This Chart Shows the U.S. Economy Might Be In Better Shape Than Voters Think
U.S. stocks have roared back after a horrible start to the year, but voters haven't noticed.
Donald Trump and Bernie Sanders have built their campaigns around the idea that the American economy is faltering. Federal Reserve chief Janet Yellen says low oil prices and China’s slowdown could reverberate within the U.S. The International Monetary Fund revised its annual U.S. growth projections down from 2.8 percent last year to 2.6 percent. Still, there are good reasons to think that conditions aren’t as bad as many people think.
Check out the chart below. It shows the year-to-date average of the Dow Jones Industrial Average, which measures the value of large U.S. corporations.
As the graphic shows, 2016 got off to a horrible start, with the Dow reaching year-to-date lows in mid-February. But it also shows a vigorous comeback since then, with the index turning positive for the year earlier this month. It continues to go up, which is good news for American investors who own stocks directly or through their mutual funds or 401(k)s.
Stocks are only one indication of the health of an economy. And whether a rising Dow is enough to convince election year voters, many of which are angry about the perceived lack of opportunity for the working and middle classes, that the U.S. economic lot is improving remains to be seen.
“This country is dying. And our workers are losing their jobs,” Trump said last month.
But the Dow rising is important, because it’s closely tracked by investors each day. Combine that with continuing job growth — payroll processor ADP announced Wednesday that private sector employment increased by 200,000 jobs in March — and increased wages –average hourly wages in January increased 0.5 percent to $25.39 — and things might not be as bleak as some fear.
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