Let’s hope capex investment in data centers is sustained. Figure 1: Nonresidential fixed investment (blue) GDPNow of 8/7 (light blue square), nonresidential fixed investment minus data center capex (dark red), GDPNow of 8/7 (red square), all in bn.Ch.2017$ SAAR. Annual data…

Today we are pleased to present a guest contribution by Mark Copelovitch (University of Wisconsin – Madison) and Thomas Pepinsky (Cornell University). Are cryptocurrencies viable as money? What is the economic function of “shitcoins” and “stablecoins”? And how can we understand the political…

Oracle billionaire CEO Larry Ellison is aggressively moving into media and military contracting to consolidate his power in the Trump 2.0 era. Larry Ellison’s ambitions have been known in Silicon Valley for a long time, as this 2003 biography’s title reveals:…

by Calculated Risk on 8/11/2025 01:50:00 PM Back in 2005 I was mostly writing about the housing bubble - and the coming housing bust. But I also mentioned the possibility of a financial crisis. In early 2007, I started forecasting a…

We implement five different tests of whether grand juries, which are drawn from a representative cross-section of the public, discriminate against Black defendants when deciding to prosecute felony cases. Three tests exploit that while jurors do not directly observe defendant race,…

by Calculated Risk on 8/11/2025 10:49:00 AM Today, in the Real Estate Newsletter: August ICE Mortgage Monitor: Home Prices Continue to CoolBrief excerpt: House Price Growth Continues to SlowHere is the year-over-year in house prices according to the ICE Home Price…

I must confess to be wanting in imagination. Widespread adoption of smartphones has led to a fall in social skills. Examples are pervasive, such a family members fooling with their devices rather than talking to each other at meals and our…

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by Calculated Risk on 8/11/2025 08:11:00 AM Altos reports that active single-family inventory was down 0.8% week-over-week.Inventory is now up 37.6% from the seasonal bottom in January.   Usually, inventory is up about 21% from the seasonal low by this week in…

R&D investment has grown robustly, yet aggregate productivity growth has stagnated. Is this because “ideas are getting harder to find”? This paper uses micro-data from the US Census Bureau to explore the relationship between R&D and productivity in the manufacturing sector…

The author is Samuel Scheffler, and the subtitle is The Mysteries of Time and the Goods of Attachment.  He is one of America’s leading philosophers, and proves it once again here. Much of this book is devoted to arguing against Derek…

Courtesy of Ed Yardeni: Source: Yardeni as edited by Chinn. In terms of assessing how the general economy is responding to tariff and other uncertainty shocks, one might want to look at the SP500 excluding the Magnificent 7. As of August…

by Calculated Risk on 8/10/2025 06:23:00 PM Weekend: • Schedule for Week of August 10, 2025Monday: • No major economic releases scheduled.From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 7 and DOW futures are up 54 (fair value).Oil…

We’re about halfway into Q3. Nowcasts put equipment and structures investment — particularly forward looking investment — at near flat relative to Q2. Figure 1: Equipment and Structures investment (blue line, left log scale), GDPNow nowcast of 8/7 (light blue square),…

by Calculated Risk on 8/10/2025 08:42:00 AM The Consumer Price Index for July is scheduled to be released on Tuesday, August 12th. The consensus is for a 0.2% increase in CPI, and a 0.3% increase in core CPI. The consensus is for…

We estimate transitory and permanent import tariff shocks in the United States over the postwar period. We find that transitory tariff increases are neither inflationary nor contractionary, and are not associated with monetary tightening. In contrast, permanent tariff increases trigger a…

A BEST CASE SCENARIO FOR AI? The Doomer narratives were wrong. Predicated on a “rapid take-off” to AGI, they predicted that the leading AI model would use its intelligence to self-improve, leaving others in the dust, and quickly achieving a godlike…

by Calculated Risk on 8/09/2025 02:11:00 PM At the Calculated Risk Real Estate Newsletter this week:Click on graph for larger image.• Q2 NY Fed Report: Mortgage Originations by Credit Score, Foreclosures Decrease• How Much will the Fannie & Freddie Conforming Loan…

Personally, I’m not convinced, but if you are, then consider this graph: Figure 1: Nonfarm payroll employment from July release (bold black), from June release (green), civilian employment adjusted to the NFP concept, experimental research series using smoothed population controls (bold…

Here’re other prior 2 month cumulative revisions, normalized by employment (after all, the country has been growing for the past 100 years): Source: Abecasis, Walker, “US Daily: Q&A on the Revisions in the July Employment Report,” Goldman Sachs, August 2, 2025.…

Businessweek, August 27, 2019 Let’s get this out of the way upfront: There is no such entity as the “Shadow Kansas City Federal Reserve Board.” This isn’t a “The first rule of Fight Club” situation. No one denies that a gathering of…

by Calculated Risk on 8/09/2025 08:11:00 AM The key reports this week are July CPI and Retail Sales.For manufacturing, the August NY Fed survey, and the July Industrial Production report will be released. ----- Monday, August 11th ----- No major economic…

Today, I am going to explain why tariffs on more countries can be better! Not to worry, I still think free trade is the best policy (modulo some special cases discussed in Modern Principles) but I am going to show that…

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You will see termite mounds, baobab trees, and open skies. The major city is Tamale, the third largest urban settlement in the country.  The town is manageable and traffic is not intense.  At night it is quiet.  The “main street” is…

by Calculated Risk on 8/08/2025 04:06:00 PM From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission. Rail volumes are holding up, indicating goods movement remains resilient despite the headwinds. Looking ahead, though, sustained pressure…

