Relevant and even prescient commentary on news, politics and the economy.

Retail Sales Rose 9.8% in March as Consumers Spent Stimulus Checks

March consumer prices, retail sales, industrial production, & new home construction; February’s business inventories RJS at MarketWatch 666

Seasonally adjusted retail sales increased by 9.8% in March, the second largest jump on record, after retail sales for January and February were both revised higher…the Advance Retail Sales Report for March (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled a record high $619.1 billion during the month, which was up by 9.8 percent (±0.5%) from February’s revised sales of $529.3 billion and 27.7 percent (±0.7 percent) above the adjusted sales in March of last year… February’s seasonally adjusted sales were revised from $561.7 billion to $563.7 billion, while January’s sales were revised from $579.1 billion to $579.552 billion; as a result, the percent change from January to February was revised from down 3.0 percent (±0.5 percent) to down 2.7 percent (±0.2 percent)….estimated unadjusted sales, extrapolated from surveys of a small sampling of retailers, indicated sales were actually up 27.3%, from $493,085 million in February to $627,885 million in March, while they were up 30.4% from the $481,513 million of sales in March of a year ago…

Included below is the table of the monthly and yearly percentage changes in retail sales by business type taken from the March Census Marts pdf….the first double column of this table shows us the seasonally adjusted percentage change in sales for each kind of business from the February revised figure to this month’s March “advance” report in the first sub-column, and then the year over year percentage sales change since last March in the 2nd column; the second double column pair below gives us the revision of the February advance estimates (now called “preliminary”) as of this report, with the new January to February percentage change under “Jan 2021 r” (revised) and the February 2020 to February 2021 percentage change as revised in the 2nd column of that pair…(for your reference, our copy of this same table from the advance February estimate, before this month’s revisions, is here)…. lastly, the third pair of columns shows the percentage change of the first 3 months of this year’s sales (January, February and March) from the preceding three months of the 4th quarter (October thru December) and from the same three months of the 1st quarter a year ago….as you can see from that fifth column, overall retail sales for the 1st quarter of 2021 were roughly 7.7% higher than the 4th quarter of 2019, which implies that nominal personal consumption of goods for the 1st quarter will be up by roughly the same amount, before any inflation adjustments…

Jobless claims break on through – 1M+ jobs report for April looks likely

Jobless claims break on through – 1M+ jobs report for April looks likely

As I have said for the past few weeks, new jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. With the number of those vaccinated continuing to increase, I have been expecting a big increase in renewed consumer and social activities, with a concomitant gain in monthly employment gains – as we saw in the March jobs report.Four weeks ago I set a few objective targets: new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 
This week was a major advance towards those targets.


On a unadjusted basis, new jobless claims declined by 152,833 to 612,919. Seasonally adjusted claims declined by 193,000 to 576,000 (with last week’s number being adjusted upward by 25,000). The 4 week average of claims also declined by 42,250 to 683,000. 

Here is the close up since last August (recall that these numbers were in the range of 5 to 7 million at their worst in April of last year): 

Numbers

The interviewee says that blacks are disproportionately imprisoned in the United States; notes that though blacks only make up 13% of the general population, they make up 40% of the prison population. While it is quite likely that blacks are disproportionately imprisoned, it is what the interviewee didn’t say that begs asking. Why is it that blacks are being disproportionately imprisoned? For the answer to that, first, let’s take a look at some U.S. Department of Justice data on arrests:

Selected from the above linked table: Estimated number of arrests by offense and race, 2019, All ages:

All offenses blacks more than 25% of total

Murder and nonnegligent manslaughter blacks more than 50% of totalotal….

Robbery blacks more than 50% of total

….

Aggravated assault blacks more than 33% of total

….

These Justice Department figures tell us that blacks are in fact committing a disproportionate percentage of all crimes being committed. What else do we know in our search for the why?

It is known, or at least believed to be known: That, by far, most black citizens are law abiding. That upper and middle income blacks are exceptionally law abiding. That in modern day populations, males are far more likely to commit crimes than females. That almost all crimes by black Americans are committed by young black males. That nearly half of black Americans live in areas of concentrated poverty. That almost all of the crime committed by black Americans is committed by young black males between the ages of 12 and 34 years of age who live in areas of concentrated poverty (most of their victims live in these same areas).

It would help to know: What percentage of those black Americans who live in areas of concentrated poverty are males between the ages of 12 and 34. What percentage of this group commit criminal acts.

