While the US central bank cites official unemployment under 5% and inflation near 2% as mission accomplished on their dual monetary mandate, the reality is that the labor force participation rate is the lowest since 1978, and especially for the critical worker bee cohort (ages 25-54) who are supposed to be paying into all the benefit programs the boomers are drawing on as they age. And then there are all the very expensive properties and financial assets that the boomers want to sell at peak valuations to younger folks, in order to raise cash for their retirement years. Older folks can’t keep their jobs into their 70’s, collect all the benefits, and sell all their assets at peak levels…something has to give… younger people need some wage growth and savings as well as lower asset prices, if they are to be buyers and taxpayers. This discussion is on point.
Gary Shilling, president at A. Gary Shilling & Co. and Bloomberg View columnist, examines the shortfalls he sees in the U.S. economy with a focus on the labor force. Here is a direct video link.