Saturday, August 31, 2013

The Health of Our Service Economy

The following chart shows the ratio of service-providing employees to all non-farm employees.


Click to enlarge.

More than 86% now work in the service-providing industries! Hurray! Never healthier!

The next chart shows the year over year change in the total nominal amount we're collectively spending on services.


Click to enlarge.

There is still 2.5% growth!
Our service economy is therefore still healthy!
The present is still bright!
I still gotta wear shades!

I have mercifully spared you the pain and suffering of short-term and long-term trend lines. Oops. I probably should not have mentioned that. Sorry!

Hey, at least I didn't point out that the current 2.5% growth is almost entirely made up of smoke and mirrors inflation. That really won't add much to "real" services job growth from here if it continues. Oops. I did it again. Sorry!

I'm drawing the line. No amount of torture could make me confess what would happen to services employment if the growth rate in services continues to fall like it did as the dotcom bubble was popping or as the housing bubble was popping. @#$%! There's nothing I can say now to adequately express my remorse over implying the obvious. Shame on me!

I'm determined to end on an upbeat note though, so trust me on this. The future is still so bright! I gotta wear moonshades!

“I guess I just prefer to see the dark side of things. The glass is always half empty. And cracked. And I just cut my lip on it. And chipped a tooth.” - Janeane Garofalo

See Also:
Still Investing

Source Data:
St. Louis Fed: Service-Providing Employees / Total Nonfarm Employees
St. Louis Fed: Personal Consumption Expenditures: Services (YoY)

4 comments:

Troy said...

http://research.stlouisfed.org/fred2/graph/?g=lXW


is a chart I made today that blew my mind about our so-called service economy.

Yeah, it services you alright.

Stagflationary Mark said...

Troy,

Yeah, it services you alright.

That's why Dr. Bernanke is repeatedly performing resurrectal exams.

I sure hope there's not a blockage someday!

Gallows humor. Shame on me.

Troy said...

Krugman is talking over on his blog now about $2T of missing goods and services not produced due to not enough stimulus 2011-now.

I wonder if he understand that more than half our incomes are going towards housing and healthcare.

I don't need any more stimulus there, thanks.

The thing about Japan at least is that they've got their medical costs sorted out, and a tiny baby boom to deal with.

http://research.stlouisfed.org/fred2/graph/?g=lYu

Age 55-64, US vs. Japan

That's it, their baby boom arrived 1947-1950 and was over, while ours wasn't just 10 years, but 18, with demographic center at 1955, age 58 this year.

http://research.stlouisfed.org/fred2/graph/?g=lYv

compares age 65+ populations

2013-65 was 1948, where Japan's baby boom was in year 2 of 3, while the US's was in year 3 of 18.

So Japan is mostly done intaking age 65+, while we're just getting started:

http://www.intellectualtakeout.org/library/chart-graph/projected-number-medicare-beneficiaries-2001-2030

Kinda funny, us Gen X types followed the boomers in school, getting their new schools handed down to us, now we're going to get their new hospitals handed down to us . . .

I'm not a doomer per se -- as long as we can produce enough food and fuel to feed ourselves, nothing else really matters -- but it's weird how little us Americans understand what this upcoming reality is going to bring.

The future is not going to be like the past. I don't think we're heading towards a Soylent Green future, but if we don't get our political process sorted, things are going to get pretty weird around here.





Stagflationary Mark said...

Troy,

I'm not a doomer per se -- as long as we can produce enough food and fuel to feed ourselves, nothing else really matters -- but it's weird how little us Americans understand what this upcoming reality is going to bring.

The future is not going to be like the past. I don't think we're heading towards a Soylent Green future, but if we don't get our political process sorted, things are going to get pretty weird around here.


That's pretty much my thinking as well. I'm a permabear but not a permadoomer. I would like to think that I'm neither an optimist nor a pessimist. Most of the charts I post here are rather gloomy, but they are mostly intended to punch holes in the overly optimistic beliefs seen elsewhere.

Like you, I believe that the future is not going to be like the past, much to the dismay of ivory tower economists like Jeremy Siegel predicting more of the same (extrapolating 200 years of rear view mirror economic data well into the future). Still waiting on those mythical 3.5% real yields and a stock market that could mythically tolerate them!