Labour's share of income and the outlook for US equities

Labour’s share of income in the US nonfarm business sector hit its lowest level since at least 1947 in Q3 according to data released last Thursday by the Bureau of Labor Statistics (BLS). (See Chart 1.) A continued drop in labour’s share would be a boon for corporate profits. But we doubt it will happen. And even if it does, it will not necessarily be accompanied by a stronger stock market.

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