As the U.S. economy has been normalizing—even moving back to good times—politics has been what I can only call denormalizing. In one more back-to-the-future moment, I am now substantially more worried about political threats to the economy than I am about economic threats.

When markets drop, I always get calls from advisors and the media asking what the heck is going on. Volatility (at least when combined with a market decline) is often considered evidence that it’s time to worry—that something is broken. It makes sense; after all, if you’re losing money on your investments, something isn’t right. But, somehow, I don’t see the same reaction when there’s a market melt-up. No one called me yesterday to ask what was going on, anyway.

Maybe they should have.

Data last week was right in the middle of the fairway, to use a late-summer metaphor. We saw a weak print, a strong print, and a medium print, all of which, on balance, added up to a pretty good week for economic news, overall.

It seems appropriate to be talking about the August jobs report as we head into the Labor Day weekend. This report certainly has been a market mover so far today, but I’m not sure there’s much news here.  

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead.

There has been some minor weakening of trends from last month, but only at a level that appears reasonable and typical for the news we have had and for this stage of the cycle. Overall, the data hasn’t changed much.

In my latest Market Thoughts video, I review the recent, surprising declines in U.S. and international markets and what contributed to them. I also provide an update on U.S. economic performance, highlighting an increase in job growth and consumer spending.

In thinking about the ongoing U.S. market correction, it occurred to me that, in one respect at least, it really is different this time. Historically, when we have experienced a correction—and, remember, we haven’t had one for years—it was either due to systemic factors or to events here in the U.S. That is not the case today.

August was the worst month for U.S. markets in more than three years, so say the headlines. I suspect it was also the worst month in at least that long for many international markets as well. And, as today’s numbers show us, we aren’t done yet. As I write this, U.S. markets are down about 2.5 percent, and European markets closed down around 3 percent.

Looking at today’s news, the lack of worrisome economic headlines is remarkable. Considering all that’s happened in the past couple of weeks—not to mention that markets are closing out their worst month in years—this seems to reinforce the idea that things here in the U.S. really are moving back to normal.

Now that things seem to have calmed down a bit, it’s a good time to discuss why the past week has been so turbulent. The usual explanations—the Chinese currency devaluation and stock market crash—are certainly valid, but there’s more to the story.

Let's take a closer look at the connection between the news from China and U.S. stock prices.