Author Archives: Ted Kavadas

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – March 17, 2017 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.

Below are three long-term charts, from Doug Short’s ECRI update post of March 17, 2017 titled “ECRI Weekly Leading Index…”  These charts are on a weekly basis through the March 17, 2017 release, indicating data through March 10, 2017.

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

ECRI WLI

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.:

ECRI WLI,Gr.

 

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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 2380.05 as this post is written

March 2017 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On March 15, 2017 the March Duke/CFO Global Business Outlook was released.  It contains a variety of statistics regarding how CFOs view business and economic conditions.

In this CFO survey, I found the following to be the most notable excerpts – although I don’t necessarily agree with them:

Results also show that CFOs are feeling the most confident about economic growth than they’ve been in more than a dozen years, and they strongly support several of the president’s initiatives.

These findings and detailed analysis of tax and economic reforms are from the Duke University/CFO Global Business Outlook. The survey has been conducted for 84 consecutive quarters and spans the globe, making it the world’s longest-running and most comprehensive research on senior finance executives. This quarter, nearly 900 CFOs responded to the survey, which ended March 10. Results are for the U.S. unless stated otherwise.

also:

The Optimism Index jumped this quarter to 69 (on a 100-point scale), the highest level in 14 years and much higher than the long-run average of 60.

“The jump in business optimism is leading to strong hiring and spending plans for 2017,” Graham said. “Our analysis of past forecasts shows that the Optimism Index is an accurate predictor of GDP growth and employment over the next year.”

Sixty-one percent of U.S. firms plan to increase their payrolls in 2017, with an average increase of about 3 percent (median 1 percent). Wage hikes are expected to average nearly 4 percent. Capital spending is expected to increase 6 percent on average (median 3 percent), a notable improvement from flat or negative spending plans for most of 2016.

“There’s a disconnect here,” said Duke finance professor Campbell R. Harvey, founding director of the CFO Survey. “Despite the optimism, the high rate of employment growth and wages, and the substantial possibility of both corporate and individual tax cuts, CFOs have very pessimistic growth forecasts, where only 16.8 percent believe we can hit 3 percent growth in 2017. That is surprising.”

The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 69, as seen below:

Duke CFO Optimism March 2017

It should be interesting to see how well the CFOs predict business and economic conditions going forward.   I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.

(past posts on CEO and CFO surveys can be found under the “CFO and CEO Confidence” tag)

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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog 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

SPX at 2381.38 as this post is written

The March 2017 Wall Street Journal Economic Forecast Survey

The March 2017 Wall Street Journal Economic Forecast Survey was published on March 16, 2017.  The headline is “WSJ Survey Of Economists See Growth Climbing in 2017 and 2018, Then Dissipating.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

Two excerpts:

On average, forecasters expect 2.4% growth in 2017, compared with 2.2% prior to the election. Their increase for 2018 was more significant. They now expect 2.5% growth that year, compared with 2% in pre-election forecasts.

also:

Most remain optimistic for now. The Wall Street Journal’s survey of 61 academic, financial and business economists was conducted from March 10 to March 13, and found that 62% believe it is more likely growth will outperform than underperform.

By contrast, just 23% see risks to the downside. The odds of a recession in the next 12 months are placed at just 14%, down from 20% during the same month last year.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 14.41%. The individual estimates, of those who responded, ranged from 0% to 33%.  For reference, the average response in February’s survey was 15.09%.

The current average forecasts among economists polled include the following:

GDP:

full-year 2016:  1.9%

full-year 2017:  2.4%

full-year 2018:  2.5%

full-year 2019:  2.1%

Unemployment Rate:

December 2017: 4.5%

December 2018: 4.4%

December 2019: 4.5%

10-Year Treasury Yield:

December 2017: 2.94%

December 2018: 3.39%

December 2019: 3.65%

CPI:

December 2017:  2.4%

December 2018:  2.4%

December 2019:  2.4%

Crude Oil  ($ per bbl):

for 12/31/2017: $54.70

for 12/31/2018: $57.31

(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)

_____

I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog 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

SPX at 2381.38 as post is written

Janet Yellen’s March 15, 2017 Press Conference – Notable Aspects

On Wednesday, March 15, 2017 Janet Yellen gave her scheduled March 2017 FOMC Press Conference. (link of video and related materials)

Below are Janet Yellen’s comments I found most notable – although I don’t necessarily agree with them – in the order they appear in the transcript.  These comments are excerpted from the “Transcript of Chairman Yellen’s Press Conference“ (preliminary)(pdf) of March 15, 2017, with the accompanying “FOMC Statement” and “Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents, March 2017“ (pdf).

