Signs of a Stock Market Collapse
The stock market is directly influenced by the economic status of our country, and you can see this correlation from the economy and stock market crash of 2008. Most people did not see this coming because they did not know the economic indicators. Economic indicators are statistical data that show trends in the economy.
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Employment
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The market's sensitivity to the nation's employment situation is very high. Employment and unemployment have great economic and political significance. This information is released by the Bureau of Labor Statistics, Department of Labor. The main focus is whether jobs are being created. If there are no new jobs, the economy will be stagnant. The more workers earn, the more they spend. This is what propels the economy. A bullish market is usually a sign of lively job growth.
Personal Income and Spending
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The personal spending of Americans directly impacts the economy. If there was no consumer spending, the economy would be at a standstill. If there is a downturn in income, consumers will stop spending. Changes in stock and real estate values can alter household wealth, thus curbing consumer spending.
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Housing
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It is no secret--the real estate market crashed and crashed hard. Sadly, many lives were turned upside down. But, if you could have foreseen this crash, you would have known the economy would crash, too. The only time there has ever been a recession when the real estate market was healthy was during World War II. Shareholders see a bearish stock market when housing is down, and when housing starts to climb back, a more bullish view appears.
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