I thought that I would share some interesting charts and data that I saw this past week regarding the health of the U.S. economy.
The following graph shows industrial production since 1967.
Industrial production is a measure of output of the industrial sector of the economy. The industrial sector includes manufacturing, mining, and utilities. The industrial sector is not as big a portion of our GDP as it once was but it’s still nice to see some increase in production in this area.
We are still spending like we just got out of a pandemic:
The Conference Board’s consumer confidence survey asks households if they plan to travel to a foreign country, and the chart below shows that a record-high share of US consumers is planning to go on vacation to a foreign country within the next six months.
Because of the significant rise in the stock market and significant cash flows from fixed income, US households have more money to travel on airplanes, stay at hotels, eat at restaurants, go to sporting events, amusement parks, and concerts, and that is why inflation in the non-housing service sector continues to be so high.
Homeowners and Auto Insurance Premiums are Surging
Regarding homeowners insurance, check this chart out which compares homeowners versus renters insurance over the last 5 years:
If you think that’s a big increase, look how much car insurance has jumped:
We are back on top of the world in oil production:
There’s a lot of good stuff happening in our economy. Unfortunately, one of the trade offs of a strong economy is inflation. Eventually, the high interest rate environment that we are currently in will help bring prices down but for now, the majority of U.S. consumers are keeping their wallets open. Hopefully, we can hit that soft landing that the Federal Reserve is aiming for so we don’t crash into a recession.
Please comment or send an email if you have any questions. Thanks!
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassemanagement.com
