Seven Charts That Leave You No Choice But To Not Feel Optimistic About The US Economy

Tyler Durden's picture

Submitted by Shane Obata-Marusic of Triggers

Seven charts that leave you no choice but to (not) feel optimistic about the US economy

At the end of July, 2014, Quartz posted an article called “seven charts that leave you no choice but to feel optimistic about the US economy”.

Although the facts that they presented are correct, the conclusion that they drew is not.

In the following sections, we will examine and refute each of the seven pieces of evidence that were presented by QZ.

 

Jobs

Growth in nonfarm private payroll employment (NFP) has been steady since 2012.

That said, it’s taking more money printing – aka Quantitative Easing (QE) – to achieve the same number of job gains month over month.

The following chart shows that if you deflate the gains in NFP by the increase in the Fed’s assets then you’ll see a diminishing return on QE.

Despite the fact that the labor markets have been improving for years, the Fed’s actions are having less and less of an effect.

 

Unemployment

The unemployment rate has been in decline since it peaked it late 2009.

But that’s not the whole story.

In contrast, the employment to population ratio has barely moved since 2010.

The next figure shows that, since the financial crisis, the falling unemployment rate has not been matched by a rising employment to population ratio.

 

This means is that unemployment rate is falling for the wrong reasons; i.e. because people are leaving the labor force.


Job Openings

Job openings have been on the rise since the middle of 2009 and are now as high as they were in 2007.

Be that as it may, job hires have been lagging openings since the summer of 2010.

As you’ll see in the following graph, hires are still well off their peak in 2006.

 

The labor market is better than it was but it’s still far from strong.


Housing

The housing market has improved significantly since the last depression but it’s still extremely weak by historical standards.

Often times, the financial media will present housing statistics that begin right after the last crisis.

That’s a great way to show the improvement that’s occurred this cycle; however, it doesn’t give you the proper context.

The subsequent diagram shows that new one family houses sold are still at a level that’s been associated with recessions in the past.

If this recovery was as strong as some people say it is then new home sales would be much higher than they are.

 

Autos

As a result of cheap financing, car sales are now at post-crisis highs.

But is the auto market as strong as it seems? Maybe not.

The ensuing chart shows that domestic auto inventories are now at their highest levels since early-mid 2001.

This means that, although sales have been rising, so has the number of autos available for sale.

If demand starts to fall off then there will be a lot of outstanding supply.

That scenario would not be good for the auto market.

 

Consumer Sentiment

Sentiment has been increasingly positive since 2009.

That said, it’s still lower than it was in 1995.

The succeeding figure shows that consumer sentiment has been making lower highs – i.e. lower peaks – since 2000.

This could be indicative of a loss of confidence in the financial industry.

In other words, after each bubble – first the Nasdaq, then the housing, and now the Fed bubble? – the consumer loses confidence in the system.

Intuitively this makes sense because of how many people were negatively affected by market crashes.

 

Stocks

The S&P 500 has been on fire since it bottomed in early-mid 2009.

S?t?e?v?e? ?L?i?e?s?m?a?n?  Some will argue that its performance is a reflection of an improving economy.

Others say that it’s been driven by the Fed’s monetary policy.

Take a look at the following graph – the S&P 500 divided by the Fed’s balance sheet – and then decide for yourself.  ;)

This chart is just hilarious.

It goes to show that the Fed is to the S&P what steroids were to Barry Bonds.

 

Do I have to?

After reading through this piece, it should be quite clear that you don’t have to be optimistic about the US economy.

Yes, there are some bright spots; but everything’s relative.

The current expansion has been ongoing for quite some time.

Therefore, it’s unlikely that “this is just the beginning” of secular bull market.

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intotheblack's picture

... because I felt so optimistic before I read these charts, yo.

intotheblack's picture

But now that I have read the charts I'm all like ... and then I'm like ... You know. Like that.

r00t61's picture

When I look at old receipts from a few years ago for things like beef, sugar, bread, chocolate, ice cream, etc., and compare prices to today, I feel anything but exuberance.

Seasmoke's picture

Don't forget to check the ounces !!!

Grouchy Marx's picture

Then think of it this way: if you could see what your receipts in the future are *going* to look like, then you would be absolutely ecstatic that you're getting everything so incredibly cheap right now. 

BeetleBailey's picture

I wish I could morph into a sitting member of the Congressional committees that sit in front of Dammit Janet Smellin like a Printin Felon Yellen ....

AND WHIP THOSE BABIES OUT THE NEXT TIME THE FUCKING CUNT SAYS/UTTERS/REFERS TO "INFLATION REMAINS LOW" ....

...AND FUCKING LAUGH IN HER FACE AND HAMMER THAT POINT HOME LIKE A NAIL AT AN AMISH BARN RAISING....ENOUGH SO THAT THE LAME STREAM PRESSTITUTES SHIT THEIR DIAPERS...AND HAVE TO REPORT SUCH A RANT....

Sudden Debt's picture

Yeah!
But there should be more graphs!
Like that unemployment graph with labor participation should also include the increase in retirments and disabilitie applications.

