economy

Why the U.S. Economy Needs More Consolidation, Not Less, a recent paper from the Information Technology & Innovation Foundation (ITIF), explains from an economics perspective the advantages of scale economy for improving an industry’s overall efficiency and productivity. Not all industries see significant economies of scale as firms grow, ITIF research points out. In fact, one in four sectors in the 938 NAICS industries do not, ITIF reports, suggesting—but not discussed, that some public policies designed to improve the performance of these small business-oriented sectors may be beneficial. Policy recommendations included in the report are intended to discourage the federal government from refining regulations governing mergers, acquisitions, and potential monopolizing effects from increased consolidation in those 710 sectors where increased consolidation yields greater efficiency and corporate receipts.

Last week (Jan. 3), Maryland’s state comptroller released the state’s first State of the Economy report. The 110-page document uses publicly available data, academic research, and government studies to analyze relevant economic indicators within the state. It compares that data across neighboring states and nationally to better understand the current economic climate and to help Maryland policymakers understand the sources of weakness, as well as identify the strengths and opportunities available, and to leverage those resources for more sustained, long-term economic growth.

Setting aside multibillion fraud and the large black market economy, cryptomining inflicts pain to society in quieter ways as well, research found. In a nutshell, cryptocurrencies contribute more negative externalities that impact individual wallets and global warming, stemming from the intensive electricity requirements to complete each unregulated transaction.

The third quarter of 2023 continues the venture capital market’s recent two-year decline in investments, investors, and initial public offerings. This puts a squeeze on startups. How helpful investment funding will be to startups in the rest of 2023 and beyond likely depends on whether the downward trends settle in alignment with pre-pandemic activity or continue into a VC-specific recession. Regardless, there could be dire consequences for many companies.

Most states, businesses, families, and individuals spent the pandemic walking on the edge of a jagged economic cliff. Luckily, there were some guardrails in the form of fiscal recovery funds, disaster loans, paycheck protection, and childcare grants. These devices helped pull thousands back from the edge.

The dynamics of population growth in the U.S. changed during the pandemic. As people migrated away to avoid the limitations of the pandemic, one region’s population loss was another region’s gain. Now, economists are analyzing the impact of migration on local economies.

Every year, inadequate childcare causes the US economy to take a $122B hit, according to a study by an economist at the University of Pennsylvania. This economic hit affects everyone—workers, businesses, and taxpayers. Parents lose income when they miss work to take care of a child. Businesses suffer from lower productivity when employees are absent. Taxpayers end up paying more when parents leave the workforce and generate fewer tax revenues. Future economic growth slows when tax revenues decline.

Almost 40% of American adults report they struggle to make ends meet each month, an increase from 34.4% in 2022 and 26.7% in 2021. At 46.2%, Louisiana had the highest percentage reporting financial struggles followed by Mississippi (45.7%) and Arkansas (45.6%). Additionally, 11.3% of adults in households in the U.S. experienced some or very frequent times when they did not have enough to eat from April 26 through May 17, 2023. That percentage fell below the national average in 24 states, with Louisiana weighing in with more people (15.6%) going hungry than anywhere else. Meanwhile, people in Montana (5.9%) reported the lowest level of struggling with hunger during the same period.

The 2020 pandemic was unique when it came to changes in the labor market. Unlike in previous recessions, most layoffs from the pandemic were temporary. While employment is back to pre-pandemic levels, the recovery has been uneven across states and industries, leaving some states still with a deficit while others have grown past 2019 levels. Utah, for example, according to an economic commentary by Martin DeLuca and Roberto Pinheiro of the Cleveland Fed, observed employment growth above 6% since 2019, while Vermont remains 6.5 percent below its 2019 average employment. Similarly, while services and sales occupations are down 6% and 7%, respectively, since 2019, the authors found that management and computer and engineering occupations are up 7% and 10%, respectively.

This edition of Useful Stats takes a high-level look at the United States’ change in Real Gross Domestic Product (RGDP, which is GDP adjusted for inflation) on a per capita basis for each of its counties, boroughs, parishes, etc. (hereon referred to as “counties”). Looking at RGDP per capita allows for an inflation adjusted, population standardized metric for comparing counties over time.