So today we're going to talk about the misery index
and why it's important and why you need to watch it.
So for those of you who might not know what the misery index yet,
because inflation has been pretty good in most of our lifetime,
for those of you who are a little bit older,
the misery index was a real thing back in the seventies, in the eighties.
The reason I'm talking about it
today is because it's now become very relevant in today's times.
The original misery index was initially popularized in the 1970s
to measure America's economic health using the misery index.
It's derived at both higher unemployment rates and inflation worsening.
Create the economic and social cost for the entire country.
So why is this important?
Because this can determine elections.
The misery index is basically seasonally adjusted rate of unemployment
and the annual inflation rate r m i equals U plus I.
The information around the misery index is wide available
on the Bureau of Labor Statistics and the US Department of Labor.
What should be obvious
is that the lower the score, the better the economy and the better the times.
As you can see from the Jimmy Carter era, from the seventies
and the early eighties, the misery index was very high at 19.7,
which caused him the election to Ronald Reagan the very following year.
And during that time, Reagan was able to get the economy back in order
and bring that misery index to 9.7.
And through these years you can see
we've had pretty good unemployment and pretty good inflation
as reflected by all the presidents during that period of time.
As you can see from the last two presidents, we're starting
to trend back up from 8.1 to 10.8, and we'll see in a minute what it is today.
So now let's take a look at the first part of the equation, which of course
is labor or employment or unemployment.
And as you guys have seen from a video I did before,
there are several ways that employment gets categorized or unemployment.
You one through you six.
And this has been around for a long time.
What I most want you to understand,
the unemployment rate that you see in the media is the U.
Three report.
But the real number, as I've said before, is you six
because you six includes persons marginally attached to the labor force
are those who currently are neither working nor looking for work,
but indicate that they want to now available for a job
and have looked for work sometime in the last six months.
Discouraged workers are a subset of the marginally attach,
have given a job related reason for not currently looking for work.
Persons employed part
time for economic reasons are those who want and are available
for full time work but have had to settle for a part time schedule.
Updated population
controls are also introduced annually with the release of this January data.
The point is that these unemployment rates that are listed here and are listed
here under U3 don't represent really the true misery index
because you really need to take a look at all people that are unemployed.
So now let's take a look at the real numbers.
As of March of 2022 when these were last updated.
The first one for you three is 3.6% unemployment.
Not bad.
If you go back
and look for one year later of course as we come out of this pandemic,
the U-6, however, is significantly higher, a little over 3% higher at 6.9%.
And we move over here to the inflation chart.
We all know that we're experiencing high inflation.
And some would say that this number is extremely conservative.
But the reported number is 7.9, and the forecasted
number actually brings it up over eight to 8.2 to 8.3.
Stormy weather.
Just to give my poor.
Self to give.
But for purposes of our misery, index, we're going to look at the two
ranges, the 3.6 plus the 6.9 plus the 7.9 of inflation.
And we come with a misery index of 11.5
to 14.8 under the current administration.
So here's a summary now of the current administration of what's happening
in March of 20, 22 as compared with the other presidents in history.
The reason this is important is because these numbers
do affect elections and we have a midterm coming up.
So who we vote for and all of our individual states
and federally is a very, very important as an investor,
I'm concerned about the following interest rate supply chains, oil
prices, war and inflation, which we really haven't seen yet
from the war as a result of some of the sanctions, the employment
or underemployment plus the wages as we roll into these midterm elections.
All of these are going to become very, very, very important.
So on my YouTube channel, I continue to get lots
and lots of questions from my own subscribers
on our inner circle and our premium channel on YouTube.
As investors, you need to be tuned into these kinds of things.
Is the Fed going to continue to rise interest rates and slow down the economy?
Because if it does, we are definitely going to see less consumption,
less GDP, and we could move into stagflation.
Nation.
Just take a look at the video I just did on that topic, too.
The supply chains are going to get worse, especially with all these sanctions
and all of these countries positioning
right now as a result of the Russia invasion to the Ukraine.
I don't know about you guys, but I'm speaking from personal experience
about the supply chain issues that I'm having just on the projects
that we're trying to build here in Arizona.
And we're trying to renovate in Texas and Oklahoma and some of the other areas.
The third one is oil price.
Now, energy and oil drives everything.
There's a couple of things to pay attention to.
One is in order for us to get things, the cost of transport
it is going to go up. Therefore, those things are going to go up.
The second one that you really need to look at is the petrodollar.
Right now, the countries are positioning on whether or not they're going to pay
for the oil in US dollars, a policy that's been in place since the seventies.
If that policy is compromised, then the US
dollar is more at risk than it was before.
For there's big concerns around the war and there's lots of uncertainty
on what will happen to the rest of the world
as a result of some of these sanctions that are already in place.
Five Even though the employment rate
has shown to be better, there's still a lot of displaced workers.
Over 12 million of them right now.
And those wages are not keeping up with the inflation rates.
And so people are falling further and further behind.
As a business owner, a landlord, a real estate investor, a property manager,
a contractor and all the business I own, I'm concerned about all these things
because as they relate to my own renters, my own employees, and my family,
all of these will impact how we do things not just now, but in the future.
So who we elect in office will impact policy so we can try to get
these misery index back down like we've enjoyed for the last 30 years.
So again, thank you guys for watching.
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And I'll continue to do this just for you guys.