Month: February 2023

Yesterday I passed along the news that new intelligence had persuaded the Department of Energy to support the COVID lab-leak theory with "low confidence." That was from the Wall Street Journal. Today the New York Times has the same story but adds this:

While the department shared the information with other agencies, none of them changed their conclusions, officials said.

I think we can pretty safely say this is a nothingburger, though I'm sure congressional Republicans will go to town with it. I can't wait.¹

¹This is sarcasm. I would be happy to wait forever.

The Wall Street Journal reports that rents are falling. And indeed they are. Here's the Zillow ZORI index through January:

Rents peaked in August and have been falling ever since. The February numbers will be out shortly and will probably show that rents have almost completely reverted to their pre-pandemic trend.

That's good news, but a little less good than it looks. Wages haven't been keeping up with inflation since the start of the pandemic, which means rentals are taking a bigger share of income than they did a few years ago:

In dollar terms, average rent is $110/month higher than it would be if it had followed the pre-pandemic trend. That's about $1,300 per year.

Here's a little bonus astrophotography post for you. This is the same star trails picture that I put up a few weeks ago, but while I was messing around recently on the NASA site I realized that it probably showed something interesting. And it does:

I grayed out the image except for the part I've pointed to. In a normal star trails photo, the trails are circular because they're a result of the rotation of the earth against a motionless sky. However, comets have some motion of their own, which makes their trails slightly non-circular. And sure enough, if you look closely at the trail I pointed to,¹ it's not quite concentric with the one to its right. This is a sign that it's a comet, not a star.

¹As always, click to embiggen!

Hum de hum:

The U.S. Energy Department has concluded that the Covid pandemic most likely arose from a laboratory leak, according to a classified intelligence report recently provided to the White House and key members of Congress.

....The Energy Department’s conclusion is the result of new intelligence and is significant because the agency has considerable scientific expertise and oversees a network of U.S. national laboratories, some of which conduct advanced biological research. The Energy Department made its judgment with “low confidence,” according to people who have read the classified report.

This is from the Wall Street Journal, though I imagine other news outlets are already scurrying to get more details from their own sources. Without knowing more—and until that "low confidence" changes—I wouldn't put too much stock in this. Still, I suppose it ought to move your priors a little bit.

The Wall Street Journal is at it again:

Burned Out, More Americans Are Turning to Part-Time Jobs

Part-time work is exploding. The number of Americans working part time rose by 1.2 million in December and January compared with the preceding months, according to the Labor Department. Most of that increase—857,000 workers—was driven by people who worked part time by choice, not because they were unable to find full-time work or their hours were cut.

The total number of people working part time voluntarily—22.1 million in January—is now almost six times the 4.1 million who are working part time but would prefer full-time hours. That is the highest ratio in two decades.

Here's a look at voluntary part-time employment over the past two decades:

There is literally no story here. Most of the tiny January spike is due to the annual benchmarking process, new seasonal adjustment factors, and a couple of other technical changes. And even at that, all it tells us is that voluntary part-time work currently accounts for 14.0% of the workforce. In January 2010 it accounted for 14.0% of the workforce. In January 2000 it accounted for 14.0% of the workforce.

(And where did they come up with that ridiculous statistic about the number of voluntary part-timers being six times the number who would like more hours? This is literally meaningless.)

Why does the Journal insist on writing stories like this? All it takes is 30 seconds of FREDwork to see that nothing special is going on. Workers aren't cutting hours because they're burned out. Nor is 25 the new 35:

Don't take this chart seriously. It doesn't have enough granularity to show very much, and the January number probably spiked slightly for the same technical reasons as the number for part-time workers. Still, it certainly doesn't support the notion that droves of full-time workers are cutting back to part-time hours.

I really don't get this stuff. It's not ideological, since a switch to part-time hours doesn't confirm anything either liberal or conservative. Is it just a desperate search for a trend story, any trend story? I'd ask the Journal, but I imagine that would be about as useful as asking the Teamsters where Jimmy Hoffa's body is buried.

Here is Paul Krugman responding to the latest economic data:

While we shouldn't make too much of one month's report, pretty clear that economy is still running too hot, which isn't really a shock given everything else we know. The puzzle — and I'm genuinely puzzled, without strong priors or a political axe to grind — is why it's so hot 1/

— Paul Krugman (@paulkrugman) February 24, 2023

At the risk of sounding like an idiot, is the economy running hot? The usual answer is that unemployment is at 3.4%, which indicates a tight labor market and therefore economic hotness. But what about all the other economic data available to us?

• GDP increased 2.1% in 2022. This is precisely average for the past decade.
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• The Labor Force Participation Rate is currently at 62.4%. That's one percentage point lower than it was just before the pandemic. Over the past year it's been flat for both men and women. Prime age LFPR has grown a bit over the past year, but is still lower than it was before the pandemic.
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• Personal spending is on the same trendline as before the pandemic:
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• Real wages spiked when the pandemic hit, then fell for two years, and have been flat since mid-2022. The average hourly wage is now exactly the same as it was just before the pandemic. In other words, real hourly wages have increased 0% over the past three years and are not increasing now.
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• Gross private investment is generally on its pre-pandemic trendline. However, it declined 4% over the past year.
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• And then there's this:
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The only thing that seems especially hot right now is corporate profits. Everything else is firmly in the "OK but not great" category.

So please: go ahead and school me. Aside from a low unemployment rate—which is an iffy measure of the labor market—what exactly is it that's convincing the Fed and so many others that our economy is running too hot?

POSTSCRIPT: And to make the obvious point: If the economy isn't running especially hot, then high inflation is due to temporary artificial factors like a bit of remaining supply-chain stress, mounting credit card debt, and the modest amount of excess savings still left in consumer bank accounts. Those are all going to fade away on their own within the next few months.

NOTE: As usual, the trendlines are all based on data through February 2020 and then extended to the current month. This gives you an idea of where we'd be if we had simply continued on our pre-pandemic trend.

This is Hilbert being hauled back into the house after he escaped during a little episode of rainfall. Careful observers will note the mud on his rear foot. Because of this he got a little paw bath before Marian would let him down, which he didn't seem to like very much. However, he did like the drying off part, which was sort of a paw massage.

With Jimmy Carter apparently nearing death, a number of conservatives have taken to their word processors to declare that his 1979 "malaise" speech was pretty good after all. But, like David French, they say it was wrong then but right now:

Carter was wrong. There wasn’t a crisis of confidence. There was no malaise. There was instead a failure of leadership. Better, or at least luckier, leaders revived a broken nation.

Yet with every passing year, the deeper truths of Carter’s speech become more apparent. His insights become more salient. A speech that couldn’t precisely diagnose the maladies of 1979 more accurately describes the challenges of 2023. The trends he saw emerging two generations ago now bear their poisonous fruit in our body politic.

See also Peggy Noonan in the Wall Street Journal today.

This is a great example of the way that knowledge of history warps our understanding of . . . history. Time has passed since the Carter era, so it's now obvious that a low point in our past was just a passing storm. Things may or may not have been as bad as we thought at the time, but it's clear that none of it spelled an irreversible decline in the stature of the United States.

Today we're experiencing the same phenomenon but without the passage of time. So once again—as it did at the time—Carter's speech seems prescient. Democracy is doomed. America is doomed. Race relations are doomed. Carter called it, but four decades too early.

I doubt this is any more true today than it was in 1979. Less true, in fact. After all, the late 1970s really did feature stratospheric inflation, an oil shock, busing wars, a hostage crisis, a punitive Fed, and, shortly, a massive recession. Practically every one of those things—along with nearly everything else—is better today than it was in Carter's time.

But in the face of a huge set of positive trends, we're all determined to focus instead on the smallish number of things going wrong. Here's an example that just happens to be close to mind. Yesterday I noted that trends among teens were quite positive along a large number of measures. This came from the CDC's YRBSS data, but here's how the CDC itself presented it:

In fact, the news is good on every single one of these measures except for the last one. But why shouldn't teen mental health be in trouble if they're constantly being bombarded with information designed to scare the hell out of them?

The same thing is true more broadly. Local news is stuffed with reports about dangers to ourselves and our kids. Fox News specializes in doomsaying and fearmongering. Politicians of all stripes are (apparently) motivated to insist that everything is terrible even when a plain look at the data shows that it's not so.

So we're afraid to let our kids walk alone in the neighborhood. We're afraid they're being taught to hate America in our schools. We're afraid they're abusing drugs and bullying each other into suicide. We're afraid that Social Security is going broke and Millennials are doomed to McJobs forever and the social safety net is all but tattered and lying in shreds. We're afraid that trans people are corrupting our youth and woke ideology is making us weak. We're afraid that cops are killing Black people in growing numbers. We're afraid that social media is destroying our sense of community. We're afraid that illegal immigrants are pouring across the border and taking our jobs. Hell, we're afraid to report good news for fear of being mobbed by people who insist that we're erasing the experiences of people who aren't doing so well.

And above all, we're terrified of what the other party will do if it ever gets power.

But in reality, we keep rolling along no matter who's in charge:

Even the booms and busts are small if you look at long-term trends. We just keep growing and growing at the same exact rate, with only modest deviations for a few years here and there.

The truth is that most things are fine—and getting better. As they say in Dune, fear is the mind killer. Or, if you prefer something less fictional, all we have to fear is fear itself.

As it happens, I've never liked that FDR line because there are things to fear aside from fear itself. Still, there's little question that overall societal fear of practically everything far exceeds the actual danger posed by most of the things we're afraid of.¹ But we're addicted to fear these days, and plenty of people have learned that they can make money off of it. The fear-industrial complex has us in its grasp and has no intention of ever letting go.

¹Climate change is the biggest exception.

Now this is what I'm talking about:

Washington DCs DCA airport boarding areas are outfitted with numerous 254 nm UV disinfection systems. pic.twitter.com/fnBC0gPZce

— Dustin Poppendieck (@Poppendieck) February 23, 2023

I've written about this before: it's called Far UV, and it's ultraviolet light in a range that's deadly to COVID-19 but harmless to human beings. It's not cheap, but it's a great passive technology that ought to become widespread in crowded indoor spaces. That potentially includes classrooms, arenas, airports, and anyplace else that lots of people gather at a single time.

Note that these units require decent ventilation to work properly. There's further discussion of UV disinfection in the comments to Poppendieck's tweet.

There's no good news on inflation this month:

As usual, don't pay too much attention to noisy monthly changes. That said, this was a mighty big monthly change, just like the one we saw a few days ago in the CPI numbers. It's so big, in fact, that it makes the trendline for core PCE inflation look nearly flat at around 4.5%.

The year-over-year figures came in at 5.4% for headline PCE inflation and 4.7% for core PCE inflation.

I expect to see a reversion to the mean next month, but who knows?