The news has been horrific this summer in more ways than it is possible to recount. So it is time to focus on some good news, at least in the financial world.
Despite the initial fear sparked by Britain’s unexpected vote to leave the European Union, so far there has not been a huge spillover into the rest of the world. Yes, Brexit has created “a wave of uncertainty amid already fragile business and consumer confidence,” according to the International Monetary Fund (IMF), but so far it appears that the economy in the UK will suffer but the rest of Europe and the world will hold up. The IMF cut its forecasts for global economic growth to 3.1 percent this year and 3.4 percent next. That doesn’t sound too bad, considering that the world was bracing for a much larger negative impact.
Meanwhile, here in the United States, the economy continues to grind ahead as we begin the eighth year of the recovery since the Great Recession. Many lament that growth has not picked up more, but when compared with other developed economies such as the European Union, Japan and the UK (even before the Brexit vote), the United States looks pretty good. Growth should be about 2.2 percent this year, which certainly is not blistering but is strong enough to spur gains in the labor market.
Although job creation has not been as strong this year as in the previous two, that was mostly expected. The more positive news is that layoffs are declining, the broadest measure of unemployment is falling, and wage growth is slowly strengthening. Employees are feeling confident enough about the market to quit voluntarily — in fact, U.S. workers are the happiest they have been in a decade, according to a report from The Conference Board.
It is also worth noting that some of the global uncertainty is actually helping consumers. The jitters have pushed down — and kept down — overall interest rates, which is very good news for borrowers, if not savers. Mortgage rates remain at rock bottom, which has been a boon to first-time homebuyers, who are finally able to enter the housing market. Although home prices are rising nationally, in many parts of the country it is still cheaper to own than rent.
The recovery in home prices has helped more homeowners keep their homes out of foreclosure. According to RealtyTrac, U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2016 were down 20 percent from the previous six months and down 11 percent from the first six months of 2015. And the trend showed strength as the quarter came to a close: June foreclosure filings fell 19 percent from a year ago to the lowest level since July 2006.
And then there’s the stock market, which has come roaring back since dropping into a correction in February. Those who stuck to their asset allocation plans and did not muck around too much should be doing just fine despite the 2016 market gyrations. In fact, the Dow Jones industrial average and the S&P 500 have recently touched all-time highs, as investors believe that global uncertainty will encourage the European Central Bank, the Bank of England and the Bank of Japan to keep stimulating their local economies. It should also keep the Federal Reserve on the sidelines at least until September and maybe even December.
None of this is to say that everything is perfect or that the situation can’t change, but it is just a bit of summer sunshine amid the gloomier headlines.
Jill Schlesinger, a certified financial planner, is a CBS News business analyst. She welcomes emailed comments and questions.