From Janet Yellen’s opening comments:

CHAIR YELLEN. Good afternoon. Today, the Federal Open Market Committee decided to raise the target range for the federal funds rate by 1/4 percentage point, bringing it to 3/4 to 1 percent. Our decision to make another gradual reduction in the amount of policy accommodation reflects the economy’s continued progress toward the employment and price stability objectives assigned to us by law. For some time the Committee has judged that, if economic conditions evolved as anticipated, gradual increases in the federal funds rate would likely be appropriate to achieve and maintain our objectives. Today’s decision is in line with that view and does not represent a reassessment of the economic outlook or of the appropriate course for monetary policy. I’ll have more to say about monetary policy shortly, but first I’ll review recent economic developments and the outlook.

The economy continues to expand at a moderate pace. Solid income gains and relatively high levels of consumer sentiment and wealth have supported household spending growth. Business investment, which was soft for much of last year, has firmed somewhat, and business sentiment is at favorable levels. Overall, we continue to expect that the economy will expand at a moderate pace over the next few years.

Janet Yellen’s responses as indicated to the various questions:

SAM FLEMING. Thanks very much, Sam Fleming from the Financial Times. Picking up on the last topic, balance sheet normalization. Clearly you said you don’t want to start pulling in the size of the balance sheet until normalization is well under way. Could you give us some sort of sense about what well under way means, at least in your mind? What kind of hurdles are you setting? What kind of economic conditions would you like to see? Is it just a matter of the level of the short-term federal funds rate as being the main issue? And what kind of role do you see the role of the balance sheet playing in the normalization process over the longer term? Is it an active tool, or is it a passive tool? Thanks.

CHAIR YELLEN. So let me start with the second question first. We’ve emphasized, for quite some time, that the Committee wishes to use variations in the Fed Funds Rate target, our short-term interest rate target as our key active tool of policy. We think it’s much easier in using that tool to communicate the stance of policy. We have much more experience with it, and have a better idea of its impact on the economy. So, while the balance sheet asset purchases are a tool that we could conceivably resort to if we found ourselves in a serious downturn where we were, again, up against the zero bound, and faced with substantial weakness in the economy. It’s not a tool that we would want to use as a routine tool of policy. You asked what well under way means. I can’t give you a specific answer to that. And I think the right, the right way to look at it is in qualitative, and not quantitative, terms. It doesn’t mean some particular cutoff level for the federal funds rate that, when we’ve reached that level, we would consider ourselves well under way. I think what we want to have is confidence in the economy’s trajectory. A sense that the economy will make progress, that we’re not overly worried about downside risks, and adverse shocks that could hit the economy, that could quickly after setting it off on the path to shrinking the balance sheet gradually over time cause us to want to begin to add monetary policy accommodation. So I think it has to do with the balance of risks and confidence in the economic outlook, and not simply the level of the federal funds rate.

also:

BINYAMIN APPELBAUM. Binyamin Appelbaum, the New York Times. The Bank for International Settlement has raised concerns that central banks are being insufficiently attentive to asset, price — excuse me, asset price inflation. And stock market investors in the United States certainly don’t seem to be waiting for the Trump administration to actually implement its fiscal policies. And I guess I’m just curious to know how much of a concern that is for you. And, if not, why not, given the remarkably elevated level of stock price evaluation?

