Elliot Eisenberg Economic & Policy Blog

Lotsa Lock Recent research shows that for every percentage point that mortgage market rates exceed the rate currently enjoyed by the homeowner , the probability of sale is reduced 18.1 %. This led to a 57 % reduction in home sales with fixed-rate mortgages in 23Q4 , and a reduction of 1.33 million sales between 22Q2 and 23Q4 . The supply reduction boosted home prices 5.7 %, outweighing the impact of higher rates , which reduced prices by 3.3 %.

Chicken Chains The Friday File : Between 19Q1- 24Q1 the market share of fast casual and quick service restaurants ( QSR ) that primarily sell chicken rose from 13.4 % to 15.3 %. Conversely , those selling primarily burgers declined from 61.3 % to 60 %, and the percentage

specializing in sandwiches fell from 8.3 % to 7.4 %. Sales for Mexicaninspired chains were flat at 9.5 % while sales at chains selling pizza and other foods were stable at about 7.5 %.

Deflating Data The Fed is calling for real GDP growth of 2.1 % in 2024 and 2 % in 2025 . Simultaneously , the nonpartisan Congressional Budget Office estimates that potential GDP , that is the increase in the labor force plus the impact of rising productivity , will be 3.5 % in both 2024 and 2025 . This means there will be growing excess capacity which is deflationary and should result in higher unemployment and further slowing in inflation .

Automobile Activity After peaking in CY2016 at 17.5 million , sales of cars and light trucks steadily slid and by CY2019 were 17 million . Between 2020- 2022 , sales were dismal and peaked in CY2021 at 15 million . While sales rose to 15.5 million units in CY2023 , since 4 / 23 sales have been flat and seasonally adjusted / annualized have averaged

15.6 million units / month , 1.5 million units , or 8 %, below their 2019 level . A new normal ? April Activity After four months of larger than expected monthly job growth , April employment grew 175,000 , it ' s fourth lowest gain since 1 / 21 . This pushed the unemployment rate up to 3.9 %, Y-o-Y wage growth down to 3.9 %, and the workweek also softened . All this suggests the labor market is cooling , which is good , but a month isn ’ t a trend , inflation remains too high , and the Fed won ’ t change course due to one report .

Converging Cicadas The Fun Finale : Sometime in May , when the soil temperature eight inches deep reaches 65 degrees , trillions of cicadas will emerge , mate , lay eggs and then die , all in about five weeks . What makes this year special is that Brood XIII , which has a 17-year cycle and Brood XIX , with a 13-year cycle ( all broods have prime-numbered cycles ), will emerge simultaneously . The last time this happened was 1803 .

Costly Cancellation President Biden ’ s student debt

cancellation plans will cost between $ 870 billion and $ 1.4 trillion . $ 620 billion has already been spent , and the latest plan will cost between $ 250- $ 750 billion more . That ’ s more than will be spent on universal pre- K and childcare through 2034 , about equal to all projected education appropriations through 2034 , and costs more than tripling the Pell Grant program . Worse , the plan raises education costs and is regressive .

Property Percentages The total value of American property , excluding farmland , is $ 66 trillion . Of that , 25 % is commercial , and of that office space is probably $ 4 trillion . Between 2007 and 2009 , US residential real estate lost a third of its value , which today would mean a decline of $ 16 trillion . Even if office values fall by half that would be just $ 2 trillion in losses , enough to be painful but not more .

Elliot Eisenberg , Ph . D . is an internationally acclaimed economist and public speaker specializing in making economics fun , relevant and educational . Dr . Eisenberg earned a B . A . in economics with first class honors from McGill University in Montreal , as well as a Master and Ph . D . in public administration from Syracuse University . Eisenberg is the Chief Economist for GraphsandLaughs , LLC , a Miamibased economic consultancy that serves a variety of clients across the United States . He writes a syndicated column and authors a daily 70-word commentary on the economy that is available at www . econ70 . com .

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