US Misery Index Rising

[38Chevy454]

Not any surprise, the misery index (defined as inflation rate plus unemployment rate) is rising. Mostly due to inflation part of the equation. The total misery index right now is officially 11.67%, which is above historical avg, but nowhere near the 75 and 80 numbers which reached almost 20% and 22% respectively. The misery index briefly hit 15% one year ago in the depths of Covid shutdowns, which was due to the unemployment numbers shooting up.

While I am feeling inflation in my wallet and budget, I have to say that I am not really feeling the misery as the numbers seem to indicate. I don't like the current trend and would prefer to get inflation under control better. However that may cause a lot of other consequences that would affect me more personally. Currently my biggest issues are supply and cost increases. Plus some labor shortages at places I go to that affect customer service.

Attached chart of the misery index 1948 to present. Interesting to see where the fairly recent times of the 2000 and 2008/2009 market drops didn't have as much effect on misery index as I would have thought.

I guess I am curious what others on the board here feel about misery index?

 

[Dash man]

That huge rise in 1979 is when I got married the first time. Coincidence? [emoji23]

 

[Car-Guy]

Not surprising except maybe that it's not worse. Inflation is real and we haven't seen anything "approaching" numbers like this since the 70's, at least in my lifetime. I think you have to take employment/unemployment numbers these days (past 2 years) with a huge gain of salt due to covid.

 

[Sunset]

I didn't even realize around 1980 about misery.
I was working and getting great interest rates on savings.
Job raises seemed to be big enough.

Now, while everything is fine, I worry a bit more as I can't really work for fresh money.
If inflation keeps rising to high rates and stays there for a few decades, it will hurt a LOT.

 

[38Chevy454]

Not surprising except maybe that it's not worse. Inflation is real and we haven't seen anything "approaching" numbers like this since the 70's, at least in my lifetime. I think you have to take employment/unemployment numbers these days (past 2 years) with a huge gain of salt due to covid.

I completely agree about unemployment numbers being all over the place and probably not a very accurate reflection of the true workforce for the past 2 years. All I know is around here in Cincinnati area it seems every single business has a help wanted/now hiring sign out in front of the place. Does not matter if it is retail, manufacturing, customer service type, restaurants, or office. They all seem to be needing help, which anecdotally should mean the unemployment rate is maybe lower than the official numbers? Which would result in subsequently lower misery index.

As for inflation, no question it is as high as I too have experienced in my life, at least as an adult.

 

[OldShooter]

"The misery index helps determine how the average citizen is doing economically and it is calculated by simply adding the Annual inflation rate to the Seasonally Adjusted unemployment rate." (https://inflationdata.com/articles/misery-index/)

HL Mencken: "For every complex problem, there is a solution that is simple, neat and wrong.”

Two parameters, unweighted, is simple, neat, and unvalidated as a measure of anything. Good recreational reading, I guess.

 

[foxfirev5]

Yeah, IMHO a meaningless statistic. The inflation rate itself is enough. The unemployment rate is so convoluted that it is a joke. Not working, but don't need a job, REALLY actively seeking a job, underemployed I was underemployed for years and never knew it. The Great Resignation ? How are these things factored into the current situation or the so called "misery index"? I guess I'm jealous since I haven't been able to come up with a series of buzzwords to capitalize on the current situation. ��

 

[eytonxav]

I don't need an index like this one to tell me I am more concerned about the state of our economy than I have been in many years, although 2008 was also very concerning.

 

[Aerides]

The thing about 2008/9 was...you didn't really know where the bottom was. My Ex Mega Corp, which trades around 140 today, was briefly below 10. And there was a very real possibility across many market sectors of going to zero. It was a very long time before we were able to safely say we were even "bouncing along" the bottom, and even longer before it was obvious the worst was behind us.

When employment isn't a personal concern, as with many of us here, then inflation is a bigger worry. Of course, we're far from the general population here, but no one can afford to lose 7% spending power year over year over year.

Still, I remain optimistic. The problem isn't fundamental weakness, it isn't houses of cards collapsing, it isn't false money running amuck just waiting to decimate people for 10 years (ie homes underwater). And some of it was overdue (very low wages, modest inflation for years).

If the foot comes off the gas pedal this year, I'll be ok.

 

[Gumby]

"The misery index helps determine how the average citizen is doing economically and it is calculated by simply adding the Annual inflation rate to the Seasonally Adjusted unemployment rate." (https://inflationdata.com/articles/misery-index/)

HL Mencken: "For every complex problem, there is a solution that is simple, neat and wrong.”

Two parameters, unweighted, is simple, neat, and unvalidated as a measure of anything. Good recreational reading, I guess.

As I recall, the greatest use of the "misery index" was in the 1970s as a cudgel used by presidential challengers to beat up on the incumbent president. Good for politics, but otherwise not a very useful metric.

 

[MarieIG]

As a new retiree - I know I don't like the rising inflation.

Currently, I'm not seeing any difficulties with friends/ former co-workers finding/ keeping employment. (In fact I have been solicited since I retired.)

 

[Car-Guy]

When employment isn't a personal concern, as with many of us here, then inflation is a bigger worry. Of course, we're far from the general population here, but no one can afford to lose 7% spending power year over year over year.

OTOH, I just got my quarterly payment credited to my 401k "conservative" (often called fixed or stable) income investments". It was the largest single quarterly credit that I can remember getting in the almost 40 years I've have the account. True the account balance is much larger than ever before but the payments have almost tripled in the past five years. Now it's almost equal to 7% a yr (before taxes)

Years ago, they (my companies 401k plan) called this a guaranteed income investment. Then it was called "fixed" and then it was called "stable" and most recently "conservative"...

