With Wall Street in bad shape, the state of Main Street, or the overall economy, remains strong. Main Street refers to individuals, investors, and just about any normal citizen of the US. Fortunately, and showing how strong our economy is, Main Street-ers are busy and happy and continuing to shop and buy.
Stock markets worldwide tumbled this year. One may think that means that economies crumbled with them, and that people tightened their belts. However, consumers have remained confident.
“It’s almost like a stock market is a different animal,” says Earl Stewart, who owns a Toyota dealership in North Palm Beach, Florida, far from the roiling markets in New York, Frankfurt and Shanghai. “We’re not seeing any of the negativity.”
Why is the state of Main Street so strong?
Factors that affect the whole economy might not always affect consumers in the same way. For example, low oil prices are hurting the shares of big energy companies and the big banks that lend to them. But, gas is cheaper, leaving consumers with more money to spend. Plus, the job market is improving, and home values are rising.
“More people care still care about the value of their homes than the value of their stocks,” says Diane Swonk, an independent economist.
How long will this stark contrast between Wall Street and Main Street last? Not forever, according to economists. Headlines about falling stocks could scare consumers from spending more, and falling profits could lead to job cuts.
“The first half of an economic cycle is when markets tend to best, and that’s when Wall Street gains on Main Street,” Bob Doll, chief equity strategist at Nuveen Asset Management. says. “The second half is when labor gets an increasing share of GDP, and that’s just starting.”
Time will tell what the future will bring to the state of Main Street. For now, consumers are confident and the economy is healthy. A large part of this is because home values are doing well. Many Americans’ homes are their biggest investments, and current home values are strong, making them more confident. Join these confident Americans and invest in a home of your own. Contact RE/MAX Paradise today!