America's record bull market left the U.S. economy behind

The current bull market is now the second-longest in history, yet the U.S. economy and American workers have lagged far behind

Tourists pose for photographs with a landmark statue of a bull in New York REUTERS/Lucas Jackson

Tourists pose for photographs with a landmark statue of a bull in New York REUTERS/Lucas Jackson

It seems congratulations are in order. The bull market in U.S. stocks that got under way in March 2009, amidst the darkest days of the Great Recession, has accomplished an astonishing feat—it’s now the second-longest bull run in U.S. history.

As Bloomberg reports, the longest bull market lasted 3,452 days from October 1990 to March 2000. The current bull market, at 2,607 days, now matches the market boom that ran from 1949 to 1956 and will surpass it this week (barring calamity).

There’s only one problem. The stock market left the U.S. economy back at the starting gate.

There’s a reason this has been called the most-hated bull market ever. Here’s how U.S. economic growth, employment and full-time earnings—three broad measures of the health of the real economy—fared during the two bull markets starting in 1990 and 2009.

By all three measures the U.S. economy and American workers saw much stronger gains during the bull market of the 1990s than over the course of the current market ascent.

It’s a further reminder that this era of ultra-easy monetary policy, with near-zero interest rates and quantitative easing, has delivered far more benefits to the financial sector than it has done to Main Street. The driving force behind the rally has been stock buy backs, in which corporations borrow cheap debt and use it to buy back their shares, thereby boosting their share prices.

Will the bull market keep going? That’s impossible to say. It looked like the market’s number was up in the first part of the year when stocks fell sharply through January and February, but since then the S&P 500 has rebounded by 13 per cent. Another test will surely come as the U.S. Federal Reserve prepares to raise interest rates again later this year.

What is certain is that America’s real economy still has a lot of catching up to do.



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