John Adams, second president of the United States and a Founding Father, said: “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”

Here’s a stubborn fact that today’s financial naysayers either can’t fathom or refuse to acknowledge: the economy is actually doing well.

The recovery continues apace, in the U.S. and around the world. However, certain pundits with an axe to grind are intent on talking down the economy and spreading gloom. Don’t fall for it.

Below, I’ll explain why factors are in place for accelerating economic growth and a continuation of the stock market rally, and why fretting right now about another recession (or market crash) constitutes “the dumb money.”

Perception versus reality…

Unwarranted pessimism about the present state of the economy reminds me of attitudes about crime. Recent polls show most Americans think crime rates in the country are increasing, whereas in reality they’ve been sharply falling for decades.

These “reality bubbles” arise from a confluence of factors, including partisan media, political demagoguery, and preconceived cultural biases.

Some investment risks are undeniably real, notably the default of China-based property developer China Evergrande Group (OTC: EGRNF); the rapid rise in November of the U.S. consumer price index (CPI); and the emergence of Omicron-induced restrictions in overseas countries.

But there are plenty of positives to offset the negatives. Don’t take my word for it. Just look at the hard data:

More jobs. The Labor Department reported last Thursday that initial claims for unemployment insurance in the week ended December 4 totaled 184,000, below the consensus estimate of 211,000 and the lowest reading since 1969. The jobless rate fell to a 21-month low of 4.2% in November.

Higher wages. In the third quarter of 2021, hourly wages in the U.S. jumped by the most in 20 years.

Economic expansion. The Conference Board forecasts that U.S. gross domestic product (GDP) growth will rise to 5.0% on an annualized basis in Q4 2021, compared to 2% in Q3 2021, and that 2021 annual GDP growth will come in at 5.5%. The International Monetary Fund forecasts that global economic growth will reach 6% in 2021.

Record household savings. Total U.S. household net worth (the value of all assets minus liabilities) jumped by $5.8 trillion this year to a record $141.7 trillion, according to the Federal Reserve.

Robust retail sales. Adobe Analytics expects U.S. holiday sales online to hit $207 billion from November 1 to December 31, for a new record. This marks a 10% increase from 2020.

Stocks are at record highs. The bears have been consistently warning of an imminent market collapse all year, and yet, the S&P 500 has risen nearly 26% year to date and hovers near an all-time high (see table).

To be sure, the U.S. Bureau of Labor Statistics reported last Friday that the CPI surged by 6.8% in the year through November, the fastest pace in about 40 years.

Increasing demand during the economic recovery is crashing headlong into supply bottlenecks and shortages. Housing leads the inflation pack, as the mismatch between available homes and demand worsens, sending the cost of home prices and rent soaring.

A faster Fed taper…

The reasoning of policymakers who implemented stimulus is that inflation generated by a growing economy is a better alternative than an outright economic depression. However, inflation has been stickier than the Fed expected, which increases pressure on the central bank to pivot toward hawkishness.

Fed Chair Jerome Powell recently indicated the Fed would accelerate the timeline of its balance-sheet tapering “by a few months.” But keep in mind, equities historically have kept their footing during tapering.

This week, we’ll get further answers to the Fed’s intentions, from the December 14-15 meeting of the policy-making Federal Open Market Committee (FOMC).

The consensus on Wall Street is that the FOMC will announce a faster tapering, increasing from the current pace of $15 billion per month to about $30 billion per month. This would allow the Fed to wind down tapering by Q1 2022.

Watch This Video: The Omicron Conundrum

In the week ahead, several key economic reports are on the docket that deserve close scrutiny: producer price index (Tuesday); retail sales, FOMC announcement, Powell press conference (Wednesday); initial jobless claims, housing starts, and Markit manufacturing and services PMIs (Thursday). Additional positive economic data should provide upward impetus for stocks.

The upshot: I expect the bull market to stay on track well into 2022, with cyclical and value plays in the lead as economic reopening gathers steam. Consumer staples and health care look particularly appealing now; companies in these sectors enjoy pricing power, which is valuable amid rising inflation.

Stay invested (and stay informed). Focus on the hard facts and remain wary of misinformation. In the meantime, our investment experts have devised a trading methodology that provides steady gains, no matter how current risks play out. Click here for details.

John Persinos is the editorial director of Investing Daily. To subscribe to John’s video channel, follow this link.