One brutal reality of the current climate is an extended period of economic pain for the bottom half of the country. The economic recovery from 2009 was only beginning to be felt by this group over the last couple of years as the labor market was tightening.
The financial economy was strong throughout the entire bull market which contributed to rising inequality. In contrast, industries connected to the "real" economy remained weak. Today, the same dynamics are back. The labor market is going to be back in oversupply which will depress wage growth. Depressed economic growth rates will hamper cyclical industries.
Further, this group's financial situation in terms of savings has always been precarious with a large portion of the country living paycheck to paycheck, so this type of economic disruption could be catastrophic for many people, especially as people still have to pay their bills.
Dollar Stores
One beneficiary of this unfortunate circumstance is the dollar stores. The hollowing out of the middle class has been a catalyst for these stores' growth. As grocery stores and retailers have gone out of business, dollar stores have stepped into rural and suburban communities. Over the last decade, 10,000 new dollar stores were built in the U.S. And, it's expected that 20,000 new stores are going to be built by 2030.
The two dominant players in the space are Dollar General
Pawn Shops/ Cash Advance
Another industry that does well during these periods is pawn shops and cash advance locations. Some believe that these stores are predatory and take advantage of desperate people, while others see them as providing an essential role to an underserved community. In many states, they face regulatory risk, and this is always a threat especially if Democrats are in power.
First Cash Financial Services
