Brick & Mortar Banks Go Bust, Fearful Consumers, and Surplus of Labor Shortages

The banking industry plays a crucial role in the economy by facilitating financial transactions, providing loans, and offering various financial services. However, the industry has experienced notable collapses and economic crises throughout history. One significant event was the Great Depression in the 1930s, which saw numerous bank failures and the introduction of regulatory measures like the Glass-Steagall Act. More recently, the global financial crisis of 2008 led to the collapse of major financial institutions such as Lehman Brothers and Bear Stearns, resulting in widespread economic repercussions. These incidents highlighted the importance of regulatory oversight and risk management within the banking sector. As of September 2021, the total assets of commercial banks in the United States amounted to approximately $21.4 trillion (source: Federal Reserve). In 2020, the net income of US commercial banks reached $147.9 billion, despite the challenges posed by the COVID-19 pandemic (Source: Federal Deposit Insurance Corporation).

Low consumer sentiments can have a significant impact on the economy and various industries. When consumers are pessimistic about the future, they tend to reduce their spending, which can lead to a decline in overall economic activity. This decrease in consumer spending can negatively affect businesses, particularly those in the retail, hospitality, and discretionary sectors. It can also contribute to job losses and slower economic growth. The University of Michigan Consumer Sentiment Index, which measures consumer confidence, dropped to its lowest level since 2011 in April 2020 amid the COVID-19 pandemic. During the 2008 financial crisis, the Conference Board Consumer Confidence Index in the United States fell to its lowest level in over 40 years, reflecting the significant impact on consumer sentiments during that time.

Labor shortages resulting from a large number of people retiring can have wide-ranging impacts on economies and industries. As experienced workers exit the workforce, there may be a scarcity of skilled talent to fill their positions, leading to a loss of institutional knowledge and potential disruptions in productivity. The shortage of workers can also drive up labor costs and put pressure on businesses to attract and retain qualified employees. According to the U.S. Bureau of Labor Statistics, by 2029, all baby boomers will be older than 65, and they are projected to account for over 20% of the total U.S. population. A study by the Pew Research Center estimated that roughly 10,000 baby boomers are reaching retirement age each day in the United States, creating a significant impact on workforce demographics and labor supply. The National Association of Manufacturers reported that in the manufacturing sector alone, nearly 4.6 million jobs could be left unfilled by 2028 due to retirements and a lack of skilled workers.

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