Vehicle Miles Traveled: A Structural Change in Our Behavior Click to view

December 19th, 2014 Doug Short

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

"Travel on all roads and streets changed by 2.6% (6.6 billion vehicle miles) for October 2014 as compared with October 2013." The less volatile 12-month moving average is up 0.22% month-over-month. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is up 0.13% month-over-month but down 0.12% year-over-year.

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Treasury Snapshot: Post-Fed and Pre-Christmas Click to view

December 19th, 2014 Doug Short

Quantitative Easing is over, the last FOMC meeting of the year is behind us and Christmas is just around the corner. Let's take a quick look at what's been happening for US Treasuries. The yields on the 10-, 20- and 30 year Treasuries have generally trended downward since the end of 2013. In fact, the 10-year Note yield is only 10 bps off its 2014 low set earlier this week.

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Five Decades of Middle Class Wages: Update Click to view

December 19th, 2014 Doug Short

Note from dshort: I've updated this series to include Wednesday's release of the November inflation data.

Here's a perspective on personal income for production and nonsupervisory private employees going back five decades.

The Bureau of Labor Statistics has been collecting data on this workforce cohort since 1964. The government numbers provide some excellent insights on the income history of what we might think of as the private middle class wage earner.

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Real Earnings of Private Employees: Looking Better Click to view

December 19th, 2014 Doug Short

Note from dshort: I've adjusted this commentary to include the inflation data released on Wednesday.

Here is a look at two key numbers in last week's monthly employment report for November:

  • Average Hourly Earnings
  • Average Weekly Hours
The government has been tracking the data for Production and Nonsupervisory Employees for decades. But coverage of Total Private Employees only dates from March 2006.

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ECRI Recession Watch: Weekly Update Click to view

December 19th, 2014 Doug Short

Yesterday the Conference Board released its monthly Leading Economic Index, data though November. Here is an overlay of the LEI with ECRI's Weekly Leading Index. The ECRI indicator is, not surprisingly, the more volatile of the two, given its weekly granularity. Note that I've included linear regressions for both series; they are virtually identical.

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The Philly Fed ADS Business Conditions Index Click to view

December 19th, 2014 Doug Short

Note from dshort: I’ve updated my periodic look at the Philly Fed ADS Index through the December 18th release, which included the latest Initial Jobless Claims (for the week ending December 13th).

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.

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S&P 500 Snapshot: Best Two-Day Gain in Over Three Years Click to view

December 18th, 2014 Doug Short

The S&P 500 posted a whopping gain of 2.40% for the day. That was that best one-day gain since the 2.54% pop on first day of trading in 2013. On top of yesterday's 2.04% advance, the index has posted the best two-day gain in three years. The rally in the US was part of a global phenomenon. The Euro STOXX 50 surged 3.33% today and is up 5.73% over the past three sessions. As for oil, "Look out below!" West Texas Crude dropped another 3% today.

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The Big Four Economic Indicators: Real Retail Sales Click to view

December 18th, 2014 Doug Short

Note from dshort: This commentary has been updated to include the November Real Retail Sales using yesterday's release of the Consumer Price Index for November.

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

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Conference Board Leading Economic Index Increased Again in November Click to view

December 18th, 2014 Doug Short

The Latest Conference Board Leading Economic Index (LEI) for November is now available. The index rose 0.6 percent to 105.5. October was revised to downward 104.9 percent (2004 = 100). The latest number came in slightly above the 0.5 percent forecast by Investing.com.

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Philly Fed Business Outlook: Activity Slows But Remains Positive Click to view

December 18th, 2014 Doug Short

The Philly Fed's Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. The latest gauge of General Activity came in at 24.5, a substantial decline from last month's 40.8. The 3-month moving average came in at 28.7, little changed from 28.0 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook slipped to 51.9 from last month's 57.7.

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New Jobless Claims Once Again Better Than Expected Click to view

December 18th, 2014 Doug Short

In the week ending December 13, the advance figure for seasonally adjusted initial claims was 289,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 294,000 to 295,000. The 4-week moving average was 298,750, a decrease of 750 from the previous week's revised average....

Today's seasonally adjusted 289K beat the Investing.com forecast of 295K. However, the four-week moving average at 298,750 is now 19,750 above its 14-year interim low set six weeks ago.