CHAIR YELLEN. Well, we do look at financial conditions in formulating our view of the outlook. And stock prices do figure into financial conditions. So, I think, the higher level of stock prices is one factor that looks like it’s likely to somewhat boost consumption spending. We also notice that, in the last several months, that risk spreads particularly for lower grade corporate issuers have narrowed, which is another signal that financial conditions have become somewhat easier. Now, on the other side, longer term interest rates are up some in recent months, and the dollar is a little stronger. How does that net out? There are private sector analysts that produce financial conditions, indices that attempt to aggregate all these different factors affecting financial conditions. And, for some of the more prominent analysts and indices, I think the conclusion they’ve reached is that financial conditions on balance have eased. And that’s partly driven by the stock market. So, that is a factor that affects the outlook.

also:

KATHLEEN HAYS. Chair Yellen, Kathleen Hays. Oh excuse me, Kathleen Hays from Bloomberg. I’m going to try to take the opposite side of this because, on this question about market expectations and how the markets got things wrong, and then how you say the Fed suddenly clarified what it already said. But, for example, if the–if you look at the Atlanta Fed’s latest GDP tracker for the first quarter, it’s down to 0.9 percent. We had a retail sales report that was mixed, granted the, you know, upper divisions of previous months make it look better, but the consumer does not appear to be roaring in the first quarter, kind of underscoring the waitand-see attitude you just mentioned. If you look at measures of labor compensation, you note in this statement that they’re not moving up. And, in fact, they are–and if you look at average–there are so many things you can look at. And you, yourself, have said in the past that the fact that that is happening is perhaps an indication there’s still slack in the labor market. I guess my question is this, in another sense, what happened between December and March? GDP is tracking very low. Measures of labor to compensation are not threatening to boost inflation any time fast. The consumer is not picking up very much. Fiscal policy–we don’t know what’s going to happen with Donald Trump. And, yet, you have to raise rates now. So what is the, what is the motivation here? The economy is so far from your forecast, in terms of GDP, why does the Fed have to move now? What is this signal, then, about the rest of the year?

CHAIR YELLEN. So, GDP is a pretty noisy indicator. If one averages through several quarters, I would describe our economy as one that has been growing around 2 percent per year. And, as you can see from our projections, we, that’s something we expect to continue over the next couple of years. Now that pace of growth has been consistent with a pace of job creation that is more rapid than what is sustainable if labor force participation begins to move down in line with what we see as its longer run trend with an aging population. Now, unemployment hasn’t moved that much, in part because people have been drawn into the labor force. Labor force participation, as I mentioned in my remarks, has been about flat over the last 3 years. So, in that sense, the economy has shown, over the last several years, that it may have had more room to run than some people might have estimated, and that’s been good. It’s meant we’ve had a great deal of job creation over these years. And there could be, there could be room left for that to play out further. In fact, look, policy remains accommodative. We expect further improvement in the labor market. We expect the unemployment rate to move down further, and to stay down for the next several years. So, we do expect that the path of policy we think is appropriate is one that is going to lead to some further strengthening in the labor market.

KATHLEEN HAYS. Just quickly then, I just want to underscore. I want to ask you, so following on that, you expect it to move. What if it doesn’t? What if GDP doesn’t pick up? What if you don’t see wage measures rising? What if you don’t, what if the core PCE gets stuck at 1.7 percent, would you, is it your view, perhaps, that if there’s a risk right now in the median forecast for dots, that it’s fewer hikes this year rather than the consensus or more?

CHAIR YELLEN. Well, look, our policy is not set in stone. It is data dependent and we’re, we’re not locked into any particular policy path. Our, you know, as you said, the data have not notably strengthened. I, there’s noise always in the data from quarter to quarter. But we haven’t changed our view of the outlook. We think we’re on the same path; not, we haven’t boosted the outlook projected faster growth. We think we’re moving along the same course we’ve been on, but it is one that involves gradual tightening in the labor market. I would describe some measures of wage growth as having moved up some. Some measures haven’t moved up, but there’s some evidence that wage growth is gradually moving up, which is also suggestive of a strengthening labor market. And we expect policy to remain accommodative now for some time. So we’re, we’re talking about a gradual path of removing policy accommodation as the economy makes progress, moving toward neutral. But we’re continuing to provide accommodation to the economy that’s allowing it to grow at an above-trend pace that’s consistent with further improvement in the labor market.

also:

JO LING KENT. Hi, Chair Yellen. I’m Jo Ling Kent with NBC News. I just want to know, what message are you trying to send consumers with this particular rate hike?

