Archive for June 2024

The Friday File: While Coca-Cola is by far the single most popular carbonated U.S. drink with a market share of 19.18%, there is a spirited fight for second. After climbing steadily for 20 years, Dr. Pepper, invented in 1885, is now #2 at 8.34%. In third is Sprite at 8.09%, followed by Diet Coke at…

At the most recent Fed meeting, eight members expect there to be two 25bps cuts by 12/24, seven expect one, and four expect none. The median is one cut, the mode is two, and fifteen of nineteen, only 12 of which vote, expect one or two. It’s very fuzzy. Moreover, put almost no weight in…

Inflationary pressures continued ebbing in May with the CPI unchanged (0.0%) M-o-M and up 3.3% Y-o-Y, down from 3.4% Y-o-Y in April. More importantly, core-CPI rose 0.2% M-o-M compared to 0.3% in April and 3.4% Y-o-Y, both the mildest gains since 2021. Critically, the May slowdown was broad-based and keeps the Fed on track for…

Pre-Covid, consumer credit grew by $15 billion/month and remained that way through 12/21. During CY2022, consumer credit growth jumped to $30 billion/month, but since 1/23 growth has steadily weakened and is now about $5 billion/month. Moreover, credit card balances declined by $462 million in April, the first decline in three years, evidence of strain on…

The establishment survey reported May net new jobs of 272,000, way more than expected, and wages up 0.4% M-o-M and 4.1% Y-o-Y, both slightly hot. However, the household survey showed the labor force participation rate falling to 62.5%, the unemployment rate rising to 4%, and the number of jobs declining by 408,000. During turning points,…

The Friday File: In 1981, the New Zealand sheep-to-person ratio peaked at 22 when the sheep population was about 70 million and the human population 3.2 million. Since then, the ratio has steadily fallen and in 2022 was just 4.6, the lowest ratio in at least 170 years. The sheep now number about 24 million…

Hoping to change jobs? Think again. The number of available jobs in April sank to 8.059 million, down from 8.355 million in March, 9.904 million a year ago, and a peak of 12.182 in 3/22. They are at their lowest level since 2/21. As a result, the number of job openings/job seeker is down to…

Estimates of 24Q2 GDP growth are quickly sinking as more data becomes available. The Atlanta Fed is now expecting quarterly seasonally adjusted annualized growth of 1.8%, down from 4.2% in mid-May. Similarly, the NY Fed now also sees growth at 1.8%, down from 2.75% in late April, and the St. Louis Fed sees just 1.2%…

During the run up to the Housing Bust, home prices surged and the value of revolving home equity loans rose dramatically from $185 billion in 2002 to $603 billion in 2009 as households tapped into their home equity and supercharged the economy. Now, despite large home price increases, the value of revolving home equity loans…

The April personal savings rate was just 3.6%, a level seen only in 2022 following repeated Covid stimulus and in 2005/06 in the run up to the Housing Bust. Moreover, excess Covid savings have been depleted, and the labor market is slowing. This matters because real disposable income growth, the primary driver of consumer spending…