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I always get mixed views when this topic comes up in a discussion since some people will say the economy is fine right now and some will say the economy is bad. I'm not too knowledgeable myself when it comes to economics, but what exactly are the key indicators that a person looks out for when measuring economic conditions? Or what are the physical signs that a person should look out for? I live in New York City so maybe it isn't as apparent here as in other states. I walked around midtown the other day and a lot of commercial space and retail stores in the street I usually shop at have closed down and become vacant space open for rentals. Again, not sure if that had anything to do with anything, but it's something I've observed. I read a lot of posters who say the job market is bad, and some who say there are plenty of jobs out there. I'm still in school at the moment so I'm not exposed to the job market yet. So what do you guys and girls think? What are the signs?
That explains much of the problem with the economy. About half of the population is doing alright. The other half.... not so much - they are either on a treadmill or are seriously failing in the bottom 15-20% or so.
For those on the high side of the coin, things are okay. Things are very good for the top 15% or so. Much of that bottom half is out of sight and out of mind for those in the top half. Since the 21st century, we've seen that bottom half stop treading water and actually sink a bit... while the top half seems to get a better and better boat. It all comes out to a wash in the stats like unemployment, etc... Unemployment looks good.
Things don't look so good when those workers are working for effective wages that are the same as they were 25 years ago.
Much of the split is college education. Only 32% of the population has a bachelor's degree or higher. Only 45% have an associates or higher. The thing is, those degreed people tend to all cluster together in the same types of jobs and same neighborhoods, so they don't actually see what's going on.
Drive from New York City a couple hours to any of the towns upstate. You'll see what I'm talking about. There is also a rural vs. urban divide on this. The economies of small to medium sized towns have cratered, badly.
45I am not sure the OP is looking for a social/political response as much as for whether the economy as a whole is currently in good shape and facing another adjustment/recession. While I do not have an answer, I would like to know the same thing. I am being told to modify my 401K to prepare for another crash. Not sure if this is BS trying to sell some services or something or real.
While my major city (Detroit) is doing very well downtown, I do not think it is necessarily representative of all cities. However I do see a lot of families struggling. Personally we are only making slightly over half of our 2008 income and we are not unusual among our friends. Our home has not quite reached 70% of its 2007 appraisal. The company I work for is very very busy but margins are not what they were and a lot of our work is outside the country. So, I do not really know if things are looking up or just flat or even declining. It does not look good to me, but that is a tiny perspective.
What I know is:
While unemployment is down, that is in part because many people have left the workforce; and actual income per family adjusted for inflation is still down.
The economy has been propped up by consumer spending, particularly by car sales. Car sales have been propped up by giving out car loans to people who can barely or cannot afford the car they are buying (sounds familiar). All of my daughters were given car loans, one had no job at the time, one was being paid $10,000 a year stipend for grad school and has accrued substantial student loan debt, and one is working at a minimum wage job. I did not have to cosign for any of them, but I do not understand why they were given loans. It seems like the housing bubble, they are giving car loans to everyone. That cannot be good.
Most young people have huge student loan debt compared to their income. They are only one paycheck away from default/bankruptcy. A lot of younger people have the huge debt and no job or a part time job. Not sure how we are going to avoid massive student loan defaults in the next five years. Even if they do not default, they are going to be saddled with this debt for a very long time. Those cars better outlast the seven year loans on them by quite a lot.
The economy will definitely take a hit in November no matter who gets elected President. Either one will cause a temporary panic. But will it recover?
It is not clear to me what is happening with Europe and Asian economies. They are not doing well. I think that results in a stronger dollar which makes products more affordable here, but reduces employment here. Is that correct? Is it likely to continue?
What impact is any of this likely to have on the stock market? Obviously if you could answer definitively, you would be a billionaire, however lots of people say the economy is bubbled (usually around car loans) and about to burst, while others say it is doing great. I am certain there are some people on CD who work in or dabble in this area who certainly have more knowledge than I have. I am curious what such people have to say.
If my 401K takes another 50% hit (from which it has yet to fully recover), I am going to have to work until I am 90. I am not a fan of moving money about trying to predict the market, but if a crash is likely, I might try moving the funds into something safer, but what? Bonds were not the answer during the last crash from what I understand.
Last edited by Coldjensens; 10-25-2016 at 01:25 PM..
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Not only vacant business space, but rents dropping and also a lot of homes for sale, with those prices dropping. Just a few vacant spaces doesn't mean bad economy, in fact can be the opposite. Here in Seattle, there are a couple of places I walk by where an entire block is vacant. The reason is that the leases were not renewed because it will be demolished for new construction in our hot market. You cannot generalize the condition of the economy on a national basis, some places are still pretty bad off, while others are thriving. Seattle's median household income jumped $10,000 in the last year to reach $80,000, but that is still well below some of the suburban eastside cities.
How in debt we are???
As a person (mortgage, student loans, CC, etc)
As a state (some states and government bodies are bankrupt).
As a country (jobs, debt clock, debt to gdp etc)
What is your economic mood???
What signs are there to tell you if you can spend or be frivolous???
Etc...
History always repeats itself...
Look at Venezuela.
Look at Argentina.
Look at China.
Look at Greece.
Look at even German banks.
What does the recent housing market says of Vancouver, Australia etc..
Britain is hooked on gambling and payday loans.. why???
Look at empty failing retail in Singapore...
It's Global!!!
Everything is interrelated now...
