Let me know if nitpicks are more annoying than welcome.
>OpenAI released their first open-source models
Small correction: this is the first open source models since GPT-2 in 2019.
>A falling housing market will dampen US consumer spending and economic growth.
Not a nitpick, but a genuine question: I'm not an economic expert, but what is the reasoning behind this? Is the idea that a falling housing market is an indicator of lower consumer confidence? I'm probably being dumb here, so thanks
> There are several reasons why a falling housing market generally reduces consumer spending. First, when people's homes are worth less, then they feel less wealthy, so they tend to spend less; this is called the "wealth effect." Second, when their homes are worth less, they are generally able to borrow less from their home equity, and hence, they can generally spend less overall. Third, yes, a falling housing market tends to cause lower consumer confidence, which makes people more conscious about spending. Fourth, when the housing market falls, spending on construction, furniture, and everything housing-related also falls. And fifth, if the fall in prices is fairly severe, households can end up uncomfortably over their heads in debt, to the point where they prioritize paying down debt over consumption.
>
> Obviously, there are a lot of moving parts to the economy, but all else equal, a falling housing market will lead to reduced consumer spending. An extreme version of this happened in the 2008-09 financial crisis and in the years that followed.
Thank you as always!
Let me know if nitpicks are more annoying than welcome.
>OpenAI released their first open-source models
Small correction: this is the first open source models since GPT-2 in 2019.
>A falling housing market will dampen US consumer spending and economic growth.
Not a nitpick, but a genuine question: I'm not an economic expert, but what is the reasoning behind this? Is the idea that a falling housing market is an indicator of lower consumer confidence? I'm probably being dumb here, so thanks
Longer answer from one of our forecasters:
> There are several reasons why a falling housing market generally reduces consumer spending. First, when people's homes are worth less, then they feel less wealthy, so they tend to spend less; this is called the "wealth effect." Second, when their homes are worth less, they are generally able to borrow less from their home equity, and hence, they can generally spend less overall. Third, yes, a falling housing market tends to cause lower consumer confidence, which makes people more conscious about spending. Fourth, when the housing market falls, spending on construction, furniture, and everything housing-related also falls. And fifth, if the fall in prices is fairly severe, households can end up uncomfortably over their heads in debt, to the point where they prioritize paying down debt over consumption.
>
> Obviously, there are a lot of moving parts to the economy, but all else equal, a falling housing market will lead to reduced consumer spending. An extreme version of this happened in the 2008-09 financial crisis and in the years that followed.
Hey, nitpicks are welcome. If very trivial probably better to send them via DM.
> Small correction: this is the first open source models since GPT-2 in 2019.
Whoops, thanks
> A falling housing market will dampen US consumer spending and economic growth.
Not actually sure, asked the forecaster who drafted this to answer this
Good to know! Thank you for the response (and asking the other forecaster to clarify) -- that makes a lot of sense.