I was taken aback to see the dour assessment of 2017 when news outlets did their usual year-in-review reports. If you believe the articles, last year was a decidedly bad one. What’s more, the outlook for 2018 came off as bleak
I was taken aback because, well, 2017 seemed a particularly good year. And 2018? Appears plenty promising.
Oh, sure, it was cringe-inducing to read year-end recaps that included the outrageously scandalous acts of the Matt Lauers and Bill O’Reillys of the world. And it is downright terrifying to think that a nuclear missile from North Korea could land on a real target.
But what was so mystifying about the year-in-review articles was how lightly they skipped over the economy. It was the big feel-good story of 2017, yet it was dismissed as an aberration, with a kind of attitude that all but declared, “yeah, the economy and stock markets might have done OK, but the world is going to hell.”
The economy should be accorded more respect. After all, we spend most of our early years – not to mention enough cash to fill a Blue Bird school bus – to educate ourselves so we can enter the economy and test our potential. It has been soul deadening for too many years for young people to do all that work and graduate into a job market almost as lifeless as Harvey Weinstein’s reputation.
The rising economy we saw last year typically means more jobs, new kinds of jobs, higher wages and a buoyant stock market – where many people save for a down payment, send their kids to college and bankroll their retirement. The economy is where personal dreams are fulfilled. There’s a reason why the phrase, “it’s the economy, stupid,” is so often repeated.
As far as the economy is concerned, 2017 was a very good year. Unemployment, which ended 2016 at 4.7 percent nationally, went down to 4.1 percent by November. That’s better than what economists predicted at the beginning of last year, according to the Wall Street Journal. Likewise, jobs gains, the inflation rate and other markers were good and did better than expectations.
The California and Los Angeles economies in 2017 did well, too, though a bit less than the nation’s. The unemployment rate in November was 4.5 percent in Los Angeles County and 4.6 percent statewide.
And just look at the stock markets. The Dow Jones industrial average went up 25 percent in 2017 – passing 1,000 point milestones as if they were mile markers on a road trip. The Dow hit a record high 71 times, which it had never done before. The Nasdaq did even better, going up 28 percent and, well, we could go on, but the headline on one year-end article said it all: “The Year Everything Went Up.”
Local stocks did well, too, albeit less so. Our Valley 50 stock index – a mashup of biggest public companies in our area – went up about 11 percent for the year. Our index was weighed down by the many problems of our largest company, Walt Disney Co. Its stock managed only a meager gain of 2 percent. But we did have several standouts including Avery Dennison Corp., whose stock went up 64 percent, and Teledyne Technologies, up 47 percent. (For more on local stocks, see the story on page 4.)
Amgen Inc., the biggest company in the area after Disney, saw its stock go up 15 percent. That may seem a bit underwhelming considering the overall gains in the market, but it speaks to the industry Amgen is in. You know, it just struck me that I shouldn’t be apologizing for a 15 percent gain. If the stock did that every year, you’d double your money in five years and triple it in eight. Amgen did just fine.
The markets’ rise is important not just for the wealth it created for companies and individuals in 2017. It is also noteworthy because stocks are forward looking. They traditionally are considered augurs of the future economy. In other words, the markets in 2017 told us that 2018 and 2019 appear promising. It’s a more hopeful sign than we’ve seen in years.
To be sure, California has some obstacles, economically. There are several new laws that make it more difficult for employers to hire people. (See the op-ed on the opposite page.) And the through-the-roof housing prices make it increasingly difficult to attract outside talent and keep residents here, among other challenges.
Still, the rising tide of the economy lifts all boats, and – fingers crossed – the new year will be even better than the last.
Charles Crumpley is editor and publisher of the Business Journal. He can be reached at firstname.lastname@example.org.