Economic Update, October 31 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Really, there is no normal. There’s only change and resistance to it and then more change.” – Meryl Streep WEEKLY TIP               If you are newly married and don’t have a will, why not create one? It is a thoughtful and very responsible move. WEEKLY RIDDLE              There is one question that nobody can possibly answer “yes” to with 100% honesty. What is that question?      Last week’s riddle: Ray pulls out of his driveway and immediately drives at 55 miles per hour, but he is not cited even though a police car sees him. Why?   Last week’s answer: He lives on a major road, and the speed limit on that road is at least 55mph.           October 31, 2016     ECONOMY EXPANDS 2.9% in THIRD QUARTER After just 1.4% growth in Q2, this was welcome news. Surging exports and greater inventory investment and federal spending made Q3 the best quarter for the economy in two years, according to the Department of Commerce. The federal government’s core PCE price index was up 1.7% for the quarter versus 1.8% in Q2.1    CONSUMER CONFIDENCE INDICES DESCEND Last week, the Conference Board’s gauge of household confidence came in at 98.6 for October, down from 103.5 in September. The University of Michigan’s final October consumer sentiment index slipped to 87.2 from its prior mark of 87.9.2     PENDING HOME SALES ReBOUND The National Association of Realtors noted a 1.5% gain in housing contract activity in September, following a 2.5% downturn in August. The August S&P/Case-Shiller home price index...

Economic Update, October 24 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Learn to obey before you command.” – Solon WEEKLY TIP               At what age do you want to retire? 62? 65? 70? Having a specific age in mind will help you solidify and refine your retirement plan. WEEKLY RIDDLE              Ray pulls out of his driveway and immediately drives at 55 miles per hour, but he is not cited even though a police car sees him. Why?       Last week’s riddle: I possess a single eye, yet I cannot see. I could, however, hurt you – even if I don’t move. What am I?   Last week’s answer: A needle.           October 24, 2016     YEARLY INFLATION INCREASES Consumer prices rose 1.5% in the 12 months ending in September, the Bureau of Labor Statistics announced last week. That is the highest annualized inflation rate seen since October 2014, up from 1.1% in the year ending in August. The headline Consumer Price Index advanced 0.3% last month; the core CPI 0.1%.1    EXISTING HOME SALES REBOUND September saw a 3.2% gain in resales – the first improvement since June, according to the National Association of Realtors. First-time buyers made up 34% of home purchasers, a 4-year peak. Separately, the Census Bureau reported a 9.0% plunge for groundbreaking in September, but building permits increased by 6.3%.2,3     OIL PRICES KEEP RISING; STOCKS MAKE MINOR GAINS Settling Friday at $50.85, light sweet crude added 1.0% for the week. Crude now has a 5-week winning streak going on the NYMEX. All three major indices advanced during the past five trading...

Economic Update, October 17, 2016

Philip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Young is the one that plunges into the future and never looks back.” – Milan Kundera WEEKLY TIP               If you are trying to rebuild or ramp up your retirement savings in your forties or fifties, avoid grasping at straws. Extremely speculative, high-risk investments are often hard to understand and may drastically underperform compared to their hype. WEEKLY RIDDLE              I possess a single eye, yet I cannot see. I could, however, hurt you – even if I don’t move. What am I?       Last week’s riddle: I have 6 faces, but I wear no makeup. I often roll around and bump into things. What am I?   Last week’s answer: A die (singular of dice).           October 17, 2016     RETAIL SALES JUMP 0.6% This September gain was impressive – minus auto sales, the advance was still 0.5%. In August, both headline and core retail sales fell 0.2%. While consumers bought more last month, they were less confident earlier this month – the University of Michigan’s initial October consumer sentiment index fell 3.3 points to 87.9.1    INTEREST RATES MAY SOON RISE The minutes from September’s Federal Reserve policy meeting affirmed what some investors suspected. One, last month’s decision not to raise the federal funds rate was a “close call.” Two, the Federal Open Market Committee expects to make a move “relatively soon.” Last month, 74% of economists responding to a Wall Street Journal survey thought the central bank would raise rates in December.2     PRODUCER PRICE INDEX UP 0.3% A 2.5% advance in energy...

Economic Update, October 10 2016

Philip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Treasure the love you have received above all. It will survive long after your gold and good health have vanished.” – Og Mandino WEEKLY TIP               If you are under 35, see if you can save 15% of your salary toward retirement. If your company matches your retirement plan contributions, count the employer match as part of that 15%. WEEKLY RIDDLE              I have 6 faces, but I wear no makeup. I often roll around and bump into things. What am I?       Last week’s riddle: What jumps higher than a building?   Last week’s answer: Everything. A building cannot jump.           October 10, 2016     hiring picked up in the Third quarter Employers added 156,000 net new jobs to their payrolls in September, the Department of Labor stated Friday. The August gain was revised up to 167,000, so monthly job growth averaged 192,000 in Q3, improved from 146,000 in Q2. The unemployment rate ticked up to 5.0% in September; the U-6 underemployment rate remained at 9.7%. Yearly wage growth reached 2.6%, with the average hourly wage rising six cents to $25.79.1,2    ISM INDICES SHOW A SEPTEMBER REBOUND America’s manufacturing sector grew again last month; the Institute for Supply Management’s factory PMI improved to 51.5 in September, recovering from its recessionary August mark of 49.4. The Institute’s non-manufacturing PMI surged north 5.7 points last month, rising to 57.1.2     OIL & GOLD PRICES HEAD IN OPPOSITE DIRECTIONS On Friday, gold closed down at $1,251.90 on the COMEX, falling about 5% for the week. Light sweet...

Economic Update, October 3, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Our greatest glory is not in never falling, but in getting up every time we do.” – Confucius WEEKLY TIP               Some pension plans let retirees choose between smaller lifelong income payments or a large lump sum. If one or both spouses are in line to receive pensions, a couple should at least explore some of the possibilities for lump sum investment. WEEKLY RIDDLE              What jumps higher than a building?       Last week’s riddle: How can you take three toothpicks and make them into the number nine?   Last week’s answer: Use three toothpicks, placing one straight and two across one another, to make the Roman numeral nine (IX).           October 3, 2016     NO ADVANCE IN CONSUMER SPENDING Personal spending was flat in August even as personal incomes rose 0.2%. These numbers from the Department of Commerce fell short of expectations: economists polled by MarketWatch had forecast a 0.2% gain in both categories. In other news linked to consumer spending, the federal government revised second-quarter GDP up to 1.4% in its third estimate; it had previously put Q2 growth at 1.1%.1       HOUSEHOLD CONFIDENCE IMPROVES September brought a big jump in the Conference Board’s closely watched consumer confidence index, which rose 3.0 points to 104.1. The University of Michigan’s consumer sentiment index ended September at 91.2, up from 89.8 at the end of August; the main factor in that gain was an improved outlook among higher-income households.1,2     New Home SAles DIP 7.6% This housing indicator tends to be very volatile, and this August...