This week the news about the global economy has been gloomy, but news about real workers earning more money has cheered me up.
Morgan Stanley’s Global Chief Strategist gave me 2 good reasons to doubt the global boom, one of them being a lack of potential spending by the US consumer and the second being a crackdown on tech companies in the middle kingdom.
Added to this are the misguided (in my opinion) concerns on inflation and the delta variant putting a spanner in the works of a V shaped recovery. As equity markets look southwards, high risk assets like crypto look highly likely to get spanked as the avalanche of macro bad news gathers pace.
This is not the bit where I ask you to “buy the dip.” Rather, to reflect on the good news from the New York Fed that shows the mean salary employers must offer to entice a new worker into the labour force, known as the “reservation wage”, is up nearly $10,000 in the past year to $71,403.
Unite Here, the hotel workers’ union, said “There is no question that many people say, I’m done working for poverty wages.” An increase in the reservation wage and workers rejecting non living wages, feels like sunshine on a cold day.
Pooh Bear was not a commentator on macroeconomics, nor did he have a view on capital returns vs labour, but he did point out that “it never hurts to keep looking for sunshine.” As the macroeconomic news sours this summer, I am going to follow his advice and keep looking.
Have a great summer.