Wednesday, June 29, 2016

US Bottled Water Sales Growth: 2000 - 2016

From Bloomberg, "NestlĂ© Discovers Water in the Arizona Desert, and Bottles It: Despite a 17-year drought, Phoenix has welcomed the sale of its water as a consumer product—but for how long?" by Eric Roston:
In America, single-serving bottles of water recorded 40 straight quarters of 20 percent growth or more starting in 1995, a decade long run during which the product went from novelty to mainstay, visible in almost every conceivable setting. Though its overall growth has dropped since then, Michael Bellas of Beverage Marketing Corp. said this year may mark a more telling milestone: Water sales are expected to surpass soda sales for the first time.

Bottled Water Growth
Source: Bloomberg

Tuesday, June 21, 2016

Pharmaceutical Industry Practice Of Cheap Free Meals to Doctors Increases Prescriptions For Higher Priced Branded Drugs Over Generics

From Bloomberg, "Doctors Getting Free Meals Pick Branded Drugs More, Study Finds" by Jared S Hopkins:
Doctors who accept free meals from the pharmaceutical industry are more likely to prescribe certain branded drugs to Medicare patients than generics, according to a study published Monday.

The article in JAMA Internal Medicine documents a group of almost 280,000 doctors who received industry-sponsored meals, typically costing less than $20, in 2013. The study found that the doctors more frequently prescribed the four most common brand-name drugs that were available in the Medicare Part D program. In the case of Bystolic, a beta blocker for high blood pressure, physicians who received at least four meals chose the brand 5.4 times as often as generics.

"What was most surprising to me was that such small payments were associated with big differences in physician prescriptions," said Colette Dejong, one of the study’s authors and a research fellow at the Center for Healthcare Value at the University of California at San Francisco. "It was previously thought it takes a certain amount of money to influence a doctor, and the current guidelines are written that way."
What a surprise. Doctors are human after all and behave just like everyone else. Their decisions are not always objective or the best and can be manipulated.

The US Upper Middle Class Is Larger: Expanding From 12% In 1979 To Nearly 30% In 2014

From The Wall Street Journal, Real Time Economics, "Not Just the 1%: The Upper Middle Class Is Larger and Richer Than Ever: Research shows the number of upper middle class households has more than doubled since 1979" by Josh Zumbrun:
A range of data after the recession and the housing bust supported the idea that only a tiny elite of U.S. society, generally seen as the top 1%, had rebounded and was doing well.

But a growing body of evidence suggests the economic expansion since the 2007-2009 financial crisis has enriched a much larger swath of the upper middle class, and that a deeper income divide is developing between that top quarter or so of the population and everyone else.

The latest piece of evidence comes from economist Stephen Rose of the Urban Institute, who finds in new research that the upper middle class in the U.S. is larger and richer than it’s ever been. He finds the upper middle class has expanded from about 12% of the population in 1979 to a new record of nearly 30% as of 2014.
From the abstract to the "The Growing Size and Incomes of the Upper Middle Class" by Stephen Rose:
This report uses absolute income thresholds adjusted for inflation and family size to show that the size of the upper middle class grew from 12.9 percent of the population in 1979 to 29.4 percent in 2014. In terms of shares of total income, the middle class controlled a bit more than 46 percent of all incomes in 1979, while the upper middle class and rich controlled 30 percent. By 2014, the rich and upper middle class controlled 63 percent of all incomes, while the middle class share had shrunk to 26 percent.

Thursday, June 16, 2016

The Key To Growth: My Comment To The Wall Street Journal Opinion, "The Fed Surrenders"

My posted comment to the The Wall Street Journal Opinion, "The Fed Surrenders: The central bank underscores the slow-growth reality:"
Low interest rates expand the economy primarily through housing. Fed data shows that from the end of 2013 to the end of 2016Q1, total mortgages dollars, by all holders, for 1-4 family residences increased less than 1.3 percent over the entire period, or about 0.6 percent per year.

Net private domestic business investment, in nominal dollars and not inflation adjusted, has been declining for the previous year, from $557 billion to $439 billion at 2016Q1. The post recession peak of $559 billion in 2015Q2 was below 2000Q2 peak of $565 billion. $565 billion in 2000 is equivalent to $785 billion in 2016 on an inflation adjusted basis.

Bursting of the housing bubble might explain the lack of interest in homes. It does not explain the lack of business investment. Without business investment, there has been and will be many fewer new business formations and little or no wage and employment growth.

The key to growth is increasing domestic private business investment. The Fed is powerless here.

Wednesday, June 15, 2016

California Is The World's Sixth Largest Economy, Overtaking France

From BloombergPolitics, "California Overtakes France to Become Sixth-Largest Economy" by Alison Vekshin:
California has overtaken France as the world’s sixth-largest economy, fueled by strong growth and the U.S. dollar’s gains against foreign currencies, state data released Tuesday show.
California Is The World's Sixth Largest Economy: Chart
Source: BloombergPolitics

California grew by 4.1 percent in 2015, compared with a 2.4 percent increase for the U.S. and 1.1 percent for France, Asmundson said.

Last year, California created the most jobs of any state, more than the second- and third-most-populous states Florida and Texas combined.

Tuesday, June 14, 2016

Decision Of The US Court of Appeals Upholding FCC Net Neutrality Regulations

United States Telecom Association v FCC

Link to the decision on the US Court of Appeals website,$file/15-1063-1619173.pdf.

55 Percent Of US Workers Left 658 Million Unused Vacation Days In 2015: Third Of Unused Vacation Days Could Not Be Rolled Over Or Paid Out

From The Wall Street Journal, Real Time Economics, "More Than Half of U.S. Workers Are Leaving Some Vacation Days Unused: New study says many workers feel too integral to get away, or may worry about returning to piles of work" by Melanie Trottman:
More than half of U.S. workers left some vacation time unused in 2015, ... according to a new study.
The study found that workers used 16.2 vacation days on average last year, compared with the long-term average of 20.3 days from 1976 to 2000. More than half of workers surveyed as part of the research — 55% — left days unused last year, up from prior years, Ms. Denis said, though figures aren’t exactly comparable because the methodology changed.
In total, Americans left 658 million vacation days unused last year. Of those, 222 million were forfeited because they couldn’t be rolled over or paid out in any way. That means an average of two full days were forfeited per worker.

"Americans are effectively volunteering hundreds of millions of days of free work," forfeiting $61.4 billion in benefits, the study said.

Monday, June 13, 2016

Incredibly, 99 Percent Of Federal Employees Get Excellent Or Better Performance Reviews And Less Than 1 Percent Get A Not Good at Their Job Review

From The Washington Post, "The federal workforce, where everyone’s performance gets rave reviews" by Lisa Rein:
Source: The Washington Post

In the ranks of the federal government, 99 percent are really good at their jobs — and almost two-thirds exceed expectations or do outstanding work.

That’s the conclusion of a new report by the Government Accountability Office, which also found that 78 percent of high-level civil servants — those in GS grades 13 through 15 — were given top performance scores of outstanding or fully successful.
At the other end of the spectrum, it is “equally not credible” that just 1 percent of employees are not doing a good job, he said.

Source: The Washington Post

Wednesday, June 8, 2016

Income Inequality Is Higher Among Black Households Than Asian Or White Households

Income inequality is higher among Blacks than Asians or Whites. See the chart below from The St. Louis Federal Reserve FRED Economic Data Series, "Income Gini Ratio For Households By Race Of Householder:"

Source: FRED Economic Data

Does the higher income inequality among Blacks mean we need to redistribute the income from richer Black households to poorer Black households? Of course not. The median income of Blacks is lower than the median income of Asians or Whites, as the following chart from Business Insider, "American Median Incomes By Race Since 1967 [CHART]" by Steven Perlberg shows:

The higher income inequality among Blacks is a good sign.

Income has a lower value of $0 and does not include the value of many government benefits available to lower income households, such as SNAP (formerly Food Stamps), subsidized government housing, housing vouchers, Medicaid, Earned Income Tax Credit, etc.

The inequality in income among Black households is an indication that there are households that are earning income in amounts that can tip the inequality measure upward. It is a sign of economic progress among some, but not enough, Black households. As more Black households make economic progress and see an increase in their household income compared to receiving government benefits, inequality measures will continue to increase until the point that economic progress and income increases reach the lowest income Black households. As Black households move away from government benefits not included in income measures to more earned income, income inequality among Blacks will eventually reach a maximum and then begin to show a decrease.

Among Black households, the high income inequality measure is an indication of poverty and reliance on government benefits. It is not an indication of too much income earned by too few at the top.

Sunday, June 5, 2016

80 Percent Of US Residents Have More Pleasant Weather Now Due To Climate Change: Models Predict Worse Weather By Next Century

From ScienceNews, "U.S. weather has gotten more pleasant, but will soon worsen: Researchers hope shift will spur action on climate change" by Thomas Sumner:
Americans have climate change to thank for a decades-long spate of milder winters. Around 80 percent of U.S. residents live in counties where the weather has become more pleasant over the last four decades (see map). That trend won’t last, however: Researchers predict in the April 21 Nature that 88 percent of Americans will experience noticeably worse weather by 2100 than they do today. [Emphasis added.]
Fair weather

Redder-shaded counties in the contiguous United States had relatively nicer weather (milder winters and cooler summers) between 1974 and 2013; green-shaded counties had worse weather. White-colored counties had insufficient data to gauge the area’s changing weather.

80 percent
Source: ScienceNews
Portion of Americans living in counties that experience better weather today than in 1974

88 percent

Portion of today’s Americans who live in counties that will have worse weather by 2100

Source: P.J. Egan and M. Mullin/Nature 2016

Saturday, June 4, 2016

Affordable Care Act Is Pushing Too Many Low Productivity Resources Into Healthcare: Hurting Job Growth And Economic Growth

From NCPA Health Policy Blog, "Eight Thousand Non-Health Jobs Lost in May" by John R. Graham:
The true scope of this [June 3, 2016] morning’s miserable jobs report is disguised by the headline figure of 38,000 jobs gained. In fact, health services added 46,000 jobs while civilian non-health, non-farm employment dropped eight thousand (Table I). The warping of our economy towards the government-controlled health sector ....
Source: NCPA Health Policy Blog