Traffic Declines Part 2

Apr 3, 2024 | Finconomics 101, No Bull Economics

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In our last analysis, we mentioned that we have yet to hear a logical explanation for the troubling trend of the persistent post-covid traffic declines which should be a major concern for every retail stakeholder. In our opinion, a look at the labor participation rate provides a clue worth exploring.


  • How do you define a depression?
  • The unemployment rate is perhaps the best measurement by which to judge if we’re in a depression, according to Stephen Woodbury, an economics professor at Michigan State University. The unemployment rate peaked at 25.6% in May 1933 during the Great Depression according to NBER data.
  • Fast forward to today & we see that the labor force participation rate is currently just 62.5% which implies that 37.5% of the eligible workforce is not employed, or unemployed for all practical purposes, and this does not include those that are actually unemployed according to the government’s definition. While some of these people are disabled & some retired early, this is a big percentage of idle people which makes the Great Depression from the 1930’s look like a time of great productivity.

Labor Force Participation Rate Graph

Is it possible that more Americans are opting out of consumerism?

  • While this data alone does not fully explain the persistent retail traffic declines post-covid as discussed in our last analysis, it may provide a clue to a secular change in the economy which may become more apparent over time.
  • The nearly complete devastation of the middle class is becoming more apparent as the cost of housing, college education & even vehicles grow increasingly out of reach for the average American. The Fed’s rate hikes are clearly aggravating the condition.   
  • We need a middle class willing to buy into a vision of the American Dream sufficiently such that they will contribute to the game by shopping at their favorite restaurants & stores. A disenfranchised American makes for a terrible consumer.
  • Retail is fueled by productively employed consumers who are optimistic about the future. Consumerism is an economic model worth fighting for as it represents a virtuous cycle in which society self-sustains by working hard to earn enough to pay for the necessities, with something left over for the little treats that make life worth living. All is good, so long as consumers keep their debt to a manageable level.

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