Skip to content

Month: September 2023

Published on 3 Comments on Consumer spending up slightly in August

If it's PCE inflation day, it must also be PCE spending day. So how much did consumers spend last month?

Spending was up 0.6% from the previous month on an annualized basis. It was up 2.3% from the previous year.

So spending continues to increase. Not by much, though.

Published on 16 Comments on Core PCE inflation dropped below 216 in August

We have some pretty good news on inflation today:

The headline rate of PCE inflation spiked up to 4.8%, which was fully expected due to rising gasoline prices, but the core rate dropped to 1.8%. The core rate is (say it with me) the Fed's preferred measure of inflation, and it's no longer "heading toward 2%." It's below 2%.

On a conventional year-over-year basis, headline inflation came in at 3.5% and core inflation was 3.9%.

Published on 19 Comments on Lead and crime in Washington DC

Yesterday I ran across an item about the high murder rate in Washington DC. I also happened to remember this, based on the research of Marc Edwards:

Beginning in the year 2000, Washington DC experienced an episode of lead contamination in its drinking water that wasn't discovered until 2004. For five years, DC's kids were drinking water with highly elevated levels of lead.

I adjusted the lead numbers so they'd nicely overlay the DC murder rate with a 20-year lag.¹ Here's what it looks like:

Crime has lots of causes—and correlations like this one are especially tricky in small regions over short periods of time—but it's interesting nonetheless, isn't it? It sure looks like the lead crisis of 2000-2004 produced a cohort of kids 20 years later who are more likely than usual to commit murders.

¹I shifted the lead levels up by 100 and squeezed them slightly. It's all kosher and produces a normal correlation equation. I did this solely to make everything visually clearer.

NOTE: I'd like to check lead levels vs. the violent crime rate, but (a) the FBI's violent crime figures only go through 2020 before becoming unreliable, and (b) NCVS doesn't track crime in individual states and cities. So the DC murder rate is the best I can do.

Published on 40 Comments on Rising mortality is mostly limited to white high school dropouts

This chart is making the rounds on Twitter:

A paper from a few years ago breaks this down in more detail. After a big pile o' math, here's what it tells us:

Note that the bottom figure is a chart of mortality, so higher is worse. And what it shows is that our middle-aged mortality problem isn't broadly about everyone without a BA. It's specifically about white high school dropouts (the bottom 10% of the education spectrum). The data only goes through 2018, but I imagine that if it included more recent years it would show that the big life expectancy decline due to COVID is also heavily centered on high school dropouts.

Why? One probable factor is 15 years of falling wages from an already paltry level:

Average earnings of the poorest 10% were lower in 2015 than in 2000. It wasn't until 2016 that they started to increase. If the rising mortality rate among high school dropouts really is due to deaths of despair, it's hardly any wonder.

Published on 29 Comments on Appeals court tells Trump to buzz off

As predicted, an appellate judge has tossed out Donald Trump's lawsuit against the trial judge in his business fraud case:

The appeals court, in a terse two-page order Thursday, effectively turned aside for now a lawsuit Mr. Trump filed against the trial judge, Arthur F. Engoron. The lawsuit had sought to delay the trial, and ultimately throw out many of the accusations against the former president.

"Terse"! It's amazing the way things work when you can't forum shop for a Texas judge you appointed yourself.

Anyway, the trial judge has already pronounced Trump guilty, so all that's left is for him to decide on Trump's punishment. This might happen as soon as next week.

Trump, of course, will also appeal that, so tack on another year or so before everything becomes final. It's possible that by Election Day Trump will be a quarter of a billion dollars poorer; no longer in control of his company; banned from doing business in New York; and on his way to prison. It couldn't happen to a more deserving guy.

Published on 29 Comments on Rare earths aren’t rare

I suppose no one cares, but last night Doug Burgum said this:

China controls 85 percent of the Rare Earth minerals. They’re called Rare Earth, because they’re measured in parts per million.

Nah. They're measured in grams or kilograms, just like everything else. They're only called "rare" earths because they were rare 200 years ago when they were first discovered. China mined about 300,000 metric tons of the stuff last year, up from 100,000 metric tons a decade ago. A mine in California is already producing rare earths and a mine in Texas will open soon. Sweden, the original home of rare earths, recently announced it had discovered a deposit of more than a million metric tons.

The issue with rare earths is not that they're especially rare. The issue is that China has low wages and lax environmental laws, which allows them to produce and refine the stuff cheaply. Two-thirds of all rare earth deposits are outside China, which means the rest of the world can catch up whenever it wants to. It will just be more expensive than Chinese product, that's all.

Published on 25 Comments on Republican impeachment inquiry not going well

Republicans revved up their impeachment inquiry against Joe Biden today. So how's it going?

Keep in mind that these are not a bunch of spear carriers for the Biden crime family. They are the Republicans' own witnesses.

When even Steve Bannon has a point, you know you're in trouble.

Published on 33 Comments on You gotta wear a tie in the Senate

Our long national nightmare is over:

Pennsylvania senator John Fetterman will no longer be allowed to wear shorts and a hoodie on the floor of the Senate. Our weeklong experiment with casual dress is over and it is once again safe for women and children to watch the proceedings of the world's greatest deliberative body.

For myself, I have to say that it won't kill Fetterman to wear a suit and tie. He's not working from home and voting by Zoom, after all. At the same time, it's remarkable how unhinged everyone got over this. I mean, the dress code was restored by unanimous consent! When was the last time anything in the Senate passed by unanimous consent?

There are some who bitingly remark that the Senate surely has better things to do than fuss over its dress code. But not really. I guess they could approve another few military promotions over Tommy Tuberville's blockade, but anything else is little more than symbolic given the endless legislative deadlock currently embroiling the House. So I suppose they might as well restore their dress code instead of just twiddling their thumbs waiting for Kevin McCarthy to wrangle his herd of mad cows.

Published on 11 Comments on Has the economy really grown 511 in the third quarter?

This is crazy:

The Atlanta Fed's GDPNow model is still forecasting that GDP growth in Q3 will be a red hot 4.9%. It was one thing to dismiss this early in the quarter, but as the model gets more and more data to work with it becomes more accurate. At this point, Q3 is just about over and the model has nearly all the data it will ever have. And it still thinks the economy is going gangbusters.

Nobody agrees with this, although, as you can see in the chart, the "blue chip consensus" of human forecasters has been steadily rising. Even if the GDPNow forecast is off, it look as if Q3 is going to turn out to be a surprisingly good one.