Broker Check

A Deeper Dive Into The Economy

June 02, 2022
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We’re starting to hear multiple sources using the word “recession” in regards to the future of the economy. No doubt there are headwinds out there – some significant. However, with so much negative news we thought it would be helpful to share some encouraging economic statistics.
 
Job growth is continuing. An astonishing 1.7 million jobs were created in the first three months of the year, per the U.S. Bureau of Labor Statistics (US BLS). In addition, first-time claims for unemployment insurance are hovering near the record low set in the late 1960s—records date back to 1967 (Department of Labor). Business openings are at a record high (U.S. BLS), in part because business activity has been strong.
We wouldn’t be seeing these numbers if the economy were contracting.
If the economy is headed toward a recession, consumers shy away from discretionary purchases. When it comes to travel and entertainment, that’s not happening. Airline tickets are up more than 50% from where they were at the beginning of the year.1  
Here’s an interesting remark from the CEO of McDonald’s, who said the consumer is in “good shape” because customers are still ordering items for delivery, the most expensive way to buy due to the hefty convenience fees.2 
 
Of course, risks are still present but the good news is often underreported. 
 
So, how should you proceed? Successful investors are disciplined. They refuse to let excess optimism or pessimism guide their decisions. Now is the time to employ a disciplined approach and maintain your asset allocation. Just as these ‘guardrails’ can keep you from lurching into riskier assets when stocks are quickly rising (and we feel invincible), the parameters are also in place to prevent emotion-based decisions that can sidetrack you from your long-term goals.
  1. www.marketplace.org; “Airline ticket prices are going up – but demand isn’t slowing down”; April 20, 2022
  2. www.cnbc.com; “McDonald’s revenue tops estimates, fueled by price hikes and overseas same-store sales growth”; April 28, 2022