If we estimate 12 to 34 year old black males constitute 12% of the black population in areas of concentrated poverty, and that one-half of them are committing criminal acts; we aren’t looking at 13% of the population committing a disproportionate of all crimes committed. We are looking at (0.5 x 0.12 x 0.13 x 100 ~ 0.9%) less than 1%, of the overall population committing an extremely disproportionate per cent of all crimes committed. More specifically, we are talking about young black males in poor urban black communities committing an extremely disproportionate per cent of all crimes.

Why is it that 12 to 34 year old black males who live in urban areas of concentrated poverty are committing crimes at such a disproportionately high rate? Why is the cause we seek. Living in poor urban areas of concentrated poverty is the where. Why do young black males living in poor urban areas of concentrated poverty more like to commit criminal acts? It is known, or thought to be known, that young males are more likely to commit crimes. There appears to be little, if any evidence, that race alone is a factor. Leaving us with young males living in poor urban areas of concentrated poverty; with good reason to suppose that the lack of adequate housing, food, healthcare, education, hope, … of everything they need, and want, might be the most significant factor, the greater cause. These causes/things: inadequate housing, inadequate food, inadequate healthcare, inadequate education, little reason for hope, …, are things we as a society can do something about. Our doing so would be far better than going forward with the long failed more and more incarceration, imprisonment.

It appears that the most proximate cause of the most disproportionate percentage of young black males being incarcerated was their socioeconomic environs. Suppose that the reason for one group of citizens having a disproportionately high arrest rate was found to be because of their ‘culture’, their biology, their genetics, their upbringing, their psychology, …? Or, some combination of these things? What would an ‘Estimated number of arrests by offense and socioeconomic status’ look like? What would an ‘Estimated number of arrests by offense and culture’ look like? We have learned that there is a strong correlation between whether the child was wanted. What would an ‘Estimated number of arrests by offense and parenting’ look like? What other things do we not know? Asking the right questions and getting the correct answers is all important; is our best hope for finding solutions.

On Ghost Walls

Raffi Khatchadourian’s Ghost Walls {Surviving the Crackdown in Xinjiang ( As mass detentions and surveillance dominate the lives of China’s Uyghurs and Kazakhs, a woman struggles to free herself.)} is beyond Margaret Atwood dystopian. Ghost Walls gives a victim’s accounting of her own experiencing of China’s reaction to the cultural differences between the Uyghurs, Kazakhs, and other indigenous Turkic peoples, and China’s Han Chinese majority. A reaction that seems to be a crazy of mixture of the 13th and 21st Centuries with a f—ed up, post Mao, culture thrown in. For the world, the worst thing that could possibly happen is for this manic genocidal crackdown to succeed. When in doubt, when in China, double down. Can anybody make anyone do anything?

The idea of imposing one group’s set of values on another hasn’t worked very well so far. Seems it is rather a recipe for conflict and strife Looking ahead, this problem of living in multiracial, multicultural societies is an old one that is suddenly getting worse. One we really need to figure out.

It is said that Africa is home to more genotypes than the rest of the world combined. Our neighbor to the south is not a land of one people but is rather home to a thousand peoples. All around the world: Hong Kong, Tibet, Mongolia, and Xinjiang in China; the Kurds in Syria, Iraq, Turkey and Iran; the Palestinians in Israel (or vice versa); the Rohingya in Myanmar; all across Africa; …, the world is trying to come to grips with differences. Too often, we see one group trying to make another second group behave as they, the first group, think they should.

Weekly Indicators for April 12 – 16 at Seeking Alpha

 – by New Deal democrat

Weekly Indicators for April 12 – 16 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

The big call I made last year is that conditions were setting up for a Boom this year, once the pandemic started to be overcome. Well, almost half of all Americans have received at least one dose of vaccine, and all the signs are that the Boom is well and truly upon us.

So the nowcast and short term forecast is all about chronicling the Boom, while the long term forecast is about what happens as the Boom begins to fade.

As usual, clicking over and reading will bring you up to the virtual moment about the economy, while rewarding me just a little bit for my efforts.

Daunte Wright’s Killing Makes the Case for Shrinking Police Budgets

Naked Capitalism had this commentary up on its site as introduced by Yves Smith. I made some small editorial changes to further emphasize the two points Yves makes in the beginning and also some of the commentary in the article. Both parts are good reads.

To wit; If you are handcuffed and on the ground, you are killed. If you drive away, you are killed. If you run, then stop, and turn around with your hands up; you are killed. The common thread here is the victims are all Black Americans.