BeetleBailey's picture

Exactly. I'm smart enough to know that I don't know that answer.

spinone's picture

We are at the end of a 100 year demographic and monetary cycle.  It ends with bankruptcy and chaos.

Da Yooper's picture

The bankers & the Government have yet to learn

 

Ya cant have a viable economy when the "PEOPLE"

 

have no money

 

The people cant pull money out of thin air like the banker & government do & SPEND it

 

sooooo at some point this house of cards is going TU

yogibear's picture

"Ya cant have a viable economy when the "PEOPLE" 

have no money"

That's why their trying to force wage increases through mandatory minimum wage increases. Their trying to force inflation. 


U4 eee aaa's picture

That's just a sham to keep the slaves from revolting. Another shell game. If you study the history of the Fed (especially during the Greenspan years) You'll see that as soon as labor rates start to rise (IOW when the last guy in the lineup finally gets compensated), the Fed starts raising interest rates

Bossman1967's picture

Cant you read the charts man all os good matter of fact all is fantastic . Its time to have s block party and loote like Fugessson. ,an look at thos peeps free cloths food starting fires tear gas and barbecue dominos. All those negative talk is fucking with my saturday beer biz y'all. Lighten up and have a moos head

Carpenter1's picture

OI!! Methinks me animal spirits is about to bust loose!!

 

 

Fuku Ben's picture

I'm optimistic about my Puts

Ban KKiller's picture

As long as some asshole doesn't "reach out" to me I am fine.

db51's picture

Luke 21:28  GSIV   (Goldman Sachs International Version)

So when all these things begin to happen, stand and look up, for Tuesday is Coming!     BTFD

luna_man's picture

 

 

Yeah, the only "bright spot" for me, still have income to pay for the things I think I still need.

 

could change for the worse any day now...all I see is change for the worse

Peter Pan's picture

The mess reminds me of someone trying to cook three different meals in the same pot. The result is not going to be good.

Unless large swathes of unserviceable and therefore unpayable debt is wiped.
Unless military expenditure is curtailed.
Unless corporate welfare is reigned in.
Unless speculation through derivatives is reigned in.
Unless big pharma and medical costs are reigned in.
Unless bankers are jailed for the same things other people are jailed such as laundering.
Unless we make a start on this list......no chart is going to be intrinsically hopeful and promising.

seek's picture

I love it when mainstream news stories get called out like this. The original feel-good Quartz story was an absolute crock of shit.

It just goes to show how carefully selected "facts" can paint a completely false picture of reality to those unaware.

PeeramidIdeologies's picture

Easily on of my favourite aspects of ZH. There are two sides to every tale, and usually the more bias one is, the father from the truth be the tale.

Yen Cross's picture

How's that pyramid working out SEEK?

   I levitate @ GMT minus-8

seek's picture

Just caught this. Still up 100s of % but man is pricing acting strange the last few days.

Spitzer's picture

I'm greatfull that some people still have the energy to expose this Keynesian claptrap for what it is. Cuz I sure don't

And someone please send this to Kyle Bass. He is bullish. I repeat, Kyle fcking Bass is bullish.

El Hosel's picture

Show the chart for the increase in MOAR..... for us slowsky's.

MedicalQuack's picture

Well you missed one here:)  Zero Hedge  does such a good job on manipulation of gold for sure but I ran across this article in the New York Times.  They did some really good investigative reporting here.  Now it's all about manipulating the power grid, electricity in other words.  Some quants found their way around the abilities of the utility companies to siphon off profits there too.  According to the article it has not received a lot of attention, but it explains why electricity keeps going up and the utility companies don't get to share in the derivatives here and hedge when there's demand on the power grid to where congestion contracts come into play. Heck Monsanto is making it hard for farmers to hedge as well with planting seeds that now carry IP protection..it's nuts! 

They nail them, power companies are screwed as the Quant have figured out to how siphon that money off as well.  So think of it this way, when power demands are high the quants are out after those contracts to make a few million in a matter of maybe 48 hours or a little less or maybe a little more.

http://ducknetweb.blogspot.com.es/2014/08/quant-run-investment-companies...

We need to start also calling foul on some of these proprietary models too, whether it's in finance or health care or whatever, and stop believing every news article or marketing scheme that's put in front of us.

http://ducknetweb.blogspot.com/2014/08/somebody-needs-to-start-calling-f...

 

 

Dead Man Walking's picture

great, so now our utility bills go straight to some parasite banker.  WTF !

Captain Obvious.'s picture

They nail them

Has a special meaning around here.

adr's picture

There is no limit to the depths the tribe will go to squeeze every penny from the populace. Never adding anything of value.

Icebramovich's picture

All the empires fall down, and the empires fell down for economic problems.

 

Although USA still has a powerful  big  army, they will fall down because of this problems. I´m sure of this

DirkDiggler11's picture

Another ZH article that leaves you with just one remaining investment "thesis" is you will... Buy guns, Ammo, Gold, Silver and of course food.

Atomizer's picture

Just print moar counterfeit USD 

Pat the lambs on the head . Bhha, bhaa.

alexcojones's picture

Optimistic? you Bet!

