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‘Government And Friends’
One bank sees recession canaries in the US jobs data. And I don't mean the unemployment rate or anyone's namesake "rule."
"Private sector jobs are <40% of total hiring," BofA observed, in this week's installment of Michael Hartnett's popular "Flow Show" series.
Hartnett's away again this week, but Flow Show struck familiar thematic chords in his absence. The figure below illustrates declining participation (there's a bad labor market joke in there) for private sector employers outside of ed
A.I.
First slowly then quickly.
High interest rates and small business sentiment.
Soft landings will not be soft for everyone.
There are makers, takers and drones.
Dumb question, but as the general populace ages, shouldn’t we be expecting the amount of government workers and especially healthcare workers to be a greater percentage of the labor force as a country ages given there is going to be more demands from older people for social security offerings and medicare / medicaid? Per Hartnett’s graphs, the magnitude in change looks to be more than what one would normally expect, but the general direction appears in line with demographic expectations.
I suspect this is a correct observation but I also suspect the trend will last a shorter time than people realize. I’m 80 and most of my friends and family have already died, meaning they won’t need any more health care. That segment of the economy will grow a while yet but I wouldn’t commit any capital to it because too soon, I’ll probably be dead, too, and health care will be left with much unfilled capacity.
US demographics suggest long-term growth in services for the elderly. Look at the size of the cohorts from age 60 on up. Not an industry suitable for robots or AI except in the most dystopian of futures – or perhaps China.
https://www.statista.com/statistics/241488/population-of-the-us-by-sex-and-age/
JL – Japan has been grappling with this ahead of us. Given the nation’s aversion to immigrants, companies have been trying to come up with “carebots” and other non-human helpers. So far “trying” in most cases.
But if Trump returns to the White House, we’d better start paying attention to what Japanese firms are coming up with.
@derek, yes, I am boggled that our industry isn’t more alarmed about the potential quadruple whammy of huge tariffs, mass deportations, a co-opted Federal Reserve, and an weak USD policy. I suspect there is a scenario in which the bond boffins send long rates upward before year-end.