Saturday, July 27, 2013

Demographics vs. Yields (Musical Tribute)

Click to enlarge.

The black line shows the employment level of 16-24 year old workers divided by the employment level of 55+ year old workers (left scale).

The blue line shows the 3-month treasury yield (right scale).

Coincidence? Let's make a scatter chart of that data.

Click to enlarge.

That's a fairly high correlation. I bet we can do better though. The data is noisy. Let's smooth it out by using 10-year moving averages and try again.

Click to enlarge.

Coincidence? I think not. Let's do another scatter chart.

Click to enlarge.

That's a very high correlation. If this chart is any indicator, then those anxiously awaiting a return to the interest rates of the 1970s may be in for an extremely long wait.

This is not investment advice.


I noticed a labeling error in my charts. It has been corrected.

Source Data:
St. Louis Fed: Custom Chart


Stagflationary Mark said...

I made a mistake in these charts and am currently correcting it.

It isn't 55+ year olds / 16-24 year olds. It's the other way around.

I should have it fixed shortly.

Stagflationary Mark said...