Daily update
Daily update
- A large part of the world is not working today, in celebration of workers. But the old order is changing—and increasingly we may need to celebrate profits. One of the features of the pandemic was an explosion in small business creation. More people have side hustles: Selling on eBay; renting on AirBnB; writing economic books that are widely available for purchase. Self-employment and contract work have increased. The income from these endeavours is often classified as profits.
- Thus, dividing an economy between profit and wages is increasingly unhelpful. If the TikTok content creator’s profit puts food on the table, then the economic effect of such income is the same as a traditional wage. Similarly, savings of the self-employed may be classified as “corporate” but are in fact used as “household”—this additional (disguised) pot of money might contribute to consumer resilience.
- The Federal Reserve delivers its policy decision today. No change is expected. The Powell Fed has had remarkably little dissent in recent years, despite the poor quality of the decisions taken. Today’s focus will be on the press conference.
- Unfortunately, there is no hope of a medium-term policy framework being set out today. Expect Pavlovian responses to the most recent data releases.
