The American Paradox: Cooling Inflation, Rising Markets, Unhappy Citizens
By John Persinos
The U.S. boasts the strongest economy among developed countries, with an unemployment rate that hovers at 55-year lows. But as my sainted Greek grandmother used to say: "There's no pleasing some people."
The American public has shown an unyielding grumpiness about the economy. On closer examination, a more cheerful reality emerges. Inflation is cooling, the Federal Reserve is dusting off its interest rate scissors, and the U.S. economy is reaching a "normalized" stride.
This confluence of positive indicators should have investors questioning why everyone's still sulking. Spend a few minutes watching the relentless negativity on cable news and you'll get an inkling.
However, although opinion polls consistently reveal widespread unhappiness among the electorate, the economy is strong and the stock market is primed to extend its bull run.
My "Yia Yia" raised a family in Lynn, Massachusetts during the Great Depression. During the height of the 1930s Depression, the unemployment rate peaked at 25%. During the 1981–1982 recession, the unemployment rate peaked at 10.8%. During the Great Recession of 2007-2008, the rate peaked at 9.5%. During the coronavirus epidemic of 2020-2021, the rate peaked at 13%.
As of June 2024, the seasonally-adjusted unemployment rate in the United States was 4.1%. And yet, I still hear politicians and their partisan shills in the media say that the U.S. jobs market is in the toilet and the economy is going to hell. It's simply not true. But as rock poet Jim Morrison said in 1969: "Whoever controls the media, controls the mind."
Stirrings of enthusiasm on Main Street…
In some quarters, reality is breaking through and the gloom is lifting. Let's start with small business. It's a truism that small companies form the heart of the country's job creation. Main Street is starting to catch up to the optimism of Wall Street.
The NFIB Small Business Index, released Tuesday, climbed to 91.5 in June, marking its highest point this year. We're seeing a gradual recovery in small-business sentiment (see chart).
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