MINNEAPOLIS (WCCO) — Despite the roller coaster on Wall Street, White House press secretary Sarah Huckabee Sanders says the president is focused “on our long-term economic fundamentals, which remain exceptionally strong.”
So what are those fundamentals? Good Question.
“Consumer confidence is high, unemployment is low, inflation is low,” said Jay Kiedrowski, a fellow at the Humphrey School of Public Affairs and former Minnesota Commissioner of Finance. “People are pretty confident today about the economy being better in the future.”
Experts say the stock market is generally not known for being good measure of the health of the economy.
“It’s a leading indicator, but not a great one,” sayd Kiedrowski. “Financial assets aren’t the only thing that matters. People working, people’s interest rates and how they feel about the future. All those things are more important than financial assets.”
He look at gross domestic product growth (which averages 2.5 to 3 percent), a 17-year-low unemployment rate of 4.1 percent and a measurement of consumer confidence that’s among the highest it’s been in the past 10 years.
“The only negative would be the trade deficit,” he says.
The stock market tries to anticipate what might happen in the future. In yesterday’s case, experts say some of the sell-off was due to reports of higher wages, which lead to fears of inflation.
“We have been enjoying this bull market since March 9, 2009, the second-longest bull on record, so it stands to reason that we’ve been a little bit overdue for some selling,” says CBS News business analyst Jill Schlesinger.
To give Monday’s 4.6-percent drop in the Dow some perspective, it is far less than the 10-percent that’s considered a “correction” and 22.6-percent that happened on Black Monday in 1987.