Economic Growth Metrics

China’s Youth Unemployment stats are back. 🤔🇨🇳 That’s right, China’s State Statistics Service resumed publication of youth unemployment data, which was suspended in August 2023. So, what’s new? ✔️ We all remember how in 2023, China reported a youth unemployment rate of 21.3% and then suspended the stat's publication. ✔️ Many further noted that China’s official unemployment rate was not taking into account those who do paid work for at least 1 hour a week, so the sentiment was that the “real numbers must be much gloomier”. ✔️ A few months later a Peking University professor issued estimates with a “more accurate youth unemployment rate at 46.5%”. 😬 This outsized figure came about by adding youths who were "not in employment, education or training" and also not actively looking for work – which isn't the way youth unemployment is measured in most countries. There were problems with how the official stats calculations were done, too. The numbers, for say, l included full time students, and if they didn’t work, counted them as unemployed. 📊 So, after a 6-month reporting break, the stats are back, with adjusted methodology. So, here’s how the newly reported stats will be done. ✔️ The unemployment rate among young people aged 16-24 will be calculated without taking into account students, who make up more than 60% of this age group. ✔️ They youth unemployment rate will now also include persons aged 25-29 years (excluding students), in order to “more fully reflect the picture of employment and unemployment among young people after graduation”. ✔️ However, it seems nothing was done with the definition of “employed = someone doing paid work for at least 1 hour a week”. 📊 So, how do the numbers look for 2023? ✔️ According to new estimates, the unemployment rate of Chinese aged 16-24 years is 14.9% compared to 21.3%, as reported in July 2023 with the old method. ✔️ Unemployment in the 25-29 age bracket is at 6.1% vs 5.2% in the country as a whole among the urban population. 📊 Soooo, what does this youth unemployment actually look like in China today? ✨ Many highly educated grads go for "slow employment". Meaning, many young people have chosen not to enter the workforce in 2023, preferring to pursue further education or gov't exams. ✨ The family safety net provides GenZ more flexibility to become “full-time children”. With their parents' support, they are less anxious to rush into work. ✨ “Light work" among Chinese youth has led to the birth of new professions that emphasise interests and hobbies. The "pal" economy was born with photo pals, travel pals, shopping pals and gaming pals, among others. What’s your take? 🤓👇 __ #china #economy #ashleytalks  Insights via Premia Partners, China State Statistics Service, Chinagram on TG, video via kotmaomao

Today’s Australian Bureau of Statistics Labour Force data showed that the seasonally adjusted unemployment rate rose slightly, by less than 0.1pt, to 4.1% in June. With employment rising by around 50,000 people and the number of unemployed growing by 10,000 people, the unemployment rate rose slightly to 4.1% and the participation rate also rose, up to 66.9%. The participation rate in June was only 0.1pt lower than the historical high of 67.0% in November 2023. The employment-to-population ratio rose by 0.1pt to 64.2%, which was also close to its historical high of 64.4% in November 2023. The employment-to-population ratio and participation rate both continue to be near their late 2023 highs. This, along with the continued high level of job vacancies, suggests the labour market remains relatively tight, despite the unemployment rate being above 4.0% since April. Unemployment rose by 10,000 people in June, following a fall of 9,000 in May. While it has increased from a low of 491,000 people in October 2022 to 608,000 in June 2024, it is still around 100,000 people or 14.2% lower than just prior to the COVID-19 pandemic. The unemployment rate was 0.5pts higher than June last year, and 1.1pts lower than March 2020. Monthly hours worked rose by 0.8%. The growth rate over recent months was broadly in line with employment. In June, we continued to see more people than usual working reduced hours because they were sick, similar to what we saw in May. Around 4.5% of employed people in June could not work their usual hours because they were sick, compared to the pre-pandemic average for June of 3.6%. However, we also saw less people taking annual leave in June 2024. There were around 12.5% of people working fewer hours because they were on leave, compared with the pre-pandemic average for June of 14.5%. This contributed to the increase in hours worked this month. Consistent with the increase in hours worked, the seasonally adjusted underemployment rate fell 0.3pts to 6.5%. The underemployment rate was 0.1pt lower than June last year, and 2.3pts lower than March 2020. The underutilisation rate, which combines the unemployment and underemployment rates, also fell 0.2pts to 10.5%. While this was 0.4pts higher than June 2023, it was 3.4pts lower than March 2020. For more, see: https://lnkd.in/gV2h6H5U

