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Friday, Apr 18, 2014
Commentary

It was — surprise — a very good year


Published:

The Dow Jones industrial average finished the year at an all-time record high, even adjusting for inflation.

The Dow is the most widely watched measure of American economic vitality. It has also become something of a boogeyman in the debate over income inequality — its rise a supposed symbol of the rich getting richer while everyone else struggles.

Keep in mind, though, that while stock ownership has declined since the start of the great recession, about half of Americans do have investments in the market.

With its strong performance in 2013, the nation’s leading market indicator overcame demons that have bedeviled business and consumer confidence in recent times.

Consider the challenges of the past 14 years, since the Dow hit the previous inflation-adjusted high on Jan. 14, 2000: the bursting of the Internet bubble in 2000, the Sept. 11 terrorist attacks, the housing bust, a near-meltdown of the economy in 2008-09, the great recession and lingering hangover, high unemployment and year after year of political gridlock in Washington.

Yet the Dow chalked up a 26 percent gain in 2013.

The nation’s gross domestic product, the broadest measure of economic growth, slogged along at 2 percent in 2012, but has risen each quarter in 2013 and hit an impressive 4.1 percent in the third quarter. Inflation has purred.

Corporate profits have soared to $1.9 trillion as of the third quarter, almost triple the profits booked the same quarter five years ago.

Housing starts and existing home sales have rebounded in most of the country.

The nation’s unemployment rate stood at 7.0 percent in November, down from 7.8 percent in November 2012 and the lowest since November 2008.

Hundreds of millions of people have been lifted from poverty. Yes, international competition has put more pressure on the U.S. job market and U.S. wages, which remain flat.

No one’s saying 2014 won’t require nerves of steel. But after so many challenges, we can look at 2013 as a very good year.

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