Wages vs. Jobs

In Outside the Box today, my good friend Gary Shilling draws some crucial distinctions with respect to wage and jobs and explains why our perplexing US labor market is actually quite rational. Gary shares with me a fundamental optimism regarding our prospects for long-term economic growth, and in this report he tells us why.
This kind of in-depth dissection of macro trends is what Gary is known for. You can learn more about subscribing to his monthly Insight report and take advantage of a special offer for OTB readers at the conclusion of today’s letter.
[John is off-site this afternoon, doing research with some hedge fund managers, and so he hasn’t had time to write more here. He has asked us to go ahead and publish without his usual personal remarks. He’ll be back in full force in this weekend’s Thoughts from the Frontline.] John Mauldin, Editor
Outside the Box
Wages vs. Jobs
(Excerpted from the August 2017 edition of A. Gary Shilling’s INSIGHT newsletter)
Real wages have been stagnant in the U. S. and other developed countries for over a decade. As we’ve discussed in numerous past Insights, this has made people ‘mad as hell’ and has resulted in populist uprisings that spawned Brexit and the election of Donald Trump. Extremely aggressive monetary policy that reduced central bank-controlled interest rates to essentially zero did little to revive economic growth since creditworthy borrows already had plenty of money and banks, scared and chastened after the financial crisis, had little desire to lend to the rest.

This post was published at Mauldin Economics on AUGUST 16, 2017.