Making Sense Of The Latest Economic Data - InvestingChannel

Making Sense Of The Latest Economic Data

Proprietary Data Insights

Top ETF Searches This Month

#1SPDR S&P 500 ETF1,458,927
#2Invesco QQQ Series Trust532,224
#3ProShares UltraPro Short QQQ140,769
#4ProShares Ultra VIX Short-Term Futures126,590
#5ProShares UltraPro QQQ125,802

Before we try to make sense of the latest economic data, a quick primer on ETFs, which kicks off a little series The Juice will run this month on exchange-traded funds

What Is An ETF?

It’s basically a mutual fund. The big difference that matters for our purposes: ETFs trade on stock exchanges just like individual stocks. Hence the name, exchange-traded fund. So you can buy and sell them at all hours unlike mutual funds, where orders finalize once per day at the same closing price. 

We’ll up the complexity level as we go, but today we start simple around the question… 

What Should I Buy If I Start My Investing Career TODAY?

First, only you can definitively answer this question. The Juice is merely here to offer ideas.

With this in mind, if you’re new to investing or merely looking for a fresh start, consider starting your journey in index funds. That is, the top two ETFs investors searched for over the last thirty days, according to The Juice’s proprietary Trackstar database.  

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500 stocks and the Invesco QQQ Series Trust (QQQ), which mimics the returns of the biggest companies trading on the Nasdaq. 

Using the S&P 500 as our example, here’s why: 

Source: WSJ

Within a year of the 12 most recent bear markets, the S&P 500 has returned to positive territory nine times. And impressively, for a median post-bear market gain of 23.9%. 

The worse the bear market, the longer it takes stocks to recover. Of course, we have no idea how long the present bear market will last. 

For the record, the length of these bear markets ranges from a low of 33 days (2020) to a high of 630 (1973). The bear market that coincided with the housing crash of 2008 lasted 408 days. 

If you have time on your side – as in, you’re a long-term investor – it might not matter.  

One strategy is to put your free cash to work now. From there, you can invest in one or both of these index ETFs regularly (maybe once or twice a month). You’ll buy more shares when the price is low and fewer shares when it’s high. This is known as dollar-cost averaging

ETFs 101. We look forward to digging deeper later this month. 

Now, scroll with us for some fingernail on chalkboard type stuff – trying to make sense of the latest economic data.

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The Economy

Making Sense Of The Latest Economic Data

Key Takeaways:

  • At the individual level, sometimes economic data doesn’t make sense. 
  • The Juice considers reasons why. 
  • At day’s end, all you can do is worry about and insulate yourself as much as possible. 


Consider some of the latest economic data you see gracing the headlines: 

  • Personal income and personal disposable income both increased 0.5% in May. 
  • Spending on services increased $76.2 billion in May, while spending on goods decreased $43.5 billion. 
  • The personal savings rate was 5.4% in May, up from 5.2% in April, but down from 8.7% in December. 

Here’s the breakdown of total personal savings:


  • Credit card balances jumped 20% between March and April to $841 billion. 
  • Total household debt hit an all-time record of $15.84 trillion. 

We could keep going, but you get the point. 

The Problem With Economic Data 

Here’s the problem – or the problems – with widely reported economic data: 

  • It captures a moment in time. 
  • That moment in time varies depending on who is collecting and reporting the data. 
  • Different agencies and entities used different methods to collect, analyze, and report data. 
  • Sometimes the data you see doesn’t come from the government. It’s based on surveys, which often rely on self-reported data. 

And so on. 

Here’s what The Juice thinks might be true about the data we included here:

  • Consumers spent a lot of money on goods – things like food, clothing, and appliances – during the stay-at-home portion of the pandemic. 
  • As the opportunity to do things out of the house came back, they shifted some of that spending to services. Going out to eat, traveling, and such. 
  • As inflation took hold, goods became even less attractive, so the shift to spending on services intensified. People made choices with their money. Like always. 

A Tale Of Two Very Different Consumers

From there, how do you explain relatively healthy savings alongside increasing and record debt? 

Some consumers probably carry both, not wanting to part with cash (think cash security) to pay down debt. 

However, The Juice thinks it might be even more straightforward than that. 

There are households doing super well – maybe folks who actually could afford to buy a house in the last year. They have cash saved and little debt outside of that 30-year mortgage they just took on. Maybe they did so well on stocks and crypto they don’t have a mortgage or they made a healthy down payment. 

Then, there are households struggling. Living paycheck to paycheck. They blew through their pandemic stimulus. As their savings run dry, they turn to credit cards to cover necessities and, most definitely, discretionary spending. 

If and when the bubble bursts on the latter group – and The Juice thinks it will – the headlines will scream debt crisis. However, if you’re in the doing super well group, you’ll wonder what all the hysteria is about. 

The Bottom Line: Personal finance is personal. Now more than ever. 

You hear a lot about the haves and haves not. The rich getting richer. The poor getting poorer. We might be living through the thick of this phenomenon right now. How else do you explain seemingly contradictory data beyond methodological differences? 

You can’t. And you shouldn’t try to. At least not for a living. Leave that to us. 

Consider yourself lucky if you’re in a position to make the choice to part with savings to pay off debt. Or to, better yet, be debt-free to begin with. That’s a surefire way to get your house in order – resist taking on debt, particularly when it’s as expensive as it is now.

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