Today Versus Post-War History Of U.S Economic Cycles
Published Friday, July 16, 2021 at: 8:20 PM EDT
Looking back on modern history, where are we in financial economic terms?
These four charts can help you figure out where we are.
In the post-War era, major declines in stock prices are highly correlated with recessions, and stock prices generally bottomed months before the end of recessions. At present, no recession is on the horizon. It's quite the opposite: the fundamental measures of the economy are all strong.
Retail sales in America, excluding gasoline sales because of their volatility, in the 12 months ended June 30, 2021, surged by +16.6%!
The increase in retail sales was six-tenths of 1% higher than at the end of May.
The 12-month growth in retail sales excluding gasoline for the 12-months ended May 31, 2021, was an astounding +25.7%.
The 12-month rate of retail sales growth excluding gasoline is slowing but remains near record levels, much better than had been expected.
The monthly retail sales reports from the Census Bureau principally measure sales of goods. They are not a good measure of sales of services. Total retail sales account for 30% of the U.S. economy. The service sector comprises 89% of the economy.
This measure of service sector growth, as reported last week, was very strong through the end of June. It is a survey of corporate purchasing managers conducted monthly by the Institute for Supply Management, a private trade group and professional certification body.
This index is comprised of 10 components and a key component is a survey question of new orders. That component (not shown in this chart) -- was at 62.1, which is very strong and an indication of what’s ahead in the coming weeks.
The Standard & Poor’s 500 stock index closed this Friday at 4,327.16. The index lost -0.75% from Thursday and -0.97% from last Friday, when prices closed at an all time high. The S&P 500 for the three previous weeks had closed at record highs. An index of progress in the world’s No. 1 economy, the S&P 500 is up +63.66% from the March 23, 2020, bear market low.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
- 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?