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‘Dr. Doom’ Warns Of The Gathering Global Stagflationary Storm

‘Dr. Doom’ Warns Of The Gathering Global Stagflationary Storm

Authored by Nouriel Roubini via Project Syndicate,

While recent shocks have…

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'Dr. Doom' Warns Of The Gathering Global Stagflationary Storm

Authored by Nouriel Roubini via Project Syndicate,

While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy’s only problems. Even without them, the medium-term outlook would be darkening, owing to a broad range of economic, political, environmental, and demographic trends.

The new reality with which many advanced economies and emerging markets must reckon is higher inflation and slowing economic growth. And a big reason for the current bout of stagflation is a series of negative aggregate supply shocks that have curtailed production and increased costs.

This should come as no surprise. The COVID-19 pandemic forced many sectors to lock down, disrupted global supply chains, and produced an apparently persistent reduction in labor supply, especially in the United States. Then came Russia’s invasion of Ukraine, which has driven up the price of energy, industrial metals, food, and fertilizers. And now, China has ordered draconian COVID-19 lockdowns in major economic hubs such as Shanghai, causing additional supply-chain disruptions and transport bottlenecks.

But even without these important short-term factors, the medium-term outlook would be darkening.

There are many reasons to worry that today’s stagflationary conditions will continue to characterize the global economy, producing higher inflation, lower growth, and possibly recessions in many economies.

For starters, since the global financial crisis, there has been a retreat from globalization and a return to various forms of protectionism. This reflects geopolitical factors and domestic political motivations in countries where large cohorts of the population feel “left behind.” Rising geopolitical tensions and the supply-chain trauma left by the pandemic are likely to lead to more reshoring of manufacturing from China and emerging markets to advanced economies – or at least near-shoring (or “friend-shoring”) to clusters of politically allied countries. Either way, production will be misallocated to higher-cost regions and countries.

Moreover, demographic aging in advanced economies and some key emerging markets (such as China, Russia, and South Korea) will continue to reduce the supply of labor, causing wage inflation. And because the elderly tend to spend savings without working, the growth of this cohort will add to inflationary pressures while reducing the economy’s growth potential.

The sustained political and economic backlash against immigration in advanced economies will likewise reduce labor supply and apply upward pressure on wages. For decades, large-scale immigration kept a lid on wage growth in advanced economies. But those days appear to be over.

Similarly, the new cold war between the US and China will produce wide-ranging stagflationary effects. Sino-American decoupling implies fragmentation of the global economy, balkanization of supply chains, and tighter restrictions on trade in technology, data, and information – key elements of future trade patterns.

Climate change, too, will be stagflationary. After all, droughts damage crops, ruin harvests, and drive up food prices, just as hurricanes, floods, and rising sea levels destroy capital stocks and disrupt economic activity. Making matters worse, the politics of bashing fossil fuels and demanding aggressive decarbonization has led to underinvestment in carbon-based capacity before renewable energy sources have reached a scale sufficient to compensate for a reduced supply of hydrocarbons. Under these conditions, sharp energy-price spikes are inevitable. And as the price of energy rises, “greenflation” will hit prices for the raw materials used in solar panels, batteries, electric vehicles, and other clean technologies.

Public health is likely to be another factor. Little has been done to avert the next contagious-disease outbreak, and we already know that pandemics disrupt global supply chains and incite protectionist policies as countries rush to hoard critical supplies such as food, pharmaceutical products, and personal protective equipment.

We must also worry about cyberwarfare, which can cause severe disruptions in production, as recent attacks on pipelines and meat processors have shown. Such incidents are expected to become more frequent and severe over time. If firms and governments want to protect themselves, they will need to spend hundreds of billions of dollars on cybersecurity, adding to the costs that will be passed on to consumers.

These factors will add fuel to the political backlash against stark income and wealth inequalities, leading to more fiscal spending to support workers, the unemployed, vulnerable minorities, and the “left behind.” Efforts to boost labor’s income share relative to capital, however well-intentioned, imply more labor strife and a spiral of wage-price inflation.

Then there is Russia’s war on Ukraine, which signals the return of zero-sum great-power politics. For the first time in many decades, we must account for the risk of large-scale military conflicts disrupting global trade and production. Moreover, the sanctions used to deter and punish state aggression are themselves stagflationary. Today, it is Russia against Ukraine and the West. Tomorrow, it could be Iran going nuclear, North Korea engaging in more nuclear brinkmanship, or China attempting to seize Taiwan. Any one of these scenarios could lead to a hot war with the US.

Finally, the weaponization of the US dollar – a central instrument in the enforcement of sanctions – is also stagflationary. Not only does it create severe friction in international trade in goods, services, commodities, and capital; it encourages US rivals to diversify their foreign-exchange reserves away from dollar-denominated assets. Over time, that process could sharply weaken the dollar (thus making US imports more costly and feeding inflation) and lead to the creation of regional monetary systems, further balkanizing global trade and finance.

Optimists may argue that we can still rely on technological innovation to exert disinflationary pressures over time. That may be true, but the technology factor is far outnumbered by the 11 stagflationary factors listed above. Moreover, the impact of technological change on aggregate productivity growth remains unclear in the data, and the Sino-Western decoupling will restrict the adoption of better or cheaper technologies globally, thereby increasing costs. (For example, a Western 5G system is currently much more expensive than one from Huawei.)

In any case, artificial intelligence, automation, and robotics are not an unalloyed good. If they improve to the point where they can create meaningful disinflation, they also would probably disrupt entire occupations and industries, widening already large wealth and income disparities. That would invite an even more powerful political backlash than the one we have already seen – with all the stagflationary policy consequences that are likely to result.

Tyler Durden Tue, 04/26/2022 - 06:30

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Economics

Global IT Consulting Sourcing and Procurement Report with Pandemic Impact Analysis, Supplier Evaluation and Price Trends | SpendEdge

Global IT Consulting Sourcing and Procurement Report with Pandemic Impact Analysis, Supplier Evaluation and Price Trends | SpendEdge
PR Newswire
NEW YORK, July 3, 2022

Over 200 Forbes 2000 companies rely on our actionable insightsMore than 100 CPOs…

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Global IT Consulting Sourcing and Procurement Report with Pandemic Impact Analysis, Supplier Evaluation and Price Trends | SpendEdge

PR Newswire

  • Over 200 Forbes 2000 companies rely on our actionable insights
  • More than 100 CPOs and 500 category managers use our insights daily
  • SpendEdge has the fastest growth rate in number of reports and client base

NEW YORK, July 3, 2022 /PRNewswire/ -- The IT Consulting market size is expected to grow by USD 131.35 Billion by 2025, at a Compound Annual Growth Rate (CAGR) of 9.19% during the forecast period. To know more about this market.

Request For a Free Sample Report

IT Consulting Market Analysis

Analysis of the cost and volume drivers and supply market forecasts in various regions are offered in this IT Consulting research report. This market intelligence report also analyzes the top supply markets, market opportunities, challenges and the critical cost drivers that can aid buyers and suppliers devise a cost-effective category management strategy.

The report provides insights on the following information:

  • Regional spend dynamism and factors impacting costs
  • The total cost of ownership and cost-saving opportunities
  • Supply chain margins and pricing models
  • Competitiveness index for suppliers
  • Market favorability index for suppliers
  • Supplier and buyer KPIs

Get detailed insights on the COVID-19 pandemic crisis and recovery analysis of IT Consulting Market

www.spendedge.com/report/it-consulting-services-market-procurement-research-report

Related Reports on Professional Services Market:

Detect blind spots in your revenue decisions by analyzing interconnected unknowns around the "IT Consulting Market."

Report Metrics

Details

Base year considered

2021

Forecast period

2021 - 2025

Forecast units

USD Billion

Geographies covered

North America, South America, Europe, Middle East and Africa, and APAC

Leading IT Consulting suppliers

Deloitte Touche Tohmatsu Ltd., PricewaterhouseCoopers International Ltd., and Ernst & Young Global Ltd.

Top Pricing Models

Flat-fee model, hourly rate model, and cost-plus model

This procurement report answers help buyers identify and shortlist the most suitable suppliers for their IT Consulting Market requirements following questions:

  • Am I engaging with the right suppliers?
  • Which KPIs should I use to evaluate my incumbent suppliers?
  • Which supplier selection criteria are relevant for?
  • What are the workplace computing devices category essentials in terms of SLAs and RFx?

Table of Content

  • Executive Summary
  • Market Insights
  • Category Pricing Insights
  • Cost-saving Opportunities
  • Best Practices
  • Category Ecosystem
  • Category Management Strategy
  • Category Management Enablers
  • Suppliers Selection
  • Suppliers under Coverage
  • US Market Insights
  • Category scope

Appendix

About SpendEdge:

SpendEdge shares your passion for driving sourcing and procurement excellence. We are the preferred procurement market intelligence partner for 120+ Fortune 500 firms and other leading companies across numerous industries. Our strength lies in delivering robust, real-time procurement market intelligence reports and solutions.

