A recession indicator?

Rising wage costs, and a new bill progressing through Congress that will increase Federal minimum wages are causing concerns for small businesses. Business owners mentioning labor costs as their greatest problem just hit an all-time high. Historically, when NFIB surveys for cost of labor as the single most important problem for small businesses reaches and index level of eight, a recession has followed. Currently, the index has reached 10. This raises the risk that corporate profit margins will begin to narrow. This could cause the Fed to regain some of its lost enthusiasm for tighter monetary policy, which would likely presage lower growth.



DISCLAIMER: This report was prepared for circulation to institutional and sophisticated investors only and without regard to any individual’s circumstances. This report is not to be construed as a solicitation, an offer, or an investment recommendation to buy, sell or hold any securities. Any returns discussed represent past performance and are not necessarily representative of future returns, which will vary. The opinions, information, estimates and projections, and any other material presented in this report are provided as of this date and are subject to change without notice. Some of the opinions, information, estimates and projections, and other material presented in this report may have been obtained from numerous sources and while we have made reasonable efforts to ensure that the content is reliable, accurate and complete, we have not independently verified the content nor do we make any representation or warranty, express or implied, in respect thereof. We accept no liability for any errors or omissions which may be contained herein and accept no liability whatsoever for any loss arising from any use of or reliance on this report or its contents.

© 2019 PGM Global Inc. All rights reserved. This report may not be reproduced, distributed or copied, in whole or in part, in any form, without the written consent of PGM Global. PGM Global Inc. is a CIPF member.