Friday, March 19, 2010

Long-term correlation between U.S. power production and job growth

SHOOT: Interesting argument here - that employment is correlated to energy. Of course it works in the reverse too - when energy gets more expensive, jobs are lost. Which is why the number 1 news story each day should be the oil price, because everything else is dependent on that...isn't it?
This relationship makes complete sense yet is frequently forgotten -- There has been a simple long-term correlation between U.S. power production and job growth, going back decades, as shown below.
U.S. power production fell with the recent economic downturn, most likely because there was less economic activity (plus some belt tightening when it came to energy usage).
Yet now it is rebounding. Which unless this relationship has suddenly changed, means that new jobs are highly likely to be created in the coming quarters.
The chart below is also interesting as a validation of the U.S. recovery because, right now, many who doubt the validity of Chinese government statistics look to Chinese power usage numbers as a tangible check on the economic growth that the government claims.
chart of the day, employment vs electricty/gas production
 blog it

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