Contact
SpendEdge
Anirban Choudhury
Marketing Manager
Ph No: +1 (872) 206-9340 
https://www.spendedge.com/contact-us

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Spread & Containment

Visualizing A Decade Of Population Growth And Decline In US Counties

Visualizing A Decade Of Population Growth And Decline In US Counties

There are a number of factors that determine how much a region’s population…

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Visualizing A Decade Of Population Growth And Decline In US Counties

There are a number of factors that determine how much a region’s population changes.

If an area sees a high number of migrants, along with a strong birth rate and low death rate, then its population is bound to increase over time. On the flip side, as Visual Capitalists Nick Routley details below, if more people are leaving the area than coming in, and the region’s birth rate is low, then its population will likely decline.

Which areas in the United States are seeing the most growth, and which places are seeing their populations dwindle?

This map, using data from the U.S. Census Bureau, shows a decade of population movement across U.S. counties, painting a detailed picture of U.S. population growth between 2010 and 2020.

Counties With The Biggest Population Growth from 2010-2020

To calculate population estimates for each county, the U.S. Census Bureau does the following calculations:

      A county’s base population → plus births → minus deaths → plus migration = new population estimate

From 2010 to 2020, Maricopa County in Arizona saw the highest increase in its population estimate. Over a decade, the county gained 753,898 residents. Below are the counties that saw the biggest increases in population:

Phoenix and surrounding areas grew faster than any other major city in the country. The region’s sunny climate and amenities are popular with retirees, but another draw is housing affordability. Families from more expensive markets—California in particular—are moving to the city in droves. This is a trend that spilled over into the pandemic era as more people moved into remote and hybrid work situations.

Texas counties saw a lot of growth as well, with five of the top 10 gainers located in the state of Texas. A big draw for Texas is its relatively affordable housing market. In 2021, average home prices in the state stood at $172,500$53,310 below the national average.

Counties With The Biggest Population Drops from 2010-2020

On the opposite end of the spectrum, here’s a look at the top 10 counties that saw the biggest declines in their populations over the decade:

The largest drops happened in counties along the Great Lakes, including Cook County (which includes the city of Chicago) and Wayne County (which includes the city of Detroit).

For many of these counties, particularly those in America’s “Rust Belt”, population drops over this period were a continuation of decades-long trends. Wayne County is an extreme example of this trend. From 1970 to 2020, the area lost one-third of its population.

U.S. Population Growth in Percentage Terms (2010-2020)

While the map above is great at showing where the greatest number of Americans migrated, it downplays big changes in counties with smaller populations.

For example, McKenzie County in North Dakota, with a 2020 population of just 15,242, was the fastest-growing U.S. county over the past decade. The county’s 138% increase was driven primarily by the Bakken oil boom in the area. High-growth counties in Texas also grew as new sources of energy were extracted in rural areas.

The nation’s counties are evenly divided between population increase and decline, and clear patterns emerge.

Pandemic Population Changes

More recent population changes reflect longer-term trends. During the COVID-19 pandemic, many of the counties that saw the strongest population increases were located in high-growth states like Florida and Texas.

Below are the 20 counties that grew the most from 2020 to 2021.

Many of these counties are located next to large cities, reflecting a shift to the suburbs and larger living spaces. However, as COVID-19 restrictions ease, and the pandemic housing boom tapers off due to rising interest rates, it remains to be seen whether the suburban shift will continue, or if people begin to migrate back to city centers.

Tyler Durden Sat, 07/02/2022 - 21:00

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Economics

The Best Cities to Buy a Starter Home

Competition for starter homes is intense. What’s a buyer to do? Look to these cities to break into the real estate market.

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Competition for starter homes is intense. What's a buyer to do? Look to these cities to break into the real estate market.

Who wants to buy a home? A lot more people than there are homes to buy, and the outlook for first-time buyers is particularly grim.

About 26 million Americans plan to buy a home in the next 12 months, but just 5-6 million homes were sold in each of the past five years, according to a NerdWallet survey conducted in December 2021.

Millennials, aged about 26-41 years, are the largest group trying to buy homes, about 37%, according to the National Association of Realtors, and first-time buyers made up 31% of all home buyers. The supply of starter homes decreased by more than half from 2017-2021, according to an analysis by Realtor.com, which defined starters as single-family homes, condos, and townhomes under 1,850 square feet.

While median monthly asking rent in the U.S. surpassed $2,000 in May, the national median sale price topped $431,000, according to Redfin data.

And it’s not just low inventory and high prices, the competition is fierce for first-time homebuyers. Urban renters headed for the suburbs during the pandemic to compete for those entry-level homes, baby boomers looking to downsize also go after smaller properties, and to make matters worse, first-time home buyers must compete with investors who pay cash to fix and flip homes. These cash-rich flippers now make up about 10% of homebuyers

Lastly, builders have largely been unable to offset the decline in starter homes.

