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State Of The Economy Part 2: Bull Market To Set Record As Economic Strength Hits 6-Month High


  • America's Goldilocks economic growth continues, with the latest jobs report pointing to continued strength in the labor market.
  • While wage growth remains muted, adjusting for a large number of retiring workers, it's actually far more impressive than it seems.
  • This is helping drive strong consumer demand which bodes well for continued strong economic growth in 2018.
  • In fact, looking at 19 leading economic indicators shows that America's economy is at its strongest point since February. That bodes well for the bull market which becomes the longest in US history on August 23rd.
  • Recession risk remains very low, and thus I see no strong need for investors to start getting more defensive at this time.

(Source: imgflip)

Note that due to reader requests I've decided to break up my weekly portfolio updates into three parts: commentary, economic update, portfolio summary, stats, & watch lists. This is to avoid excessively long articles and maximize the utility to my readers.

This week's commentary explains how to build a high-yield retirement portfolio that can hopefully ensure that your golden years are actually golden.


Note that I offer these weekly economic updates purely because I believe that investors should always take a holistic "big picture view" of the world. That means knowing the state of the economy and what the short- and medium-term recession risks likely are. However, as I'll explain later in this article (recession risk section), macroeconomic analysis has historically proven to be a terrible tool for stock market timing (SPY) (DIA) (QQQ). Which is why I only offer these analyses so that readers will likely be able to see a recession coming about a year or so away.

That will hopefully allow you the time to prepare yourself emotionally and financially for the downturn. It will also hopefully allow you to adjust your portfolio's capital allocation to a more defensive stance, such as with defensive sectors, or potentially greater allocation to bonds (for lower risk tolerant investors).

The Current State Of The Economy: Strongest It's Been In Six Months

Since about 70% of the US economy is driven by consumer spending, one of the most important things macro nerds like me look at is the monthly jobs report. The most recent report from the Bureau of Labor Statistics, or BLS, indicates that America's labor market remains very strong.

  • Net jobs created in June: +157K (economist expectation 194K)
  • April & May revisions: +59K
  • 3-month average: +224K
  • 12-month average: +203K
  • Unemployment rate (U3): 3.9% (down from 4.0%)

This article was written by

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Maximize your income with the world’s highest-quality dividend investments

Adam Galas is a co-founder of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 5,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

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I'm a proud Army veteran and have seven years of experience as an analyst/investment writer for Dividend Kings, iREIT, The Intelligent Dividend Investor, The Motley Fool, Simply Safe Dividends, Seeking Alpha, and the Adam Mesh Trading Group. I'm proud to be one of the founders of The Dividend Kings, joining forces with Brad Thomas, Chuck Carnevale, and other leading income writers to offer the best premium service on Seeking Alpha's Market Place.

My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives.

With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and safe and dependable income streams in all economic and market conditions.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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