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A Long-Term Look at Inflation Click to view

December 17th, 2014 Doug Short

The Consumer Price Index for Urban Consumers (CPI-U) released this morning puts the November year-over-year inflation rate at 1.32%, off the May 19-month high of 2.13%. It is substantially below the 3.86% average since the end of the Second World War and 43 percent below its 10-year moving average.

Let’s take a step back and look at the history of inflation over the past 140 plus years.

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Inflation: A Six-Month X-Ray View Click to view

December 17th, 2014 Doug Short

Here is a table showing the annualized change in Headline and Core CPI 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 Click to view

December 17th, 2014 Doug Short

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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Headline Consumer Price Index Declined in November, Biggest Monthly Drop since December 2008 Click to view

December 17th, 2014 Doug Short

The Bureau of Labor Statistics released the November CPI data this morning. Year-over-year unadjusted Headline CPI came in at 1.32% (rounded to 1.3%), down from 1.7% (rounded to 1.66%) the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.70%, down from the previous month's 1.81% (rounded to 1.8%). The non-seasonally adjusted month-over-month Headline number was down 0.54% (rounded to -0.5%), and the Core number was down 0.07% (rounded to -0.1%). On a seasonally-adjusted basis, the all items index was down 0.3%.

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Weekly Gasoline Price Update: Down Another 13 Cents Click to view

December 16th, 2014 Doug Short

It's time again for my weekly gasoline update based on data from the Energy Information Administration (EIA). Rounded to the penny Regular dropped 13 cents and Premium 12 cents. Regular is now at its lowest price since October 2009. Will the price decline in gasoline boost discretionary spending during the holiday season? Stay tuned!

According to GasBuddy.com, Hawaii has the highest cost at $3.69. The highest continental average price is in New York at $2.96. Missouri has the cheapest Regular at $2.22.

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Empire State Manufacturing: First Contraction in Nearly Two Years Click to view

December 15th, 2014 Doug Short

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions contracted for the first time since January 2012, 23 months ago. The headline number dropped 14 points to -3.58, down from 10.16 last month.

The Investing.com forecast was for a reading of 12.52.

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World Markets Update: Worst Week of 2014 Click to view

December 13th, 2014 Doug Short

The world market rally came to an abrupt halt this week with seven of the eight indexes on my watch list posting declines ranging from -3% to -7%. In fact, the -4.01% average of the eight is the worst weekly performance of 2014. China's Shanghai Composite took the top spot with a microscopic 0.02% gain. The three European indexes were the biggest losers, with France's CAC 40 in the bottom spot with its -7.03% plunge.

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The Fed Balance Sheet: What Is Uncle Sam’s Largest Asset? Click to view

December 12th, 2014 Doug Short

Note from dshort: I've updated the quiz based on yesterday's Q3 Financial Accounts of the United States (previously referred to as the Flow of Funds Accounts). Hint: The correct answer is the same as it was for the last quiz.


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?

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Preliminary Michigan Consumer Sentiment for December Surges Click to view

December 12th, 2014 Doug Short

The Preliminary University of Michigan Consumer Sentiment for November came in at 93.8, a strong surge from last month. Today reading is a is a post-recession high and the highest level since January 2007, almost eight years ago. Today's sentiment level came in substantially above the Investing.com forecast of 89.7.

See the chart below for a long-term perspective on this widely watched indicator.

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Producer Price Index: Inflation Remains Tame Click to view

December 12th, 2014 Doug Short

Today's release of the November Producer Price Index (PPI) for Final Demand came in at -0.2% month-over-month seasonally adjusted. That's down from the previous month's 0.2% increase. Core Final Demand (less food and energy) was unchanged from last month.

The year-over-year change in Final Demand is up 1.4%, the lowest since 1.2% in February.

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Market Cap to GDP: The Buffett Valuation Indicator Declines a Bit Click to view

December 11th, 2014 Doug Short

Note from dshort: I've updated this commentary to include today's release of the Federal Reserve's Q3 balance sheet.

Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that "it is probably the best single measure of where valuations stand at any given moment."

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Household Net Worth: The ’’Real’’ Story Click to view

December 11th, 2014 Doug Short

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 48.0% above the 2009 trough and 19.9% above the 2007 peak, just off the all-time high at the end of Q2. The nominal Q3 net worth is down 0.2% from the previous quarter but up 6.7% year over year.