 

[scrabbler1]

I remember a variation on the Misery Index including the interest rate in the calculation. This would make the period in the late 1970s and early 1980s look even worse than today.

 

[youbet]

.


If inflation keeps rising to high rates and stays there for a few decades, it will hurt a LOT.

It won't take "a few decades" of high inflation to put the hurt on us. Just a few years at the current rate will cause prices to double (+ or - depending on the actual rates and their sequence) and we'll have to live with that permanently. Remember that a slowing of inflation doesn't mean a reduction in prices. Prices will continue to rise, just more slowly, after inflation is brought back down to 2% - 3%.

I think DW and I could survive with prices doubled and continuing to rise (but more slowly). But it sure would be cause for some painful changes in plans!

Others who have better ability to increase their income along with prices will fair better of course.

 

[Ian S]

Meh, I'm not very concerned. We've come through a huge covid-induced jolt to the world economy but are gradually seeing our way through that - with the Russian invasion of Ukraine looking like a bump in the road at this point instead of WW3. Today we have a huge surprising jump in the measure of consumer sentiment https://www.marketwatch.com/story/c...as-prices-ease-umich-survey-finds-11649945499 as gas prices clearly ease and unemployment is low.

 

[Walt34]

That huge rise in 1979 is when I got married the first time. Coincidence? [emoji23]

Maybe it was both of us. My first marriage was in 1978 and ended five years later.

My own misery index is pretty low right now, perhaps being lower only when I was maybe four years old. I'm sure that not having to go to school, or to work, or pretty much not having to do anything I don't really want to has everything to do with that.

 

[Koolau]

A "constructed" number such as the Misery Index isn't something anyone actually feels. It might predict results of something like the (IIRC) "Right Track Wrong Track" poll or similar. I wouldn't pay too much attention to MI as it's so individual. JUST inflation would seem a better misery index as EVERYONE experiences inflation. If you are comfortably empl*yed or retired, unemployment numbers don't mean all that much. If you're unempl*yed then inflation maybe be secondary.

Just because the MI is an actual numerical value with "objective" numbers doesn't add to it's credibility IMHO. Asking folks how they "feel" seems a better way to estimate the "misery" of the average person. Just a thought so YMMV.

 

[Dash man]

Maybe it was both of us. My first marriage was in 1978 and ended five years later.

My own misery index is pretty low right now, perhaps being lower only when I was maybe four years old. I'm sure that not having to go to school, or to work, or pretty much not having to do anything I don't really want to has everything to do with that.

My Misery Index took a huge leap yesterday and today. After two years and two months of avoiding Covid-19, I started hacking away yesterday around 11:00am. Used an at home rapid antigen test. Positive. Went to Urgent Care for a PCR test. Positive. Laying in bed achy, coughing, stuffy and runny nose, slight fever, did I mention coughing? I’ll survive, but can’t wait for it to be over.

 

[jollystomper]

I didn't even realize around 1980 about misery.
I was working and getting great interest rates on savings.
Job raises seemed to be big enough.

+1

I did not notice much either... I was a year into my Megacorp job and had passed all of the first year training program "hurdles", and would make about $21,500 that year ($75K in today's dollars). But maybe that is why some college classmates who were very anti-Megacorps during my senior year suddenly started asking me to help get them interviews with Megacorp...



I was in a fortunate position then, as I am being FIREd now.

 

[Koolau]

My Misery Index took a huge leap yesterday and today. After two years and two months of avoiding Covid-19, I started hacking away yesterday around 11:00am. Used an at home rapid antigen test. Positive. Went to Urgent Care for a PCR test. Positive. Laying in bed achy, coughing, stuffy and runny nose, slight fever, did I mention coughing? I’ll survive, but can’t wait for it to be over.

Make it a "Nyquil Night" That's good stuff (though YMMV.)

 

[latexman]

For March, the Misery Index ticked up to 12.14, from 11.67 in February.

No surprise there!

 

[Gumby]

Make it a "Nyquil Night" That's good stuff (though YMMV.)

Nyquil, Dayquil and lots of tissues. Drink plenty of water. Eat something you like. Try to move around a little if you can. That's how we got through it. Only 4 or 5 days and it was largely over...

 

[street]

My Misery Index took a huge leap yesterday and today. After two years and two months of avoiding Covid-19, I started hacking away yesterday around 11:00am. Used an at home rapid antigen test. Positive. Went to Urgent Care for a PCR test. Positive. Laying in bed achy, coughing, stuffy and runny nose, slight fever, did I mention coughing? I’ll survive, but can’t wait for it to be over.

Darn!!
At least you aren't one of the many that had to be hospitalized. I hope for a fast recovery.

 

[Dash man]

Darn!!

At least you aren't one of the many that had to be hospitalized. I hope for a fast recovery.

Thanks! Lots of water and tissues. NyQuil for sure. Can’t move around much because I stuck in the bedroom. DFIL is 88 and I’m completely avoiding him. So far DW is okay. Telemedicine appointment in the morning with my primary care doctor.
Been eating okay so far.

 

[Scuba]

Thanks! Lots of water and tissues. NyQuil for sure. Can’t move around much because I stuck in the bedroom. DFIL is 88 and I’m completely avoiding him. So far DW is okay. Telemedicine appointment in the morning with my primary care doctor.
Been eating okay so far.

Best wishes for a speedy recovery and hopefully no one else in the household impacted.