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 August 15, 2025, 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; the year 2021 value is $208.12/share; the year 2022 value is $218.09/share; the year 2023 value is $221.36/share; and the year 2024 value is $242.73/share:
Year 2025 estimate:
$267.19/share
Year 2026 estimate:
$302.91/share
Year 2027 estimate:
$341.41/share
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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.
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The Special Note summarizes my overall thoughts about our economic situation
For reference purposes, the most current estimates are reflected below, and are as of August 13, 2025:
Year 2025 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $258.63/share
-From a “bottom up” perspective, “as reported” earnings of $242.27/share
Year 2026 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $300.67/share
-From a “bottom up” perspective, “as reported” earnings of $277.12/share
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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 2025: 1.7%
full-year 2026: 1.6%
full-year 2027: 2.1%
full-year 2028: 1.8%
Unemployment Rate: (annual average level)
for 2025: 4.2%
for 2026: 4.5%
for 2027: 4.4%
for 2028: 4.3%
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Regarding the risk of a negative quarter in real GDP in any of the next few quarters, mean estimates are 22.8%, 29.6%, 28.9%, 25.0% and 24.0% for each of the quarters from Q3 2025 through Q3 2026, respectively.
As well, there are also a variety of time frames shown (present quarter through the year 2034) 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 2.1% to 3.1% range.
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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 August 7, 2025 with a last price of 6340.00), 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
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 August 4, 2025 using data through July 2025) this “Yield Curve” model shows a 28.947% probability of a recession in the United States twelve months ahead. For comparison purposes, it showed a 28.7153% probability through June 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 August 7, 2025 currently shows a .6% probability using data through June 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 August 7, 2025: http://research.stlouisfed.org/fred2/series/RECPROUSM156N
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The two models featured above can be compared against measures seen in recent posts. For instance, as seen in the July 13, 2025 post titled “The July 2025 Wall Street Journal Economic Forecast Survey“ economists surveyed averaged a 33% probability of a U.S. recession within the next 12 months.
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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 August 7, 2025 update (reflecting data through August 1, 2025) is -.6777:
source: Federal Reserve Bank of St. Louis, St. Louis Fed Financial Stress Index [STLFSI4], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed August 7, 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 August 6, 2025 incorporating data from January 8, 1971 through August 1, 2025 on a weekly basis. The August 1 value is -.53500:
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed August 7, 2025: http://research.stlouisfed.org/fred2/series/NFCI
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The ANFCI chart below was last updated on August 6, 2025 incorporating data from January 8, 1971 through August 1, 2025, on a weekly basis. The August 1 value is -.48198:
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed August 7, 2025: http://research.stlouisfed.org/fred2/series/ANFCI
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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
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:
Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms (DRSDCILM)
“The Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms” measure has been notably weak. The current value is -28.6% as of the August 4, 2025 quarterly update:
source: Board of Governors of the Federal Reserve System (US), Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms [DRSDCILM], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed August 6, 2025: https://fred.stlouisfed.org/series/DRSDCILM
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All Employees, Temporary Help Services (TEMPHELPS)
I have written extensively about many facets of employment and unemployment, as the current and future unemployment issue is of tremendous importance yet is in many ways misunderstood.
One theory regarding employment is that hiring cycles typically begin with an uptake in temporary employment. Conversely, due to various factors a reduction in temporary employees can be an (early) indicator of lessening labor demand.
Shown below is this TEMPHELPS measure with last value of 2,521.6 (Thousands) through July 2025, last updated August 1, 2025:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -2.8%:
source: U.S. Bureau of Labor Statistics, All Employees, Temporary Help Services [TEMPHELPS], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed August 6, 2025: https://fred.stlouisfed.org/series/TEMPHELPS
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Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing (AWOTMAN)
Various U.S. manufacturing measures continue to indicate growth. However, overtime hours for manufacturing is somewhat subdued by recent-era economic expansion standards and the measure on a Percent Change From Year Ago basis has recently been negative.
Shown below is the “Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing” measure (with last value of 3.6 hours through July) last updated August 1, 2025:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -2.7%:
source: U.S. Bureau of Labor Statistics, Average Weekly Overtime Hours of Production and Nonsupervisory Employees: Manufacturing [AWOTMAN], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed August 6, 2025: https://fred.stlouisfed.org/series/AWOTMAN
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Quits: Total Nonfarm (JTSQUR)
Quits (Quits: Total Nonfarm [JTSQUR]) have recently declined significantly. This measure had a value of 2.0 through June 2025 as of the July 29, 2025 update, as shown below:
Below is this measure displayed on a “Percent Change From Year Ago” basis with value -4.8%:
source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed August 6, 2025: https://fred.stlouisfed.org/series/JTSJOL
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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.
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The Special Note summarizes my overall thoughts about our economic situation
