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Elliot Eisenberg Economic & Policy Blog
Federal Funding As of 2022, federal funding made up 40 % of overall revenue in nearly half of US states. Federal funding accounted for the greatest share of state revenue, 50.5 %, in Louisiana, 50.2 % in Alaska, and 49.7 % in Arizona. By contrast, it accounted for just 22.2 % of ND state revenue, 25.9 % in HI, and 27.6 % in VA. With Republicans looking to cut federal spending, some states will be more vulnerable than others.
Fed Freedom Recently, President Trump suggested firing Fed Chair Powell. A decision in a SCOTUS case may give Trump his wish. If granted, Fed independence will be gone, investors will expect the Fed to do the President’ s bidding, short-term rates will fall and inflation will rise, pushing up long-term rates. The market reaction to firing Powell will make the ugly aftermath of what happened after“ Liberation Day” look like a party.
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Easter Eggselence Iowa produces more eggs than any state, the next biggest states: Ohio, Indiana, and Pennsylvania. Total US 2024 table egg production was 93.1 billion, down 1 % from 2023. The daily rate of lay averaged 82.5 eggs / 100 table egg layers, or 301 eggs / hen, up 1 % from 2023. In March, a dozen eggs cost a record $ 6.23.
Data Dichotomy Hard data like March retail sales remain solid, rising 1.4 % M-o-M. The car segment jumped 5.3 % M- o-M, building materials surged 3.3 %, the biggest jump since 2021, sporting goods gained 2.4 %. But households were front-running tariffs. Conversely, soft data like the NY Fed’ s business services( survey) index was dismal, contracting sharply for the second straight month. The hard / soft data battle rages, with hard fortunately holding sway. But will it hold on?
Discount Dominance In 2019, the percentage of apparel trips to off-price stores was 28.1 %. In 2024, 35.1 %. Similarly, thrift store trips rose from 9.4 % to 12.2 %. However, trips to traditional department stores and general apparel stores declined from 28.5 % to 21.1 %, and 17.8 % to 15.8 %, respectively.
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Activewear / athleisure stores slipped from 13.8 % to 13.7 %, luxury slid from 2.4 % to 2.1 %. Discounters rock, high end is OK, the middle struggles, echoing the overall economy.
Data Distraction Usually, stellar CPI numbers would have resulted in melting Treasury yields, but due to tariffs the report was utterly ignored. That said, M- o-M CPI fell 0.1 %, the first decline since 6 / 24, and core CPI rose 0.1 %, the smallest rise since 1 / 21. Y-o-Y, CPI and core rose 2.4 % and 2.8 % respectively. Moreover, the declines were breathtakingly broad-based. Absent tariff concerns, I bet the Fed would cut rates in May.
Market Mysteries April 9’ s 9.52 % S & P 500 increase was the third largest since WWII. The largest boost was an 11.58 % rise on 10 / 13 / 08 followed by a 10.79 % updraft on 10 / 28 / 08. Both jumps occurred during the Housing Bust. The fourth biggest rise was on 3 / 24 / 20 and was 9.38 %, the fifth biggest was on 3 / 13 / 20 and saw the index percolate 9.29 %. These two were both during Covid. The biggest jumps occur during bad volatile times.
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Troubled Treasuries The recent steepening of the yield curve and the astounding and quick rise in 10-year and 30-year Treasury rates suggest several allbad possibilities. Is there concern that a recession could strain federal government resources? Is China selling Treasuries? Is everyone deleveraging Treasury trades all at once, and thus is everyone looking for cash simultaneously? Who knows, but this is potentially terrifying. Maybe it helps explain the sudden 90-day tariff pause.
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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