Feeling good about the economy?

While the media continues an incessant stream of happy news reiterating the mantra “things are getting better”, I try to look at a broad range of indicators to get a true idea of the state of economy. So you think “things are getting better” do you? Enough to quit your job? Perhaps without another [...]

A trillion dollars lost

The chart above shows US Gross Domestic Product for the period 1973 to 2013 (GDP, thick black line), with recessions indicated by vertical gray bars. For each period of economic expansion I’ve added a flat trend line, essentially identifying the level of US GDP as if the recession had never happened. You’ll notice that [...]

What a recovery

Most of the happy news about GDP looks at quarterly changes, but a broader perspective reveals a different story. The chart above shows real1 GDP from January, 1947 to the present. I’ve calculated the average GDP for the period of economic expansion in the table below. The present period of expansion is the second [...]

Housing is booming, right?

Wrong. The Fed is buying. But let’s look deeper: the latest news on US housing was promising, with prices gaining some 9.3% YOY in 20 cities. An old expression claims as housing goes so goes the US economy so what’s not to like about this picture?

Unfortunately, much of this growth is being [...]

America’s finance economy

Pre credit crunch, many folks acknowledged The United States had what is called a FIRE economy, or one that derives a significant amount of revenue from the FInance and REal estate sectors. Many people have suggested America migrate away a FIRE economy by encouraging economic activity in a more diverse range of sectors. How [...]

A rather anemic recovery

The amount of money a business entity has left after all costs have been paid – corporate profits after tax – indicates the overall health of the economy. As these profits grow then businesses are expanding, hiring new workers, and investing in infrastructure.

The chart above shows Corporate Profits After Tax (CP, black [...]

Hey American consumer feeling any poorer?

You should be. Between shrinking wages and low but relentless inflation the wealth of the American consumer has been steadily eroded. From time to time I’ve looked at the consumer price index, or CPI and it’s effects on various investible assets. But some folks find rather abstract metrics such as CPI a tad difficult [...]

Employment has flat lined

Lots of attention is focused on the unemployment rate, with minor reductions pointed to as evidence that things are “getting better”. I thought it would be interesting to look not at unemployment but rather at employment. The chart above shows three series – Civilian Employment (CE16OV, blue line), Workers Not in Labor Force (LNS15000000, [...]

A horrible jobs number

came out this AM, even though we saw unemployment dip to 7.6% what the happy news reports (rather conveniently) omit is the simple fact that at the same time the participation rate dropped from 63.5% to 63.3% of the population. In other words, this month another 0.2% of the workforce decided labor isn’t for [...]

The S&P 500 adjusted for inflation

Lots of happy news last week about The S&P 500 following the Dow Jones 30 Industrials and hitting record highs. Or did it?

The chart above shows two series, the S&P 500 in nominal terms and the S&P 500 in real terms. The difference? Nominal measures a “stated” rate, while real is “adjusted [...]