Elliot Eisenberg Economic & Policy Blog

Timing Trouble While many equity investors try to time market tops and bottoms to improve returns , their results have only gotten worse since Covid . Between 1 / 1 / 2015 and 12 / 31 / 2019 , market timing attempts across a variety of actively traded mutual-fund styles cost investors 0.53 percentage points / year . However , from 1 / 1 / 2020 through 10 / 21 / 24 , value destruction from poor timing almost doubled to 1.01 percentage points / year . This deterioration is probably because more do-it-yourself investors began playing the market .

Worker Weakness November employment growth was a hearty 227,000 , and there

were upward revisions totaling 56,000 to September and October . The good November result confirms the weak October result was due to hurricanes and the Boeing strike . However , the unemployment rate rose slightly to 4.2 % despite the labor force participation rate falling to 62.5 % which shows the labor market continues to slowly weaken , making a 25bps mid-December Fed rate cut highly likely .

Tariff Totals 61 % of the price of a new home is construction , including labor . Of the 61 %, 56 % ( or 34 % of the total price ) is wages / salaries and 44 % ( or 27 % of the price ) is material . 7.3 % of materials ( or 2 % of the total price ) are imported . A median new home price of $ 440,000 means $ 9,000 in imported materials . Assuming a 30 % tariff , that means new home prices rise by , at most , $ 3,000 .

Miserable Masters Almost half of U . S . government student lending goes to postgraduates even though they are 17 % of all students . Moreover , since 2000 the inflation-adjusted cost of graduate studies has tripled , and the average debt load has risen by 50 % to $ 50,000 in the last 20 years . Making this much worse , after accounting for SES and undergraduate grades , in the U . S . earning a master ’ s raises average lifetime wages by a trivial $ 50,000 .

Broker Bucks While it ’ s still very early and the existing housing market is profoundly weak , preliminary evidence shows real estate agent commissions declining since new rules went into effect in mid-August following a landmark legal settlement . From mid-August through early October , average commissions received by buyer agents were 2.28 % compared to 2.65 % over the prior year . Interestingly , seller

agent commissions also declined , going from 2.98 % to 2.69 %. These declines follow economic theory .

Electric Enhancements For all the talk of a slowdown in U . S . electric vehicle sales , U . S . drivers purchased 346,000 battery-powered vehicles in 24Q3 , a 5 % Q-o-Q rise and an 11 % Y-o-Y increase . EVs now comprise 9 % of new car sales , the highest level on record . Tesla easily retained its EV sales crown by delivering 167,000 vehicles . However , its share is now 48 % and continues to decline as more affordable , longer-range vehicles appear .

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 Miami-based 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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