What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?

Multiple jobholders account for 5.4% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.

Let's take a close look at November's employment report numbers on Full and Part-Time Employment. The latest data shows that 82.8% of total employed workers are full-time (35+ hours) and 17.2% of total employed workers are part-time (<35 hours).

Wholesale inflation rose 0.4% last month, above economist estimates of 0.2%. The producer price index for final demand was up 0.1% month-over-month (s.a.). On an annual basis, headline PPI accelerated from 2.6% in October to 3.0% in November.

In the week ending December 7th, initial jobless claims were at a seasonally adjusted level of 242,000. This represents an increase of 17,000 from the previous week's figure and is worse than forecasts for 221,000.

The weekly leading economic index (WLEI) is a composite for the U.S economy that draws from over 20 time-series and groups them into the following six broad categories which are then used to construct an equally weighted average. As of November 29, the index was at 32.851, up 1.819 from the previous week, with 5 of the 6 components in expansion territory.

This series has been updated to include the November release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $51,510, down 6.5% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

Inflation rose slightly in November. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index rose to 2.75% year-over-year, right in line with economist expectations. Additionally, core CPI came in at 3.3% as expected.

The S&P 500 finished the week ending December 6 with solid gains, up 0.96% from last Friday. The index closed right at a record high and is now up 28.41% year-to-date.

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.

There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. November saw a 227,000 increase in total nonfarm payrolls and the unemployment rose to 4.2%.

Consumer sentiment continued to rise, according to the preliminary December report for the Michigan Consumer Sentiment Index. The index rose 3.1 points (3.1%) from November's final reading to 74.0. The latest reading was below the forecast of 73.1.

The latest employment report showed 227,000 jobs were added in November, above forecasts of the expected addition of 202,000 new jobs. Meanwhile, the unemployment rate ticked up to 4.2%.

The Institute of Supply Management (ISM) has released its November services purchasing managers' index (PMI). The headline composite index is at 52.1, worse than the forecast of 55.5. The latest reading moves the index back into expansion territory for 51st time in the past 54 months.

The BEA's core Personal Consumption Expenditures (PCE) Price Index for October showed that core inflation continues to be above the Federal Reserve's 2% long-term target at 2.3%. The October core Consumer Price Index (CPI) release was higher, at 3.3%. The Fed is on record as using core PCE data as its primary inflation gauge.

The S&P 500 real monthly averages of daily closes reached a new all-time high in July 2024. Let's examine the past to broaden our understanding of the range of historical bull and bear market trends in market performance.

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $17,236 for an annualized real return of 10.94%.

Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of November 29, it was 4.18%.

With the Q3 GDP second estimate and the November close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 194.7%, unchanged from the previous quarter.

Here is a summary of the four market valuation indicators we update on a monthly basis.

• The Crestmont Research P/E ratio
• The cyclical P/E ratio using the trailing 10-year earnings as the divisor
• The Q ratio, which is the total price of the market divided by its replacement cost
• The relationship of the S&P composite price to a regression trendline

Based on the November S&P 500 average of daily closes, the Crestmont P/E of 41.3 is 173% above its arithmetic mean, 198% above its geometric mean, and is at the 100th percentile of this 14-plus-decade series.

Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 26.6 and the latest P/E10 ratio is 37.3.

The latest job openings and labor turnover summary (JOLTS) report showed that job openings increased in October, reflecting more hiring. Vacancies increased to 7.744 million in October from September's downwardly revised level of 7.372 million. The latest reading was more than the expected 7.510 million vacancies.

The Q Ratio is the total price of the market divided by the replacement cost of all its companies. The latest Q-ratio is at 1.81, unchanged from 1.81 in October.

Bitcoin's closing price climbed toward the $100,000 level this past week. BTC is currently up ~117% year-to-date. Here are the latest charts on three of the largest cryptocurrencies by market share through 12/03/24.

Quick take: At the end of November, the inflation-adjusted S&P 500 index price was 183% above its long-term trend, up from October.

About the only certainty in the stock market is that, over the long haul, over-performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.

As of November 29, 2024, the 10-year note was 366 basis points above its historic closing low of 0.52% reached on August 4, 2020.

