Last week’s GDP report caught headlines for the weak economic growth in Q1. But a less-discussed part of the report was the surge in corporate profits in the fourth quarter of 2016.
Where GDP goes, consumers follow.
Yesterday the Commerce Department reported that the U.S. economy grew at a 0.7% annualized rate in Q1, below estimates of 0.9%. There were some positive underlying trends within the report, but the market took this as a disappointment.
The bigger worry is that the GDP report and the University of Michigan’s Consumer Sentiment – which measures how people feel about the prospects of economic growth and their own budgets – track each other.
Politicians should focus on growing the economy to help those left behind. But that’s not enough – inequality still looms large over capitalism.
Income inequality is widening in the United States, and its impact could be felt in the stock markets.
Inventories grew as a larger-than-expected share of GDP, worrying investors. But manufacturers are actually pretty good when it comes to predicting demand.
Can the minimum wage be used as a tool to increase the level of productivity in the economy?
Investors may not take a hit directly from the Puerto Rico debt default, but there are still lessons to be drawn.
Universal Basic Income, or UBI, is the economic theory du jour, but there remains a gap between theory and practice.
Productivity growth has stalled – are we measuring it wrong? Or can we really do less with more? The service economy and inequality might be to blame.
Simon Kuper wrote an excellent commentary this weekend on why journalists need to get out of their city bubbles and talk to real citizens who represent more typical life experiences. As he notes, “Today, most remaining journalists live in metropolitan enclaves such as Brooklyn, north London and central Paris, and look like the elites they cover.” It’s difficult to understand how a voter in Iowa feels if you live/work/play all within two miles of Fort Greene.