Weekly Updates
Weekly Updates
- We tend to think of consumers as individuals—one person browsing the shops for what they want. But the reality is that much of consumption takes place as a household. Parents rarely send their children out to forage for food in the local supermarket. We buy food as a household. Similarly, housing, power, and transport are often part of a communal budget.
- When investors think about consumer spending power, they really need to think about what is happening at a household level. That is factored into the consumer price measure (which uses the basket of goods as household purchases). Thinking about households also makes a difference to income measurement.
- Markets often focus on individual wage growth as a proxy for income. This is becoming less useful as societies age—when pension or investment income become proportionately more important. It is also less useful in a world where labor force participation is rising.
- In many developed economies, female participation in the workforce has rebounded more than male participation in the past year—following a pandemic-era drop. While an individual may face declining real wages, a household with more members working could have increasing real household income. This means that consumer spending power is not necessarily as bad as headline real wages imply.
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