The District Sentinel Discontent Index gauges social instability and disquiet in the United States using empirical observations published by reputable research institutions.
It is an aggregate of three components measuring broad subsets of the economy that affect every American, and is updated on a monthly basis.
Labor Discontent, a signal of ills in the labor market, is based on ratios of unemployment and underemployment to the labor force participation rate, and a coefficient that grows in proportion to the number of participants in work stoppages involving over 1,000 workers. All data used to calculate Labor Discontent are collected and published by the US Department of Labor Bureau of Labor Statistics (BLS).
Consumer Discontent measures purchasing power and the mood of American consumers. It is calculated by taking a ratio of the consumer price indexes for food and transportation to an index of the average non-supervisory wage and multiplying that result by a coefficient that fluctuates inversely with the Conference Board’s Consumer Confidence Index. As the Consumer Confidence Index drops, the Consumer Discontent index rises. The wage and price indexes are calculated and published by BLS.
Finally, Housing Discontent measures pain, as its name indicates, in the housing market. It’a calculated by taking a ratio of the consumer price index for housing and an index of the average non-supervisory wage and multiplying that number by a coefficient that is proportional to the serious delinquency rate on loans backed by the Housing and Urban Development Federal Housing Administration (FHA).
The index’s baseline is its January 2004 level (DI = 99.9), when it gave equal weight to the three sub-indexes.
Between January 2004 and its public launch in late 2014, it peaked at 144.35 in Aug. 2011 – one month before the Occupy Wall Street movement started. Its record low was 87.65 in Dec. 2006 – when unemployment reached a post-tech bubble recession low of 4.4%.