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Census Bureau Revisions to Retail Sales Click to view

December 11th, 2014 Doug Short

Earlier today I posted my monthly update on Retail Sales. Those of us who routinely track this series know that the Advance Estimate will be followed by a second estimate next month and a third estimate the month after. How big are those revisions? Are they big enough to warrant skepticism about the Advance Estimate?

See for yourself. Here is a visualization of the cumulative change from the first to third estimates from January 2007 through September 2014, the most recent month for which we have all three data points.

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November Retail Sales: A Strong Prelude to the Holiday Season Click to view

December 11th, 2014 Doug Short

The Advance Retail Sales Report released this morning shows that sales in November came in at 0.7% (0.72% at two decimals) month-over-month, up from 04% in October. Core Retail Sales (ex Autos) came in at 0.5% (0.47% at two decimals), up from 0.4% in October.

Today's numbers came in above the Investing.com forecast of 0.4% for Headline Sales and 0.1% for Core Sales.

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Continuing Proof of Structural Changes in the U.S. Workforce Click to view

December 10th, 2014 Doug Short

At this 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 that support my view that the U.S. workforce has undergone structural changes that are far more significant than the cyclical impact of a recession -- even the so-called "Great Recession".

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Demographic Trends in the 50-and-Older Work Force Click to view

December 9th, 2014 Doug Short

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 Click to view

December 9th, 2014 Doug Short

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

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 Seven-Year High Click to view

December 9th, 2014 Doug Short

The latest issue of the NFIB Small Business Economic Trends is out today. The December update for November came in at 98.1, up 2.0 points from the previous month. Today's report subtitle underscores the theme of the report: "Index components collectively gained a net 22 percentage points on strength of business expectations and higher sales". The index is now at the 37.1 percentile in this series and at a new post-recession high, its highest level since February 2007.

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

December 8th, 2014 Doug Short

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 60.7%.

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Inside the World of Multiple Jobholders: Two Decades of Trends Click to view

December 8th, 2014 Doug Short

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 around 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 Remains Substantially Higher Than the Pre-Recession Level Click to view

December 8th, 2014 Doug Short

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 Click to view

December 5th, 2014 Doug Short

Note from dshort: I’ve updated this commentary to include the latest labor force data in today’s employment report.

A long-term chart of the seasonally-adjusted 4-week moving average of Initial Claims gives a rather distorted view of the economy. Why? Because it doesn’t take into account the 104% growth in the Civilian Labor Force since January 1967. For a better understanding of the weekly Initial Claims data, let’s put the numbers in a ratio with the Civilian Labor Force.

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Real Median Household Income Declined 0.59% in October Click to view

December 5th, 2014 Doug Short

Summary: The Sentier Research monthly median household income data series is now available for October. The nominal median household income was down $318 month-over-month but up $1,417 year-over-year. Adjusted for inflation, it was down $320 MoM (not statistically significant) and up only $554 YoY. The real numbers equate to a -0.59% MoM decline and a 1.04% YoY increase.

In real dollar terms, the median annual income is 6.9% lower ($3,966) than its interim high in January 2008 but off its low in August 2011.

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A November Surge in New Jobs and Upward Revisions to September and October Click to view

December 5th, 2014 Doug Short

Today's report of 321K new nonfarm jobs in November was substantially above the Investing.com forecast of 225K, and there were upward revisions to the two previous months (+15K in September and +29K in October). The unemployment rate remained unchanged at 5.8%.

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Young Adults Then and Now: A Perspective on the Millennials Click to view

December 4th, 2014 Doug Short

The Census Bureau has released a fascinating new study on young adults today compared with previous generations. Among other things, we learn that today's 18-34 population numbers 73 million, about 23 percent of the total population compared to 30 percent for that cohort in 1980. Millennials today are more highly educated but have lower employment rates and are more likely to be living in poverty. They are also less likely to be married and more likely to be living with parents.

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ISM Non-Manufacturing: Continued Growth in November Click to view

December 3rd, 2014 Doug Short

Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 59.3 percent, up from last month's 57.1 percent. Today's number came in above the Investing.com forecast of 57.5.

