Political Calculations
Unexpectedly Intriguing!
07 February 2023

The relative affordability of the typical new home sold in the U.S. remained near its all time lows in December 2022. That outcome occurred despite new home sale prices and mortgage rates falling during the month.

Meanwhile, data revisions affecting median new home sale prices and median household income confirm October 2022 as the all-time record low for the affordability of new homes in the U.S. The revised data also confirms the new homes were even less affordable than the previous estimate indicated. The following chart shows that a mortgage payment on the median new home sold in the U.S. during December 2022 would consume 41.6% of the monthly income earned by the typical American household, down from the record of 49.3% recorded for this measure in October 2022.

Mortgage Payment for a Median New Home as a Percentage of Median Household Income, January 2000 - December 2022

The period from July through December 2022 represents the least affordable for Americans in history. All but one month during this time exceeds the peak of unaffordability recorded for April 2006 during the first U.S. housing bubble.


U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 26 January 2023. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 26 January 2023. 

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 5 February 2023. Note: Starting from December 2022, the estimated monthly mortgage rate is taken as the average of weekly 30-year conventional mortgage rates recorded during the month.

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06 February 2023

On Friday, 3 February 2023, an unexpectedly large upward adjustment to the number of employed Americans in the January 2023 employment situation report prompted investors to reset their expectations for how high the Fed's rate hikes will go before peaking. Before the report was issued, investors were looking for the Fed's rate hikes to top out in the 4.75%-5.00% range in March 2023. After the report, their expectations changed to anticipate a peak target rate range of 5.00%-5.25% being hit in May 2023.

In response, the trajectory of the S&P 500 (Index: SPX) shifted downward to close the week at 4,136.48, which was still up from the previous week's close. That's not unexpected, because the index has been running on the high side of the redzone forecast range in the dividend futures-based model's alternative futures chart:

Alternative Futures - S&P 500 - 2023Q1 - Standard Model (m=+2.0 from 13 September 2022) - Snapshot on 3 Feb 2023

The week also saw continued improvement in the expectations for the S&P 500's quarterly dividends per share during 2023, which we'll revisit separately in a couple of weeks since we just featured it in the previous edition of our running S&P 500 chaos series. For now, we'll simply observe these positive changes in expectations are shifting the trajectory of the S&P 500's alternative futures upward.

Here are the past week's market-moving headlines:

Monday, 30 January 2023
Tuesday, 31 January 2023
Wednesday, 1 February 2023
Thursday, 2 February 2023
Friday, 3 February 2023

After the Fed's expected quarter point rate hike last week, the CME Group's FedWatch Tool still projects another quarter point rate hike at the Fed's upcoming 22 March (2023-Q1) meeting, followed by another at its 3 May (2023-Q2) meeting, with the latter representing the last for the Fed's series of rate hikes that started back in March 2022. After that, the FedWatch tool anticipates the Fed will hold the Federal Funds Rate at a target range of 5.00-5.25% through September 2023. After which, developing expectations for a U.S. recession in 2023 have the FedWatch tool projecting two quarter point rate cuts, in November and December (2023-Q4).

The Atlanta Fed's GDPNow tool's projection for real GDP growth in the first quarter of 2023 held steady at +0.7%. Meanwhile, the so-called "Blue Chip" consensus forecast is leaning toward negative GDP growth in the current quarter.

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03 February 2023

In our world of pressure-sensitive, self-adhesive stamps, it seems strange anyone would think it normal to lick a postage stamp before mailing a letter. But that world has only existed for Americans since 1992, when the U.S. Post Office introduced them to the nation. After that, even the thought of licking stamps had all but disappeared within 13 years.

But before that time, licking stamps was a frequent activity. For most, it was the easiest way to affix the proof that the cost of postage to send a letter through the U.S. mail had been paid. Many Americans before the age of self-sticking stamps would agree it was an awful experience.

That's because the taste of the glue the U.S. Postal Service applied to the back of stamps to get them to stick to paper envelopes after they were moistened was, shall we say, unpleasant. That design failure created an opportunity for American inventors, who quickly found a ready market made of anyone who might otherwise have to regularly lick a lot of stamps.

Donald Poynter was one of those inventors, who was awarded U.S. Patent 4,300,473 for his unique solution to the problem of licking the bad-tasting glue on the back of postage stamps. He describes his innovation in the patent's background section:

The present invention relates to an apparatus for moistening the adhesive coating on a postage stamp, envelope or the like and more particularly concerns a novelty device for performing this function.

Due to the unpleasant taste of adhesive coatings placed upon postage stamps, envelopes and the like, many persons using such articles dislike licking the coating with their tongue. Many other persons object to licking stamps for reasons of health and sanitation or personal propensities. For these or other reasons, it is desirable to moisten the adhesive coating by means which do not include the use of the human mouth.

Further, many people obtain great satisfaction from novelty devices. Therefore, for many people, it is desirable to present an apparatus for performing the highly useful function of moistening adhesive coatings in a novelty arrangement.

We know. You were on board until you got to the part about people obtaining satisfaction from novelty devices, which comes across like a strange plot twist. Fortunately, the text of the patent's abstract tells us exactly what he he had in mind for the specific apparatus he envisioned for his invention:

Apparatus for moistening adhesive coatings on postage material and the like which includes an enclosure having a container of liquid therein. A plunger is provided to lift an absorbant applicator from the liquid and pass the applicator through an opening in the side of the enclosure. A closure member for the opening is opened in response to the applicator movement. The applicator may be in the form of a human tongue and the closure may be in the form of a human lip.

And if that technical description doesn't do it for you, Figures 1 and 2 of the patent's illustration will complete the picture.

