Navigating the Narratives
Our worldviews are shaped by many different elements. How we were raised, our life experience, and the battles we've won and lost along the journey all play a part.?
They're also shaped by external narratives and how much (or little) attention we devote to them.?
Depending on what media you consume, how much of your day is spent doom scrolling social media, and what you've overheard at the water cooler, you could have a drastically different view on reality than your neighbor down the street.
It's our job to sift through which narratives hold kernels of truth and which aim to cover them up. Sometimes, it's hard to tell.
Here, we're diving into some of the latest economic narratives floating around and what they could mean for the bigger picture.
Getting Personal
Recession indicators continue to flash red while we wait for the official call from the media and the powers that be. This month, we've got our eye on several indicators, including the labor market and the consumer personal savings rate.
Right now, the consumer personal savings rate sits at 2.9%, a significant drop from last year's rate of 4.5%.?
On a recent segment of CNBC's Fast Money, David Rosenberg expanded on why this is another alarm bell. Consumer disposable income grew 1% over the last year, but real consumer spending is running at 3%. The difference between the two points towards the relentless decline in the personal savings rate.?
Powell's concern that there's too much slack being built up in the jobs market may be why he plans on cutting rates. However, unemployment is going up, making us wonder if the Fed is behind the curve.
Speaking of unemployment, we experienced further job loss in the last month to the tune of 438,000. Part time work continues to displace full time work, with 65,000 more multiple job holders recorded this past month as well.
Gig workers also increased in August by 274,000. While some of these folks are achieving the digital nomad dream, far more are simply picking up gigs with Uber and DoorDash to make up for what their other one or more jobs don't pay.
Additionally, we're experiencing what some have coined "The Great Replacement," referring to the influx of foreign-born workers.?
According to the August jobs report, American born workers lost over 1.3 million jobs, while foreign-born workers gained over 1.2 million jobs during the same period. Since the end of 2020, over 9 million immigrants have entered the country, 2.6 million of which came through legally.?
The jobs report can’t tell the difference between legal and illegal immigrants, leaving it up to us to assume how this plays into the latest official numbers.