A new analysis shows that U.S. stocks are now the most expensive in history relative to workers’ purchasing power.
Leuthold Group’s research finds that manufacturing workers today must work more than 200 hours to afford one unit of the S&P 500. That figure dramatically exceeds the long-term median of 33 hours recorded in data going back to 1947.
That extreme valuation is reinforced by other concerning metrics. The S&P 500’s forward price-to-earnings ratio is about 21.4 times expected 2025 earnings, and the index’s price-to-sales ratio has climbed to levels not seen since the aftermath of the dot-com bubble.
Although the market has been resilient—rising more than 50% from its October 2022 lows—these valuation measures point to an unusually wide gap between stock prices and real-world wages. Recent favorable inflation readings have helped propel market gains, but the disparity between asset prices and workers’ purchasing power remains notable.
