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.
August Retail Sales Indicate The Recovery Is Intact
This Week’s Financial Economic News
Latest Financial Economic News For Investors
After Fed Inflation Policy Speech, Stocks Closed At New Record High
Stocks Closed 1% Off All-Time High; Strong New Economic Data
Stocks Broke Record High Again This Week
U.S. Jobs Picture Improved, Covid Variant Risk Declined, And Stocks Closed Week At Record
This Week’s Economic And Investment News
Positive Earnings, Housing, and LEI News; Stocks Closed Week At A Record
Today Versus Post-War History Of U.S Economic Cycles
Stocks Surged 1.1% Today, Closing At A Record High For The Third Straight Week
Strong Jobs Report Confirms Recovery
What's Ahead For The Second Half Of 2021?
Despite Strong Economic News, Stocks Dropped This Past Week
Stocks Closed At A Record High; What's Expected For The Rest of 2021?
Jobs Situation Report Pushes Stocks A Fraction From All Time High
Inflation Rate Doubled In Past Two Months
Fed Signals It's Thinking About Starting To Talk About Tightening
Expect Inflation To Make Investors Nervous Through 2021
Stocks Closed At A Record, Ignoring A Bad Jobs Report
Stocks Soared 5.2% In April; Now, For The Good News
A Window Of Opportunity Is About To Close
Retail Sales, Housing Starts, And Stocks Rocket Higher
The Fed Is Not Braking The Boom Anytime Soon
As your financial partner, our mission is to provide you the information you need to make the choices that matter most in your life.
August Retail Sales Indicate The Recovery Is Intact
Retail sales for the 12 months through August rose 14.9%. According to the U.S. Census Bureau, retail sales totaled $618.7 billion in August, a seven-tenths of 1% jump from July.
