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Conventional Conforming loan limits now up to $625,000

January 2020 Economic Observer


November housing starts came in at an annualized rate of 1.365 million, up a strong 13.6% Y-o-Y. Single-family starts were up 16.7% Y-o-Y; multifamily was up 4.4% Y-o-Y. Despite these seemingly strong Y-o-Y numbers, YTD starts are up a scant 0.6%. This is because 2018 started well but ended badly as rates rose; this year, it’s the opposite. In 2020, housing will boost GDP by a small but pleasant 0.1%.


Net jobs growth of 266,000 in November, along with upward revisions to September and October totaling 41,000, and a slight decline in the unemployment rate to 3.5% makes this a solid job report. Better yet, average job growth over the past three months has averaged 205,000, the best since 1/19. The only clear weakness, wage growth of just 0.2% during November and just 3.1% Y-o-Y.


One reason wage growth has been weak is the rise of non-compete clauses in employment contracts. The percentage of US workers who have signed a non-compete is now 20%! Not surprisingly it’s 40% for those with professional degrees, and 30% for workers with a MA. But it’s 25% for those with a BA, and it’s 15% for all others including HS grads and dropouts. What secrets do they have?


In November, women comprised exactly 50% of employed persons in the US. The last and only other time this occurred was in 2009-2010, when male employment collapsed due to the massive loss of manufacturing and construction jobs during the Great Recession. From 8/09-3/10 women were 50.1% of employed persons! Today the rise is the result of rapid service-sector employment growth. In 1/64 women comprised just 31.6% of all employees.


Just 9.8% of Americans changed their residence between 2018 and 2019, the lowest percentage since such record keeping began in 1947/48! This new low is occurring amidst the weakest population growth on record, limited immigration and an aging society. Most troubling, however, just 20% of those between the ages of 18-34 (Millennials) moved this year, down from 29% as recently as 2005/06. Reduced mobility reduces economic opportunities and GDP growth.


The average dollar bill lasts 5.8 years. The average $5 bill, 5.5 years, while the $10 bill lasts just 4.5 years, less than any other note. $20s average 7.9 years, $50 bills last a slightly longer 8.5 years. The longest lifespan, the C-note at 15 years. The Bureau of Printing and engraving produces 7.8 billion banknotes a year at a cost of $700 million; almost ten cents/banknote.

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