Domino effect.
The job market is booming in most places - that's clear by incomes rising, low unemployment and many other factors.
As to more general questions of the economy...it always depends on where you are looking from!
Empty stores, malls or big boxes are not an indicator of much - between online sales and changing habits, there is not a need for the amount of commercial spaces built. In fact, there likely never was. Capitalism doesn't build the amount of big box stores needed to fill demand. What it does is that each individual entity (for example, Wal-Mart)...if they have the money and investors, they will build and build and build even if their stores mean that 100's of small retailers (and some big ones) close up shop. WalMart (or our system as a whole) does not care about the "other" companies or the townships or the taxpayers who end up holding the bag.
Using most measurements - against the rest of the world and against our own past - things are fairly good right now. But a lot of Americans are realizing that our system has its shortcomings - and they don't know what to do about it or how it got that way.
Remember, if we say the economy is "bad" or "slow" we may be comparing it against false bubbles like the dot-com boom and housing booms. Those were "good" economic times for many.
IMHO, the true definition of a good economy would be one more inclusive, equitable, environmental and sustainable. But that is not the American Way and I am certain I can't change it by my lonesome.
I don't think we will ever see truly sustainable good times until we decide - en masse - to fix the healthcare debacle. We simply cannot pay the amounts that a predatory capitalistic system requires (because, like walmart, it doesn't care a bit about what it leaves behind).
There comes a time to just outright admit that 9K to 10K per person per year cannot be afforded...now or ever...and to completely change the system to one that makes some sense and rewards companies for keeping people well - instead of for making them sick and then treating them.
Not meant as a health care rant but when a family of 4 is costing 35K a year (to someone) for health care, it's the elephant in the room when it comes to whether we can prosper. Our short term fix has been adding lots of that money to debt and deficit. It won't work.
Americans need to become realistic about everything...again, unlikely. I will get my full SS and Medicare even though I have plenty of other resources. Yet people out there are fighting for me to get BIGGER yearly raises! Why? What happened to common sense? A billionaire over 65 is not even asked to help with his own health care - individually or by special taxation. In fact, it's the opposite!
And so, you asked about the economy but I told you how to fix it too!
These are the economic indicators that are generally used for tracking the state of the economy. These combined will give you a pretty good picture of how the economy is trending.
Unemployment Rate New Business Startups New job growth New unemployment claims Manufacturing orders (durable and non-durable goods) Building permits
Consumer confidence index S&P 500
Case Schiller index FHFA Housing price index
Consumer Price Index
GDP growth (or decline) Retail sales Inventory (wholesale & retail goods)
Fed interest rates
Balance of trade
Those in BOLD are leading indicators, while the ones not bolded are lagging indicators. Pay most attention to the bolded if you want to have an idea where the economy is headed. When you get a lot of those bolded ones declining then you know we are headed for trouble. If some are declining and some are increasing it's a sign of a stagnant economy (depending on which as some are tied to each other). If most are trending positive then it's a growing and healthy economy.
I always get mixed views when this topic comes up in a discussion since some people will say the economy is fine right now and some will say the economy is bad. I'm not too knowledgeable myself when it comes to economics, but what exactly are the key indicators that a person looks out for when measuring economic conditions? Or what are the physical signs that a person should look out for? I live in New York City so maybe it isn't as apparent here as in other states. I walked around midtown the other day and a lot of commercial space and retail stores in the street I usually shop at have closed down and become vacant space open for rentals. Again, not sure if that had anything to do with anything, but it's something I've observed. I read a lot of posters who say the job market is bad, and some who say there are plenty of jobs out there. I'm still in school at the moment so I'm not exposed to the job market yet. So what do you guys and girls think? What are the signs?
There's not a single answer that you can use--and frankly, it might be better to think about our economies, plural, than our economy, singular. Stock market performance & unemployment are among the better broad-based measures of where we are at right now. A number of industry-specific metrics, like retail inventory, new home starts, etc. can be useful.
I think the standout pair of metrics right now are low inflation in spite of persistent low interest rates. The "normal" response to low interest rates is inflation. We haven't had sustained interest rates at this low of a level since . . . ever. And yet inflation remains just 1.5%. What's the "meaning" of this pair of metrics, taken together? I think it means our recovery remains fragile. Why? I think the poster below hits the nail pretty close to the head.
Quote:
Originally Posted by redguard57
Income inequality.
That explains much of the problem with the economy. About half of the population is doing alright. The other half.... not so much - they are either on a treadmill or are seriously failing in the bottom 15-20% or so.
For those on the high side of the coin, things are okay. Things are very good for the top 15% or so. Much of that bottom half is out of sight and out of mind for those in the top half. Since the 21st century, we've seen that bottom half stop treading water and actually sink a bit... while the top half seems to get a better and better boat. It all comes out to a wash in the stats like unemployment, etc... Unemployment looks good.
Things don't look so good when those workers are working for effective wages that are the same as they were 25 years ago.
Much of the split is college education. Only 32% of the population has a bachelor's degree or higher. Only 45% have an associates or higher. The thing is, those degreed people tend to all cluster together in the same types of jobs and same neighborhoods, so they don't actually see what's going on.
Drive from New York City a couple hours to any of the towns upstate. You'll see what I'm talking about. There is also a rural vs. urban divide on this. The economies of small to medium sized towns have cratered, badly.
Low GDP growth, we barely break the 2% in the last few years, we should try to aim for 3-4 %.
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