I have written extensively about the data behind the headline media reports. I have also discussed the importance of the relationship between the underlying data trends relative to broader macroeconomic perspectives. However, it is sometimes helpful just to view the various economic indicators and draw your own conclusions outside of someone else's opinion.
With the economy now more than 4 years into an expansion, which is long by historical standards, the question for you to answer by looking at the charts below is:
"Are we closer to an economic recession or a continued expansion?"
How you answer that question should have a significant impact on your investment outlook as financial markets tend to lose roughly 30% on average during recessionary periods. However, with margin debt at record levels, earnings deteriorating and junk bond yields near all-time lows, this is hardly a normal market environment within which we are currently invested.
Therefore, I present a series of charts which view the overall economy from the same perspective utilizing 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. Any other special data adjustments are noted below.
If you have any questions, or comments, you can email me or send me a tweet: @stawealth
Leading Economic Indicators

Durable Goods

Investment


ISM Composite Index

Employment & Industrial Production


Retail Sales

Social Welfare

The Broad View

Economic Composite
(Note: The Economic Composite is a weighted index of multiple economic survey and indicators - read more about this indicator)

If you are expecting an economic recovery, and a continuation of the bull market, then economic data must begin to improve markedly in the months ahead. If not, the drag of economic growth will ultimately continue to erode corporate earnings, profitability and weigh on the financial markets.
For the Federal Reserve, these charts make the case that continued monetary interventions are not healing the economy, but rather keeping it afloat by dragging forward future consumption. The problem is that it leaves a void in the future that must be filled.
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.
Expansion. You keep on using that word. I do not think it means what you think it means.
Expansion, as in hot gas molecules moving farther apart to occupy a greater volume while not increasing in mass. We are expanding like hot air but no real growth. Its going to blow!
As long as the people who have money can make more money off of economic contraction than they can off of real economic growth, we will have no real growth.
Affirmative action working hard in the Oval Office and the Fed ...what can possibly go wrong ?
Affirmative action run amok fer sure.
End the QE Bullshit now,and let the chips fall.
The Bullshit in this so call "expansion" will be cleared one way or another.
This is all going to end badly.
But the charts were lovely... no, really.
It always ends badly; bank on it. JPM does.
The charts + QE = expansion.
The charts - QE = depression.
So,
Charts = expansion - QE
Charts = depression + QA
expansion - QE = depression + QE
expansion = depression + 2QE
I find your expansion depressing.
I am always bothered by charts that extend before 2008, which implies that the world is the same one that existed before 2008.
It's not. And it never will be again.
Things are the same as they always have been when assuming we always have a recovery after a recession. They are only different when we are assuming that we can do the same stupid shit that has been tried countless times before that ended in failure, yet have a positive result this time. Hold my beer and watch this....
Wow, where are my shades man?!
That future is so bright!
You bet the economy is too weak to stand on it's own two feet. Taper? Fuggetaboutit.
trickle down just ain't workin, so lets force the fed's hand with a catch-22 fastball? raise the minimum wage!!!
that's the talk in the country today... and, seeing that 70% of GDP is created by penniless consumers how can it hurt.
no,... they'll be able to mask inflation when the revenues come right back into ramp'd-up QEternity?(killing the taper-worm)...
Sure, let's REALLY raise it though: $300/hr, that way, everyone can make as much as a rocket surgeon!
Looks like we're on the right track. Keep improvin productivity until no-one but robots are employed and wait it out till the unemployed fall off benefits and when the last one is standin we have full employment and a geat econoimy!
Not sure if this was already commented on, but the Employment/Population (Participation) and Jobless Claims chart is interesting.
Previous cycles saw the Jobless Claims fall as Participation recovered. This cycle, Participation is dead in the water, flatlined since 2009, but Jobless Claims are falling.
I assume this is due to 99-week Emergency Claims finally being exhausted and people rolling off Eligibility, regardless of whether they have found jobs or not (they haven't).
It would be great if somebody could dig through the data and find a way to determine if the market excitement each Thursday morning is as pointless as the falling Unemployment Rate.
The Fed will never (voluntarily) taper or stop QE.
Collapse will dictate that
No matter how you slice it or dice it -
Things are just not what they once were. Change is inevitable.
The one constant in chaos is change. Like ying & yang, up or down, good or bad, change will occur.
Right now the current change, which had its ground zero in the crash of 07- 08, is accelerating.
There is no resolution until an equitable solution is found for most. Its either that or deepening chaos.
There will be no change until we get a real president. This regime is not interested in our countries success. Hope and change is just recycled socialism and corruption Chicago style.
In reality, I'm looking for a global financial collapse.
You would have to adjust each of the graphs by the % increase in FRAUD for the graphs to be meaningful.