Cost Components

The CPI is designed to broadly capture changes in the prices of goods and services purchased by U.S. consumers. The largest component is housing, with a weight of 44.6%. Next is transportation at 17.2%, then food and beverages at 14.2%. Medical care is fourth at 7.8%, education and communication are 5.7%, recreation is 5.3%, other goods and services are 2.7%, and apparel has a weight of 2.6%. Housing really matters.

Payroll Performance

Payroll Performance U.S. payrolls grew a net 199,000 in November, 152,000 after accounting for previously striking workers. 199,000 is the fourth weakest number since 1/21, all of which have occurred since 6/23. Wage growth ticked up slightly despite the labor market’s continued softening, thus the Fed will hold on 12/23/23. Job growth is increasingly concentrated, with 148,000 net jobs in education/healthcare and government. With continued luck we narrowly avoid recession.

Phenomenally Philanthropic

In 2022, philanthropic giving totaled $499.3 billion. Individuals gave $319 billion, foundations $105 billion, bequests $46 billion, and corporations $29 billion. Contributions declined 3.4% from 2021 and 10.5% after inflation, the biggest decline since the Great Recession. Charitable giving meaningfully jumped in 2020 and peaked in 2021 at $516.9 billion inflation adjusted. After peaking in 2017, the 2017 tax law revisions probably caused charitable giving to decline slightly in 2018.

Veep Votes

The Friday File: On 12/5/23, Vice President Kamala Harris broke the almost 200-year old record for casting the most tiebreaking Senate votes at 32. The prior recordholder was Vice President James Calhoun who, during his eight years as Vice President (1825-1832), cast 31 such votes. In third is John Adams who cast 29 votes between 1789-1797. Fourth is George Dallas (1845-1849) at 19 and then Schuyler Colfax (1869-1973) at 18.

CO2 Conundrum

In 2022, US coal-related CO2 electricity generation emissions declined 7% due to an 8% reduction in coal-fired power generation. That capacity was, however, replaced by natural gas, solar, and wind such that CO2 emissions from electricity generation declined just 4%. Yet overall, 2022 emissions still rose 0.7% due to increases elsewhere in energy consumption. With coal down to just 20% of electricity production, reducing CO2 emissions gets increasingly more difficult.

Glittering Gold

While gold prices are setting nominal price records at $2,000/oz, inflation adjusted, gold doesn’t shine. As recently as 2020 it was close to $2,400/oz, and in 2011 it was almost $2,500/oz. In 1980, gold traded at slightly more than $2,500/oz, its all-time inflation-adjusted peak. As far back as 1790, gold was worth $1,200/oz. Over very short holding periods gold can do very well, over long periods gold performs poorly.

Vessel Volume

After seeing volumes and profits surge during Covid, containership operators ordered new vessels totaling 26% of global container capacity just in time to see shipping volume sink. Old ships are suddenly being scrapped and overcapacity will persist for years. Maersk, a global shipping bellweather, has seen Y-o-Y 23Q3 profit collapse from $8.88 billion to $521 million. Retailers are cheering as container rentals are down 95% since peaking in 2021.

Retail Receipts

During the 2023 Thanksgiving week, retail sales activity rose 6.3% Y-o-Y, the best weekly sales boost of the year as is almost always the case during Thanksgiving week. However, the rise in Y-o-Y sales was well down from last year’s 10.4%, 2021’s stunning 21.9% jump, and 2020’s Y-o-Y rise of 9.2%. This year’s boost was the weakest since 2017’s 4.8%. Buyers may be showing signs of fatigue.

Friend Figures

The Friday File: While the number of close friends we have averages three, and the number of people we call friends is about 150 (also known as the Dunbar number), the number of people we know, including persons we see or communicate with as infrequently as every other year, averages 611, with a median of 472. 1.5% of the population know as few as 100-149 people, 5% know over 1,500.

Package Performance

In 2019, UPS delivered 4.7 billion domestic packages, FedEx delivered 3 billion, and Amazon 1.9 billion. Last year, UPS distributed 5.3 billion, Amazon 5.2 billion and FedEx 3.3 billion. With UPS and FedEx volumes expected to be flat in 2023 as they focus on higher margin volume, and Amazon growing, 2023 will see Amazon snatch the delivery crown and deliver 6 billion packages. The USPS remains the largest parcel provider.

Healthcare Hiring

In 10/23, net job growth was relatively weak at 150,000. Moreover, most of the gains were in just three sectors, healthcare (58,000), government (51,000), and leisure & hospitality (19,000). While job growth will likely slow in the latter two categories, healthcare employment remains very strong. Since 1/22, healthcare employment has risen 6.8% and continues to be solid, while employment elsewhere is up 4.3% and is slowly softening.

Crypto Crimes

With FTX exposed as fraudulent, and Binance as a money laundering operation, large, monopolistic, hugely profitable crypto exchanges must become legitimate actors. Binance’s settlement with the U.S. Treasury requiring it to create true anti-money laundering systems, and in the process, become the eyes and ears of the U.S. Treasury is the first. Heavy government crypto oversight has arrived. Now uncovering crypto’s legitimate function/purpose/use, if one exists, can hopefully commence.