Fact Pack! Festivus!
By Hightower Las Vegas and RCG Economics on December 15, 2023
Before we share an amusing Festivus-centric item, we want to note that mortgage rates fell below 7 percent for the first time since mid-August last week, marking the seventh straight week rates have dropped. As inflation continues to improve and the job market holds pretty steady, the Fed is hovering its thumb over the pause/play button on rate increases.
Even so, not everyone is feeling economically sunny, including The Kobeissi Letter, a compilation of commentary in a weekly newsletter on global capital markets:
As of 12/12/23
Holiday Cheer from BLS
We are delighted to brighten today’s newsletter with an amusing snippet from the Bureau of Labor Statistics:
Here’s the accompanying BLS graph (shaded areas indicate recessions):
As for celebratory meals (Festivus and otherwise), BLS’s 2022 Consumer Expenditure Surveys found that the average U.S. household spent $9,343 on food. That included $5,703 on food at home and $3,639 for food consumed away from home. (Spending for food away from home in 2022 exceeded 2019 levels, the first time that has happened since the onset of the COVID-19 pandemic.)
Job Openings
The job openings rate was 5.3 percent in October 2023, 0.3 percentage point lower than it was in the previous month and 2.1 percentage points lower than its peak of 7.4 percent in March 2022. It is the lowest since it was 5.1 percent in February 2021.
Bureau of Labor Statistics graph:
As of Oct. 2023
Personal Income and Home Construction
One of the many useful things produced by the aforementioned Bureau of Economic Analysis is the annual release of county level personal income per capita data which, along with the Census Bureau’s county level permit data, helps the National Association of Home Builders (NAHB) analyze single-family and multifamily construction activity and pricing.
In this NAHB analysis, counties were grouped into five quintiles by the personal incomes per capita for each county, as follows:
- The highest quintile consists of counties where the personal income per capita is greater than $62,212.
- The high-middle level counties consist of income less than $62,212 but greater than or equal to $53,771.
- The middle quintile consists of counties where personal income per capita is less than $53,771 but greater than or equal to $48,159.
- The middle-low quintile consists of counties with less than $48,159 but greater than $43,533.
- The low-income quintile contains counties where personal income per capita is less than $43,533.
NAHB graph:
As of Q3 2023
The highest income counties have lost 4.2 percentage points in market share, falling from 45.0 percent in Q3 2018 to 40.8 percent in Q3 2023. The middle-high income counties market share was the only other area to lose market share, falling 1.5 percentage points over the same period.
Both the middle and middle-low income areas gained 2.0 percentage points, while the low income area gained 1.6 percentage points over the past five years.
As was seen in the HBGI release last week, single-family construction has slowed across the county. Unsurprisingly, the biggest decline occurred in the same quintiles that have lost market share with the high quintile declining 17.9 percent over the year and middle-high declining 17.1 percent, per NAHB. The low-income quintile declined the least, still dropping 10.0 percent over the prior year in Q3 2023. NAHB graph:
As of Q3 2023
Poverty
The median estimated poverty rate of children ages 5 to 17 in U.S. school districts in 2022 was 13.9 percent, according to new data from the U.S. Census Bureau’s 2022 Small Area Income and Poverty Estimates (SAIPE), which provides the single-year income and poverty statistics for the nation’s 3,143 counties and 13,146 school districts. More stats:
Income
- In 2022, county-level median household income in the U.S. ranged from $28,972 to $167,605, with a median income of $60,833.
- Median household income increased in 4.1 percent of counties and decreased in 5.6 percent of counties from 2021 to 2022.
- Between 2007 (the year before the Great Recession) and 2022, median household income increased in 22.4 percent of counties and decreased in 3.3 percent of counties.
Poverty
- In 2022, the county-level poverty rate ranged from 3.1 percent to 42.4 percent.
- The poverty rate decreased in 3.0 percent of counties and increased in 3.0 percent of counties from 2021 to 2022.
- Between 2007 and 2022, the poverty rate declined in 6.4 percent of counties and rose in 4.6 percent of counties.
Statista graph showing the average poverty rate for all children in the U.S. (a slightly different metric than the one cited above, resulting in a slightly higher rate) between 1990 and 2022:
Sleepless in… Nevada
The Silver State has been named among the top 10 states with residents most likely to suffer from sleep disorders. New York topped the charts, and Maryland, Virginia, Massachusetts, and California residents round out the top five.
The study on which the rankings were based was conducted by sleep experts at Eachnight, which analyzed online search data for keywords including ‘insomnia’ and ‘narcolepsy’ to determine the top ten states with residents who suffer from sleep disorders the most.
