12.01.2025
The Asymmetry of Unemployment
A fundamental characteristic of U.S. labor markets is the pronounced asymmetry in unemployment dynamics, as joblessness rises anywhere from three…
This week’s chart illustrates recent shifts in the personal savings rate and household net worth. As seen in the graph, household wealth is approaching its pre-recession level as the recovery in the stock and housing markets has helped repair household finances. The Federal Reserve’s tactics of holding interest rates low and offering stimulus in the form of Treasury and mortgage purchases seem to be creating its intended wealth effect, albeit slower than anticipated.
As household finances improve, consumers will be less inclined to save and more likely to purchase goods and services. Currently, the personal savings rate is hovering around 2.5% which is substantially less than its recession high of 6%. If the current rallies in the stock and housing markets continue, we should see a trickledown effect to many sectors of the economy, most notably jobs. In theory, an increase in consumer demand should lead to an increase in labor demand as companies ramp up production in response to more consumer spending. Additionally, labor demand will increase wages, further perpetuating the wealth effect.
The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.
12.01.2025
A fundamental characteristic of U.S. labor markets is the pronounced asymmetry in unemployment dynamics, as joblessness rises anywhere from three…
11.24.2025
With gold now trading near $4,000 per ounce after a steady multi-year climb, investor attention has turned to the potential…
11.17.2025
After a largely synchronized hiking cycle beginning in 2022, there has been a slight divergence in interest rate policies across…
11.10.2025
Over the weekend, the Senate overcame a key procedural obstacle in its attempt to end the record-breaking government shutdown, as…
11.03.2025
Small-cap equities are in a prolonged period of underperformance relative to large-cap stocks, but this trend has shown early signs…
10.27.2025
To paraphrase a quote from former President George W. Bush: “Fool me once, shame on… shame on you. Fool me…
Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.
We respect your privacy. We will never share or sell your information.
If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.
Contact Us >