“Once you replace negative thoughts with positive ones, you’ll start having positive results.” – Willie Nelson
If anyone knows how to stay high on life it’s Willie Nelson.
The Spirit of Hawaii
The third of seven principles of Huna, a Hawaiian form of metaphysics that emphasizes practical living in harmony with three levels of consciousness, is makia. Makia means “energy flows where attention goes.”
Think about your own life. Have you ever woken up on the wrong side of the bed, and then nothing went right all day. Traffic was bad. You spilled your coffee. Your computer wouldn’t work, as if you needed another reason to crawl back into bed, and your day continued to go downhill.
Occurrences in and of themselves are not bad. Occurrences are neutral. We are the ones that associate positive and negative qualities to them. Dr. Stephen Covey used to say that in between a stimulus and a response is a space. In that space, we make a decision. We choose to respond positively or negatively to the stimuli we receive. Our response, however, has consequences.
With that said, so much negative economic news has been released over the last couple of weeks opening the paper is like a prelude to The Dr. Phil Show. We can understand why people want to bury their heads in the sand.
Using our infinite optimism, we searched for ten positive economic indicators to spread positivity.
1) Decreased Unemployment
People are working.
Though the official unemployment rate didn’t drop as much as expected, it did drop to 6.6% in January 2014 from 6.7% in December 2013. This is the lowest since October 2008.
We often dismiss the official unemployment rate because it doesn’t take into account “discouraged workers”, or those who have stopped looking for a job because they eventually gave up.
January 2014’s U6 unemployment rate, which factors in those “discouraged workers”, dropped to 12.7% from 13.1% in December 2013. This 0.4% improvement is the best U6 figure reported in over 12 months.
2) Increased Labor Force Participation
The January 2014 labor force participation rate increased to 63% after reaching a 35 year low of 62.8% in December 2013. January 2014’s rate was equivalent to November 2013’s rate.
While the net rate is flat, we’re at least fighting a month-to-month downward trend. Many will say it’s too soon to celebrate, but we disagree and only in part because we’re always looking for a party.
3) Private Sector Expansion
Most of January 2014’s unemployment growth was in the private sector, including professional and business (up 36,000 jobs), construction (up 48,000 jobs, offsetting a 22,000 loss in December 2013) and manufacturing jobs (up 21,000 jobs).
The significance and breadth of these job numbers shouldn’t be understated. While they are off 2009 highs, we again avoided a trend of month-to-month declines. An expanded private sector means less drain on the economy, less pressure on government programs and increased tax revenue.
Don’t forget Uncle Sam’s finances are as messy as snow at the Sochi Olympics.
4) Increased Wages
Average hourly wages were up $0.05 or 0.2% to $24.21 in January 2014. Year-over-year average hourly wages were up $0.46 or 1.9%. This beats the 2013 inflation rate of 1.5%.
While this is only a couple of extra beers a week, it’s still a couple of more beers a week.
5) The Stock Market is Up
The S&P 500 is up 21.12% year-over-year, the DOW Industrial Average is up 15.37% year-over-year and the tech-heavy NASDAQ is up 33.86% year-over-year. This is good news for investors even if your investments are only in a company-sponsored retirement plan or if you stopped contributing to an existing plan.
While current data suggest that only about 52% of Americans own stocks, this is at least good news for those 52%. Keep in mind that between 2008 and 2012 about $500 billion was pulled out of U.S. stock mutual funds and $1 trillion put into bond funds. This suggests there are more stock investors on the sidelines.
6) Increased Household Net Worth
The latest data suggest that household net worth increased 2.6% in Q3’13. This, too, beats 2013’s rate of inflation of 1.5%. Again, that’s not stellar, but it is positive and that’s what we’re focuses on today.
7) Low Inflation and Interest Rates
The 2013 inflation rate was 1.5%. January 2014’s inflation rate will be released tomorrow, February 20th.
The rates for a 48 month car loan and 30 year fixed mortgage remain historically low.
Banks are, finally, lending again. Lending standards heading into 2008 were too low and then banks responded by making lending too difficult. Goldilock’s never had it so rough.
All of this bodes well for the American consumer. While we don’t advocate taking on more debt than is fiscally prudent and we don’t want deflation, the economy needs money to flow freely. Banks lending at low rates with low inflation will provide much needed liquidity.
8) Cheaper and Improved Technology
Not only is technology getting better, it’s getting cheaper. A MacBook Pro can cost as little as $1,500 today while an Apple II 30 years ago cost $7,770 in today’s dollars.
The first commercial cellular phone was released by Motorola in 1983 and cost $8,589 in today’s dollars.
Technology today is better, cheaper and making our lives better, more efficient and more connected. I wrote this article on an iPad Air in a Denver coffee shop.
9) Increased U.S. Oil and Gas Production
Oil & Gas Production
Oil and gas production in the U.S. has been steadily increasing over the last five years. This is good for U.S. consumers, though it upsets Al Gore. While gas has increased 2.75% in the last couple of weeks, it’s down 9.5% year over year.
Now the U.S. is poised to become the leading oil and natural gas producer within the next couple of years. This is good for jobs.
9.8 million people currently work in oil and gas and receive a total of $200 billion in direct compensation, while another $300 billion is paid to workers supported by oil and gas. These numbers will increase with increased production. That will benefit current direct and indirect workers and increase the number of positions.
10) Home Foreclosures Dropped
The rate of home foreclosures decreased over 30% year-over-year and is currently at a six year low. This has helped pull the housing market out of its five year slump and boost the household net worth we mentioned earlier.
While many of these improvements are modest, they are positive and we are focusing on the positive. Good things are happening and, as we’ve been saying for a while, it will be a bit bumpy road until the U.S. makes a full recovery. It will take time and, quite honestly, a slow recovery beats another unstable bubble.
Regardless of how bumpy the road is, as the classic Willie Nelson song goes, we will be “On the Road Again” and that alone is positive.