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…..
MBMG Investment Advisory is licensed by the Securities and Exchange Commission of Thailand as an Investment Advisor under licence number Dor 06-0055-21.
For more information and to speak with our advisors, please contact us at info@mbmg-investment.com or call on +66 2 665 2534.
About the Author:
Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment planner.
Disclaimers:
1. While every effort has been made to ensure that the information contained herein is correct, MBMG Investment Advisory cannot be held responsible for any errors that may occur. The views of the contributors may not necessarily reflect the house view of MBMG Investment Advisory. Views and opinions expressed herein may change with market conditions and should not be used in isolation.
2. Please ensure you understand the nature of the products, return conditions and risks before making any investment decision.
3. An investment is not a deposit; it carries investment risk. Investors are encouraged to make an investment only when investing in such an asset corresponds with their own objectives and only after they have acknowledged all risks and have been informed that the return may be more or less than the initial sum.
Thanks for reading MBMG Flash! Subscribe for free to receive new posts and support our work.