Why are people so upset?

I was traveling this week conducting seminars for our advisors and their clients. After my prepared remarks one evening the Q&A turned into a lively hour long “town hall” type format. It became obvious many of the people in the room share what a large number of Americans feel — there is something wrong with the economy.

Last night I received a research report from Goldman Sachs that asked, “With the economy at full employment, why are so many people upset?” Their first answer was simple and something those in attendance at my seminars felt as well — there is a large disconnect between people that are doing well and the rest of the country. This is clear in both the income levels as well as the outlook for younger Americans.

These charts show the divide that is likely creating the frustration. Goldman went on to also explain that they found a large swing towards Trump support in counties that are directly impacted by trade with China (meaning local industries have been hurt by “free” trade.)

As I said at the seminar, this type of divide is not necessarily something that will cause immediate declines in the market, but it is a longer-term problem that needs to be solved. The longer this goes on or the wider the divide, the more likely we are going to see the divide in our country increase, which is bad news for the economy and the markets over the longer-term.