Here is the report summary:

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Anticipating the Employment Report for November Click to view

December 3rd, 2014 Doug Short

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 the November estimate of 208K new nonfarm private employment jobs from ADP, which we can consider along with the estimate of 306K total new jobs from TrimTabs.

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Market Valuation Overview: November Overvaluation Surpassed Only by the Tech Bubble Click to view

December 2nd, 2014 Doug Short

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 Click to view

December 2nd, 2014 Doug Short

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 normal 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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The Q Ratio and Market Valuation: New Update Click to view

December 2nd, 2014 Doug Short

Based on the latest Z.1 data, the Q Ratio at the end of the second quarter of 2014 was 1.12. As of the November close, the broad market was up 5.1% (based on VTI's monthly averages of daily closes). My latest estimate would put the ratio about 73% above its arithmetic mean and 86% above its geometric mean.

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Crestmont Market Valuation Update Click to view

December 1st, 2014 Doug Short

Quick take: Based on the November S&P 500 average of daily closes, the Crestmont P/E is now 95% above its arithmetic mean and at the 98th percentile of this fourteen-decade monthly metric.

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Is the Stock Market Cheap? Click to view

December 1st, 2014 Doug Short

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 2,044.57. The ratios in parentheses use the monthly close of 2,067.56. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.

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ISM Manufacturing Index: Little Changed, But Better Than Forecast Click to view

December 1st, 2014 Doug Short

Today the Institute for Supply Management published its monthly Manufacturing Report for November. The latest headline PMI was 58.7, a slight decline from 59.0 percent but above the Investing.com forecast of 57.9.

Here is the key analysis from the report:

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

December 1st, 2014 Doug Short

Quick take: At the end of November the inflation-adjusted S&P 500 index price was 93% above its long-term trend, up from 83% above trend the previous month.


About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let’s apply some simple regression analysis to the question.

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

December 1st, 2014 Doug Short

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). The charts below have been updated through the end of November.

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Secular Bull and Bear Markets Click to view

November 30th, 2014 Doug Short

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 Click to view

November 29th, 2014 Doug Short

Valid until the market close on December 31, 2014

The S&P 500 closed September with a monthly gain of 2.45%. All three S&P 500 MAs and three of the five the Ivy Portfolio ETF MAs are signaling "Invested".

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Two Measures of Inflation and Fed Policy Click to view

November 28th, 2014 Doug Short

Note from dshort: I've updated the accompanying charts with the latest Personal Consumption Expenditures price index from the Bureau of Economic Analysis. The annualized rate of change is calculated to two decimal places for more precision in the side-by-side comparison with the Consumer Price Index.

The BEA's Personal Consumption Expenditures Price Index for October shows core inflation below the Federal Reserve's 2% long-term target at 1.55%, but for the past seven months this indicator has hovered above its narrow range during the previous 12 months.

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The "Real" Goods on the Latest Durable Goods Data Click to view

November 28th, 2014 Doug Short

Earlier today I posted an update on the November Advance Report on October Durable Goods New Orders. This Census Bureau 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 Latest on Real Disposable Income Per Capita Click to view

November 28th, 2014 Doug Short

With the release of the pre-Thanksgiving report on October Personal Incomes and Outlays we can now take a closer look at "Real" Disposable Personal Income Per Capita.

The October nominal 0.11% month-over-month increase disposable income drops to 0.06% when we adjust for inflation. The year-over-year metrics are 3.23% nominal and 1.75% real.

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October Durable Goods: Another Mixed Bag Click to view

November 28th, 2014 Doug Short

The October Advance Report on September Durable Goods released on Wednesday by the Census Bureau was another mixed bag of volatile components. Here is the Bureau's summary on new orders:

New orders for manufactured durable goods in October increased $1.0 billion or 0.4 percent to $243.8 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.9 percent September decrease. Excluding transportation, new orders decreased 0.9 percent. Excluding defense, new orders decreased 0.6 percent.

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PCE Price Index: Headline and Core Remain Below Target Click to view

November 26th, 2014 Doug Short

The latest Headline PCE price index year-over-year (YoY) rate is 1.44%, unchanged from the previous month. The Core PCE index of 1.55% is is up slightly from the previous month's 1.49% YoY.

The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. I've highlighted the 12 months when Core PCE hovered in a narrow range around its interim low.

