Weekend Reading: Your Guide to 'Good News is Bad News' and 'Bad News is Good News'
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend Reading
Recent economic metrics have been contradictory. Consumer confidence is low, but spending is high, gas prices fall, but inflation doesn’t… The list goes on. All this being said, it can be difficult to make sense of up or down, which also might make you question the latest news stories.
READ THE ARTICLEData that’s a double-edged sword: You might wonder: Is good news really “good”, and bad news really “bad”? Author Sam Ro takes a deep dive into a few of the latest headlines, particularly how they relate to inflation and what they might mean from either perspective. A few to note include:
📌 Stocks rally: This is undoubtedly a positive for investors, however, economic growth in excess is also one of the contributors to high inflation, meaning the Fed is more supportive of a bear market right now.
📌 Unemployment rate rises: While not a good sign for workers, a slack in the labor market is a positive for the Fed to help bring down inflation.
📌 Home prices rise: Homeowners are seeing higher value in their largest asset, but shelter cost is also a measure of inflation, sending those metrics up (in a negative direction) for the Fed.
📌 Sentiment plummets: This mindset can cause consumers to create a deteriorating economic environment, followed by a slowdown; However, it might also cause consumers to scale back spending, leading to relief in supply chain issues, and potentially, inflation.
Make note: Neither the stock market nor the economy follows a linear path. Both operate much more like a teeter totter, so you better be one that enjoys the playground.