Despite the subject line, the current bull market still is showing some amazing bursts of growth. As the numbers shake out, the second quarter of this year, growth in the economy registered at an impressive 4.2% annualized rate. Part of this performance is probably a surge in exports for certain industries and companies trying to beat the impending drag that will come with tariffs. The economists I listen to are all predicting a slowdown or softening of growth starting late this year into 2019. This slowdown will start showing up globally among the same partners that were full participants in the very synchronized global expansion. In the U.S., we are starting to see evidence that big segments of the economy are growing at a slower pace. Vehicle sales across most manufacturers are flat following several years of robust growth. Housing sales of existing homes are weakening in some segments of the country. Unemployment is at its’ lowest level since 1969. Despite the 9 year expansion, however, wage increases have been sparse suggesting that technology advances and aggressive cost control by management have held the line on wages.
Our unemployment rate of 3.7% suggests that most of the employable candidates in our economy are employed which could create some inflation as workers in demand will be recruited with the offer of higher wages to switch companies and industries.
It is expected that The Federal Reserve will be raising rates gradually to achieve its dual mandates of low inflation and employment.
The U.S. despite any slowing still seems to one of the best places to be invested. It is important to note that in 38 none recession years since 1971 the S& P 500 produced 35 years of positive investment returns. No guarantees offered or implied, just some strong supporting data.