Pro Perspectives 9/6/19

September 6, 2019

The jobs report today continues to show a very healthy job market.  And wages continue to grow at over 3% annualized. 
This 3%+ annualized growth in wages is the best since the pre-crisis era, and has sustained for a full year now.  That’s good news for consumers – good news for the economy.
So, let’s regroup on the state of the economy (after the noise of recession calls the past few weeks), and then I have a chart that adds some perspective as we head into the weekend.
We have continue to have record low unemployment.  We have consumers sitting on record high household net worth, and record low debt service ratios.  U.S. companies reported record profits in the second quarter. 
Yet, all we hear about is looming recession.
The bond market, has of course, given signals of recession, finally providing some evidence for the economic and stock market bears. 
But, unlike past yield curve inversions, we have global central banks that have pinned down the long-end of the curve now for the past decade (i.e. distortion).  That makes for a hard comparison … “this time is different.” 
So what is driving this persistent gloomy messaging?  As I’ve said over the past year, I suspect we are seeing plenty of people make the mistake of letting politics cloud their judgement on the economy and the outlook for stocks.
With that, this chart from Pew Research appears to have this bifurcated view, we hear from the media and Wall Street, nailed. 

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