Joining us on the podcast today is Denise Chisholm, Director of Quantitative Market Strategy. She speaks with host Pamela Ritchie about productivity and unit labour costs, higher wages and smaller margins misconceptions, as well as the global impact of AI. Denise says unit labour cost is a key variable impacting the stock market right now. She says there has been an abrupt normalization. One of the biggest concerns in the market is not goods cost because goods have been in deflation, but it is the middle part driven by wage growth. And in regards to the stickiness of wages, she says, what it actually means is that it’s good for profit margins on a go-forward basis. Denise also talks about the “miracle aspect of productivity.” She says two major factors contributed to the current situation. A.I. was a game-changer for productivity in software and computers and COVID created a positive productivity shock. This in turn generated a positive outlook for productivity cycles and their impact on the stock market.

Recorded on November 24, 2023.

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