NOTE : This is a subscriber-only article that was made open for public viewership on 20 May 2016. A few subscribers have been concerned by the recent jump in recession odds of the Headwinds Index model to 60% A probability of recession of 60% most certainly also implies probability of no recession of 40% and of course this is related directly to any false positives that may (and have) occurred in the past (see March 2003 in above chart.) You […]
Archive | April, 2016
Over 30% of States with rising unemployment
The March 2016 figures are in for state-wide unemployment and the percentage of states with growing unemployment has risen to over 30% now: The useful thing with this breadth metric is that deterioration in unemployment is made visible long before it shows up in the average national unemployment rate. Whereas the national unemployment rate is at best a co-incident indicator for recession, the percentage of states with increasing employment acts as a reliable leading indicator – reliable enough to be […]
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Labor market not as strong as you think
The strength of the labor market is constantly being trotted out in defense of the robust status of the US economy, but broad sets of labor data show this not to be the case. First, let us examine a very broad US labor market growth metric: This indicator needs to fall below -10 before the odds of recession skyrocket to a near certainty and so whilst there is no cause for immediate alarm, it is clear the indicator is not […]
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Animation : The incredible US employment recovery
Below is an animation of the annual average unemployment rate per U.S state from 2011 onward. It’s quite incredible to see how unemployment was erased state-by-state over the years: However statewide improvements in employment have probably peaked-out as shown in the chart below, which depicts the aggregate (equal weighted) inverse 6-month unemployment rate growth for each of the 52 U.S States together with a diffusion showing the percentage of 52 U.S states with increasing unemployment. You can see that recently […]
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How can we forecast 30% upside for 2016 with RAVI?
The RecessionALERT Valuation Index (RAVI) is currently forecasting 30% growth for 2016 for the SP500 with its 1-year forecast model. “How the heck is this possible given current overvaluation of the market?” we can hear you say. Let us show you how this is calculated so we can put the forecast into context: Firstly, we know we have a very accurate 10-year forecast model with the RAVI: We can see that 10-year forecasts for the SP500 Total Return Index (including […]
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