International Air Travel Shows Continuing Strength in July; Volumes are Above Pre-Recession Levels

Updated Graph (back to 2007)

Sydney - "The International Air Transport Association (IATA) announced international scheduled traffic statistics for July which showed continued strengthening of demand for both passenger and cargo traffic. Compared to July 2009, international passenger demand was up 9.2% while international scheduled freight traffic showed a 22.7% improvement (see chart above).

These year-on-year comparisons for July were less than the June growth data showing 11.6% and 26.6% increases for passenger and cargo traffic, respectively. The apparent slowdown was entirely due to the fact that by July 2009 traffic was already starting to recover. After adjusting for seasonality, the improvement in demand was faster month-to-month in July than it was in June."

Other highlights include:

1. July global passenger traffic was 3% higher than the pre-crisis levels of early 2008.

2. July global cargo demand was 4% higher than pre-crisis levels in early 2008.

3. Year-to-date global freight volume is 27.5% higher than 2009. 

4. During the second half of 2009, demand was rebounding at an annualized rate of 12% for passenger and 28% for cargo. In the year to July, the annualized growth rates had dropped to 8% for passenger and 17% for air freight. However, this is still considerably above the industry’s traditional 6% growth trend.

MP: International air travel (passenger and freight volumes) are both above the pre-crisis levels in early 2008, and the annualized growth rates (8% for passengers and 17% for freight) of 6%.

Is War Between Generations Inevitable? What About a War Between The Sexes?

From the 2001 study "Is War Between Generations Inevitable?" by economists Jagadeesh Gokhal of the Cleveland Fed and Laurence J. Kotlikoff of Boston University:

"Seniors today will receive far more benefits from government transfer programs (programs that redistribute resources among groups) than their share of the national tax burden. On average:

1. A male reaching 65 years of age today can expect to receive $71,000 more in government transfer benefits (of all kinds at both the federal and state levels, but mainly from Social Security and Medicare) than he will pay in taxes (of all kinds at both the federal and state levels) before he dies.

2. A 65-year-old female can expect a net gain of more than twice that amount; she can expect $163,000 more in benefits than she will pay in taxes.

A far different picture confronts people entering the labor market today. In general, they will pay far more in taxes than they will receive from transfer programs, and any expansion of elderly entitlements will make things worse. For example:

3. A 20-year-old female can expect to pay $92,000 more in taxes than she will receive in transfer benefits over her lifetime.

4. The future looks more than three times as bleak for her male cohort, who can expect to pay $312,000 more in taxes than he will ever receive in benefits."

HT: Walter Williams

MP: We've got quite a gender gap here!  On average, 65-year old men today will receive only 43.6% of the net benefits that women receive, and young men today can expect a net tax burden over their lifetimes that will be 3.4 times greater than for women. 

Housing: The End of the Artificial Stimulus

The National Association of Realtors (NAR) reported today that existing homes sales in July of 3,830,000 units at a seasonally-adjusted annual rate was 27.2% below the sales level in June of 5,260,000 units, and 25.5% below last July, when 5,140,000 homes were sold.  Here are some of the reports and reactions:

1. LA Times -- "Many buyers who rushed to beat the April 30 deadline to sign a sales contract were closing their deals in May and June, helping to propel the market. With many of those deals now apparently closed, the market is faced with standing on its own.  Real estate experts said the tax credits led many buyers to speed up their plans to buy houses, boosting sales this spring, but sapping demand over the summer.

A few months ago "we were getting eight or nine offers on every property, and we knew that we would have a tremendous drop-off, because it was being artificially stimulated," said Gary K. Kruger, a real estate agent with HomeStar Real Estate Services in Hemet."

2. Lawrence Yun, NAR chief economist, said “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."

“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."

3. Nigel Gault, IHS Global Insight: All of the action earlier this year appears to have been driven by the tax credit. … The underlying path of housing sales is not as disastrous as July’s number suggests – we are now undershooting, as sales that would have happened now were pulled forward by the tax credit. But a sustained upturn will depend on an improvement in the jobs market, which at the moment is slowing down rather than gathering pace."

Random Roundup

1. NY Times -- Some scholars are challenging the peer review monopoly and are instead using the Internet to "expose scholarly thinking to the swift collective judgment of a much broader interested audience."  (HT: Steve Bartin)

2. If all elite private universities enacted race-blind admissions, the percentage of Asian students would jump from 24 percent to 39 percent (similar to what they already are now at Caltech and Berkeley, two elite institutions with race-blind admissions; the former due to a belief in meritocracy, the latter due to Proposition 209).

3. Top 10 NBA Player Highlight Reels On Youtube

4. Tiger Woods and World's Top 10 Highest Divorce Settlements

5. Did Bully Boss Prompt Editor's Suicide at University of Virginia? Editor Made 18 Calls to University Before Committing Suicide

Leading Economic Indexes: 4 Up, 1 Down

Over the last week, the Conference Board reported increases in the June Leading Economic Indexes for China, Germany and Mexico, and an increase in the July Leading Economic Index for the U.S.  The Leading Economic Index for France fell in June, the first decline in more than a year. 

ASA Staffing Index Reaches 97-Week High

The American Staffing Association (ASA) Staffing Index for temporary and contract employment activity reached a 97-week high of 95 for the week of August 9, the highest index level since a reading of 97 in the week of September 29, 2008 (see chart above, data here).

Compared to the same week last year, the latest ASA Staffing Index has improved by 26.7% for Week 33 (see bottom chart above). This marks the 17th week in a row with percentage gains above 20% compared to the same month in 2009, the 26th straight week of double-digit percent increases vs. 2009, and the 32th consecutive week for the ASA Index being above the same level in the previous year (every week this year).  The improvements this year follow 80 consecutive weeks of percentage declines in the weekly index that started in May 2008 and continued through the end of 2009.   

The ongoing improvements in the ASA Staffing Index in every single  week this year compared to 2009, along with the recent 97-week high in temporary help suggest that the labor market is gradually recovering from the recession, and the increases in demand for temporary and contract employment are a leading indicator of broader-based job gains in the months to come.   

Putting Tomatoes on the "Bathroom Scale"

A few days ago I quoted P.J. O'Rourke: "The free market is not an ideology or a creed or something we're supposed to take on faith, it's a measurement. It's a bathroom scale. I may hate what I see when I step on the bathroom scale, but I can't pass a law saying I weigh 160 pounds."

Steven Landsburg has a related post about how to correctly compare the total cost (including all energy costs) to a New Yorker of a locally-grown tomato from a lavishly heated greenhouse in the Hudson Valley and a tomato transported all the way from California. 

"How can we possibly gather enough information to compare the opportunity costs of land, fertilizers, equipment, workers, transportation and energy costs (among many others) and reach a conclusion about which tomato imposes the fewest costs on our neighbors?

Well, it turns out there’s actually a way to do that. You do it by looking at a single number that does an excellent job of reflecting all those costs. That number is known as the price of the tomato."

HT: Don Boudreaux