Figuring out the Economy
When it comes to figuring out the economy, let me borrow the famous line from Charles Dickens: “It was the best of times, it was the worst of times....” If you follow the economic headlines, trying to make money decisions that impact your life, it’s understandable that you might be confused. Economists are confused, too!
There’s a lot of good news to cheer about:
—The latest reports say the economy is growing at a 6.5 percent annual rate, the best growth in years. As one economic report put it: “The U.S. economy has more than recouped the output lost during the coronavirus recession.”
—The stock market is at all-time highs, as I write this. Interest rates remain low, despite worrisome signs of inflation in consumer prices.
—Mortgage rates remain at record lows, and home prices (America’s largest investment) soared 16% over a year ago in the most recent month (May) just reported.
—And the value of that old car you’re driving may have doubled!
—Consumer confidence has gained in each of the last three months.
—Corporate profit reports are setting records.
—The Federal Reserve says things will be fine, and that we shouldn't worry about inflation.
So why worry? What could go wrong? Well, here are some things to consider: