Political Calculations
Unexpectedly Intriguing!
November 14, 2018

The city of Philadelphia is continuing to experience shortfalls in the monthly revenues it collects from its controversial soda tax. As a result of those ongoing shortfalls, Philadelphia Mayor Jim Kenney's Rebuild initiative is being significantly scaled back from the levels that city officials have promised city residents.

The following chart shows the amount of revenue that the city has collected through the Philadelphia Beverage Tax assessed in the months of January 2017 through August 2018. In the chart, the blue "Desired" line shows the amount of tax collections that city officials originally expected to collect throughout 2017, while the red "2017" line shows how much the city actually collected from its soda tax in each month of that year. The red 2017 line subsequently became the city's expected revenue for its soda tax in 2018, whose actual level of revenues are indicated by the green "2018" line.

Desired vs Actual Estimates of Philadelphia's Monthly Soda Tax Collections, January 2017 through August 2018

Through August 2018, Philadelphia is running about $1.6 million short of its expected revenue levels for the calendar year, and about $10.5 million below its original revenue expectation for the first eight months of collections for its soda tax.

City officials passed Philadelphia's soda tax into law by promising to use 100% of the money it would collect to fund "free" pre-Kindergarten programs in the city, community schools, and the mayor's Rebuild initiative, which would fund repairs and improvements to city parks, libraries, recreation centers and playgrounds.

With the city's soda tax collections persistently falling short of expected levels, one or more of these spending programs would have to pay the price by being scaled back, where the city's Rebuild initiative appears to have become the designated loser.

That much became evident last month when Mayor Kenney began walking back promises to fund $500 million worth of improvements to the city's public infrastructure.

The glowing "First 1,000 Days" report [pdf] released Oct. 1 by Mayor Jim Kenney contained 15 mentions of Rebuild, the most expensive and highest profile initiative of Kenney's first term. But unlike past mentions of the heralded program, these didn't include the $500 million price tag that the administration has used consistently since it introduced the program in 2016.

"Through the Administration’s signature infrastructure initiative Rebuild, we're investing hundreds of millions of dollars in our neighborhoods by renovating our aging recreation centers, playgrounds, parks, and libraries," the report reads.

The subtle adjustment to “hundreds of millions” may seem innocuous yet it portends an intentional shift that could result in fewer dollars reaching neighborhoods hungry for functional, decent places to play and learn.

Philadelphia is reliant upon the taxes it collects through its soda tax to support the borrowing it needs to fund the Rebuild initiative. With those revenues falling over 17% short of the city's original expectations, the mayor has scaled back the city's planned commitment for the Rebuild initiative from $500 million to $348 million, a 30% reduction. The difference between the percentage for the city's soda tax revenues and its funding commitment confirms that the Rebuild program is bearing a disproportionately larger share of Philadelphia's failure to collect its desired level of revenue through its soda tax.

That outcome could have been avoided if only Philadelphia's residents were more willing to pay the city's soda tax instead of engaging in tax avoidance behaviors. It's as if they don't care enough about what city officials want....

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November 13, 2018

The U.S. Federal Reserve boldly took no action to increase short term interest rates in the U.S. at the conclusion of its 7-8 November 2018 meeting, leaving them at their current target rate of 2.00% to 2.25%, the level to which they had set them back in September 2018.

The risk that the U.S. economy will enter into a national recession at some time in the next twelve months now stands at 1.9%, which is up by roughly three-tenths of a percentage point since our last snapshot of the U.S. recession probability from late-September 2018. The current 1.9% probability works out to be about a 1-in-54 chance that a recession will eventually be found by the National Bureau of Economic Research to have begun at some point between 8 November 2018 and 8 November 2019.

That small increase from our last snapshot is mostly attributable to the Fed's most recent quarter point rate hikes on 26 September 2018. Since then, the U.S. Treasury yield curve has very slightly flattened, as measured by the spread between the yields of the 10-Year and 3-Month constant maturity treasuries, which has only contributed a very small portion of the increase in recession risk in the last six weeks.