Nevada was ranked seventh with 539 average monthly searches per 100,000 people for terms related to sleeplessness. (For comparison, New Yorkers ran an average of 570 monthly searches for sleep disorder terms.)
Old money
From the house of Hermès to Gulf royals, the wealth of global dynasties soared 43% in the last year. So says this Bloomberg sub-headline on an article highlighting the world’s 25 wealthiest families with money handed down over at least one generation (meaning it excludes first-generation money, which often includes tech success stories such as Elon Musk). Those families are now collectively worth a cool $2.1 trillion.
At the top of the list is the house of Al Nahyan, the ruling family of the Emirate of Abu Dhabi (and owners of the UK soccer club Manchester City). The family’s $305 billion net worth exceeds that of the previous leaders, America’s Walton family (heirs to the Walmart fortune).
With first-generation money excluded, the industries on the list are quite different than most modern rich lists — think petroleum and petroleum processing, for instance — which, as noted above, are often dominated by tech entrepreneurs.
As for which has passed its wealth down for the most generations, the Al Thani family — who have ruled Qatar since the mid-19th century — have maintained their enormous fortune (currently estimated at $133 billion) across eight generations.
1773
Two hundred fifty years ago (or so —December 16) tensions between American colonists and the British powers-that-be had been brewing for years, much of it over tea and taxation without representation. Boston-based merchants including John Hancock were so enraged by a 3-cents-per-pound tax on tea arriving in colonial ports that they declared that anyone who drank the ‘baneful weed’ and paid the tax was an ‘Enemy of America’.”
As we all know, the colonists eventually declared independence and the U.S. Constitution was ratified, mandating (among other things) a population count for the new democracy. The first census was taken in 1790. Historians estimate it was about 2.41 million and had climbed to around 2.56 million — about half a million of which were slaves — by 1776.
Connecticut was the state with the most people (96.2 percent) with English roots, and Pennsylvania (which at the time contained the state now known as Delaware) was the state with the fewest (59.0 percent) — mostly because of its large (26.1 percent) German population.
South Carolina was the state with the most (2.6 percent) people of Irish descent, and New York had the most (16.1 percent) of Dutch descent.
The 2022 American Community Survey 1-year estimates, our most current self-reporting of ancestry, show 31.4 million Americans said they had English roots and 30.7 million Irish.
The first census in the newly formed United States (1790) counted almost 4 million residents. The first census in Great Britain (1801) counted almost 11 million residents.
According to the Census Bureau’s International Database, the U.S. population is now an estimated 339.7 million and the United Kingdom’s 68.1 million.
In 2022, the U.K. was the seventh ranked U.S. export market and 12th among all the countries from which we imported. As for tea, we still import it from the U.K. — in 2022, we spent $18.6 million on it. The Tea Association of the U.S.A. estimates that on any given day, more than one half of the American population drinks it.
As for coffee, the National Coffee Association reported in September that more Americans drink coffee every day (63 percent) than any other beverage — including bottled and tap water.
Blame Canada
Aghast at the current cost of a real Christmas tree? Prices are soaring as demand rises and supply dwindles. In North America, according to GZero, a shortage exists because there are fewer Christmas tree farms:
The number of U.S farms fell sharply during the 2008 financial crisis and has continued to decline – so much so that 96% of the Christmas trees sold in the U.S. come from Canada. But Canadian farms took a hit this summer from droughts, floods, and wildfires…
Christmas trees take 8 to 10 years to grow, making it difficult to start new farms and even harder to turn profits. Inflation is raising the cost of fertilizer and fuel, and these costs are being passed on to consumers.
So if you’re wondering why the price of cheerful boughs is making you feel like the Grinch, blame climate change, a lack of farmers, inflation, and … well, Canada.
Infographic:
As of 12/4/23
Holiday Break
This will be the last edition of Fact Pack in 2023. Have a warm and wonderful rest of the year, and look for the next newsletter on Monday, Jan. 8th.
On the Horizon
Mike PeQueen: Economic pundits have been predicting a recession for more than a year now, but it has not yet come to pass. The concept of a “soft landing” — when the Fed raises rates enough to slow inflation without pushing the economy into recession — has only been accomplished once in the past few decades, but we may see it this time around. Inflation has fallen from around 9 percent (on an annualized basis) to 3 percent this month, and the labor market and consumer spending remains healthy. On Thursday we will see the release of data for the leading economic indicators, which is designed to provide early warning of a slowdown.
This week’s MarketWatch calendar:
