Remodeling and Home Design

Housing & Economic Updates


HBA Fox Cities has partnered with Elliot Eisenberg, Ph.D., GraphsandLaughs LLC, to bring you informative articles each month on housing- and economy-related issues and insights. 

2018 Forecast
January 2018
The combination of solid, widespread global growth; strong labor markets; low inflation; improving commodity prices; a slightly weaker dollar; and continued easy monetary policy from most central banks sets the stage for a good year. Moreover, the recently passed front-loaded tax cuts here in the US will help by adding a pleasant tailwind to the domestic economy. The possibility of increases in infrastructure and defense spending, along with the continued deregulatory efforts of the Trump administration, make the domestic economic landscape heading into 2018 as strong as it has been since the end of the Great Recession.  The combination of solid, widespread global growth; strong labor markets; low inflation; improving commodity prices; a slightly weaker dollar; and continued easy monetary policy from most central banks sets the stage for a good year. Moreover, the recently passed front-loaded tax cuts here in the US will help by adding a pleasant tailwind to the domestic economy. The possibility of increases in infrastructure and defense spending, along with the continued deregulatory efforts of the Trump administration, make the domestic economic landscape heading into 2018 as strong as it has been since the end of the Great Recession…READ MORE

The Fed's Interest Plan for 2018
February 2018
At the start of 2017, the Federal Reserve anticipated raising interest rates three times and shrinking its large bond portfolio. Unlike in 2015 and 2016, where the forecasts made by the Fed were overly optimistic, the 2017 forecast was spot on. Whether officials at the central bank can pull off a repeat performance of three rate hikes in 2018 will very much depend on two conflicting signals from the two variables that matter most to the Fed: employment and inflation...READ MORE

The Age of Austerity is Over
March 2018
When the Congressional Budget Office made its June 2017 forecast of our fiscal future, it projected a deficit of $689 billion in FY2019. The deficit is now poised to be $1.2 trillion, a dramatic and profound change that is hard to overstate. One major reason for the growing deficit is that the GOP tax cut that passed in late December is estimated to reduce revenue by $1 trillion over the next decade, even after pro-growth economic effects are factored in. The other reason is the budget deal passed by Congress in early February, includes $300 billion in new spending over two years, along with $90 billion in hurricane relief, fully financed by larger deficits...READ MORE

Jobs: They're Not What They Used to Be
April 2018
During every business cycle, economies experience job losses followed by subsequent job gains such that, in time, all job losses are made up, and then some. Between January 2008 and February 2010, almost nine million jobs were lost, but by January 2013 the number of employed Americans had almost fully recovered. The typical good news story, right? Not so fast; the educational attainment of the persons employed in the "recovered" jobs were dramatically different than those in the "lost" jobs. This has profound social and economic implications....READ MORE

Trade Wars: It's All About Leverage
May 2018
With the US-China trade war looking increasingly ominous, two questions are on the minds of many: do trade deficits matter and which side has more to lose? Economists of almost all stripes agree that trade is good, that trade deficits don't really matter, that the nation that imposes tariffs hurts itself, and that if it faces retaliation, the harm is made worse. That said, why is Trump threatening steep tariffs on Chinese imports? That relates to the second question: China has much more to lose economically in an all-out trade war than the US. But that is not the end of the story...READ MORE

The Economy Through 2018: Finally Behaving Well!
June 2018
Despite more political uncertainty than usual emanating from Washington, the next 12 months are shaping up well. The odds of a recession remain very low – about 10% -- despite now being in the middle of the second longest economic recovery in US history. Global growth is solid, and while inflation is rising, it’s doing so slowly, giving the Fed time to raise rates at a leisurely pace and not upend the fastest economic growth our economy is about to experience since 2005...READ MORE

The Developing Trade War & Interest Rates
August 2018
The US economy is, at present, growing very rapidly,and 2018 is shaping up to be the best year for economic growth since 2006. As a result, the Federal Reserve is a lock to raise rates by a quarter-point in September, and there is at least a 70% chance that they will do so again in December to cool down growth and prevent inflation from taking hold. But plenty can go wrong with this forecast. Contagion from an emerging market or financial crisis is always possible, but the biggest immediate threat comes from the rapidly escalating trade-war we are in...READ MORE

Why Healthcare is So Expensive
September 2018
While there are many reasons why healthcare spending is growing much faster than the economy - including an aging population and the rising cost of prescription drugs - one problem that gets virtually no attention and is a primary cost driver is cross-subsidies. The reason cross-subsidies exist in the first place is because lawmakers want to subsidize healthcare costs for the poor, the sick, and other potential voters - which is well meaning - but lawmakers do not want to raise taxes to pay for these programs. So they hide the taxes they should impose in the form of cross-subsidies...READ MORE

