================2019 June================

The Economic Stress Index in the 2nd Quarter of 2019 Was:

3.63

Underemployment: 7.3
GDP: 2.29
Household Income: 1.38

The Economic Stress for June 2019 is 3.63; up from 2.71 in May which was up from 2.32 in April. The lower the index, the better the economy is. The historical annual average of the ESI (1973 through 2018), is 7.16

Underemployment (the U-6) averaged 7.30% the last three months ending with the June 2019 jobs report released early July 2019, and Gross Domestic Product (“The Economy”) was 2.29% higher the last quarter compared to the same quarter a year earlier. Household Income was 1.38% higher in the last three months (April-May-June) compared with the same three months a year earlier according to Sentier Research.

An economic number reflecting a bad part of the economy (such as Underemployment) adds to the ESI. A good economic number such as the GDP and Household Income both rising reduces the ESI. Hence, the ESI for June 2019 adds up as follows:

7.30 is the base number; reflecting Underemployment

2.29 is deducted; reflecting the economic growth

1.38 is deducted; reflecting Household Income growth

3.63 remains; reflecting an Economic Stress Index of 3.63 for June 2019.

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U6 Explanation

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.

GDP Explanation

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.

Income Explanation

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.)