CHAIR YELLEN. I think that’s a great question; I appreciate your asking it. And the simple message is the economy’s doing well. We have confidence in the robustness of the economy and its resilience to shocks. It’s performed well over the last several years. We’ve created, since the trough in employment after the financial crisis, around 16 million jobs. The unemployment rate has moved way down. And many more people feel optimistic about their prospects in the labor market. There’s job security. We’re seeing more people who are feeling free to quit their jobs, getting outside offers, looking for other opportunities. So, I think the job market, which is an important focus for us, is certainly improving. That’s not to say that it’s good labor market conditions for every individual in the United States. We know there are problems that face, particularly people with less skill and education, and certain sectors of the economy, but many Americans are enjoying a stronger labor market and feel better, feel very much better about that. And inflation is moving, moving up, I think, toward our 2 percent objective. And we’re operating in a, in an environment where the U.S. economy is performing well, and we seem pretty balanced. So, I think people can feel good about the economic outlook.

also:

NANCY MARSHALL-GLENZER Some Fed critics have said it’s too soon to raise interest rates because wages haven’t risen enough to justify a rate increase. What would you say to that?

CHAIR YELLEN. Well, I don’t, I would like to see wages increase and think there’s some scope for them to increase somewhat further. But our objectives are maximum employment and inflation. And we need to consider what path of rates is appropriate to foster those objectives. Unfortunately, one of the things that’s been holding down wage increases is very slow productivity growth. And I think we are seeing some upward pressure as the labor market tightens. I take that as a signal that we’re coming closer to our maximum employment objectives. But productivity is, for those focusing on wage growth, productivity is an additional important factor.

 

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2381.38 as this post is written

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the March 9, 2017 update (reflecting data through March 3, 2017) is -1.335.

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:

http://www.chicagofed.org/webpages/publications/nfci/index.cfm

Below are the most recently updated charts of the NFCI and ANFCI, respectively.

The NFCI chart below was last updated on March 15, 2017 incorporating data from January 5,1973 through March 10, 2017, on a weekly basis.  The March 10, 2017 value is -.77:

NFCI

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 15, 2017:

http://research.stlouisfed.org/fred2/series/NFCI

The ANFCI chart below was last updated on March 15, 2017 incorporating data from January 5,1973 through March 10, 2017, on a weekly basis.  The March 10 value is -.04:

ANFCI

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 15, 2017:

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 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 2381.13 as this post is written

NFIB Small Business Optimism – February 2017

The February NFIB Small Business Optimism report was released today, March 14, 2017. The headline of the Small Business Economic Trends report is “Small Business Owners Continue To Have High Expectations For Washington.”

The Index of Small Business Optimism decreased .6 points in February to 105.3.

Here are some excerpts that I find particularly notable (but don’t necessarily agree with):

Business owners reporting higher sales improved four percentage points, rising to the first positive reading since early 2015. The percent of owners expecting higher real sales fell three points to a net 26 percent. This follows a 20-point rise in December and remains positive.

Capital spending among small business owners rose two points to 62 percent, the second highest reading since 2007. Owners reported spending on new equipment, vehicles, and improvement or expansion of facilities. The percent of owners planning capital outlays slipped one point to 26 percent. Duggan said after years of ball-and-chain regulation and poor economic growth, small businesses are ready to invest.

“Small businesses will begin to turn optimism into action when their two biggest priorities, healthcare and small business taxes, are addressed,” said Duggan. “To small business, these are both taxes that need reform. It is money out the door that strangles economic growth.”

also:

Credit Markets

Three percent of owners reported that all their borrowing needs were not satisfied, down 1 point. Thirty percent reported all credit needs met (down 1 point), and 52 percent explicitly said they did not want a loan. However, including those who did not answer the question, uninterested in borrowing, 67 percent of owners have no interest in borrowing. Record numbers of firms remain on the “credit sidelines”, seeing no good reason to borrow yet, in spite of the surge in optimism. As optimism is translated into spending plans, borrowing activity should pick up. Only 2 percent reported that financing was their top business problem compared to 22 percent citing taxes, 15 percent citing regulations and red tape, and 17 percent the availability of qualified labor. Weak sales garnered 12 percent of the vote.

