Economic Update, September 26, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Learning is not attained by chance. It must be sought for with ardor and attended to with diligence.” – Abigail Adams WEEKLY TIP               By tracking a company’s typical month-to-month sales cycle, a business owner can identify when to put money into reserve to see a business through leaner months on the way to boom times. WEEKLY RIDDLE              How can you take three toothpicks and make them into the number nine?       Last week’s riddle: I am soft and seldom upright. I lose a head in the morning, but I get it back at night. What am I?   Last week’s answer: A pillow.           September 26, 2016     FED WAITS TO RAISE INTEREST RATES Federal Reserve officials decided against a rate hike last week, but two details in the central bank’s latest policy statement suggested an upward move was near. One, the Federal Open Market Committee voted 7-3 against raising the federal funds rate – an unusually close margin. Two, the Fed’s new dot-plot forecast showed consensus for a rate increase before the end of 2016. “Our decision [to wait] does not reflect a lack of confidence in the economy,” Fed chair Janet Yellen told the media after the announcement. “We’re generally pleased with how the U.S. economy is doing.”1      FEWER HOUSING STARTS, LESS HOMEBUYING August saw existing home sales dip 0.9%; as the National Association of Realtors delivered that news, it also revised its July sales calculation to a decline of 3.4%. A Census Bureau report showed housing starts falling 5.8% last...

Economic Update, September 19, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “The man who says he is willing to meet you halfway is usually a poor judge of distance.” – Laurence J. Peter WEEKLY TIP               Just married? About to marry? Develop a plan to save jointly for your financial goals. If you both save for them, they may be attained more quickly. WEEKLY RIDDLE              I am soft and seldom upright. I lose a head in the morning, but I get it back at night. What am I?       Last week’s riddle: You contact it in the street, and lie above it in the night. It may shake as if it is angry, but it will never bite. What is it?   Last week’s answer: The ground.           September 19, 2016     RETAIL SALES DECREASE SLIGHTLY Shoppers bought 0.3% less goods and services in August, according to the latest monthly report from the Department of Commerce – but minus auto sales, the decline was just 0.1%. Retail sales were still up 1.9% from year-ago levels, with online sales rising 10.9% in 12 months.1      CONSUMER COSTS RISE IN AUGUST The Consumer Price Index rose 0.2% after a flat July, with the core CPI up 0.3%. Economists surveyed by MarketWatch had expected the headline and core CPI to respectively advance 0.1% and 0.2%. August brought no change whatsoever in the Producer Price Index, which had fallen 0.4% a month earlier. Speaking of production, the Federal Reserve announced a 0.4% dip in industrial output for August, a marked difference from July’s 0.6% gain.2      HOUSEHOLD SENTIMENT INDEX SHOWS...

Economic Update September 12, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Forever is composed of nows.” – Emily Dickinson WEEKLY TIP               If you are thinking of adopting a child, you should know that some employers offer adoption assistance programs, through which you can offset some or all of those costs with a tax-free reimbursement. In addition, you may be eligible for a federal credit with a $12,150 limit to counter any adoption expenses not reimbursed by an employer subsidy. WEEKLY RIDDLE              You contact it in the street, and lie above it in the night. It may shake as if it is angry, but it will never bite. What is it?       Last week’s riddle: You use your hand to write; you use me to keep the writing neat and make a point. Every once in a while, you empty me out. What am I?   Last week’s answer: A pencil sharpener.           September 12, 2016     SERVICE SECTOR SEES WEAKEST GROWTH SINCE 2010 The Institute for Supply Management’s non-manufacturing purchasing manager index came in at a disappointing 51.4 in August, 4.1 points below its July level. While American service industries expanded for a 79th consecutive month, the pace of expansion was the slowest since February 2010, and the monthly drop in the ISM index was the largest recorded since November 2008.1      BEIGE BOOK SHOWS LITTLE WAGE PRESSURE If the economy is near full employment, it is not seeing the strong wage and inflation gains usually linked with that situation. The Federal Reserve’s latest summation of economic activity in its 12 districts stated that wage...

Economic Update September 5, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Realize deeply that the present moment is all you ever have.” – Eckhart Tolle WEEKLY TIP               Three actions can help you to build a good financial foundation prior to turning 40: funding retirement accounts, paying off credit card debt and creating an emergency fund. WEEKLY RIDDLE              You use your hand to write; you use me to keep the writing neat and make a point. Every once in a while, you empty me out. What am I?       Last week’s riddle: Together, an antique dresser and the old baseball cards found within it are valued at $20,000. If the baseball cards are worth $18,000 more than the dresser, how much is the dresser worth?   Last week’s answer: $1,000. The baseball cards are worth $19,000.           September 5, 2016     MODEST JOB GROWTH IN AUGUST Payrolls expanded with 151,000 net new jobs last month, according to the Department of Labor’s latest report. The jobless rate was unchanged at 4.9%, and the U-6 rate tracking underemployment remained at 9.7%. After the release of the data, Wall Street traders saw only a 21% chance of a September interest rate hike by the Federal Reserve and a 55% chance of a rate increase by the end of 2016.1      FACTORY SECTOR CONTRACTS Taking a surprisingly steep drop, the Institute for Supply Management’s manufacturing purchasing manager index fell down to 49.4 in August, indicating a slowdown in U.S. factory activity. In July, the PMI had a reading of 52.6.2      SOLID Consumer Confidence, spending NUMBERS The Bureau of Economic...

Economic Update August 29, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Education’s purpose is to replace an empty mind with an open one.” – Malcolm Forbes WEEKLY TIP               One path toward some back-to-school shopping savings: follow your favorite stores on Facebook and Twitter. See if they can also text you some discount offers. WEEKLY RIDDLE              Together, an antique dresser and the old baseball cards found within it are valued at $20,000. If the baseball cards are worth $18,000 more than the dresser, how much is the dresser worth?       Last week’s riddle: It floats gently when it is born, lies still when it is alive, and runs when it is dead. What is it?   Last week’s answer: Snow.           August 29, 2016     YELLEN HINTS AT A RATE HIKE Speaking Friday at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming, Fed chair Janet Yellen commented that “the case for an increase in the federal funds rate has strengthened in recent months.” That statement was interpreted by some economists as a sign that the central bank could adjust interest rates this fall, but perhaps only after the presidential election.1      NEW HOME SALES ACCELERATE, RESALES DECLINE The good news, from the Census Bureau: July brought a 12.4% leap in new home buying. Sales approached a 9-year peak, even with only 4.3 months of new home inventory available. The bad news, from the National Association of Realtors: July saw existing home purchases slip 3.2%. Inventory was down 5.8% year-over-year; the median sale price was $244,100, 5.3% better than a year earlier.2      SENTIMENT GAUGE SLIPS...