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 illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
We are now seeing some of the highest inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.
Note: This commentary has been updated with the latest numbers from the latest Employment Report for December. Consider: Today nearly one in three of the 65-69 cohort and one in five of the 70-74 cohort are in the labor force.
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
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).
We've updated our monthly workforce analysis to include the latest Employment Report for December. The unemployment rate dropped to 3.5%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 223K.
At present, multiple jobholders account for 5.1 percent of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the current relative sizes of which we've illustrated in a pie chart.
Let's take a closer look at this week's employment report numbers on Full and Part-Time Employment.
The latest monthly employment report showed a gain of 223K nonfarm jobs, which consists of a gain of 183K service-providing jobs and a gain of 40K goods-producing jobs.
Pop Quiz! Without recourse to your text, your notes, or a Google search, what line item is the largest asset in Uncle Sam's financial accounts?
In response to a standing request, here is an updated comparison of four major secular bear markets. The numbers are through the December 30, 2022 close.
With the Q3 GDP Third Estimate and the December close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 146.7%, down from 156.2% the previous quarter.
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,364 for an annualized real return of 5.8%.
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
This commentary has been updated to include this morning's release of Nonfarm Employment. December saw a 223K increase in total nonfarm payrolls. The unemployment rate ticked down to 3.5%. The Investing.com consensus was for 200K jobs gained.
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of December 30, 2022, it was at 3.88%.
Here is a summary of the four market valuation indicators we update on a monthly basis.
This morning's employment report for December showed a 223K increase in total nonfarm payrolls, which was above the Investing.com forecast of 200K jobs added. The unemployment rate ticked down to 3.5%.
Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite since 2000. We've updated this through the December 30, 2022 close.
Here is the latest 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.
Note: This update includes December close data.
The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. The headline number of -$61.5B was better than the -73.0B Investing.com forecast.
Quick take: At the end of December the inflation-adjusted S&P 500 index price was 115% above its long-term trend, unchanged from the previous month.
About the only certainty in the stock market is that, over the long haul, over performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.
The S&P 500 peaked in November of 2021 and 2022 was a bear market. Let's examine the past to broaden our understanding of the range of historical trends in market performance.
The moving average for the per-capita Light Vehicle Sales series peaked in 2005. Over fifteen years later, it is now down 22% from that peak.
The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through November, is now available.
This morning the Institute for Supply Management published its monthly Manufacturing Report for December. The latest headline Purchasing Managers Index (PMI) was 48.4, down 0.6 from the previous month and in contraction territory. Today's headline number was below the Investing.com forecast of 48.5.
The December S&P Global US Manufacturing PMI™ came in at 46.2, down 1.5 from the final November figure and in contraction territory for the second consecutive month. S&P Global US Manufacturing PMI™ is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Quick take: Based on the December S&P 500 average of daily closes, the Crestmont P/E is 115% above its arithmetic mean and at the 97th percentile of this fourteen-plus-decade monthly metric.
As of December 30, 2022, the 10-year note was 336 basis points above its historic closing low of 0.52%, reached on August 4, 2020
Valid until the market close on January 31, 2023.
The S&P 500 closed December with a monthly loss of 5.9% after a gain of 5.4% in November. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "cash" — iShares Barclays 7-10 Year Treasury (IEF), Vanguard REIT Index ETF (VNQ), Vanguard Total Stock Market ETF (VTI), and Invesco DB Commodity Index Tracking (DBC) — down from from last month's quintuple "cash" signal.
The Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose to 44.9 in December from 37.2 in November, which is still in contraction territory. It has spent 1/3 of 2022 in contraction territory. Values above 50.0 indicate expanding manufacturing activity.
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.
Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for December is -11.2, down from the previous month.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for December. The latest general business activity index came in at -18.8, down 4.4 from last month. All figures are seasonally adjusted.
With this morning's release of the October S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% decrease month over month. The non-seasonally adjusted national index saw a 9.2% YoY increase. The MoM is reduced to -1.1% after adjusting for inflation.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for October. U.S. house prices were unchanged from the previous month. Year-over-year the index is up 9.8% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is down 0.28% in October and up 1.5% year-over-year (seasonally adjusted).
Here's the top 10 most popular AP Charts of 2022.
Personal Income (excluding Transfer Receipts) in November rose 0.39% and is up 5.5% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.28%. The real number is unchanged year-over-year.
"Travel on all roads and streets changed by +0.1% (+0.3 billion vehicle miles) for October 2022 as compared with October 2021. Travel for the month is estimated to be 286.0 billion vehicle miles." The 12-month moving average was mostly unchanged month-over-month and up 3.0% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) inched down 0.1% month-over-month and was up 2% year-over-year.
The headline number of 108.3 was an increase of 8.1 from the final reading of 100.2 for November.
Household debt increased by $351B (2.2%) to $16.51 trillion in Q3 2022. Mortgage balances climbed the highest and credit card balances increased 15% YoY.
This is a couple months past its release, but the latest Fed balance sheet shows a total net worth that is 141% above the 2009 trough. The nominal Q2 2022 net worth is down 4.1% from the previous quarter and up 1.1% year-over-year.
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q3 2022.
Advisor Perspectives, a leading publisher and ranked as the #1 eNewsletter for financial advisors by Erdos & Morgan “FAMOUS” Study (2019-2022) has announced its Venerated Voices™ awards for commentaries published in Q3 2022.
Today's release of the publicly available data from ECRI puts the WLI at 145.6, up from the previous week's figure. The WLIg is at -10.3, up from last week and the WLI YoY is at -4.92%, down slightly from last week.
Advisor Perspectives has announced its Venerated Voices™ awards for commentaries published in Q1 2022.
This morning we have the ADP April estimate of 247K nonfarm private employment jobs gained, a decrease over the ADP revised March figure of 479K.
We have announced our Venerated Voices awards, representing the most-read market commentaries, authors and firms.
The Department of Energy's Energy Information Administration (EIA) monthly data on volume sales is several weeks old when it released. The latest numbers, through mid-November, are now available.
