Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, December 17, 2018

AI Summary. Data on capital expenditures per share for the companies in the S&P 500 stock index tracks corporate spending on long-term investment and infrastructure, measured in dollars and not adjusted for depreciation.

Ed Yardeni Yardeni Research
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S&P 500 Capital Expenditures Dollars per Share 1994-2018.

How much are large public companies investing per share?

Core argument: The S&P 500 capital expenditures per share series covers 1994–2018 in dollar terms, tracking corporate investment trends across the companies in the index.

From 1994 to 2018, the S&P 500 capital expenditures (capex) per share, measured in dollars, provides a critical insight into corporate investment trends within the index. This metric, which does not reflect year-over-year changes or account for depreciation, highlights the financial commitment of companies to long-term growth and infrastructure. Understanding capex per share is essential for evaluating the economic health and future potential of these firms, as it directly impacts their ability to innovate and expand. The data underscores the importance of capital allocation decisions in shaping the competitive landscape and influencing shareholder value. As companies navigate economic cycles, their capex strategies reveal priorities and potential shifts in industry dynamics, offering valuable insights for investors, economists, and policymakers.

Takeaways by Macro Roundup® AI

  1. The S&P 500 capital expenditures per share series covers 1994–2018 in dollar terms, tracking corporate investment trends across the companies in the index.
  2. The S&P 500 capex-per-share measure is presented as a level rather than a year-over-year change and does not account for depreciation.
  3. Capex per share indicates companies' financial commitment to long-term growth and infrastructure, bearing on their ability to innovate and expand.

Yardeni Research has S&P 500 capex per share in $. Note this is not y/y change like theEconomistchart. Unclear if it nets depreciation

Stock Market Briefing SP 500 Income Statement and Ratios: Extended Excerpt Image 1


Stock Market Briefing SP 500 Income Statement and Ratios: Extended Excerpt Image 2


Stock Market Briefing SP 500 Income Statement and Ratios: Extended Excerpt Image 3


Ed Yardeni and Joe Abbott, "Stock Market Briefing S&P 500 Income Statement and Ratios," Yardeni Research, November 15, 2018, https://www.yardeni.com/pub/spxis.pdf

AI Summary. Capital spending among S&P 500 companies has surged, with the technology sector accounting for over half the growth, and Alphabet's capital expenditure reaching $7.3bn — nearly triple the prior year — on data centers and real estate. Alphabet's shares fell 4.8% after earnings as investors questioned whether such spending is sustainable.

Akane Otani Wall Street Journal
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Capex among S&P 500 firms surged in Q1, driven by tech sector growth. Alphabet’s capex nearly tripled to $7.3bn, but shares fell 4.8% post-earnings as investors questioned spending sustainability.

Does surging capital spending lift share prices for investing companies?

Core argument: Alphabet's capital expenditure reached $7.3bn, nearly triple the prior year's level, driven by investments in data centers and real estate.

Capital expenditure (capex) among S&P 500 firms has surged, particularly in the tech sector, which accounts for over half of the growth in Q1. Alphabet's capex reached $7.3bn, nearly triple its previous year's spending, driven by investments in data centers and real estate. Despite a rise in quarterly profits due to strong advertising demand, Alphabet's shares fell 4.8% post-earnings as investors questioned the sustainability of such high spending. This highlights a disconnect between increased capex and immediate shareholder returns, as market reactions remain cautious despite potential long-term value creation.

Takeaways by Macro Roundup® AI

  1. Alphabet's capital expenditure reached $7.3bn, nearly triple the prior year's level, driven by investments in data centers and real estate.
  2. Alphabet's shares fell 4.8% after earnings despite higher quarterly profits on strong advertising demand, as investors questioned the sustainability of its elevated spending.
  3. Capital spending among S&P 500 firms has surged, with the tech sector accounting for over half of the first-quarter growth.

this is from this spring,

Capital Spending Boom Is No Great Boost to Capital Markets: Extended Excerpt Image 1

