May 2014 Update: Social Security Enrollment

The May 2014 numbers are in and we added 114k people to the SS rolls compared to 124k in May 2013.The total consolidated enrollment now stands at 58.589M…good for 18.41% of the population receiving an average of $1187 per month.2014-06-28 May SS Analysis

We can see what appears to be stabilization for four months now just a bit over a 1.1M annual rate of increase. I keep an eye on this series to catch a material change in the enrollment trend….in particular the beginning of another spike like we saw in 2008-2010. Clearly…we don’t see that this month. In fact, it’s not even clear that the stabilization is a trend…yet.

As of May 2014…the rate of change in SS EFT cash outlays was +$50B annualized. This is down from a peak of $65B in Dec 2012, but it’s still a big number….requiring $50B of new revenues each year just to keep the deficit even. That hasn’t been a problem in the last year…with revenues gaining at a $300B+ rate, but this is unlikely to be the case forever.

April 2014 Update: Social Security Enrollment

The April 2014 SS numbers are in and we added 130,874 people to the consolidated headcount just barely edging last years 130,724 add by 150 people. The total consolidated enrollment now stands at 58.472M…good for 18.38% of the population.

2014-05-20 April SS Analysis

So in the big picture, we are still plodding along at an annualized rate adding about 1.1M people a year….pencil that out assuming new benefits at a rate of $1500/month, that’s about $20B per year…a big chunk of the programs ~50B growth rate….with the rest being primarily the COLA adjustments which are small, but being applied to a huge base.. At that rate, assuming everything else in the entire budget is frozen…we need about 1.6% annual growth in revenues just to stay even….or about what we just saw in April.

But the real reason I watch this series is because I am watching for a material change in the enrollment trend. Clearly we don’t have that this month. What we do have is two months of essentially no YOY change against over a 4 year trend of moderate decline. Two months in a row isn’t particularly alarming, but a few more would definitely be interesting.

March 2014 Update: Social Security Enrollment

In March 2014 the SS rolls added 143k to the headcount bringing the total to 58.341M. This compares to a 138k add last March, breaking a 4 month string of improvement.

2014-04-14 March SS Analysis

It’s just a one month break in a downward trend dating back to the last peak in December 2009 at 1.6M, so it’s nothing to get excited about either way. The rolls are growing by over 1.1M people per year, and cash outlays are growing at 8% annually, which is a combination of additional people, COLA adjustments, and new retirees coming into the system with higher monthly payments than the people they are replacing.

As I’ve explained before, I monitor this series primarily to look for signs of a new spike similar to what we saw between 2008 and 2009. If this correlated with a decrease in revenues, we would have a pretty clear sign that a recession is either already in progress or imminent. As it stands, we see neither. Revenue is at all time highs and growing at about 12% through the first 100 days of 2014. Retirements…while still high historically, continue to trend down….slowly. It’s clearly too soon to declare that everything is going to be ok, but even I must admit….things have been a lot worse.

February 2014 Update: Social Security Enrollment

In February, the SS rolls added 120k people….up from January’s 103k, but down from February 2013’s 159k add. February is typically the largest add of the year, so no real surprises here.

2014-03-20 February SS Analysis

The above chart shows the TTM change starting in 2007 with an annual rate of about 700k, spiking to 1.6M in 2009, and trending down since. We are still well above 1M at 1.138M, but we have 4 months of decline…note that this is just a decline in annual additions…we are still adding at a historically high rate, just not as high as the peak of the recession. That said, the 4 month trend does look steeper than anything we’ve seen since the peak. Perhaps Boomers close to retirement are deciding to stay in the labor force a bit longer….holding the rate down for now, and ultimately increasing their payouts.

Looking to the cash outlays on the DTS, YOY growth comparing this trailing twelve months to the prior shows about an 8% growth which is made up by growth in population, COLA increases, and by an increase in average payouts….driven by new enrollees having higher monthly payouts than the existing population….for example in a given month an 85 year old recipient with an $800 monthly payment passes away and a 66 year old recipient files for the first time with a $1500 per month payment…..population stays the same, average payout goes up.

The primary reason I monitor this is to spot the early stages of a new recession driven spike in enrollment…. If anything we see exactly the opposite, which is the same sign we are getting from surging tax revenues for going on 2 years straight. Very curious….

January 2014 Update: Social Security Enrollment

This report was finally released yesterday…about a month late for some reason, but at least we have it now. So…just to recap, The umbrella of SS covers about 58M individuals. 38M are retired individuals, about 9M are disabled workers, and the balance are generally spouses/widows/children of retired or disabled workers.

Each month, obviously we have new people retiring, some say 10k per day….and of course we also have people passing away each month. Note that retirements especially are seasonal, and I suspect to some lesser degree, so are deaths, so it is important to compare the current month vs the prior year as this is far more relevant than the prior month.

I track this monthly because SS is a huge piece of the federal budget, and secondly, I am on the lookout for a substantial increase in retirements at some point over the next few years, and I believe that this report will provide evidence of this in real time.

Fortunately, the January 2014 report does not have any evidence of an impending spike. Traditionally, January usually has a large increase in retired workers….I guess people try to retire near the end of the year, and get all of their paperwork completed by January.??Personally, I’d choose to retire probably in the fall….depending on where the tax brackets were in relation to my income, but that’s just me…maybe I’ll cover it in a “fun with math column” when I retire…in about 35 years:)

This January was no exception, with an increase in retired workers of 150k, but 21k under Jan-2013’s 171k, but right in line with Jan-2012 at 153k. Annualized, we are adding 1.15m people per year to the retirement program…roughly the same pace as last year. So while there is no spike…yet…we are still adding a huge number of people to the program.

Quick math…adding 1.2M people, at $1300 per month….So divide 1300 by 12.4%(ss withholding rate)….and you get that it takes an additional $10,484 of monthly income by a worker to support each new retiree. So if for each retiree, we added one new job at 126k per year, we’d be more or less ok right?  Well, there probably aren’t too many of those…so scratch that. If you happen to believe the federal jobs report, we added 2.2M jobs over the last 12 months, including 113k in January. So if we pencil this all out….we need each marginal worker…all 2.2M of them to contribute $8500 per year to cover the 1.2M new retirees. again…divide by 12.4%….If they all can just average $69k of pay, we’ll be fine. Still a stretch huh?? One last try. How many minimum wage employees (assuming Obama’s new $10 rate passes) do we need to add per year just to pay for the additional 1.2M retirees? “Only” 7.5M….per year indefinitely.

So while the long run still appears to be hopeless, that’s been known for a few decades now. There was some good news in the report. For the first time since 1997, the number of disabled workers actually showed a month over month drop falling 12k to 8.930M from last month’s record 8.943M. Drops elsewhere pulled the consolidated number to only +100k overall vs last year’s 146k January total increase. That’s a pretty big drop….it will be interesting to see the February report…..is this just a blip, or could our trend actually be headed down a bit?