Weekly Articles

How has the Market Changed Since the Bull Market?

Early March was the 7th anniversary of the market bottom of 2009. Here's an update as to how the market has changed since then:

The S&P 500 has grown 199%

The S&P 500 grew almost 215% through its high point in the middle of may last year, going beyond previous highs. Since then, stocks have lost value, battered by global economic forces. However, it’s a testament to how durable markets are that they have lost so little when going up against serious concerns about global growth.

Price return between 3/09/09 and 3/11/16. Past performance is no guarantee of future results. Source: Yahoo Finance. All data as of March 11, 2016.

Economic growth has recovered speed

Source: BEA

The economy has also made great progress over the past seven years. Looking at this chart, we can see that in the first quarter of 2009, the economy contracted by 5.4%, putting it definitely in recession territory. However, the latest data from the fourth quarter of 2015 shows that the economy grew by 1.0%. Now, that level of growth isn't wild, but the economy has grown considerably since 2009.

Millions of Americans have returned to work

Source: BLS

Since the 2009 bottom, the economy has gained over 11.5 million jobs - a great deal more than the 8.7 million jobs that were lost in the recession. While much of the growth has been in fairly low-paying industries, the improvement has been far-reaching, suggesting that several sectors of the economy are hiring.

Source: BLS

We can also see that the number of both unemployed and “discouraged” workers has been consistently declining since its peak in mid-2010. This is a broader measure of unemployment as it also includes people who aren't looking for jobs because they don't think work is available. As the labor market improved, more Americans had confidence in their prospects and returned to the labor market.

Americans are driving economic activity by spending

Along with the rise in available work, Americans began spending again, increasing personal spending by 15.9% over the last seven years. Since consumer spending accounts for about 70% of economic activity, it represents a driving force for our economy. Though we don’t have February or March data yet, consumer spending still appears to be on a healthy trajectory.

If you're looking to build your wealth or manage your finances in a recovering market, contact financial advisors at Professional Wealth Strategies today!


S&P 500 price performance between 3/9/09 and 5/21/15. Source: Yahoo Finance

http://www.cbpp.org/research/economy/chart-book-the-legacy-of-the-great-recession

https://research.stlouisfed.org/fred2/series/PAYEMS

https://research.stlouisfed.org/fred2/series/U4RATE#

https://research.stlouisfed.org/fred2/series/PCEC96#

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