".... Capital spending has been growing rapidly in the tech sector, where companies that have seen some of the biggest share-price growth in recent years are becoming increasingly capital intensive. More than half of the growth in first-quarter capex spending can be attributed to the tech sector, Credit Suisse data show. Investments in data centers, undersea cables and New York City real estate pushed Alphabet’s capex tab in the first quarter to $7.3 billion—the most of any S&P 500 firm, and nearly triple what it spent a year earlier. Although Alphabet’s quarterly profits surged thanks to strong demand from advertisers, its shares tumbled 4.8% on the day following its earnings report as investors questioned the sustainability of the costliest spending spree in the firm’s 14-year history as a public company. The stock has since rebounded. The company has said it believes these investments will create shareholder value."Akane Otani, Ben Eisen and Chelsey Dulaney, "Capital Spending Boom Is No Great Boost to Capital Markets,"Wall Street Journal, May 15, 2018, https://www.wsj.com/articles/capital-spending-boom-is-no-great-boost-to-capital-markets-1526376600

AI Summary. Business investment adjusted for net depreciation and inflation has shown minimal growth since the corporate tax overhaul, with capital spending remaining relatively flat despite lower corporate tax rates. The absence of an investment surge raises questions about whether the tax cuts have effectively incentivized companies to increase capital spending.

Matthew Klein Barron's
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Corporate tax changes have failed to boost business investment. Investment levels remain flat despite tax cuts, raising concerns about productivity and economic expansion.

Have lower corporate tax rates boosted business investment?

Core argument: Business investment adjusted for net depreciation and inflation has shown minimal growth since the corporate tax overhaul, with the anticipated surge in capital expenditures failing to materialize despite lower corporate tax rates.

The corporate tax changes intended to boost business investment have not yielded the expected results. Business investment, when adjusted for net depreciation and inflation, has shown minimal growth since the tax overhaul. Despite the reduction in corporate tax rates, the anticipated surge in capital expenditures has not materialized, with investment levels remaining relatively flat. This stagnation suggests that the tax cuts have not effectively incentivized companies to increase their capital spending. The lack of significant investment growth raises concerns about the long-term impact on productivity and economic expansion, as businesses are not reinvesting their tax savings into growth-driving assets. Consequently, the policy's effectiveness in stimulating economic activity and enhancing competitiveness remains questionable.

Takeaways by Macro Roundup® AI

  1. Business investment adjusted for net depreciation and inflation has shown minimal growth since the corporate tax overhaul, with the anticipated surge in capital expenditures failing to materialize despite lower corporate tax rates.
  2. Flat investment levels following the corporate tax cuts suggest the policy has not effectively incentivized companies to increase capital spending, leaving its effectiveness in stimulating economic activity questionable.
  3. The absence of significant investment growth raises concerns about long-term productivity, economic expansion, and competitiveness, as businesses are not reinvesting tax savings into growth-driving assets.

business investment net depreciation and inflation (Indexed to 2012)

So Far, the Corporate Tax Changes Have Been a Bust: Extended Excerpt Image 1


Matthew Klein, "So Far, the Corporate Tax Changes Have Been a Bust,"Barrons, December 7, 2018, https://www.barrons.com/articles/last-years-corporate-tax-overhaul-hasnt-made-much-of-a-difference-1544226832

AI Summary. Structures and equipment capital spending, two-thirds of total US capital expenditure, stands at $1.9tn and is growing 6-7% year on year, but a 20% rise in energy capital spending — just 8% of the total — accounts for much of that; excluding energy, growth is under 5%. Weaker-than-expected capital spending would pose downside risk to GDP forecasts.

Francis Rybinski and Harris Kere Aegon Assert Management
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US capex growth is driven by 20% yoy increase in energy capex, which makes up only 8% of total S&E capex. Excluding energy, tangible capex growth is under 5%. @FrancisRybinski @HarrisKere, Aegon Assert Management.

Is US capital spending growth weaker than headline numbers suggest?

Core argument: Structures and equipment capex, two-thirds of total US capex, stands at $1.9tn and is growing 6–7% year on year, but excluding energy, tangible capex growth is under 5%.

Despite a robust US economy and revised tax code boosting profit growth, capex spending is not as strong as perceived. S&E [Structure and Equipment] capex, which makes up two-thirds of total capex, is at $1.9tn, growing 6-7% year on year. However, this growth is significantly driven by a 20% year-on-year increase in energy capex, which constitutes only 8% of total S&E capex. Excluding energy, tangible capex growth is under 5%. The previous 30-50% growth in energy capex, following a 60% decline, masks modest trends elsewhere. Trade uncertainties and potential policy reversals add to the caution, with S&P 500's 15% return on equity making stock buybacks appealing. If capex falls short of expectations, GDP forecasts may face downside risks, potentially influencing Federal Reserve rate decisions.

