The consumer of last resort (the U.S. shopper) is in the doldrums. The combination of (1) disappointing retail sales, (2) stagnation in real wages (with the exception of high-skilled jobs), and (3) loss of momentum in the labour market (with unemployment rates staying at 5.1% only because of a drop in the labour participation rate) suggests that the trend will not reverse any time soon.
WELLNESS BAROMETER
This point about the “stagnating” consumer alludes to the broader issue of the lost middle class and of rising inequalities, not only in the US, but in other high-income countries as well.
The way in which it correlates with wellness is illustrated by two recent pieces of research. One comes from the recent Nobel Laureate in economics, Angus Deaton. He and his wife, Anne Case, just co-authored an academic paper showing that the mortality rate for white U.S. men and women aged 45-54 with less than a college education increased markedly between 1999 and 2013, reversing decades of progress towards longer lives. The most proximate cause is drugs, alcohol and suicide. “Half a million people are dead who should not be dead” observe the co-authors.
The other is about a rise of gout (which can reflect a prevalence of junk food in one’s diet) and malnutrition in the UK (the number of hospital admissions for primary or secondary diagnosis of malnutrition has increased by 51% in the past five years from 4,850 to 7,400). It is shocking that diseases of the Victorian Era could make a comeback, but health campaigners attribute this to rising food poverty as Britain goes through spending cuts.
In the coming years, the issue of how wellness correlates with real income will gain more prominence. New ways and bolder policy measures will have to be found to ensure that the benefits of wellness are more equally distributed.
By Thierry Mallaret, predictive economist and board member of the Global Wellness Institute
