From Trading Economics today:
Figure 1: Gray line is TradingEconomics forecast. Orange line at 1/21/2025. Source: TradingEconomics, accessed 2/27/2025.
Egg prices as measured here have risen 22% since 1/21.
Interestingly, for at least the past couple of weeks, even as egg prices have risen, the terminal point forecast from TradingEconomics has remained the same.
Not sure USDA Secretary Rollins’s plan will dramatically change this trend. I do experience some cognitive dissonance as I read of the possible use of vaccination to treat bird flu, while other parts of the administration (HHS) are considering slow-walking new vaccines for people.
Off topic – Ukraine:
Contrary to what the liar-in-chief has said, our European (former?) allies have provided more support to Ukraine during Russia’s invasion than has the U.S. The mineral deal, if it goes through, screws the Europeans. They did more, and suffered more, for Ukraine than the U.S. has, but get nothing from this deal.
Here’s a look at the Ag Department’s $1 billion, 5-pronged plan to deal with bird flu:
https://www.agriculture.com/ag-organizations-react-to-changes-in-usda-bird-flu-strategy-11687313
The “reactions” of farm organizations is mostly pro-forma blurbs, but there is something between the lines. The beef and dairy people cheer for vaccination of birds above all else. Cow people know what would deal most effectively with the disease element of this problem, and say so. Bird people are split between egg and meat producers, with meat people afraid of export losses if vaccination is widespread. So the message from chicken people is a bland “Yay for money”. Vaccination is already used elsewhere, so I’m confused.
The price tag, $1 billion overall and $100 million for vaccine research, is chicken feed. “Better security measures”, to the tune if $500 million, is a way of saying “reduced slaughter of infected flocks”. The hope is that it will fix the problem, but we won’t know until it’s tried. The remaining $400 is income support for chicken farmers – the usual thing from politicians, but with the aim of re-establishing flocks quickly, so maybe helpful against inflation.
As regards the New! New! New! Not Biden’s! effort to combat bird flu, there’s this:
“But the measures come as the Agriculture Department is struggling to rehire key employees working on the virus outbreak who were fired as part of the administration’s sweeping purge of government workers. Roughly a quarter of employees in a critical office testing for the disease were cut, as well as scientists and inspectors.”
So eggs are going to keep getting more expensive until demand cools. Demand will cool when bird flu becomes readily communicable between humans.
we are in the second month of the trump presidency. and still I do not have the 2% mortgage trump promised. and inflation seems to be getting worse. it cost me more to buy a dozen eggs than to fill up my gas tank. and now we have an economic storm brewing on the horizon, with rising unemployment and profit contraction. hey rick stryker and bruce hall, why are trump’s economic promises failing in year 1? this was supposed to be taken care of on day 1. instead we have airplanes crashing into each other because we laid off the air traffic controllers. apparently somebody in the trump admin thought that would be a wise move. question is, Ricky, do we get a recession in year 1 or does trump hold it off until year 2? inquiring minds want to know.
Egg prices up, pending home sales down…to the lowest reading on record:
https://www.advisorperspectives.com/dshort/updates/2025/02/27/pending-home-sales-sink-all-time-low-january-2025
January is the off season, but look at the last few months. Pending sales are persistently weak, at levels below the lows of the housing bust.
Mortgage rates have come down since January, by about 1/4% at 30 years, so maybe we’ll see better data soon. Pending sales in January correspond roughly to existing sales in March.
New home sales were down 10.5% m/m in January, down 1.1% y/y. New sales are, however, well away from their Covid-era low.
this could be where seasonal adjustments distort the reported data…three consecutive El Nino winters created a bias for mild Januarys, along comes La Nina, we get the worst January in a quarter century, and the seasonal adjustments barely touch it…
True.
That helps with a single month’s dire showing, but the trend is still quite bad.
do you really believe your El Niño explanation is the primary driver of the bad news? if the data stays low next month, what will be the excuse?
I recently sold a house myself. I don’t think weather has had any outsized influence. action is slow because rates are very high. action picks up if house prices are reduced. that is what I have seen over the past couple of months. so either housing prices will drop, interest rates will drop, or action will stay dry. trumps action on the economy does not bode will for house prices. but it could impact interest rates. but housing will get hurt if rates drop due to a recession.
