Headline PCE was down only a bit, but core PCE—which the Fed focuses on—was down substantially to 3.2%. This is pretty good news since it suggests that last month's spike was probably pretty transitory.
On a more conventional year-over-year basis, headline PCE was 2.5% and core PCE was 2.8%.
NOTE: Oddly, inflation in goods was up 6.1% on an annualized basis, a big spike from last month. This was largely because of gasoline prices. Conversely inflation in services was up only 3.1%, a big decrease since last month. Go figure.
Here's an odd one. A few weeks ago the CFPB issued a new rule substantially cutting late fees on credit card payments. The US Chamber of Commerce quickly sued. They unsurprisingly chose to file in the Fort Worth division of the Northern District of Texas, home to judges Reed O'Connor and Mark Pittman, who are both well known for regularly ruling in favor of Republicans.
But a funny thing happened: Pittman got the case and has determined that suing in Texas was ridiculous. Rather, the case belongs in Washington DC since that's where the CFPB, the Chamber of Commerce, and most of the lawyers reside:
Venue is not a continental breakfast; you cannot pick and choose on a Plaintiffs’ whim where and how a lawsuit is filed.... The Rule at issue in this case was promulgated in Washington D.C., by government agencies stationed in Washington D.C., and by employees who work in Washington D.C. Most of the Plaintiffs in this case are also based in Washington D.C. and eighty percent of the attorneys in this matter work in Washington D.C.
....As far as this Court can discern, not one of the banks or credit card companies directly affected by the future Rule is located in the Fort Worth Division.... This case does not belong in the Northern District of Texas and certainly not in the Fort Worth Division....The Court concludes that this case should be and is hereby TRANSFERRED to the United States District Court for the District of Columbia.
Maybe folks are really getting the message that judge shopping is now a thing of the past. Very cautiously, I'd count this as good news.
Just in case you're curious, here's the annual rate of bridge failures in the US:
There's no trend either up or down. It's perhaps also worth noting that virtually none of these failures were due to age or bad design. The vast majority failed due to floods, being hit by trucks, being hit by barges, or by construction work.
The LA Times reports today on the impact of raising the fast-food minimum wage in California to $20 per hour:
Chipotle, McDonald’s, Starbucks, Jack in the Box and Shake Shack are planning to raise menu prices. Fast-food franchisees are laying off employees or cutting their hours. Smaller independent business owners, meanwhile, worry their workers will bolt unless they also increase wages.
Think what you will about burger flippers earning $20 an hour, but the median wage of fast-food workers in California is currently about $18 an hour.¹ So this is an average increase of 12%. And the overall impact? "David Neumark, a minimum-wage expert at UC Irvine, estimated that overall prices will rise between 2.5% and 3.75%."
A 12% raise is substantial, but the market would have produced the same thing in three or four years. This is honestly not that earth shattering.
¹The May 2023 figure from the BLS was $17.63. Fast food wages since then have risen 2.5%, bringing it to $18.07 per hour.
Sunset at the Desert Lily Sanctuary in Chuckwalla Valley. This is where I go (almost) every month to skygaze, and I have yet to see any lilies. Of course, I've never been there in daytime, and I've never walked beyond the parking area. Maybe I should leave early and check it out for real the next time I go out.
Sam Bankman-Fried was sentenced to 25 years in prison today for his role in the collapse of crypto broker FTX. Here's what John Ray, the guy hired to clean up the mess after FTX declared bankruptcy, had to say about him a few days ago:
Vast sums of money were stolen by Mr. Bankman-Fried, and he was rightly convicted by a jury of his peers. That things that he stole, things he converted into other things, whether they were investments in Bahamas real estate, cryptocurrencies or speculative ventures, were successfully recovered through the enormous efforts of a dedicated group of professionals (a group unfairly maligned by Mr. Bankman-Fried and his supporters) does not mean that things were not stolen. What it means is that we got some of them back. And there are plenty of things we did not get back, like the bribes to Chinese officials or the hundreds of millions of dollars he spent to buy access to or time with celebrities or politicians or investments for which he grossly overpaid having done zero diligence. The harm was vast. The remorse is nonexistent.
I agree wholeheartedly. And yet, I think the 25-year sentence was too harsh. Why? Because I think pretty much every prison sentence handed out in the US is too harsh. If we cut every sentence served by every prisoner in half, we'd probably still be a little too harsh. But it would be a start.
That said, if there's an exception to be made, it would be for someone like Bankman-Fried. Generally speaking, long sentences ruin lives for little reason, since they don't do much to deter crime and most people don't commit violent crimes after their 30s anyway.
But a white collar criminal like Bankman-Fried? There's no aging out of crime for a guy like him. When he gets out there's a good chance that he'll get involved in some scam or another very quickly. It's what he's good at, after all.
GDP and GDI are supposed to be identical: just different ways of measuring the same thing. But a gap opened up in late 2022 and has grown ever since. GDP is now about half a trillion dollars bigger than GDI.
The BLS began collecting unemployment data by race in 1972. Since then, the lowest Black unemployment rate ever recorded was in 2023. The second lowest was in 2022.
Headline PCE was down only a bit, but core PCE—which the Fed focuses on—was down substantially to 3.2%. This is pretty good news since it suggests that last month's spike was probably pretty transitory.
