Economics

I was born and raised on a farm in a small town in Ohio. I've worked to get H-1B visas and green cards for my team members my entire career. There are three simple economic arguments for increasing legal immigration by highly educated workers: 1) If another country pays to raise and educate a child through college and that young person then moves to the US, we just gained a fully mature tax payer at zero cost. All the news about student loans? In this case, another country paid for that education. They bore all the costs, we get all the benefits. 2) Education in most countries that send us H-1B candidates is incredibly limited and highly competitive. The result is, only the absolute cream of the crop in those countries gets a chance to apply for an H-1B. We are literally stealing the very best from other countries. To stop that would be suicidal madness. 3) Highly educated immigrants create jobs. Yes, they also compete for jobs, and I competed against some exceptionally brilliant leaders from all over the world. But those leaders have now either created or lead some of our most impressive companies. This debate ends up being complicated for many emotional reasons: a) If you need a job and someone born outside the US gets one you wanted, it is easy to blame and hate, because while overall legal immigration may be good for the country and the economy in general, in that situation it was bad for you. b) Legal immigration gets lumped in with immigration in general and people coming in to the country illegally. Since there are far more people who come in illegally, that conversation dominates the immigration discussion, drowning out the nuance about highly educated workers. c) There are plenty of problems with our domestic education system, including runaway costs, that we need to fix so that all people, including people born in the US, can get world class education. Luckily, online education and AI tutors will create more of this access at lower costs. I no longer need to attend an exclusive university when the best education is available from anywhere. Finally, there are many moral arguments for immigration. Here is just one: Evans is a Welch name. I can trace my ancestry to John Evans, who came to Virginia in 1712. Those 300 years do not change the fact that I am still an immigrant. Even "native" Americans came to this country across a land bridge. "First Peoples" means "first people to get here," not "magically grew from the ground like grass." It is certainly reckless to attempt to have a nuanced discussion about something as explosive as immigration in a limited length format like LinkedIn. At the same time, I am absolutely going to stand up for my many brilliant colleagues who came to the US on H-1B or other visas. They are my friends and our country is better off for their presence, talents, and hard work. I welcome constructive discussion of how we can make a better world, and a better America, for all of us.

I’ve been headhunting in the CPG industry for the past decade, and I’ve never seen a post-inflation market like we’re in right now. For the past three years, customers have been capitulating to price hikes by extending their budgets. But now, they’re at a breaking point. American families, already tethering on edges of their budgets, do not have the ability or the desire to expand their budget in order to accommodate increased prices. I’m sure you’d agree with this, because my family certainly does. With grocery bills through the roof, we’d rather skip on groceries and essentials rather than paying a premium right now. A couple things led us here, starting the pandemic and the post-pandemic impact on spending and savings. Secondly, the wave of AI and tech developments that caught us off guard. So, where do the companies go now? Once the “price increase” playbook is done, CPG brands can only win in both value and volume by shifting gears. In my chats with executives, I’m sensing a change in tone. To stay competitive, they’re looking for ways to shift from the post-pandemic survival mindset to a growth-focused one that accommodates the customer as well. Rather than hiking prices, the focus is now on bringing down costs, and getting to terms with consumer’s limited budgets and increasing product choices. Layoffs aren’t the only way to bring down costs. In my view, CPG companies do have the leeway to embrace data-driven innovation and efficiency to cut costs. Here are some of the ways in which companies can use AI and ML to achieve targets in 2025 and beyond: 1/ Predicting the demand: Post-pandemic behavior is tough to predict, especially in CPG markets. With AI, the companies can now leverage real-time insights from sources like point-of-sale systems, social media, and even economic indicators to see future trends more clearly. PepsiCo, uses Tastewise to track what consumers are eating across 60+ million touchpoints and making decisions that align with local preference. 2/ Inventory management: With AI-powered predictive analytics, companies are now turning inventory management into a science. Procter & Gamble’s Supply Chain 3.0 initiative is one example of this shift. 3/ Increased personalization: Leaders are tapping into geographical intelligence to connect meaningfully with audiences. Estée Lauder has a voice-enabled makeup assistant for visually impaired customers, reaching a new market while boosting brand loyalty. Bottom line is: customers are no longer meeting brands where they’re at. It’s high time that companies start caring about customers and their shrinking bottom lines. Are you excited to see your grocery bill go down in the next few months? #CPG #AI #ML #fmcg #marketing #trending

