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October 23, 2011

Special Report: US 'Misery Index' Hits 28 Year High

The misery index, which is a sum of the unemployment rate and inflation is at its highest since 1983, indicating that the economy, at least for the middle class worker, is not improving. The main reason for the index hitting these levels is inflation, which now stands at 3.9%, the highest since the financial crisis started. Unemployment has remained steadily over 9% throughout most of the Obama administration.

Basically, Americans are seeing few job opportunities and costs for the basic necessities increasing. The index does not (which it should) include wages, but by President Obama's own admission, wages have been stagnant. Therefore, Americans who are working are slowly having their disposable income eroded, which for an economy that is 70% consumption, does not bode well for economic growth.

Meanwhile, the Federal Reserve is showing no signs of holding up on its easy money, pro-inflation policies. The trend, therefore, shows inflation continuing to rise while wages and jobs stagnant and the American people are left to pay the bill. It's only a matter of time before this inflation begins to show up in interest rates as well.

You can read the CNBC article on the Misery Index here

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