Image Image Image Image Image Image Image Image Image Image

Affluent Investor | April 28, 2017

Scroll to top

Top

No Comments

A Nation of Part-Time Renters

Part-Timers

Amidst all the talk of an economic recovery that is supposed to kick into high gear right about now, the truth is that we’re becoming a nation of part-time workers that are just finding it harder to afford the purchase of a single family home.

There has been a lot of fanfare in the past few months about a rebound in the labor market. However, it may come as a shock to those who enjoy portraying the notion that debt and money printing saved the world, that aggregate hours worked has remained unchanged since May. This means even though non-farm payrolls have increased around 195k in each of the last few months, the actual output of labor hours hasn’t improved at all. Therefore, we can describe the labor market as one that is reducing the hours of full-time employees and hiring a concentrated amount of part-time workers. Couple that with the lack of productivity in the economy, averaging zero percent annualized growth in the last four quarters, and you get an economy that’s simply stuck in neutral.

Consumers have been burdened with a lack of real income growth as well. Perhaps this is why the home-building sector chose in July to erect an increase of 26% multi-family dwellings, as opposed to a reduction of 2.2% in single-family homes.

This great country should be able to do better than producing a nation of part-time renters.

But I guess after nearly five years of ZIRP and QE, this is the best the Fed can do. Why anyone thought more debt and inflation would save us is beyond me. And now that Bernanke has finally threatened to remove his money-printing crutch, interest rates have started to climb significantly. It can’t be much of a mystery what the rise in rates will do to housing, stocks, employment and the economy. So I have to wonder how much longer the Fed will keep watching, as a rising cost of money delivers s a crushing blow to an economy that is already on life support.

My suggestion for the Fed and D.C. is to admit your failures and let the free markets work it all out. We all will be far better off in the long run. But I doubt I’ll get my wish.

Michael Pento is the President and Founder of Pento Portfolio Strategies (PPS). PPS is a Registered Investment Advisory Firm that provides money management services and research for individual and institutional clients.

Michael is a well-established specialist in markets and economics and a regular guest on CNBC, CNN, Bloomberg, FOX Business News and other international media outlets. His market analysis can also be read in most major financial publications, including the Wall Street Journal. He also acts as a Financial Columnist for Forbes, Contributor to thestreet.com and is a blogger at the Huffington Post.

Prior to starting PPS, Michael served as a senior economist and vice president of the managed products division of Euro Pacific Capital. There, he also led an external sales division that marketed their managed products to outside broker-dealers and registered investment advisors.

Additionally, Michael has worked at an investment advisory firm where he helped create ETFs and UITs that were sold throughout Wall Street. Earlier in his career he spent two years on the floor of the New York Stock Exchange. He has carried series 7, 63, 65, 55 and Life and Health Insurance Licenses. Michael Pento graduated from Rowan University in 1991.

Become An Insider!

Sign up for Affluent Investor's free email newsletter and receive Jerry Bowyer's Special Report, "How to Be an Affluent Investor in the Age of Obama & Ineffectual Republican Opposition."



The Affluent Mix

Become An Insider!

Sign up for Affluent Investor's free email newsletter and receive Jerry Bowyer's Special Report, "How to Be an Affluent Investor in the Age of Obama & Ineffectual Republican Opposition."