These days, we are told that the US has powered out of recession and the country can look forward to GDP growth next year of 3% or so.  Or perhaps not. The chart below shows annual growth in private sector jobs in the US since 1949. It is not pretty. Even worse; most of what growth there is, is in government-related fields such as health care and education.

This chart, along with many other measures, shows that the US (along with the other “G7” economies – Canada, France, Germany, Italy, Japan, United Kingdom) is in the midst of an economic transformation. And yet most economists are still trying to solve yesterday’s problems.

We can have no certainty about what the future holds for us, other than that it will be different to the past. The main reason is that the world’s economies have depended upon very cheap energy to fuel growth, for over 100 years. Notwithstanding the current decline in the oil price, cheap energy is not here to stay.

Pvte_Sector_JobsCourtesy US Bureau of Labor Statistics and Washington’s Blog


Our economic future will be very different to the past. The transition will be difficult as we wean ourselves off cheap energy. At current prices, oil is a good investment.