Location Strategy Chartbook 030924

Location Strategy Chartbook

At Location Strategy we are growing increasingly concerned about the resurgence in inflation, similar to what we saw in the late 1970s. Remember, we have already seen a historically significant spike in inflation. The list below ranks presidential terms by the value of $100 36 months into their administration. Over the last 100 years, only Jimmy Carter saw a greater decline in dollar value than we have seen in the first 36 months of Joe Biden’s term in office.

Incomes are growing, but not matching productivity gains - so what workers are producing per unit of output is growing faster than wages for that same hour. This combined with the hangover effets of inflation are undoubtedly contributing to the prevailing sense that people can’t keep up economically.

The continued rise in food prices is now changing the way that people shop for groceries:

Here is the goods share of total spending compared to the pre-COVID trend.

Americans now incur as much interest on consumer debt as they do on mortgage loans.

But American consumers look downright responsible when compared to Federal Government spending.

Even high-income users are aggressively using “buy now pay later” offerings:

Another key cost, childcare, remains inflated:

The 2-year Treasury yield fell below 4.5% following Chair Powell’s hinting that the Federal Reserve is increasingly confident in the deceleration of inflation trends. Of course, this is the same Fed that (1) didn’t see inflation coming when it increased the money supply by 40% in a single year and (2) persisted in calling it transitory long after it was clear inflation was here to stay.

Job growth appears to be slowing but the labor market remains tight

WARN notices continue to signal higher unemployment claims ahead.

With slowing job growth comes slowing wage growth. About the most we can about that is wage growth is inflationary.

We need robust growth creating lots of new companies because that’s where the job growth is:

I suppose another side benefit is higher unemployment rates will yield higher rate cuts:

If fertility is related to optimism about the future, projected US population growth is telling a very negative story:

Americans born in 1990 are having half as many chilfren by age 30 as their mothers and grandmothers did:

Even in a time period that’s been difficult for buying new homes, homeownership rates across various ethinc groups has increased:

Very few residential properties are currently under negative equity.

Mortgage applications showed some improvement last week.