Economic Update May 25, 2015

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE      WEEKLY QUOTE                “If you don’t know where you are going, any road will take you there.” – Lewis Carroll WEEKLY TIP               As your household’s income and expenses increase with time, so should the size of your emergency fund. It should be large enough to cover 3-6 months of household costs.    WEEKLY RIDDLE              Your mother’s brother’s only brother-in-law is taking a picture of you. How is he more closely related to you? Last week’s riddle: No matter how little or how much you use me, you change your view of me every month. What am I?   Last week’s answer: A calendar.           May 25, 2015     HOMEBUYING SLOWS, CONSTRUCTION ACCELERATES The National Association of Realtors offered some good news and some bad news last week. While existing home sales decreased 3.3% in April, they were up 6.1% from a year ago. Along with the annual improvement in the pace of resales, the median home price rose 8.9% year-over-year to $219,400. April also saw a 20.2% leap in housing starts, taking groundbreaking to a high unseen since November 2008; the Commerce Department also noted a 10.1% increase in building permits last month.1,2     CONSUMER PRICES BARELY RISE April brought just an 0.1% advance for the Consumer Price Index, a development influenced by a 1.7% fall in gasoline costs. (The average price for a gallon of unleaded was $2.73 as of Memorial Day weekend, nearly a dollar lower than a year ago.) In the bigger picture, the headline CPI declined 0.2% year-over-year. The Labor Department did report...

Economic Update May 18, 2015

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE       WEEKLY QUOTE                “The truth is not simply what you think it is; it is also the circumstances in which it is said, and to whom, why and how it is said.” – Vaclav Havel WEEKLY TIP               Wondering what your cash flow might be like in retirement? Think about your potential income needs in your eighties and nineties as well as your sixties and seventies. Take sustained moderate inflation and the possibility of major medical expenses into account for the long term.    WEEKLY RIDDLE              No matter how little or how much you use me, you change your view of me every month. What am I? Last week’s riddle: I’m tall when I’m young and short when I’m old, usually indoors and sometimes on fire. What am I?   Last week’s answer: A candle.           May 18, 2015     RETAIL SALES WERE FLAT IN APRIL Analysts surveyed by MarketWatch had forecast only a 0.1% advance, so this news was no shock. Still, it was disappointing after the (revised) 1.1% gain noted by the Commerce Department for March. The year-over-year improvement in the pace of retail sales was just 0.9%; last August, it reached 5.0%. Core retail sales (minus car and truck buying and fuel purchases) only increased 0.1% last month.1,2     CONSUMER SENTIMENT DIPS The decline in the preliminary May University of Michigan consumer sentiment index defied expectations. At 88.6, the index fell 7.3 points from its final April mark. A consensus forecast of analysts contacted by Reuters projected a 96.0 reading.3        PRODUCER PRICES &...

Economic Update May 11, 2015

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE       WEEKLY QUOTE                “Don’t try to be better than your contemporaries or predecessors. Try to be better than yourself.” – William Faulkner WEEKLY TIP               Do you and your spouse have very similar investment portfolios? As a couple, you might want to approach the goal of investment diversification from a joint (rather than strictly individual) viewpoint.  WEEKLY RIDDLE              I’m tall when I’m young and short when I’m old, usually indoors and sometimes on fire. What am I? Last week’s riddle: At times it begs to be answered, sometimes it interrupts you, but it will never ask you a question. What is it?  Last week’s answer: A phone.           May 11, 2015     HIRING REBOUNDS IN APRIL Employers added 223,000 new jobs last month, the Labor Department noted Friday. That news made the March payroll gain of 85,000 look like an aberration. The main jobless rate fell to a 7-year low of 5.4% in April, and the U-6 rate tracking the total unemployed ticked down to 10.8%; the population of people out of work for six months or longer fell by 38,000 to 2.5 million, representing 29% of the total unemployed. Wages were up 2.2% year-over-year. 1     SERVICE SECTOR PMI REACHES 5-MONTH PEAK Rising to 57.8 for April, the Institute for Supply Management’s non-manufacturing purchasing managers’ index displayed its best reading since November. A 4.1% upturn in business activity was instrumental in the gain.2        CRUDE OIL NEARS $60 ON THE NYMEX Last week’s 0.5% advance took oil prices to a Friday settlement of $59.46. A key...

Economic Update May 4, 2015

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE       WEEKLY QUOTE                “There can be no happiness if the things we believe in are different from the things we do.” – Freya Stark WEEKLY TIP               Before accepting a college loan, be sure that you and your student understand the consequences of a default. Student loan defaults are currently at historic highs.  WEEKLY RIDDLE              At times it begs to be answered, sometimes it interrupts you, but it will never ask you a question. What is it? Last week’s riddle: It traveled from Kentucky to Texas in three days, and it did so while staying in a corner. What is it?  Last week’s answer: A postage stamp.           May 4, 2015     PERSONAL SPENDING IMPROVES, Q1 GDP POOR Consumer spending rose 0.4% in March, the Commerce Department noted; that doubled the February advance. Personal incomes were flat, however. The Bureau of Economic Analysis said the economy grew 0.2% in the first quarter; in better news, private-sector wages rose 2.8% in Q1. Another major indicator stayed flat in April: the Institute for Supply Management’s U.S. factory PMI again read just 51.5.1,2     CONSUMER CONFIDENCE POLLS GO DIFFERENT WAYS April’s final University of Michigan consumer sentiment index rose 2.9 points off the final March reading to 95.9, its second-best mark since 2007. The Conference Board’s April consumer confidence poll came in at 95.2, a 4-month low.1,2        PENDING HOME SALES, HOME PRICE GAINS MODERATE According to the National Association of Realtors, pending home sales rose 1.1% for April, beating the 0.3% rise forecast by analysts polled by MarketWatch but...