Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour about even on little real news. The November Pending Home Sales Index gained .2 to 109.5. But has been notably weak for the last 9-months. On a regional basis most of the gain was seen in the Northeast +4.1% and the Midwest +.2%. The West fell 1.8% marking a 3rd decline in the last 4-months. The South slipped .4% also a 3rd decline in the last 4-months. On a year ago basis all regions remain positive save the West, as it marked an 11th consecutive monthly decline.
Despite the official narrative of a booming economy and roaring jobs market the closer one looks the more questions emerge. A recent piece by Charles Hugh Smith writer of the Blog, Of Two Minds notes that income distribution has become increasingly skewed in the modern era based on data from the Wall Street Journal and New York Times. Spending by the top 5%, who incidentally will receive almost all of the benefits from Trumps tax cut, increased by almost 150% since 1990. Conversely the other 95% has managed to increase its spending just 95% over the same period and has made essentially no progress since 2007. The Journal took it a step further and looked at earned income broken down on the same basis and noted that the 95% saw their incomes decline by about 10% from 2002-2012. Of the earned income gains seen over the 2002-2012 period almost all of it went to the top .1% and in fact the top .01% took the Lions share. As a result it is no surprise to learn, courtesy of Zillow that a record 30.2% of adults in America live in a “doubled up” household. This includes two or more working age adults living together, such as adult children living at home with parents, and those with roommates of one form or another that are not romantically involved. Taking a closer look at the Zillow report shows that the all time highest doubled up metropolitan area is Los Angeles at 45.5%. Also of note Riverside 43.7%, San Jose 38.6%, San Francisco 38.5%, and San Diego 37.9%. San Jose also featured the highest median rent at $3,488, followed by San Francisco $3,379, Los Angeles $2,720, San Diego $2,535, and New York $2,393.