The Economy is Not Overheating
November 2018
The US unemployment rate recently fell to 3.7%, a rate last seen in 1969. This very low rate is giving the Fed and many other market watchers reasons to worry that the labor market, and thus the overall economy, may be overheating.  While it is true we are late in a business cycle, labor market indicators suggest that we are not as late as we may think.  To be precise, job growth remains too high, wage growth remains too low, and the employment rate still has room to rise before we run out of workers and hit full employment...READ MORE

Economic Forecast 2019: Good, But Not as Good as 2018
January 2019
Despite increasing political uncertainty, a split Congress, trade concerns, financial-market volatility, and slowing global growth, from an economic perspective, the next 12 months should be decent. The odds of a recession have roughly doubled but remain relatively low – about 25% -- despite being just a few months away from the longest economic recovery in US history.  While growth is slowing in all major economies, inflationary pressures are surprisingly tepid. As a result, the Fed will have the luxury of raising rates at a very leisurely pace, and thus hopefully avoid prematurely ending the continuing, albeit slowing, expansion that we will experience...READ MORE

Why Is Wage Growth So Lousy?
February 2019
While the most recent jobs report showed the unemployment rate at 4.0% — the lowest rate in almost 50 years — it also showed annual wage gains running at just 3.2%. While that is the best rate of growth in over a decade, late in the last business cycle, wage gains were over 4%, and at the height of the dot.com bubble, wage gains were over 5% a year. Shouldn’t the current tight job market result in faster wage growth as employers compete for increasingly scarce workers? The answer is “not really,” and it’s for several reasons...READ MORE 

The Green New Deal Is A Bad Deal 
March 2019
While advocates of the Green New Deal (GND) suggest it will solve a multitude of problems by combating global warming and creating millions of well-paid jobs, the reality is that the GND is a profoundly expensive plan that takes leave of all economic principles. Within only its climate change portion, the GND ignores entirely the fact that CO2 emissions are a global — not local — problem; it fails to reduce carbon emissions most cost effectively; and suggests nonsensical ways of paying for the program...READ MORE

Free Isn’t Really Free
April 2019
Over the last few years large social media and search engine firms have been routinely accused of trading and selling our personal information, propagating toxic content, weaponizing user information, and more generally eroding our privacy. Last October, Tim Cook, CEO of Apple, made many of these same claims while bashing technology companies in front of a receptive audience in Brussels. Yet this is not simply a battle between tech billionaires. Rather, it is a result of a serious design flaw plaguing the Internet...READ MORE

World Growth Is Increasingly China Dependent
May 2019
The global economy got off to a weak start in 2019. Equities went into a tailspin, the US government was closed for over a month, the weather was terrible and trade disputes seemed intractable. But of late, things have turned around. The government is open, the US and China seem on the brink of a trade deal, domestic stock markets are at an all-time high, and Q1 GDP came in at a surprisingly strong 3.2%. That said, the global economy really is cooling. At the start of 2018, there was broad-based synchronized global expansion, the broadest since at least 2010. Recently, forecasters have yet again reduced their growth estimates for 2019 and 2020...READ MORE




Elliot Eisenberg, Ph.D.
is President of GraphsandLaughs, LLC. His daily 70-word economics and policy blog can be seen at econ70.com. Dr. Eisenberg is a nationally acclaimed economist and public speaker specializing in making the arcana and minutia of economics fun, relevant and educational. He earned a B.A. in economics with first class honors from McGill University in Montreal, as well as a Masters and Ph.D. in public administration from Syracuse University. Eisenberg, a former Senior Economist with the National Association of Home Builders in Washington, D.C., is the creator of the multifamily stock index (the first nationally recognized index to track the total return of public firms principally involved in the ownership and management of apartments), the author of more than eighty-five articles, serves on the Expert Advisory Board of Mortgage Market Guide and is a regular consultant to several large real estate professional associations, hedge funds and investment advisory groups. He has spoken to hundreds of business groups and associations, often as keynote speaker. Dr. Eisenberg has been invited to testify before lawmakers and is often asked to comment on proposed legislation. His research and opinions have been featured in Bloomberg, Business Week, Bureau of National Affairs, Forbes, Fortune, and many other publications. He is a regularly featured guest on cable news programs, talk and public radio.