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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 shows the natural log of annual change in the CPI less food and energy. When using logs, exponential growth (or in this case, decay) is seen as a straight line.Click to enlarge.No matter how hard the Fed tries, it cannot seem to break through the top of the decaying trend channel. So what's the latest tactic? Taper! Good luck on that. Maybe it works. Maybe it doesn't.As seen in the following chart,...

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 the annual change in the 2-year moving average of retail sales (excluding food services). I'm going for a maximum smoothing approach to remove as much noise as possible (while still seeing the underlying trend).Click to enlarge.Good luck blaming the slow and steady growth rate decline (since 2012) on this winter's weather.In May of 2012, I predicted that the next recession would hit on or before...

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...

The following chart shows the US trade deficit with China divided by the price of crude oil (annualized billions of barrels).Click to enlarge.It shows the amount of oil China could buy if they were to use their entire trade surplus with us to do so. That's assuming the price of oil would not be driven even higher in response to increased purchases of course, which is no doubt a bad assumption.The next chart plots the...

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 the annual change in the semiannual average of the producer price index for finished goods.Click to enlarge.1. Heckle the Fed for achieving long-term "stable price" certainty?2. Heckle Jeremy Siegel for warning us that the Fed would raise rates well before 2014?3. Heckle CNBC for warning us what the taper would do to interest rates?4. Heckle Shadowstats for misguided hyperinflation theories?So...