Small caps reveal a shifting economy

The US has experienced a massive shift in the nature of its economy over the last half century. The US was traditionally a manufacturing-focused economy, supplying a variety of raw materials and consumer and industrial products domestically and abroad. Today, data shows the US economy is most heavily represented by service-oriented sectors such as Technology, Health Care and Financials and less so by the industrial sectors such as Energy, Basic Materials and Industrials. However, the leading sectors are always in a state of change indicative of economic, consumer, and industry trends. Fourth quarter saw the addition of 39 companies to the Russell 2000 and eight companies to the Russell 1000.