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US Economic Indicators

The coincident economic indicators, can be seen at Doug Short/Advisor Perspectives

2013 data, Update January 2014

 

2012 data

Big 4 Indicators Doug Short

Big 4 Indicators: Industrial production, retail sales, real income,

 

We observe the following:

US indicators point upwards, when the rest of the world is slowing.

After capital left many emerging markets and Europe, this capital helps the United States to push up house prices, consumer sentiment and stocks. Gasoline prices are not rising any more, which is positive for consumer sentiment.

 

Real income has risen far more slowly than industrial production, overtime work

Real income has risen far more slowly than industrial production. Companies are increasing profits, the US is becoming more productive. Productivity comes from both higher production and slowly increasing real wages, hence the US is becoming more “Chinese”. A point which is not covered in Doug’s charts is that real income per hour is not rising.

US Real Hourly Wage Growth Since 2000

source Zerohedge

Employment cannot cope up with population growth, creates a split society

Employment remains subdued. It cannot cope up with population growth. Like often around Christmas, job creation is better. In addition the Fed’s QE3 let people spend more.

If we take the September value of 114’000 new jobs, then job creation cannot cope with population growth and the 11.8 million jobs lost since the financial crisis.

 

New jobs based on CES survey

jobs creation needed based on September (source)

College Premium Krugman

College Premium (source Paul Krugman), click to expand

 

This leads to a split American society:

  • entrepreneurs, stock owners, well qualified people
  • the ones with negative real increases in income,
  • the ones without work (the “not in labor force has increased by 8.5 million since 2008) and/or the ones who live on foodstamps (from 31.1 in 2008 to 47.6 million)

Real sales are rising more quickly than real income: Deficit spending

Real sales is rising more quickly than real income: Last but not least thanks to the Fed’s actions, Americans are deficit spending again.

 

George Dorgan, snbchf.com

Disclaimer: The opinions expressed above are not intended to be taken as investment advice. It is to be taken as opinion only and we encourage you to complete your own due diligence when making an investment decision. Even if we often write about Forex trading, our advices aren't written for day traders who follow technical channels, but rather for mid- and long-term investors. Our aim is to show discrepancies between fundamental data and current asset valuations, which can lead in mid-term to an inversion to technical channels.
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