"Index points to slower economic growth in August." This is the headline for today's release of the Chicago Fed's National Activity Index, and here is the opening paragraph from the report: "Led by declines in production-related indicators, the Chicago Fed National ActivityIndex (CFNAI) moved down to –0.31 in August from +0.03 in July."
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for September. The latest general business activity index came in at 21.3, up from 17.0 in August.
The median household is the statistical center of the Middle Class. In terms of income, this class has not fared well in recent decades. Let's take a closer look at a troubling aspect of the Census Bureau's latest annual household income data, issued this month. In this update, we'll focus on the growing gap between the median (middle) and mean (average) household incomes across the complete time frame of the Census Bureau's annual reporting, which began in 1967, to the release last month of the annual data for 2016.
The Chicago Fed's National Activity Index, which we reported on this morning, is based on 85 economic indicators drawn from four broad categories of data:
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?
Earlier this week, we updated our commentary on household income distribution to include the Census Bureau's release of the 2016 annual data. Our focus was on arithmetic mean (average) household incomes by quintile (and the top 5%) over the 50-year history of this data series. The analysis offered some fascinating insights into U.S. household incomes. But the classification misses the implications of age for income. Households are by no means locked into the same quintile over time.
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 at an all-time high — 74.5% above the 2009 trough. The nominal Q2 net worth is up 1.2% from the previous quarter and 7.3% year-over-year.
Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 143.4, unchanged from the previous week. Year-over-year the four-week moving average of the indicator is now at 2.83%, down from 3.09% last week and its eleventh consecutive week of declines. The WLI Growth indicator is now at 0.0, also down from the previous week, its lowest since March of 2016.
The S&P opened Friday below its Thursday close and oscillated around the same point until about 2pm. The index closed the day with a gain of 0.06% and a week-over-week gain of 0.08%. The index is up 11.76% YTD.
RecessionAlert has launched an alternative to ECRI's Weekly Leading Index Growth indicator (WLIg). The Weekly Leading Economic Index (WLEI) uses fifty different time series from these categories: Corporate Bond Composite, Treasury Bond Composite, Stock Market Composite, Labor Market Composite, Credit Market Composite. The latest index reading came in at 15.4, down from 15.7 the previous week.