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As Economy Strengthens, No Cause for Doom and Gloom

Written by Brad McMillan, CFA®, CFP® | Oct 23, 2014 4:50:38 PM

Looking at the data over the past few days, it’s apparent that the economy continues to improve. Consumer comfort is rising, initial jobless claims are up a bit but remain at extremely low levels, job openings are at multiyear highs . . . the list goes on and on.

This is exactly what I’ve been talking about for the past year and more—that the recovery is gaining strength and starting to feed on itself. Listening to the speakers at the Goldman Sachs conference I’m attending, things elsewhere in the world may be even worse than I thought. Here in the U.S., though, we’re in pretty good shape.

Dire predictions unlikely to play out

To those who are predicting doom, I would ask the following question: how will it happen?

Not that long ago, many of those now predicting the collapse of the U.S. economy as the dollar strengthens and other currencies weaken were prophesying dollar collapse. Not that long ago, other doomsayers were predicting hyperinflation or saying employment would never come back. All of those predictions have been proved wrong since the depths of the crisis. What would make them right now, when things are much better?

Concerns remain, of course—Europe and China, the stock market, the deficit, and the Fed’s exit from the markets, to name a few. There have always been concerns, and always will be. But they don’t necessarily translate into doom.

Many of us have become Depression babies, prone to assume systemic collapse from normal troubles. Problems exist, and other areas—Europe in particular—face severe challenges. Nonetheless, things are better than they have been and should continue to improve.