Archive for September 2023

The Friday File: Smucker’s Uncrustables, the lunchbox treats first produced in 1995, were introduced to stores in 2000. Sales are expected to hit $800 million in FY2024. Currently, four million of the sandwiches are produced each day in Denver, CO (where the plant is being expanded)and Scottsville, KY, and a new plant is being built…

August CPI rose a sharp 0.6% M-o-M, largely attributable to costlier gasoline. Core inflation rose 0.3% M-o-M, its highest reading since May, but just 4.3% Y-o-Y, its lowest reading since 9/21 and its 10th decline in 11 months. However, core services rose 0.6% M-o-M, unchanged since March. The Fed’s favorite, core services minus housing rose…

The resumption of student loan payments on 10/1/23 is likely to knock 0.25 percentage points off quarterly annualized GDP. A government closure will knock 0.2 percentage points per week off quarterly annualized GDP, and a UAW strike against all three automakers would knock off another 0.1 percentage point/week. A two-week closure combined with a three-week…

Pricey Payments High rates have pushed up the average interest and principal payment for new borrowers using a 30-year mortgage to $2,306. Similarly, two years ago 5% of new borrowers had a payment over $3,000/month, today it’s almost 25%. Moreover, high rates have depressed the dollar volume of cash-out refi activity by about half from…

While gasoline prices have increased somewhat since May as the price of WTI crude has risen by 13%, diesel prices are up over 40% over the same period. It’s because in May Saudi Arabia, Russia, and others in OPEC+ surprised markets with production cuts, and their heavy sour crude, which is usually cheaper than lighter…

The Friday File: During 1H23, AMC Theaters grossed $2.3 billion. Ticket sales generated $1.3 billion, other categories including advertising, auditorium rental, arcade games, etc. generated $200 million, and food and beverage spawned $817 million. Amazingly, food and beverage costs were $153 million, that’s a gross profit margin of 82% and a 434% markup. By contrast,…

Since 2020, the employed foreign-born population of the U.S. has increased by 9.9%. It took until 21Q4 for this population to return to where it was pre-Covid. As for the native-born population, it is now 0.7% higher than it was pre-Covid, and it took until 22Q3 before it fully returned to its pre-Covid level. Immigration…

Student loans began accruing interest on 9/1/23 and loan payments are due starting 10/1/23, clipping GDP by one-fifth of a point. Additionally, the odds of a 10/1/23 government closure are rising, and that would knock off an astounding one-fifth of point of GDP/week. Lastly, it’s increasingly likely that the UAW will simultaneously strike Ford, G.M.,…

August payrolls grew by 187,000, and June and July were revised sharply down and now show growth of 105,000 and 157,000, respectively, the first three-month sub-200,000 stretch since mid-2019. The unemployment rate rose from 3.5% to 3.8%, and wage growth slid from 4.4%/year to a still too high 4.3%/year. So far OK, but these declines…

The Friday File: In 2000, avocado imports to the U.S. totaled 170 million pounds and avocado consumption was 2 pounds/person. By 2021, imports totaled 2.5 billion pounds, an increase of roughly 1,400%, as consumption rose to 8 pounds/person. With domestic avocado production and acreage steadily declining since 2011, 90% of avocados currently consumed in the…