Sam McElroy is concerned about jobs numbers-currently there are many indications that the US economy is moving in the right direction. In addition to strong jobs reports we’ve also seen the Fed make slight rate increases. However, despite some economic indicators looking strong, there are still many others that are somewhat troubling which makes predicting what will come next somewhat of a question mark. If we compare today’s economic underpinnings to where we were in the mid to late 90’s preceding the NASDAQ crash (dot.com bubble) we can see that many measures are actually worse today, such as: Slower GDP growth Lower productivity growth Higher Federal debt Higher Debt:GDP ratio Higher Personal and Corp Debt Lower 10yr Treasury Rate Lower Fed Funds rate
Worse 3, 5, and 10yr Earning Growth for the S&P 500 All of this data doesn’t necessarily suggest that the economy is moving back towards a recession, but it does suggest that there is a lot more complexity is assessing the US economy and equity market’s strength and that we have to recognize that there is a heavy mixture of both positive and negative indicators.
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