The Recession Probability Track shows where these two factors have set the probability of a recession starting in the U.S. during the next 12 months.

U.S. Recession Probability Track Starting 2 January 2014, Ending 8 November 2018

We continue to anticipate that the probability of recession will continue to rise through the end of 2018, since the Fed is expected to hike the Federal Funds Rate again in December 2018. As of the close of trading on Friday, 9 November 2018, the CME Group's Fedwatch Tool was indicating a 76% probability that the Fed will hike rates by a quarter percent to a target range of 2.25% to 2.50% at the end of the Fed's next meeting on 19 December 2018. Looking forward to the Fed's 20 March 2019 meeting, the Fedwatch Tool indicates a 53% probability that the Fed will hike U.S. interest rates by another quarter point at that time. Looking even further forward in time, the Fed is expected to hold rates steady for a while, then hike them by an additional quarter point in September 2019.

If you want to predict where the recession probability track is likely to head next, please take advantage of our recession odds reckoning tool, which like our Recession Probability Track chart, is also based on Jonathan Wright's 2006 paper describing a recession forecasting method using the level of the effective Federal Funds Rate and the spread between the yields of the 10-Year and 3-Month Constant Maturity U.S. Treasuries.

It's really easy. Plug in the most recent data available, or the data that would apply for a future scenario that you would like to consider, and compare the result you get in our tool with what we've shown in the most recent chart we've presented. The links below present each of the posts in the current series since we restarted it in June 2017 and, barring significant events, our next update will be in December 2018.

Previously on Political Calculations


November 12, 2018

The big news last week, aside from the U.S. midterm elections, which apparently are still going on in some places, was the stock market’s response to the return of political gridlock on Capitol Hill, where stock prices rallied strongly enough on the day after the election that they completed the fourth Lévy flight event of 2018, as investors fully returned their forward-looking attention to 2019-Q1 after having devoted all their attention to 2019-Q3 in the previous week.

Alternative Futures - S&P 500 - 2018Q4 - Standard Model with Redzone forecast assuming investors focusing on 2019-Q1 from 7 November 2018 through 7 December 2018 - Snapshot on 9 Nov 2018

Since our dividend futures-based model uses historic stock prices as the base reference points from which we project future potential values for the S&P 500, the recent Lévy flight events have significantly skewed our model’s projections in the period from 7 November 2018 through 7 December 2018. To compensate for what is, in effect, the echo of past volatility in our model's forecasts for the future the S&P 500, we've added a new redzone forecast to our regular spaghetti forecast chart for the S&P 500, where we've assumed that investors will maintain their focus on 2019-Q1 over this period of time.

Now, just because we've assumed that doesn't mean they will. If they don't, then our first potential confirmation that they have shifted their attention toward a different point of time in the future will come as the actual trajectory of the S&P 500 moves outside the rectangular red-zone that we've indicated on the chart. Given recent history and the Fed’s autopilot inclination to keep hiking interest rates well into 2019, even though the U.S. economy is expected to significantly slow (particularly in the third and fourth quarters), the most likely alternative focus point for investors will continue to be 2019-Q3.

Our thinking is that investors will be largely focused on 2019-Q1 during the next month because of the change in political control of the U.S. House of Representatives in early 2019 will keep investors concerned about what policies may come out of Washington D.C. during the first quarter. As we've seen in previous years, those potential policy changes can greatly influence how corporate boards set their dividend policies before the end of 2018, although we would expect this effect to be much less this year than in years where one political party has taken control of both houses of Congress and the White House.

That’s about the extent to which politicians can affect the stock market. The good news is that politicians are mostly impotent otherwise in their ability to affect the stock market, which is why we don’t bother paying much attention to their antics in our analysis!

