Saturday, November 22, 2008

Oh the Misery Index

No wonder you are feeling bad. The Misery Index tells me so. The Misery Index is equal to the sum of the the unemployment rate and the inflation rate. We are supposed to feel bad whenever either of these indexes rises and when they both start to rise, we really feel awful. Since the turn of the century the Misery Index reached a low of 5.8% in October 2006 when the unemployment rate was 4.4% and the inflation rate was 1.4%. Who knew that those were the good old days? Since then the Misery Index has risen to a high in August of this year. In October we were slightly off the peak with a Misery Index of 10.2% that included a 6.4% unemployment rate and a 3.7% unemployment.

We still have a ways to go before we achieve the all-time high of 21.98% in 1980. Too bad the index does not have a stock component. If it did, I am sure we would be setting new records.


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