak house size – to today, median and average house sizes are down 130 and 108 square feet respectively. Starts in the South have returned to…

Consumer spending is fine! Retail sales, that is sales at stores, restaurants, and importantly online retailers, rose 0.4% in April, the best gain in three months and sales in March were meaningfully upwardly revised. However, April non-store retail sales (which includes online shopping) jumped 1.4%, while department stores sales rose just 0.2%. Over the past…

The Friday File: If your favorite sports team isn’t winning, don’t blame the players, coaches, and GMs, blame politicians! Turns out that the higher the income tax rate, the lower the team winning percentage. This effect is most powerful for teams in leagues that have salary caps; they cannot compensate players for their increased taxes.…

While you may sneer at each mention of the 35-hour French workweek, it’s not as extreme as it sounds. It’s simply the legal maximum number of hours that must be worked before overtime is paid. Moreover, the average workweek in France is 36 hours, and third, the average US workweek is currently 34.4 hours and…

Despite a sizeable cutback in oil production by OPEC and several non-OPEC nations and a subsequent rise in price, oil prices are testing 5-month lows. The initial rise in price caused US fracking activity to increase, negating the OPEC cutback. Moreover, total US gasoline demand is noticeably shrinking. As a result, US crude inventories keep…

While Bitcoin was first used on 1/12/09, its value remained well under $50 until early 2013 when it hit $200 for the first time and $1,100 six months later. Bitcoin then collapsed, bottoming at $200 in mid-2015. Since then, it’s been on a tear and is now worth over $1,600. This is amazing as nations…

Friday’s labor report was strong. The unemployment rate fell to 4.4%, its lowest level since 5/01. The broadest measure of unemployment declined to 8.6%, its best showing since 12/07, and monthly employment gains this year are averaging 185,000/month, hearty! The only disappointment, Y-o-Y wage growth remains weak at 2.5%. The tightening labor market essentially insures…

The Friday File: Transporting $10 million is easiest in 1,000 franc Swiss banknotes. They would weigh 25 lbs and fit in one briefcase. Using enough 500 euro banknotes would weigh 45 lbs and fit in two briefcases. Using US $100 bills would require eight briefcases and weigh 220 lbs. Using 100 bolivar Venezuelan banknotes might…

Despite a decent economy, Y-o-Y loan growth by banks in the US dramatically decelerated in late 2016. It’s partly because firms are going directly to bond markets, oil & gas firms are paying down lines of credit, and undoubtedly due to heightened political uncertainty as tax, trade and healthcare policy remain unknown. Reduced auto lending…

We know 70% of households don’t itemize deductions, that there are 117 million households, and that 34% of all households (42 million) rent. Assuming all renters take the standard deduction, that means 40 million owner households take the standard deduction and 35 million owner households itemize. We also know that 30%, or 21 million, households…