Fast Food Worker Wages Compared To Labor Market

Many popular phrases on Wall Street are completely wrong and offer poor advice. One popular moniker that falls into this category is “the easy money has been made.” The only way it looks like easy money has been made is in hindsight. It’s easy to say the year to date gains were simple to obtain, but the reality is it was scary to buy stocks early in the year and in late 2018 even though they were cheap. During the shutdown there wasn’t much government economic data available. The data we had showed global developed market growth was slowing.

It turns out that the American economy has been outperforming other developed markets, but this was an unknown 6 weeks ago. The proof that these profits weren’t easy money is the chart below.

The TD Ameritrade investor movement index shows retail investors became more bearish in January as stocks rallied. The index fell from 4.41 to 4.28. This rally has been met with skepticism. On the other hand, just because retail investors aren’t euphoric, doesn’t mean stocks can’t pull back. Currently the 14 day RSI signals stocks are overbought as it is at 74.65. Anything above 70 signals stocks are overbought in the near term.

To be clear, there is no sustainable way to make easy money. It’s possible to have a lucky trade where something you don’t predict ends up leading to profits.

Fast Food Workers Are Getting A Raise

As we mentioned in a previous article, wage growth was revised higher in December which put it above rent inflation. Wage growth for production and non-supervisory workers, which make up 82% of the work force, was 3.5% in December which was the highest of this cycle. It fell to 3.4% in January but that’s still strong. It’s worth pointing out that including 82% of workers means the lower and middle class comprise this group. It’s not only minimum wage workers.

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