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dshort – Advisor Perspectives

Anticipating the Employment Report for March

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April 1st, 2015

The economic mover and shaker this week is the Friday employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, probably the most publicized in the near term being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository).

Today we have a February estimate of 189K new nonfarm private employment jobs from ADP. The 189K estimate came in below the Investing.com forecast of 225K for the ADP number.

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Secular Bull and Bear Markets

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April 1st, 2015

Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? At this point, over five-and-a-half years later, the S&P 500 has set an inflation-adjusted record high.

Let's examine the past to broaden our understanding of the range of historical trends in market performance. An obvious feature of this inflation-adjusted series is the pattern of long-term alternations between up-and down-trends.

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Moving Averages: Month-End Update

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March 31st, 2015

Valid until the market close on April 30, 2015

The S&P 500 closed March with a monthly loss of 1.74%, which follows the biggest monthly gain in 40 months. All three S&P 500 MAs and three of the five Ivy Portfolio ETF MAs are signaling "Invested". In the table below, monthly closes that are within 2% of a signal are highlighted in yellow.

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Consumer Confidence Rose in March

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March 31st, 2015

The Latest Conference Board Consumer Confidence Index was released this morning based on data collected through March 19. The headline number of 101.3 was a rise from the revised February final reading of 98.8, an upward revision from 96.4. Today's number was above the Investing.com forecast of 96.0.

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Moving Averages: Month-End Preview

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March 31st, 2015

Here is an advance preview of the monthly moving averages I track after the close of the last business day of the month. At this point, before the open on the last day of the month, three S&P 500 strategies are now signaling "invested" -- unchanged from last month. One of the five of the Ivy Portfolio ETFs, PowerShares DB Commodity Index Tracking (DBC), is signal "cash" -- unchanged from last month. Note, however, that the 12-month moving average variant also shows VEU as signalling "cash".

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NYSE Margin Debt Surged in February

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March 30th, 2015

Unfortunately, the NYSE margin debt data is about a month old when it is published. The latest debt level is 0.17% below its nominal high set one year ago. However, real (inflation-adjusted) debt rose 4.07% month-over-month and is hovering a mere 0.14% off its record high set in February 2014.

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Weekly Gasoline Price Update: Virtually Unchanged

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March 30th, 2015

It's time again for my weekly gasoline update based on data from the Energy Information Administration (EIA). Rounded to the penny, Regular dropped a penny and Premium was unchanged -- the reverse of last week's pattern.

According to GasBuddy.com, California has the highest average price at $3.20,. South Carolina has the cheapest Regular at $2.09.

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Two Measures of Inflation and Fed Policy

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March 30th, 2015

The BEA's Personal Consumption Expenditures Chain-type Price Index for February shows core inflation below the Federal Reserve's 2% long-term target at 1.37%. The latest Core Consumer Price Index release, also data through February, is higher at 1.70%. The Fed is on record as using Core PCE data for its primary inflation gauge.

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Market Cap to GDP: The Buffett Valuation Indicator

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March 30th, 2015

Note from dshort: This update includes the Q4 Third Estimate of GDP and the alternate version with the First Estimate of the Q4 GNP divisor.

I've now updated the GDP denominator with the BEA's Q4 Third Estimate. The numerator is from the Fed's Z.1 Financial Accounts. The indicator remains over 2 standard deviations above its mean at an interim high of 127.4%. The bigger news will be our first look at the Q1 2015 GDP data on April 29th.

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The Latest on Real Disposable Income Per Capita

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March 30th, 2015

With the release of today's report on February Personal Incomes and Outlays we can now take a closer look at "Real" Disposable Personal Income Per Capita.

The February nominal 0.36% month-over-month increase in disposable income drops to 0.18% when we adjust for inflation. The year-over-year metrics are 3.54% nominal and 3.19% real.

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PCE Price Index: Little Change in the Fed's Preferred Inflation Gauge

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March 30th, 2015

The latest Headline PCE price index year-over-year (YoY) rate is 0.33%, up fractionally from the from 0.24% the previous month. The Core PCE index (less Food and Energy) at 1.37% is little changed from the previous month's 1.33% YoY.

The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012.

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ECRI Recession Watch: Weekly Update

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March 29th, 2015

Friday's release of the publicly available data from the Economic Cycle Research Institute (ECRI) puts its Weekly Leading Index (WLI) at 131.6, up slightly from 131.2 the previous week. The WLI annualized growth indicator (WLIg) is at -3.2, up from the previous week's -3.6 and off its interim low of -4.9 in mid-January.