Monday, 5 November 2018
Tuesday, 6 November 2018
Wednesday, 7 November 2018
Thursday, 8 November 2018
Friday, 9 November 2018

Elsewhere, Barry Ritholtz celebrated the end of all the robocalls, emails, doorbell rings, and political advertising as a positive in this week's succinct summary of the week's major economy and market-related events. That’s a political motion we’re happy to second!

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November 9, 2018

Can you afford to stop working and retire? How would you know if you were? And if you're not ready today, how far away is retirement for you?

Retirement Day Calendar (Winter Is Coming!)

It turns out that there is some shockingly simple math that can answer these questions! That math was developed by none other than Mr. Money Mustache, who found that whether you can afford to retire can be expressed as a single factor: the percentage of your annual after tax income from your job that you're able to save. He describes the intuition behind why this number matters more than almost every other in determining how soon you can retire:

If you are spending 100% (or more) of your income, you will never be prepared to retire, unless someone else is doing the saving for you (wealthy parents, social security, pension fund, etc.). So your work career will be Infinite.

If you are spending 0% of your income (you live for free somehow), and can maintain this after retirement, you can retire right now. So your working career can be Zero.

In between, there are some very interesting considerations. As soon as you start saving and investing your money, it starts earning money all by itself. Then the earnings on those earnings start earning their own money. It can quickly become a runaway exponential snowball of income.

As soon as this income is enough to pay for your living expenses, while leaving enough of the gains invested each year to keep up with inflation, you are ready to retire.

While he built an Open Office spreadsheet (*.ods) to do the math, we thought the insight behind it was interesting enough to develop an online application that doesn't require any special downloads to run, unless perhaps you're reading this article on a site that republishes our RSS news feed, in which case, you'll want to click through to our site to access a working version of this tool.

That said, just enter the indicated information in the following tool, and we'll work out how long it will take you to save up enough to retire and also how old you'll be when you can, assuming that you can sustain your savings plan....

Update 10 November 2018: Some of our readers have reported running into some very counterintuitive results when playing with the "safe withdrawal rate" in the tool. We've confirmed their results and also that our tool is accurately replicating the results that would be obtained using Mr. Money Mustache's original spreadsheet, so it's something that's baked into the math he developed. We've followed up with him, and will report back when we know more. In the meantime, we recommend limiting the range of values you might enter for the safe withdrawal rate to fall between 3% and 4%.

Retirement Factors
Input Data Values
Your Current Age
Your Current Savings (Including for Retirement)
Your Annual After-Tax Income
What Percent of Your Annual After-Tax Income Do You Save Each Year?
What Average Rate of Return Do You Expect on Your Savings/Retirement Investments (After Inflation)?
After You Retire, What Percent of Your Accumulated Savings Do You Expect to Withdraw Each Year?

When Can You Afford to Retire?
Calculated Results Values
Minimum Number of Years To Save Enough to Retire
Your Projected Earliest Possible Retirement Age

Running the tool with the default values, which assume a 35 year old individual who has already saved $15,000, who can afford to save 20% of their after-tax income of $30,000 per year would be able to retire in 42 years, at Age 76, given the conservative after-inflation rate of return of 4% for their retirement savings and a plan to withdraw 3.5% of the money they've accumulated in their nest egg after they retire.

Playing with the numbers If there were able to save 30% of their after-tax income, it would cut 10 years off that retirement scenario. Boosted to 50%, the time to retirement could be reduced to 19 years, where they would be Age 53.

Mr. Money Mustache notes that's a feature, not a bug, of how the retirement savings math works:

The most important thing to note is that cutting your spending rate is much more powerful than increasing your income. The reason is that every permanent drop in your spending has a double effect:

  • it increases the amount of money you have left over to save each month
  • and it permanently decreases the amount you’ll need every month for the rest of your life

So your lifetime passive income goes up due to having a larger investment nest egg, and it more easily meets your needs, because you’ve developed more skill at living efficiently and thus you need less.

