Tuesday, November 29, 2016

The US is A Service Economy and Has Been for A Very Long Time

President-elect Trump has promised he'll bring back high-paying manufacturing jobs.  Unfortunately, macroeconomic forces disagree with him.

The above chart places total service sector and goods-producing jobs on a logarithmic scale.  You'll notice that total manufacturing jobs plateaued in the late 1970s.  Meanwhile, total service jobs have consistently increased since the beginning of the 1960s.

The above chart plots total monthly increases of service sector (red) and goods producing (blue) jobs. For the last four expansions, the service sector has consistently created far more jobs than the goods producing sector.

The US is a service economy.  Period.