Even though the horror of the Connecticut school shootings leaves us heartbroken and the looming fiscal cliff economic crisis taints our year-end plans, my gift to you this holiday season is optimism. Rather than dwell on the issues which drag us down, I prefer to take a more long-term view and offer the opinion that this year will be fondly remembered as the year things turned around for our economy. In fact, we have much to be thankful for this holiday season, and I'm predicting a prosperous 2013.
Many economic indicators suggest a fairly robust economy, believe it or not. We have spent the past year and a half listening to the presidential candidates tell us how bad everything is, but statistics say otherwise. Stock markets here and around the world are up, some dramatically. Gold has leveled off, oil has dropped and housing is coming back. The downside is jobs. While the overall unemployment rate is dropping, there are still a lot of people out of work. Talks of the "man-made" fiscal cliff have also dampened enthusiasm. Any other year, we would be looking at the economic indicators in the United States and seeing a rosy future.
Stock markets around the world are on the rise. Since this time last year, the Dow Jones Industrial average is up more than 12 percent, the S&P 500 is up nearly 20 percent and the Nasdaq is up more than 20 percent. Such phenomenal gains normally have us dancing in the streets during the holidays. Go overseas and see even more staggering news. Several markets in Asia are up more than 20 percent, and Germany's stock market is up more than 35 percent. Companies have built up a lot of cash which they can soon use to buy equipment or create jobs if the cliff is averted and confidence continues to rise.
Gold prices are up a mere 4 percent this year, after seeing dramatic gains annually since 2009. As the red-hot flight to gold over the past few years appears to have cooled, it looks to me as though fewer people are squirreling away their investment dollars in the relative safety of precious metals in favor of greater potential in the stock market.
Oil prices are off for the year after a roller-coaster ride which saw a mid-summer spike of more than $110 per barrel. Low oil prices and hopefully accompanying fuel costs directly affect transportation and construction expenses. Lower shipping costs for everything from asphalt to iPhones have a positive impact on our economy, either lowering consumer prices or increasing corporate profits.
Construction and housing become the main benefactor of lower and stable fuel costs. New home construction has surged in recent months, and confidence among home builders this month reached its highest level in more than six and a half years. A healthy housing market sends powerful ripples through our economy. Valuable construction jobs are added, and new homes require new refrigerators, air conditioners and dishwashers. Tradesmen get hired to install such equipment and so on and so on.
Positive signs are everywhere from my perspective, and I'm not alone. JPMorgan Chase CEO Jamie Dimon recently said we could have "booming economy" in a couple months if the fiscal cliff is averted. Warren Buffett remains high on our economy, recently suggesting that corporate America will continue to invest in our country whether or not taxes are increased. His Berkshire Hathaway has also increased its holdings in the residential real estate brokerage industry.
While our economy might not see double digit growth in 2013 and the jobless rate is still troublesome -- and I may be overly optimistic -- 2012 may very well be seen as the year it all turned around.
On a more somber note, the Connecticut school shootings, while grisly and heinous, have given all of us a reason to stop and think during this holiday season. If anything positive can come from such an event, then let it be that we appreciate our friends, our families and our opportunities a little more than we did just a few days ago.
Americans have much to be thankful for this holiday season. We live in the greatest country in the world, our economy appears to be back on track and despite efforts by some to knock us down, we remain a strong and united people. I wish everyone a joyous holiday season -- and yes, a very prosperous 2013.
Follow Wm. Scott Page on Twitter: www.twitter.com/ScottPageCEO