It is very hard to take experts seriously when you can find different experts who forecast every possible outcome on a given topic. This is a challenge to the credibility of the futurist/forecasting industry in general, as the current environment is one where you can find very smart, credentialed, trusted experts who espouse contradictory or mutually exclusive views on every topic that is important.

One aspect of this challenge is that for most professional forecasters the benefit of being right far outweighs the consequences of being wrong. This is true especially for bold claims - we reward experts who go against the consensus view and are right and we forgive (or forget) the other 90% of the time they go against the consensus and are wrong. Entire careers have been built on one correct prediction, especially when the event being predicted moves financial markets in a significant way.

A related element to this challenge is the way the news industry functions in 2019. News companies have adopted the entertainment businesses model over the past 20 years (some more slowly than others). This means that news companies report based on what will generate an audience. Bold claims and arguments between articulate experts espousing different views generates a larger audience than does more subdued/moderate forecasting. Larger audiences translate to greater advertising revenue for news companies and greater financial opportunity for the expert fund managers, consultants, and professional forecasters being featured. 

This dynamic is specifically relevant to the issue of technology and labor disruption that we have been focused on in recent weeks, and we hope you enjoy our latest analysis where we bring together the supporting data for various views. Other topics this week include US consumer confidence continuing its long-term upward trend, more evidence of a Chinese economic slowdown, the often counterintuitive (for me) Global Opportunity Index from the Milken Institute, and more.

Featured Blog

This article continues our ongoing series about the rise of automation technology and its impact on employment. In our first piece, we looked at employment in the context of previous technological revolutions and concluded that this current technological revolution will differ markedly from those in the past not only because of the pace of innovation but the challenges it poses to the labor market. This raises a myriad of questions: How big will the impact be? Who will bear the brunt of the economic consequences? How will we as individuals, corporations, and society cope with major changes? Today, we'll examine these questions, evaluate some of the most reliable available data that speaks to them, and present a few alternate (data-based) views of the future.

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VIZ - U.S. Consumer Confidence Index

Consumer confidence in the world's biggest economy - the United States - rebounded in February after a sharp drop in January according to the University of Michigan. While January's decrease was the sharpest since 2012, most likely it was a temporary shock caused by the government shutdown rather than the start of a new long-term downward trend. The Federal Reserve's signal that it will take a pause in raising interest rates in 2019 combined with thawing trade relations with China also contributed to the rebound of consumer confidence in February.

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Insights Around the Web

🚢 As the US trade posture shifts, Israel and Iran are both separately joining a Russia-led free trade zone known as the Eurasian Economic Union. The Times of Israel

📈 The U.S. posted the widest November budget deficit on record as spending doubled revenue. Bloomberg

🛢️  After decades of supplying itself and its European neighbors with natural gas, the  Netherlands has become a net importer. World Oil

🤖 The OECD anticipates that in developed countries one in seven jobs are at risk of being fully automated while another 30 percent will likely be overhauled. OECD

🇨🇳 With 65 million empty apartments across the country, China's property market is showing signs of a slump. NIKKEI

🚜 US Midwestern farmers are filing the highest number of bankruptcies in a decade. Farmers are being battered by sinking commodity prices and stiff tariffs from China and Mexico in retaliation for President Trump’s tariffs on imports. Wall Street Journal 

New Data In Knoema
This dataset is from a  manufacturing outlook survey in the third Federal Reserve District (eastern Pennsylvania, southern New Jersey, and Delaware). This dataset indicates the direction of change in overall business activities along with relative movement of various measures of activity at the plant level like employment, working hours, new orders, and unfilled orders over more than five decades. The dataset ranges from 1968 to 2019.
This index tracks countries’ performance in five categories in terms of capital flow through banking, foreign direct investment (FDI). and portfolio flows. The index considers not only economic fundamentals that influence investment activity but also financial services, business perception, institutional framework, and international standards and policy. Moreover, the dataset provides important information for investors to diversify their investment strategies and to understand the factors which influence both FDI and portfolio flows. The dataset ranges from 2000 to 2018.
This dataset summarizes the latest bond ratings, default spread, and Moody’s rating for different countries. The dataset is very helpful for investors across the globe as it measures Country Risk Premium, Equity Risk Premium, and Corporate Tax Rate. Moreover, the Moody’s long term rating of countries helps give a risk context to country obligations in the form of likelihood of default metrics with estimated financial loss suffered in the event of default. The dataset ranges from 2018 to 2019.

Bret Boyd
CEO, Knoema

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