By The Numbers - September 2019Submitted by S. F. Ehrlich Associates, Inc. on October 3rd, 2019
Source: Direxion Funds
September 30, 2019
- I’M ALL DONE WITH MY WORK - An average American worker has increased his/her productivity by +97% in the last 35 years, i.e., an average worker can complete in 1 hour as of 12/31/18 the same amount of work that it took him/her 2 hours to finish as of 12/31/83 (source: Department of Labor).
- I QUIT - 3.43 million American workers quit their jobs in June 2019. A decade earlier, just 1.79 million American workers quit their jobs in June 2009 (during the nation’s 2008-09 recession). A higher “quit level” is indicative of a greater level of confidence in finding a new job to replace one’s current occupation (source: Department of Labor).
- SHOULD WE BUY TODAY? - 70% of Americans surveyed in June 2019 think “it’s a good time to buy a house.” That percentage was as high as 83% in December 2014 and has been as low as 57% in October 2008 (source: University of Michigan Surveys of Consumers).
- BIG NUMBERS - The total net worth of Americans as of 3/31/19 was $108.6 trillion, including $29.1 trillion (27% of the overall net worth total) in retirement accounts (source: Investment Company Institute).
- DYING INDUSTRY? - The number of Americans that work in the newspaper business has almost been cut in half over the last decade, falling 46% from 71,000 newsroom employees in 2008 to just 38,000 employees in 2018 (source: Pew Research Center).
- PRICEY - The cost of tuition, fees, room and board for the upcoming 2019-2020 school year at Bennington College in Vermont is $72,650 (source: Bennington College).
- LOWEST YIELD EVER - The US Treasury Department has auctioned off 30-year government bonds since 1977. The lowest yield ever on our nation’s 30-year paper until last week was 2.10% on 7/08/16. The 30-year Treasury bond yield fell to 1.98% on Thursday 8/15/19, an all-time record low (source: Treasury Department).
- BROKE BOOMERS - 12.2% of individual bankruptcy filers were at least age 65 in 2016, i.e., 1 out of every 8 bankruptcies. 2.1% of individual bankruptcy filers were at least age 65 in 1991, i.e., 1 out of every 48 bankruptcies (source: “Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society).
- COLLEGE COSTS - 45 million Americans owe $1.48 trillion in student loan debt as of 6/30/19, a +114% increase (up +$790 billion) in just the last 10 years (source: Federal Reserve Bank of New York).
- NEED WORK? - 51% of the 2.25 million new jobs created in the United States during the 12 months ending 7/31/19 were produced in just 6 states – Texas (323,300 jobs), California (311,800), Florida (227,200), Washington (102,400), New York (95,500) and North Carolina (75,700) (source: Department of Labor).
- MOST EVER - Mortgage debt in the United States peaked at $9.29 trillion as of 9/30/08, fell 16% to $7.84 trillion by 6/30/13, and now has climbed all the way back to a new record level of $9.41 trillion as of 6/30/19 (source: Federal Reserve Bank of New York).
- MAINTAINING PURCHASING POWER - A 65-year old spending $100,000 per year (after-tax) would need $128,008 per year (after-tax) by age 75 and $163,862 per year (after-tax) by age 85 if his/her cost of living was increasing by +2.5% per year due to inflation (source: BTN Research).
- UNEXPECTED - The average interest rate nationwide on a 30-year fixed rate mortgage has dropped from 4.51% on 1/03/19 to 3.58% on Thursday 8/29/19 (source: Freddie Mac).
- SPOOKY NUMBERS - The Congressional Budget Office estimated on 8/21/19 that over the next 10 fiscal years (2020-2029), the US government will take in $45.6 trillion of tax receipts versus $57.8 trillion of outlays, resulting in a $12.2 trillion deficit, or an average annual deficit of $1.22 trillion. The United States has produced annual deficits of at least $1.22 trillion just 3 times in our nation’s history – 2009-2010-2011 (source: CBO).
- MEDICAID - Medicaid expenditures make up on average 29% of the budget of a US state. Medicaid is a health care program for low-income Americans that is jointly funded by the federal government and states, but running the program is the responsibility of the individual states (source: Medicaid and CHIP Payment Access Commission).
- MOST OF THEM - The sales of existing homes account for 90% of all homes sales in the United States (source: Treasury Department).
- NO MORE – 8,051 American retail stores have closed YTD through 8/31/19. This year’s store closures are on pace to exceed the all-time record of 8,139 store closures from 2017 (source: Coresight Research).
- THEY DO NOT LAST FOREVER - There have been 10 recessions in the United States since 1950, the most recent being an 18-month downturn that ended in June 2009. The average length of the 10 recessions since 1950 is 11 months (source: National Bureau of Economic Research).
- GUARANTEED INCOME - The city of Stockton, CA started a program in February 2019 to pay $500 per month to 125 low-income citizens for the next 18 months. There are no restrictions on how recipients can spend the money (source: Stockton Economic Empowerment Demonstration).
- ADULTS IN THE ROOM - 73% of stocks (by dollar) owned by Americans are held by households headed by individuals over the age of 55 (source: Federal Reserve).
- PLAN FOR PRICE INCREASES - As of 8/31/19, the “consumer price index” is up +19% over the last 10 years, up +54% over the last 20 years, and up +106% over the last 30 years. The consumer price index (CPI) is a measure of inflation compiled by the US Bureau of Labor Studies (source: Department of Labor).
- THE BANK OWNS IT NOW - Lenders repossessed 11,493 homes in August 2019, down 47% from 21,640 repossessions in August 2018. The all-time record for bank repossessions in a single month in US history: 102,134 in September 2010 (source: Attom Data Solutions).
- COST HAS DOUBLED - Through 8/31/19, the US government has spent $1.13 billion per day during fiscal year 2019 on interest payments related to our national debt. At the same point in time a decade ago during fiscal year 2009, the government was spending $0.57 billion per day on interest payments (source: Treasury Department).
- ANNUAL BUMP - The “cost of living adjustment” (COLA) made to Social Security benefits is calculated based upon the year-over-year increase in prices from the 3rd quarter of subsequent years. E.g., the COLA that will be applied to benefits paid in January 2020 will be based on the change of prices from the end of the 3rd quarter 2018 to the end of the 3rd quarter 2019. The COLA increase was +2.8% last year (source: Social Security).
- FINAL QUARTER OF THE YEAR - Over the last 25 years (1994-2018), the S&P 500 stock index has gained an average of +4.3% (total return) over the final 3 months of the year (October-November-December). 19 of the last 25 fourth quarters (76%) have produced a positive total return gain. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value (source: BTN Research).
- BIGGER LOAN - On 1/03/19, the national average interest rate for a 30-year fixed rate mortgage was 4.51%, producing a $507 monthly “principal and interest” payment per $100,000 borrowed. The same $507 payment at last week’s 3.64% national average would allow a home buyer to borrow $111,027 (source: Fannie Mae).