Friday, January 24, 2014

Smartphone Sales Declining?

Two side-by-side stories in the Wall Street Journal this morning might be a straw in the wind. In one Nokia’s smartphone sales are showing a down-turn; in the other, similar results are reported for Samsung. Is this market finally maturing? I note that new technologies have their own well-known cyclicality. When they are in their growth phases, they resemble bubbles. When they mature, the media always sound as if some kind of End Time has arrived. See for instance this article in the Wall Street Journal, dated April 11, 2013, “Computer Sales in Free Fall” (link). The chart shown does have an alarming aspect—until you realize that the down-ward trend is that of growth. When a market is mature, growth will tend to match that of an economy, not that of a bubble. And then the great leaders of an industry begin gradually divesting of the product to those who will keep selling them for many, many, many years to come. At a profit—but not at the kind of profit that lifts stocks. A recent example is IBM selling its network server unit to Lenovo of China (link).

Friday, January 10, 2014

Employment Update: December 2013

Well, employment data for 2013 are now all in, and the results bring echoes of that well-known saying: “Not with a bang but a whimper.” The economy gained 74,000 jobs in December. Revised November estimates added an extra 38,000 to the total jobs gained. Those two figures added produce a gain of 112,000. As a consequence of this, the economy’s total performance in 2013 fell 7,000 jobs below the 2012 performance: 2012: 2.193 million; 2013: 2.186 million. These data come from the Bureau of Labor Statistics (the press release is here).

To sum up the annual performance, herewith a graphic showing job growth (or loss) from 2007 through and including 2013.

The monthly performance is shown in the next visual. It looks there as if, in December, the economy sort of gave up—just as the year ended.

Finally, herewith the pie chart showing how much of the 2008-2009 job loss has been recovered so far. The answer is 87.2 percent—after four years of trying.

As 2013 ended, great exuberance filled the business media because the Stock Market had performed well through 2013. Those of us who look at job generation as the real measure of economic recovery are entitled to answer that exuberance by saying: “Hold the Hallelujahs, please!” We’re not there yet. First let us recover all the jobs lost. Then let us reflect, in employment, the actual growth in population. And then, finally, we shall have reached the status quo ante, the 2007 levels.