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When is bad news good news? Take a look at last week.
Major stock indices in the United States hit all-time highs on Friday, despite a lackluster employment report and a surge in COVID-19 cases, reported Lewis Krauskopf of Reuters. During the week, we saw:
In light of this news, why were markets bullish?
Signs the economic recovery is faltering create a strong incentive for Congress to pass a stimulus bill in 2020 instead of delaying until next year, reported Barron’s. An analyst cited by the publication said, “Under the circumstances, it is hard to be a seller of any risk asset as long as there is a good possibility of getting a deal done…”
During the next few months, markets may be quite volatile. Hang tight and keep your eyes on your long-term financial goals.
WHAT DOES IT TAKE TO BE MIDDLE CLASS IN THE UNITED STATES? The not-so-simple answer is it depends on how you define ‘middle class.’
In a 2018 report, Pew Research Center defined middle class as middle income. “In our analysis, “middle-income” Americans are adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. In 2016, the national middle-income range was about $45,200 to $135,600 annually for a household of three.”
In November, USA Today shared an analysis by Michael Sauter that adopted a different standard. It considered U.S. family income from “…the lower boundary of the second quintile and the upper boundary of the fourth quintile [of the U.S. Census Bureau’s 2018 American Community Survey], representing in total 60 percent of American families…The analysis made some cost-of-living adjustments and found, “…the range of income that could be considered middle class in a given state.”
In the states with the highest median (the number in the middle of the list) family incomes, middle-class income ranged from:
States in the middle of the pack for median family income had these middle-class income ranges:
In the states with the lowest median family incomes, the middle-class income range was:
It’s interesting to note the 2020 federal poverty threshold set by the U.S. Department of Health and Human Services, which determines eligibility for various federal programs, was $26,200 for a family of four.
Not everyone uses income to define the middle class. Richard V. Reeves, Katherine Guyot, and Eleanor Krause of Brookings explored the question, asking:
“Is middle-class status a reflection of economic resources, especially income or wealth? Or is it denoted more clearly by occupational status and/or educational attainment? Is it, rather, a state of mind, a set of aspirations, or revealed through behavior, cultural tastes, or by certain kinds of consumption? Is it a question of how we define ourselves?”
What do you think?
Weekly Focus – Think About It
“Each day is always breaking out anew Aspirations swirling round what you do”
--Richard L. Ratliff, Author
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https://www.barrons.com/articles/stocks-hit-new-highs-as-reopening-euphoria-rages-on-can-it-last-51607130695?mod=hp_DAY_Theme_1_1 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-07-20_Barrons-Stocks_Hit_New_Highs_as_Reopening_Euphoria_Rages_On-Can_It_Last-Footnote_3.pdf)
https://www.wsj.com/articles/as-covid-19-patients-stretch-hospitals-some-doctors-ration-intensive-care-11607022592 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/12-07-20_WSJ-Covid-19_Hospitalizations_Single-Day_Deaths_Hit_New_US_Highs-Footnote_7.pdf)