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When I compare spending in recoveries it turns out that in this recovery spending on goods especially durable goods and on business equipment and software have pretty much kept pace with recoveries in the past. At one point business equipment and software spending was faster in this cycle than in any previous recovery. The problem, as I like to re-cast it HAS NOT BEEN WHOLLY WEAK DEMAND. It has been the composition of demand. IF we had bought more services and fewer goods there would have been much more jobs growth in this expansion. With that, income growth would have been higher and corporate profits would have been lower. And the recovery would have been more balanced. We need to look more closely into this area to try to understand what has happened to our services sector.

http://www.zerohedge.com/contributed/201....

It's technology in my opinion. Traditional, bricks and mortar retail is dying. Think about the number of Blockbusters that have closed in the last couple years. And bookstores. Content can now be delivered via downloading to a myriad of devices from the internet. This option was not widely available until the last few years.

Beyond content, virutally everything can be ordered from a warehouse and delivered to your door - no middlemen required.

This has been occurring for 15 years, but its affects accelerated in the past 5 years, and the construction bubble masked the decline in service jobs before that in my opinion.


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