The State of America’s Economy Explained in 16 Charts
As the White House scrambles to fix
the many issues that still plague the multimillion-dollar failure known
as healthcare.gov, and as Republicans digest Tuesday’s election results,
the U.S. economy continues to plod along at a sluggish pace.
President Barack Obama (Getty Images)
In fact, with all the news of the
failed implementation of President Barack Obama’s health care law, it
seems that jobs and the economy have gone largely ignored.
But how is the U.S. economy performing? In short, the U.S. economy is far from peak strength and there’s still a lot of work to be done.
And here to help illustrate the health of the economy is a collection of charts from Lance Roberts of STA Wealth Management.
Are we expanding or are we looking at
yet another recession? The best way to answer that question is to look
at the data and “draw your own conclusions,” Roberts notes.
The following is a view of the overall economy (charts represent an annualized rate of change).
“In some cases, where the data is
extremely volatile, I have used a 3-month average to expose the
underlying data trend,” Roberts wrote, adding that all special data
adjustments have been noted.
1. Leading Economic Indicators (recession indicators)
Image source: STA Wealth Management.
2. Durable Goods (orders for factory hard goods)
Image source: STA Wealth Management.
3-4. Investment
Image source: STA Wealth Management.
Image source: STA Wealth Management.
5. ISM Composite Index (an index based on surveys of more than 300 manufacturing firms)
Image source: STA Wealth Management.
6-8. Employment & Industrial Production
Image source: STA Wealth Management.
Image source: STA Wealth Management.
Image source: STA Wealth Management.
9. Retail Sales
Image source: STA Wealth Management.
10. Social Benefits
Image source: STA Wealth Management.
11-16. A Broader Look at Things
Image source: STA Wealth Management.
What’s the bottom line?
Simply put, if you’re looking for brighter days ahead, the above data must improve first.
But perhaps more important than the
fact that a sluggish economy threatens to weigh heavily on profits and
markets, Roberts notes, is the fact that the above data would seem to
make a strong case against the Federal Reserve’s multibillion dollar
easy-money polices.
Indeed, it would seem that the last
few years of endless quantitative easing, which includes spending $85
billion per month on bond purchases, has merely kept the economy afloat
(as opposed to growing it).
“The problem is that it leaves a void
in the future that must be filled,” Roberts wrote. “In my opinion, the
economy is far to weak to stand on its own two feet. Therefore, while
the Fed may ease off on the current rate of bond purchases, likely not
before mid-2014, it is highly unlikely that they will remove their
‘highly accommodative stance’ anytime soon.”
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