The stock market is a forward indicator of economic health. For that reason, today’s arrival of a bear market, as the Dow drops 20% below its all-time high last fall, is a bleak look at the future. Falling housing prices, financial sector weakness, and especially rising oil prices are taking their toll, even though the country still isn’t in recession.
Is the housing market collapse reaching bottom? No, according to the National Association of Realtors. Prices continue to fall, but in the last month for the nation, total inventory measured in months fell, and sales activity rose.
Michael Marks, writing in Forbes, has some optimistic findings on middle class income. In a late 2007 study, the Treasury Department, after reviewing the returns of 100,000 filers over 1996 to 2005, found that the same individuals from the middle quintile saw their incomes increase by 16.6% in constant 2005 dollars over the period.
As Marks said, “Wow.”