Takeaways by Macro Roundup® AI

  1. Structures and equipment capex, two-thirds of total US capex, stands at $1.9tn and is growing 6–7% year on year, but excluding energy, tangible capex growth is under 5%.
  2. Energy capex is rising 20% year on year while making up only 8% of structures and equipment capex, and its earlier 30–50% growth followed a 60% decline, masking modest trends elsewhere.
  3. Trade uncertainties and potential policy reversals add caution, while the S&P 500's 15% return on equity makes stock buybacks appealing; capex falling short of expectations would pose downside risk to GDP forecasts and could influence Federal Reserve rate decisions.

Francis Rybinski and Harris Kere, "The Great Capex Resurgence - A Cautionary Tale," Aegon Assert Management, November 27, 2018, https://www.aegonassetmanagement.com/us/thought-leadership/blog/macro-research/the-great-capex-resurgence---a-cautionary-tale/

The Great Capex Resurgence - A Cautionary Tale

As we close out the year, a robust US economy, revised tax code and repatriation of foreign earnings has provided many US companies with a boost to profit growth which typically signals a resurgence of capital-expenditure spending (capex) and a strong growth outlook. However, as we approach 2019, companies' capex spending is slowing slightly. While it will still be one of the key drivers to growth in the next year, we believe that capex is not as robust as the headlines imply. In fact, we believe the risk in the downside predictions is that they are not realistic enough, due largely to masked modest trends in growth, uncertainty in trade, and waning foreign direct investment (FDI).

Not the full story

After record spending by companies in the S&P 500 Index in the first half of the year, capex is not as strong as many believe it to be. Consider structure and equipment (S&E) capex—the tangible components accounting for two-thirds of total capex—which is currently at $1.9 trillion. Exhibit 1 illustrates that structure and equipment (S&E) industry capex has grown 6-7% year on year. But, this has been significantly boosted by the recovery in energy capex after an enormous decline in 2015 and 2016. Ex-energy, the rally in S&E capex has been less thrilling. Energy is only 8% of total S&E capex, but it is growing 20% year on year—down from 60%. When the energy component from capex is removed, tangible capex is growing at less than 5%. In short, the 30-50% year-on-year growth in energy capex—after a 60% decline in absolute levels over the past few years—is masking modest capex trends elsewhere.

The Great Capex Resurgence - A Cautionary Tale: Extended Excerpt Image 1


Trade wars

Uncertainty surrounding tariffs and trade could affect capex and FDI as projects that typically have long lead times and changing trade landscape can dramatically alter the economic viability. This, coupled with Democrats threatening to reverse the corporate tax cut and it is understandable that capex surveys have seemingly peaked, reflecting growing caution by management teams to increase capex spending. Economic symptoms of lower trend growth also indicate increased caution. What is also not helping is the high relative hurdle rate—return on equity of S&P 500 is currently at 15%, making the argument for stock buybacks quite compelling. With these factors in motion, we think the skew of risk distribution to consensus growth forecasts is to the downside.

What does it mean?

Capex is a key driver to above-trend growth in 2019. If capex falls below consensus expectations, downside risks to current gross domestic product forecasts could force the Federal Reserve to lower the dots on its projected interest rate dot plot and hike rates less than the dots will imply. After a year of strong capex spending buoyed by Trump's tax law, the US' solid rule of law and advantaged energy costs, the outlook on capex should tell a more robust story. While the general consensus sees a slight slowing of capex spending, we are more cautious going into year-end as we think the risk is asymmetrically skewed to the downside.

AI Summary. U.S. net domestic investment by private businesses fell during the 2008 financial crisis and then recovered gradually, with a sharper rise coinciding with the passage of tax cuts. The data indicate that business investment is sensitive to fiscal policy changes and broader economic conditions.

U.S. Bureau of Economic Analysis Bureau of Economic Analysis
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US private domestic business investment saw significant fluctuations from Q1 2007 to Q3 2018, with a notable dip during the 2008 financial crisis and a sharp rise following tax cuts in Q4 2017.

