IOP's Working Man Index (Musical Tribute)

I figure every amateur economic blog should have its own economic index that tracks the health of the economy. I therefore present the Illusion of Prosperity's Working Man Index.


Click to enlarge.

I won't go into the gory details of how my index is constructed (you are free to look in the "source data" link below). I will simply say that it factors in hourly wages, inflation, and nonfarm payrolls as a percent of the population.

Check out that trend line in blue. Can't you just feel the illusion of prosperity leaking out?

Kudos to the government for giving us a temporary reprieve in 2007. (The key word is temporary.)

Would anyone like to make a gentleman's bet that we won't eventually return to the red trend line? I think the odds are fairly high that we will. I might even go double or nothing on the notion that we'll overshoot it.

But what would you expect? I'm a permabear. Sigh.



Update:

I've made a slight improvement to the index. The upper end of the base period has been extended to December of 1995 (previously December of 1992).

Source Data:
St. Louis Fed: Custom Chart