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This is an update to a post I did several years ago.September 23, 2011An Employment Trend that Has Not FailedI promised an exponential trend that has not failed. Here it comes!We can get this ratio to infinity simply by continuing to shed manufacturing jobs faster than we shed financial activities jobs. It might not be as easy as it looks though.In hindsight, it has not been easy.The following chart shows the natural...

The following chart compares the growth in the number of retail production and nonsupervisory employees (in black) to the growth in the aggregate weekly hours worked by retail production and nonsupervisory employees (in blue).Click to enlarge.We have "successfully" transitioned to a "weaker than appears" retail employment economy. Get out the party hats.See Also:Sarcasm DisclaimerSource Data:St. Louis Fed: Custom C...

The Fed isn't quite sure what threshold it should be using to determine when to raise interest rates. Can't say I blame them. I therefore thought I'd offer some free (deflationary) advice.Furniture sales and new home sales go hand in hand. Right? So simply raise rates when furniture store sales (as a percentage of disposable personal income) reach "normal" levels again. What could be easier? Transparent. Clean. Consistent.Click...

The following chart shows annual nonstore retail sales as a fraction of total retail sales (excluding food services).Click to enlarge.The growth trend is extrapolated out to 2050. I'm simply showing what the future will look like if the current trend continues. If 10% causes shopping mall pain now (which it clearly does), then what would 20% do in just 17 more years? Or 40% just 17 years after that?A 4.2% growth rate...

Click to enlarge.What's Plan B?See Also:Real Yields: Why They Are Falling (Musical Tribute)Source Data:St. Louis Fed: Custom Cha...

The following chart shows industrial capacity per capita (industrial production index adjusted for capacity utilization and population).Click to enlarge.That's a 0.998 correlation over 27 years of data (Jan 1967 to Jan 1994). And then... Boom! Trend broken big time. That has to be one of the most impressive trend failures I've ever posted on this blog. It was so incredibly consistent and predictable right up until it...

Click to enlarge.The line in black shows real net corporate dividends.The line in blue shows the real trade deficit (same scale).The red line shows the exponential trend in real dividends from 1947:Q1 to 1987:Q1. Note the exponential trend failure (to the upside).Will real dividends stay permanently elevated? Will profit margins stay permanently elevated? Can we be assured that the worst is behind us? Can we expect...

The following chart shows nonfarm payrolls divided by initial claims. I'm using quarterly averages to smooth things out a bit (1967:Q1 to 2013:Q4). In my opinion, the higher the ratio, the higher the potential for layoff surprises.Click to enlarge.The 3rd order polynomial trend channel in red uses the red data points.The 3rd order polynomial trend in blue uses all the data points.I would be among the last to argue that...