Economic Review and Outlook: Implications for the US

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By Michael Rodriguez & Heather Romani, June 2013
The US economy continued to show moderate growth in the first quarter of 2013, following the trend of modest growth seen through all of 2012. Some economic indicators are showing positive signals: housing prices are continuing to rise; unemployment has remained under eight percent for eight months; and the private sector continues to add jobs despite continued cut backs in non-military government employment. Of these, the most positive signs are in the housing market because the net worth of families and individuals is often tied to real estate prices, and increased net worth can in turn lead to increased consumer spending down the road. On balance, the trend continues with a similar story to what this column reported in the December 2012 issue of EFR—a modest recovery that sustains some economic growth but has been insufficient to yield a full recovery.

Full article via Parsons Brinckerhoff, Economic Forecast Review

New Car Prices are Down in Historical Terms, A Lot

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I know so many of us in the transportation industry strive to get people to ride bikes and transit and other modes. However, we are facing one unambiguous fact: new car prices are low – really low! It turns out that it’s not just the dealer telling you that on the radio – they really are low in comparison to historic terms. I did some digging into some inflation numbers, and it turns out that cars as of July 2013 are about 30 percent less expensive than they were in January 1998, when you account for inflation.

Sen. Warren is Wrong on Student Loans, but Almost Right

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Senator Warren is wrong on her recent student loan proposal, but her instincts are right. My initial feeling is to love Senator Warren’s idea to allow students to borrow at lower rates because, well, why should Big Banks get such a great deal at 0.75%, right? As someone who knows what its like to be paying student loans at 6.8%, I can appreciate the sentiment. However, let me put my economist hat on for a minute and explain why this is a little too aggressive. I think charging students at the 10-year bond rate (around 1.80% as of today) would … Continue reading