Here is a chart of the NFIB Small Business Optimism chart, as seen in the March 14 Doug Short post titled “NFIB Small Business Survey:  Optimism Remains High in February“:

NFIB Small Business Optimism Index

Further details regarding small business conditions can be seen in the full February 2017 NFIB Small Business Economic Trends (pdf) report.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2364.97 as this post is written

10-Year Treasury Yields – Two Long-Term Charts As Of March 14, 2017

I have written extensively about U.S. interest rates and their importance.  Rising interest rates have substantial ramifications for many aspects of the current-day economy.  My commentaries with regard to interest rates and the bond bubble are largely found under the “bond bubble” tag.   From an intervention perspective commentary is found under the “Intervention” category.

Lately interest rates, including the 10-Year Treasury yield, have been increasing.  An excerpt from the March 13, 2017 Wall Street Journal article titled “U.S. 10-Year Bond Yield Closes at Highest Level Since September 2014”:

The yield on the benchmark 10-year Treasury note closed Monday at the highest level in more than two years, deepening its rise this month as investors expect that the Federal Reserve will raise short-term interest rates later this week.

The yield on the 10-year note settled at 2.609%, compared with 2.582% Friday. It toppled the recent peak of 2.6% closed in mid-December and marked the highest close since September 2014. Yields rise as bond prices fall.

As reference, here is a long-term chart of the 10-Year Treasury yield since 1980, depicted on a monthly basis, LOG scale:

(click on charts to enlarge images)(charts courtesy of StockCharts.com; chart creation and annotation by the author)

TNX Monthly LOG since 1980

Here is a long-term chart of the 10-Year Treasury yield since 2008, depicted on a daily basis, LOG scale:

TNX Daily LOG since 2008

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2364.18 as this post is written

Deflation Probabilities – March 9, 2017 Update

While I do not agree with the current readings of the measure – I think the measure dramatically understates the probability of deflation, as measured by the CPI – the Federal Reserve Bank of Atlanta maintains an interesting data series titled “Deflation Probabilities.”

As stated on the site:

Using estimates derived from Treasury Inflation-Protected Securities (TIPS) markets, described in a technical appendix, this weekly report provides two measures of the probability of consumer price index (CPI) deflation through 2021.

A chart shows the trends of the probabilities.  As one can see in the chart, the readings are volatile.

As for the current weekly reading, the March 9, 2017 update states the following:

The 2015–20 and 2016–21 deflation probabilities have remained at 0 percent since November 3 and January 17, respectively. These 2015–20 and 2016–21 deflation probabilities, measuring the likelihoods of net declines in the consumer price index over the five-year periods starting in early 2015 and early 2016, are estimated from prices of the five-year Treasury Inflation-Protected Securities (TIPS) issued in April 2015 and April 2016 and the 10-year TIPS issued in July 2010 and July 2011. We will continue updating the deflation probabilities file and chart weekly but will discontinue social media and update alerts until probabilities move above 0 percent.

_________

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 2372.60 this post is written

“Not In Labor Force” Statistic – As Of March 2017

In the November 13, 2013 post (“Not In Labor Force Statistic“) I featured editorial commentary from the Wall Street Journal, as well as an accompanying long-term chart, with regard to the number of people not working.

Also, on February 9, 2015 I wrote another post titled “Unemployment And The ‘Not In Labor Force’ Statistic,” in which I discussed various facets of this measure.

Below is an updated chart regarding this statistic.  The current figure, last updated on March 10, 2017 depicting data through February 2017, is 94.764 million people (Not Seasonally Adjusted):

LNU05000000

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Not In Labor Force [LNU05000000] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed March 12, 2017;

http://research.stlouisfed.org/fred2/series/LNU05000000

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2372.60 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 (FRED series CES0500000003)(current value = $26.09):

(click on chart to enlarge image)(chart last updated 3-10-17)

CES0500000003_3-10-17

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 March 11, 2017:

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 3-10-17)

CES0500000003_3-10-17 2.8 percent change from year ago

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 = $21.86):

(click on chart to enlarge image)(chart last updated 3-10-17)

AHETPI_3-10-17 21.86

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 March 11, 2017:

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 3-10-17)

AHETPI_3-10-17 2.5 percent change from year ago

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 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 2372.60 this post is written