The Fed should be under criminal indictment for this instead.

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The Fed can’t balance a budget for the country, but sure, let’s build a $3 billion palace while Americans can’t pay rent.

U.S. workers just received 53.8% of GDP in the third quarter, the lowest share since the government started tracking this in 1947. That’s down from 54.6% the quarter before and well below the 55.6% average for the 2020s. At the same time, corporate profit margins are hitting some of their strongest levels in decades.

To put this simply: GDP measures the total value of everything the economy produces. Labor share tells you how much of that goes to workers as wages, salaries, bonuses, and benefits versus how much goes to company profits and shareholders. When labor share drops, it means the economy can grow while workers see less of the gains.

My Take
This is the chart that explains why so many people feel like the economy isn’t working for them even when GDP numbers look fine. The pie is getting bigger, but workers are getting a smaller slice. That 53.8% is a record low going back nearly 80 years.

The productivity story makes this even more interesting. Productivity jumped at the fastest pace in two years, which sounds great until you realize companies are using those gains to operate with fewer workers rather than pay existing workers more. Richmond Fed President Barkin basically said as much: businesses are relying on productivity gains to run leaner. Add AI into the mix and you have a recipe for GDP growth that doesn’t translate into hiring or wage gains. This is why I keep saying the headline economic numbers don’t capture what regular people are experiencing. The economy can look healthy on paper while the people who power it fall further behind.

Hedgie🤗