Challenged Week in Review

Job losses, airport shutdowns, & more

This week should have brought us a critically important jobs report, new job openings data, and an update on construction spending. Instead, we’re worrying about how the shutdown is going to affect air travel starting Friday, how reliable often-ignored but now focal point private indicators are, and how impactful Daylight Savings is. It’s an interesting time to be an economist. Let’s begin.

Monday

Daylight Saving Time Ends

What does the research say about DST? A few points below:

• DST doesn’t really affect energy usage.

• Time changes lead to a decently large increase in workplace injuries, plausibly due to less sleep.

• One study suggests permanent DST would reduce fatal pedestrian accidents around dusk.

• Another study suggests springing forward raises morning car accidents.

• There’s some evidence that darker evenings leads to more crime, especially during that hour long period when it would have been light out.

• Anecdotal evidence from Zack suggests that rolling the clocks back “is not super fun” with a toddler. Don’t worry, I’m not putting any weight on that.

TSA Checkpoint Travel Numbers

The number of people flying has held up well compared to last year, according to TSA data. But starting today (Friday), the FAA is going to cut travel capacity by up to 10% at forty major airports due to the shutdown, including what many in my family would argue is the nation’s most important airport, Baltimore-Washington Thurgood Marshall International.

Indeed, this could be dire for yours truly, who has a flight scheduled for each of the next few days, including a trip to Minneapolis this weekend to watch the suddenly resurgent Baltimore Ravens take on an equally purple but not quite as good Vikings squad (Prince would love to be at this game – and if you understand that reference, you are a child of the 80s – bless you). Tourism economies will also suffer. You can see the list of affected airports here.

Anyone flying for Thanksgiving should pray for a speedy resolution to the shutdown…and then keep praying.

Oil stuff

Gas prices inched down to a relatively low average of $3.15/gallon, which is great—if all my flights are cancelled, at least I’ll save at the pump driving across the country to make my presentations.

Diesel prices rose and are about $0.20/gallon higher than one year ago.

Tuesday

ISM Manufacturing PMI

The manufacturing sector shrank for an 8^th consecutive month in October, according to this survey of industry managers. There’s no way to sugarcoat it: tariffs have been disastrous for many manufacturers, and that’s widely apparent in the comments from survey respondents. These two provide a nice summation of the situation:

“The unpredictability of the tariff situation continues to cause havoc and uncertainty on future pricing/cost. But even with the tariffs, the cost to import in many cases is still more attractive than sourcing within the U.S. Challenges with tariffs on production equipment necessary for internal production make it difficult to justify expansion of capacity.”

“Tariffs continue to be a large impact to our business. The products we import are not readily manufactured in the U.S., so attempts to reshore have been unsuccessful. Overall, prices on all products have gone up, some significantly. We are trying to keep up with the wild fluctuations and pass along what costs we can to our customers.”

Senior Loan Officer Opinion Survey on Bank Lending Practices

The SLOOS shows that virtually all banks kept their lending standards unchanged over the past three months (which is to say, very tight). That’s discouraging given that the Fed cut rates in September (and then again in October). If you want a silver lining, banks reported a very modest increase in demand for nonresidential construction loans (15% of banks reported an increase, while 5% reported a decline).

Wednesday

ADP Employment Report