The crazy Powell gang...

Powell is a (Chico) Marxist (Part 5) Double dynamite

We finished part 4 noting that the labour share of profit having fallen consistently for decades, broad consumption is far from resurgent.

Why aren’t consumers spending more?

A prevailing justification throughout the post-pandemic era has been US consumer health predicated on the perceived health of the labour market. The consumption story is demonstrably weak. The roseate employment story is equally misleading. The past year has seen the rate of increase of the number of employees not only slow but slow to a greater extent than the working aged population has increased, resulting in a falling labour participation rate (i.e. the % of potential employees actually employed – what might be termed the employment rate):

This has happened to such an extent that the unemployment rate has increased appreciably:

Since the beginning of 2021 the average number of weekly hours worked by US private sector employees has declined back below the low levels prior to the outbreak of COVID-19 that indicated to us, at that time, that the US economy was slowing towards stall speed:

Which begs the question….why hasn’t this been all over the headlines - surely this is important?

Next time we’ll examine the gap between perception and reality…..

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Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment planner. 

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