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World Markets Weekend Update

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March 28th, 2015

Only two of the eight indexes on my world market watch, list posted a weekly gain. The top performing Shanghai Composite rose 2.04%, with Hong Kong's Hang Seng as a distant second at 0.46%. The losses of the other six indexes ranged from -1.05% to -2.84%, with the average of the eight at -1.10%, the worst since the -1.21% at the end of January.

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S&P 500 Snapshot: Selloff Ends with a Modest Gain

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March 27th, 2015

Friday was a mixed bag of economic data. Hopes for an upward revision to Third Estimate of Q4 GDP were disappointed when the BEA left the annualized rate at 2.2%. The Michigan final Consumer Sentiment for March was an improvement on the preliminary reading, but it was below the February final and well off the January 11-year high. The S&P 500 spent the day in a narrow range, ending with a modest 0.24% gain, which snapped a four-day selloff. The index was down 2.33% for the week, its second worst weekly performance of 2015 (the worst being the -2.77% plunge in late January).

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Median Household Income Up Slightly in February

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March 27th, 2015

Summary: The Sentier Research monthly median household income data series is now available for February. The nominal median household income was up $178 month-over-month and up $1,409 year-over-year. That's a 0.3% MoM gain and 2.7% YoY. Adjusted for inflation, the numbers were up $60 MoM and $1447 YoY. The real numbers equate to a 0.1% monthly increase and a 2.7% yearly increase.

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Michigan Consumer Sentiment at 93.0, An Improvement from the March Preliminary

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March 27th, 2015

The University of Michigan final Consumer Sentiment for March came in at 93.0, up from the 91.2 March preliminary reading but down from the final reading of 95.4 in February and the 98.1 level in January. Investing.com had forecast 92.0 for the March final.

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Q4 GDP Third Estimate Remains Unchanged at 2.2%

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March 27th, 2015

The Third Estimate for Q4 GDP, to one decimal, came in at 2.2 percent, unchanged from the Second Estimate. Today's number was a minor disappointment for most economic forecasts, which were looking for a somewhat higher Third Estimate.

Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 13.6% below trend. That is slightly off the 14.0% below in Q1 of 2014.

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Gasoline Volume Sales, Demographics and our Changing Culture

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March 26th, 2015

The Department of Energy's Energy Information Administration (EIA) data on volume sales is over two months old when it released. The latest numbers, through mid-January, are now available. However, despite the lag, this report offers an interesting perspective on fascinating aspects of the US economy. Gasoline prices and increases in fuel efficiency are important factors, but there are also some significant demographic and cultural dynamics in this data series.

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New Jobless Claims at 282K, Better than Forecast

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March 26th, 2015

Today's seasonally adjusted 282K beat the Investing.com forecast of 290K. The four-week moving average at 297,000 is now 18,000 above its 14-year interim low set in early November of last year.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

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The "Real" Goods on the Latest Durable Goods Data

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March 25th, 2015

Earlier today the Census Bureau posted the Advance Report on February Durable Goods New Orders. This series dates from 1992 and is not adjusted for either population growth or inflation.

Let's now review Durable Goods data with two adjustments. In the charts below the red line shows the goods orders divided by the Census Bureau's monthly population data, giving us durable goods orders per capita.

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The Big Four Economic Indicators: Real Retail Sales

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March 25th, 2015

Retail Sales fell again in February, down 0.58%, the third month of decline and substantially below estimates. The inflation-adjusted data, using the seasonally-adjusted Consumer Price Index, came in even worse at -0.80%. The chart below gives us a close look at the monthly data points in this series since 2009. I've included a linear regression to help us identify the trend.

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February Durable Goods Plunge

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March 25th, 2015

The March Advance Report on February Durable Goods released today by the Census Bureau was quite disappointing. Here is the Bureau's summary on new orders:

New orders for manufactured durable goods in February decreased $3.2 billion or 1.4 percent to $231.3 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 2.0 percent January increase. Excluding transportation, new orders decreased 0.4 percent. Excluding defense, new orders decreased 1.0 percent.

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Vehicle Miles Traveled: A Structural Change in Our Behavior

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March 24th, 2015

The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through January.

"Travel on all roads and streets changed by 4.9% (11.1 billion vehicle miles) for January 2015 as compared with January 2014." The less volatile 12-month moving average is up 0.36% month-over-month and 2.12% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is little changed, up 0.08% month-over-month and up only 0.97% year-over-year.

