Disturbing Charts (Update 55)

The following is the latest update of 9 charts that depict various aspects of the U.S. economic and financial situation.

I find these charts portray disturbing long-term trends. These trends have been in effect for years.

These charts raise a lot of questions.  As well, they highlight the “atypical” nature of our economic situation from a long-term historical perspective.

All of these charts are from the Federal Reserve, and represent the most recently updated data.

(click on charts to enlarge images)

Housing starts (last update September 18, 2024):

U.S. Bureau of the Census, Housing Starts: Total: New Privately Owned Housing Units Started [HOUST], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/HOUST/, October 14, 2024.

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The Federal Deficit (last updated March 11, 2024):

U.S. Office of Management and Budget, Federal Surplus or Deficit [-] [FYFSD], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYFSD/, October 14, 2024.

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Federal Net Outlays (last updated March 11, 2024):

U.S. Office of Management and Budget, Federal Net Outlays [FYONET], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYONET/, October 14, 2024.

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State & Local Personal Income Tax Receipts (% Change from Year Ago)(last updated September 26, 2024):

U.S. Bureau of Economic Analysis, State and local government current tax receipts: Personal current taxes: Income taxes [ASLPITAX], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/ASLPITAX/, October 14, 2024.

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Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated October 11, 2024):

Board of Governors of the Federal Reserve System (US), Loans and Leases in Bank Credit, All Commercial Banks [TOTLL], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTLL/, October 14, 2024.

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Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated October 11, 2024):

Board of Governors of the Federal Reserve System (US), Bank Credit of All Commercial Banks [TOTBKCR], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTBKCR/, October 14, 2024.

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Median Duration of Unemployment (last updated October 4, 2024):

U.S. Bureau of Labor Statistics, Median Duration of Unemployment [UEMPMED], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/UEMPMED/, October 14, 2024.

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Labor Force Participation Rate (last updated October 4, 2024):

U.S. Bureau of Labor Statistics, Civilian Labor Force Participation Rate [CIVPART], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CIVPART/, October 14, 2024.

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The Chicago Fed National Activity Index Three Month Moving Average (CFNAI-MA3)(last updated September 17, 2024):

Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CFNAIMA3/, October 14, 2024.

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I will continue to update these charts on an intermittent basis as they deserve close monitoring…

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 5859.85 as this post is written

The October 2024 Wall Street Journal Economic Forecast Survey

The October 2024 Wall Street Journal Economic Forecast Survey was published on October 14, 2024. The headline is “’Economists Say Inflation, Deficits Will Be Higher Under Trump Than Harris.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the forecasts section.

An excerpt:

The survey found that economists’ outlook had brightened since July. They now expect U.S. gross domestic product to expand 2.2% in the fourth quarter of 2024 from a year earlier, compared with an average forecast of 1.7% in July. Inflation as measured by the consumer-price index is seen at 2.5% at the end of this year, down from a July forecast of 2.8%.

Meanwhile, unemployment is seen closing this year at 4.2%, little changed from in July. It was 4.1% in September.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 26%. The individual estimates, of those who responded, ranged from 1% to 56%.  For reference, the average response in July’s survey [the previously published survey] was 28%.

As stated in the article, the survey’s 66 respondents were academic, financial and business economists.  The survey was conducted October 4 – October 8. Not every economist answered every question.

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Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2024:  2.21%

full-year 2025:  1.92%

full-year 2026:  2.15%

full-year 2027:  2.13%

Unemployment Rate:

December 2024: 4.24%

December 2025: 4.33%

December 2026: 4.18%

December 2027: 4.14%

10-Year Treasury Yield:

December 2024: 3.86%

December 2025: 3.71%

December 2026: 3.72%

December 2027: 3.80%

CPI:

December 2024:  2.50%

December 2025:  2.30%

December 2026:  2.27%

December 2027:  2.26%

Core PCE:

full-year 2024:  2.62%

full-year 2025:  2.13%

full-year 2026:  2.09%

full-year 2027:  2.13%

(note: I have highlighted this WSJ Economic Forecast survey each time it is published; it was published monthly until April 2021, after which the survey is conducted (at least) every three months; commentary on past surveys can be found under the “Economic Forecasts” label)

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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 5815.03 as this post is written

Building Financial Danger – October 8, 2024 Update

My overall analysis indicates a continuing elevated and growing level of financial danger which contains many worldwide and U.S.-specific “stresses” of a very complex nature. I have written numerous posts on this site concerning both ongoing and recent “negative developments.”  These developments, as well as other exceedingly problematical conditions, have presented a highly perilous economic environment that endangers the overall financial system.

