The Economic Stress Index is at 5.11 in early August 2017, down from 5.08 in early July, and 6.09 in early June. The lower the index, the better the economy is. The current 5.11 Index is below the historical average of 7.5 (years 1973 through 2016).
Underemployment (the U6) averaged 8.53 the last three months ending with the July 2017 jobs report released early August, and Gross Domestic Product (“The Economy”) was 2.08% higher the last quarter compared to the same quarter a year earlier. Median Household Income was 1.34% higher the last three months of available data (March-April-May) compared to the same three months a year earlier, according to Sentier Research. (Sentier has yet to release its June 2017 data.)
The August 2017 Index adds up as follows:
8.53 Underemployment is the base number
Deduct 2.08 for a positive GDP
Deduct 1.34 for a positive Household Income
5.11 Economic Stress Index for early August 2017
The U-6 counts the regular unemployed (known as the official Unemployment Rate or U-3), plus those marginally attached to the workforce (halfway looking for jobs) and also those who have part time jobs because they can’t find full-time jobs due to the state of the economy. This is basically the broadest measure of the unemployment picture in the US. The monthly Economic Stress Index uses a rolling 3-month average of the Seasonally Unadjusted U-6.
The percent change in GDP of the latest quarter compared to the same quarter a year earlier. In the Annual section it is the annual percent change in GDP (Gross Domestic Product) of the current year compared to the full year before.
We look at the year over year change in Disposal Personal Income for the monthly report and at Household Income by the Census for the annual report. The monthly report looks at a three-month average, such as this year’s fist quarter compared to last year’s first quarter, while the annual report compares the full year-over-year change. (Until 2020, we used the monthly Household Income data from Sentier Research for the monthly report. However, Sentier stopped releasing it so we are using Disposal Personal Income minus government transfers such as social security payments. The report is released monthly by the Commerce Department.)