Stocks Are Up, Economy Is Down
Why is the stock market up when the economy is in a shambles? It’s a question many Americans are asking.
On Friday, the Dow eclipsed 14,000 last week for the first time since October 2007, even as news hit that the U.S. economy grew at -0.1% last quarter. During his weekly radio address, President Barack Obama took a victory lap of sorts, saying: “Home prices are starting to climb again. Car sales are at a five-year high. Manufacturing is roaring back. Our businesses created 2.2 million jobs last year. And we just learned that our economy created more jobs over the last few months than economists originally thought.”
But as financial experts are quick to point out, the economy and the stock market are not the same thing.
“Don’t be fooled into looking at the Dow as your economic barometer,” says the NY Post’s Jonathon M. Trugman. “That’s for the lazy, the amateurs, the armchair partisan economists.”
Indeed, most industry insiders don’t pay much attention to where the Dow closes. “It is good trivia to talk about on television and the radio,” said Joe Gordon managing partner at Gordon Asset Management. “It’s meaningless to the average professional.”