Economists pushing the narrative that Real GDP growth will climb back to mid-single-digit percentages in 2022 have got it wrong. The combination of persistent price inflation and weak labor participation will ensure that Real GDP remains range bound between zero and 2%. The sooner Wall Street pundits learn to say "Stagflation" the more honest conversation … Continue reading Real GDP Growth Will Not Rebound In 2022
Tag: labor force participation
The fact is that the U.S. economy was more productive from a Labor Force Participation Rate perspective during the Financial Crisis as compared to where it stands today. The Labor Force Participation Rate stood at 66.0% in October 2008 and steadily declined until January 2020 when the Labor Force Participation Rate stood at 63.4%. The … Continue reading Fewer People Are Productive Today As Compared To The 2008 Financial Crisis
Over the past 11 months and as recently as Tuesday the Federal Reserve has consistently reiterated its mission to get the U.S. Economy back to full employment. We are not there yet. The labor participation rate remains below 2008-2009 financial crisis levels. Let me know your thoughts on the below (particularly if you are on … Continue reading Is The Fed’s View On The Relationship Between Interest Rates and Jobs Wrong?
The Fed would have us believe "There's nothing to see here," (to quote Frank Drebin), as it relates to inflation. Consumer spending funded by government debt is of inferior quality as compared to spending funded by increased production. In January Americans spent their debt-funded government checks that were mailed out at the end of December. … Continue reading Long Rates Continue To Climb As Inflation Persists. Nothing To See Here.
Whether one measures EV/Revenue multiples, EV/EBITDA multiples, Stock Market P/E multiples or various other measures there is no doubt the market is frothy and that certain sectors are firmly in bubble territory. Two trends are troublesome. The first is that the Market Cap to GDP ratio (measured by the Wilshire 5000 index to Nominal GDP) … Continue reading Stocks Are at A High. Labor Participation Is at A Low.