================2019 November================

As Of November 2019 The Economic Stress Index is:

0.87

Underemployment: 6.5
GDP: 2.07
Household Income: 3.56

The Economic Stress in November 2019 was 0.87 which is down from 1.17 in October and 1.96 in September. The lower the index, the better the economy is. For example, for all of year 1999, during the tech boom, the ESI was 0.0; making it of the best years on record. For all of 2009, during the aftershocks of the Great Recession, the ESI averaged 19.39; a record high.

Underemployment (the U-6) averaged 6.50% in the last three months ending with the November 2019 jobs report released early December, and Gross Domestic Product (“The Economy”) was 2.07% higher in the last quarter compared to the same quarter a year earlier. Household Income was 3.56% higher in the last three months (September-October-November) compared with the same three months a year earlier according to Sentier Research.

An economic number that reflects a bad part of the economy (such as Underemployment) adds to the ESI, and economic numbers which reflect a good part of the economy (such as rising GDP and an increase in Household Income) reduces the ESI. Hence, the ESI for October 2019 adds up as follows:

6.50 is the base number; reflecting the average 6.50% Underemployment Rate in the last three months.

2.07 is deducted to reflect the year over year 2.07% GDP growth.

3.56 is deducted to reflect the 3.56% growth in Household Income.

= 0.87 which is the ESI for November 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), plus those who have part time jobs because they can’t find full-time jobs due to the state of the economy. 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 year before.

Income Explanation

The three month average income level change from the same three months a year earlier. In the Annual section, it is the income level change of the current year compared to the proceeding year. The monthly numbers are from Sentier Research. The Annual number is preliminary until the Census releases its annual report.