Thursday, October 11, 2012

Manufacturing Employees vs. Treasury Bills

The following chart shows the 20-year moving average of 3-month treasury bills and the 20-year moving average of manufacturing employees.

Click to enlarge.

Now lets' move to a scatter chart of that same data.

Click to enlarge.

Correlation does not prove causation. That said, I think a strong case could be made that there is a definite connection here. Where will the jobs of the future come from when we have fully automated factories? I certainly wouldn't want to be one of a billion Chinese workers when their factories are fully automated.

There are currently 11.9 million manufacturing employees in the USA. We are extremely likely to fall off of this chart over the next 20 years. We could therefore be stuck with 0% treasury yields for an extremely long time (perhaps even my lifetime). This also explains why I'm not terribly worried about hyperinflation any time soon.

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart


TJandTheBear said...

Cow Milking Robot

Stagflationary Mark said...

One of the first posts on my blog involved cows. No joke!

September 23, 2007
Productivity Miracle

Add on a productivity miracle. (As a side note, I feel very sorry for the cows.)

EconomicDisconnect said...

Finally seeing the Robopocalypse as the risk that is is! Kidding aside, nice post Mark.

Stagflationary Mark said...


I think I get a bit of that each night as the automated phone systems try to contact us.

I sure would like a "Do Not Call" list that actually worked. What are the odds of that ever happening though? Sigh.