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Dow Jones Decline But did not Affect US Economy


February, 06 2018
watermark Economic news

The decline of the stock market on Monday did not cause a significant impact on the American economy that currently reaps the benefits of hiring and spending. However, the plunge could possibly shake the consumer sentiment, which increased on the back of November 2016 election.


According to economists, the growth impact depends on the market performance, whether it will continue to weaken or failed to conduct rebound and beat the strong performance in 2017. The S&P 500 grew by 19 percent against the expected downturn of 4.1 percent yesterday during the close of New York session.

The weakening on Monday wiped out the gains for this year. The weekly Bloomberg Consumer Comfort Index, the University of Michigan's monthly survey and the consumer confidence index indicates some correlation with the US stock market over a certain period of time. Based on its most recent reading, the Bloomberg gauge attained a record-high since the beginning of 2001, while the Michigan index nearly reached its 13-year high.


The gross domestic product (GDP) rose to 2.6 percent at an annual rate during the last three months of the 2017 and the consumer expenditure had increased at its fastest pace in more than a year. The figures from the Labor Department were released last week and showed that companies hired more workers versus the expected numbers in January, while the average hourly earnings had its highest increase since 2009.


The Institute for Supply Management indexes for January indicates that manufacturers and service providers had the largest gains of expansion. Moreover, there is a warning that saving rate will reduce to a 12-year low in December due to lavish spending by consumers during the holiday season, with the possible lower finances to lift spending in the following months.



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Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.