The Nervous Economy

The Nervous Economy

Income inequality is getting larger, leading many to discuss the “haves” and “have-nots” of society. But that discussion misses the subtleties of shifts in economic realities. Three types of shifts help to capture risks facing an economy at the edge of a precipice. First, Wealth Anxiety captures connections between real estate and consumer spending as well as between equity markets and consumer spending. From that perspective, consumer spending could be headed downward. Second, Three Squeezes—salaries, healthcare and housing—are causing stress among many middle-class consumers. Third, Gig Hell is what has emerged from the juxtaposition of digitization and the Great Recession, yielding job displacement, temporary and part-time work and independent contracting, all of which place heavy pressure on those caught in the swirl of changes that have led to the New Economy. These shifts in attitudes and realities will make any economic downturn more stressful than currently anticipated.

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