The Relationship of The Stock Market And Our Economy

Thus far, 2022 has been a bumpy ride for the stock market and economy. Investing in the market is more challenging when you have high inflation, rising interest rates, and supply constraints caused by the Ukraine conflict and lockdowns in China.

It’s hard to succeed in the market when you’re feeling the higher prices at the grocery stores, gas stations, and others. The Fed is resetting its monetary policy to a contractionary one to tighten the economy.

They are raising their interest rates (i.e., fed funds) to cool down the highest inflation in 40 years. Some investors fear the Fed may push us into a recession, which is not suitable for investing.

The Stock Market And Economy: Latest 2022 Statistics

The unemployment rate in April 2022 was 3.6% remains low. It remains low and that’s excellent news.

Real GDP in the first three months of 2022 contracted by 1.4% annually, down significantly from the 6.9% recorded in the 4Q 2021.

Inflation in April measured by CPI was 8.3%, slightly down from the 8.5% reported in the previous month and still near the highest levels in 40 years.

The personal savings rate was 6.2% for March 2022, continuing its decline in recent months, likely impacted by consumers paying higher prices.

The US Index of Consumer Sentiment provided by the University of Michigan dropped to 59.1 in May 2022, down from 65.2 in April 2022.

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