The Dow Jones fell around 500 points earlier this week.
A local economist described the Dow as an overall gauge of the major stocks of some of the biggest industrial companies in America. He explained what caused the Dow to fall.
“People who invest in these big companies are feeling less certain about the future profitability. So many people are selling off these stocks, which, if nobody wants to keep these stocks, that’s what depresses the prices causing that plummet,” said Kenneth Louie, Ph.D., director of the economic research institute of Erie at PSU Behrend.
Louie said there are broader measures like the S&P 500 that look at a variety of U.S. companies.
He added the inflation report report released by the U.S. government on Tuesday showed inflation is above the target level.
Louie stated these indicators, like the Dow, could reflect uncertainty about inflation and the fear of the economy slowing down, adding Americans should remain optimistic.
“The national economy is performing quite well, and even locally, the Erie economy has been quite resilient. We’ve created over 1,000 jobs over this last year. The unemployment rate is at a historic low,” said Louie.
There are other factors that contribute to pessimism about the economy, though.
“In the past few months, since the end of last year, gas prices have inched back up again. When people fill up their gas tanks, they see that impact in their pocketbook,” Louie said.
However, on average, gasoline prices are actually about 30 cents less a gallon compared to last year.
Some residents said they’re still feeling the strain.
“It’s tough when you have to pay more money for gas, especially when it jumps up 40 cents a gallon and then some people travel a lot, it starts compounding. So you’re spending money on gasoline rather than doing other things,” said Frank Bercik, an Erie resident.
