Ironman: Iron Ore, Crude Oil and Labor Share of National Income Keep Declining As Consumer Credit Keeps Rising (Along With House Prices)

Fortunately, 2014 is grinding to a halt if you are long in certain commodities. While some cheer falling commodity prices, they is little reason to cheer if the cause if declining demand (e.g., a global economic slowdown).

Major commodities lost ground in 2014, particularly energy and silver.

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commodoik

And for vegans, plunging commodity prices is excellent news! Soybeans and rice are both down over 20% for the year. But for us omnivores, cattle prices are UP over 20% for the year.

foodcommod

Iron ore, an important element for steel production, was down about 50% in 2014.

ironmanwti

Switching from commodities to labor, we see that labor share of national income has been falling steadily as well, but for a longer time. Real median household income had been falling since 2007, but is showing a slow rise.

laborhrminc

Average wage growth is stalled at 2.1% YoY to go along with declining labor share.

laborshavgwage

Meanwhile, consumer credit keeps rising going in the opposite direction of labor share. Thanks to The Federal Reserve zero interest rate policy.

concredt

House prices (the Case-Shiller repeat sales index for 20 metro areas) keeps rising despite other commodities falling.

laborshcs

Hopefully, 2015 will find global demand increasing for commodities along with wages. Otherwise, we will all have to wear Ironman suits for protection.

ironsmandowney

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  1 comment for “Ironman: Iron Ore, Crude Oil and Labor Share of National Income Keep Declining As Consumer Credit Keeps Rising (Along With House Prices)

  1. shenoiekaant
    February 4, 2015 at 3:03 am

    Many companies have look for ways to improve their iron metal production efficiency to rescue themselves due to price increase.
    http://www.vrfoundries.com/

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