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Main Street vs. Wall Street

Kenneth Reid
Article | 01.14.10 | By
Main Street is struggling with a very weak jobs market, but Wall Street does not particularly care. It is not that Wall Street is heartless; it is just that it knows that a weakened labor force puts operating leverage back in the hands of corporate management. It means greater productivity per dollar of wages, which flows directly to the bottom line.
 
Consequently, although the December employment report came in much worse than expected, the Dow was able to close in the green. Moreover, with 50% of sales in the S&P 500 coming from foreign operations, a retrenching consumer on Main Street has less impact. Additionally, the payroll figure for November was revised upward to +4,000, the first increase in two years. The country needs a +100k month, however, to make a dent in the unemployment rate.
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