What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should do.
The cold, hard facts
Reuters is reporting that the number of Americans filing new jobless claims hit a three-and-a-half-year low last week. Reuters is also reporting that GDP growth for the third quarter has been revised down.
Some context
The Labor Department said today that initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 364,000, the lowest level since April 2008. Along with this heartening news comes the disheartening news that GDP growth for the third quarter, which was previously reported to be 2%, has been revised down by the Commerce Department to 1.8% due to a sharp drop in health-care spending.
What might be next, and what you should do
So where exactly does all this leave us? For starters, even with the downward revision of GDP growth, at least it's only 0.2%. Compared to what we've seen over the last few years, 1.8% total growth is still pretty good. We'll take it.
And this is the second positive jobs report of late, indicating, hopefully, the start of a trend in that direction. Unemployment (not counting the chronically unemployed, of course) currently stands at 8.6%, down from that seemingly unyielding 9%.
The country also suffered a historic sovereign debt downgrade over the summer, yet investors still flocked to U.S. Treasuries for safe haven. And while the markets have been up and down all year, the Dow Jones (INDEX: ^DJI), the S&P 500 (INDEX: ^GSPC), and the Nasdaq (INDEX: ^IXIC) are all operating at or near pre-recession levels.
Of course there's still the slightly terrifying eurozone crisis, and the U.S. economy could really use that extension of unemployment benefits and the payroll tax cut. All things considered, though, I think we're netting on the positive side of things. Our Foolish advice in times of potential financial turmoil is actually pretty simple: Don't have money in the market you're going to need over the next three to five years, keep an eye on the fundamentals of the companies you're invested in, and stay calm. Like us, you're in it for the long term. Happy holidays.
Keep track of what's happening with the market indexes mentioned here by adding them to My Watchlist, a free service of The Motley Fool that lets you easily keep up with everything on your investing radar.
- Add Nasdaq Composite to My Watchlist.
- Add Dow Jones Industrial to My Watchlist.
- Add S&P 500 to My Watchlist.