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A Long-Term Look at Inflation

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March 24th, 2015

The Consumer Price Index for Urban Consumers (CPI-U) released this morning puts the year-over-year inflation rate at -0.03%. It is substantially below the 3.85% average since the end of the Second World War and its 10-year moving average, now at 2.25%.

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Inflation: A Six-Month X-Ray View

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March 24th, 2015

Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. I've also included each of the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.

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What Inflation Means to You: Inside the Consumer Price Index

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March 24th, 2015

Let's do some analysis of the Consumer Price Index, the best known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I'll refer to hereafter as the CPI.

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Richmond Fed Manufacturing Composite: Activity Declined in March

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March 24th, 2015

The March update shows the manufacturing composite at -8, down from 0 last month. Above zero indicates expanding activity; below zero indicates contraction. Today's composite number was well below the Investing.com forecast of 2.

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February Headline Consumer Price Index: First Increase in Five Months

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March 24th, 2015

The Bureau of Labor Statistics released the February CPI data this morning. Year-over-year unadjusted Headline CPI came in at -0.03% (rounded to 0.0%), up from -0.09% (rounded to -0.1%) the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.70% (rounded to 1.7%), up from the previous month's 1.65% (rounded to 1.6%). The non-seasonally adjusted month-over-month Headline number was up 0.43% (rounded to 0.4%), and the Core number was up 0.35% (rounded to 0.3%).

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Understanding the CFNAI Components

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March 23rd, 2015

The Chicago Fed's National Activity Index, which I reported on earlier today, is based on 85 economic indicators drawn from four broad categories of data:

  • Production and Income
  • Employment, Unemployment, and Hours
  • Personal Consumption and Housing
  • Sales, Orders, and Inventories

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Chicago Fed: Economic Growth Slightly Below Average In February

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March 23rd, 2015

"Index shows economic growth slightly below average in February": This is the headline for today's release of the Chicago Fed's National Activity Index, and here are the opening paragraphs from the report:

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Conference Board Leading Economic Index Remains in Growth Territory

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March 20th, 2015

Note from dshort: I've appended a couple of rather striking charts at the bottom of this commentary in response to a suggestion from my friend Bob Bronson. What would the Conference Board's LEI look like if it were adjusted for population growth and inflation? Check it out.

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The Declining Demand for Driving Vehicles

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March 20th, 2015

Paul Hodges, who writes a blog for ICIS.com on Chemicals and the Economy, recently sent me link to his fascinating study on the correlation between gasoline prices and the Department of Transportation's monthly statistics on vehicle miles driven. Paul offers a new perspective with a scatter chart showing the correlation between gasoline prices (vertical axis) and per-capita vehicle miles traveled on the horizontal axis.

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The Philly Fed ADS Business Conditions Index

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March 20th, 2015

The Philly Fed's Aruoba-Diebold-Scotti Business Conditions Index (hereafter the ADS index) is a fascinating but relatively little known real-time indicator of business conditions for the U.S. economy, not just the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey, and Delaware. Thus it is comparable to the better-known Chicago Fed's National Activity Index.

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Philly Fed Business Outlook: Modest Growth, A Bit Below Expectations

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March 19th, 2015

The latest gauge of General Activity came in at 5.0, essentially unchanged from last month's 5.2 and the lowest reading since the -2.0 contraction in February of last year. The 3-month moving average came in at 5.5, down from 11.9 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook was little unchanged at 32.0 versus the previous month's 29.7.

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WSJ Economists' Forecasts for 10-Year Yields and the Fed Funds Rate

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March 18th, 2015

The big economic news today will start the statement from the Federal Open Market Committee at 2 PM ET and followed by Janet Yellen's press conference 30 minutes later. The economic press has been a veritable cacophony pundit views on whether the word "patient" remains or is discarded in the new statement. Here is the key sentence in the previous statement (emphasis added).

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Empire State Manufacturing: Modest Expansion, Below Expectations

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March 16th, 2015

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 6.90 shows a slippage from last month's 7.78, which signals expansion at a modest pace. The Investing.com forecast was for a reading of 8.0.

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Household Net Worth: The "Real" Story

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March 13th, 2015

Let's take a long-term view of household net worth from the latest Z.1 release. A quick glance at the complete data series shows a distinct bubble in net worth that peaked in Q4 2007 with a trough in Q1 2009, the same quarter the stock market bottomed. The latest Fed balance sheet shows a total net worth that is 50.9% above the 2009 trough and 22.2% above the 2007 peak and at an all-time high. The nominal Q4 net worth is up 1.9% from the previous quarter and up 5.2% year over year.

