A chart suggests the US stock market may be bottoming, an inflation story on why Halloween candy is 7.5% more expensive in 2023, a study finds GenZs & millennials want to retire rich & more...
Hi Matthew - In addition to what Amrita said, a growing number of Gen Z's and Millennials are working at more than 1 job at the same time.
Often these jobs are gigs (Uber Eats, Doordash etc.), side hustles (Fiverr, Private Consulting etc.), mini projects (Art projects which are then sold on ETSY, buy and reselling on Facebook marketplace) or even pursuing passions (teaching).
While the survey (link below) does not go into the reasons driving optimism, my take would be that the younger a person is, the more "time" he/she has and that drives the psychology of optimism. I would also say that the young workers today are upskilling fast and are not sticking to the traditional 9-5, instead building multiple streams of income, which shields them to a certain degree from the loss of primary income if mass layoffs start to take place.
On a separate note, as per the survey, it's just over 50% of GenZs, i.e. just half who are optimistic about reaching their retirement goals, which I would not think as outstandingly optimistic necessarily.
Hi Amrita, thanks for your very interesting note. Do you think that the resiliency of the job market even with multiple Fed rate increases has to do with millennials and GenZ working multiple jobs? There is something different going on right now than in precious cycles. Interested in your perspective.
I actually think that the resiliency of the job market is driven by a significantly lower labor force participation rate that we see today compared to pre-pandemic levels and the years prior to that. Economists would often attribute the decline in labor force participation to the aging population and early retirement. The US economy is close to full employment level at 62-63% labor force participation rate, never seen below. This is creating the supply-demand mismatch in the labor market, putting upward pressure on wages. I believe, there is about 1.5 job per unemployed person in the economy today. As a result, while we have a resilient job market today (as per the data suggests), we also have higher than normal inflation, especially when things like prices of housing and food are growing faster than wages. Therefore,the younger generation are picking up multiple jobs and building multiple sources of income to shield themselves somewhat from higher costs.
That Amazon robot, Digit, is clearly design to be super-cute and non-threatening with its "blinking" eyes. Oddly enough, AI and leaps in robots tech could actually....be a good thing. I can see this being big business soon as the population in many countries begins to shrink. As I wrote here: https://www.lianeon.org/p/we-dont-have-enough-people
"Remember also that growth is largely a function of improved labor output. Thus, as the labor force shrinks, labor productivity needs to rise much faster for growth rates to remain stable. A shrinking labor force makes growth all but impossible absent significant technological leaps."
Fully with you. The only way to long term growth and prosperity takes place through higher productivity and technology has spearheaded that since the beginning of human civilization, though the large scale effects that we see today are mostly from the Industrial Revolution. As for today's time period. as you said aging population is reducing labor force participation and putting upward pressure on wages and inflation and the only way to negate the effects would be faster growth in technologies such as what Amazon is doing. I believe I had seen a chart (can't post a picture in comments) how the average number of workers needed to produce a defined quantity of output per S&P500 companies have declined over the course of time. I can see how this would produce backlash as AI and tech taking away jobs, it's now up to the system to work coherently together to upskill today's and future labor force in the right direction.
“Out of that, 62% of millennials and 58% of GenZers are optimistic about reaching their retirement savings goals.” What’s driving such optimism?
Hi Matthew - In addition to what Amrita said, a growing number of Gen Z's and Millennials are working at more than 1 job at the same time.
Often these jobs are gigs (Uber Eats, Doordash etc.), side hustles (Fiverr, Private Consulting etc.), mini projects (Art projects which are then sold on ETSY, buy and reselling on Facebook marketplace) or even pursuing passions (teaching).
There aren't enough data sources that capture this but Bank of America does some analysis on this by analyzing deposits other than salary credits in accounts: https://business.bofa.com/en-us/content/bank-of-america-institute/economic-insights/gig-work-back-wages-slide.html
I believe, the scale of this projects that Gen Zers and Millennials are quickly ramping up may be driving some of the optimism.
