Month: August 2022

Carl Quintanilla of NBC News provides us with a sampling of charts from a recent JPMorgan report:

The easing inflation/supply-chain crisis, in four charts.

(via JPMorgan) pic.twitter.com/F38bpA73Mp

— Carl Quintanilla (@carlquintanilla) August 19, 2022

Of course, there's always this too:

The monthly change in CPI (i.e., velocity) peaked in January and has been easing off ever since. Likewise, although the monthly acceleration of CPI has been declining for nearly two years, the trendline crossed into negative territory in January.

If you use other measurements you get roughly the same results: inflation seems to have peaked in early 2022 and has been slowly softening ever since. The monthly data is volatile, but the trendline tells all.

Some of you may have noticed and others might not have, but the blog went kablooey last night and didn't get fixed until this morning. The cause was something to do with a plug-in from my hosting service, which they promptly fixed as soon as I contacted them.

In any case, no harm done since I had nothing to say anyway. But maybe I do now that I've finally awakened this morning! Let's go find out.

This morning I got a call from the transplant folks and I now have a date for my CAR-T treatment. I'll do a bunch of testing over the next two weeks followed by a plasma collection in early September. The plasma will then be shipped off to the CAR-T factory, where it will be turned into personalized cancer-killing T-cells. The treatment itself will take place in early October, and after that it's just a matter of waiting and hoping that my response is strong and the side effects are mild.

Assuming everything goes well, total recovery time will likely be a few months and I will be cancer free (sort of) by 2023. This treatment is still pretty new, however, so there's no telling how well I'll respond or how long it will last. If I'm average, it will last at least a couple of years, during which I'll need no chemo at all.

For those of you curious to know more, the treatment is called Carvykti and you can read more just by googling it. It was originally developed in China and is marketed in the US by Johnson & Johnson. It was approved by the FDA in February.

It's the end of the week.

As we all expected, home sales continued to slide in June:

The number of existing homes sold in July was 20% lower than it was in July last year. The median selling price is still 2.1% higher, but declined by $10,000 over the past month.

The official consensus is that home prices will continue to fall, but only by a little bit. That's my bet too, but the more it congeals into conventional wisdom the more I wonder if we might be looking at a bigger fall in house prices than we think.

Over at Bob Somerby's place he's pondering the question of whether half of all Americans read at less than a 6th grade level. Long story short, if you follow the links from a recent George Will column they lead you to a report that places everybody at one of three different reading levels. The report says that only 46% of adults can read at "Level 3," which a different report casually interprets as "the equivalent of a sixth-grade level."

But my interpretation is different. "Level 3" sounds to me like basic adult proficiency. I'd say that Level 2 is closer to 6th grade proficiency, and something like 70% of US adults can read above that level.¹

But even that might be too pessimistic. Here's an easier way of looking at it based on NAEP tests given to 12th graders:

Since the NAEP is given to 4th, 8th, and 12th graders, it's easy to interpolate the average scores for 6th graders. That in turn makes it easy to figure out the grade-level reading scores for graduating 12th graders. This chart tells us that 90% of grads read above a 6th grade "basic" level and 75% read above a 6th grade "proficient" level.

Unless lots of adults lose a significant chunk of their reading skills later in life, this suggests that about 75% of Americans read above a 6th grade level. My interpretation of the other test pegged it at 70%. Put together, I'd go with 75% since I suspect the NAEP is the better and more easily interpreted test. But feel free to go with 70% if you're feeling pessimistic in this day and age—which no one could blame you for.

In any case, it's well over half.

¹You can read a description of the levels here.

This is a patch of Dame's Rocket blowing in the wind and photographed with a long exposure time. It's my photographic attempt to emulate Monet and his lilies. And while it might not be as good, it sure took a lot less time to make.

I have been thinking that it might be time to get a hearing aid, so I was pleased to hear this:

The F.D.A. has now taken a final step that could put more accessible, and potentially less expensive, hearing aids in stores by the fall. People seeking out hearing aids will no longer have to be examined by a doctor first.

“As early as mid-October, Americans will be able to purchase more affordable hearing aids over the counter at pharmacies and stores across the country,” President Biden said in a statement.

....The new F.D.A. rule applies to adults ages 18 and older with mild to moderate hearing loss. People with this type of hearing loss may struggle to hear conversations on the phone or in crowded places, and find themselves consistently turning up the volume on their computers or televisions. They may have a hard time distinguishing between voices when multiple people speak at once, or right after each other, and strain to understand people wearing masks.

In my case, I'm not sure my hearing has deteriorated much over the past few years, but it's been a little sketchy for a while. Unfortunately, although modern hearing aids are supposed to be very good, they also cost a fortune: Around $1,500 for a low-end pair at Costco all the way up to $3,000 or more depending on what brand and features you want.