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Producer Price Index: Another Negative Surprise

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March 13th, 2015

Today's release of the February Producer Price Index (PPI) for Final Demand came in at -0.5% month-over-month seasonally adjusted. That follows the previous month's -0.8% decline. Core Final Demand (less food and energy) also came in at -0.5% month-over-month following a -0.1% change the month before. The Investing.com forecasts were for 0.3% headline and 0.1% core. The year-over-year change in Final Demand is -0.7%, the lowest in the brief history of this data series.

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The Fed Balance Sheet: What Is Uncle Sam's Largest Asset?

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March 13th, 2015

Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset on Uncle Sam's balance sheet?

  • A) U.S. Official Reserve Assets
  • B) Total Mortgages
  • C) Taxes Receivable
  • D) Student Loans

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The Q Ratio and Market Valuation: New Update

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March 12th, 2015

Note from dshort: This commentary has been updated to incorporate the Federal Reserve release of the Q4 Financial Accounts.

The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It's a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies.

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A Stunning Miss for February Retail Sales

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March 12th, 2015

The Advance Retail Sales Report released this morning shows that sales in February came in at -0.6% month-over-month, which comes on top of a -0.8% in January and a -0.9% decline in December. Core Retail Sales (ex Autos) came in at -0.1%, which follows a -1.1% in January and a -0.9% December decline. The general pundit view is that unseasonably cold weather was responsible for the weak numbers.

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Continuing Proof of Structural Changes in the U.S. Workforce

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March 11th, 2015

At last year's Jackson Hole Symposium, Fed Chair Janet Yellen delivered an extended analysis of "Labor Market Dynamics and Monetary Policy". Her speech essentially reviewed the ongoing debate over the mix of cyclical versus structural factors in employment since the Great Recession.

I've updated a series of charts illustrating some structural changes in the workforce that are far more significant than the cyclical impact of the Great Recession.

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A Warning Sign from the Latest Wage Data: Update

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March 10th, 2015

Note from dshort: I've added a second chart to show the correlation between hourly earnings and inflation.

Over the weekend, my virtual friend and occasional correspondent New Deal Democrat requested some assistance on visualizing Average Hourly Earnings of Production and Nonsupervisory Employees.

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Demographic Trends in the 50-and-Older Work Force

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March 10th, 2015

Note from dshort: I've updated this commentary with the latest numbers from last week's Employment Report.

This is not the scenario that would have been envisioned a generation ago for the "Golden Years" of retirement. Consider: Today nearly one in three of the 65-69 cohort and almost one in five of the 70-74 cohort are in the labor force.

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Structural Trends in Employment by Age Group

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March 10th, 2015

The Labor Force Participation Rate (LFPR) is a simple computation: You take the Civilian Labor Force (people age 16 and over employed or seeking employment) and divide it by the Civilian Noninstitutional Population (those 16 and over not in the military and or committed to an institution). The result is the participation rate expressed as a percent.

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Small Business Optimism: A Fractional Monthly Gain

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March 10th, 2015

The latest issue of the NFIB Small Business Economic Trends is out today. The March update for February came in at 98, a fractional change of 0.1 point from 97.9 the previous month and off the December interim high of 100.4. The index is now at the 37th percentile in this series. The Investing.com forecast was for 99.2.

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Inside the World of Multiple Jobholders: Two Decades of Trends

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March 9th, 2015

What are the long-term trends for multiple jobholders in the US? The Bureau of Labor Statistics has two decades of historical data to enlighten us on that topic, courtesy of Table A-16 in the monthly Current Population Survey.

At present, multiple jobholders account for about five percent of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the current relative sizes of which I've illustrated in a pie chart.

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Ratio of Part-Time Employed Still Remains Higher Than the Pre-Recession Level

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March 9th, 2015

Let's take a close look at Friday's employment report numbers on Full and Part-Time Employment. Buried near the bottom of Table A-9 of the government's Employment Situation Summary are the numbers for Full- and Part-Time Workers, with 35-or-more hours as the arbitrary divide between the two categories. The source is the monthly Current Population Survey (CPS) of households. The focus is on total hours worked regardless of whether the hours are from a single or multiple jobs.