While the survey (link below) does not go into the reasons driving optimism, my take would be that the younger a person is, the more "time" he/she has and that drives the psychology of optimism. I would also say that the young workers today are upskilling fast and are not sticking to the traditional 9-5, instead building multiple streams of income, which shields them to a certain degree from the loss of primary income if mass layoffs start to take place.
On a separate note, as per the survey, it's just over 50% of GenZs, i.e. just half who are optimistic about reaching their retirement goals, which I would not think as outstandingly optimistic necessarily.
Link to survey: https://www.bankrate.com/retirement/retirement-savings-survey/#many-workers-say-they-would-need-over-1-million-in-retirement-savings-to-feel-comfortable
Hi Amrita, thanks for your very interesting note. Do you think that the resiliency of the job market even with multiple Fed rate increases has to do with millennials and GenZ working multiple jobs? There is something different going on right now than in precious cycles. Interested in your perspective.
I actually think that the resiliency of the job market is driven by a significantly lower labor force participation rate that we see today compared to pre-pandemic levels and the years prior to that. Economists would often attribute the decline in labor force participation to the aging population and early retirement. The US economy is close to full employment level at 62-63% labor force participation rate, never seen below. This is creating the supply-demand mismatch in the labor market, putting upward pressure on wages. I believe, there is about 1.5 job per unemployed person in the economy today. As a result, while we have a resilient job market today (as per the data suggests), we also have higher than normal inflation, especially when things like prices of housing and food are growing faster than wages. Therefore,the younger generation are picking up multiple jobs and building multiple sources of income to shield themselves somewhat from higher costs.
Very comprehensive answer! Thank you for your detailed thoughts.
You are most welcome.
Naivety.
lol
That Amazon robot, Digit, is clearly design to be super-cute and non-threatening with its "blinking" eyes. Oddly enough, AI and leaps in robots tech could actually....be a good thing. I can see this being big business soon as the population in many countries begins to shrink. As I wrote here: https://www.lianeon.org/p/we-dont-have-enough-people
"Remember also that growth is largely a function of improved labor output. Thus, as the labor force shrinks, labor productivity needs to rise much faster for growth rates to remain stable. A shrinking labor force makes growth all but impossible absent significant technological leaps."
Fully with you. The only way to long term growth and prosperity takes place through higher productivity and technology has spearheaded that since the beginning of human civilization, though the large scale effects that we see today are mostly from the Industrial Revolution. As for today's time period. as you said aging population is reducing labor force participation and putting upward pressure on wages and inflation and the only way to negate the effects would be faster growth in technologies such as what Amazon is doing. I believe I had seen a chart (can't post a picture in comments) how the average number of workers needed to produce a defined quantity of output per S&P500 companies have declined over the course of time. I can see how this would produce backlash as AI and tech taking away jobs, it's now up to the system to work coherently together to upskill today's and future labor force in the right direction.
Great read!
Thanks, glad you enjoyed it.
Ah candy corn. Happy memories. I reckon I’d pay the premium just to be nostalgic.
The iconic Halloween candy! Nostalgia is always worth the premium.
We wrote to our premium subscribers to take some profits on there short position. And showed them the average return.
- October 28th: The average return is a whopping +126.68%.
- October 29th: It's a solid +77.49% on this day.
- October 30th: The average return is +55.50%.
- October 31st: It's still positive at +15.80%.
- November 1st: On this day, the average return is +42.60%.
- November 2nd: It's a strong +71.58%.
- November 3rd: The average return is an impressive +95.26%.
- November 4th: It's a positive +52.85%.
- November 5th: Ending the strong period on a high note with +72.97%.
Thanks for sharing, very helpful.
You are correct, stocks bottom at the end of October, its time to get sober and buy in October.
What did you think of the market action today? Still bottoming or something else?