Upbeat Data (9/11/2018)

The economy has been sending out some very positive signals this year. In the first and second quarters, we saw large amounts of corporate spending on capital projects. These range from new facilities, new equipment, and new computers to major new projects. Some of this spending has been possible from the repatriation of money from overseas.

The U.S. appears to be at full employment. A few years ago, I was pointing out that the unemployment rate was likely higher than what was being reported, because some people had given up looking. Based on what I see currently, “help wanted” notices are popping up all over the place. Corporations are not just adding to staff, but are also training. After a long time without, corporations are seeing fit to bring in new employees and give them real training programs, which likely bodes well for the future of a younger population.

With lower taxes and more growth, corporate profits have risen. The Wall Street Journal reported on August 30th that U.S. firms posted the largest year-over-year gain in six years in the second quarter. American factory activity was also reported in August to have expanded at the strongest pace in more than 14 years.

Wages have been increasing as well. Consumer sentiment and spending are up. Some of the brick and mortar department stores, like Macy’s, have seen a major pickup in sales.

Yes, the economy has been growing for years, but slowly. We appear to be getting some very strong growth and momentum for the future. The stock market is full of volatility as we approach the mid-term elections. In addition, September is historically a volatile month for the stock market. If history is any indicator, the volatility should all subside after the mid-term election in November. Then we will see what happens.

Ed Mallon

September 11, 2018