Most of the factors noted above are short-term drags rather than long-term game-changers, and even the short-term drags will have longer-term positive effects. Drilling declines, for example, affect employment quickly. It takes longer for lower gas prices to prompt extra spending by consumers, usually six to 12 months. Lower exports hit employment quickly; faster European growth helps the U.S. economy over the longer term.
We’re feeling short-term pain right now, but the expectation of longer-term gain is very real. I could be wrong, of course. If we get another couple months' employment growth like we just had, I will be revising my conclusions. At this point, though, the weight of the data suggests this is just a bump in the road -- albeit a large one -- rather than a car-eating pothole.
Slow down, drive carefully, and carry on.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by Brad McMillan.