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Moving Averages: Month-End Preview Click to view

November 26th, 2014 Doug Short

Here is a preview of the monthly moving averages I track after the close of the last business day of the month. All three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, the Vanguard FTSE All-World ex-US ETF (VEU) and the PowerShares DB Commodity Index Tracking (DBC, are signal "cash" -- also unchanged from last month.

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NYSE Margin Debt Declines in October Click to view

November 25th, 2014 Doug Short

Unfortunately, the NYSE margin debt data is about a month old when it is published. Following its February peak, real margin declined sharply for two months, -3.9% in March -3.2% in April and was flat in May. It then jumped 5.7% in June, its largest gain in 17 months. July saw a 0.9% decline, but number has drifted higher the two subsequent months, up 0.6% in August and 0.2% in September. However the October level is now 2.2% off the February peak.

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Visualizing GDP: A Look Inside the Q3 Second Estimate Click to view

November 25th, 2014 Doug Short

The chart below is my way to visualize real GDP change since 2007. I’ve used a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself....

Here is the latest overview from the Bureau of Labor Statistics:

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Real GDP Per Capita Now at 3.1% Click to view

November 25th, 2014 Doug Short

Earlier today we learned that the Second Estimate for Q3 2014 real GDP came in at 3.9 percent (rounded from 3.89 percent), up from 3.5 percent in the Advance Estimate. Real GDP per capita was lower at 3.1 percent (rounded from 3.09 percent).

Here is a chart of real GDP per capita growth since 1960. For this analysis I’ve chained in today’s dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis.

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Consumer Confidence Surprises to the Downside Click to view

November 25th, 2014 Doug Short

The Latest Conference Board Consumer Confidence Index was released this morning based on data collected through November 13. The headline number of 88.7 was a surprising drop from the revised October final reading of 94.1, a downward revision from 94.5. Today's number was well below the Investing.com forecast of 95.9.

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Q3 GDP Second Estimate at 3.9% Beats Economists' Expectations Click to view

November 25th, 2014 Doug Short

The Second Estimate for Q3 GDP, to one decimal, came in at 3.9 percent, an increase from the Advance Estimate of 3.5 percent. Today's number beat mainstream economists' estimates, which were for a fractional decrease. For example, Investing.com had a forecast of 3.3 percent.

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Understanding the CFNAI Components Click to view

November 24th, 2014 Doug Short

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

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Gasoline Volume Sales, Demographics and our Changing Culture Click to view

November 24th, 2014 Doug Short

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-September, 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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Chicago Fed: Economic Growth Moderated in October Click to view

November 24th, 2014 Doug Short

"Index shows economic growth moderated in October": 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:

"Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved down to +0.14 in October from +0.29 in September. Two of the four broad categories of indicators that make up the index decreased from September, and two of the four categories made negative contributions to the index in October."

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Understanding Investor Anxiety: A Perspective on Diversification Click to view

November 19th, 2014 Doug Short

Diversification is a cornerstone of Modern Portfolio Theory and risk management. We spread our investments across a range of asset classes, rebalancing periodically, to ensure participation in the upside and reduce exposure to the downside. This is a time-honored strategy that works ... most of the time. But during the epic market downturn of the Financial Crisis, equity asset classes essentially marched in step to the same dismal drumbeat.

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Corporate Profit Margins versus Employee Compensation: A Rather Disturbing Comparison Click to view

November 12th, 2014 Doug Short

Yesterday's collection of Advisor Perspectives articles particularly caught my attention: "Why Jeremy Grantham is Right about Corporate Profit Margins." The article includes a number of fascinating graphs, the first of which is a snapshot of US Corporate Margins since 1947 calculated by dividing Corporate Profits after Tax by Gross National Product.

The article inspired me to produce a chart of the Profit-to-GNP ratio, but with an added and rather sobering overlay: Employee Compensation (wages and salaries), which I've likewise divided by GNP.

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Happiness Revisited: A Household Income of $75K? Click to view

September 25th, 2014 Doug Short

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 Click to view

September 19th, 2014 Doug Short

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 Click to view

September 17th, 2014 Doug Short

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 Click to view

September 17th, 2014 Doug Short

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 Click to view

September 16th, 2014 Doug Short

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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