The Service sector increasingly dominates the U.S. labour market

The private service sector in the United States now accounts for over 71% of all jobs given the growth in entertainment, tourism, healthcare and educational services. The exponential growth of the internet and people buying more experiences (like travelling or eating out) rather than buying goods means the goods-producing industries (like construction, manufacturing and mining) have seen a decline in jobs and now contribute less than 14% of all jobs. Government jobs have contributed around 15% consistently to the overall labour market over the past 50 years.

US goods services government jobs

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Here’s why wages aren’t rising despite record employment and labour shortages

Both the United Kingdom and the United States currently have record multi-year high levels of employment, yet wages haven’t kept up with inflation for the vast majority of people causing a real income squeeze. Although the U.S. recently reported the highest wage growth since the last recession most people don’t feel their wages are keeping up with rising prices. What is going on?

US wage increase annual until August 2018
Source: U.S. Bureau of Labor Statistics

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Currency carnage everywhere, here’s how every currency in the world has performed against the US dollar over the past year

What a difference six months makes, here’s the performance of the US dollar against each currency as of the 5th of September 2018,

USD 1-year change 20180905
USD 1-year change mapped (data as of 05-September-2018)

Notes: 1. We have excluded the performance of Angola, Sudan, Argentina, Turkey and Venezuela on the map because they are major outliers. They are included in the data set below. 2. Currency price data updated 05-September-2018

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Australian credit growth is slowing with Investor housing credit growth slowest ever, Broad Money Supply growth slowest since the last recession 26 years ago

Australian credit growth is slowing but outstanding debt remains at historically high levels. Housing credit growth, personal credit growth, investor housing credit growth and business credit growth are all slowing. But the rather surprising thing is broad money (M3) supply growing at a 12-month rate of just 1.9%, the slowest since 1992 when Australia faced eight consecutive quarters of declining economic growth.

Australia Broad Money M3 12-month growth rate until July 2018
Data Source: Reserve Bank Of Australia

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Do nations with balance of payments or trade surpluses really outperform those with deficits?

Does a balance of payment (or trade) surplus equate higher growth? Not necessarily, Australia which has had deficits for over forty years has grown faster than Germany which has had over forty years of surpluses. Does a current account surplus (i.e. exports greater than imports) mean a nation is doing better than other nations with current account deficits? The answer is no, what really matters is why the deficits exist.

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Highlights from August 2018

Here are highlights from August 2018,

Our three most read posts in August 2018

Do economic fundamentals matter anymore? (Most read for a second month running)

The S & P 500 is up 180% since the end of the last U.S. recession but the average wage is only up 21.2%, disposable income up 24.6% and GDP up 39.5%

London house prices have fallen most since 2009 but it is not what it seems        

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The UK’s net worth is now estimated at £10.2 trillion, an average of £155000 per person

The United Kingdom’s net worth was estimated at £10.2 trillion in 2017 or an average of £155,000 per person as per the Office for National Statistics. UK net worth more than trebled between 1995 and 2017, and much of this was from growth in the value of land. Land accounts for 51% of the UK’s net worth. The UK’s net worth rose by £492 billion from 2016 to £10.2 trillion in 2017.

UK Net worth 2018
Data Source: Office for National Statistics

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Here’s how the demographic and economic statistics look for candidate members of the European Union

We will be publishing a number of statistics for the United Kingdom (and the European Union) over the next few days in the run up to a major piece we will be publishing on the real economics of Brexit.

Montenegro, the former Yugoslav Republic of Macedonia, Albania, Serbia, Turkey, Bosnia and Herzegovina and Kosovo are countries on the road to join the European Union.

European Union Membership 2018
Compiled by thistimeitisdifferent.com

 

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The U.S. economy is set to contribute its highest share of global GDP since 2007 as other economies everywhere else stumble

The U.S. economy is doing great and is set to contribute 25% of global Gross Domestic Product (GDP) this year, its highest share since 2007. The rise of the U.S. dollar and increases in interest rates are squeezing emerging economics at an unprecedent pace. But it isn’t just emerging economies that are feeling the squeeze, Europe has its problems with Italian debt (and yields), the Australian dollar which has long been considered a growth asset has been falling this year and elsewhere trade worries and rising oil prices are having a big impact on other nations. Even German factory orders are the weakest in years as the U.S. is truly taking back economic leadership.

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The S & P 500 is up 180% since the end of the last U.S. recession but the average wage is only up 21.2%, disposable income up 24.6% and GDP up 39.5%

The S & P 500 has had a stellar run of nine and a half years of gains closing at a new high in the week gone by. It is up 300% since the 9th of March 2009 when it hit a multi-year low in the aftermath of the financial crisis. Even considering the time post the end of the last U.S. recession, the S & P 500 has outperformed every major financial metric by a big margin.

SP 500 stellar rise
Data Source: U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, S&P Dow Jones

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