Why I’m Not Worried About the Stock Market

A lot of scary words have been floating around with “recession” and “inflation” at the top of the list. People are worried about the economy and the Federal Reserve has not been helping as it steadily raises interest rates. That, in theory, acts as a check on inflation, but mostly makes money more expensive which impacts mortgage rates, credit card interest, and really any money people borrow going forward.

That has driven the Dow Jones Industrial Average steadily downward. The index fell by nearly 500 points on Sept. 23 sending it to a low for 2022. In a broad sense. it’s not just the Dow as the Nasdaq has steadily fallen as well.

We all know the story and understand the fears, but market fears about what might happen don’t actually track with what’s actually happening in the U.S. economy.

The U.S. Economy Has Been Strong

Obviously, inflation has hit many lower-income Americans hard. But the employment market remains strong with the unemployment rate sitting at 3.7%. That’s not quite a historical low, but it’s in that range. In addition, there’s exactly one-half of an available job seeker for every available job opening, That actually is a historical low since the Bureau of Labor Statistics has been tracking that data.

Job openings, however, don’t always mean good jobs, but wages have also been rising in the service industry and even fast food jobs. Walmart (WMT) , Target (TGT) , Yum! Brands (YUM) , Starbucks (SBUX) , and a number of other retailers have embraced a $15 minimum wage.

And, while the employment market remains strong, the flip side of that is rising housing costs coupled with higher mortgage rates. That’s not great news for people buying a house (even if history suggests they still should) but it has a flip side. If you own a house, it has become a fast-rising asset that increases your net worth.

The economy is, of course, personal. If you can’t find a job or afford to live where you want to, that’s very real. Broadly, however, there are a lot of signs that the economy remains strong and that many of the issues we’re having relate to…


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