Also of ongoing immense importance is the existence of various immensely large asset bubbles, a subject of which I have extensively written.  While all of these asset bubbles are wildly pernicious and will have profound adverse future implications, hazards presented by the bond market bubble are especially notable.

Predicting the specific timing and extent of a stock market crash is always difficult, and the immense complexity of today’s economic situation makes such a prediction even more challenging. With that being said, my analyses continue to indicate that a near-term exceedingly large (from an ultra long-term perspective) stock market crash – that would also involve (as seen in 2008) various other markets – will occur. [note: the “next crash” and its aftermath has paramount significance and implications, as discussed in the post of January 6, 2012 titled “The Next Crash And Its Significance“ and various subsequent posts in the “Economic Depression” label]

As reference, below is a daily chart since 2008 of the S&P500 (through October 7, 2024 with a last price of 5695.94), depicted on a LOG scale, indicating both the 50dma and 200dma as well as price labels:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 5695.94 as this post is written

Charts Indicating Economic Weakness – October 2024

Throughout this site there are many discussions of economic indicators.  This post is the latest in a series of posts indicating facets of U.S. economic weakness or a notably low growth rate.

The level and trend of economic growth is especially notable at this time. As seen in various sources, recession estimates have been at elevated levels.

As seen in the July 2024 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 1.66% GDP in 2024, 1.90% GDP in 2025, and 2.05% GDP in 2026.

Charts Indicating U.S. Economic Weakness

Below is a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

University of Louisville and Oklahoma State University: LoDI National Index (LODINIM066N)

The LoDI National Index is described in FRED as:

The LoDI Index uses linear regression analysis to combine cargo volume data from rail, barge, air, and truck transit, along with various economic factors. The resulting indicator is designed to predict upcoming changes in the level of logistics and distribution activity in the US and is represented by a value between 1 and 100. An index at or above 50 represents a healthy level of activity in the industry.

As seen in the long-term chart below, the index appears to have recently peaked.

Shown below is a chart with data through October 2024 (last value of 75.98793), last updated October 4, 2024:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -2.9%:

source: University of Louisville. Logistics and Distribution Institute and Oklahoma State University, University of Louisville and Oklahoma State University: LoDI National Index [LODINIM066N], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2024: https://fred.stlouisfed.org/series/LODINIM066N

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Job Openings (JTSJOL)

Job openings (Job Openings: Total Nonfarm [JTSJOL]), although still at a (very) high level, have recently declined significantly. This “Job Openings” measure had a value of 8,040 (Thousands) through August 2024 as of the October 1, 2024 update, as shown below:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -14.1%:

source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2024: https://fred.stlouisfed.org/series/JTSJOL

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All Employees, Temporary Help Services (TEMPHELPS)

I have written extensively about many facets of employment and unemployment, as the current and future unemployment issue is of tremendous importance yet is in many ways misunderstood.

One theory regarding employment is that hiring cycles typically begin with an uptake in temporary employment. Conversely, due to various factors a reduction in temporary employees can be an (early) indicator of lessening labor demand.

Shown below is this measure with last value of 2,676.2 (Thousands) through September, last updated October 4, 2024:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -5.2%:

source: U.S. Bureau of Labor Statistics, All Employees, Temporary Help Services [TEMPHELPS], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2024: https://fred.stlouisfed.org/series/TEMPHELPS

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Truck Tonnage (TRUCKD11)

“Truck Tonnage” (TRUCKD11) has yet to reach its pre-pandemic peak, and has recently been faltering. Shown below is this measure with last value of 113.9 through July, last updated September 12, 2024:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -1.3%:

source: U.S. Bureau of Transportation Statistics, Truck Tonnage Index [TRUCKD11], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2024: https://fred.stlouisfed.org/series/TRUCKD11

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate weak economic growth or economic contraction, if not outright (gravely) problematical economic conditions.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 5751.07 as this post is written

Stock Market Capitalization To GDP – Through Q2 2024

“Stock market capitalization to GDP” is a notable and important metric regarding stock market valuation.  In February of 2009 I wrote of it in “Does Warren Buffett’s Market Metric Still Apply?”

On the Advisor Perspectives’ site there is an update depicting this “stock market capitalization to GDP” metric.

As seen in the October 4, 2024 post titled “Buffett Valuation Indicator: September 2024” two different versions are displayed, varying by the definition of stock market capitalization. (note:  additional explanation is provided in the post.)

For reference purposes, here is the first chart, with the stock market capitalization as defined by the Federal Reserve:

(click on charts to enlarge images)

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Here is the second chart, with the stock market capitalization as defined by the Wilshire 5000:

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As one can see in both measures depicted above, “stock market capitalization to GDP” continues to be at notably high levels from a long-term historical perspective.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 5751.07 as this post is written