Click to enlarge.
We continue to fall behind the exponential trend that was established between 1939 and 2000. It is virtually impossible to return to the red trend line.
The next chart shows the difference between where we are now and the red trend line.
Click to enlarge.
That's 39.1 million missing jobs.
Click to enlarge.
The chart above shows why it is impossible to return to the red trend line. Over the long-term, we cannot grow employment faster than we grow our population. At the very least, we can no longer add women to the workforce like we once did. Women now make up roughly half of it.
The last chart shows weekly unemployment claims as a percentage of nonfarm payrolls.
Click to enlarge.
We may think unemployment is bad now (and it is), but it can clearly get a lot worse. As seen in the blue arrows, the long-term trend that started in 2000 is not working in our favor.
I remain firmly in the bears' camp long-term.
Source Data:
St. Louis Fed: Total Nonfarm Payrolls
St. Louis Fed: Initial Claims
As a man, I worry that men's participation in the workforce will continue to decline while women continue to answer phones in pointless admin jobs.
ReplyDeleteAs a human being, I just worry for everyone, but especially for myself.
word verification is stesse - not quite stasi.
Good set of charts. My thought is exponential growth of NFP was due to credit growth. Now that credit growth has stalled and average wage is stagnant at best, as you say, there's no returning to the trend line.
ReplyDeleteshtove,
ReplyDeleteAs a human being, I just worry for everyone, but especially for myself.
Don't let your boss know. Robots never worry. Sigh. (Gallows humor.)
Scott,
ReplyDeleteMy thought is exponential growth of NFP was due to credit growth.
Missing Jobs by Gender
Note what happened to the growth of jobs for women. They were growing exponentially and then saturation appeared.
That said, it was the unsustainable debt trend that turned me bearish in 2004. We were acquiring debt like the exponential employment trend would continue forever. Oops.
It's a complex system and it is therefore hard to distinguish cause from effect. It is not at all hard to spot an exponential trend failure though (and that is true both for jobs and for private debt).