So I'll happily wait until October or even later to see what the market produces when it's unleashed to reach its full potential. Unfortunately, I see two ways for this potential to be unleashed:

The good. Reputable manufacturers produce high-quality products with an impressive range of features and charge only a few hundred dollars per pair.

The bad. Dodgy manufacturers, with no audiologists standing between them and their Parade/AARP/Fox News audience, produce lots of junk that's marketed with loud, misleading ads.

As always, I suppose the answer is that we'll have to take the good with the bad. The sad thing is that well off, well educated folks will mostly get the good, while poor, undereducated folks will mostly be the target for the bad.

American Airlines announced yesterday that it planned to buy 20 planes from Boom Supersonic, whose Overture supersonic plane—currently in development and not scheduled to carry passengers until 2029—is alleged to fly about twice as fast as today's commercial jets.

That sounds great, of course, if they can pull it off, but then there's this:

Boom has said Overture will be able to fly over 600 routes in half the time those flights currently take—such as Miami to London in under five hours, and Los Angeles to Honolulu in three hours—at fares comparable with current business-class prices.

Hmmm. You may or may not be aware of this, but a typical business-class seat costs about five times more than a coach seat. So that's a pretty expensive way to save a few hours.

Among the vast vacationing middle class, this won't matter. They won't pay fares like this. Among the rich, it also doesn't matter. They'll pay the higher fare without blinking. Hell, they'll pay for a business-class Overture seat, and God only knows how much that will cost. The key, as always, is corporate executives and the upper tier of the middle class. They'll make up the bulk of the market, and it's unclear how much they'll be willing to pay for a squashed¹ but faster flight to Heathrow.

Based on the Concorde experience, which was mostly marketed to the jet set and eventually failed for lack of passengers, I have my doubts about this, especially since the Overture will almost certainly come onto the market late and with fewer features than promised. We'll see in 2029 I guess.

¹At least, I assume that a standard seat will be fairly squashed. This plane is likely to be right on the edge of being a moneymaker, and that means lots of seats and high prices.

Our nation's statistical agencies were busy today, so instead of writing half a dozen posts with half a dozen charts, how about if we just collect them all in one big post? Starting us off today is the Census Bureau with its advance retail sales report for July:

Normally I would chastise everyone reporting about this in nominal terms, since it's a classic example of a series that only makes sense if you adjust it for inflation. But it so happens that inflation last month was roughly zero—actually down slightly—so everyone gets a reprieve from my usual chewing out.

In nominal terms, retail sales were up 0.03% from June to July. In real terms they were up 0.05%. In other words, basically flat no matter how you measure it, but still well above the pre-pandemic trendline.

But that's not all from the busy nerds at the Census Bureau. They also have the latest figures for the inventory-to-sales ratio:

This is a ratio of $/$, so once again inflation doesn't matter. Huzzah! In any case, the IS ratio stayed flat at 1.3 in June, which is well below the pre-pandemic trendline. This means that despite some anecdotal reports of bulging warehouses, inventory levels remain historically low. Generally speaking, that's likely to produce higher inflation rather than lower.

Next up is the ever-busy Bureau of Labor Statistics. Today they have JOLTS data by state, which you can see here. Here's the national map for hiring rates:

Alaska and Wyoming have the strongest hiring rates right now. New York, Massachusetts, Washington DC, and Minnesota have the weakest.

Not to be outdone, the BLS also has two releases today. The second one is about the state of youth employment, and it shows total employment, the unemployment rate, etc. Here's the chart for the labor force participation rate over the past few summers:

Every racial group has seen its youth participation in the labor force decline since before the pandemic. The only exception is among Asian youths, who have increased their participation very strikingly from 44% to 49%.

The USDA is pleased to offer us the latest annual figures for production of feed grains. Here's the chart for price increases:

Corn is by far the biggest component of feed grain, and its price was up 31% last year and another 12% this year. In addition, total corn production was down 5% during the 2022/23 season.

That's bad, but on the bright side you will once again be spared a lecture on inflation adjustment because feed grain is itself an important input into the food inflation rate, so you need to see the raw nominal figures. The basic takeaway here is that for the past two years feed grain prices have skyrocketed, which is one of the reasons that food prices are going up so much (the other reasons are fertilizer prices and bad weather that affected the production of corn and sorghum).

Finally, here's some airline news. It turns out this is a few days old, but here is passenger airline employment over the past few years:

Despite receiving billions of dollars in federal funds to help them maintain employment during the pandemic, airlines shed nearly 100,000 jobs over that period. In May they finally caught up to their pre-pandemic employment level, but they're still well below their pre-pandemic trendline. However, there's also this:

In terms of workers per million passengers, for the past year it's hovered around 6,400 compared to 5,800 before the pandemic. That's because even now, despite everything you hear about chaos in the airports, the monthly flow of passengers is still down 11% compared to the last month before the pandemic started.

But this only goes through May, so it doesn't tell us anything about summer travel. For that you'll have to wait a few months.