The stock mar­ket and the real econ­omy

Lodi News-Sentinel - - OPINION -

It's of­ten said that the stock mar­ket is not the real econ­omy, mean­ing: Wall Street traders make ed­u­cated guesses about the fu­ture, so don't read too much into this or that mo­ment's re­sults. Stocks bounce around. GDP num­bers, hir­ing and other data bet­ter re­flect the na­tion's health.

But if the stock mar­ket isn't the real econ­omy, it's real life for tens of mil­lions of Amer­i­cans who have 401(k), IRA or other retirement sav­ings. If you're one of those peo­ple, check your mail­box or on­line ac­count for sec­ond-quar­ter re­sults to get a sat­is­fy­ing jolt: Your bal­ance is ris­ing. Be­cause the econ­omy con­tin­ues to grow, and add jobs at a fast clip, 10 years into a record ex­pan­sion. At this junc­ture, the stock mar­ket re­flects the real econ­omy.

The Stan­dard & Poor's 500 in­dex shot up­ward by 17% in the first half of 2019, the best re­sult since 1997. The Dow Jones in­dus­trial av­er­age is up about 15% this year. This con­tin­ues a pros­per­ous streak for the mar­kets since Pres­i­dent Don­ald Trump was elected, vow­ing poli­cies that would goose the prior steady but staid growth. From Elec­tion Day 2016 to July 2019, the Dow is up about 47% , the S&P 40%. With div­i­dends rein­vested, the Dow has risen at an an­nu­al­ized rate of 17.3%, the S&P 14.7%.

About those real-life im­pli­ca­tions: It's not just the wealthy who ben­e­fit. Gallup polling sug­gests that about 54% of Amer­i­cans own stocks ei­ther di­rectly or via mu­tual funds, pen­sion ac­counts and other retirement kit­ties.

As of this month, the U.S. is in the long­est eco­nomic

The Stan­dard & Poor's 500 in­dex shot up­ward by 17% in the first half of 2019, the best re­sult since 1997. The Dow Jones in­dus­trial av­er­age is up about 15% this year. This con­tin­ues a pros­per­ous streak for the mar­kets since Pres­i­dent Don­ald Trump was elected.

ex­pan­sion in U.S. his­tory, sur­pass­ing the 1990s. The growth spurt be­gan with the June 2009 end of the Great Re­ces­sion. Stocks re­bounded from dev­as­tat­ing lows a few months ear­lier, de­liv­er­ing Pres­i­dent Barack Obama a sen­sa­tional re­sult — a 149% jump in the Dow — over his eight years in of­fice.

Ten years is a long time to sus­tain growth, yet un­der Trump the econ­omy keeps go­ing, and stocks keep ris­ing — de­spite Trump's ill-ad­vised trade fights with China and Mexico. On Fri­day, the La­bor Depart­ment said the U.S. cre­ated 224,000 new jobs in June — well above economists' ex­pec­ta­tions. Wages grew 3.1% over the past year. The un­em­ploy­ment rate crept up to 3.7%, from 3.6%, and re­mains at or near his­toric lows for Amer­ica's mi­nor­ity groups. A quirk of the cal­cu­la­tion: The job­less rate rose be­cause more Amer­i­cans have gone look­ing for work. One se­ri­ous con­cern: More peo­ple pay­ing taxes helps the govern­ment's bal­ance sheet, but without spend­ing re­straint from a prof­li­gate pres­i­dent and Congress, that alone won't re­lieve a na­tional debt that also con­tin­ues to ex­pand.

By cut­ting taxes and re­mov­ing reg­u­la­tory bur­dens, Trump's administra­tion has given pri­vate sec­tor busi­ness own­ers con­fi­dence to in­vest in fu­ture growth — and to hire more em­ploy­ees. If he can re­solve trade fights that have hurt Illi­nois farm­ers and raised the cost of do­ing busi­ness for many Illi­nois com­pa­nies, he'll help the econ­omy and the mar­kets ex­tend their growth curves.

No, the stock mar­ket isn't the econ­omy. But it's an im­por­tant source of in­come and retirement se­cu­rity for many Amer­i­cans. And for those who don't own stocks, the ex­pand­ing jobs mar­ket con­tin­ues to of­fer real hope.

News with dif­fer­ent views de­signed to amuse:

Gov­er­nor apol­o­gizes

The state gov­er­nor is­sued an ex­ec­u­tive or­der apol­o­giz­ing to all res­i­dents for the mis­steps of Adam and Eve.

“I’m ashamed of those two giv­ing into temp­ta­tion the way they did. It has ul­ti­mately led to our state be­ing the mess that it is to­day,” he said.

Some lo­cals ap­pre­ci­ated the rare ac­knowl­edg­ment, say­ing it could bring heal­ing to all hu­mans who have sinned over un­told mil­len­nia.

“Peo­ple must face their dark his­tory. We can never undo the pain and suf­fer­ing di­rectly caused by

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