Meanwhile, if you go in the opposite direction and shrink the percent of income that you save each year, you'll discover that it can take much, much longer. We put an artificial stop in the tool so it won't consider scenarios that last for more than 130 years, because if you cannot save enough to retire within that period of time, you will most likely expire before you can ever afford to retire.

Sharp-eyed readers will probably have noticed that the tool does not take any Social Security payments into account. That's because it considers the possibility that if you're successful, you could afford to retire at a much younger age where it might be years before you even see your first check from the program. And because it does, those who are concerned about whether their Social Security will be cut in the future as currently forecast can breathe easier because they're not dependent upon that additional income.

You can also play with the after-inflation savings rate of return, where values between 3% and 6% would be reasonable for long term scenarios. Meanwhile, retirement specialists suggest that a "safe withdrawal rate" from your retirement savings each year after you're retired would fall between 3% and 4%.

But the big driver in the numbers is the percent of your after-tax income that you can save. The bigger that number, the sooner you can leave the rat race!

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November 8, 2018

2018 has been a big year for outsized stock price movements in the S&P 500 (Index: SPX)! It was just earlier this week that we marked the end of the index' third Lévy flight event in 2018, which had begun when investors suddenly shifted their forward-looking focus away from the future quarter of 2019-Q1 toward the more distant-future quarter of 2019-Q3. And now, in just the span of seven trading days, investors appear to have fully returned their attention to 2019-Q1, with the market's post-midterm election reaction marking the end of a fourth Lévy flight for the S&P 500 in 2018.

With the end of that new Lévy flight, we can now draw a new redzone forecast to project where the S&P 500 will go over the next month, where we assume that investors will sustain their focus on the near-term future of 2019-Q1 and the expectations for dividends associated with it from 7 November 2018 through 7 December 2018, which you can see in the latest update to our alternative futures spaghetti forecast chart.

Alternative Futures - S&P 500 - 2018Q2 - Standard Model with Redzone Forecast from 7 November 2018 through 7 December 2018 - Snapshot on 07 November 2018

Given the volatile nature of the stock market in 2018, it's possible that investors may shift their attention once again back toward 2019-Q3 (or 2019-Q4) and send stock prices falling again, or alternatively, to 2018-Q4 or 2019-Q2, either of which would coincide with a strong rally in the stock market, so that will be something to watch out for during the next month. If we're right regarding the future trajectory for the S&P 500 however, we won't see much in the way of interesting behavior during the next 30 calendar days, where we define "interesting" as being when the S&P changes in value by more than two percent from one trading day's closing value to the next.

We'll catch up with the market-moving news headlines in our regular Monday update to our ongoing S&P 500 Chaos series of stock price analysis. Until then, if you want to find out more about our prediction accuracy whenever we've presented a red-zone forecast for the S&P 500, please see our track record tally from March 2018 and, just for fun, also check out where we predicted where the floor would be for the S&P 500's third Lévy flight event of 2018 compared with where the index actually went during the time it ran. If any of that intrigues you, here's a discussion of how we're able to do it.

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November 7, 2018

On 22 March 2018, President Trump initiated a trade war by imposing tariffs on goods the U.S. imports from China. Almost immediately, China retaliated by imposing its own list of tariffs on goods that it imports from the United States.

In the months since, there have been additional rounds of tit-for-tariffs imposed by both nations on each other's goods. As for their impact, we can see little effect on the U.S., which has seen an increase it the year over year growth rate in the value of its imports from China, while the exchange-rate adjusted growth rate of the value of U.S. exports to China have clearly fallen.

Year Over Year Growth Rate of Exchange Rate Adjusted U.S.-China Trade in Goods and Services, January 1986 - September 2018

In the absence of tariffs, we would consider the negative growth rate of U.S. exports to China as evidence of a significant deterioration in the health of China's economy. And there is certainly independent evidence to support that observation, but the evidence is not as clear as it could be because of the specific actions China has taken in retaliation against the U.S.

Those actions were largely directed against two of the U.S.' principal exports to China: soybeans and crude oil. We decided to take a closer look at each to see what the impact of each action has been to the U.S.

