By Haddon Libby
Statistics can be informative and misleading. Some help us to make sense of a complex situation while others are meant to obfuscate and confuse.
Some of the best misuse of statistics and facts came from the tobacco industry for decades. In 1946, Camel boasted that more doctors smoked Camel cigarettes than any other brand. Camel even tried to assure expectant mothers that a simple indulgence like a cigarette would help with an expectant mother’s disposition and help keep them from feeling ‘edgy’.
The night before the Presidential election of 2016, statisticians had Hillary Clinton with an 85% chance of victory for President of the United States. As we all know, that did not happen. According to OddsShark.com, the once 2016 long-shot and current President is the odds-on favorite for reelection in 2020 at +110. That means that if you were to bet $100 and Trump was reelected, you would win $10.
Of the football team-sized field of contenders for the Democratic nomination, ‘Pocahontas’ Elizabeth Warren has +425 while vinyl-playing Joe Biden is at +500 and fading. Bernie Sanders is +900 while California Senator, Kamala Harris is the closest of the long shots at +1600. Andrew Yang and his Yang Gang are at +1800 while the only openly gay candidate, Pete Buttigieg, is +2500.
Moving on from the political to tropical disturbances, the next storm to follow the destructive Hurricane Humberto this year will be named Imelda after which we can expect Jerry, Karen, Lorenzo and Melissa. The 2020 storm season will start with Arthur, Bertha, Cristobal, Dolly, Edouard, Fay, Gonzolo and Hanna.
Income and Employment Statistics
According to the U.S. Census Bureau, the median household income (meaning half are above and half are below) was $63,179 for 2018, up 1% from the prior year. This was a lower level of gain than at any point since 2015. Western states (includes California) earned a median wage of $69,520 while the Northeast (includes New York City) had the best wage growth at 4.3% to $70,113. Southerners did the worst, up a scant 0.3% to $57,299.
The median pay was up 3.4% in 2018 with men earning $55,291 and woman earning $45,097 or 82% of what a man earns. American-Asians earned the most at $87,194 followed by Caucasians at $70,642, Hispanics at $51,450 and African-Americans at $41,361.
The top 20% of earners took home 50% of all pay while the bottom 20% took home 3.5%. Thirty-eight million Americans continue to live in poverty. While this 1.4 million fewer than 2017 and the lowest levels since 2008, it remains a blemish on our country. Americans without healthcare rose for the first time in years to 8.5% of Americans or 27.5 million, an increase of 2 million people.
When we look at the unemployment rate for the state, the official rate is 4.1%. When we look at a more accurate portrayal of the real unemployment rate (termed the U6 unemployment rate), 8.6% of all working age Californians are not employed. Nearly one in nine working age people in Los Angeles County are unemployed. Nationally, this number is 7.4%. Here in Riverside County, the unemployment rate is 3.7% and average hourly earnings of $28.11.
According to CoreLogic, at the end of July, the average price of a home in Riverside County at $395,000 is 2.9% higher than last year. For comparison, Los Angeles County rose by 5% to $635,000, Orange County fell 0.8% to $729,000 and San Diego County was flat at $580,000.
Your 401k Statistics
All U.S. stocks as a group are up 21.7% for the year through September 15th. It sounds impressive until you look at the 1 year number which is 4.8%. While a 5% return isn’t bad, U.S. bonds produced an 8.5% return over the same period. That said, past results is most certainly no indication of future performance.
Haddon Libby is the Founder and Managing Partner of the award-nominated Fiduciary Investment Advisory practice, Winslow Drake Investment Management. For more information, please visit www.WinslowDrake.com or email TWells@WinslowDrake.com.