For the house hunter who still has the moxie to try, turn to this list of cheapest cities to buy a home. To find the cheapest places for homebuyers and the best places for starter homes, StorageCafe, an online platform that provides storage unit listings across the nation, looked at data from 108 U.S. cities with populations ranging from 90,000 to 8 million. The metrics include property values, number of sales between 2015 and 2021, housing affordability, cost of living, unemployment rate, homebuyers’ ages, the ratio of renters to owners, income levels, FHA lending limits and average mortgage rates. They scored each city on these metrics then ranked them based on their potential with regard to starter homes.

Here are the best cities for first-time homebuyers:

1. Fort Wayne, Ind.

  • Median property value: $113,144
  • Cost of living index: 87
  • Homebuyers' age: 35
  • 2021 average mortgage rate: 3.14%

The analysis used average mortgage rates from 2021, and rates have since gone up, hovering near 6% in June, but last year's rates might still give you a sense of where rates tend to be lower.

2. Columbia Md.

  • Median property value: $264,055
  • Cost of living index:106
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

3. Pittsburgh

  • Median property value: $170,042
  • Cost of living index:104
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.03%

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4. Fishers, Ind.

  • Median property value: $258,679
  • Cost of living index: 92
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.14%

5. Columbus, Ohio

  • Median property value: $164,229
  • Cost of living index: 92
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.16%

aceshot1 / Shutterstock

6. Carmel, Ind.

  • Median property value: $244,670
  • Cost of living index: 104
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.01%

7. St. Paul, Minn.

  • Median property value: $286,151
  • Cost of living index: 92
  • Homebuyers' age: 38
  • 2021 average mortgage rate: 3.14%

8. Cary, N.C.

  • Median property value: $308,611
  • Cost of living index: 94
  • Homebuyers' age: 43
  • 2021 average mortgage rate: 3.02%

9. Manchester, N.H.

  • Median property value: $276,257
  • Cost of living index: 111
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.03%

10. Minneapolis

  • Median property value: $288,926
  • Cost of living index: 105
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.01%

11. Nashville, Tenn.

  • Median property value: $318,046
  • Cost of living index: 93
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.02%

f11photo / Shutterstock

12. Bakersfield, Calif.

  • Median property value: $216,063
  • Cost of living index: 102
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 3.04%

13. Arvada, Colo.

  • Median property value: $476,672
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

14. Alexandria, Va.

  • Median property value: $432,703
  • Cost of living index: 137
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 2.99%

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15. Centennial, Colo.

  • Median property value: $444,747
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

16. Denver

  • Median property value: $505,777
  • Cost of living index: 113
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

17. Raleigh, N.C.

  • Median property value: $279,304
  • Cost of living index: 94
  • Homebuyers' age: 43
  • 2021 average mortgage rate: 3.02%

18. Germantown, Md.

  • Median property value: $261,511
  • Cost of living index: 157
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

19. St. Petersburg, Fla.

  • Median property value: $283,684
  • Cost of living index: 96
  • Homebuyers' age: 53
  • 2021 average mortgage rate: 3.11%

20. Lakewood, Colo.

  • Median property value: $380,165
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

21. Aurora, Colo.

  • Median property value: $360,542
  • Cost of living index: 114
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.00%

22. Boca Raton, Fla.

  • Median property value: $280,104
  • Cost of living index: 116
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.11%

23. Modesto, Calif.

  • Median property value: $319,328
  • Cost of living index: 119
  • Homebuyers' age: 39
  • 2021 average mortgage rate: 3.04%

Shutterstock

24. Chandler, Ariz.

  • Median property value: $388,450
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

Shutterstock

25. Las Vegas

  • Median property value: $265,170
  • Cost of living index: 107
  • Homebuyers' age: 50
  • 2021 average mortgage rate: 3.11%

26. Washington, D.C.

  • Median property value: $623,135
  • Cost of living index: 157
  • Homebuyers' age: 40
  • 2021 average mortgage rate: 4.90%

27. Scottsdale, Ariz.

  • Median property value: $478,609
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

28. Spokane, Wash.

  • Median property value: $300,881
  • Cost of living index: 107
  • Homebuyers' age: 44
  • 2021 average mortgage rate: 3.06%

29. Peoria, Ariz.

  • Median property value: $373,588
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

30. Gilbert, Ariz.

  • Median property value: $409,324
  • Cost of living index: 103
  • Homebuyers' age: 51
  • 2021 average mortgage rate: 3.12%

31. Portland, Ore.

  • Median property value: $484,475
  • Cost of living index: 132
  • Homebuyers' age: 44
  • 2021 average mortgage rate: 3.08%

Check out how all 108 cities ranked and see the methodology for this study at StorageCafe.com

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