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The Civilian Labor Force, Unemployment Claims and the Business Cycle

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March 6th, 2015

What does the ratio of unemployment claims tell us about where we are in the business cycle and our current recession risk? At present, the ratio for Continued Claims has been trending down. Excluding the 1981 recession, the Initial Claims trough lead time for a recession has ranged from 7 to 22 months with an average of 12 months if we include the 1981 recession and 14 months if we exclude it.

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Surprisingly Strong Jobs Growth in February

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March 6th, 2015

Today's report of 295K new nonfarm jobs in January was well above the Investing.com forecast of 240K. However, January nonfarm payrolls were revised downward by 18K from 257K to 239K. The unemployment rate ticked down from 5.7% to 5.5%.

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Treasury Snapshot: Where Are Yields Headed?

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March 5th, 2015

With Quantitative Easing behind us as well as the Fed's first semi-annual congressional testimony, let's take a quick look at US Treasuries. The yields on the 10-, 20- and 30 year Treasuries had trended downward rather dramatically since the end of 2013. They hit their recent lows at the end of January. The 20- and 30-year yield hit record closing lows of 2.04% and 2.25%, respectively. The yield on the 10-year Note closed at 1.68%, substantially off its 3.04% close at the end of 2013 but above its 1.43% historic low in July of 2012.

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Light Vehicle Sales Per Capita: A Better Look at the Long-Term Trend

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March 4th, 2015

For the past few years I've been following a couple of transportation metrics: Vehicle Miles Traveled and Gasoline Volume Sales. For both series I focus on the population adjusted data. Let's now do something similar with the Light Vehicle Sales report from the Bureau of Economic Analysis. This data series stretches back to January 1976. Since that first data point, the Civilian Noninstitutional Population Age 16 and Over (i.e., driving age not in the military or an inmate) has risen 61.7%.

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ISM Non-Manufacturing: Continued Growth in February

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March 4th, 2015

Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 56.9 percent, up fractionally from last month's 56.7 percent. Today's number came in above the Investing.com forecast of 56.5.

Here is the report summary:

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The Four Totally Bad Bear Recoveries: Where Are We Now?

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March 3rd, 2015

This chart series features an overlay of the Four Bad Bears in U.S. history since the market peak in 1929. They are:

  1. The Crash of 1929
  2. The Oil Embargo of 1973
  3. The 2000 Tech Bubble bust and,
  4. The Financial Bubble and Crisis.

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The Market Moves Higher into Overvaluation Territory

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March 3rd, 2015

Here is a summary of the four market valuation indicators I updated at the beginning of the month.

  • The Crestmont Research P/E Ratio
  • The cyclical P/E ratio using the trailing 10-year earnings as the divisor
  • The Q Ratio, which is the total price of the market divided by its replacement cost
  • The relationship of the S&P Composite price to a regression trendline

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Market Valuation, Inflation and Treasury Yields: Clues from the Past

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March 3rd, 2015

My monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a "normal" market environment -- one with conventional business cycles, Federal Reserve policy, interest rates and inflation -- current valuation levels would be a serious concern.

But these are different times.

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Crestmont Market Valuation Update

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March 2nd, 2015

Quick take: Based on the February S&P 500 average of daily closes, the Crestmont P/E is now 98% above its arithmetic mean and at the 98th percentile of this fourteen-plus-decade monthly metric.

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Is the Stock Market Cheap?

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March 2nd, 2015

Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month, which is 2,082.20. The ratios in parentheses use the monthly close of 2,104.50. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.

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ISM Manufacturing Index: ISM Manufacturing Index: Slowest Growth in Thirteen Months

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March 2nd, 2015

Today the Institute for Supply Management published its monthly Manufacturing Report for February. The latest headline PMI was 52.9 percent, a decline from the previous month's 53.5 percent and below the Investing.com forecast of 53.0. This was the lowest PMI since January 2014, thirteen months ago.

Here is the key analysis from the report:

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Regression to Trend: A Perspective on Long-Term Market Performance

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March 2nd, 2015

Quick take: At the end of January the inflation-adjusted S&P 500 index price was 96% above its long-term trend, up from 91% above trend the previous month.

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The S&P 500, Dow and Nasdaq Since Their 2000 Highs

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March 2nd, 2015

Here is a update in response to a standing request from a couple of sources that I also share with regular visitors to my Advisor Perspectives pages. The request is for real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite. In response, I maintain two overlays — one with the nominal price, excluding dividends, and the other with the price adjusted for inflation based on the Consumer Price Index for Urban Consumers (which is usually just refer to as the CPI).