Gonna get me an Elio, 86 MPG, a Ukraine or Russian Bride, and some "Bad Idea" T-shirts,

ALL of THIS from the side ads on ZEROHEDGE.

Would YOU drive this 'car'? £4,000 Elio needs stabilisers
NoPension's picture

Got my eye on the "seed vault" in the blue dress. And those eyes!

MrSteve's picture

Just a thought brother, but You ought to go real slow on ordering up one of those Uke or Russkie brides or the current Old Lady might get really torqued up. Plus, you don't really want your new bride's brothers and cousins coming to "visit" so soon after the wedding night. Might get kinda jammed up in more ways than you can imagine.... just sayin'.

homiegot's picture

Long Ferguson, MO.

NoPension's picture

Get the popcorn ready for the curfew.
Gonna be a "reelly good shew" this evening .

Dead Man Walking's picture

Seriously, in an article about how bad off the Ukraine is, I was looking at their houses..they  seemed pretty nice, and they were on acreage.  Sure, maybe their electricity in undependable, but do they pay 20cents per KWH like i do, and are their taxes and mortgage overwhelming?  Probably not.  I bet it's nicer to live there than NJ. We pay 1/2 of our salary to the govt and the other half to the bankers.  I bet their  kids are not autistic from poison vaccines, either.

 

TeethVillage88s's picture

Repost from other thread:

;

I think you are Identifying "Trans-National Government or Trans-National Government Officials & Diplomats"

Trends:

A) Presidents that Lie about war & Suppress Individual Rights & Constitutions... and otherwise abandon Geneva Conventions that made us GREAT and Stated that as a People we abhorred Aggressive War
B) Personally now I am Questioning if US Federal Government had a Coup in 1947 or before this... in favor of acting like an Empire
C) Reasons for House of Lords, House of Commons, or US Congress to Lie has always been clear, It is the Influence of Money, Power, Status, Legacy
D) Royal Families were never fully Denounced, Haciendas were never Reformed with Land Reforms... and Today we live with Government Service Families who are rich & believe they are Royalty... while we create a new threat... the Tech Dynasties or the Newly Rich who join Government Personalities knowingly or unknowingly to advance Fascist Agendas

But I don't stop there.

Knowledge is power, and all European Families seem to know this and work to keep education from commoners. Petroleum, Bitumen, and Gas products have lead to a new age starting in like 19th Century. But what if this is based on Sumerian Technology that was known to Germans, Jews, the Vatican, the French, the Dutch, and the British Empire?

We see Royal Families in Europe that have done well... same as the above but add the Luxemburg, Lichtenstein, Belgium, and Switzerland. Norway & Sweden discovered oil later I guess.

Knowledge creates classes. The french & English explored Egypt & ancient Iraq and discovered the knowledge of the Sumerians in use for Alcohol in medicine and the value of bitumens.

A) German Drive for ancient knowledge and a pipe line from Iraq considered major in WWII
B) UK Colonized Middle East and confiscated all ancient artifacts
C) Africa was old mining resource that attracted Germany, France, British Empire, and Dutch.
D) "Naphta" is the most commonly used word for petroleum product and is linguistically derived from Sumeria
E) Sumeria is situated on Iraq
F) Sumeria was an agricultural, animal husbandry & metallurgy based society that also had the most words for Petro, Oil, Gas, Alcohol, and Bitumen

- Trans-National Government Officials could give a crap about your economic well being...
- you are just labor, military fodder, or a source of energy
- Profits & Wealth mean more to these Sociopaths.
- US & UK States of Serfdom & Indentured Servitude.

photonsoflight's picture

SHHHH. Thats forbidden knowledge.

BeetleBailey's picture

"B) Personally now I am Questioning if US Federal Government had a Coup in 1947 or before this... in favor of acting like an Empire"

That was in 1913. The Federal Reserve Act.

ALLLLLLLL DOWNHILL FROM THERE

Grouchy Marx's picture

It's nicer to live anywhere rather than NJ.

Just sayin'.

dolbiere's picture

next step will be to add estimations for the drug trade and prostitution to the gdp and everything will be rosy.

Atomizer's picture

The dispatched group of illegal aliens will save the day. US educational book editors are working hard to release the new publication of Spanglish.

Book sales are expected to reach the trillions. Spokesmen stated, words by phonetics is a outdated platform in teaching children today. 

/ sarc 

Yen Cross's picture

 Blahh...Blahh. Burp.

 Long corrugated cardboard.

  It'd be  FUCKING  " ground hog' day!

Atomizer's picture

Glad to see your doing well, Mrs Atomizer just returned from a 2 week stint. Today was my first time in posting. Gave it a break. Focused on her. Missed her nagging 

;-)

Yen Cross's picture

 NOTHING! Will change my mind Atomizer/ I'd expect NOTHING less from you!

  Okay fuktrards, refuktards<  The Dail;y chart usd/jpy peaked in 8-"13

  usd/jpy is going to get ass>raped over the next  (4) weeks.

 I'm stealing your "ash tray" coin!