Reflecting on Recent Progress of Economy
As a general rule progress comes in very small increments. Whether we’re talking about the economy or learning to play a piano, often the day-to-day gains are barely measurable. We are primed to want “more…better…now” and as time passes we reassess our long-term investments, asking “what have you done for me… lately?” Frequently the best way to appreciate a financial position is to stop and reflect on economic progress over a longer period of time. With that in mind, let’s compress time and evaluate our economic progress since the low point of the Great Recession of 2008-2009.
Before we start, we want to be up-front with an important disclosure: we’ve ‘cherry picked’ a bit (not a lot) and rounded off the numbers to give you a Big Picture that’s easy to follow. Not all measurements are positive but certainly the majority are trending the right direction.
- Gross Domestic Product (the measurement of the expansion of our overall economy annualized); Q3 2008- negative 8%…Q2 2013-positive 1.7%.
- Retail auto sales (annualized); Q1-2009-nine million…Q2-2013 fifteen million.
- New orders for durable goods; Q1 2009-$150 billion…Q2 2013-$225 billion.
- Monthly retail sales; Q1 2009-$300 billion…Q2 2013-$380 billion
- Total housing starts (annual rate); Q1 2009-500 million…Q2 2013-800 million
- Industrial production (2007 = 100); Q1 2009-85…Q2 2013-100
- Non Agriculture employment; Q2 2009-130 million…Q2 2013-136 million
- Consumer confidence (100 = 1985); Q2 2009-25… Q2 2013-80
Yes, the economic recovery has been tepid; but we see the current trend continuing and a silver lining in the slow growth. There’s a possibility that the current expansion will last longer than most, and that inflation and borrowing costs (i.e. interest rates) will remain low.
Oh I almost forgot…one more statistic. The Dow Jones Industrial Average; Q2 2009-6500…Q2 2013 15,500.
Thanks for your business and trust,
Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.
Comments contained above are meant to be generic in nature and are not meant for specific action.