As many are aware, Refinitiv publishes earnings estimates for the S&P500. (My other posts concerning S&P earnings estimates can be found under the S&P500 Earnings label)
The following estimates are from Exhibit 24 of the “S&P500 Earnings Scorecard” (pdf) of November 11, 2022, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts. For reference, the Year 2014 value is $118.78/share; the Year 2015 value is $117.46/share; the Year 2016 value is $118.10/share; the Year 2017 value is $132.00/share; the Year 2018 value is $161.93/share; the Year 2019 value is $162.93/share; the Year 2020 value is $139.72/share; and the year 2021 value is $208.12:
Year 2022 estimate:
$220.38/share
Year 2023 estimate:
$231.32/share
Year 2024 estimate:
$253.53/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 many are aware, Standard & Poor’s publishes earnings estimates for the S&P500. (My posts concerning their estimates can be found under the S&P500 Earnings label)
For reference purposes, the most current estimates are reflected below, and are as of November 9, 2022:
Year 2022 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $202.04/share
-From a “bottom up” perspective, “as reported” earnings of $183.22/share
Year 2023 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $228.93/share
-From a “bottom up” perspective, “as reported” earnings of $206.22/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
The survey shows, among many measures, the following median expectations:
Real GDP: (annual average level)
full-year 2022: 1.9%
full-year 2023: .7%
full-year 2024: 1.8%
full-year 2025: 2.2%
Unemployment Rate: (annual average level)
for 2022: 3.7%
for 2023: 4.2%
for 2024: 4.3%
for 2025: 4.2%
–
Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 36.3%, 47.2%, 49.4%, 46.1%, and 43.5% for each of the quarters from Q4 2022 through Q4 2023, respectively.
As well, there are also a variety of time frames shown (present quarter through the year 2031) with the median expected inflation (annualized) of each. Inflation is measured in Headline and Core CPI and Headline and Core PCE. Over all time frames expectations are shown to be in the 2.5% to 7.7% range.
_____
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
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 November 7, 2022 with a last price of 3806.80), 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 estimates, the probability of recession has grown significantly.
While I continue to have the stated reservations regarding the “Yield Curve” as an indicator, I do believe that it should be monitored.
The U.S. Yield Curve (one proxy seen below) has turned negative and is (all things considered) notably low when viewed from a long-term perspective. Below is the spread between the 10-Year Treasury Constant Maturity and the 2-Year Treasury Constant Maturity from June 1976 through the November 4, 2022 update, showing a value of -.49% [10-Year Treasury Yield (FRED DGS10) of 4.14% as of the November 4 update, 2-Year Treasury Yield (FRED DGS2) of 4.71% as of the November 4 update]:
source: Federal Reserve Bank of St. Louis, 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity [T10Y2Y], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 4, 2022: https://fred.stlouisfed.org/series/T10Y2Y
Real Median Household Income In The United States (MEHOINUSA672N)
In mid-September 2022 the Real Median Household Income statistic was updated. The figure is $70,784:
This figure, which is released annually, shows a -.6 Percent Change From Year Ago:
source: U.S. Census Bureau, Real Median Household Income in the United States [MEHOINUSA672N], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 7, 2022: https://fred.stlouisfed.org/series/MEHOINUSA672N
__
Personal Savings Rate (PSAVERT)
The Personal Saving Rate has been very volatile since 2020, and has now declined to nearly the lowest levels seen in the entire data series.
As seen below, the Personal Savings Rate is now at 3.1% through September 2022, as of the October 28, 2022 update:
source: U.S. Bureau of Economic Analysis, Personal Saving Rate [PSAVERT], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 6, 2022: https://fred.stlouisfed.org/series/PSAVERT
__
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
For reference purposes, below are five charts that display growth in payroll employment, as depicted by the Total Nonfarm Payroll measures (FRED data series PAYEMS).
PAYEMS, which is seasonally adjusted, is defined in Financial Reserve Economic Data [FRED] as:
All Employees: Total Nonfarm, commonly known as Total Nonfarm Payroll, is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed. This measure accounts for approximately 80 percent of the workers who contribute to Gross Domestic Product (GDP).
This measure provides useful insights into the current economic situation because it can represent the number of jobs added or lost in an economy. Increases in employment might indicate that businesses are hiring which might also suggest that businesses are growing. Additionally, those who are newly employed have increased their personal incomes, which means (all else constant) their disposable incomes have also increased, thus fostering further economic expansion.
Generally, the U.S. labor force and levels of employment and unemployment are subject to fluctuations due to seasonal changes in weather, major holidays, and the opening and closing of schools. The Bureau of Labor Statistics (BLS) adjusts the data to offset the seasonal effects to show non-seasonal changes: for example, women’s participation in the labor force; or a general decline in the number of employees, a possible indication of a downturn in the economy. To closely examine seasonal and non-seasonal changes, the BLS releases two monthly statistical measures: the seasonally adjusted All Employees: Total Nonfarm (PAYEMS) and All Employees: Total Nonfarm (PAYNSA), which is not seasonally adjusted.
The series comes from the ‘Current Employment Statistics (Establishment Survey).’
The source code is: CES0000000001
The first chart shows the monthly change in Total Nonfarm Payroll from the year 2000 through the current October 2022 report (October 2022 value of 261 (Thousands)):
(click on charts to enlarge images)
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 November 4, 2022; https://fred.stlouisfed.org/series/PAYEMS
The second chart shows a longer-term chart of the same month-over-month change in Total Nonfarm Payroll (reports of February 1939 through the present report of October 2022):
The third chart shows the aggregate number of Total Nonfarm Payroll, from the reports of January 1939 – October 2022 (October 2022 value of 153.308 million):
The fourth chart shows this same measure of aggregate number of Total Nonfarm Payroll as seen above but presented on a LOG scale:
Lastly, the fifth chart shows the Total Nonfarm Payroll number on a “Percent Change from Year Ago” basis from January 1940 – October 2022: (October 2022 value of 3.6%)
_________
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
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 = $32.58):
(click on chart to enlarge image)(chart last updated 11-4-22)
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 November 4, 2022: http://research.stlouisfed.org/fred2/series/CES0500000003
–
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 11-4-22)
–
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 = $27.86):
(click on chart to enlarge image)(chart last updated 11-4-22)
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 November 4, 2022: http://research.stlouisfed.org/fred2/series/AHETPI
–
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 11-4-22)
–
I will continue to actively monitor these trends, especially given the post-2009 dynamics.
_________
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.
_____
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 3.7% unemployment rate:
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 November 4, 2022: http://research.stlouisfed.org/fred2/series/UNRATE
–
Here is the U-6 chart, currently showing a 6.8% 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 November 4, 2022: http://research.stlouisfed.org/fred2/series/U6RATE
_____
The Special Note summarizes my overall thoughts about our economic situation
