Forget about the market for a second, and remember the US economy is kicking butt

The stock market has been on a wild ride the past few days, but if you look beyond that, the US economy is doing just fine.

There are numerous explanations for the sell-off in the markets, but none of them are because of the American economy.

Unemployment is still down around its pre-recession levels, the housing market is still improving with more being built and increasing values, consumer confidence is very healthy, and GDP is still growing.

None of that’s changed.

In trying to explain the chaos, most analysts have noted that, for the most part, the economy is healthy.

“There are no signs of any major downturn in the US economy,” said Paul Ashworth at Capital Economics in a note to clients Monday. He said the “volatility doesn’t reflect any genuine economic slump.”

In a note on the effect of the market moves on the Federal Reserve, Michael Gapen and Rob Martin at Barclays also said the problems aren’t in the US economy.

“Although we continue to see economic activity in the US as solid and justifying modest rate hikes, we believe the Federal Reserve is unlikely to begin a hiking cycle in this environment for fear that such a move may further destabilize markets,” they wrote.

Jonathan Golub of RBC Capital Markets also highlighted that the downturn most likely isn’t because of weakness in the economy. “What has been most interesting about last week’s 6% market decline is the absence of a visible catalyst,” he wrote.

“2Q corporate results have broadly surprised to the upside and signs of global financial distress remain well contained. As a result, news flow has focused on the market itself, rather than underlying events.”

Francis Yared and Dominic Konstam at Deutsche Bank agreed.

“In the meantime, some key indicators suggest that the domestic US economy remains robust,” they wrote in a note Friday.

So while the markets may look like a disaster, the underlying economy in the US is anything but.

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