Pew Portrays Population Prognistication Perfectly

There is a great and truly beautiful graphical illustration of the changing demographics of our country that Pew Research put together. There upcomng book, Next America, should provide a lot of great details on where the trend lines are going.  Demographics play a key role in understandingbroader economic trends and jobs trends, so this is fascinating reading. The way they present the data (on my ipad at least) really draws you in as well.

If you have 15 minutes check it out here: http://www.pewresearch.org/next-america/

Read More

Capital Expenditures: Big Boom or Too Soon?

In Fortune, Shawn Tully has a great piece about how some economists are starting to see a solution to our current economic malaise: Capital Expenditures or "capex" for short. Capex is the major investments and purchases businesses make like building a factory, buying equipment like a plane, or investing in new product lines. You can read the article for yourself here:

http://finance.fortune.cnn.com/2014/04/02/hold-on-to-your-hard-hats-a-capital-spending-boom-may-be-coming/

In the article Mr. Tully talks about how some economists see capex as poised to rise and that this increase could have a huge impact on the economy. He says that "A resurgence in capital investment is what America's been waiting for. It would create a virtuous, self-reinforcing cycle of growth."  While I have some concerns with the evidence of the economists he cites (one being improving CEO confidence, which could be due to other factors), he is correct that such a resurgence could pull our economy out of the funk we are in.   Earlier in the article he points out that capex "Now stands at just over 12% of national output, compared with around 13.5% of GDP in 2007". If it were to grow by even half to its normal output it would have an outsized impact on our feeble economy.

The fear that I have though is that if this is occurring too rapidly that it might prematurely drive up prices as resources are bid up to meet business needs.  The jump in prices might reduce the size of an investment (the company builds one less plant as prices eat into the budget) or it could reduce overall demand in the economy (price shocked consumers pull back on purchasing discouraging other companies from investing).  Combine that with a summer that may already have high energy costs due to geo-political turmoil and a frigid winter in the US and the capex recovery could be over before it gets started.

On the other hand, businesses may invest regardless of the winds of economy.  Many organizations think in 5 year business cycles, and while the recession may have thrown a wrench into the best plans times are different now.  The recovery is occurring, albeit slow, and domestically our politics are in a relative tranquil period and may be for months to come.  If there was ever a time to invest in aging infrastructure or new products, that time is now.

Hopefully the latter wins out over the course of the year, although only time will tell.

Read More

More Education Leads to More Money, Also Water Wet and Grass Green

There is a fun tool (or at least fun if you are a jobs geek) over at CNN Money that shows just how many jobs there are that pay different hourly rates.  It breaks down all of the jobs in the United States by $10 dollar an hour increments, and then visually displays then along a bar in relative population size. You can check it out here:

http://money.cnn.com/interactive/economy/us-jobs-wages/?iid=HP_LN

It is interesting that of the 151 million jobs, over half pay less than $20 an hour.  While this should not be surprising as the median household income is under $55,000, what is interesting are the jobs that CNN Money cites as examples of jobs in each category.  In the under $20 an hour category truck drivers and construction workers are cited while in the under $10 fast food workers and personal care aids are representative.  Conversely in the over $20 an hour categories civil engineers and lawyers are present.   This is further emphasis on the importance of education and training as the lower wage jobs have a lack of higher education requirements as a commonality, while many of the higher wage jobs require extensive education.

Read More