We now have S&P’s monthly dividend report for October 2016, so we now have a more complete picture of what the trends for dividends are communicating about the relative health of the U.S. economy.

Our first chart shows both the number of U.S. firms that have announced dividend increases or dividend cuts from January 2004 through October 2016, where in that most recently completed month, 171 firms acted to increase their cash dividend payments to their shareholding owners, while 21 acted to reduce their dividend payments.

Looking at the year over year trend for dividend increases, we see that 2016 is falling behind 2015, which in turn, was lower than 2014, as the number of dividend increases is clearly continuing its downward trajectory. To a large extent, what this trend suggests is that the U.S. economy is only generating enough growth to boost the profits and cash flow necessary to support higher dividend payments at a narrowing number of firms, which confirms that the nation’s overall economic growth has become weaker over the last two years.

Let’s next zoom in closer on the number of dividend cutting firms.

That weakening trend over the past two years is more clearly evident in this chart, although here, we see some positive indications in recent months, where what had been an upward trend may have finally begun to reverse.

What that result indicates is that the factors that led to falling economic growth in the previous two years has abated enough to where the most distressed firms in the U.S. economy are becoming more able to avoid having to cut their dividends. With 21 firms declaring in October 2016 that they will cut their cash dividends confirms that the U.S. economy is still experiencing recessionary conditions, with only one of the last four months having spiked up to levels that indicate some degree of economic contraction, that result never the less represents some degree of improvement within the most distressed parts of the U.S. economy.