In this post, Edward Lambert takes a deeper look at capacity utilization, with a strong suggestion that it's more important to the economy than the 16% contribution that industrial production makes to the total. So maybe I have my assumption backwards.
First a H/T to Mish. Graph 1 is one He recieved from one of his readers, with the quote: "It seems rather unlikely that private economic activity is poised to accelerate under these conditions." Mish concurs, and so do I. The graph shows Growth in Bank Lending Per Capita (Black) and Real Final Sales Per Capita (Blue). Both are rolling over from extremely anemic recovery peaks.
Graph 1 - Lending Growth/ Cap and Real Final Sales/Cap
Next, a huge H/T to Stagflationary Mark at Illusion of Prosperity, who sometimes looks at data and relationships that I would never even think of, and often goads me into a different perspective. He has graciously allowed me to use some of his graphs. Graph 2 shows the YoY % change in capital goods orders for non-defense industries. Mark added a twelve month moving average which is clearly sloping down, and is now at 0%. In the following graphs, all trend lines and modifications are Mark's.
Graph 2 - Non-defense Capital Goods Orders
Graph 3 shows Real Manufacturers' Sales per Capita. I've added TCU in blue. Since the beginning of this data set in 1990, it looks as if these sales have to grow in order to keep TCU constant. Alas, though, they've leveled off.
Graph 3 - Real Mfg Sales/Cap and TCU
Graph 4 - Goods Producing Employment
Graph 5 - Sales and Office Employment
Graph 6 - Personal Consumption Expenditures - Services
This is probably why the fraction of employees in service industries has flat-lined, as shown in Graph 7.
Graph 7 - Service Employees / Total Non-farm Employees
Graph 8 - Real Disposable Income - YoY % Change
Not so well, as it turns out.
This doesn't mean we're going to slip back into a recession next week. I think a Japan-style decades-long doldrums is a more realistic possibility. All that requires, as graph 9 indicates, is to keep doing what we've been doing this century. Graph 9 - US Real GDP/Employed person divided by Japan Real GDP per Employed Person, is dead flat this century
Graph 9 - USARGDPC/JPNRGDPC
I'd really like to be wrong about this.
But I can't think of any reason to suspect that I am.
3 comments:
Strong argument! Good evidence. I especially like those color bands on the graphs, Mark's second order polynomial channel and your pink-on-blue in Graph 8.
Nothing has changed, really, except things got so bad that people started noticing. So it should not be surprising if all the trends continue downhill.
I like the post title, too.
Thanx.
Graph 8 is Mark's, too.
I've made some editorial changes for clarity.
Cheers!
JzB
As you know, I'm a chart junkie on my blog. As of this moment, I've done 1,261 posts with charts in them since the fall of 2007. I will no doubt be adding to that total today.
It was very interesting to see which charts of mine you would use to help sum up our shared long-term rational nonexuberance.
For what it is worth, I tried to sum it up in 5 charts back in 2012.
The 5 Charts I Shared with My Tax Preparer
So many exponential trend failures, so little time. Sigh.
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