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It started out as just a normal market correction, as we see frequently.
Unfortunately, a lot of investors had gotten complacent. They borrowed on the margin to double down on profits they thought would continue forever. But when the market corrects, they get a margin call and can usually only cover by selling some of their stocks. So that creates more selling.
The economy is continuing to grow at the same, slow & steady rate. We are right around full employment, so you should expect a certain amount of wage-driven inflation (which will bite the profits we've been seeing the last few years).
Globally, Brexit & uncertainty about NAFTA & TPP drive uncertainty about the short- to mid-term future of trade and the economy.
Equities were rising well above the growth of the economy. The economy is adding jobs while we are at full employment, so there is upward pressure on labor costs. That is a recipe for a correction, I think.
The economy is adding jobs while we are at full employment, so there is upward pressure on labor costs.
We've been adding jobs since early 2010; since the middle of 2011 if you want to consider the brief dip earlier that year a restart. I think I just saw that we've added jobs for 88 straight months. It hasn't created any "upward pressure" on employers yet. I see absolutely no reason why a sudden leap in profits due to the tax cuts will devolve to the workforce in any meaningful amount. Why on earth should it?
I see happy C-level and stockholders and owners; I see substantial investment of those funds; I see some capital investment by many firms; I don't see anything pressuring them to increase wages. It's like an unmanaged conspiracy - as long as no one else is raising compensation, no one will.
We've been adding jobs since early 2010; since the middle of 2011 if you want to consider the brief dip earlier that year a restart. I think I just saw that we've added jobs for 88 straight months. It hasn't created any "upward pressure" on employers yet. I see absolutely no reason why a sudden leap in profits due to the tax cuts will devolve to the workforce in any meaningful amount. Why on earth should it?
I see happy C-level and stockholders and owners; I see substantial investment of those funds; I see some capital investment by many firms; I don't see anything pressuring them to increase wages. It's like an unmanaged conspiracy - as long as no one else is raising compensation, no one will.
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015. https://www.frbatlanta.org/chcs/wage...r.aspx?panel=1
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015.
Wow. A whole percent a year, after what, fifteen years of nearly flat wages? While all other economic indicators have risen sharply?
Continued job additions while we are at full employment puts upward pressure on wages. It's a simple supply and demand result. The data bears it out--we've had wage inflation of 3% plus since 2015. https://www.frbatlanta.org/chcs/wage...r.aspx?panel=1
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