S&P 500 Earnings Yield

Earnings yield = earnings ÷ price, the inverse of the P/E ratio — the share of each invested dollar that corresponds to one year of earnings. A 5% earnings yield corresponds to a P/E of 20.

Two common uses: comparing with its own history — a current value far below the long-term mean/median (e.g. more than one standard deviation below the 1871+ mean) marks a rich historical percentile; and comparing with the risk-free rate — when the earnings yield minus the 10-year Treasury yield is materially negative, stocks look less attractive versus bonds. Both are position references, not market-timing signals.

Data is based on the public monthly file ie_data.xls by Robert J. Shiller (distributed via shillerdata.com), covering 1871 to the present. This site syncs automatically once a month, usually shortly after the prior month closes (recent months\u2019 earnings are estimated from the latest disclosure and marked).

Quarterly disclosures lag, so the S&P TTM earnings figure can only be finalized once most constituents have reported. Shiller\u2019s file holds the earnings column at the latest disclosed quarter; this site therefore computes those months\u2019 yields from the last disclosed earnings and marks them "estimated", subject to small revisions later.

Three basis differences dominate: (1) monthly-average vs latest-close price (often 0.1–0.5 pp apart); (2) reported (GAAP) vs operating (non-GAAP, usually higher) earnings; (3) different data cut-off dates. This page always uses the Shiller monthly series (monthly-average price + TTM reported earnings) and is not directly comparable with other bases.

Shaded areas are US recessions as dated by the NBER (National Bureau of Economic Research), from peak to trough. Earnings-yield spikes often coincide with recessions (earnings collapse while prices have not yet fully adjusted) — a classic observation for cycle positioning.

When trailing 12-month reported earnings turn negative (as at the depths of 2008–2009), the earnings yield goes negative. The inverse relation to P/E still holds mathematically, but the figure loses its usual comparative meaning. The "historical low" on this page is the algebraic minimum — read it together with the recession shading.