Each month the Social Security Agency issues a report detailing the number of retirees, survivors, and disability recipients currently receiving nearly $900 billion dollars of social security payments each year. For the last five years I have been following this monthly report for additional insight into the health of the labor market and the future of the US budget deficit. Social security enrollment has a close, if lagging correlation with employment prospects and US recessions.

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We can see this clearly in the chart showing the annual change from 2006 to 2016. Starting back in 2006 we see that Social Security was adding beneficiaries at a rate of about 700,000 a year but spiked to over 1,600,000 by the end of 2009 following the "Great Recession." The mechanism for this link is clear and simple. In a recession, as the unemployment rate rises and it becomes harder to find jobs, workers over the age of 62, and workers with qualifying disabilities start enrolling in social security en masse. They may prefer to work, but when unemployment runs out and there are no jobs to be had, Social Security becomes a viable plan "B." Knowing this, a spike in this rate is a negative indicator for both the economy and the budget while a decrease is a positive indicator.

As I track it, there are 3 distinct parts of what we think of as Social Security. The first is the retirement program. The idea is that you pay into the system with a portion of each paycheck, and when you reach 62 you can retire and receive a moderate check each month for the rest of your life. Of course, you can keep working, and each year you defer retirement will increase the size of your monthly check. Spouses and dependent children are also eligible for benefits from the retirement program.

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At the end of March 2016 there were 43,462,512 individuals receiving an average of $1,300 a month through the retirement program. The March 2016 increase in beneficiaries was 121,657 and the annual rate increased to a rate of 1.173 million per year. While the rate of new beneficiaries does seem to be trending up again, the increase isn't particularly alarming, and in fact is about what we would expect as more and more Boomers retire.

The second part of Social Security is the Disability Program. If you are an eligible worker, and become disabled, Social Security will pay you a monthly benefit until you are able to work or reach "full" retirement age, at which point you are shifted off of disability and into the retirement program. Spouse and dependents of disabled workers are also eligible for payments.

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At the end of March 2016 the Social Security Disability Program had 10,784,844 beneficiaries receiving an average benefit of $1,022 a month. For the month, enrollment fell 9,231 and is now falling at an annualized rate of 129,115 individuals per year. the disability program peaked at just over 11 million beneficiaries in May 2014 and has been trending downward at a slowly accelerating rate ever since. I wouldn't get too excited until this hits -500,000 or so, but it's a good sign for now indicating more people are getting off of disability than becoming disabled each year...so cheers to that!!

The final piece of the Social Security "Pie" is the survivor's program. Basically, if you pass away, your surviving spouse and dependent children will likely be eligible for a monthly benefit.

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At the end of March 2016 there were 6,077,020 individuals receiving an average survivor benefit of $1,114 a month. The chart above may look a bit confusing at first because it is all negative. The number of survivor beneficiaries has actually been falling steadily for decades now as is shown in the chart below:

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Really nothing to see there as premature deaths are clearly on the decline and not materially correlated with economic cycles. Still, it's good news to see it continue downward, currently at a rate of -42,691 per year.

Put it altogether, and the March 2016 Social Security beneficiaries report certainly doesn't throw out any red flags for the economy as a whole or the budget deficit. For now, all is relatively calm with the total program population of 60,324,376, growing at a rate of about 1 million net new beneficiaries a year. Annualized spending is at 891B, and increasing at about $24B per year. While those are both huge numbers, the annual rate of change actually toped out in 2009 just shy of $62B per year. If nothing else, we can all be glad this isn't 2009!

**Interactive excel dashboard and data social security data used in this analysis available at Excel-Data-Junkies.com here