St. Louis Financial Stress Index – August 9, 2012 Update

On March 28, 2011 I wrote a post ("The STLFSI") about the  STLFSI (St. Louis Fed’s Financial Stress Index) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on August 9, incorporating data from December 31,1993 to August 3, 2012 on a weekly basis.  The August 3, 2012 value is .215 :

(click on chart to enlarge image)

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I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog 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

SPX at 1402.80 as this post is written

August 7 Gallup Poll Results On Economic Confidence – Notable Excerpts

On August 7, Gallup released the poll results titled “Economic Confidence Slips in July, for Second Month in a Row.”  The subtitle is “Economic outlook falls to a new 2012 low.”

Two of the most notable excerpts:

Gallup's Economic Confidence Index averaged -26 in July, a decline from -22 in June, and close to the 2012 low of -27 measured in January. Economic confidence improved during the first five months of the year, but July marks the second monthly decline in a row. Still, the index remains significantly higher than the -42 from July of a year ago.

also:

Gallup's Economic Confidence Index consists of two measures -- one assessing current U.S. economic conditions and the other assessing the nation's economic outlook. Americans were more pessimistic about both current conditions and the economic outlook during July. Fourteen percent of Americans said the economy is excellent or good, while 42% considered it poor, resulting in a -28 current conditions rating. The -23 economic outlook rating reflects a five-percentage-point decline from June, with 36% of Americans saying the economy is getting better and 59% saying it is getting worse. This is the lowest economic outlook rating of 2012.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1401.40 as this post is written

Recession Measures – Updated

This post is the latest update to a series of blog posts seen on the CalculatedRisk.com blog.  The original blog post of April 12, 2010, is titled “Recession Measures.” In it, Bill discussed key measures that the NBER uses to determine recoveries, and posted four charts.

Here are those charts, updated in his August 5, 2012 post titled “Update:  Recovery Measures.”  The charts are constructed in a fashion different than most – in a “percent of peak” fashion.  As defined, “The following graphs are all constructed as a percent of the peak in each indicator.  This shows when the indicator has bottomed – and when the indicator has returned to the level of the previous peak.  If the indicator is at a new peak, the value is 100%.”  Periods of recession, as defined by the NBER, are shown as blue bars.

Here are the four charts, updated through the dates shown:

(click on images to enlarge)

Real Gross Domestic Product, above its pre-recession peak:

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Real Personal Income Less Transfer Payments, still 3.0% below the pre-recession peak:

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Industrial Production, still 3.3% below the pre-recession peak:

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Payroll Employment, still 3.5% below the pre-recession peak:

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1390.99 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – August 3, 2012 Update

As I stated in my July 12, 2010 post ("ECRI WLI Growth History"):

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reaffirmed that view since, most recently in a Bloomberg interview of July 10 titled “Recession Here” in which Lakshman Achuthan argues that the U.S. is now in a recession.

Other past notable reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order)  on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

Bloomberg video, May 9:  ”Lakshman Achuthan on Renewed U.S. Recession Call: Video”

ECRI, May 9:  ”Revoking Recession:  48th Time’s The Charm?”

Wall Street Journal video, May 9: “Free Market Economies Have Business Cycles”

ECRI, May 11, “Rising GDP Doesn’t Rule Out Recession.”

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Below are three long-term charts, from Doug Short’s blog post of August 3 titled “ECRI Recession Call: Weekly Leading Index Slips But Growth Index Improves.”  These charts are on a weekly basis through the August 3 release, indicating data through July 27.

Here is the ECRI WLI (defined at ECRI’s glossary):

(click on charts to enlarge images)

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This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

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This last chart depicts, on a long-term basis, the WLI, Gr.:

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1390.99 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of August 3, 2012

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 8.3% unemployment rate:

(click on charts to enlarge images)(charts updated as of 8-3-12)

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Here is the U-6 chart, currently showing a 15.0% unemployment rate:

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1390.99 as this post is written

3 Critical Unemployment Charts – August 2012

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 situation.

The first two charts are from the St. Louis Fed site.  Here is the Median Duration of Unemployment (current value = 16.7 weeks) :

(click on charts to enlarge images)(charts updated as of 8-3-12)

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Here is the chart for Unemployed 27 Weeks and Over (current value =  5.185 million) :

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Lastly, a chart from the CalculatedRisk.com site, from the August 3 post titled “July Employment Report:  163,000 Jobs, 8.3% Unemployment Report.”  This shows the employment situation vs. that of previous recessions, as shown:

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As depicted by these charts, our unemployment problem is severe.  Unfortunately, there do not appear to be any “easy” solutions.

On April 24 I wrote a five-part blog post titled “The Unemployment Situation Facing The United States”, which discusses various problematical issues concerning the present and future employment situation.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1390.99 as this post is written

St. Louis Financial Stress Index – August 2, 2012 Update

On March 28, 2011 I wrote a post ("The STLFSI") about the  STLFSI (St. Louis Fed’s Financial Stress Index) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on August 2, incorporating data from December 31,1993 to July 27, 2012 on a weekly basis.  The July 27, 2012 value is .261 :

(click on chart to enlarge image)

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1392.54 as this post is written

U.S. Dollar Decline – August 2, 2012 Update

U.S. Dollar weakness is a foremost concern of mine.  As such, I have extensively written about it.  I am very concerned that the actions being taken to “improve” our economic situation will dramatically weaken the Dollar.  Should the Dollar substantially decline from here, as I expect, the negative consequences will far outweigh any benefits.  The negative impact of a substantial Dollar decline can’t be overstated, in my opinion.

The following three charts illustrate various technical analysis aspects of the U.S. Dollar, as depicted by the U.S. Dollar Index.

First, a look at the monthly U.S. Dollar from 1983.  This clearly shows a long-term weakness, with the blue line showing technical support (until 2007):

(charts courtesy of StockCharts.com; annotations by the author)

(click on charts to enlarge images)

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Next, another chart, this one focused on the daily U.S. Dollar since 2000 on a LOG scale.  The red line represents both a trendline as well as a relatively good visual “best-fit” line.  The gray dotted line is the 200-day M.A. (moving average):

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Lastly, a chart of the Dollar on a weekly LOG scale.  There are some clearly marked  channels here, with a potential large, prominent triangle featured (shown with two potential lower trendlines, one red and one dashed light blue line):

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I will continue providing updates on this U.S. Dollar situation regularly as it deserves very close monitoring…

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1375.32 as this post is written