No Nonsense Economics

Over the past few years, it would have been difficult to miss news coverage reporting that people are leaving California for states like Texas and Florida. While this outmigration is important, Beacon Economics has identified a larger, and growing, dynamic that affects far more Californians and their decisions about where to live. Our analysis finds that residents of the Golden

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Despite a year of recession calls by many, the U.S. economy came into 2023 with strong momentum. While the headline GDP number for the first quarter was only 1.1%, that was entirely due to the anticipated rundown in inventories. Final demand—the sum total spending by consumers, business, and government—grew at a 3.2% annualized real pace, the highest level in almost

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Today’s big news was that the Federal Reserve only raised the Federal Funds Rate by a quarter point and has seemingly backed off on its plans for future interest rate hikes. Is this good news or bad? Oddly, the news first caused equity markets to rise, then fall. Why such a mixed reaction? Because the Fed didn’t actually address the

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“If the economy shrinks next year, no one should be surprised. We’re facing the most widely forecast recession in history.” Wall Street Journal, Dec 4, 2022 The year 2022 was like the proverbial month of March—it came in like a lion and went out like a lamb. The start of the year was full of optimism following 2021’s high-growth recovery

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Over the past year U.S. mortgage rates have risen from sub-3% to over 7%. Unsurprisingly the nation’s real estate market is swooning; home sales are plummeting, inventories of new homes for sale are rising sharply and we are already starting to see signs that home prices are falling. Little doubt that most people over the age of 30 are suffering

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The biggest obstacle to slowing inflation is that the real causes of it—excessive consumer demand and rapidly rising wages—are too politically toxic to acknowledge. The August CPI report showed prices in the United States continuing to increase, contrary to the predictions of most Blue-Chip forecasts and the Federal Reserve. This has spooked the markets and caused a sharp decline in

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On the 13th of July 2022 the euro broke through parity with the dollar, meaning that one euro traded for less than one dollar. This had not happened in 20 years and is a symbolic testament to the dollar’s strength. It follows that as the euro currency weakens, exports of goods and services from the Eurozone become more attractive. Indeed,

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In conversations about the economy, there are a lot of conventional wisdoms that are neither conventional nor wise. One very relevant example today is the idea that a recession is defined as two consecutive quarters of negative GDP growth, exactly what the United States experienced in the first half of 2022. This definition enjoys wide acceptance and shows up in

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Given the frenzied and contradictory economic news lately, I wouldn’t blame anyone for having a bad case of whiplash. It’s difficult to get a read on what’s happening when the headlines flip between bull and bear faster than the stock market. One moment the discussion is about labor shortages restraining growth even as the administration pitches new relief efforts, how

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In the 3rd quarter, U.S. GDP grew by 2%, down from an almost 6% pace over the three preceding quarters. Weak growth in consumer spending, with a sharp drop in spending on durables, is the primary culprit. Business investment slowed as well. Not surprisingly, the relatively weak number has led to an abundance of hang-wringing by pundits and many in

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