With the market hitting records, what could go right?
This market has advanced against a lot of skepticism. China is slowing down, the payroll tax hike will slow consumer spending, the sequester will cut government employment, national politics are dysfunctional, the states are bankrupt—there has been plenty of gloom to go around.
Topping it all has been our stuck-in-the-mud economy. Month in, month out employment has grown by around 170 thousand jobs per month. At this rate, employment will recover to its previous high in a year and a half, and unemployment will get below 6.5% in two and a half years. But our economy won’t get back to its potential for about five.
The unemployed in our country need something. It’s not redistribution or extended benefits, and it’s not a good swift kick in the seat of the pants. It’s a job—something our slow-growth economy isn’t generating enough of. But the market, hitting record levels, somehow thinks we’ll get there. I sure hope it’s right.
Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!