Published Thursday, August 3, 2017 at: 7:00 AM EDT
Real disposable personal income grew 2.8% in the 12 months ended June 30. That's the same rate as in the last economic expansion and is enough to fuel continued economic growth.
Real disposable personal income is a key figure in driving the economy because it is the key determinant of consumer spending and 70% of U.S. growth comes from consumer spending.
Meanwhile, the official unemployment rate declined to 4.3%. That's lower than the bottom of 4.4% in the rate of joblessness achieved in the last economic expansion in spring 2007.
Not since May 2001 has the unemployment rate been this low, and that was at the end of the longest expansion in modern U.S. history.
In addition, the economy has continued to create new jobs - 208,000 of them in June - which was above expectations.
New job creation and a decline in unemployment has been stretched out because the severity of The Great Recession caused more job losses than in past recessions.
The economy cannot keep producing new jobs the way it has in recent years because the U.S. is at full employment, or near it. When companies find that their new positions cannot be filled or take much longer to be filled, they continue to operate but with open positions. However, companies eventually are likely to stop creating new jobs when they cannot fill their current openings. This is likely to happen in the months ahead.
The Dow Jones Industrial Average closed above the 22,000 mark for the first time ever on Wednesday, August 2. The Standard & Poor's 500 index has repeatedly broken its all-time high for months and it closed the week fractionally lower than its all-time high.
At 98 months, the current expansion and bull market is the third-longest in modern U.S. history, and the good times could surpass the longest-ever U.S. expansion, the 120-month-long boom that spanned the entire decade of the 1990s and ended with the tech bubble of early 2000.
A bad surprise could turn sentiment abruptly, and a 10% or 15% price drop is possible any time. However, earnings on the Standard & Poor's are expected by Wall Street analysts to rise by 18% in 2017 and 12% in 2018 - far stronger than the long-term annual average rate of earnings growth of 7%, and the latest economic data released this past week bolstered expectations for continued economic growth, indicates, which drives corporate earnings, so the bull market could also go on for years.
Combined with the one-two punch of tax and financial planning, adhering to a discipline of broad diversification and strategic asset allocation in a low-cost core portfolio that is periodically rebalanced is a smart regimen to prepare for the best of times and worst.
We are independent financial professionals, communicating at a frequency attuned to you.
Get financial wisdom here anytime from your Smartphone, by subscribing to our e-mail newsletter.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.
Stocks Declined Sharply, Even As Economists Expect 3% Growth In 2022
Should You Care About Wall Street Stock Market Predictions?
Weekly Economic Update For Investors
Despite Pandemic, Stocks Closed 2021 With A 26.9% Return
Tracking The Economic Boom
Fed Changes Its Inflation Stance
Despite Inflation And Omicron, A Booming Economy
The Week's Financial News: Crosscurrents In The Economy
After Breaking Records For Six Weeks, Stocks Dropped -2.3% Friday
Already Higher Than Ever, Leading Economic Index Surged Again In October
Five Observations For Investment Planning For The Decades Ahead
Financial Economic Outlook
S&P 500 Closed Friday At Record High Again On Strong Earnings Reports
With Economic Recovery Intact, Stocks Are Near Record Again
Are The Five Stocks Driving The Market's Great Returns Overvalued?
As your financial partner, our mission is to provide you the information you need to make the choices that matter most in your life.
Stocks Declined Sharply, Even As Economists Expect 3% Growth In 2022
The Standard & Poor's 500 stock index declined 5.7% for the week. It was the third consecutive week of losses and the worst week for stocks since March 2020.
