Yep, you read that correctly. According to the latest issue of The Economist, over the past 2-3 years, the American economy has almost completely reinvented itself and has changed from the centrally consumer-driven economy of 5 years ago to a far more diversified one.
One main change that stands out in the article comes from our nation's exports, something that's almost never talked about on any news channel except maybe CNBC or Bloomberg.
And American exporters are changing. Some of the products—Boeing jets, Microsoft software and Hollywood films—are familiar. But there is a boom, too, in high-value services (architecture, engineering and finance) and a growing “app economy”, nurtured by Facebook, Apple and Google, which employs more than 300,000 people; its games, virtual merchandise and so on sell effortlessly across borders. Constrained by weakness at home and in Europe, even small companies are seeking a toehold in emerging markets. American manufacturers are recapturing some markets once lost to imports, and pioneering new processes such as 3D printing.
But, with our anemic job market, will these changes translate into jobs? What can help?
Ha! look at the increase in the S&P denoted in gold and you will find that the recovery has been stagnant and anemic, the only reason the S&P is up is because of stimulus and inflation, remove those variables and we are still in a recession. As for jobs, I believe that 8% is probably the new natural rate of unemployment, perhaps because companies have learned how to operate with less workers, and because the costs of hiring people today are higher than they have ever been. For example, hiring somebody at a salary of 20k per year effectively costs a company 40k after benefits and healthcare. And here's a quick fact, the biggest percentage of the cost of a car comes from paying for the person who built it's healthcare and not the actual components of the car.
The cover is epic on that issue.
Growing app economy? Sounds like real growth to me. Or maybe not.
I LOVE the economist, but they have been jumping the shark lately with cover stories like this. Last week's cover on how amazing London is was similar as well.
The economy is not near the abyss of 2008-2009, but it's still weak on many fronts. Corporate profits are fine, but there is little growth in many of the core areas of our economy. With respect to the job market, unless you have solid technical skills, it's still a very bad market.
What people believe...or choose to...is a primary factor in an economic recovery. There's a lot of weakness and holes in the system (see: debt) but companies investing/hiring and people spending/working is a very psychological part of it. In terms of self fulfilling prophesies, this is good news and I'm glad to see it, so hopefully things start looking up.
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