David Lerner Associates: The Economic Rebound
It’s been nearly six years since the official end of the Great Recession. Now, finally Americans have reasons to feel upbeat about their financial prospects. Key economic indicators are signally progress for the US economy. Let’s take a look at some of them:
First is the employment picture. More than one million jobs were created from November 2014 through January 2015 – the best three-month stretch since 1997. That’s 18 years ago. The unemployment rate also improved to 5.7% in January 2015 from a post-Recession peak of 10% in October 2009.
Next is consumer confidence. Household spending accounts for more than two-thirds of US economic activity, so the average consumer’s willingness and ability to spend are critical factors. During the fourth quarter of 2014 consumer spending grew at the fastest pace in more than eight years. In January 2015 the consumer confidence index, a measure of how confident consumers feel about their finances and prospects for the future, exceeded economists’ expectations and surged to its highest level since 2007.
Finally, let’s look at housing. Housing numbers can be an important economic indicator because a healthy housing market tends to boost employment and positively impact local businesses. Home buyers often need to purchase appliances, furnishing and other home goods and services. In January 2015 housing starts improved 18-7% year-over-year to an annual rate of just over one million. Though this number is down from the 2.3 million housing starts in 2006, it’s up from under half-a-million starts in 2009. The national median existing-house price rose 5.8% in 2014 to $208,500 – the highest since 2007.
Government officials and business leaders rely on economic data to monitor the health of the US economy and inform public policy and business decisions. Economic reports can also help investors assess current and future investment opportunities. Keep in mind that many factors have the potential to affect economic growth, so it may not be wise to put too much stock in any one report.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
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David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.