Does business investment respond to tax cuts and economic conditions?

Core argument: U.S. net domestic investment by private domestic businesses fluctuated from Q1 2007 to Q3 2018, dipping during the 2008 financial crisis before recovering gradually.

From Q1 2007 to Q3 2018, net domestic investment in private domestic businesses in the U.S. experienced significant fluctuations, reflecting broader economic trends and policy impacts. The period saw a notable dip during the 2008 financial crisis, followed by a gradual recovery. By Q4 2017, coinciding with the passage of tax cuts, investment levels began to rise more sharply, indicating a positive response from the private sector. This trend underscores the sensitivity of domestic business investment to fiscal policy changes and economic conditions. The data highlights the importance of stable economic policies to foster sustained investment growth, which is crucial for long-term economic expansion and competitiveness.

Takeaways by Macro Roundup® AI

  1. U.S. net domestic investment by private domestic businesses fluctuated from Q1 2007 to Q3 2018, dipping during the 2008 financial crisis before recovering gradually.
  2. Beginning in Q4 2017, coinciding with the passage of tax cuts, U.S. net private domestic business investment rose more sharply.
  3. The pattern of U.S. net private domestic business investment from 2007 to 2018 suggests business investment is sensitive to fiscal policy changes and economic conditions.

Here is Net Domestic Private Business investment in Billions of Dollars Range is is Q1 2007 though Q3 2018 (Tax cut passed Q4 2017)

Net Domestic Investment: Private: Domestic Business: Extended Excerpt Image 1


U.S. Bureau of Economic Analysis, "Net Domestic Investment: Private: Domestic Business," Federal Reserve Bank of St. Louis, Accessed December 17, 2018, https://fred.stlouisfed.org/series/W790RC1Q027SBEA

AI Summary. Business capital spending on fixed assets such as equipment and buildings has picked up, supported by increased cash flow from corporate tax cuts, but the growth is moderate relative to past expansions. The uptick suggests the economic expansion retains momentum without signaling a major surge.

Justin Fox Bloomberg
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Business capital spending in 2018 shows a positive trend, driven by increased cash flow from corporate tax cuts. However, growth appears moderate when measured against past expansions. @JustinFox

Have corporate tax cuts produced a business investment boom?

Core argument: Business capital spending on fixed assets such as equipment and buildings rose in 2018 relative to 2016 and 2017, with increased cash flow from the corporate tax cuts cited as a driver.

Business capital spending in 2018 shows a positive trend when compared to 2016 and 2017, driven by increased cash flow from recent corporate tax cuts. However, when measured against past expansions, the growth appears moderate. The uptick in investment, focused on fixed assets like equipment and buildings, suggests the ongoing economic expansion, now the second-longest on record, still has momentum. Yet, the scale of this investment is not substantial enough to signal a major economic surge. The economic impact of the tax legislation will continue to unfold over the coming years, potentially influencing future investment patterns.

Takeaways by Macro Roundup® AI

  1. Business capital spending on fixed assets such as equipment and buildings rose in 2018 relative to 2016 and 2017, with increased cash flow from the corporate tax cuts cited as a driver.
  2. Measured against past expansions, 2018 business investment growth is moderate rather than a boom, and its scale is not large enough to signal a major economic surge.
  3. The 2018 investment uptick suggests the economic expansion, the second-longest on record, retains momentum, while the tax legislation's economic impact will continue to unfold over the coming years.

nuanced view from Justin Fox on "capex whiplash" depends you your baseline

"...For several months now, consumers of U.S. business media have beensubjected to what you could call capex whiplash. That is, one day you’ll read or hear that business capital spending is booming, and a few days later you’ll be told that it is not.I had been confused by this, but just a few minutes of reading and chart-making made clear that the main thing driving the differing assessments is simply the time frame. If you compare current business capital spending (that is, spending on fixed assets such as equipment, buildings and land) 1with that of 2017, or 2016, it looks great. If you compare these capex gains with those of past expansions, or even earlier in the current expansion, they look … OK. And given how much cash U.S. corporations suddenly have on their hands thanks to the big tax cuts approved by Congress and signed into law by the president late last year, “OK” is perhaps slightly disappointing.This does not mean the corporate tax cuts were necessarily a bust. Economic growth will likely be up this year over 2016 and 2017, and the economic effects of the tax legislation will be playing out for years to come.The recent uptick in business investment is a hopeful sign that the now-nine-year-old expansion — the second-longest on record — has some life left in it yet. This capital spending increase just isn’t big or sustained enough (at least not yet) to indicate any kind of major economic takeoff...."

