IMHO the “economy” is composed to several interlocking but totally distinct segments.
One such segment is the stock market. If you base your evaluation of the “economy” strictly on the DOW average the “economy” is doing great.
Another such segment is the housing market/industry. If you base your evaluation of the “economy” strictly on the hosing market/industry the “economy” is so-so.
Another such segment is personal disposable income. If you base your evaluation of the “economy” strictly on the personal disposable income the “economy” is in the crapper.
And there are several, dozen or more?, other segments that can be used to judge the health of the “economy”.
My bottom-line is the politicians are, again, cherry-picking the indice to base the health of the “economy” on. And unless they use personal disposable income as their indice they can lie to us with a straight face while the “economy” continues to tank.
Why do I base my judgment on personal disposable income? In my world I recognize that the economy is driven by personal spending habits. Without a person going out any buying something, major or minor, there is no market activity and the ‘economy” tanks.
It is the individual and collective fear of the total impact of “ObamaCare” that has stopped any future spending. That coupled with the reduced personal income that has reduced personal spending in the here and now that has stopped current future spending. And, until BOTH indices are changed for the positive we will look at a 2% GDP growth as “good news for the economy”.
I dispute that the DOW indicates the economy is doing great. It has moved sideways for most of the last 13 years. In the last 10 years there has been only a 5% CAG. In the last 20 year the CAG has been 7.7%. The state of the economy and the lack of productivity of the nation suggests that the very best we could hope for is about 7%. This is paltry compared to the 8 to 10% over 10,20 and 30 year periods of the last 140 years.
The market is doing worse now than it was in the dismal years of the late 60’s and early 70’s.
Let’s face it FRiend, the United States is dying or dead. At best we are virtually stagnant now. The growth of the market is funded by fiat currency printed out of thin air. We all know there has been no recovery and that this economy can’t cash the checks that have been written. We can’t go on supporting all these NON-WORKING and NON-PRODUCTIVE people. IT IS IMPOSSIBLE!
http://www.oftwominds.com/blogmay13/genX5-13.html
http://www.investorsfriend.com/return_versus_gdp.htm