Showing posts from September, 2021

60% of millennials earning over $100,000 say they're living paycheck to paycheck

I always suspected that living paycheck to paycheck did not involve your income, but was influenced by bad behavior and outright ignorance of how to handle your personal finances. And throw in some vanity, and you've got a recipe for eating cat food in retirement. Or maybe you'd prefer dog food.  Been there, done that, so I'll include myself in this category, until I shook off the insanity and put things right. I'm on a ribeye diet, nicely retired, thank you. Here are some facts, as reported by Business Insider. In a survey this June, 60% of millennials earning over $100,000 said they live paycheck to paycheck. Some of these millennials - known as HENRYs - prefer a comfortable, expensive lifestyle. In today's economy, $100,000 is considered middle class in the US. High-earning millennials feel broke. Sixty percent of millennials raking in over $100,000 a year said they're living paycheck to paycheck, found a survey this June by PYMNTS and LendingClub, which ana

Biden's Tax-And-Spend Agenda Accelerates America's Fiscal Decline

In a study just published by the Club for Growth Foundation, co-authored with Robert O'Quinn (former Chief Economist at the Department of Labor), they estimated the likely economic impact of President Biden's so-called Build Back Better plan to expand the welfare state. Here are the main findings: A loss of $3 trillion of economic output over the next 10 years A loss of $1.6 trillion of worker compensation over the next 10 years A loss of more than $10,000, on average, in compensation for workers over the next 10 years A lifetime drop in living standards of almost four percent for young workers What's especially noteworthy about the study is that they based their analysis on research published earlier this year by the Congressional Budget Office . In other words, a very establishment source. Biden's fiscal agenda would made the United States more like Europe and the economic data unambiguously demonstrate that Europeans suffer from significantly lower living standards

Housing Market Remains Hot

Below are some interesting charts that show how hot the housing market has been. While I'm reading lots of articles about this abating, the market hasn't slowed yet.  Housing starts for August rose 3.9% month-over-month (m/m) to an annual pace of 1,615,000 units, above the Bloomberg consensus forecast of 1,550,000 units, and compared to July's upwardly-revised pace of 1,554,000 units. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, gained 6.0% m/m at an annual rate of 1,728,000, north of expectations calling for 1,600,000 units, and compared to the downwardly-revised 1,630,000 unit pace in July. These numbers may help with the supply shortage, but that affect is several months away. 

Inflation: More Transitory than Expected

We are experiencing inflation for the first time in a long time: at least four decades as a matter of fact. We are also experiencing scarcity in some goods and services. I am 69 years old—the only time in my life that I recall experiencing this level of scarcity was with gasoline in the 1970s because of the oil embargo.  From what I recall of the 70s, people were plenty grumpy about having to do even/odd days at gas stations and sit in hour-long lines. And the interest rate on my mortgage was north of 10 percent. Americans are generally great people. But we are not good at rationing scarce resources. It is every man for himself. If I think we are going to run out of cat food, I am not going to leave some in the store for my neighbor. My cats are more important. It’s simply supply and demand. Supply is shrinking for a variety of reasons, but a big reason is the shrinking labor supply—there simply aren’t enough people to transport it and stock it and put it on the shelves. People are sta

Democrats to Increase Taxes and Spending, Setting New Records

Higher taxes and increased government spending will generally slow economic growth. This correlation has been supported throughout history many times, but it's something not generally discussed by Democrats or the mainstream media.  Here's some examples to get started on the subject. Not everyone is in agreement, but I generally take the position that higher taxes and/or higher government spending takes resources from the private sector, which has a moderating affect on growth: Higher business taxes and lower investment 'not a plan for growth' What Is the Evidence on Taxes and Growth? Tax Rates and Economic Growth Does Government Spending Affect Economic Growth? High Implicit Tax Rates Trap Poor People in the Quicksand of Government Dependency Regardless of where you'll end up deciding what is the "truth," the fact remains that the U.S. taxpayer spends too much money on taxes. According to a recent study by the Bureau of Labor Statistics (BLS), Americans s

Energy Prices Rise: Caps on Supply Affect Markets

By Kelly Evans The Exchange , CNBC The price of fossil fuels keeps surging. The situation in Europe is getting worse. Natural gas prices are spiking through the roof--even worse than they were   last week . Even oil is higher today as Goldman says $80 for U.S. crude could be next, up from about $70 where it's trading today. Why? Because there is "growing scarcity across physical markets," with demand for all energy except oil back at pre-pandemic levels  while "the system is becoming increasingly constrained in its ability to supply goods."    The crucial difference between the energy spike today and any prior one over the past couple decades is that this one comes as policymakers (and "ESG" investors) have  chosen to cap supply . Europe, as I've mentioned, has basically, depending on how you run the numbers to get to "net zero" emissions by 2050,  about 600 gigatons of carbon left  to produce. Even traders are taking the goal seriously t

What No One Is Saying About the Jobs Report

By the Tax Foundation   Last week, a disappointing jobs report came out: only 235,000 jobs were added when closer to 720,000 were expected. President Biden blamed the Delta variant, but that is not the whole explanation. While the Delta variant is a contributor, it is likely companies are also unsure of what the future holds for them as the Biden administration’s international tax plan and the Wyden proposal are debated in Congress, so they’re putting hiring, expansion, and investments on hold. Vice President of Global Projects Daniel Bunn says, “The tax reform in 2017 was helpful in reversing the pressure that U.S. companies felt to shield profits from U.S. taxes. However, if the tax code changes in line with what President Biden has proposed, those incentives for investing in the U.S. would go away, and companies would again feel the pressure to offshore profits and potentially jobs and investment. “You can combat profit shifting by making your country’s tax code more attractive fo

Biden Plan: Highest Corporate Taxes in the OECD

President Biden’s proposal to raise the federal corporate tax rate to 28 percent as part of his plan to fund infrastructure spending would increase the combined average top tax rate on corporate income to 32.4 percent, highest among industrialized countries in the OECD .

It's All About Jobs: August Employment Report Misses

The Bureau of Labor Statistics jobs report for August came out today, and it was way below expectations. The economy added 235,000 jobs, about 500,000 fewer than expected. This year, monthly job growth has averaged 586,000 jobs, according to the report. This is probably due to the issue with the Covid-19 Delta variant.  Nonfarm payrolls rose by 235,000 jobs month-over-month (m/m) in August, well below the Bloomberg consensus estimate of a 733,000 rise, though July's figure was upwardly-adjusted to an increase of 1,053,000. Excluding government hiring and firing, private sector payrolls increased by 243,000, versus the forecasted rise of 610,000, after increasing by an upwardly-revised 798,000 in July.  The labor force participation rate remained at July's 61.7% rate, compared to forecasts of an increase to 61.8%. The Department of Labor said job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing, and other serv

Americans Still Stranded; Labor Day

 Americans still stranded, including high school students. Larry Kudlow shreds Biden's 'anti-work' policies.