Economic Update, September 25, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Price is what you pay. Value is what you get.” – Warren Buffett WEEKLY TIP               Are your antiques and collectibles worth more than they used to be? Their current value should be accurately stated on your homeowner insurance policy. Otherwise, an insurer may not reimburse you for their full value if they are lost or damaged. WEEKLY RIDDLE              A 6-foot chain is suspended with its ends nailed to a wall, with the nails parallel to the floor. The chain sags and hangs down between the nails; the height of the hanging chain is therefore 3 feet from top to bottom. What is the distance in between the nails?         Last week’s riddle: Take three letters, arrange them one way, and you have a word for “conflict.” Arrange them another way, and you have a word for “uncooked.” What are the three letters?      Last week’s answer: A, R, and W.           September 25, 2017     FEDERAL RESERVE: UNWINDING WILL BE GRADUAL Last Wednesday, the country’s central bank detailed how it would shrink its mammoth balance sheet. During the fourth quarter, the Fed will unload $10 billion of maturing bonds per month; in each subsequent quarter, the monthly runoff will increase by $10 billion until reaching a limit of $50 billion. Fed chair Janet Yellen said that this schedule is set in stone, barring a “sufficiently great” economic threat. The Fed made no interest rate move last week, but 12 of 16 Fed officials do project a hike before 2017 ends.1   HOME...

Economic Update, September 18, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “People need to be reminded more often than they need to be instructed.” – Samuel Johnson WEEKLY TIP               Did you just get a raise or a promotion? Beware of lifestyle creep – the tendency to spend more when you make more. Be sure to direct appropriate amounts of your increased income into savings and investments. WEEKLY RIDDLE              Take three letters, arrange them one way, and you have a word for “conflict.” Arrange them another way, and you have a word for “uncooked.” What are the three letters?         Last week’s riddle: I walk and run on all fours, and I laugh while stalking my prey, but I seldom go in for the kill. What animal am I?      Last week’s answer: A hyena.           September 18, 2017     INFLATION SPIKED IN AUGUST Economists had long assumed consumer prices would rise abruptly at some point, and they certainly did last month. The Consumer Price Index increased 0.4% in August, its biggest one-month advance since its 0.6% gain in January. Higher gas prices were a major influence: they rose 6.3% for August. Core inflation was up 0.2% after four straight 0.1% monthly gains. Yearly consumer inflation is now at 1.9%. Wholesale inflation, as measured by the Producer Price Index, rose 0.2% in August to an annualized pace of 2.4%.1,2   RETAIL SALES STAGE A LATE-SUMMER RETREAT Americans cut back on retail purchases during August. Retail sales declined 0.2%, a disappointment after the 0.3% July gain. The silver lining: the core number, minus gasoline and...

Economic Update, September 11, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “An unhurried sense of time is in itself a form of wealth.” – Bonnie Friedman WEEKLY TIP               Grandparents might want to look at this potential tax break: two-thirds of U.S. states offer a state income tax deduction for contributions to a 529 college savings plan. Grandparents are eligible to claim such a deduction if they live in the state hosting the plan. WEEKLY RIDDLE              I walk and run on all fours, and I laugh while stalking my prey, but I seldom go in for the kill. What animal am I?         Last week’s riddle: What has a neck, yet no head?         Last week’s answer: A bottle.           September 11, 2017     EQUIFAX BREACH MAY IMPACT 44% of AMERICANS Thursday evening, credit reporting agency Equifax disclosed that hackers had raided its databases this spring, accessing the personal information of up to 143 million people. Equifax believes that about 209,000 credit card numbers may have been collected in the process, plus numerous Social Security and driver’s license numbers. Consumers can visit equifaxsecurity2017.com to see if they may have been affected by the breach. Equifax is offering a free year of identity theft insurance and credit monitoring for those at risk.1   SERVICE SECTOR EXPANDS FASTER At an August reading of 55.3, the Institute for Supply Management’s service sector purchasing manager index was 1.4 points improved from its July mark, indicating a quicker pace of expansion for non-manufacturing firms in the eighth month of the year. Readings above 50 indicate sector growth.2    ...

Economic Update, September 5, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.” – Eddie Rickenbacker WEEKLY TIP               Has your emergency fund or checking account taken a hit lately? Consider setting up a monthly automatic transfer to help you replenish it. WEEKLY RIDDLE              What has a neck, yet no head?         Last week’s riddle: Jon drove past the college where he was enrolled at 60mph, but he wasn’t pulled over or cited, even though a police officer was right behind him. Why?         Last week’s answer: He was driving on a highway with a speed limit above 60mph.           September 4, 2017     SEPTEMBER BRINGS A MEDIOCRE JOBS REPORT The Department of Labor’s latest employment snapshot shows payrolls expanding by 156,000 net new jobs in August. This was a retreat from the job gains of 200,000+ reported in both June and July. The headline jobless rate ticked up to 4.4%; the U-6 rate, which factors in the underemployed, held steady at 8.6%. Annualized wage growth remained stuck at 2.5%.1   POSITIVE NEWS FROM MAIN STREET Climbing once again, the Conference Board’s consumer confidence index ascended 2.9 points to 122.9 in August. That topped the forecast of economists surveyed by MarketWatch, who anticipated a 122.5 reading. Additionally, the Department of Commerce said that consumer spending advanced 0.3% in July, up from 0.2% in June. Household incomes rose 0.4% in July; they were unchanged in June.2     ISM: FACTORY SECTOR IN FINE SHAPE Can the Institute for Supply Management’s manufacturing...

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...

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