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...

Economic Update August 22, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Because we don’t think about future generations, they will never forget us.” – Henrik Tikkanen WEEKLY TIP               If you have recently divorced, be sure to review your will, your legal documents, and the beneficiary forms for your retirement accounts and insurance policies. All of them may need to be revised. WEEKLY 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 riddle: Three women leave work with only one umbrella to share between them. They all try to fit under the one umbrella as they walk to a cafe. When they reach the cafe, none of them are the least bit wet. Why?   Last week’s answer: It never rained as they were walking.           August 22, 2016     IS A 2016 INTEREST RATE HIKE STILL POSSIBLE? According to the minutes from the Federal Reserve’s July monetary policy meeting, some Federal Open Market Committee members felt “that economic conditions would soon warrant taking another step in removing policy accommodation.” Others favored waiting longer to adjust rates, contending that the strong hiring seen in recent months would presently moderate. Fed officials broadly agreed that more economic data would be needed before any action.1      NO CPI ADVANCE IN JULY The federal government’s Consumer Price Index went nowhere last month, leaving yearly inflation at a mere 0.8%. The core CPI advanced another 0.1%, which put the 12-month gain in core consumer prices at 2.2%. In the year ending in June,...

Economic Update August 8, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength to body and soul alike.” – John Muir WEEKLY TIP               Your will, trust, and powers of attorney should be reviewed regularly, once a year if possible. Time can alter priorities and intentions. WEEKLY RIDDLE              What three letters can you use to spell out a word meaning “enemy?”       Last week’s riddle: What can you find precisely in the middle of Miami?   Last week’s answer: The letter A.           August 8, 2016     TWO STRAIGHT MONTHS OF IMPRESSIVE JOB GAINS The Department of Labor provided Wall Street and Main Street with some great news Friday. Last month, the population of Americans with full-time jobs rose by 255,000. About 70,000 of the workers hired in July found employment within the professional and business services sectors. In addition, the huge June hiring gain was revised slightly upward to 292,000. As labor force participation increased to 62.8% in July, the headline jobless rate stayed at 4.9% while the broader U-6 measure of unemployment came in at 9.7%; the average wage rose 0.3%. Across the past year, the economy has added an average of 206,000 jobs a month.1     SOLID CONSUMER SPENDING IN JUNE Households boosted their spending by 0.4% in the sixth month of 2016, according to a new report from the Bureau of Economic Analysis. The June advance matched the gain in May. Personal incomes also rose 0.2% for the second month in a row.2...