U.S. Business Cycle: Private Non-farm Employment, Corporate Profits and Employee Compensation This chart highlights the decline in corporate profits and rising wages, one characteristic of the late stage of the business cycle. Image: Fidelity Investments
U.S. Productivity Growth and Hourly Compensation When wages lag behind productivity growth, workers do not receive their fair share of the wealth created. Image: Economic Policy Institute
Inequality: CEO Compensation vs. Typical Worker Compensation in the U.S. CEO compensation has grown 940% since 1978, while typical worker compensation has risen by only 12%. Image: Economic Policy Institute
U.S. 10-Year Treasury Term Premium The increasing term premium suggests investors require greater compensation for longer-term bonds, reflecting heightened interest rate and inflation risks associated with extended durations. Image: Morgan Stanley Wealth Management
Equity Risk Premium The equity risk premium, at the 94th percentile from 2010 and at the 67th percentile from 2000, suggests that investors may not be receiving adequate compensation for the risks associated with investing in U.S. stocks. Image: J.P. Morgan Equity Macro Research
S&P 500 Equity Risk Premium The current equity risk premium suggests that investors may not be receiving adequate compensation for the risks associated with investing in stocks. This situation has led to U.S. Treasury bonds appearing more attractive to investors. Image: The Daily Shot
Global Market Implied Equity Risk Premiums The current low equity risk premium in the U.S. suggests a challenging investment landscape, indicating that investors may not receive adequate compensation for the risks inherent in equity investments. Image: Goldman Sachs Global Investment Research
S&P 500 Valuations – Combined P/E Ratio and Equity Risk Premium Given the S&P 500’s high P/E ratio, should investors be cautious about U.S. equities? And do they receive adequate compensation for the risk associated with owning U.S. equities rather than bonds? Image: Topdown Charts
National Income vs. GDP and U.S. Recessions Fast rising compensation of employees tends to precede economic slowdowns in the United States. The U.S. economic recovery is expected to slow down in 2022. Image: Real Investment Advice