Off topic – Who’s on first?
This is from the Washington Post, via Slate:
“(Secretary of State) Rubio had decreed that certain critical programs—such as aid to Ukraine and Syria and costs related to the PEPFAR program to combat HIV in Africa—would continue to be funded. Several times, USAID managers prepared packages of these payments and got the agency’s interim leaders to sign off on them with support from the White House.
“But each time, using their new gatekeeping powers and clearly acting on orders from Musk or one of his lieutenants, (DOGE employees) Farritor and Kliger would veto the payments—a process that required them to manually check boxes in the payment system one at a time…”
https://slate.com/news-and-politics/2025/02/doge-elon-musk-donald-trump-marco-rubio.html
So Musk’s squad of unelected, not-government-employed, not-security-cleared computer jockeys (with ties to white supremacists*) are overruling Cabinet Secretaries, Congress and the White House. Sometimes overruling them in suspiciously ties-to-white-supremacists kinda ways.
*Read the Slate piece for more on ties to white supremacists.
Remember when everyone was saying that Trump was just going to come in and ride the Goldilocks Biden economy and take the credit. Well, that didn’t last, did it. Not even three months.
trump survived his first term because he rode the Obama economic wave. he could have done so with the Biden economic wave this term. this time he chose differently. rather than creating a mess in year 4 that the next president will need to clean up (he was not reelected because the electorate did not believe he could clean his mess last time), he is going to have to clean up his own mess before his term expires. my guess he will fail to do so.
Off subject, but far more important than eggs.
https://www.c-span.org/program/white-house-event/president-trump-holds-first-cabinet-meeting-of-second-administration/656328
However eggs are touched on at around 33 minutes
Time to focus on the real issues. Spend some time and bring on your objections.
By the way…
https://mitsloan.mit.edu/ideas-made-to-matter/federal-spending-was-responsible-2022-spike-inflation-research-shows
More relevant to the cost of living than the avian flu.
You’ve already linked to Kritzman. Now, you’re just linking to someone who linked to Kritzman.
You have yet to explain why you think Kritzman’s research method is superior to those used in many other studies which identified supply-chain interruptions as the main cause of Covid-era inflation. I asked you last time, and you ducked the question. Let’s try again:
Do you have any reason, other than a preference for Kritzman’s finding, to favor Kritzman’s work over the work of other? Any reason at all?
Bruce Hall Kritzman is a finance guy with an MBA; he’s not a macro guy with a PhD. In other words, when it comes to macro stuff he’s out of his depth, just as you are.
Republicans have a new gimmick to fudge their budget numbers, as if phony dynamic scoring wasn’t enough. Now they want to change the scoring of deficits from “current law” to something they call “current policy”.
The way scoring has always worked is you tally all budget changes from what is the current law. This means that expiration of the Trump TCJA tax cuts at the end of 2025 are the baseline because that is current law. To extend the tax cuts requires increasing deficits from what is accounted for in current law, something like $4.6 trillion.
But Republicans want to change the baseline to “current policy”, magically assuming that the tax cuts don’t expire, which means extending the expiring tax cuts costs nothing because that is the current policy. No, it doesn’t make any sense but that never stops Republicans.
So keep your eye out whenever you see them talking about “current policy”. It just another hocus pocus scam to justify tax cuts for the rich.
From yesterday’s data, non-profit spending down $8.8 billion in January, part of the overall decline in PCE. Could be noise. Could be DOGE. Real PCE fell 0.5%.
Imports up over 10% in January, widening the goods trade gap by 26% to $153 billion, a record.
GDPNow cut its Q1 growth forecast to 1.5% from 2.3% in response. The import surge is going to be paid back, perhaps starting later in Q1. January’s weather is a one-time thing. For now, though, 1.5% would be the slowest pace of growth since Q2, 2022.
Broiler eggs are getting talked about. Are they safe? I see ag/chicken industry people blaming Obama and asking for them to be put into the market. The risk I saw was the hormones injected to fatten up those chickens and it gets passed through to eggs, but wouldn’t that also impact the chicken that’s eaten?