The chart below shows the net number of people added to corporate payrolls each month in the US. As you can see, it's been going steadily down for the past two years:
I let Excel draw two trendlines through the raw data. If things level off, we get a soft landing. If a straight line is a better predictor, we get to zero by the start of 2024 and then go negative.
There's not really any strong reason to prefer one trendline over the other. They're both equally good fits. It all depends on whether you think the Fed's rate hikes (a) have already done their work and are fading away, or (b) will start to have their biggest impact later this year.
I think it's the latter, but who knows? Which one we get is sure going to make a big difference to next year's election, though.
Those dotted lines mean nothing.
There's also the gigantic, elephant-in-the-room assumption here that the Fed's rate changes are both (1) a primary determinant of this measure, and (2) actually still have the effect in the current economy that dogma/gospel says that they have, and that there isn't a structural reason (e.g., extreme consolidation and oligopoly power) that it might not be very accurate anymore.
I don't think straight lines are a good fit for most dynamics observed in the real world. The rate can't continue past zero into negative territory forever. At some point, it implies no one is working at all. A curved trendline is more realistic because even steep rates of change will tend toward stability eventually.
That said, is this where the inflection point occurs? Hard to say.
Seems more like a reversion to the norm to my eyes. https://fred.stlouisfed.org/graph/?g=17AFd
OT:
Oregon and Washington have accepted formal invites to the B1G and notified PAC-12 they're leaving the conference. Arizona already accepted their invite to Big-12 and Big-12 voted to accept. ASU and Utah have received Big-12 invites and have accepted. You need 6 schools to remain a conference.
What is your post-mortem going to say?
Also Colorado is joining the Big 12.
Your analogy fails because while you know that age and schooling are the important variable tying feet size and spelling scores together, you dont have any idea what the rule should be for job creation/destruction.
Predicting future job growth/destruction based on the number of non-working adults doesnt work very well.
Kevin accepts your premise as he posits the soft landing as a possibility. But job creation isnt closely related to the size of the non-working population , if it were forecasting would be easy and recessions would never occur.
i dont know, i think the political dynamic is set and even a terrible recession prior to Nov 2024 will not change the result )narrow biden win)
As a risk adverse person, I would prefer a significant Biden win, along with the Democrats control of the House and Senate. A good economy will help enormously. I remember the large expected winning margin for Hillary, which evaporated quickly in 2016.
It is sort of like charting a kid's shoe size and their spelling scores.
You'll see that kids with bigger feet spell far better than kids with little feet.
In order to get any meaningful information, you need to take the age of the kids into account.
So you are completely wrong.
The chart you are showing means nothing without taking into account the number of people available to work.
As people get hired, the pool of potential workers shrink.
Neil
"The chart you are showing means nothing without taking into account the number of people available to work.
As people get hired, the pool of potential workers shrink."
You are technically correct in your last sentence.
But there's more at play here
The labor force of people aged 25 - 54 here in the U.S. has been shrinking as population growth tapered off. Add to that the COVID years and you can see that for many folks working until their 70 or even working INTO their retirement years has now become too risky. Add to THAT the performance of the stock market over the last 25 years and those who invested heavily into 401k plans provided by the employer in lieu of fixed retirement payments (pensions) now have LOADs of money available to them in addition to social security.
We have become victims of our own success, at a time when we NEED as many employees as possible.
Old measurements, old outlooks, old models just don;t work anymore.
And the government is slow to change their ways or measuring things.
Yup
New job formation is absurdly complicated and it is wrong for Kevin to create a chart that has zero chance of being meaningful.
At absolutely full employment the number would exactly equal the change in the size of the work force since, in my absurd hypothetical, there would be no unemployed people. In this case, it would be crazy to complain about the number flatlining at zero.
Simple charts that say absolutely nothing are not helpful.
++++++++++
The odds are fairly good that the stock market returns over the next 30 years will be the worst in history as baby boomers sell their investments to fund their retirement.
"The odds are fairly good that the stock market returns over the next 30 years will be the worst in history as baby boomers sell their investments to fund their retirement."
Considering that over 530 of the world's largest and most influential international companies are listed on the NYSE, spanning across 45 countries, it's not clear to me why the value of the stock market is closely tied to the American boomers.
I agree with you, but it made me wonder just how much of wealth/stock ownership in American companies is in American boomers' hands. Is it 30%? More? Less? How much more or less? I'm curious.