1. Was it emigration that ended the British empire? 2. Thiel fellowship data. 3. A kind of Jevons Paradox for AI pricing and usage. 4. Redux of Patrick Collison interviewing me in 2017. 5. “Dynastic composers are between 14 and 21…

From Cleveland Fed, Goldman Sachs, plus Bloomberg consensus – generally, acceleration in the q/q annualized: Figure 1: Quarter-on-Quarter annualized inflation of CPI (bold black), Cleveland Fed nowcast as of 8/8 (gray square), Bloomberg consensus, Kalshi betting CT (chartreuse triangle), Goldman Sachs…

by Calculated Risk on 8/08/2025 12:37:00 PM This is something to watch again. Here is another update on lumber prices.SPECIAL NOTE: The CME group discontinued the Random Length Lumber Futures contract on May 16, 2023.  I switched to a physically-delivered Lumber…

Lots of stories regarding the impact of CEA Chair’s temporary appointment to the vacancy at the Fed Board. For an insight into Dr. Miran’s views, here’s a list of his peer reviewed articles. Peer-Reviewed Article Balanced budget requirements lead to substantial…

Yes, I will be having another Conversation with him.  Much of it will focus on Steven’s forthcoming book When Everyone Knows that Everyone Knows…Common Knowledge and the Mysteries of Money, Power, and Everyday Life. Here by the way is my previous…

by Calculated Risk on 8/08/2025 11:41:00 AM From BofA: Next week, we will initiate our 3Q GDP tracker ... [August 8th comment]emphasis addedFrom Goldman: [W]e boosted our Q3 GDP tracking estimate by 0.2pp to +1.2% (quarter-over-quarter annualized). Our Q3 domestic final…

Here is the transcript and also the link to the audio.  Forty five minutes or so.  Here is the YouTube.  We discuss much more than Bach, full of fresh material, plus Evan knows a lot and prepares, definitely recommended.  There are…

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by Calculated Risk on 8/08/2025 08:15:00 AM Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in JulyA brief excerpt: Tracking local data gives an early look at what happened the previous month and also reveals…

by Calculated Risk on 8/08/2025 08:15:00 AM Today, in the Calculated Risk Real Estate Newsletter: 1st Look at Local Housing Markets in JulyA brief excerpt: Tracking local data gives an early look at what happened the previous month and also reveals…

I hear that Bannon is pushing Heritage Chief Economist EJ Antoni for BLS Commissioner. EJ Antoni: Source: Heritage Foundation, accessed 8/7/2025.  If he is nominated, I’ll just observe that he declared (with St. Onge) a recession starting in 2022 [1]. And…

Manufacturing employment, hours, capacity utilization down since March 2025 (pre-“Liberation Day”); manufacturing production (Fed index) flat since March. Figure 1: Manufacturing employment, all employees (brown), manufacturing aggregate hours (green), manufacturing production (blue), real value added in manufacturing (blue bars), all in…

by Calculated Risk on 8/07/2025 10:29:00 AM From STR: U.S. hotel results for week ending 2 August The U.S. hotel industry reported mostly positive year-over-year comparisons, according to CoStar’s latest data through 2 August. ...27 July through 2 August 2025 (percentage…

by Calculated Risk on 8/07/2025 09:15:00 AM From Manheim Consulting today: Wholesale Used-Vehicle Prices Decreased in JulyWholesale used-vehicle prices (on a mix, mileage, and seasonally adjusted basis) were lower in July compared to June. The Manheim Used Vehicle Value Index (MUVVI)…

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Bill McBride’s assessment here. In early April, I went on recession watch, but I’m still not yet predicting a recession for several reasons: the U.S. economy is very resilient and was on solid footing at the beginning of the year, and…

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You think the official BLS NFP series is worrying, consider the alternatives: Figure 1: BLS establishment nonfarm payroll (NFP) July series (bold blue), Jun series (light blue), Philadelphia Fed early benchmark (green), and experimental BLS household series adjusted to NFP concept,…

Discussed the employment numbers on WPR this morning. One question came up, which inspired this post – how’s Wisconsin doing, tradewise, given the states’ trade/manufacturing dependence. Figure 1: 12 month trailing moving average of Wisconsin goods exports deflated by US goods…

From Cavallo et al. (Aug. 2025): Source: Cavallo,  et al. (Aug 2, 2025). Some data consistent with an impact of tariffs: Figure 1: PCE-durables deflator (blue), PCE-services deflator (tan), in logs 2025M01=0 Source: BEA.

This week’s livestream featuring Menzie Chinn and Lydia Cox, moderated by Mike Knetter, is Tuesday, Aug. 5, at 7 p.m. CDT (hosted by the Wisconsin Alumni Association): Register here. In the first half of the year, the Trump administration has reshaped…

Through 8/3: Figure 1: EPU (blue, left scale), EPU-trade (green, right scale). Source: policyuncertainty.com.  Trade policy uncertainty, I can see why that’s risen. Economic Policy Uncertainty? Well, if you start disassembling the economic data infrastructure that underpins TIPS, Social Security COLAs,…

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From the NYT: Two days after President Trump fired the top labor official in charge of compiling statistics on employment, Kevin Hassett, the director of the White House National Economic Council, insisted on Sunday that the administration was “absolutely not” shooting the messenger…