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Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here. |
In our flow analysis, the employment landscape is pivotal. Alterations in job dynamics directly impact 401(k) contributions and consequently, the flow. Deciphering the 2023 employment scene is akin to piecing together a cryptic puzzle. The data often raises more questions than answers, whether it's due to survey response rates, various adjustments, or the large chunk of GDP from government spending. Our aim is to track these nuances closely. The featured chart today shows a 5% decline in labor costs over the past 12 months, hinting at a softer employment landscape.
Michael Taylor's Twitter discussion with Hedgeye’s Robert McGroarty last evening brought forth an insightful observation: a decelerating gig economy could be redirecting many back to traditional jobs, boosting labor supply. This gig economy, representing short-term, temporary tasks, is driven mainly by platforms like Uber and Airbnb, which constitute 88% of its global volume. 16% of Americans have engaged in gig work at some point, with 40% of US organizations employing 1 in 4 workers as freelancers. It's worth noting that this phenomenon isn't just confined to the US; globally, 20% of full-time independent American workers serve overseas clients in fields like IT and marketing.
Significantly for our analysis, many freelancers operate as recently established, single-owner LLCs, often evading traditional job report metrics, especially unemployment claims. Bank of America notes a consistent decline in freelance income since January 2022, attributing this to diminished delivery demands and a shift of freelancers to conventional jobs. Such a downturn in the freelance realm might remain under the radar in job reports for a while, making it a crucial factor to monitor.
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Learn more about the Market Situation Report written by Tier 1 Alpha. |
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