For reference purposes, the most current estimates are reflected below, and are as of April 8, 2025:
Year 2024 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $233.36/share
-From a “bottom up” perspective, “as reported” earnings of $210.17/share
Year 2025 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $265.27/share
-From a “bottom up” perspective, “as reported” earnings of $246.78/share
Year 2026 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $303.26/share
-From a “bottom up” perspective, “as reported” earnings of $284.13/share
_____
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 agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
As one can see from the above chart, the average expectation is that the residential real estate market, as depicted by the Fannie Mae Home Price Index, will continually climb.
The detail of the survey is interesting. Of the survey respondents, two (of the displayed responses) forecasts a cumulative price decrease through 2029.
The Median Cumulative Home Price Appreciation for years 2025-2029 is seen as 4.00%, 7.51%, 11.39%, 16.06%, and 21.15%, respectively.
For a variety of reasons, I continue to believe that these forecasts will prove far too optimistic.
I have written extensively about the residential real estate situation. For a variety of reasons, it is exceedingly complex. While many people continue to have an optimistic view regarding future residential real estate prices, in my opinion such a view is unsupported on an “all things considered” basis. Residential real estate is an exceedingly large asset bubble. As such, from these price levels there exists potential for a price decline of outsized magnitude.
_____
The Special Note summarizes my overall thoughts about our economic situation
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 March 18, 2025):
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/, April 14, 2025.
–
The Federal Deficit (last updated October 18, 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/, April 14, 2025.
–
Federal Net Outlays (last updated October 18, 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/, April 14, 2025.
–
State & Local Personal Income Tax Receipts (% Change from Year Ago)(last updated March 27, 2025):
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/, April 14, 2025.
–
Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated April 11, 2025):
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/, April 14, 2025.
–
Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated April 11, 2025):
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/, April 14, 2025.
–
Median Duration of Unemployment (last updated April 4, 2025):
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/, April 14, 2025.
–
Labor Force Participation Rate (last updated April 4, 2025):
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/, April 14, 2025.
–
The Chicago Fed National Activity Index Three Month Moving Average (CFNAI-MA3)(last updated March 24, 2025):
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/, April 14, 2025.
–
I will continue to update these charts on an intermittent basis as they deserve close monitoring…
_____
The Special Note summarizes my overall thoughts about our economic situation
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:
Since President Trump took office, economists have dramatically slashed estimates for growth while raising them for inflation and unemployment.
The main reason, according to respondents to The Wall Street Journal’s quarterly survey of economists: tariffs.
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 45%. The individual estimates, of those who responded, ranged from 1% to 99%. For reference, the average response in January’s survey [the previously published survey] was 22%.
As stated in the article, the survey’s 64 respondents were academic, financial and business economists. The survey was conducted April 4 – April 8. Not every economist answered every question.
–
Economic Forecasts
The current average forecasts among economists polled include the following:
GDP:
full-year 2025: .78%
full-year 2026: 1.83%
full-year 2027: 2.12%
Unemployment Rate:
December 2025: 4.69%
December 2026: 4.59%
December 2027: 4.35%
10-Year Treasury Yield:
December 2025: 4.08%
December 2026: 4.10%
December 2027: 4.12%
CPI:
December 2025: 3.58%
December 2026: 2.61%
December 2027: 2.42%
Core PCE:
full-year 2025: 3.52%
full-year 2026: 2.59%
full-year 2027: 2.36%
(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)
_____
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.
_____
The Special Note summarizes my overall thoughts about our economic situation
The St. Louis Fed’s Financial Stress Index (STLFSI4) is one index that is supposed to measure stress in the financial system. Its reading as of the April 10, 2025 update (reflecting data through April 4, 2025) is .0944:
source: Federal Reserve Bank of St. Louis, St. Louis Fed Financial Stress Index [STLFSI4], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 10, 2025: https://fred.stlouisfed.org/series/STLFSI4
Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.
Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).
Here are summary descriptions of each, as seen in FRED:
The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.
The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.
For further information, please visit the Federal Reserve Bank of Chicago’s web site:
Below are the most recently updated charts of the NFCI and ANFCI, respectively.
