Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – December 14, 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, seen most recently in these two media sources of December 7:

• ECRI, “The Tell-Tale Chart” including this excerpt:

“Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012.”

• CNBC video, "Definitional Recession Indicators"

Other past notable 2012 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”

Also, subsequent to May 2012:

• Bloomberg video, July 10:  “Recession Here”
• ECRI, September 7:  “Recession Evidence Obscured in Real Time”
• ECRI, September 13: “The 2012 Recession:  Are We There Yet?”
• Bloomberg video, September 13: “Recession Update.”
• CNN video, November 29, “Official Recession Indicators“
• CNN video, November 29, “ECRI Recession Update“
• Yahoo video, November 29, “Ignore GDP and the Fiscal Cliff, U.S. Is Already in Recession“
• Bloomberg video, November 29, “Recession Underway“

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Below are three long-term charts, from Doug Short’s blog post of December 14 titled “ECRI Weekly Update:  Walking the Recession Plank.”  These charts are on a weekly basis through the December 14 release, indicating data through December 7, 2012.

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 1413.58 as this post is written

St. Louis Financial Stress Index – December 13, 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 December 13, incorporating data from December 31,1993 to December 7, 2012 on a weekly basis.  The December 13, 2012 value is -.307 :

(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 1419.45 as this post is written

NFIB Small Business Optimism – December 2012

The December NFIB Small Business Optimism report was released yesterday, December 11.  The headline of the Press Release is “Small Business Owner Confidence Plunges More than 5 Points.”  The subtitle is "One of the lowest optimism readings in survey history."

The Index of Small Business Optimism fell by 5.6 point in November to 87.5.

Here are some excerpts from the Press Release that I find particularly notable:

The most significant factor impacting the decline in optimism is the expectation that future business conditions will be worse than current ones. The net percent of owners expecting better business conditions in six months fell 37 points to a net negative 35 percent. In October, the percent of owners who said they were uncertain as to whether business conditions would be better or worse in six months hit a record low of 23 percent. Many of those who were uncertain about the economy in October became decidedly negative in November; 49 percent of the owners now expect business conditions to be worse in six months, while 11 percent still express uncertainty about the future.

In the history of the monthly Index, only seven readings were lower, all but one in the last few months of 2008 and early 2009, the depths of the last recession. Prior to 1986 (when the survey was conducted on a quarterly basis), there were just two readings lower, 1975Q1 and 1980Q2.

also:

Twenty-three (23) percent of owners still cite weak sales as their top business problem; this is historically high but down from the record 34 percent reading last reached in March 2010.

Also, a chart of the NFIB Small Business Optimism chart, as seen in Doug Short's December 11 post titled "Small Business Sentiment:  'Confidence Plunges More than Five Points'."

(click on chart to enlarge image)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1427.84 as this post is written

Disturbing Charts (Update 9)

I find the following charts to be disturbing.   These charts would be disturbing at any point in the economic cycle; that they depict such a tenuous situation now – 41 months after the official (as per the 9-20-10 NBER announcement) June 2009 end of the recession – is especially notable.

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 (except one, as noted) are from The Federal Reserve, and represent the most recently updated data.

The following 8 charts are from the St. Louis Federal Reserve:

(click on charts to enlarge images)

Housing starts (last updated 11-20-12):

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The Federal Deficit (last updated 10-15-12):

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Federal Net Outlays (last updated 10-15-12):

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State & Local Personal Income Tax Receipts  (% Change from Year Ago)(last updated 7-27-12):

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Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated 12-7-12):

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Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated 12-7-12):

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M1 Money Multiplier (last updated 12-6-12):

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Median Duration of Unemployment (last updated 12-7-12):

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This next chart is from the CalculatedRisk.com blog post of 12-7-12, titled “November Employment Report:  146,000 Jobs, 7.7% Unemployment Rate" and it shows (in red) the relative length and depth of this downturn and subsequent recovery from an employment perspective:

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This last chart is of the Chicago Fed National Activity Index (CFNAI) and it depicts broad-based economic activity (last updated 11-26-12):

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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

SPX at 1432.44 as this post is written

Average Hourly Earnings Trends

I have written many blog posts concerning the worrisome trends in income and earnings.

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 (current value = $23.63) :

(click on chart to enlarge image)(chart last updated 12-7-12)

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This next chart depicts the 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 12-7-12)

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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 = $19.84)  :

(click on chart to enlarge image)(chart last updated 12-7-12)

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Pictured below is this AHETPI measure on a “Percentage Change From A Year Ago” basis:

(click on chart to enlarge image)(chart last updated 11-2-12)

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I will continue to actively monitor these trends, especially given the post-2009 dynamics.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1417.32 as this post is written

U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of December 7, 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 7.7% unemployment rate:

(click on charts to enlarge images)(charts updated as of 12-7-12)

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Here is the U-6 chart, currently showing a 14.4% unemployment rate:

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1416.18 as this post is written

3 Critical Unemployment Charts – December 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 = 19.0 weeks) :

(click on charts to enlarge images)(charts updated as of 12-7-12)

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Here is the chart for Unemployed 27 Weeks and Over (current value =  4.786 million) :

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Lastly, a chart from the CalculatedRisk.com site, from the December 7 post titled “November Employment Report:  146,000 Jobs, 7.7% Unemployment Rate.”  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 1416.18 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – December 7, 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, seen most recently in these two media sources of December 7:

• ECRI, "The Tell-Tale Chart" including this excerpt:

"Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012."

• CNBC video, "Definitional Recession Indicators"

Other past notable 2012 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”

Also, subsequent to May 2012:

• Bloomberg video, July 10:  “Recession Here”
• ECRI, September 7:  “Recession Evidence Obscured in Real Time”
• ECRI, September 13: “The 2012 Recession:  Are We There Yet?”
• Bloomberg video, September 13: “Recession Update.”
• CNN video, November 29, "Official Recession Indicators"
• CNN video, November 29, "ECRI Recession Update"
• Yahoo video, November 29, "Ignore GDP and the Fiscal Cliff, U.S. Is Already in Recession"
• Bloomberg video, November 29, "Recession Underway"

-

Below are three long-term charts, from Doug Short’s blog post of December 7 titled “ECRI Weekly Update:  More Recession Flag Waving.”  These charts are on a weekly basis through the December 7 release, indicating data through November 30, 2012.

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

-

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

-

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 1416.24 as this post is written