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February 2020 Economic Roundup

December net job growth of 145,000 brings CY2019 employment gains to 2.1 million, down from almost 2.7 million in 2018. While job growth has slowed, average growth over the past decade has been 2.2 million/year, so it remains sufficiently solid to support continued strong household consumption growth. On the downside, wage growth decelerated slightly, but the broadest measure of unemployment fell to 6.7% the lowest level on record! Decent data.

The CY2019 deficit is $1.02 trillion and Y-o-Y it grew 17.1%. While that’s down from a 28.2% rise in 2018, it’s no reason to celebrate. In 2018, tax cuts dramatically reduced revenues. In 2019, revenues rose 5%, but expenditures rose by a still larger 7.5%. The deficit is now an uncomfortable 4.7% of GDP, and rising, up from an already large 4.2% in 2018. Traditionally, deficits always shrank in recoveries.


The US goods and services trade deficit shrank to $43.1 billion in November, its lowest level since 10/16 when it was just $42 billion. And, our trade deficit with China over the last 12 months is $358 billion, down from $420 billion for the year ending 12/18. Separately, after hurting GDP growth through September of this year, trade is expected to boost 19Q4 GDP by at least 1.2 percentage points.


In 1981, the median age of the US homebuyer was 31. By 1989, it had drifted up to 34, and just after the relatively mild 1990 recession, it shot up to 42. By 1997, it bottomed at 35 and since then has almost steadily risen. By 2000 it was 39, by 2006 it was 41, in 2013 it rose to 42, by 2015 it was 44 and now it’s 47!


New research has tentatively reconfirmed earlier findings that simply installing commercially available $700 air filters in classrooms that were void of any noxious fumes to begin with raised math scores by 0.20 standard deviations and English scores by 0.18 standard deviations! These are shocking, large, permanent improvements that are cheap, easily scalable and equal to cutting class size by one-third, and almost as large as the KIPP charter school network!


In 1851, scientists established body temperature at 98.6 degrees. After reexamining almost 700,000 temperature readings since 1840, researchers find body temperature has been steadily falling by 1/20 of a degree per birth decade. After accounting for measurement error and improved thermometry, the reason is reduced population-level inflammation; heat is a symptom of inflammation. Improving health, quicker illness detection and better interventions including antibiotics and steroids are why.


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