Starting with soybeans, we've estimated the number of bushels that the U.S. has exported to China in each month from January 2012 to the present, and also what the U.S. has exported to the rest of the world, since the U.S. grows far more soybeans than it consumes domestically - the excess would have to go somewhere, or else risk becoming spoiled while in prolonged storage if they cannot be sold.

Monthly U.S. Soybean Exports to China and the Rest of the World, January 2012 through September 2018

Soybeans are, by far and away, the United States' largest single export product to China, which are primarily used as animal feed to support China's hog production. In this chart, we can see that China has severely reduced the number of soybeans that it acquires from the U.S. since the trade war began earlier in 2018, while exports to the rest of the world has only made up about a third of the U.S.' typical level of exports in recent years.

To do that, China has boosted the amount of soybeans that it imports from Brazil, the world's largest producer of soybeans and has also begun to substitute other crops for U.S. soybeans to make up the difference. More remarkably, China's leaders have also chosen to reverse an initiative to improve the quality of soybeans that it imports and will now accept diminished quality in the soybeans they acquire, which may negatively impact the quality of its hog production.

The result of all that is that U.S. soybean producers have been considerably disadvantaged by China's trade war tactic, where many will receive a federal bailout as compensation for their losses. The full cost of that bailout for U.S. taxpayers has yet to be determined.

Meanwhile, the volume of U.S. crude oil exports tells a very different story, as shown in the following chart showing the estimated number of barrels of crude oil exported by the U.S. in each month since the U.S. Congress lifted its ban on crude oil exports in mid-December 2015.

Monthly Barrels of U.S. Crude Oil Exports to China and the Rest of the World, January 2016 through September 2018

Unlike soybeans, U.S. oil producers have been able to find other buyers around the world to make up for China's retaliatory step to stop importing crude oil produced in the U.S., where China's effort to target U.S. oil producers appears to have missed the mark.

Overall, it would appear that China has been more affected in the trade war than has the U.S., where the negative impact to that nation's economy has been felt more broadly to date than what has been experienced in the U.S. economy. How long that might continue is an open question, where it would be in the best interest of all parties to reach a deal sooner rather than later.


Board of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 5 November 2018.

U.S. Federal Reserve. ALFRED Spot Crude Oil Price: West Texas Intermediate (WTI). Accessed 5 November 2018.

U.S. Census Bureau. Trade in Goods with China. Accessed 5 November 2018.

U.S. Census Bureau. U.S. Trade Online. Accessed 5 November 2018.  


November 6, 2018

Now that General Electric (NYSE: GE) has slashed its quarterly dividend by 91%, from $0.12 to $0.01 per share, which we estimate is about 50% more than what investors had already priced in to the stock, what can they expect next for the company's share price?

Based on the historic relationship that investors have set between the company's market capitalization and its aggregate forward year dividends since 12 June 2009, we would anticipate GE's share price falling to somewhere within a range of $3 to $7.

General Electric Market Capitalization versus Forward Year Aggregate Dividends at Dividend Declaration Dates from 12 June 2009 through 30 October 2018

When GE's announced its future dividend cut on 30 October 2018, which will take effect with dividends to be paid in 2019, the company's stock price fell to $10.18 per share. Since then, the share price has continued to erode, where it has fallen into the single digits. In the absence of positive news, we would anticipate that erosion will continue until the share price stabilizes somewhere within our target range. That range is centered at about $45 billion of market capitalization, which corresponds with a share price of $5.14.

Alternatively, it is possible that the company's stock price could be sustained at higher levels if its new CEO, Larry Culp, was overly conservative in his action to preserve the company's cash by cutting its dividend. Given that GE's credit rating has been cut by S&P, Moody's and Fitch, we see that possibility as unlikely in the near term, where the reductions in its credit rating will mean higher borrowing costs going forward for a company that is awash in debt and which faces an SEC accounting investigation.