Labor demand cools further amid imminent rate cuts With the job opening rate falling back to normal while the labor supply increased, the labor market was fully in balance in July. This is an important reason why, in our opinion, the Fed should have cut rates at the previous meeting. The drop in job openings partly explains why job gains were unexpectedly low in July. This data raises some concerns about our forecast for a strong rebound in August job gains, as demand for labor is cooling across many sectors and regions. Thus, the downside risks are increasing ahead of the key job reports coming out on Friday. The next set of job numbers released this week will be among the most consequential in a while. If the numbers appear much weaker than the median consensus—which predicts a sizable rebound—there is a significant chance that the Fed will consider a super-sized 50 basis point cut in September. We believe that anything below 100,000 net jobs added, along with a higher unemployment rate, should prompt a large rate cut. This is a Fed that clearly doesn’t want to see further deterioration in labor market conditions and is ready to act if necessary. The recent minutes of the July meeting implied as much, with some members not opposed to a July rate cut. However, that still sets a high bar at the moment, as we do not anticipate a higher unemployment rate for August, and job gains should remain above 150,000. The reason is that hiring and layoff rates changed little in July. So, even though job gains are slowing, layoffs have not increased alarmingly enough to justify an emergency 50 basis point rate cut.

The August U.S. jobs report is out, pointing to a weaker-than-expected labor market. Specifically: Job creation was 22,000, below the consensus forecast of 75,000. The three-month moving average for job creation is now just under 30,000. The unemployment rate ticked up to 4.3%. Monthly earnings growth was 0.3%. Revisions for the previous two months resulted in a net loss of 21,000 jobs, also turning July's payroll growth into a negative figure. This data essentially guarantees a 25 basis point Federal Reserve interest rate cut in 12-days time The weak report also reinforces the view that the Fed should have cut rates sooner, particularly last July. It may even prompt some discussions about the possibility of a more aggressive 50 bps cut at the upcoming meeting. #economy #markets #unemployment #jobs #employment

Really interesting survey of 46 academic economists just released by the University of Chicago. They were asked about the White House's rent control proposal. The results are fascinating: Only 1 of 46 said it would substantially help middle-income households long term. Only 3 of 46 said it would NOT substantially reduce supply of available apartments. (While the White House plan excludes new construction from rent caps, the majority of economists -- 62% -- said it would still reduce supply, while the remainder said they were uncertain.) And 0 of 46 said it would substantially reduce income inequality over the next decade. It's worth noting the respondents are 46 economists in academia. They work for schools like Harvard, Yale, MIT, Stanford, Berkeley, etc. All 46 work for schools in "blue" states -- reminding us, once again, that opposition to rent control is not a partisan issue or an industry thing. It's just common sense, and yet for some reason we still sometimes read media reports saying things like "economists have mixed opinions on rent control" or ignoring academic research altogether. The University of Chicago survey allowed respondents to provide free-form commentary, and some were quite interesting: -- "Experience indicates that rent caps or controls typically backfire." -- "Rent control reduces investment in both existing and new housing. A very bad idea. Embarrassingly bad proposal." -- "Only owners of more than 50 units are affected. Many poor people would find this does not apply to their landlords. Rent controls have a bad track record of helping the poor." -- "Might increase [inequality] by benefiting existing renters and hurting new renters." -- "Some of the winners whose rents get capped will be wealthy people. This too blunt an instrument (i.e. not targeted to helped lower income people) to deliver this kind of payoff." -- "Current renters would be better off (perhaps not substantially) but it will be worse for potential movers and new renters." -- "It would help some, be irrelevant for most, and hurt others by reducing availability or quality. Poor choice for redistribution, and difficult to believe effective against inflation." Trust the science. If we really care about protecting low- and middle-income renters, the best thing we can do is build more housing. Build housing of all types and all price points, but especially more affordable and attainable housing. Income-restricted affordable housing is rent control targeted to those who need it most, without the side effects of traditional untargeted rent control. Cities and states have the tools to encourage a lot more of it, and they have a real window of opportunity right now as developers look to stay busy in a high-rate environment where most market-rate deals aren't penciling out. But it takes a mindset of "yes more housing, and let's remove the hurdles and the nonsense" to get there. #rentalhousing #rentcontrol #affordablehousing

Given the flurry of news articles about different responses to tariffs (especially as the end date for the 90-day pause on reciprocal tariffs approaches), I'm sure many folks (both in industry and academia) are struggling to wrap their heads around this topic. To aid in developing collective understanding, Yao J., David L. Ortega, and I worked together to coauthor a study titled, "Shock and Awe: A Theoretical Framework and Data Sources for Studying the Impact of 2025 Tariffs on Global Supply Chains" that can be freely downloaded from Journal of Supply Chain Management at this link: https://lnkd.in/gFHEpsdp. Below I've reproduced the diagram central to the framework we advance. A few words: •The crux of our framework is that changes in tariff levels cause firms to experience demand or supply shocks, which in turn can trigger a variety of behaviors (e.g., exporters reducing prices or shifting goods to other markets). These behaviors can be legal or represent misconduct (e.g., falsifying country of origin). While certainly not encouraging such behaviors, they will need studied (e.g., as in https://lnkd.in/gw5gQtPH). •Different actions result as importers make tradeoffs between (i) adjustment costs [e.g., the cost of shifting tooling from one country to another], (ii) transaction costs [e.g., the cost of teaching new suppliers how to produce your goods], (iii) adjustment costs for early action [e.g., reduced conformance quality while new suppliers move down the learning curve], and (iv) opportunity costs for late response [e.g., failing to shift production results in available capacity in alternative sourcing locations being captured by rivals]. •In general, I've been very pleased with how well subsequent news stories (e.g., https://lnkd.in/guMCCgrm) can be mapped to the theory we advanced. Implication: For anyone interested in understanding how firms are responding to tariffs in industry or academia, I suggest giving this paper a read. It's nontechnical and provides, to the best of my knowledge, the most holistic framework yet advanced for understanding this complex topic. #supplychain #shipsandshipping #supplychainmanagement #markets #economics #logistics #transportation

