Was this email forwarded to you? Sign up here.
Illustration: Aïda Amer/Axios
Online shopping and the gig economy haven't just disrupted traditional brick-and-mortar business, they're disrupting the way U.S. job growth, wage data and inflation are tracked, asserts a new paper from the Dallas Federal Reserve.
What it means: There has been an increase in the number of workers in the gig economy who are either working as contractors or are self-employed, but report themselves as employed. These workers often have less bargaining power and lower wages than full-time employees.
In essence, unemployment should be higher than it is because most gig economy workers should be counted as unemployed or underemployed, according to traditional metrics, but aren't. They also make less money, pushing down wage numbers. That is leading to unusually low readings in the data.
The big picture: Economists have long argued about just how much impact the gig economy has had on the persistently low wages in the U.S. and the change in the relationship between unemployment and inflation. Typically as unemployment falls, inflation rises, but that trend has been undermined in recent years, leading many to question the long-held economic principle of the Phillips Curve.
Yes, but: "These shopping and employment behavior changes are still new enough that the data are insufficient for full statistical analysis," Duca says in the Dallas Fed report.
Bridgewater Associates estimates U.S. equities would be 40% lower than where they are today without the consistent expansion of profit margins, Axios' Courtenay Brown writes.
Why it matters: The world's largest hedge fund is warning that corporations' high profit margins are peaking, posing a risk to the stock market's rally.
Of note: Without the benefit companies got from the tax cut last year, and with higher material and labor costs, analysts expect shrinking profit margins as companies release first quarter earnings.
Go deeper on the wage growth angle: The low-wage benefit for U.S. companies is over
Companies made headlines last year as they gave out a bounty of bonuses to their employees thanks to 2017's Tax Cut and Jobs Act. But those bonuses ended up totaling just 1 red cent in extra compensation for American workers, according to data analysis from the Economic Policy Institute.
What it means: The left-leaning think tank's inflation-adjusted calculations based on Bureau of Labor Statistics’ Employer Costs for Employee Compensation showed that bonuses fell $0.22 from December 2017 to December 2018, and the average bonus for 2018 was just $0.01 higher than in 2017.
"This is not what the tax cutters promised, or bragged about soon after the tax bill passed," Lawrence Mishel, a distinguished fellow at EPI, said in the report.
Peru's former President Alan García. LUIS ROBAYO/AFP/Getty Images
Former Peruvian President Alan García killed himself on Wednesday, reportedly as authorities closed in to arrest him for links to the corruption scandal involving Brazilian construction firm Odebrecht, known as Operation Car Wash, or Lava Jato.
Eye-popping stat: Peru's last 5 former presidents have all been charged with crimes. Three have been sent to jail, 1 is currently on house arrest and the other is an international fugitive.
The last president not sought by authorities for graft was Fernando Belaúnde Terry, who left office in 1985 and died in 2002.
Despite the political chaos, Peru's stock market delivered world-beating returns from the start of 2016 to the end of 2017. An ETF tracking MSCI's Peruvian index (EPU) gained 114% during that time, far outpacing the S&P 500's 43% rise and almost doubling MSCI's broader gauge of emerging market equities, which rose 66%, according to data from Yahoo Finance.