Data Sources

Dividend.com. General Electric Dividend Payout History. [Online Database]. Accessed 2 November 2018.

Ycharts. General Electric Market Cap. [Online Database]. Accessed 2 November 2018.

Yahoo! Finance. General Electric Company Historical Prices. [Online Database]. Accessed 2 November 2018.

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November 5, 2018

Expectations about future of interest rate hikes by the U.S. Federal Reserve played an outsized role in setting stock prices during the month of October 2018.

If you recall, back at the beginning of the month, investors were largely focused on 2019-Q1 in setting stock prices, where they began the month near their all-time record levels. That seemingly stable set of affairs began to change dramatically after 3 October 2018. On 4 October 2018, the S&P 500 began to slide, slowly at first, but then significantly, as stock prices entered into a new Lévy flight a week later, as investors were shifting their attention toward 2019-Q3.

That continued until the end of the market's Lévy flight event was reached on 29 October 2018. After which, investors appear to begin shifting their forward-looking attention back toward the nearer term future described by the expectations associated with 2019-Q1. At least they did through Thursday, 1 November 2018, where on Friday, 2 November 2018, they appeared to shift their attention once again toward 2019-Q3.

Alternative Futures - S&P 500 - 2018Q4 - Standard Model - Snapshot on 2 Nov 2018

How does the Fed and expectations about its plans for future interest rates play into all this action, especially in the period since 3 October 2018? Ed Yardeni provided the key observation that explains why the market began to turn south at that time.

I am convinced that last month’s stock market rout started on October 3, when Fed Chairman Jerome Powell said in an interview with Judy Woodruff of PBS: “The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don’t need those anymore. They’re not appropriate anymore.” CNBC also reported that Powell said: “Interest rates are still accommodative, but we’re gradually moving to a place where they will be neutral. We may go past neutral, but we’re a long way from neutral at this point, probably.” The CNBC article was alarmingly headlined as follows: “Powell says we’re ‘a long way’ from neutral on interest rates, indicating more hikes are coming.”

That interview was aired during the evening of 3 October 2018, where its impact would begin to be felt on the very next trading day.

We had independently observed that investors were shifting their forward-looking attention toward the more distant future of 2019-Q3, where we had identified the reason for the shift in focus to that particular future quarter as being tied to the timing of when the probability that the Fed would hike short term interest rates in the U.S. up to a target range of 2.75%-3.00% had risen above 50%, which had just happened on 3 October 2018 and which spiked upward on 4 October 2018, following the Powell interview. We believe it is the smoking gun where the start of the S&P 500's correction is concerned.

The following chart shows how that probability has evolved from the end of the first week of trading in 2018 through the trading week ending on Friday, 2 November 2018.

Probability of Federal Funds Rate Hike to Target Range of 2.75%-3.00% in September 2018, 5 January 2018 through 2 November 2018

The trend in the chart also provides an explanation for why investors would appear to have turned some of their forward-looking attention back toward 2019-Q1, which prompted a rally in stock prices during the past week: the probability of a future rate hike by the Fed in 2019-Q3 having dropped back below the 50% mark during the last week of October 2018. On Friday, 2 November 2018, that probability spiked back up above 50% and stock prices dipped as investors returned some of their focus back to 2019-Q3, thanks in part to the strong jobs report that came out earlier that day.

Speaking of news reports, here are the main headlines that we noted for their market-moving potential during the fifth and final week of October 2018. Note the lack of statements from the Fed's minions - they're in a blackout period for public comments ahead of the FOMC's next two day meeting on Wednesday and Thursday this week.

Monday, 29 October 2018
Tuesday, 30 October 2018
Wednesday, 31 October 2018
Thursday, 1 November 2018
Friday, 2 November 2018

Barry Ritholtz listed seven positives and negatives he found in the week's markets and economics news, where he described one of the negatives as "not a bad thing". What does that mean? You'll want to click through to find out!...

