Kamis, 12 September 2013

Post-Microrecession Blues In Trade and Jobs

We marked the end of the year-long microrecession in the United States yesterday, so today, we thought we'd check in on two of the lagging indicators of a nation's economic health: trade and jobs.

Our first chart shows how the year-over-year growth rate in the value of goods between the United States and China has been recorded by the U.S. Census Bureau for each month from January 1986 through July 2013. To account for changing currency exchange rates between the two nations, we have adjusted the values so that they are expressed in terms of the "receiving" nation's currency, with the growth rate of U.S. exports to China being based on the value of those goods expressed in yuan, and the growth rate of U.S. imports from China being based on the value of those goods expressed in U.S. dollars:

Year Over Year Growth Rate of U.S.-China Trade, January 1986 - July 2013

We find that both nations would appear to be have been experiencing sluggish rates of growth for the last several months. Looking just at July 2013, China's economy would appear to have fallen into recessionary territory for the third time since March 2013, as the pace of economic growth within that nation would not appear sufficient to increase its demand for the goods it imports from the U.S. Likewise, the pace at which the U.S. imports goods from China also indicates sluggish economic growth, although this month, it is in positive territory.

The sluggish growth rates observed in the past several months is not surprising given that the U.S. has only just exited a period of microrecession in August 2013, while China's economy has slowed to a very lackluster pace of growth. Since the decisions of what volume of goods to ship overseas is made many months in advance of their arrival at their destination nation's ports, which depends upon the business conditions observed at the time the decisions are made, what these growth rates are communicating are the economic conditions that existed in the respective nations several months ago.

Like international trade, jobs, as measured by the number of employed, also tend to lag behind real changes in the economy. The chart below shows how the number of employed Americans by select age groups has changed since the total number of employed Americans peaked in November 2007, just ahead of the so-called "Great Recession", through August 2013:

Change in Number of Employed by Age Group Since Total Employment Peak in November 2007, through August 2013

If you look at the data at the beginning of the Great Recession, we see that there was very little job loss at the very beginning, and no job loss outside of teens and young adults (Age 16-24) until April 2008, five months after the official start of the 2007 recession.

To take that lag effect for jobs into account, we'll use November 2012 as our start month for measuring changes in the number of employed in the U.S., since that would be five months after our dividend data first indicated the U.S. economy was experiencing recessionary conditions back in July 2012. We obtained the following figures for the net change in number of employed from November 2012 through August 2013 for each of the following age groups we regularly track:

  • Teens (Age 16-19): -58,000 (from 4,468,000 in November 2012 to 4,410,000 in August 2013)

  • Young Adults (Age 20-24): -52,000 (from 13,595,000 to 13,543,000)

  • Adults (Age 25 and Older): +1,003,000 (from 125,214,000 to 126,217,000)

It seems the U.S. economy has been no country for young men, or women, for many months.

Still, with the microrecession just behind us, we would expect to see several more months of lackluster jobs numbers for young Americans before things really pick up as the recovery from the microrecession that ran from July 2012 through July 2013 gets underway.

Perhaps just in time for Christmas!


Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 11 September 2013.

U.S. Bureau of Labor Statistics. Employment Situation Report Archive. Accessed 11 September 2013.

U.S. Census Bureau. Trade in Goods with China. Accessed 11 September 2013.

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