Economists Predict a Prosperous 2024 – Should  We Be Worried?

Due to several factors the value of that productive hour rose significantly over the last two years.  In a top-down economy increased cash flow such as tax incentives  are used to buyback stocks, invest overseas or add to the incremental wealth of an individual. The average American with more money in their pocket has no such inclination. Yes, inflation hurts the value of the money they earn, but inflation numbers assume that the buying choices of the average American are static. If the price of a bag of groceries goes up, they will continue to put the same groceries in that bag and purchase them from the same source. The average American isn’t that stupid. They will use their buying power to reward those who offer them the greatest value thus preserving the buying power of their increased salaries. They take the additional cash they earn and go out to eat, go to a movie, buy something for their kids and yes pay for the increased price of groceries.

So as profit margins declined for the investment elites the consumer’s available free cash increased. Their spending lifted the economy. GDP numbers do a very poor job of measuring small business activity but the sure sign that small businesses were thriving was the abundance of “now hiring” signs which often listed a higher hourly wage and offered signing bonuses to new employees. Ironically this increase in demand was one of the contributing factors to inflation. The consumer bought more goods, supply was slow to catch up.  Demand goes up supply doesn’t you have inflation. As we begin 2024 it appears those imbalances are settling and supply chain issues are abating. Given these developments economists now predict a robust economy for 2024. Given their track record, should we be worried?

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