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November 2, 2018

Following what is seasonally the weakest month for dividend-paying firms in the U.S. stock market, October 2018 was, by comparison, solid but not spectacular. The following chart shows how the number of dividend increases and decreases announced during the month compares with all the previous months for which we have data.

Number of Public U.S. Companies Increasing (Blue) or Decreasing (Red) Their Dividends, January 2004 through October 2018

For October 2018, the chart shows a rebound in the number of firms increasing dividends and also a decrease in the number of dividend cut announcements during the month, as reported by S&P. Unfortunately, the number of reported dividend cuts during the month may not be as good as it looks, which we'll discuss more after we run through the dividend numbers for the month.

  • No fewer than 3,654 firms declared dividends in October 2018, an increase of 31 over the 3,623 that made similar declarations in September 2018, and up dramatically (577) from the 3,077 that issued dividend declarations in October 2017.
  • There were 38 announcements related to paying an extra, or special, dividend payment to shareholders in October 2018. While that figure represents an increase of 14 over the 24 extra dividends that were announced in the previous month, it represents a decrease of 3 firms from the total of 41 that were registered in the previous October.
  • 172 firms declared that they were increasing their cash dividends in October 2018, up by 101 from September 2018's seasonal low total of 71 firms. October 2018's total was 12 fewer than the 184 that was recorded in October 2017.
  • Standard and Poor counted just 13 dividend cuts in October 2018, down from the total of 26 they counted in September 2018. This figure was also six less than the 19 that were counted in October 2017.
  • Two firms declared that they would omit paying dividends during the month, rising by one from September 2018's total of one, but down by four from October 2017's count of six dividend-omitting firms.

We think that S&P's Divstat system undercounted the number of dividend cut announcements during October 2018. Focusing on dividend cutting firms, we confirmed at least 22 dividend cut announcements for U.S.-based firms in October 2018, the majority of which (13) hail from the oil and gas industry, which was largely made up of firms that pay monthly dividends as a fixed percentage of their volatile monthly earnings. The remaining firms represent a pretty broad cross section spanning a number of industries, including financial, real estate investment trusts, food, manufacturing, mining, utilities, consumer goods, and healthcare, which had either one or two firms each. Here's the full list we extracted from our two sources of dividend declarations made in near real-time during October 2018.

We're not sure what's up with S&P's dividend cut count, which will hopefully be resolved in the near future. In the meantime, we'll continue cross-checking its monthly results with the data we extract from other sources.

Data Sources

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 November 2018.

Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 1 November 2018.

Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 1 November 2018.


November 1, 2018

Median household income in the United States increased to $63,007 in September 2018, a 0.5% increase over Sentier Research's August 2018 estimate of $62,685.

The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through September 2018. The inflation-adjusted figures are presented in terms of constant September 2018 U.S. dollars.

Median Household Income in the 21st Century: Nominal and Real Estimates, January 2000 to September 2018

U.S. median household income continues setting new monthly records in both nominal and inflation-adjusted terms. In the latter case, September 2018 represented the ninth consecutive month of record-setting highs.

The rising trend for incomes in the U.S. is being confirmed by other data sources. The Department of Labor's employment cost index indicates that individual wages and salaries have increased by 3.1% on average in the year ending September 2018, which is the largest year-over-year increase for the last decade. Meanwhile, Sentier Research's median household income has increased by 5.5% over the same period.

Analyst's Notes

Our alternative method for estimating median household income turned in a preliminary figure of $62,678 for September 2018, which is slightly more than 0.5% below Sentier Research's Current Population Survey-based estimate for the month. Our alternate estimate is up by 0.4% from the $62,417 preliminary figure that we previously reported for August 2018.

The BEA's monthly revision of its personal income data affected data from July and August 2018, neither of which were significant.

Data Sources

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 October 2018.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 October 2018.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 11 October 2018.


Sentier Research. Household Income Trends: January 2000 through May 2017, March 2018 through September 2018. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 30 October 2018. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars to develop the analysis presented in this series.]


About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

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Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.