After digging deep into the economic data released last week, from GDP to jobs, and all the releases in between, here’s why I’m even more concerned about the economy’s prospects: 1. The disconcerting Q1 GDP decline was lifted by consumers and businesses buying lots of stuff (e.g., vehicles & computers) front-running the tariffs. This steals from future spending and investment, creating an economic air pocket. Q2 will be another tough quarter for GDP. 2. I don’t take solace in the ostensibly solid April employment gain. The BLS survey, whose sample week was April 6th -12th, was conducted too soon after the “Liberation Day” tariffs for it to affect payrolls. Sizable downward revisions to previous months’ job gains are also becoming a theme, consistent with a weakening job market. There’s lots to consider, but if you want the gory details about last week's economic stats and what it all means for the economic outlook, tune into this week’s Inside Economics podcast, “Every Rose Has Its Thorn” here: https://lnkd.in/eGWxbu6H #gdp #employmentreport #podcast

Despite a slightly higher-than-expected payroll job gain, the June employment report was on the soft side, with downward revisions to payroll gains from prior months, a drop in temporary employment and only modest gains in wages. However, the weakest aspect of the report was the unemployment rate, which edged up from 4.0% to 4.1%. This, in itself, wouldn’t be particularly notable were it not for the fact that the unemployment rate has now risen steadily over the past 14 months from a 54-year low of 3.4% set in April of last year. Historically, a significant rise in the unemployment rate from its cyclical low has been a warning sign of imminent recession and can be added to others, such as a falling index of leading economic indicators or an inverted yield curve, that have been predicting recession for some time. On balance, we still don’t think recession is just around the corner. However, a rise in the unemployment rate provides further confirmation that economic momentum has downshifted to a lower gear, suggesting a need for increased vigilance by investors in making sure portfolios are not too exposed to a economic downturn. #economy #markets #investing

There's a deadly condition killing Americans that almost no one is talking about: healthcare churn. Every year, 15-20% of Americans experience disruptions in their coverage not by choice, but because of job changes, income fluctuations, or policy shifts. This "churn" creates a devastating ripple effect: insurance companies have no incentive to invest in prevention or chronic disease management if patients will likely be someone else's responsibility next year. My co-author, John Graves , and I propose several solutions: ➡️ Establish five-year enrollment periods for all insurers — Medicare, Medicaid, and private insurance plans in the exchanges — rather than annual contracts. ➡️  Mandate free prevention services from insurance companies. ➡️ Link prevention to quality assessments with meaningful bonuses or penalties. As we wrote in STAT First Opinion, the Big Beautiful Bill’s $1.1 trillion in cuts to Medicaid and ACA marketplaces will supercharge churn and cause about 15 million Americans to lose health coverage. We must stop this deadly cycle that disincentivizes prevention and kills Americans. Read our full analysis, linked in the comments below. #MAHA #HealthcarePolicy #Prevention #ChronicDisease #HealthInsurance #HealthcareonLinkedIn

Markets are always forward-looking, reacting to future risks rather than past performance. Economic indicators like GDP growth and unemployment provide a snapshot of what has already happened. Right now, the biggest challenge isn’t economic data—it’s strategic future uncertainty. Markets thrive on stability, and when there’s no clear direction on trade policy, investors become cautious, leading to market fluctuations. The key is that any rebalancing of unfair trading practices facing America will necessarily come with a period of short run uncertainty until the uncertainty to what that rebalance entails gets resolved. There is no way to rebalance without short run uncertainty of its eventual outcome. Trade negotiations, particularly around tariffs, are powerful tools, but they come with a trade-off. Keeping strategies unclear and uncertain can strengthen a country’s bargaining position, but it also fuels investor anxiety. Markets don’t react well to unknowns, and when policies remain uncertain, falling prices reflect that hesitation. The challenge is finding a balance—leveraging trade policy as a negotiation tool while ensuring it doesn’t create prolonged instability. In the long run, confidence in the market depends on clear direction, even when strategies require short-term ambiguity. #MarketTrends #TradePolicy #EconomicUncertainty #InvestorConfidence #GlobalMarkets