The US unemployment rate has risen from a low of 3.4% to 4.3%. That much of a rise in unemployment has historically tended to mean a recession is inevitable. However, employment isn’t actually falling.    How’s that possible? Most people understandably assume that rising unemployment means that employment IS falling. And when employment falls, people cut back on spending leading to further job cuts. But that’s not currently the case.   Firstly, there are two major surveys which attempt to measure US employment. The establishment survey (from which the much reported non-farm payrolls comes) and the household survey (from which the unemployment rate comes).   The household survey has recently been the weaker of the two, seeing employment go sideways. The establishment survey meanwhile has seen employment continue to rise, although the extent of prior job gains were recently revised down.   But let’s just focus for the moment on the weaker household survey. You can see from the chart below that this measure of employment, used to calculate the unemployment rate, has stopped rising but isn’t falling.   So how has the unemployment rate risen?   Some definitions may help:   To count as unemployed you have to be not employed, available for work and looking for work. The labour force is those who are employed plus those who are unemployed. The unemployment rate is then calculated as the number of unemployed people as a percentage of the labour force.   So unemployment can rise either when people lose their jobs or because of a rise in the supply of available workers looking for work.   At the moment US unemployment is rising because of a rise in the number of those available and looking for work rather than because people are losing their jobs.   That suggests the probability of a recession isn’t as high as it would be if employment was declining.     So in short, the recent rise in the unemployment rate probably overstates the weakness in the US labour market.   That doesn’t mean there aren’t risks to the growth outlook but I think there are risks both to the upside and the downside.   That also means there are two way risks which could mean the Fed end up cutting rates by either more or less than is currently priced in.    I’ll elaborate further on some of the mixed signals coming from the US data in future posts. #economy #interestrates #unemployment 

Forget the tired "manufacturing is dying" narrative. Advanced manufacturing — Chemicals (NAICS 325), Machinery (333), Computer & electronic products (334), and Transportation equipment (336), where 41% of workers hold a bachelor's degree or higher — is ripping higher, with the index up nearly 4 points in just the last 12 months, more than the entire gain of the prior decade combined. These four subsectors are 44% of manufacturing value added and explain essentially all of the net growth the sector has produced since 2022. The rest of manufacturing — where only 24% of workers hold a bachelor's — tells the opposite story: down 6% over the decade and still falling. Two manufacturing economies, moving in opposite directions, and the gap is widening fast. Methodology. Monthly seasonally-adjusted industrial production indexes come from the Fed. The two aggregate lines are Törnqvist chain indexes built directly from the Fed's published Relative Importance Weights, so "Advanced" and "Rest" recombine to the Fed's own total manufacturing IP up to rounding. Both are rebased to Jan 2016 = 100 and shown as trailing 12-month moving averages. What's driving the boom. This is what industrial policy plus a capex supercycle looks like when they hit the same industries at the same time. CHIPS, IRA, and the Infrastructure Act directed hundreds of billions into semiconductors, batteries, clean energy capital equipment, pharmaceuticals, and defense. Then the AI capex boom landed on top, pulling massive demand for semiconductors, electrical equipment, and power gear. Rising defense budgets are layering in aerospace demand. The future of American manufacturing is being built by the high-IP, high-skill end of the sector, and the gap with everything else is only going to keep widening. #manufacturing #AI

