Kathleen Madigan writes

In the man-versus-machine competition, machine is winning. And it’s not just Watson beating humans on “Jeopardy.”

Since the recession ended, businesses had increased their real spending on equipment and software by a strong 26%, while they have added almost nothing to their payrolls.

This kind of reasoning is tempting. The President even seemed to succumb to it when he suggested that ATM were taking bank teller jobs.

However, the chart above confuses stocks and flows. The size of the labor force is a stock while investment spending is a flow.

If we look at the change in payrolls, just like investment is the change in the amount of equipment, we get very similar lines across the period in question.

FRED Graph

If we want to do a proper index, then we are going to have to go back to Though, I think you get a better picture if you look at the whole recession.

FRED Graph

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