The Morning Economic Report

Monday-Friday at 7:33 am

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants.  Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes.  Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.

He is the author of numerous regional publications including the Mid-Atlantic Economic Quarterly and Outlook Maryland. Anirban completed his graduate work in mathematical economics at the University of Maryland.  He earned a Masters in Public Policy from Harvard University in 1992.  His Bachelors in Foreign Service is from Georgetown University and was earned in 1990.

One of the strongest parts of the U.S. economy today is the housing market.  According to Standard and Poor’s/Case Shiller data, home prices continued to rise through July.  The S&P/Case Shiller twenty-city home price index rose five percent in July from a year earlier.  Due largely to Northern California’s booming technology sector, home prices in San Francisco posted the largest gain. 

For many years, Detroit was often used as the example of a struggling American community.  That’s not so much the case anymore.  In August, the Detroit regional unemployment rate stood at five point six percent, a fifteen year low and not much above the national reading of five point one percent. 

A recent study funded by the Department of Energy’s Oak Ridge National Laboratory finds that U.S. government testing underestimates how much fuel cars will burn.  These findings come on the heels of a scandal involving Volkswagen, which admitted that it has been equipping diesel cars with software allowing cars to run clean during lab tests in order to hide actual emissions. 

The decline in commodity prices is denting the wallets of workers in the nation’s mining industry, generating massive layoffs and boosting unemployment payouts in a number of states.  According to a recent Labor Department report, personal earnings declined in five states during the second quarter of twenty fifteen.  In three of those states – North Dakota, Wyoming and West Virginia – earnings declines were primarily attributable to declining activity in mining industries. 

While economists and others have become a bit more nervous regarding near-term U.S. economic prospects, at least matters here are nowhere near as bad as they are in Brazil.  The Brazilian currency, the real, has declined roughly thirty five percent against the U.S. dollar this year, hitting an all-time low recently. 

Yikes, that was an ugly employment report.  The U.S. economy created just one hundred and forty two thousand jobs in September, a number that fell well short of expectations and could mean that the Federal Reserve will further delay raising interest rates.  The estimate for August was revised downward from an already lackluster one hundred and seventy three thousand positions to one hundred and thirty six thousand. 

According to data from the U.S. Census Bureau and as pointed out by the Hutchins Center for Fiscal and Monetary Policy, the typical American male earned less in twenty fourteen than they in nineteen seventy three.  If one measures income in twenty fourteen dollars to adjust for inflation, the typical man with a full time job in nineteen seventy three earned about fifty three thousand three hundred dollars – again, this in twenty fourteen dollars. 

One’s views on inflation are likely to be shaped very much by when one was born.  As pointed out by writer Neil Irwin, if you are an eighteen year old college freshman in the U.S., inflation in your lifetime has averaged less than two percent.  If you are a thirty year old millennial, you have experienced inflation above five percent for only one year – when you were in kindergarten and had precious little buying power in any case. 

It’s been more than six years since the previous recession ended.  Despite that, some cities around the nation are still struggling to fully recover.  According to new research from personal finance website WalletHub, cities in the American Southwest have fallen furthest behind.  Researchers analyzed seventeen economic indicators, including changes in poverty, violent crime rates, home prices and wage growth. 

A recent piece written by former U.S. Labor Secretary Robert Reich suggests that big technology companies have become far too influential and powerful in America.  In an environment in which information and ideas have emerged as the most valuable forms of property, gigantic technology companies, many located on the West Coast, have as much or more influence than the railroad barons and industrialists of the nineteenth century.