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Trying out just two posts a week on Tuesdays and Fridays - less frequent but a bit longer, so please let me know if you prefer this in the poll below!

If this is your first Z-Pack, welcome - I'm Zach.

⬇️ Let’s get it.

📊 What's up with the economy?

Thank you to those who voted in last week’s poll. Your wish is my command — here’s a little update on the U.S. economy that’s a ~5 minute read (sorry but tried to make a little summary for you!):

🗞️ The headlines:

🌱 The reality: It’s weird!

Allow me to explain —

By most traditional/pre-pandemic measures, the economy is crushing —

• “Nobody has a job!” Quite the opposite —

  • We have record low unemployment +

  • High level of people aged 25-54 who are employed (also known as prime-age labor force participation rate — this is GOOD) +

  • Only 5.2% work multiple jobs (~ = pre-pandemic), and they mostly have PhDs!!
    

• “But we’re poorer now!” — false. Americans are wealthier now than pre-COVID

  • Also not just based on their housing value, which is where most Americans hold most of their wealth

  • What about cash and savings? Most middle-class Americans are 12% wealthier than pre-COVID in terms of liquid assets, inflation-adjusted!
    

• “It’s only the wealthy doing well!” — false. Inequality has been decreasing since ~2010 (despite the pop narrative). Plus, 🚨 narrative break🚨- younger generations are making more money than their parents at their age (inflation-adjusted!).
  

• “Well young people can’t get a home?” Nope — Millennials are buying homes at about the same rate as prior generations at their age, but we still don’t build enough housing + median price is still too expensive
  

• “Everyone is just getting into debt!” Nope — debt as a percent of disposable income is lower than at any time between 1980-2019
  

• Stock market is on a bender 🍻

So why are people pissed off?

1. Based on the article above, it looks like we’ve experienced a vibe-quake since the pandemic — people seem to no longer care about the same things as they did pre-COVID

   • How people feel about the economy (consumer sentiment) hit the lowest ever recorded in June 2022 (going back to 1966) — that’s no bueno.

   • This matters because we’re all connected in a web of trillions of transactions, from top to bottom, and if most people start feeling bad about the economy and acting on that (ergo, spending less), then that can spell disaster. So we need to pay attention to how people are measuring the health of the economy.
     

2. Before, most Americans’ feelings about the economy were determined by vehicle prices, housing prices, and inflation — But now?

   • The authors share that it looks like NONE of these variables are solely responsible for how people feel about the economy 🤔

So.. is the economy doing good or bad?

1. Political polarization — Tbh, it looks like it just depends on who you ask — for example, the vast majority of Republicans do NOT think the economy is doing well, probably because Fox News keeps telling them this
   

2. Americans HATE inflation — even with inflation having gotten nearly back down to pre-COVID levels, it looks like Americans aren't done being pissed off that it happened. We’re probably still pissed that we spent down our excess savings from COVID relief in 2022 and 2023 with inflation.
   

3. Housing is expensive — just because younger generations are still buying homes (despite the historically high median price of a home) doesn’t mean they’re happy paying their monthly mortgage or a bigger downpayment.
   

4. Comparing ourselves to others — as they say, envy is the thief of joy. You could argue we’re experiencing an epidemic of envy and fantasizing of a past-that-never-was in this age of “social” media.
   

   As economist Noah Smith writes, middle-class families do way better now than in like the 1970s, but we often hear people talk about the “death of the middle-class” because people’s expectations of what represents a “middle-class lifestyle” increased faster than their wealth.

Still curious?

• If you’ve been looking for an easy read on how our American economy works, I def recommend Kyla Scanlon’s book, In This Economy?

• Here’s a great post of hers on our housing crisis

IYKYK

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Zach

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Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.