Economic Update February 22, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “A hunch is creativity trying to tell you something.” – Frank Capra WEEKLY TIP               Every two years, you should check to see if your retirement strategy needs adjusting in light of life events and changing goals.    WEEKLY RIDDLE              Everywhere on earth I am found, I should not make you frown, I will always bring you down, but I will never send you up. What am I?       Last week’s riddle: Switch one letter each from the words “plus” and “minus” to the other word, and you have two entirely new words. What are they?   Last week’s answer: Plum and sinus.           February 22, 2016     WALL STREET HAS ITS BEST WEEK OF 2016 Across four trading days, the S&P 500 rose 2.84% and the Dow Jones Industrial Average, 2.62%; the Nasdaq Composite beat them both with a 3.85% gain. The Friday settlements: Dow Jones, 16,391.99; Nasdaq, 4,504.43; S&P, 1,917.78. WTI crude settled at $29.64 on the NYMEX Friday and gold at $1,230.80 on the COMEX.1     WHOLESALE PRICES OUTPACE CONSUMER PRICES Core producer prices rose o.4% in January according to the Bureau of Labor Statistics, with the headline Producer Price Index up 0.1%. The Consumer Price Index was flat in January, with the core index up 0.3%; core consumer prices rose  2.2% across the 12 months ending in January.2    BUILDERS STARTED FEWER PROJECTS LAST MONTH January saw a 0.2% decline in building permits and a 3.8% dip in housing starts. Permits are still outpacing starts, so both Commerce Department indicators...

Economic Update February 15, 2015

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Laughter is the closest distance between two people.” – Victor Borge WEEKLY TIP               Some people moonlight for extra income, but getting that second job may just be a response to uncontrolled spending. Added income will not correct that problem; it may even encourage it.    WEEKLY RIDDLE              Switch one letter each from the words “plus” and “minus” to the other word, and you have two entirely new words. What are they?      Last week’s riddle: When you lack me, you feel a sort of gloom. When you use me, it is time you consume. What am I?   Last week’s answer: Sleep.           February 15, 2016     OIL JUMPS 12%, BUT STOCKS RETREAT FOR THE WEEK On Friday, WTI crude closed at a NYMEX price of $29.44 after a 12.32% surge. However, it fell 4.69% on the week, and major U.S. stock benchmarks fell as well. Across five days, the Dow Jones Industrial Average declined 1.43% to 15,973.84; the Nasdaq Composite, 0.58% to 4,337.51; and the S&P 500, 1.95% to 1,864.78. Gold closed Friday at $1,239.00 on the COMEX, capping its best week since 2008 and its first four-week win streak since last April.1,2     BETTER NEWS ABOUT RETAIL SALES Commerce Department data showed retail purchases increasing 0.2% last month, with impressive 0.6% growth for core retail sales (a category excluding auto, home improvement, and restaurant purchases). The 0.1% pullback in headline retail sales in December was revised to a 0.2% advance.3    A HINT OF CONSUMER PESSIMISM The University of Michigan’s initial...

Economic Update February 8, 2016

Phillip Allenc Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “You gain strength, courage and confidence by every experience in which you really stop to look fear in the face.” – Eleanor Roosevelt WEEKLY TIP               If you want to leave some of your IRA to your children, a Roth IRA conversion may be a great idea: the IRA they inherit could realize further tax-free growth. WEEKLY RIDDLE              When you lack me, you feel a sort of gloom. When you use me, it is time you consume. What am I?       Last week’s riddle: Karen parks her car beside a hotel and instantly recognizes that she is bankrupt. How does she know this?   Last week’s answer: She is playing Monopoly.           February 8, 2016     UNEMPLOYMENT NOW BELOW 5% Although the economy added just 151,000 jobs in January, the Labor Department’s latest employment report also showed a reduction in the headline jobless rate to 4.9%. The broader U-6 measure of underemployment remained at 9.9%. Monthly payroll gains have averaged 231,000 since November; in fact, the 3-month, 6-month, and 12-month job creation averages are now all above 200,000.1     CONSUMER SPENDING FLATTENED IN DECEMBER Personal incomes rose 0.3% in the final month of 2015, but the Commerce Department recorded no corresponding personal spending advance. The good news? The personal savings rate reached 5.5%, a 3-year high.2    MANUFACTURING SLOWDOWN CONTINUES The Institute for Supply Management’s purchasing manager index for the factory sector came in at 48.2 for January, 0.2 points higher than the previous reading, but still well under the 50 mark. U.S. manufacturing...

Economic Update February 1, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “It is better to offer no excuse than a bad one.” – George Washington WEEKLY TIP               When you eliminate a high-interest debt, direct the money that was once going toward it into an emergency fund, a college fund, or your retirement savings.    WEEKLY RIDDLE              Karen parks her car beside a hotel and instantly recognizes that she is bankrupt. How does she know this?       Last week’s riddle: The more of them you will have, the longer you will live – but as you have more and more of them, the less you have left. What are they?   Last week’s answer: Heartbeats.           February 1, 2016     ONE CONFIDENCE POLL RISES, ANOTHER FALLS The Conference Board’s consumer confidence index rose in January to 98.1, beating the Briefing.com forecast of 96.3. The University of Michigan’s consumer sentiment index lost 0.6 points on the month, ending January at 92.0.1,2     NEW HOME SALES LEAP 10.8% Census Bureau data showed new home buying at its hottest pace in 10 months in December – a seasonally adjusted annual rate of 544,000 sales. New home sales were up 14.5% for 2015. In other housing news, the National Association of Realtors said pending home sales rose 0.1% in December after a 1.1% November dip.1,3    FIRST ESTIMATE OF Q4 GROWTH: 0.7% Away from that disappointing number, the Bureau of Economic Analysis presented some better data: America’s economy grew 2.4% in 2015, and household spending rose 3.1% last year. Still, another indicator affirmed recent manufacturing weakness: after an 0.5%...