Interestingly, the 25-54 year old age group participation rate peaked at 84.6% in January 1999 and has declined to 81.2% as of July 2016, a more modest drop-off than the overall participation rate. The July jobs numbers reflected an increase of 249,000 jobs for the 25-54 year cohort, and an even greater 255,000 jobs for the 55+ year category. These gains were offset by about a quarter of a million job losses in the 16-24 year old category.
In May, we highlighted the importance of the manufacturing sector to S&P earnings (The Shadow of Manufacturing on Corporate Earnings) and how it differed from its lesser impact on GDP. As the chart below reveals, US manufacturing continues on an upswing, reaching a peak level of 52.9 for 2016. Global PMI also continued on a positive upward trend, albeit at a more moderate pace than the US. Also notable is that Emerging Markets crossed into expansionary territory for the first time in 2016, while Eurozone PMI experienced a drop-off in July.
Click the chart to enlarge:
Overall it seems as though Global GDP may continue to grow only at a modest pace, in part due to the demographic drag experienced by Developed Nations as the Baby Boomers continue to age. Due to government policy mandating one child limitations per couple for multiple decades in China, they too will undoubtedly be faced with similar challenges.
Hence, even when fueled by aggressive Central Bank policies, economic growth around the world is likely to continue at a muted pace.
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