Friday, May 17, 2019 8:44:47 AM
5. The new normal grows old
If there is a free lunch in this world, it is productivity growth. The ability to produce more (output) with less (labor input) drives investment, lowers costs and raises real wages. Productivity and labor-force growth determine how fast an economy can expand without inducing inflationary pressure.
The problem right now is that nonfarm business productivity growth has been stuck in a rut since 2004. Even manufacturing productivity is underperforming compared with prior business cycles. And while the recent pick-up in business fixed investment is encouraging, it is too early to declare a trend change — even if productivity is everywhere apparent except in the data!
Unless productivity growth picks up or the U.S. admits a lot of skilled immigrants to offset the retiring baby boomers, which seems unlikely, low interest rates, at least relative to past experience, may turn out to be the new normal.
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Wow Note: (The problem right now is that nonfarm business productivity growth has been stuck in a rut since 2004. Even manufacturing productivity is underperforming compared with prior business cycles).
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let me ask you Do you think DJ is doing the right thing now with these Tariffs while the markets hit a triple top??
I'm going to make it a little harder for you lol besides interest rates do you know why we had a Bull market for 10 years?
I don't know how old you are but do you remember Louis Rukeyser?
You remember the panelist on his show or at least one of them??
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