Fishkind Conversations: Inside 2016's Uneven Economic Start
Economic data from the first days of 2016 seem contradictory. On one side, there's the stock market - it had its worst opening week since 2011, down about 6% and losing almost $1.4 trillion in value. On the other side is the nearly 300,000 jobs added by US employers in December...that made for the best year in job creation since 1999.
So, should we be worried about the outlook for 2016? 90.7’s economic analyst Hank Fishkind says the answer is a little yes, a little no.
- The high level of stock selling can have effects on the economy, even though it may appear to be a bit distant from central Florida's local situation. However, it is important to keep in mind that the stock market is not the real economy, and that the market tends to be volatile at times like this, with bouts of overselling followed by rebounds
- Average hourly earnings increased by just 2.5% in 2015 for employees in the private sector. In the 1980s, 1990s, and mid-2000s, wage growth was averaging about 4% per year…but inflation was running between 2% and 3%, while today, inflation is essentially zero. So, in real terms, wages have been growing at the same rate or even faster over the last 2 years than they did in those decades
- At current levels, people will probably not cancel their Florida vacation plans, although visitors may spend a bit less than they otherwise would. However, the drop in gas prices likely offsets the stock price effect, since people who drive to Florida for vacation will have a significant real savings, which they will probably spend