Corporate profit margins have been on the tear, largely due to the American worker getting squeezed.
Yet, despite high unemployment and stagnant wages, consumer spending has been resilient.
In fact, this is a trend that’s been going on for a while.
In a new research note about corporate profit margins, Morgan Stanley’s Gerard Minack discusses this.
“What has been peculiar to the US is that consumer spending remained strong in the face of declining wage income share,” he writes.
Below is the chart he provided. It’s weird.