July 4th, 2024 - Volume 10 (2024), Missive 148 (Thursday)
The service industry has a supply problem too
Like goods inventories relative to sale, service jobs are too compared to work
The economy cares more for work than it does jobs, way more.
Chances are the colors red, white, and blue will be plastered on just about everything you encounter today but something even more omnivorous than that is invading all spaces of the U.S. economy: everything. Despite fears to the contrary, the U.S. economy has been accumulating everything from durable and nondurable goods to service payrolls all under the guise of an economic procession with surplus productivity as the grand marshal. A parade unlike any other, the lack of discernible transitions in the economic cycle have producers of all kinds cranking out product as unrelated to the actual demand as has ever been the case. This is leading to a firework-like explosion of goods and services that is blasting over the U.S. economy and eventually raining all over the landscape in what will seem like a never-ending cascade of product.
Akin to goods inventories, there are too many service jobs compared to service work.
While it is easy to see the inventory glut set-up on the goods side of the economy via comparing sales to inventories, it is much harder to grasp the state of infrastructure when it comes to the service side. However, because the surplus productivity-led widening of the output gap and resulting economic procession is a long-term fundamental, all areas of the economy are impacted in a similar fashion; including that of the service sector. Set for release tomorrow morning, the June employment report is likely to be yet another reminder of
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