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 April 7, 2021 with a last price of 4079.95), 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
On April 7, 2021 the latest CFO Survey (formerly called the “Duke/CFO Global Business Outlook”) was released. It contains a variety of statistics regarding how CFOs view business and economic conditions.
In this CFO Survey press release, I found the following to be the most notable excerpts – although I don’t necessarily agree with them:
CFOs expressed growing optimism for their own firms, with average optimism at 73.2 on a scale of 0 to 100 — above the fourth-quarter 2020 reading of 71. When asked to rate their optimism about the overall U.S. economy, the average rating was 67.7, which was a marked increase from the 61.6 reading in the fourth quarter.
“This pick-up in optimism is evident in the robust expectations firms have for revenue and employment growth in 2021,” said Brent Meyer, senior advisor and economist at the Federal Reserve Bank of Atlanta. “Most firms also anticipate economic growth for reasons separate from the American Rescue Plan Act — the majority of respondents did not expect the fiscal relief plan to impact employment or revenue growth.”
This CFO Survey contains an Optimism Index chart, with the blue line showing U.S. Optimism (with regard to the economy) at 67.7, as seen below:
[Note: The dashed vertical line denotes a moderate change in the question wording and presentation. Please see The CFO Survey Methodology for further information.]
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It should be interesting to see how well the CFOs predict business and economic conditions going forward. I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.
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
Below are those two charts, updated through the latest daily closing price.
The first is a daily chart of the S&P500 (shown in green), as well as five prominent (AAPL, IBM, AMZN, SBUX, CAT) individual stocks, since 2005. There is a blue vertical line that is very close to the March 6, 2009 low. As one can see, both the S&P500 performance, as well as many stocks including the five shown, have performed strongly since the March 6, 2009 low:
(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)
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This next chart shows, on a monthly LOG basis, the S&P500 since 1980. I find this chart notable as it provides an interesting long-term perspective on the S&P500′s performance. The 20, 50, and 200-month moving averages are shown in blue, red, and green lines, respectively:
(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
StockCharts.com maintains long-term historical charts of various major stock market indices, interest rates, currencies, commodities, and economic indicators.
As a long-term reference, below are charts depicting various stock market indices for the dates shown. All charts are depicted on a monthly basis using a LOG scale.
(click on charts to enlarge images)(charts courtesy of StockCharts.com)
The Dow Jones Industrial Average, from 1900 – April 1, 2021:
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The Dow Jones Transportation Average, from 1900 – April 1, 2021:
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The S&P500, from 1925 – April 1, 2021:
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The Nasdaq Composite, from 1978 – April 1, 2021:
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The Special Note summarizes my overall thoughts about our economic situation
Along these lines, one of the measures showing disconcerting trends is that of hourly earnings.
While the concept of hourly earnings can be defined and measured in a variety of ways, below are a few charts that I believe broadly illustrate problematic trends.
The first chart depicts Average Hourly Earnings Of All Employees: Total Private (FRED series CES0500000003)(current value = $29.96):
(click on chart to enlarge image)(chart last updated 4-2-21)
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of All Employees: Total Private [CES0500000003] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/CES0500000003
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This next chart depicts this same measure on a “Percentage Change From A Year Ago” basis. While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:
(click on chart to enlarge image)(chart last updated 4-2-21)
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There are slightly different measures available from a longer-term perspective. Pictured below is another measure, the Average Hourly Earnings of Production and Nonsupervisory Employees – Total Private (FRED series AHETPI)(current value = $25.21):
(click on chart to enlarge image)(chart last updated 4-2-21)
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private [AHETPI] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/AHETPI
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Pictured below is this AHETPI measure on a “Percentage Change From A Year Ago” basis. While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:
(click on chart to enlarge image)(chart last updated 4-2-21)
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I will continue to actively monitor these trends, especially given the post-2009 dynamics.
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I post various economic indicators and indices because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
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The Special Note summarizes my overall thoughts about our economic situation
Shortly after each monthly employment report I have been posting a continual series titled “3 Critical Unemployment Charts.”
Of course, there are many other employment charts that can be displayed as well.
For reference purposes, below are the U-3 and U-6 Unemployment Rate charts from a long-term historical perspective. Both charts are from the St. Louis Fed site. The U-3 measure is what is commonly referred to as the official unemployment rate; whereas the U-6 rate is officially (per Bureau of Labor Statistics) defined as:
Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
Of note, many economic observers use the U-6 rate as a (closer) proxy of the actual unemployment rate rather than that depicted by the U-3 measure.
Here is the U-3 chart, currently showing a 6.0% unemployment rate:
(click on charts to enlarge images)(charts updated as of 4-2-21)
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilian Unemployment Rate [UNRATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/UNRATE
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Here is the U-6 chart, currently showing a 10.7% unemployment rate:
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons [U6RATE] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/U6RATE
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The Special Note summarizes my overall thoughts about our economic situation
As I have commented previously, as in the October 6, 2009 post (“A Note About Unemployment Statistics”), in my opinion the official methodologies used to measure the various job loss and unemployment statistics do not provide an accurate depiction; they serve to understate the severity of unemployment.
However, even if one chooses to look at the official statistics, the following charts provide an interesting (and disconcerting) long-term perspective of certain aspects of the officially-stated unemployment (and, in the third chart, employment) situation.
The three charts below are from the St. Louis Fed site. Here is the Median Duration of Unemployment (current value = 19.7 weeks):
(click on charts to enlarge images)(charts updated as of 4-2-21)
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Median Duration of Unemployment [UEMPMED] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/UEMPMED
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Here is the chart for Unemployed 27 Weeks and Over (current value = 4.218 million):
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Civilians Unemployed for 27 Weeks and Over [UEMP27OV] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: http://research.stlouisfed.org/fred2/series/UEMP27OV
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Here is the chart for Total Nonfarm Payroll (current value = 144.120 million):
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: All Employees: Total Nonfarm [PAYEMS] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 2, 2021: https://research.stlouisfed.org/fred2/series/PAYEMS
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Our unemployment problem is severe. The underlying dynamics of the current – and especially future – unemployment situation remain exceedingly worrisome. These dynamics are numerous and complex, and greatly lack recognition and understanding.
My commentary regarding unemployment is generally found in the “Unemployment” label. This commentary includes the page titled “U.S. Unemployment Trends,” which discusses various problematical issues concerning the present and future employment situation.
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The Special Note summarizes my overall thoughts about our economic situation
![Average Hourly Earnings of All Employees: Total Private [CES0500000003] Percent Change From Year Ago](https://www.economicgreenfield.com/wp-content/uploads/2021/04/CES0500000003_4-2-21-29.96-4.2-Percent-Change-From-Year-Ago.png)