Justin Fox, "Businesses Are Investing More in 2018, But It’s No Boom," Bloomberg, July 26, 2018, https://www.bloomberg.com/opinion/articles/2018-07-26/business-capital-spending-is-good-but-not-great

AI Summary. The 2008 financial crisis was driven more by a European banking glut than an Asian savings glut, as European banks channeled funds into riskier, short-term US private mortgage-backed securities while Asian official holders bought safer US government bonds. This European capital took on credit and maturity risk and enabled US households to lever up.

Robert McCauley Bank for International Settlements
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The 2008 financial crisis was driven by a European banking glut rather than an Asian savings glut, according to @RobertMcCauley @Bank_for_International_Settlements. European banks took on credit and maturity risk by purchasing riskier US mortgage bonds.

Was the 2008 crisis driven by European banks rather than Asian savings?

Core argument: From end-2002 to mid-2007, European banks channeled substantial funds into US private asset-backed securities, while Asian official holders bought safer US government bonds, pointing to a European banking glut rather than an Asian savings glut as a significant driver of the 2008 crisis.

The 2008 financial crisis was significantly driven by a European banking glut rather than an Asian savings glut. From end-2002 to mid-2007, European banks and others funneled substantial funds into US private asset-backed securities, contrasting with Asian official holders who invested in safer US government bonds. European banks took on credit and maturity risk by purchasing riskier, short-term bonds backed by US mortgages, which enabled the leveraging-up of US households. This influx of European capital matched US mortgage market trends towards private credit risk and floating interest rates, leading to a shift from fixed-rate to adjustable-rate mortgages. Additionally, European banks' activities contributed to housing booms in Ireland and Spain, underscoring the transatlantic nature of the crisis.

Takeaways by Macro Roundup® AI

  1. From end-2002 to mid-2007, European banks channeled substantial funds into US private asset-backed securities, while Asian official holders bought safer US government bonds, pointing to a European banking glut rather than an Asian savings glut as a significant driver of the 2008 crisis.
  2. European banks took on credit and maturity risk by buying riskier, short-term bonds backed by US mortgages, which enabled US households to leverage up and accompanied a shift from fixed-rate to adjustable-rate mortgages.
  3. European banks' activities also contributed to housing booms in Ireland and Spain, underscoring the transatlantic nature of the 2008 financial crisis.

research note from BIS looks at if the global savings glut was driven by East Asian or European surpluses. concludes it was the Europeans pushing their savings on US that drove crisis.

"...The Asian savings glut hypothesis posits that net inflows into high-grade US public bonds from countries running current account surpluses led to the housing boom and bust. An excess of savings over investment abroad led to an excess of US investment over savings....Twice as much money flowed into US bonds from March 2000 to mid-2007 from Asian official holders as flowed into US private asset-backed securities from European banks and others between end-2002 and mid-2007. In the first, official reserve managers purchased safe, longer-term US government obligations, generally funding themselves with domestic currency liabilities. In the second, banks purchased riskier, short-term bonds backed by US mortgages, commercial real estate and other assets, funded by short-term dollar debt. Asian reserve managers took duration risk. European banks took credit and maturity risk, buying risky so-called “spread product” to earn a margin over the cost of short-term funding..... The European banking glut hypothesis holds that gross inflows into private bonds led to the boom. Leveraging up by European banks enabled the leveraging-up of US households. Gross flows from Europe better matched US mortgage market trends towards private credit risk, floating interest rates and narrow spreads. What is more, European banks produced, not just invested in, US mortgage backed securities. Their US securities affiliates held huge exposures to such securities that deserve recognition..... The banking glut offers a better account than the savings glut for US mortgage market developments of the 2000s. Large official inflows into US Treasury and agency notes should have reinforced a US mortgage market dominated by fixed rate mortgages that enjoyed government agency guarantees. Instead, we observe a big shift to mortgages priced with floating (“adjustable”) interest rates and to more risky, leveraged mortgages that agencies could not guarantee. The dominance of the savings glut with its demand for safe assets should have manifested itself in wider spreads, but the spread of the riskiest mortgages over normal ones actually narrowed...... Furthermore, European banks’ leveraging-up also provided credit that enabled housing booms in Ireland and Spain. These findings favour the European banking glut hypothesis..."

