Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: June 6th, 2022 | 0 Comments

NOT AS BIG – The companies in the S&P 500 had an average market capitalization of $72.8 billion as of 5/31/2022, down from an average market capitalization of $83.9 billion as of 12/31/2021. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: source: BTN Research).

IN TEN YEARS – The 10-year budget forecast released by the Congressional Budget Office on 5/25/2022 predicts that over the next decade (fiscal year 2023 through fiscal year 2032) the government will collect $56.5 trillion in tax revenues (i.e., “receipts”), spend $72.2 trillion (i.e., “outlays”), netting to a $15.7 trillion deficit created over the next 10 years. That’s on top of our national debt of $30.5 trillion as of 5/31/2022 (source: CBO).

IN THE YEAR 2034 – Social Security trustees announced on 6/02/2022 that the trust fund backing the payment of Social Security benefits (OASI retirement benefits) would be zero in 2034. A zero “trust fund” does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 77% of their originally promised levels through the year 2096. When the trustees released their report in 2007 (i.e., 15 years ago), the Social Security Trust Fund was projected to be depleted in 2042 (source: Social Security Trustees 2022 Report).

LONG-TERM ISSUE – The estimated Social Security shortfall today (i.e., a present value number) between the future taxes anticipated being collected and the future benefits expected to be paid out over the next 75 years is $20.4 trillion. The entire $20.4 trillion deficit could be eliminated by an immediate 3.24 percentage point increase in the combined Social Security payroll tax rate (from 12.40% to 15.64%) or an immediate 20.3% reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees 2022 Report).

DOLLARS IN, DOLLARS OUT – At the end of 2021, Medicare was covering 63.8 million Americans (19% of our population). The program was cash positive in 2021, taking in $888 billion of income (including $5 billion of interest income) while paying out $839 billion in benefits (source: Medicare).

WHAT, ME WORRY? – 39% of 11,874 adults surveyed in November 2021 said they were “living comfortably financially” (source: Federal Reserve’s Economic Well-Being of U.S. Households in 2021).

WHERE WE LIVE – Existing home prices in the United States have risen for 43 consecutive quarters through the end of the 1st Q 2022, i.e., from 6/30/2011 through 3/31/2022 (source: Federal Housing Finance Agency).

RICH – The average net worth needed to be considered wealthy in the United States today is $2.2 million based on a survey completed by 1,000 individuals in February 2022 (source: Schwab Modern Wealth Survey).

DID YOU NEED IT? – 41.3% of college graduates aged 22 to 27 are working in jobs in which they are “underemployed,” i.e., they are working in a job as of December 2021 that typically does not require a college degree. Historically, 33.9% of college graduates are “underemployed” (source: Federal Reserve Bank of NY).

IT DID THE JOB – The Federal Reserve began to unwind its “quantitative easing” (QE) stimulus program last Wednesday 6/01/2022. QE began early in the pandemic (March 2020) and provided money at a “near zero” interest rate to businesses and consumers for the last 2 years in an effort to stave off what could have been a severe national recession (source: Federal Reserve).

PUT IT ON THE CARD – Revolving debt in the United States, i.e., credit card debt and other similar types of debt that do not have a fixed number of payments, increased by $124.5 billion over the 12 months ending 3/31/2022 to reach $1.04 trillion. Although the $1.04 trillion is short of nation’s all-time record high of $1.09 trillion (12/31/2019), the $124.5 billion annual increase is the largest year-over-year dollar increase in US history. Revolving debt has been tracked nationally since January 1968 (source: Federal Reserve).

EUROPE – Inflation in the 19-nation Eurozone, i.e., the countries using the Euro as their common currency since 1999, was up +8.1% for the year ending 5/31/2022, a new high for Eurozone annual inflation (source: Eurostat).

ADVANTAGE TO THE WORKERS – The number of job openings nationwide as of 4/30/2022 was 11.40 million, nearly twice the 5.94 million jobless Americans as of the same date (source: Department of Labor).

WET AND WILD – Phoenix is offering $2,500 in incentive pay to attract lifeguards – $500 with a first paycheck and $2,000 if the individual works until the end of the 2022 pool season (source: Phoenix Parks and Recreation).

GUESS WHO HAS A BETTER RECORD? – The New York Mets have a $268 million payroll, the largest in MLB this season. The Oakland Athletics have a $50 million payroll, the lowest in MLB this season (source: MLB).