Doubt continues to dog markets in the U.S., as investors are more cautious than optimistic. However, some statistics indicate that the economy is actually stronger than rumors suggest. Most recently, “third-quarter headline economic growth of just 1.5 percent belies the American economy’s underlying prowess.” The strong employment report from October also adds to data indicating the resilience of the U.S. economy. Recently, Macquarie assembled a list, with charts, of ten reasons why the U.S. economy is stronger than many investors may initially believe.
First and foremost, manufacturing is growing and is increasingly strong. Companies across the country are building new plants and renovating existing ones. “Nominal investment in this year is up over 60 percent year-over-year and has more than doubled since 2012.”
Additionally, the combination of a strong dollar, cheap gas, and a strengthening economy have more people flying—domestically and internationally. People tend to hold back on travel when the economy is weak. Another habit people shirk with a weak economy? Eating out. “Nine readings into 2015, the average annual growth [of restaurant spending] is running at roughly its peak rate during the previous cycle.”
Even though doubt does persist, consumers are growing more optimistic. “A sub-component of the University of Michigan consumer sentiment survey shows that the net percentage of respondents who expect their financial situation to be better in a year has hit its highest level since 2007.”
Another positive sign is the fact that new employees entering the work force are increasingly coming with bachelor degrees. “The negative impact that the slowing in labor force additions has on gross domestic product growth may be somewhat offset by higher productivity from these better-educated employees. An environment in which well-educated workers drive labor force growth also augurs well for a reduction in income inequality, as those offering jobs that require fewer prerequisites find that the pool of available workers have shrunk, at least in relative terms.”
Innovation is also booming, which means new opportunities for investors. “The growth in research and development expenditures has eclipsed its pre-recession pace, moving steadily higher since 2012.”
All of this news bodes well for investors, who frequently use their emotional “gut feeling” as a basis for some of their portfolio decisions—for better or for worse. As the market continues to improve and evolve, there are opportunities for investors to consider for their wealth and financial well-being. Contact an expert at Apex Financial Advisors to take advantage of market strengths, prepare for changes, and start growing your wealth today.