U.S. Consumer – Full Speed Ahead

Written by Richard Hokenson 

There is at least one bright spot in the growing gloom regarding the outlook for global economic growth – the U.S. Consumer. The improvement in the normal metrics of average hourly or weekly earnings understate consumer spending power because they do not incorporate changes in the number of weeks worked during the year. Axiomatically, someone who works more weeks has more income whether they work full-time (35 or more hours per week) or part-time (1 to 34 hours per week). The most recent report on Work Experience of the Population supports the view that the consumer’s ability to spend is significantly better than commonly perceived. The proportion of workers who worked full-time, year-round (50-52 weeks) is at a new record high of 69.5% (see Chart 1). This reflects record high for both full time workers of 86.5% (see Chart 2) and part-time workers of 53.9% (see Chart 3).

Of course, there are obstacles to this positive outlook. Although an escalation in trade wars or a more intense backlash against immigration are risks, the larger risk is the Fed. We remain hopeful that Powell et al. truly believe that the expansion has room to run.



This update was researched and written by Richard Hokenson, as of December 20 2018