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Low wage growth contributing to slow economic recovery…..U.S. Conference of Mayors released results of a survey
today that shows wage levels for jobs
created in this recovery are 23% below wage levels of the jobs that were lost
in the Great Recession.
What’s the
point? Although we have some question
about this data and how the results were compiled, this information, if
credible, would be another of several reasons why this economic recovery has
been the slowest since WW2. There are a number of factors we think may be
contributing to this trend such as increased foreign competition, advancements
in technology, slower pace of hiring by corporations, demographics, and types
of new jobs being created. This trend, should it continue, would most likely
continue to support the outlook for moderate economic growth (2-2.5%),
restrained growth in consumer discretionary spending, and low inflation. The
investment implications of this are most likely that “income”-oriented stocks
(quality dividend stocks) should continue to do well, but also that it is
important to hold a diversified portfolio with exposure to higher growth areas
of the world, such as emerging markets, and select sectors that can grow faster
than the overall economy, such as technology and health care. Link: http://money.msn.com/business-news/article.aspx?feed=OBR&Date=20140811&ID=17849810&topic=TOPIC_ECONOMIC_INDICATORS&isub=3
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