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Spring 2015
economic well-being of the average consumer.
One reason for the positive effect is that 55
percent of consumers own stocks and mutual
funds. "A rising stock market increases consumer
wealth," explains Schenk. American consumers
are the major force in our $17.7 trillion economy,
representing 70 percent of all spending, he adds.
Bottom line: Consumers who feel richer spend
more. That encourages businesses to hire more
people and pay higher wages, which encourages
more consumer spending and spins up a virtuous
circle of prosperity.
When small employers add employees it is
especially positive, because small businesses
account for about half of all private-sector jobs
and two-thirds of newly created jobs, Schenk says.
"A thriving small business sector is an essential
component of a thriving and improving job market,"
he says.
Jobs and stocks are just two of many economic
indicators. It can be tough to know which ones to
pay attention to. Schenk points to home prices as
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The S&P/Case-Shiller Home Price Indices have
now regained about all the ground lost in the
last recession, and that's good news. Other key
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of which are also positive at the moment.
