🧭 The Weekly Scoop

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Here’s what you need to know this week:

Back-to-back devastating hurricanes, worker strikes, a heated election, and potential WWIII in the Middle East, but the stock market is at record highs. How? The economy is looking pretty good.

Picture the economy as a plane. We were flying high, juiced on jet fuel and maybe a little Fast and the Furious NOS, but inflation was redlining. The pilots (policymakers) said we needed to take it down, stomped on the brakes (or however planes work), and started trying to land the plane. Everyone started screaming, “We’re going to crash!” But policymakers had a steady hand, and the cabin crew (the workers) kept things together. For the past several months, it’s been looking like we were going to have one of those scary landings where you bounce hard and think you’re going to die for a second. Now, we’re coming in for a graceful landing, and some people are actually starting to say we could stay in the air. We can let off the brakes, and maybe we’ll catch a little wind.

That metaphor is what people refer to when they say “soft landing” or something similar. Whether this is just some short-term false hope or the actual start of a strong trend will be decided in the coming months.

Leaving this metaphor, the primary support for the economy over the last several months has been what I’ve been talking about for the past two years: real wage growth. Wages continue to grow each month at nearly twice the pace of inflation. The most significant strain on the economy was that people couldn’t afford a living. Prices of everything we buy were climbing far faster than our incomes. Over the past twelve months, average hourly earnings have grown 60% faster than the cost of living.

Pay workers more, and everyone wins.

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