An inflation surprise created a challenge for investors. The Consumer Price Index rose 0.9% last month. The monthly increase was the largest reached in 2021, and the yearly increase of 6.2% was the largest since 1990, when the Gulf War contributed to a surge in oil prices (Figure 1).
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After a couple weak monthly reports, U.S. employment roared back in October. The U.S. created 531,000 new jobs, beating expectations for 412,500. August and September were both revised higher by more than 100,000 jobs. Private payroll increased 604,000 while government payrolls shrank 73,000. Unemployment dipped from 4.8% to 4.6%.
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U.S. GDP grew at an annualized pace of just 2% last quarter, a marked slowdown from last quarter’s 6.7% (Figure 1). Contracted auto production sliced around 2% off growth, and concerns over the Delta variant slowed demand and the return of workers to the labor force. Third quarter growth disappointed many. Final estimates were for 2.8%, and those had been much higher earlier in the quarter.
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Thirty percent of the S&P 500 will report third quarter earnings this week. Based on earnings already in and analyst expectations, earnings are expected to grow 32.7% compared to last year as corporations continue to bounce back from a COVID-led earnings decline.
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Three economic data points released last week indicated the economy continues to rebound despite lingering challenges from the Delta variant. Job openings, which lag other measures by one month, fell to 10.4 million. Declines in demand for leisure and hospitality jobs pulled the openings back from July’s all-time high. Workers are showing increased confidence as a record 4 million people quit their jobs.
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There’s a scene in the TV show Friends where Rachel gets her very first paycheck as a waitress at Central Perk. “Who is FICA and why is he getting all my money?” she poses to the gang. Some people age 65 and older might have a similar sentiment when they get their Social Security check and see a chunk missing that’s gone to IRMAA. “Who is IRMAA and why is she getting some of my money?” you might ask. IRMAA is your income-related monthly adjustment amount, which you pay on top of both your Medicare Part B (medical coverage) and Part D […]
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Equity markets struggled in September as interest rates, inflation concerns, and developments in China all weighed on stock market averages. The S&P 500 surrendered 4.7% as large-cap growth companies led the market lower. Large-cap growth has been the top performing style box since the beginning of the second quarter. Key Points for the Week Equity markets wrapped up the worst month of the year. Interest rates, inflation concerns, and developments in China all weighed on equities in September. August core PCE rose 0.3%, but the rate of increases continues to moderate. Energy and food are still driving headline inflation figures. […]
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Last week, Democrats on the House Ways and Means Committee released a draft of their proposed tax plan, which includes changes to corporate, personal and other taxes, as well as retirement plans – though Social Security would be untouched. The proposals are part of a $3.5 trillion domestic investment plan, with many of the tax and retirement account changes designed to help pay for that plan. And though the changes at this point are nothing more than proposals, it’s still worth breaking down what they would mean for Americans. The short version: Mostly good news for the ultra-high-net-worth, and some bad news […]
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Two U.S. economic reports provided reassuring news about the economy. The inflation trend moderated in August. Consumer price inflation (CPI) rose 0.3%, down from 0.5% the previous month and below estimates of a 0.4% increase (Figure 1). Excluding food and energy, prices increased just 0.1%. Key Points for the Week Retail sales jumped 0.7% last month, trouncing expectations for a 0.7% decline. Consumer prices rose 0.3% and core inflation rose just 0.1%, continuing the trend toward lower inflation. Chinese retail sales disappointed, rising just 2.5% compared to expectations for 7.0% growth. Consumer demand remained strong. Retail sales jumped a surprising […]
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There’s an old saying that with the stroke of a pen we have the ability to affect generations upon generations of lives. That’s definitely the case with life insurance. You can buy all kinds of tangible things in this world – new clothing, new cars, new homes. While life insurance is intangible – you won’t have that new car smell when you walk away – its value is immeasurable. Life insurance is put in place to do any number of things, from providing your survivors income and income replacement, leaving the means to pay off debts or mortgages, providing plans […]
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