U.S. Patent 4,300,473 Figures 1 and 2

Basically, when a user depresses the button as shown in Figure 2, the "lips" on the box in Figure 1 open to reveal a tongue-shaped sponge that has been pre-moistened in an internal water reservoir. The sponge provided the moisture needed to activate the glue on the back of a postage stamp so it would stick to an envelope.

The advent of the self-adhesive stamp technology has made Poynter's invention obsolete. All the same, it's a testimony to the world that made the invention of the stamp-licking tongue depressor seem like both a good idea and a marketable product for an all-too-brief time.

From the Inventions in Everything Archives

We don't have any other examples of inventions that have become fully obsolete in the archives, but we do have the following discussions and essays on the topic of obsolescence.


02 February 2023

2023 got off to a rocky start for dividend paying stocks in the U.S. stock market. The number of firms announcing dividend reductions jumped back above the threshold indicating recessionary conditions are present in the U.S. economy. Meanwhile, the number of dividend increases announced during January 2023 presents a more mixed picture, up month over month, but down year over year.

These changes are visualized in the following chart.

Number of Public U.S. Firms Increasing or Decreasing Their Dividends Each Month, January 2004 through January 2023

With the new year, we're revamping how we present the U.S. stock market's monthly dividend metadata. The following table presents the data for the just completed month of January 2023, the preceding month of December 2022, and the year ago month of January 2022. We've also presented the Month-over-Month (MoM) and Year-over-Year (YoY) changes for January 2023's dividend metadata:

Dividend Changes in January 2023
  Latest Previous Month Previous Year
   Jan-2023  Dec-2022  MoM  Jan-2022  YoY
Total Declarations 3,127 5,528 2,401 ↓ 2,224 903 ↑
Favorable 221 281 60 ↓ 264 43 ↓
- Increases 168 144 24 ↑ 198 30 ↓
- Special/Extra 48 135 87 ↓ 59 11 ↓
- Resumed 5 2 3 ↑ 7 2 ↓
Unfavorable 65 31 34 ↑ 17 48 ↑
- Decreases 65 31 34 ↑ 17 48 ↑
- Omitted/Passed 0 0 0 ↔ 0 0 ↔

Our sampling of dividend decreases only captured 13 of the 65 reported divieend reductions. They are predominantly concentrated in the U.S. oil and gas sector among firms that pay variable dividends to their shareholding owners. These firms have made frequent appearances in recent months, coinciding with the ~35% decline in the price of crude oil from early June through December 2022. Dividend reductions most often represent a mildly lagging indicator for declining business conditions, so their appearance in January 2023 is not unexpected.

Here's the list for our sampling, where we also find industrial representation from the real estate and financial services sectors of the economy.

Going back to the dividend metadata, we're surprised we're not seeing more firms being recorded as omitting (or suspending) their dividend payments to shareholders. We suspect Standard and Poor is including them with the number of dividend decreases they report. That makes sense since both dividend cuts and omissions count as unfavorable changes, which we're now tracking in our monthly dividend metadata summary.


Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 February 2023.

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01 February 2023

Political Calculations' initial estimate of median household income in December 2022 is $79,405, an increase of $193 (or 0.2%) from the initial estimate of $79,212 in November 2022.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century reflects the results of that revision, showing the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through December 2022. The inflation-adjusted figures are presented in terms of constant December 2022 U.S. dollars.

Median Household Income in the 21st Century: Nominal and Real Modeled Estimates, January 2000 to December 2022

Adjusted for inflation, December 2022's estimated median household income represents a new record peak for this demographic characteristic, exceeding the revised December 2021's previous peak by $1,499. We also observe the effect of inflation continues to be muted, coinciding with the substantial decline in oil prices since the early June 2022. That decline has offset the effect of other rising prices, where increases in the cost of food has been significant.

Taking a step back to look at the average personal income earned by individual Americans, we find their inflation-adjusted income has not yet recovered to its December 2021 level.

Average Individual Earned Income in the 21st Century: Nominal and Real Estimates, January 2000 to December 2022

Zooming in to look just at the Biden era, we see that nominal earned income growth slowed considerably after December 2021.

Average Individual Earned Income During Biden Era: Nominal and Real Estimates, January 2000 to December 2022

Adjusted for inflation, personal earned income growth shrank in the first half of 2022 before bottoming in June 2022, coinciding with the nation's technical recession. It grew at a relatively steady rate in the second half of 2022.

Analyst's Notes

The U.S. Census Bureau released updated population estimates extending back to March 2020. These changes were both positive and progressively substantial. By positive, we mean that all estimates were increased over their previously reported level. By progressively substantial, we mean that the smallest adjustment (+1,000) was made for March 2020, with most months seeing a progressively larger upward adjustment ending with November 2022 seeing the biggest increase (+744,000). That's a substantial change.

By contrast, the BEA made minor downward adjustments to its aggregate wage and salary data for only the months of October 2022 (-0.1%) and November 2022 (-0.3%).

The combined effect of these changes is most notable for November 2022. As noted earlier, our pre-revision median household income estimate for month was $79,212. November 2022's estimate fell by $135 (-0.2%) to $79,077 after these revisions superseded the previous data. Revisions in our estimates of median household income for the other months from March 2020 through October 2022 are smaller.

During March 2023, the U.S. Census Bureau will collect survey data from roughly 75,000 households for its Annual Social and Economic Supplement. It will take nearly six months to analyze the data it compiles before presenting its annual estimate of the U.S. median household income for the 2022 calendar year on Friday, 8 September 2023.

For the latest in our coverage of median household income in the United States, follow this link!


U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 January 2023. Accessed: 27 January 2023.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 January 2023. Accessed: 27 January 2023.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 12 January 2023. Accessed: 12 January 2023.


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