Following a great January in which the S&P was up 4.36%, the S&P 500 is now on pace to have a 66% gain for 2012. Since 66% is not a particularly likely scenario, it’s more likely than not that there will be some give-back in coming months.
The misery index measures the squeeze on general standards of living as the sum of the unemployment rate and the inflation rate. It is a nice simple measurement of how much pain there is in the American economy at any given time. Currently, the index is around 12, which while elevated isn’t close to where it was in the 80s.
CPI is used for the inflation rate in this chart–it’s arguable whether that gives an unbiased view of the inflation rate so it’s possible this metric should be higher.
Retail sales for December were reported this morning mostly flat m/m which means that overall retail sales were up 6.5% y/y for 2011.
In nominal terms, it was a pretty good year for retail sales, which hit a new all time high at $4.69T. It was the 8th largest increase in 18 years since 1993–not bad for a year in which the S&P 500 was flat. There is quite a difference between nominal and real retail sales though. Even though Americans are spending more dollars, those dollars are buying them fewer goods. Real retail sales have still, 4 years later, not reached pre-recession highs.
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| *Millions of Dollars; Inflation adjustment to December 2011 is estimated |
Orange juice futures are making headlines today, down 9% after screaming higher yesterday.
“Here in New York they trade everything, Gold, Silver, Platinum, Heating Oil, Cocoa and Sugar, and, of course, Frozen Concentrated Orange Juice.”
Continuing on the treasury theme, below is a chart of the major holders of US Treasuries. Of 10T marketable securities, Foreign holders own $4.5T and the Federal Reserve is the largest single holder at $1.6T.
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As an addition to the previous post: a graphical representation of the US Federal budget. 57.8% of the Federal budget is spent on Health Care, Social Security and Income Security. How does the government accomplish any of these services better than the private sector would?
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While looking at some GDP numbers, I noticed something interesting that I hadn’t ever before. Government expenditures in the GDP report are smaller than those reported in the budget report. While the budget reports government spending at ~$3.7T annually, the GDP report only reports federal expenditures at $1.25T. This is because the budget report takes into account all expenditures, but the GDP report only takes into account government consumption expenditures (not entitlement expenditures). Below is a chart of the ratio of government consumption expenditures (primarily defense spending) to total expenditures. It shows the way in which entitlement spending has engulfed the Federal Budget since the 1950s.
The missing $2.5T represents the direct shift in the consumption line of GDP from the working population to the non-working population. Apparently this amount isn’t enough for the Occupy Wall Street folks.
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It’s still pretty early in 2012, but so far last year’s Dow losers have been performing pretty well. On average the 10 worst performing Dow components of 2011 are up 5.6% this year (as of yesterday’s close). By contrast, the Dow is up 1.43% ytd.
An interesting info-graphic in the Journal today about younger people getting fewer driver’s licenses. The article cites social media as one of the factors behind the declining license rate, but I’m not so sure. This seems like a question for the Freakonomics guys.