#Employment fell by 52,800 (0.4%) in February, the largest monthly fall since December 2023, with full-time employment dropping by 35,700 and part-time by 17,000 (although employment was still up by 1.9% form a year earlier. Total hours worked also dropped 0.4% in February (although it was also 2.4% up from February last year). The ABS attributes the drop in employment last month to a larger than usual number of retirements of older workers (more details on employment by age will be available next Thursday). Consistent with this hypothesis, the labour force #participation rate dropped by 0.4 pc pt in February to 66.8%, its lowest level since May last year, and against the generally strong upward trend in labour force participation (especially for women) since 2016. With the decline in employment being mirrored by a 63,900 contraction in the labour force, the #unemployment rate remained steady at 4.1% (well, to two decimal places it dropped from 4.11% to 4.05%, but that's being really picky). It's worth re-iterating that Australia has succeeded in bringing #inflation down from its peak (as measured by the RBA's preferred measure of 'underlying' inflation) of 8.4% over the 12 months to December 2022, to 2.8% over the 12 months to February 2025 (low enough to allow the RBA to begin cutting interest rates) with an increase in the unemployment rate (from its lowest point in October 2022) of just 0.6 pc pt. That's a smaller increase than in any episode of 'disinflation' since at least 1959. The last two major 'disinflations', from peaks of over 10% in the early 1980s and again in the late 1980s, entailed increases in unemployment of over 5 percentage points, as well as outright recessions. That's also a better performance than any of our peers during the most recent inflationary episode. The US comes close - its unemployment rate rose by 0.7 pc pt from its most recent low (in April 2023) to its most recent peak (of 4.2% in November last year) - but it required continued enormous fiscal stimulus (a budget deficit of 6.5% of GDP) to do that, in contrast to Australia's two consecutive (federal) budget surpluses. In Canada and New Zealand, where both countries' central banks raised their cash rates much more than the RBA did, inflation came down more quickly, but at a cost in each case of an increase in the unemployment rate of 1.9 pc point (see chart below) - as well as outright recessions, despite population growth which was even faster than in Australia). So, although the extended period of high (by the standards of the past 20 years) mortgage rates has been painful for the roughly one-third of Australian households with a mortgage, from the standpoint of minimizing the cost in terms of unemployment of getting inflation back down to 'tolerable' levels, the trade-off which the RBA made has paid off pretty well.

Despite claims that the freight recession is over, those of you who follow the public less-than-truckload (LTL) carriers note that most LTL outfits have been reporting declining year-over-year volumes for October and November (e.g., https://lnkd.in/gJ9Cf-VF). Continued soft volumes in the LTL space stem mostly from ongoing weakness in the industrial economy (e.g., manufacturing). In that regard, I wanted to share one industrial production series, focusing specifically on production of goods made by machine shops, turned products, and screws/nuts/bolts (https://lnkd.in/gnYJjMD8) that does a good job of capturing inflections in freight market cycles. One chart. Thoughts: •These industrial production data show seasonally adjusted physical unit output for this 4-digit industry. Crucially, the BEA estimates only 15% of the consumption of goods belonging to this industry are imported, suggesting an ongoing important role for domestic manufacturing (accounting for ~$70 billion in shipments each year: https://lnkd.in/g4tp2fr8). •As can be seen, during normal freight cycles, upticks of production in this sector correspond quite closely to the onset of bull market pricing cycles in late 2013/early 2014 and mid-2017. Equally, downturns in production correspond to bearish conditions. •The fact production didn’t start dropping till late Q3 2023 (about a year after the freight recession started) can be easily explained by the rampant raw material and labor shortages in 2021 and 2022 creating very large increases in order backlogs (https://lnkd.in/gB4iMH2j) that supported production even after new orders had cooled down. Implication: production by machine shops in the USA merits close monitoring as we move into 2025. An uptick of production would be another indicator that we are exiting the current limbo of flat freight volumes. As it appears this series has finally found its nadir, it will likely take a few more months for production to rise significantly (e.g., late Q1 2025). #supplychain #supplychainmanagement #freight #trucking #manufacturing 

We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: https://lnkd.in/gwMTKbSf

