I'VE BEEN PONDERING

Geek alert! Economic statistics can seem super boring. Here's a story on their real impact.

Economic statistics are important. Policymakers rely on them in making big decisions. Politicians wield them like weapons, either to find reasons to congratulate themselves, or to bash and blame their opponents.

But how reliable are they really? Coming up with a single number to characterize the experience of 330 million people, to try to explain what’s happening to people with a vast diversity of economic status and privilege in this country, is problematic.

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Take the unemployment rate for example. The current low unemployment rate is one of the reasons the Federal Reserve has been raising interest rates this year. In an opinion piece in Fortune magazine, Katica Roy, founder of Pipeline, points out “the folly of gender-ignorant indicators” and in fact the danger of making policy based on them.

The aggregate unemployment rate in July was 3.5%, well below the Fed’s target range of 4.1-4.7%. However, “the U.S. labor force has lost 1.067 million women since February 2020.” Because they’ve given up actively looking for work (for the variety of reasons oft enumerated), they’re not included in the unemployment number. Therefore, government policymakers may be aiming at the wrong target!

“The pandemic has siphoned off 63% of [the] progress” of women’s labor force participation since 1970." And if you believe, as I fervently do, that women’s economic security is key to creating a better world, that is moving in the wrong direction!

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TIMELY TOPICS

Measures of Americans' financial stress and insecurity are up! Consumer confidence is down. Companies can’t find workers (and yet over on million women have left the workforce - see above) Investment markets are reminding us that they still do what they do (i.e. go down as well as up)! And as you know viscerally, we’re living with persistent inflation and wages that have not kept up. In a recent survey on financial wellness, 55% of women say they’re actively looking for a new job with better pay.

But each of us is having a unique experience, depending on our own situation, challenges, and - let’s face it - luck. The Public Radio program Marketplace has a great segment called My Economy. There’s a conference called EconoME. They get that what matters more to an individual is their own financial statistics, not nation-wide numbers.

​Sarah Newcomb is a PhD behavioral finance expert working at Morningstar. On a recent podcast she talked about how financial health has TWO components: economic stability (the actual numbers) and emotional well-being (current level of stress or peace). Yes, our numbers are important, but the stories we tell ourselves about our numbers have just as big an impact on our feelings of well-being.

It’s what we think our numbers say about us - both to ourselves and to others - that really affects how we feel day to day. The good part is, we might have some control over that piece.

Next time you’re feeling money-related stress, try to pull back and notice your inner dialogue. What is that inner critic (which lives and thrives in all our brains) saying to you about the situation? Often, it's self-judgment - "I can't believe I let myself get here!" - or doomsday thinking - "I'll be out on the street eating cat food and no one will love me ever again!"

Sometimes just bringing the inner dialogue into the light of day is enough to defuse them, to gain a little perspective. Talking to someone you feel safe with is another good step. Do you have a Money Buddy? It could be your financial planner or a trusted friend: someone with whom you can talk about all the money stuff - the numbers as well as the emotions and self-talk that go along with them! As I often say, you want someone you can get financially naked with.
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RECENT NEWS + SIGHTINGS

1. For my September 2022 Rabbit Rabbit video, I talked about showing up.
2. Kevin and I kicked off a special series called Why Women Need to Know about Divorce on the Take Back Retirement podcast. (Do you like the video format?)
3. I was quoted in a recent MSN.com article on Financial Planning for Women:

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LET'S CONNECT

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