Jeremy Hobson: Now, We don't usually spend too much time on the ups and downs of the stock market, but consider this: The Dow is now up almost 100 percent from the low it reached in March 2009. It is at the highest point since before the financial crisis, and it's down just 9 percent from the highest point it ever reached back in 2007.
And the stock market rally is where we'll start now with Gus Faucher. He's senior macro-economist with PNC Financial, and he's with us live from Pittsburgh.
Gus Faucher: Good Morning.
Hobson: Well Gus, what's behind this? What does it tell you that the stock market has rebounded so much?
Faucher: Well if we look at a number of economic indicators we're back to where we were before the recession. GDP is above where it was prior to the recession. Corporate profits are above where they were. So it makes sense given the recovery that we've seen in the economy that the stock market would recover to its previous peak as well.
Hobson: But there are some things that have not recovered, and I'm thinking specifically about the housing market. Isn't that a problem if the housing market hasn't recovered and the stock market is showing us something different?
Faucher: I think the housing market is one piece of the economy; it's a big piece of course. And it is still very, very low compared to where we were a couple of years ago. But on the other hand if we look at things like consumer spending, if we look at business investment, those are looking stronger and so those have made up for the weakness that we're seeing right now in the housing market.
Hobson: And of course we just saw some strength in the job market with the Labor Department's report on Friday. Does that report look as good to you this morning as it did to everyone a couple of days ago?
Faucher: I think so. Payroll employment, that was up significantly. We've had more than 200,000 job gains average over the past three months. The unemployment rate has come down, and it's come down for the right reason: that we have more jobs. And that's actually bringing more people into the labor force over the past few months. So that's a sign that people are encouraged about the way the job market is heading.
Temporary services, which is an indicator of future hiring, was up. So if we look at the details of the report generally they look quite good and they're positive for near-term grown.
Hobson: Gus Faucher, senior macroeconomist with PNC Financial, thanks so much.
Faucher: Thank you.