Economic Statistic of the Decade Award:Finalists

 Economic statistics don’t get enough recognition for all of their hard work. So, I’ve decided to offer an “Economic Statistic of the Decade” Award. The three criteria are simple. First, we want to reward the economic statistic that best reflects the decade (both the good and the bad). Second, we want to recognize the economic statistic that turned in a surprising performance–that is, back in 2000, if someone had shown you a graph of the statistic over the next ten years, you would have said “no way”. Third, we want to reward economic statistics that are reliable and accurate representations of the actual economy.

In the 1990s, for example, the Economic Statistic of the Decade Award would have gone to U.S. productivity growth. The runner-ups would have been Chinese economic growth, followed by global tech spending.

What about this decade? Here are the four finalists (chosen by me):

1) Housing prices
2) Global trade 
3) Chinese growth
4) U.S. household borrowing

Here’s a bit about each of the finalists:
1) The boom and bust in housing prices clearly epitomizes the decade. What’s more, in 2000 nobody in their right mind would have predicted that the boom lasted as long as it did.  Downside: The gyrations in the housing market  may be a symptom of deeper problems, much like a fever is a symptom rather than a disease in its own right   (The chart below is drawn from the Case-Shiller price indexes) 

2) Globalization has been one of the main themes of this decade–and nothing illustrates globalization more than the rise in exports as a share of global GDP.  In 1999, global exports were about 22.7% of global GDP, as measured by the International Monetary Fund.  By 2008, that number was 32. 3% before plummeting in 2009.  Downside:  There may be systematic double-counting, as companies break up production into smaller and smaller pieces.  

3) Chinese economic growth  would have been one of the runner-ups for the Economic Statistics of the Decade for the 1990s.  Chinese economy growth averaged an astounding  10% peryear in that decade, and looks like it’s going to get to the same level again in this decade.  Downside:  No one is really sure whether to trust the Chinese economic statistics or not. 

4) Finally, we come to U.S. household borrowing, which probably is the clearest reflection of the financial crisis.  In this decade the U.S. household sector amped up its borrowing from $500 billion in 1999 to $1.2 trillion in 2006, before dramatically cutting debt  in 2009. Downside: This number from the Federal Reserve includes domestic  hedge funds and nonprofit organizations, making it a bit tough to interpret. 

I will present the winner of the award in a few days.  If you want to vote for one of these, or propose an alternative, go for it!

SABEW Teletraining

I just did a “teletraining” session for SABEW on the 2010 Economic Outlook  with Greg Ip of the Economist and Rich Miller of Bloomberg (SABEW = Society of American Business Editors and Writers). The audience was economic reporters and editors across the country, and the goal was to talk about some key themes for economics coverage going forward. Both Greg and Rich made some very good points, which I won’t repeat here. I focused on three themes:

1) How fast will  the labor market for college-educated workers recover? College-educated workers have been pounded, with their unemployment rate now at 4.9%.  Unless something really weird happens in December,  2009 will be the first year where employment of college-educated workers actually fell (the current data series goes back to 1992). I don’t think that we are having a “real” recovery until businesses start hiring high-end workers again.

2) How much of the stimulus is leaking overseas, in the form of imports? It looks like people are rushing back to the malls again–but they are buying things like big-screen televisions, which are mainly produced overseas.  In fact,  given current patterns of imports, we should think of increased consumer spending as a potential negative for the economy, because it drives up the trade deficit and increases the amount that we have to borrow from the rest of the world (on a related point, consumer spending is *not* 70% of the economy.  I’ll refer you back to a blog item that I wrote in my previous life).

3) County Business Patterns–if you want to understand your local economy, your best source is the Census Bureau’s County Business Patterns

These underutilized numbers tell you, for areas as small as zip codes, employment and payrolls by industry. They have two big problems–first, they lag, so the latest data is for 2007.  Second, the Census Bureau doesn’t want to reveal data on individual companies, so if one or two companies dominate an industry in a local area, the numbers are presented in a way that obscures individual company data.

But for figuring out the most important industries in an area,  these figures are without peer.

Anybody who has any questions re economic coverage can write me at

Added:  Before the conference call,  the SABEW folks asked me to come up with three blogs I like. Here they are:

 “Beat the Press” by Dean Baker

 “Econlog”  by Arnold Kling, Bryan Caplan, and David Henderson

  “Political Calculations”  by Craig Eyermann

The Point of this Blog

Okay, so shoot me–I’ve decided to start (re) blogging earlier than I expected.

This blog will have four (count them) four main subjects.

1) Innovation–I’m going to write about  innovation of all types: Technological, corporate, business, and even social innovation.  I’m going to try to assess the speed and direction of innovation,  identify the impact on corporate and economic performance, and even point out places where there are big gaps.  I’m also going to keep an eye on innovation metrics.

2) Growth–we all believe that growth is good, right?  So I’m going to write about growth, with special attention to the different kinds of growth.

3) Economic statistics (with a big wave to my friends at the statistical agencies in DC).  I’ve invested a lot of time in understanding the economic statistics, their good points and where they are weak. And I’ll be d**med if I let that knowledge go to waste.

4) Economic and financial reporting–Judiciously, I’m going to comment on economic and financial journalism, strong points and weak points. I’ll try to be nice.

One final remark–this blog is going to be in a state of construction for a while.  I’ve got a lot of things going on (some of which I can’t talk about yet).

P.S.  To look at my (previous) BusinessWeek blog,  go to  here as long as Bloomberg keeps the site open.