Economic Update May 23, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Live in such a way that you would not be ashamed to sell your parrot to the town gossip.” – Will Rogers WEEKLY TIP               Retiring with a strong cash position is nice. One idea that could make yours stronger: direct more of your regular retirement plan contributions into capital preservation options in the years leading up to your envisioned retirement date.   WEEKLY RIDDLE              It is a word in the English language, written using only two letters of the alphabet. You can say this word merely by using one letter of the alphabet, and that letter is a vowel. What word is this?       Last week’s riddle: You can make it, play it, crack it and tell it. What is it?   Last week’s answer: A joke.           May 23, 2016     WILL THE FED MAKE A MOVE IN JUNE? In April, the Consumer Price Index advanced 0.4% – its largest monthly gain since February 2013. While a 10% leap in gasoline prices contributed to that rise, this and other recent signals of economic vigor may be influencing the Federal Reserve. Last week, minutes from the central bank’s April policy meeting showed Fed officials broadly agreeing that an interest rate hike could be appropriate next month if economic indicators strengthened and inflation accelerated. The CPI rose 1.1% in the year ending in April, but the yearly gain for the core CPI was 2.1%.1,2      a modest gain in EXISTING home sales The National Association of Realtors announced a 1.7% increase in homebuying in...

Economic Update May 16, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Knowledge is the eye of desire and can become the pilot of the soul.” – Will Durant WEEKLY TIP               If you sense that you may need some extra income during the first decade of your retirement, explore ways to turn your favorite hobby into a part-time job. Do some networking in your metro area and among fellow hobbyists.   WEEKLY RIDDLE              You can make it, play it, crack it, and tell it. What is it?       Last week’s riddle: I can easily be divided. Within me, you will notice 13 hearts, but no organs. What am I?   Last week’s answer: A deck of cards.           May 16, 2016     A MAJOR JUMP FOR RETAIL SALES Friday, the Department of Commerce reported a 1.3% April gain in U.S. retail purchases. The core retail sales advance was also impressive at 0.9%. Minus car and truck buying, retail sales were still up 0.8% last month.1      IMPROVEMENT IN CONSUMER SENTIMENT The University of Michigan’s much-watched household sentiment index rebounded 6.8 points to 95.8 in its initial May reading. Surveys of Consumers chief economist Richard Curtin cited “frequent income gains, an improved jobs outlook, and the expectation of lower inflation and interest rates” as reasons for the sudden rise.2    WHOLESALE INFLATION PICKS UP The April Producer Price Index displayed a moderate rise, in contrast to preceding months. Wholesale inflation rose 0.2% last month, 0.3% with food and energy costs subtracted.1    A DOWN WEEK ON WALL STREET      THIS WEEK: Monday, Agilent Technologies reports...

Economic Update May 9, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “He not busy being born is busy dying.” – Bob Dylan WEEKLY TIP               In your business budget, think of your marketing costs as a percentage of sales, somewhere between 2-10%. If you are building a brand, those costs might need to approach or exceed 20% of sales.   WEEKLY RIDDLE              I can easily be divided. Within me, you will notice 13 hearts, but no organs. What am I?       Last week’s riddle: It cannot see and it feels no pain, despite matter constantly going through its eye. What is it?   Last week’s answer: A sewing needle.           May 9, 2016     APRIL JOBS REPORT RAISES QUESTIONS Employers hired 160,000 more workers than they let go last month, and that net job gain was the smallest since September. Does this suggest a job market losing steam, or does it hint at an economy nearing full employment? The hiring number may make the Federal Reserve reconsider the possibility of a June interest rate hike. Average hourly wages improved to $25.53 in April, up 2.5% year-over-year. While the main jobless rate remained at 5.0%, the U-6 rate, counting both the unemployed and underemployed, declined 0.1% to 9.7%.1     MORE EXPANSION IN FACTORY & SERVICE SECTORS Both of the Institute for Supply Management’s purchasing manager indices were above the critical 50 level (indicating growth) in April. ISM’s manufacturing index came in at 50.8, its non-manufacturing index at 55.7. Economists surveyed by MarketWatch expected a 51.4 reading for the factory PMI and a 54.7 reading for the services...

Economic Update May 2, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “He who lives little, changes little.” – Anatole France WEEKLY TIP               Starting your career? Beware of spending money to maintain an image. If you are tempted to “fake it ‘til you make it,” you may soon be awash in consumer debt.   WEEKLY RIDDLE              It cannot see and it feels no pain, despite matter constantly going through its eye. What is it?       Last week’s riddle: Sandra is running in a half-marathon and she passes the second person in the race. What position is she in?   Last week’s answer: Second place.           May 2, 2016     INCOME OUTDISTANCES SPENDING Personal income rose 0.4% in March, yet the Commerce Department reported personal spending up just 0.1%. That mild uptick contributed to a poor first quarter for GDP; last week, the Bureau of Economic Analysis estimated Q1 growth at 0.5%.1      CONSUMER OPTIMISM declineS The Conference Board’s consumer confidence index dipped 1.9 points in April to 94.2. Also descending was the University of Michigan’s consumer sentiment index, which ended April at 89.0 after concluding March at 91.0.1,2    A ROUNDUP OF HOUSING NEWS New home sales fell 1.5% in March according to the Census Bureau, after a 0.4% retreat in February. The (just-released) February S&P/Case-Shiller home price index shows a 5.4% overall rise in home values across 12 months, down from 5.7% in the January edition. Lastly, the National Association of Realtors reported a 1.4% March gain in its pending home sales index.1   MAJOR INDICES RETREAT The Nasdaq was the benchmark that stumbled...