Why do people say the economy is great because the DOW is at an all time high...?

Question

the DOW is thirty stocks. Does that make our economy strong?

Answer 1

probably because they haven't ever taken an economics class, and Bush says so.

about as bad as the people who think unemployment is a good indicator when it doesn't count the amount of folks who's benefits have run out, just the new claims being filed.

or the people who think Bush has created milions of new jobs, when he lost millions of them to begin with. I keep hearing about all these new jobs, but all isee are palnts closing, and the people getting new jobs making only half of what they were.


or people who think an increasing GDP with a devalued dollar is good.


its all speculation, like poker, and Bush is the biggest bluffer on the table.

Answer 2

Bush praises the performance of the Dow, it has broken its all time high, he is proud of 12 record closings during his entire 6 years in office that is an average of 2 a year. I wonder what he would do if his performance equaled that of Clinton. Would he claim he deserved the noble prize in economics if he ruled over 277 record breaking days; this is what Clinton accomplished. Clinton averaged 34.63 record days a year. Clinton 277 Bush 12.

On January, 20 1993, the Dow Industrial Average was 3,241.95 on January 20, 2001 it was 10,587.24. The Dow increased by 7345.29 points, it grew 226.57% during the Clinton years. That is 28.32% per year.

The Dow, when Bush took office it was 10578.24 and today it is 12194.13. It has gone up by only 16% in 6 years. That is an average of 2.6% a year. the Dow needs to climb to 23,987.51 in the next 27 months if Bush is to have the same rate of growth as Clinton

So what party does better?

My source is yahoo finance i counted each record day for a paper after i was tired of the president using the dow as his proof the economy was stupendous. The Dow is not the best indicator of economic performance but it is the indicator the Republicans wants to use so I USED IT!!

Answer 3

The Dow simply measures investor confidence in the stocks, and therefore the performance, of thirty major companies. The stock market is not and will not be the definitive measure of economic success. I would point to either the rate of inflation, GDP, and prime interest rate as more accurate indicators of how the economy is doing. These would all suggest that the economy isn't the best of all time but isn't the worst of all time either.

Answer 4

The DOW has absolutely nothing to do with how the economy is doing. The DOW is a measurement of investor's confidence in a select group of stocks.

Answer 5

the dow has very little to do with economy,unless your going over the whole year gross and you own a business on it,otherwise the economy is driven by consumer spending,and fear of social decline(some people do make money off of a declining market.this spending by the consumer if in confident spending can strenghthen,no confidence will weaken it.If an average person is able to have confidence in employment,and taxes are not increased,then spending usaully has a tendency to go up,the dow jones only intimidates consumers on what the leading trend(spending etc)is and what past histories lead us to speculate from the data on the dow

Answer 6

You are right. The Dow is only 30 stocks. But there's more evidence to support the fact that it's a good economy than the Dow.

Over 7 million new jobs created since 2003.

Unemployment at a very low rate of 4.5%, which is a very low rate.

Increases in all the stock markets every year since 2003.

Strong increases to GDP since 2003.

Increased Tax revenue due to strong economy means the national deficits have been coming in lower than expected the last 2 years, despite the increased domestic and war spending.

Wages have been increasing for the poor since 2004 and for all income groups in 2005. 2006 was a good year too, but the detailed statistics are not out yet.

The inevitable comparison to the Clinton economy will come up. I'm not comparing the present economy to the last few years of Clinton's term. There were definite losses in 2001 and 2002. However the economy has been doing well since then.

qncyguy21 is spreading a common misunderstanding. The unemployment rate is NOT based on how many people are receiving unemployment benefits. It is calculated based on national surveys of households. Go the the Bureau of Labor Statistics site and look it up for your self at www.bls.gov

He also is incorrect about Bush not creating jobs. 131,785,000 people were working at the end of 2000 in non-farm labor, just before Bush took over. 136,018,000 were working as of November 2006. That's a gain of 4,233,000 jobs since Bush took over. And that's AFTER twin blows we took of the dot.com bubble bursting and 9/11. Clinton had no such difficulties, as he inherited a rebounding economy and then had the good luck to be around for the dot.com bubble.

Yes, you read about company A laying off 1,000. It makes a nice headline. But you don't see about companies B-Z hiring 1,500 in that same time period.

The GDP is not measured with devalued dollars, but with inflation adjusted for. So when we gain X percent, we actually gain it. Read it for yourself at the link I provide below. They clearly state that "Real estimates are in chained (2000) dollars.

Answer 7

The DOW is an indication that economy is great but it encompasses the increase for people to invest due to a perceived bright future.

Answer 8

The DOW is an economic measure. When the market is up, business are doing good. For business to be doing good, they have to be moving product to consumers or other businesses. This means that consumers are having money to spend and this is an indicator of the economy. It is not used along. It is normally paired up with the unemployment rate or the real estate market.

Answer 9

No. the phrase "what is good for Wall Street is not good for Main Street" was coined for a reason.

Answer 10

no. the economy is great compared to what nixon left ford and ford left carter. but that ain't hard to beat.