Economic Update, August 28, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Knowledge is love and light and vision.” – Helen Keller WEEKLY TIP               In retirement, arranging income distributions with an eye on tax efficiency could help your savings last longer. Smaller, tax-deferred account distributions will make your annual income taxes more bearable. WEEKLY RIDDLE              Jon drove past the college at 60 mph, but he wasn’t pulled over or cited, even though a police officer was right behind him. Why?         Last week’s riddle: I follow you during the daytime, but at night I can’t be seen. What am I?         Last week’s answer: Your shadow.           August 28, 2017     SUMMER SLOWDOWN HITS HOUSING MARKET Low inventory and high prices are taking a toll on existing home sales. They declined 1.3% in July, according to the National Association of Realtors, making a second straight monthly retreat. In the past 12 months, the number of existing homes on the market has shrunk 9.0%, while the median sale price has risen 6.2% to $258,300. While resales were up 2.1% year-over-year, the seasonally adjusted annual sales rate reached a 2017 low in July. Census Bureau data showed new home sales falling 9.4% last month.1,2   GASOLINE FUTURES RISE, BUT OIL FUTURES FALL On the NYMEX, unleaded gasoline gained 2.6% last week, with prices briefly reaching a 5-month peak. Even as oncoming Hurricane Harvey posed a threat to Gulf Coast oil output, crude lost 1.6% last week to settle at $47.87 Friday.3     ORDERS FOR DURABLES DECLINE Hard goods orders retreated 6.8% for July; the decrease...

Economic Update, August 21, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “One man practicing sportsmanship is better than a hundred teaching it.” – Knute Rockne WEEKLY TIP               Business owners should dedicate one hour per month to collect and sort receipts. This is vital for independent contractors, whose tax liability is linked to the expenses they deduct. WEEKLY RIDDLE              I follow you during the daytime, but at night I can’t be seen. What am I?         Last week’s riddle: Shake me and I’ll do what you want, but first you must extract me from the earth. I may be on the tip of your tongue and over your shoulder. What am I?         Last week’s answer: Salt.           August 21, 2017     RETAIL SALES RISE IMPRESSIVELY In July, they were up 0.6% – the largest monthly increase seen so far in 2017. This gain suggests the economy has gathered momentum in the third quarter. Core retail sales (which do not include food, construction, gas, and auto buying) advanced 0.6% for July as well. The Department of Commerce also revised some spring numbers: retail purchases improved 0.3% in June and were flat a month earlier.1   AN UPTURN FOR CONSUMER SENTIMENT The University of Michigan’s monthly gauge of how U.S. households view current and future economic conditions rose 4.5 points in its preliminary August edition to 97.6. Not since January has the index been so high. In the past 12 months, it has gained 8.7 points.2     HOUSING STARTS RETREAT Groundbreaking decreased 4.8% in July, according to the latest monthly Census Bureau snapshot of...

Economic Update, August 14, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “We are what we pretend to be, so we must be careful what we pretend to be.” – Kurt Vonnegut, Jr. WEEKLY TIP               The investment markets experience cycles, and the major indices inevitably see downturns at some point. If you are focused on long-term performance, the good news is that the markets have the potential to rebound in reasonable time. If your portfolio is diversified, that may provide you with some insulation in a correction. WEEKLY RIDDLE              Shake me, and I’ll do what you want, but first you must extract me from the earth. I may be on the tip of your tongue and over your shoulder. What am I?         Last week’s riddle: What is the only type of “worm” that will never risk ending up on a hook?        Last week’s answer: A bookworm.           August 14, 2017     TAME INFLATION PERSISTS Can the Federal Reserve justify another interest rate hike in the second half of 2017? Given weak inflation pressure, maybe not. The central bank has set a 2% yearly inflation target, but the Consumer Price Index rose only 0.1% in July, resulting in a 1.7% year-over-year gain. Core consumer prices rose 0.1% for a fourth consecutive month in July, so annualized core inflation was also at 1.7%. The Producer Price Index fell 0.1% last month; analysts polled by Briefing.com expected a 0.2% rise.1,2   ANALYSIS: EARNINGS GROW AT a 10% PACE More than 90% of companies in the S&P 500 have now reported second-quarter results. FactSet, the...

Economic Update, August 7, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Whatever you are by nature, keep to it; never desert your line of talent. Be what nature intended you for and you will succeed.” – Sydney Smith WEEKLY TIP               If you are in your twenties, saving should be your top financial goal: saving for emergencies, for investment, and for retirement. WEEKLY RIDDLE              What is the only type of “worm” that will never risk ending up on a hook?         Last week’s riddle: They had weight in their stomachs, tall trees on their backs, nails in their ribs, yet feet they lacked. The world saw thousands of them centuries ago. What were they?        Last week’s answer: Sailing ships.           August 7, 2017     LATEST JOBS REPORT BRINGS GOOD NEWS U.S. payrolls swelled with 209,000 net new workers in July, according to the Department of Labor. That beat the 183,000 estimate by analysts surveyed by Reuters. About 53,000 of the hires were at restaurants and bars, with another 49,000 in the professional and business services category. While yearly wage growth remained at 2.5%, the headline jobless rate ticked back down to 4.3%. The U-6 rate (which includes the underemployed) stayed at 8.6%.1   A MEAGER GAIN IN CONSUMER SPENDING The 0.1% June advance reported by the Department of Commerce matched the (low) expectations of economists surveyed by MarketWatch. Consumer incomes were flat in June; the same group of forecasters thought they would improve 0.3%. Personal spending had increased 0.2% in May, with income up 0.3%.2     ISM PMIS SHOW CONTINUED BUSINESS Growth...

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