Data Points for April 26, 2022
Ukraine, inflation, jobs, electricity, Social Security and more
Hi everyone. Here’s a full slate of Data Points to ponder.
—— The vast majority of military aid to Ukraine in its war with Russia has come from the U.S., which has pledged more than $4.7 billion in the war effort. Estonia is the second-ranked country, with a pledge of $240 million.
—— The Federal Reserve’s battle against inflation is expected to continue through 2022, with larger interest rate hikes planned to make borrowing and spending less attractive in the coming months. The Fed will need to pull off the neat trick of doing that without causing a recession.
The term of art here is the notion of approaching “neutral”, or finding the interest rate level that avoids over-stimulating the economy on one hand, and on the other, pulling the economy downward into a recession.
In the past, even approaching neutral has proved dicey.
"Every time in recent history the Fed even just approached neutral, the economy rolled over in short order," Piper Sandler economist Roberto Perli wrote recently. "So, the risk is that the (Fed) may be too focused on bringing down inflation and willing to roll the dice with respect to growth and the labor market."
—— In related news, U.S. import prices rose 12.5 percent during the past year that ended in March. Fuel import prices were up 66.7 percent.
Prices for nonfuel imports rose 7.5 percent for the year ended in March, the largest over-the-year advance since 12-month percent changes were first published in December 2002.
—— As noted, the Federal Reserve needs to thread the needle on its handling of inflation. Especially since one indicator of economic activity, the trucking industry, is already flashing warning signals.
History has proven trucking to be a possible indicator for the U.S. economy. That is because when people buy less, companies ship less - and business activity slows. Economic recessions followed six of the 12 trucking recessions since 1972, according to an analysis by trucking data company Convoy.
Average per-mile rates in one part of the industry, the on-demand or spot market, took a sharp downturn recently and are now below where they were at the same time last year.
—— The number of unemployed Americans is at its lowest level since February 21, 1970 - that’s 52 years ago. The U.S. unemployment rate now stands at 1.0 percent. In other words, it’s probably about as close to zero as it’s going to get.
—— The Bureau of Labor Statistics published its state-level estimates of job openings and labor turnover. As the chart below shows, jobs are plentiful at a truly historic level, with more than 11 million jobs available in February of this year. Job opening rates are highest in Alaska and Georgia.
—— Electricity generation from fossil fuels took a hit during the pandemic, but now it’s heading back up. China has been the world’s largest generator since 2009. Annual output in the U.S. has trended downward since it peaked in 2007, but it is still in second place behind China. Those two countries and India are by far the largest producers of fossil-fuel-based electricity, accounting for 56 percent of the world’s total. In 2021, China accounted for 33 percent of the total, the U.S. produced 15 percent, and India generated 8 percent.
—— Recently a number of politicians have forwarded plans to reduce Social Security or even scrap it altogether. A new study from the Center on Budget and Policy Priorities shows what those plans might mean for poverty in the U.S. The study finds that Social Security is a powerful poverty buster. Without Social Security, more than 22 million people would fall into poverty. Sixteen million of those people would be adults age 65-plus, but more than 5 million are ages 18-64.
—— A Gallup poll says that nearly eight out of ten Americans support admitting up to 100,000 fleeing Ukrainians into the U.S. Partisan differences exist: 92 percent of Democrats, 79 percent of Independents and 61 percent of Republicans support this position.
—— In some good news for old-school bibliophiles, printed book sales are up yet again. Sales declined from 2009-2012, but since 2013 they’ve increased every year.
The young adult fiction segment had the largest increase, with unit sales jumping 30.7%, while adult fiction sales rose 25.5%. Sales in the juvenile fiction category increased 9.6%.
That’s it for today. Until later, take care.
Karl Pearson