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Equity Valuations, Recessions and Stock Market Declines

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February 25th, 2015

Last week I had a fascinating conversation with Neile Wolfe, of Wells Fargo Advisors, LLC. Based on the underlying data in the adjacent chart, Neile made some cogent observations about the historical relationships between equity valuations, recessions and market prices:

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Earnings of Private Employees: A Big Recovery in January

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February 6th, 2015

First, here is a chart of the Average Hourly Earnings. I've included a linear regression through the data to highlight the trend. Hourly earnings increased at a faster pace through 2008, but the pace slowed from early 2009 onward. The December data point was a bit disturbing, a 5 cent month-over-month decline, the largest decline in the history of the series. However the January data point is a big bounce of 12 cents, the largest increase in the series.

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Household Income versus Family (Tax-Unit) Income

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January 29th, 2015

My virtual acquaintance New Deal Democrat has posted an interesting article on real (inflation-adjusted incomes) based on annual IRS tax data through 2013. His discussion includes some comparisons between the Census Bureau's median Household Income data and the Family Unit average income. A Family Unit is the term used for an IRS designated Tax Unit (e.g., a couple with dependents, or a head of household with dependents, or a single person).

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Population-Adjusted Real Retail Sales: Another Perspective on the Economy

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January 16th, 2015

In real, population-adjusted terms, Retail Sales are at the level we first reached in December 2004.

Earlier this week, the Advance Retail Sales Report showed that sales in December declined 0.9% month-over-month, as I reported in my real-time update.

With the subsequent release of the Consumer Price Index, we can now dig a bit deeper into the "real" data, adjusted for inflation and against the backdrop of our growing population.

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Five Decades of Middle Class Wages: Update

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January 9th, 2015

Note from dshort: I've updated this series to include today's release of the December employment data. While my focus here is on long-term trends, I want to call attention to the six-cent decline from November to December in the average hourly earnings for this cohort. That's the largest month-over-month decline in the history of the series, which dates from 1964. The second largest was three cents in August 1983.

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Household Incomes Across Time: The Divergence at the Top

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December 30th, 2014

Among the most interesting of the long-term economic indicators I track is the Census Bureau's annual data on the mean (average) household income received by each fifth (quintile) and top 5 percent. See my latest update here. A conspicuous pattern in the series is the widening of the spread in income growth that started during the 1980s.

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Happiness Revisited: A Household Income of $75K?

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September 25th, 2014

Note from dshort: I've updated this commentary in the wake of the Census Bureau's release last week of the 2013 annual household income data from the Current Population Survey.

One of my favorite discussions on APViewpoint, which addressed "The Sad State of Happiness" included an indirect reference to a popular 2010 academic study by psychologist Daniel Kahneman and economist Angus Deaton. Their topic was the correlation between annual household income and day-to-day contentment.

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Median Household Income by State: A Sobering Look at the Data

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September 19th, 2014

The Census Bureau's annual household income reports for 2013 were published this week. I've now compiled a few tables for the 50 states and DC based on the Current Population Survey, a joint undertaking of the Census Bureau and Bureau of Labor Statistics, which includes annual data from 1984 to 2013. The details are fascinating, if somewhat sobering.

First, some context. The median US income in 2013 was $51,939, up from $22,415 in 1984 -- a 131.7% rise over the 29-year timeframe.

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Median Household Incomes by Age Bracket: 1967-2013

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September 17th, 2014

Earlier today I updated my commentary on household income distribution to include the Census Bureau's release of the 2013 annual data. My focus was on arithmetic mean (average) household incomes by quintile (and the top 5%) over the 46-year history of this data series. The analysis offered some fascinating insights into U.S. household incomes.

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U.S. Household Incomes: A 46-Year Perspective

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September 17th, 2014

The Census Bureau has now released its annual report household income data for 2013. It is posted on the Census Bureau website. What I'm featuring in this update is an analysis of the quintile breakdown of data from 1967 through 2013 along with the statistics for the top 5%.

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Median Household Income Growth: Deflating the American Dream

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September 16th, 2014

What is the single best indicator of the American Dream? Many would point to household income growth. The Census Bureau has now published some selected annual household income data in a new report: Income and Poverty in the United States: 2013. Last year the median (middle) household income was $51,939 -- a 1.8% year-over-year increase that shrinks to 0.3% when adjusted for inflation. Let's put the new release into a larger historical context.

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