The first jobs report with data post-shutdown shows a job market trajectory surprisingly unchanged by the shutdown. The job market is continuing to cool though is not yet showing signs of accelerating deterioration. 🏛️ Payroll employment grew 64,000 in November, but that follows a 105,000 drop in October which was mostly driven by 162,000 federal job losses as the last day for most federal workers under the deferred resignation program was at the end of September. 📈 Private payrolls alone were a little better, growing 69,000 in November and 52,000 in October. In the last 3 months, private payroll growth has averaged 75,000 monthly compared to just 13,000 in the 3 months prior (Jun–Aug). 🩺 Health care & social assistance added 64,000 jobs in November on top of 64,600 in October, which means that all other industries barely contributed any jobs growth in those months. Health care remains a reliable engine of jobs growth, but the narrowness of the base of jobs growth today is concerning. 💵 Average hourly earnings grew just 3.5% year-over-year in November, down from 3.7% in October. That's the slowest pace of wage growth since 2021. There is some evidence that the drop may be driven by noise so we'll want another month of data to confirm the trend. 🔺 Unemployment rose to 4.6% in November, the highest level since September 2021. The share of workers part-time for economic reasons also spiked to 3.4%, a sign that workers are having trouble finding full-time work and hours in a slowing job market. Overall, the jobs report continues to show a cooling job market. Some evidence of firming private payroll growth is positive, but rising unemployment, falling wage growth, and the narrowness of jobs growth raise questions about whether the job market is on solid ground heading into 2026. #jobsreport #economy #news

The U.S. labor market continued to defy expectations, adding 272,000 net jobs in May. However, the upside surprise was driven mostly by demand, not supply, causing wages to inch up 0.4% on a monthly basis, or 4.1% on a year-ago basis. 📊 The data was not a complete surprise to us, as our forecast had denoted a possibility of an upside swing due to seasonal hiring such as leisure, hospitality, and construction, which rose substantially on the month. The other wildcard is government hiring, which was also up by a wide margin in May. 💸 That is not a good sign for rate cut hope this summer. More likely than not, a July rate cut is out of the picture, while the odds for September should be lower now. The first reaction of the market this morning was September is back to being a coin toss at exactly 50%. 📉 In contrast to the topline payroll report, the household survey which produces the unemployment rate data, instead, showed a drop in employment, down 408,000 on the month. That led to a higher unemployment rate at 3.96%, just high enough to break the sub-4% monthly streak that would be the longest since the 1950s. 📉 The labor supply was weaker in May with the labor force participation rate falling to 62.5% from 62.7%, adding to the wage growth pressure. But most of the drop came from 55 or older workers. The prime-age group participation rate continued to go strong, up to 83.6%, the highest since 2002. 📅 It is hard to square today’s data with other economic indicators recently that have pointed to a cooling economy. Maybe one likely explanation is that some of the strength in job gains was seasonal. Of course, it is hard to hang our hat on one month of data, especially when it was the first month of the summer. Our base case remains a cut in September.

Wage growth is cooling off Labor cost pressures will continue to ease in the coming quarters as the balance of power shifts away from workers and to employers. We extended Heise, Pearce, and Weber's (2024) labor market tightness study by expanding the regression window through Q3-2025, adding five additional quarters beyond their original sample ending in Q2-2024. The HPW Index—a composite measure combining the quits rate and vacancies-to-effective-searchers ratio (V/ES)—has declined significantly from its pandemic-era peak of approximately 2.8 in early 2022 to -0.06 in Q3-2025, marking the first negative reading since the pre-pandemic period. This represents a substantial normalization in labor market conditions, with the index now sitting just below historical average of zero (by construction, the standardized index has mean zero over the estimation sample). The HPW Index's trajectory suggests that labor market tightness has fully unwound its extraordinary post-pandemic surge, with conditions now consistent with or slightly below the 1994-2025 average. While there may be some residual momentum in wage pressures, the 0.90 correlation between the HPW Index and smoothed wage growth suggests that wage growth should continue moderating in coming quarters as the lagged effects of reduced labor market tightness work through.