Global| Jan 19 2010Misery Reaches Highest Since 1983
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. economic recession brought with it the highest level of misery in over twenty five years. The December misery index reached 12.7% which was up from 11.8% during November. The index is calculated as the sum of the unemployment [...]
The U.S.
economic recession brought with it the highest level of misery in over
twenty five years. The December misery index reached 12.7% which was up
from 11.8% during November. The index is calculated as the sum of the
unemployment rate and the y/y change in the consumer price index. Not
only was the index level its highest since 1983, but the 5.2 point
increase versus December '08 was the quickest since the "credit crunch"
recession of 1980.
Higher unemployment accounts the index's stretch into double digits. At 10.0%, not only is the unemployment rate high but its 2.6 percentage point increase over the last twelve months is nearly the quickest since 1975. (Before the current reading, the 4.0 point rise as of June set the record.)
Low inflation has ameliorated some of the pain caused by higher unemployment, but the positive effect is about to diminish. The 2.8% gain in the CPI versus last year was down sharply from the 1980 peak of 14.6% when oil prices spiked. However, the misery index soon will reflect the increase in energy prices.
The Misery Index is calculated by Haver Analytics. It is the sum of the unemployment rate and the year-over-year percentage change in the CPI-U from the Bureau of Labor Statistics.· The Fed's Monetary Policy Response to the Current Crisis is from the San Francisco Federal Reserve published last May and it can be found here.
| December | November | December '08 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|---|
| Misery Index (%) | 12.7 | 11.8 | 7.5 | 8.9 | 9.7 | 7.5 |
| Unemployment Rate (%) | 10.0 | 10.0 | 7.4 | 9.3 | 5.8 | 4.6 |
| Consumer Prices (Y/Y %) | 2.7 | 1.8 | 0.1 | -0.4 | 3.8 | 2.9 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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