Food Stamps Bode Well for Revised Misery Index: Chart of the Day

The number of food-stamp recipients may provide more insight into Americans’ economic wellbeing than the rate of inflation, according to Tobias Levkovich, Citigroup Inc.’s chief U.S. equity strategist.

The CHART OF THE DAY shows a new version of the misery index, developed by economist Arthur Okun in the 1970s, that Levkovich created. The gauge is inverted to ease comparisons with the Standard & Poor’s 500 Index, which also appears.

Levkovich’s version couples the jobless rate with the year-to-year percentage changes in the number of people using the Supplemental Nutrition Assistance Program, formerly the food-stamp program, instead of the consumer-price data that Okun included. The strategist unveiled his index in a report two days ago, which said its trajectory points to higher stock prices.

“The traditional misery index encompassed unemployment and inflation, but the lack of current inflation may make it less relevant,” he wrote. Consumer prices rose 1.7 percent for the 12 months ended in August, according to data compiled by the Labor Department.

Slower growth in the number of SNAP recipients largely explains why the modified index has declined, the report said. Enrollees rose 3.3 percent in June from a year ago, according to the Agriculture Department’s latest figure. The increase was far below a peak of 23 percent in August 2009, two months after a U.S. recession ended.

Companies that rely on consumers’ discretionary income -- automakers, homebuilders, media companies, retailers -- are the second-best performers during the past 12 months out of the S&P 500’s 10 main industry groups. Only financial companies have risen more.

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