Category Archives: capital deepening

16/11/20: Retail sales, Sector employment and COVID19 recovery

Retail sales suffered a sharp shock from the demand contraction following the first phase of COVID19 pandemic. As of the end of September, based on the preliminary estimates from the U.S. Census Bureau, total volume of retail sales in the U.S. has fully recovered to pre-pandemic levels:

Based on cumulative retail sales over trailing 12 months period, September 2020 stood at USD 5.519 trillion, which is USD48.371 billion above 12 months trailing cumulative for January 2020, and USD121.178 billion above the same measure for September 2019.

The same cannot be said about the recovery in the retail sector jobs:

As of October 2020, total employment in the U.S. retail sector stood at 15,173,500, 498,500 down on February 2020 and 471,200 less than in October 2019. In fact, the problem with the retail sector employment has been evident since the start of this Millennium. Held down by automation and increasing sales volumes flowing through web based retailers, the overall sector sales increases did not translate into sector employment growth. Over the last 10 years through September 2020, retail sales by value rose a cumulative 37%. Over the same period of time, retail sector average hourly earnings grew 27%, or 8 percentage points less than total private economy average hourly earnings inflation. Meanwhile, in 2006, $1 in hourly earnings of retail sector employees wages supported, roughly $1,380 of retail sales. As of September 2020, this number is almost $1,534.

13/11/20: The economy has two chronic illnesses (and neither are Covid)

My column for The Currency this week covers two key long-term themes in the global economy that pre-date the pandemic and will remain in place well into 2025: the twin secular stagnations hypotheses and the changing nature of the productivity. The link to the article is here;


2/11/2020: Technological Deepening and De-globalization post-COVID

Interesting insights from McKinsey on changes in technology adoption in response to COVID19 pandemic:

In the ed, I marked two types of technological frontier shifts: the ones relating to displacement of status quo-ante in supply chains - re-orientation from China; and the ones relating to technological deepening. Both are the legacy of the U.S. political and economic shift toward de-globalization.