The NFCI chart below was last updated on April 9, 2025 incorporating data from January 8, 1971 through April 4, 2025 on a weekly basis. The April 4 value is -.54173:
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 10, 2025: http://research.stlouisfed.org/fred2/series/NFCI
–
The ANFCI chart below was last updated on April 9, 2025 incorporating data from January 8, 1971 through April 4, 2025, on a weekly basis. The April 4 value is -.61114:
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 10, 2025: http://research.stlouisfed.org/fred2/series/ANFCI
_________
I post various 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.
_____
The Special Note summarizes my overall thoughts about our economic situation
There are a variety of economic models that are supposed to predict the probabilities of recession.
While I don’t agree with the methodologies employed or probabilities of impending economic weakness as depicted by the following two models, I think the results of these models should be monitored.
Please note that each of these models is updated regularly, and the results of these – as well as other recession models – can fluctuate significantly.
Currently (last updated April 4, 2025 using data through March 2025) this “Yield Curve” model shows a 30.2198% probability of a recession in the United States twelve months ahead. For comparison purposes, it showed a 27.0075% probability through February 2025, and a chart going back to 1960 is seen at the “Probability Of U.S. Recession Predicted by Treasury Spread.” (pdf)
Smoothed recession probabilities for the United States are obtained from a dynamic-factor markov-switching model applied to four monthly coincident variables: non-farm payroll employment, the index of industrial production, real personal income excluding transfer payments, and real manufacturing and trade sales. This model was originally developed in Chauvet, M., “An Economic Characterization of Business Cycle Dynamics with Factor Structure and Regime Switching,” International Economic Review, 1998, 39, 969-996. (http://faculty.ucr.edu/~chauvet/ier.pdf)
This model, last updated on April 8, 2025 currently shows a .38% probability using data through February 2025.
Here is the FRED chart:
Data Source: Piger, Jeremy Max and Chauvet, Marcelle, Smoothed U.S. Recession Probabilities [RECPROUSM156N], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed April 8, 2025: http://research.stlouisfed.org/fred2/series/RECPROUSM156N
–
The two models featured above can be compared against measures seen in recent posts. For instance, as seen in the January 19, 2025 post titled “The January 2025 Wall Street Journal Economic Forecast Survey“ economists surveyed averaged a 22% probability of a U.S. recession within the next 12 months.
_____
The Special Note summarizes my overall thoughts about our economic situation
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, 2025 with a last price of 5062.25), 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)
_____
The Special Note summarizes my overall thoughts about our economic situation
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.
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 April 2025 (last value of 75.06450), last updated April 1, 2025:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -3.3%:
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 April 7, 2025: https://fred.stlouisfed.org/series/LODINIM066N
__
Job Openings (JTSJOL)
Job openings (Job Openings: Total Nonfarm [JTSJOL]), although still at a high level, have recently declined significantly. This “Job Openings” measure had a value of 7,568 (Thousands) through February 2025 as of the April 1, 2024 update, as shown below:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -10.4%:
source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 7, 2025: https://fred.stlouisfed.org/series/JTSJOL
__
Motor Vehicle Retail Sales: Heavy Weight Trucks (HTRUCKSSA)
Sales of “Heavy Weight Trucks” (HTRUCKSSA) has recently been volatile. Shown below is this measure with last value of 36.313 Thousand through February 2025, last updated March 28, 2025:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -14.2%:
source: U.S. Bureau of Economic Analysis, Motor Vehicle Retail Sales: Heavy Weight Trucks [HTRUCKSSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 7, 2025: https://fred.stlouisfed.org/series/HTRUCKSSA
__
Average Weekly Hours of All Employees, Total Private (AWHAETP)
Average Weekly Hours of All Employees, Total Private continues a significant downward progression. This “Average Weekly Hours” measure had a value of 34.2 (Hours) through March 2025 as of the April 4, 2025 update:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -.6%:
source: U.S. Bureau of Labor Statistics, Average Weekly Hours of All Employees, Total Private [AWHAETP], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 7, 2025: https://fred.stlouisfed.org/series/AWHAETP
__
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.
_____
The Special Note summarizes my overall thoughts about our economic situation
