I continue to be very frustrated by negative sentiment regarding our economy. Some of the dissatisfaction is of course attributable to politics, but there seems to be an underlying sense that we are somehow not headed in the right direction. In recent posts, I pointed out that the stock market is at an all-time high, unemployment is near historic lows, inflation has cooled off, retail sales are very strong, and the Fed is likely to reduce interest rates next month. Well, here is one more chart supporting my view that all is well.
The horizontal axis shows cumulative real growth in the economy since the fourth quarter of 2019 and the vertical axis cumulative inflation over the same time frame. Note that the U.S. has the strongest growth by a large margin while our inflation has been in the middle of the pack. What’s not to like?