We are here. The unofficial start to summer (for you druids out there, I know we aren't to the equinox yet) is here. People had to sports tourneys, to the lake, to the golf course, to the barbeque. The discussion turns to friends, family, and ... the economy

Surely there will be talk among people about sports or the weather. I doubt many will talk about religion (but maybe they should). However, the bbq conversation will surely turn to how work is going as well as the cost of food or gasoline etc

Arthur Okun came up with the idea in the 1970s when the misery was quite high. It measures the combination of unemployment & inflation - the two things people care about the most. It is in blue on the chart today

We can see how the misery has tracked since the GFC. Each rectangle is a different administration. Under Obama, misery was high because of unemployment and the jobless recovery

Under Trump, misery ran very low until Covid, and then spiked to very high levels. It is presumably this move in misery and the subsequent recession that cost him a second term. No president has gotten a 2nd term when there is a recession within 2 yrs of the election

Under Biden, misery has been running high because of inflation. It has been falling of late which one might think would have people more optimistic. However, it isn't

The white line on the chart is the Real Clear Politics Country is on the Wrong Track measure. High is bad. The first thing that stands out to me is that this number is always greater than 50%. Half the country is never happy

The second thing that stands out is that as misery moves higher, this measure moves higher. As misery moves lower, this measure moves lower, perhaps begrudgingly so. It took years of low misery index for the measure to come down under Trump. It was more responsive under Obama

The interesting thing to me on this is the far right of the graph. Even as the misery index is moving lower, with unemployment still very low while prices are falling, the measure of Wrong Track is moving higher. People are still not happy

Perhaps this is because CPI is less high but the price level is permanently higher. It simply costs a lot more to live than it did a few years ago. I went to Dollar General yesterday. Nothing in the store was even close to a dollar

Perhaps it is the debt ceiling discussion. Perhaps there is just general malaise but right now 2/3 of the country see us as being on the Wrong Track. That would clearly include members of the Presidents own party as well

Over the next 18 months, we will be in election season. More and more names are thrown into the hat. The discussion about who will do the right job starts this weekend. Remember, no president has won re-election if there is a recession within 2 yrs. The President needs a soft landing

Most importantly, take a minute this weekend to celebrate those who have given their lives so we can enjoy freedom, bbqs and the start of summer. Have a Happy Memorial Day

Stay Vigilant

#markets #investing #economy #misery #stayvigilant