Robert McCauley, "The 2008 crisis: transpacific or transatlantic," Bank for International Settlements, December 2018, https://www.bis.org/publ/qtrpdf/r_qt1812f.pdf

Tuesday, December 18, 2018

AI Summary. An estimated 734m jobs are needed globally over two decades to absorb demographic growth and reach target unemployment rates of 4% or less for adults and 8% or less for youth, with 91% of them required in low- and middle-income countries. Youth population growth is projected at 5% versus 27% for adults, reflecting declining fertility.

David Bloom Harvard University
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Btw 2010 and 2030, an estimated 734m jobs are needed globally to address demographic shifts & achieve target unemployment rates. 91% of these jobs must be created in low/middle-income countries, where demographic changes pose a larger challenge.

How many jobs must the world create to absorb population growth?

Core argument: An estimated 734m jobs are needed globally between 2010 and 2030 to absorb demographic shifts and reach target unemployment rates of ≤4% for adults and ≤8% for youth.

Between 2010 and 2030, an estimated 734m jobs are needed globally to address demographic shifts and achieve target unemployment rates of ≤4% for adults and ≤8% for youth. Notably, 91% of these jobs must be created in low/middle-income countries, where demographic changes pose a larger challenge. The working-age population is projected to grow faster than the labor force, reversing trends from 1990-2010. Youth population growth is expected at 5%, significantly lower than the adult growth rate of 27%, due to declining fertility rates. This demographic shift underscores the urgency for job creation in these regions, driven by large youth cohorts transitioning into adulthood.

Takeaways by Macro Roundup® AI

  1. An estimated 734m jobs are needed globally between 2010 and 2030 to absorb demographic shifts and reach target unemployment rates of ≤4% for adults and ≤8% for youth.
  2. Some 91% of the 734m needed jobs must be created in low- and middle-income countries, where demographic changes pose a larger challenge.
  3. The working-age population is projected to grow faster than the labor force, reversing the 1990–2010 trend, with youth population growth of 5% below adult growth of 27% amid declining fertility.

interesting theory about the global impact of aging, 91% of the jobs that need to be created are in low/middle income countries.

Job creation likely to be a bigger problem overseas then in our economy (check out the South Asia and Africa numbers) Europe has a major problem.

".... Globally, an estimated 734 million jobs will be required between 2010 and 2030 to accommodate recent and ongoing demographic shifts, account for plausible changes in labour force participation rates, and achieve target unemployment rates of at or below 4 percent for adults and at or below 8 percent for youth.....While the world faces a formidable task of job creation through 2030, reason for optimism exists regarding the challenge post-2030. Job creation requirements between 2010 and 2030 predominantly reflect population growth in the prior two decades, which was the largest period of population growth in history. Because of these lags in the effect of fertility, currently decreasing fertility and population growth rates imply that this is a transitory issue rather than a permanent one. In 1990-2010, the working-age population grew faster than the labour force did. Between 2010 and 2030, however, the reverse is projected. The differences in youth and adult population growth partially explain this reversal in growth rates. In 2010-2030, the youth population is projected to grow by 5 percent, a considerably lower growth rate than the adult population growth rate of 27 percent. This is due primarily to decreasing fertility and population growth leading to low rates of replacement in the youth working-age population. The adult working-age population will continue to grow at a much higher rate due to large youth cohorts moving into the adult population in the near future...."

David Bloom, Mathew McKenna, and Klaus Prettner, "Demography, Unemployment, Automation, and Digitalization: Implications for the Creation of (Decent) Jobs, 2010-2030,"Harvard University, January 2018, https://cdn1.sph.harvard.edu/wp-content/uploads/sites/1288/2018/04/152_Demography-Unemployment-Automation-and-Digitalization_Implications-for-the-Creation-of-Decent-Jobs_2010%E2%80%932030.pdf