Daunte Wright’s Killing Makes the Case for Shrinking Police Budgets, Naked Capitalism, Yves Smith

Yves here. I don’t pretend to have any good answers for what to do about police brutality, particularly towards people of color. During the Presidential campaign, Biden backed even more police spending, no doubt to clam the nerves of the Dem’s professional-managerial class base. More unequal societies are lower trust societies, so the K-shaped recovery is only going to increase the perception of risk among the well off.

Two things to keep in mind:

First, is that the most troubling form of police militarization is their hiring of former soldiers. Any who have seen combat have been deeply acculturated to shoot at any threat. I don’t see how to undo that.

Second, is that some data suggests that abusive policing is concentrated among a relatively small proportion of the total staff. Malcolm Gladwell looked at the Los Angeles Police Department’s efforts to improve its long-established bad relationship with community due to over-use of force. They invested a lot of effort in training, only to find it had very little effect.

Further study showed why. The average cop was not behaving badly. A small number had many warning and citations. Gladwell argued that the remedy was to get these hotheads off the street as soon as their abusive tendencies surfaced.

But the culture of police forces as currently constituted all works against that. Cops are indoctrinated to stick together. Being a do-gooder is being a rat, and being a rat is a fast path to having no backup show up when you are in a tough spot (or having drugs or other incriminating evidence planted). So cops can’t call out the abusers in their ranks for fear of repercussions. And police unions mount vigorous defense of cops facing sanctions.

Tax Evasion by the High Income

Washington Equitable: Tax evasion at the top of the U.S. income distribution and How To Fight it.

There is another version of the issue starting off with Senior fellow (Urban-Brookings Tax Policy Center of the Urban Institute), Steven M. Rosenthal taking on the issue;

“If Congress Wants the IRS To Collect More Tax from The Rich, It Needs to Pass Better Laws.”

Or you can go to NBER version of the Washington Equitible Working Paper; Tax Evasion at the Top of the Income Distribution: Theory and Evidence, March 2021.

Your Choice.

The question?

“How much tax do high-income Americans evade? And what kinds of evasion tactics do they use?”

Random audits miss two of the more common methods used to minimize taxes. The audits underestimate tax evasion capturing little of the investor tax evasion by those using offshore accounts and pass-through businesses. Both methods present opportunities unlikely to be captured by the audits of income taxes and are significant to the top income brackets or the 1% of household taxpayers making greater that $500,000 annually (TPC).

In a July 2009 NYT article, it was determined Swiss bank UBS helped US citizens hide $20 billion. This is an old article and certainly later administrations did little to stifle tax avoidance.

4-Day Work Week

From Treehuggers; “Spain To Try Nationwide 4-Day Workweek”

A shorter workweek has been suggested s a means of improving work-life balance and reducing greenhouse gas emissions. Freelance Writer, Olivia Rosane. The topics of a shorter work week and climate control was brought up by Sandwichman at Econospeak with the former being touted numerous times by Sandwichman.

Íñigo Errejón, a representative from the new leftwing party Más País, tweeted that the government had agreed to launch a pilot project to trial a four-day workweek.

“We have agreed with the Government to promote a pilot project to reduce working hours. European funds must also serve to reorient the economy towards improving health, caring for the environment and increasing productivity, ”

That Prices were up the most since 2012 is probably also noteworthy . . .

CPI Rose 0.6% in March on Higher Prices for Energy and Transportation Services, R.J.S, MarketWatch 666

The consumer price index rose 0.6% in March, the largest monthly increase since August 2012, as higher prices for fuel, utilities, transportation services, financial services, and used vehicles were only slightly offset by lower prices for clothing and for communication commodities…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.6% higher in March, after rising by 0.4% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, but after falling by 0.1% last May, by 0.7% last April and by 0.3% in March of last year….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 263.014 in February to 264.877 in March, which left it statistically 2.6198% higher than the 258.678 reading of March of last year, which is reported as a 2.6% year over year increase, up from the 1.7% year over year increase reported a month ago….with higher prices for energy a major factor in the overall index increase, seasonally adjusted core prices, which exclude food and energy, were only up by 0.3% for the month, as the unadjusted core price index rose from 270.696 to 271.713, which left the core index 1.6464% ahead of its year ago reading of 267.268, which is reported as a 1.6% year over year increase, up from the 1.3% year over year core price increase that was reported for February, but still little changed from the 1.6% the year over year core price increase that was reported for December of 2020 . . .