Slow descent or ready for takeoff?
Why not both? Some thoughts on what the new year might bring
which is it? high unemployment and doom is nigh, or high profits and the animal spirit unleashed?
ready for takeoff (maybe)
but what if it’s the other bad thing? there’s plenty of creaking, if you want to find it
another possibility: good-ish but different
what did you think ‘doing more with less’ meant? vibes? essays?
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2026 outlooks abound, but there’s a weird feature of our present setup that’s consistently overlooked.
On the one hand, we have steadily-rising unemployment:
Unemployment isn’t in crisis territory yet, but it’s definitely getting higher than anyone would like.1
Rising unemployment (especially for the youngs) is generally not considered a sign of strength.
On the other hand, we also have some pretty impressive forward estimates for revenue and profit growth:
Earnings led growth for pretty much every sector (but consumer discretionary and real estate).
Across-the-board revenue and profit growth generally is considered a sign of strength. And to be clear, while these are forward estimates, they’re not some kind of bold reversal of a downward trend. To the contrary, revenue and profits are expected to keep growing, in addition to all the impressive growth they’ve booked thus far.
So, how does it work?
How do (publicly traded) firms continue to trend up-and-to-the-right, against a backdrop of rising unemployment? Is the economy weakening, or is it going from strong to stronger? It’s a bit peculiar.
ICYMI
Ready for takeoff?
One possibility, of course, is that unemployment stops rising, and heads back in the other, more positive, direction.
In that case, everything is fine. Better than fine, even.
There’s some evidence that that might be in the offing, if you look at job postings, at least:
