Are Video Games The Reason Why Mortgage Rates Are So Low?

OK, OK…I realize the headline might be a little far-fetched, but I ran across this article in 1843 Magazine, The Economist’s lifestyle magazine, and was fascinated. The entire article is definitely worth a read.

Of significance to this blog is the thesis @ryanavent contributes to the great mystery as to why the unemployment rate is at a historically low level yet inflationary pressure remains weak. 

Effectively, the article argues that one of the reasons why the Labor Force Participation Rate is so low is because there is a large pool of eligible workers who are posted up in their parents basements addicted to video games. 

Since the unemployment rate only accounts for those who are looking for work and excludes those who are out of the Labor Force (i.e. addicted gamers), the rate of those out of work who want work is artificially low.

Young man usingh soccer ball for a pillow plays video games.
We can thank this chap for historically low mortgage rates.

Since inflation is one of the primary drivers of mortgage rates and because wages have remained relatively stagnant given the low labor force participation rate, one can argue that low mortgage rates have effectively become a beneficiary to the addictive nature of video-gaming. Thanks Nintendo!

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