Fear Not, Economic Data Indicate Healthy Finish in Store for 2017

As we get further into fall -- a period that people consider particularly worrisome for markets as ghosts of the crash of '87, the Asian financial crisis of '97 and Lehman Brothers come back to haunt investors' memories -- it becomes easy to lose sight of the factors that brought markets this far. That loss of clarity is compounded by natural disasters such as hurricanes Harvey and Irma and man-made threats such as Kim Jong Un and terrorism. Yet, even with all these negative situations, stocks have continued to climb their proverbial wall of worry as the S&P 500 just finished at a weekly all-time high of 2502. So as markets sit at highs and pundits continue to pitch fear and the "late cycle" narrative, the data tell a different story.

The first piece of data up for discussion, and something that is a pillar of all economic expansions and bull markets, is employment. While many different metrics exist for gauging the health of the labor market, the initial claims series is the most useful one, with its hard data basis and near real-time frequency. Unemployment claims data are an excellent gauge of changes in highly cyclical industries because claims are often a lifeline for many workers when a job ends. Looking at the long-term history of claims and assuming that the economy has reached most economists' nirvana of "full employment" at various times since 1980, it's safe to say that the labor market is indeed healthy....654 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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