Jul 13, 2017
Sam’s 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.