The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) increased to 48.4 in November but remains in contraction territory for an eighth straight month. The index has now contracted for 24 of the past 25 months. The latest reading was better than the forecast of 47.7.

Seven of our eight indexes on our world watch list have posted gains through December 2, 2024. The U.S. S&P 500 finished first with a year-to-date gain of 27.50%. The Hong Kong's Hang Seng finished second with a year-to-date gain of 16.45%. Germany's DAX finished in third with a year-to-date gain of 15.40%.

The yield on the 10-year note ended November 29, 2024 at 4.18%, the 2-year note ended at 4.13%, and the 30-year at 4.36%.

The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) fell to 40.2 in November from 41.6 in October. The latest reading is worse than the 44.9 forecast and keeps the index in contraction territory for a twelfth straight month.

The U.S. economy grew in line with expectations during the third quarter of this year. Real gross domestic product increased at an annual rate of 2.8% in Q3 2024, according to the second estimate. The latest estimate is in line with the forecasted 2.8% growth and is below the Q2 2024 GDP final estimate of 3.0%.

Personal income (excluding transfer receipts) rose 0.6% in October and is up 4.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.3% month-over-month and up 2.3% year-over-year.

The Conference Board's Consumer Confidence Index® rose in November to the highest level since January. The index increased to 111.7 this month from October's upwardly revised 109.6. This month's reading was slightly lower compared to the 111.8 forecasted.

Home prices continued to trend upwards in September as the benchmark 20-city index rose for a twentieth consecutive month to a new all-time high. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.2% increase month-over-month (MoM) and a 4.6% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -0.2% and the YoY was -0.6%.

FINRA has released new data for margin debt, now available through October. The latest debt level is at $815.368 billion, the highest level since February 2022. Margin debt is up 0.2% month-over-month (MoM) and up 28.4% year-over-year (YoY). However, after adjusting for inflation, debt level is up 0.2% MoM and up 25.1% YoY.

The Conference Board Leading Economic Index (LEI) decreased in October to its lowest level since March 2016. The index fell 0.4% from the previous month to 99.5, marking its eighth consecutive monthly decline.

Industrial production was down 0.3% in October, coming right in line with economist estimates. Compared to one year ago, industrial production is down 0.29%.

Nominal retail sales in October were up 0.40% month-over-month (MoM) and up 2.85% year-over-year (YoY). However, after adjusting for inflation, real retail sales were up 0.15% MoM and up 0.27% YoY.

The Census Bureau's Advance Retail Sales Report for October revealed headline sales were up 0.4% last month. The latest reading was higher than the expected 0.3% monthly growth in consumer spending.

Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the August 2024 close.

The August S&P Global US Manufacturing PMI™ fell to 47.9 in August from 49.6 in July, indicating a modest deterioration in business conditions for a second straight month. The latest reading was just below the forecasted reading of 48.0 and is the index's lowest level of the year.

Consumer attitudes are measured by two monthly surveys: the University of Michigan’s Consumer Sentiment Index (MCSI) and the Conference Board’s Consumer Confidence Index (CCI). In August, the MCSI rose for the first time in 5 months, inching up to 67.94. Meanwhile, the CCI increased to 103.3, its highest level in 6 months.

With the release of July's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.21% month-over-month change in disposable income comes to 0.06% when we adjust for inflation. The year-over-year metrics are 3.09% nominal and 0.58% real.

The BEA's Personal Income and Outlays report revealed inflation remained at its lowest level since early 2021. The PCE price index, the Fed's favored measure of inflation, was up 2.5% year-over-year, just below the forecasted 2.6% growth. On a monthly basis, PCE inflation was up 0.2% from June, as expected.

The second estimate for Q2 GDP came in at 2.95%, an acceleration from 1.41% for the Q1 final estimate. With a per-capita adjustment, the headline number is lower at 2.48%, a pickup from 0.95% for the Q1 headline number.

Real gross domestic product (GDP) is comprised of four major subcomponents. In the Q2 GDP second estimate, three of the four components made positive contributions.

The National Association of Realtors® (NAR)unexpectedly fell 5.5% in July to 70.2, its lowest level in history. Pending home sales were expected to inch up 0.2% from the previous month. The index is down 8.5% from one year ago.