Gradually, they started to spend a bit more as stock prices and the economy improved, but they are not yet back to where they were before the recession.

My parents are more optimistic now, and that spurs them to spend more, which helps businesses and the economy. There are many Americans who went through similar experiences. If we add all of them together, we can see why things seem better than before. More people feel like we're on the right track. The high stock market prices reflect this sentiment.

But the real question remains: What does the Dow tells us about the future of the economy?

There is some evidence that the stock market can predict economic prospects, but the correlation is unreliable. The improvement in the Dow is a good sign, but let's not treat it as reading the tea leaves.

Just as no one can predict the stock market, no one can really predict the economy, even if the Dow is doing great.

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