Economic Update, July 10, 2017

Untitled Document TPhillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “To know oneself is to study oneself in action with another person.” – Bruce Lee WEEKLY TIP               Many life and auto insurance policies offer the buyer the option to pay premiums on a month-to-month or quarterly basis. While this option is convenient, these fractional premiums sometimes prove more expensive than a lump-sum premium paid annually. WEEKLY RIDDLE              In many homes and offices, this can go up and down stairs without moving. What is it?       Last week’s riddle: I have an eye, yet cannot see the ground around me. I take time to generate, yet in seconds I can dissipate. What am I?    Last week’s answer: A tornado.           July 10, 2016     HIRING PICKS UP AGAIN The Department of Labor announced some good news Friday: the creation of 222,000 net new jobs in June, the largest hiring gain in four months. Approximately 4.7 million people reentered the labor force and found work in June, a peak unmatched in 27 years of monthly data. Wages rose 0.2% for an annualized gain of 2.5%. The main unemployment rate ticked north to 4.4% as more Americans joined the job hunt; the U-6 rate, including the underemployed, increased 0.2% to 8.6%, its first rise since January.1     ISM FACTORY PMI HITS 3-YEAR PEAK In June, the Institute for Supply Management’s globally watched manufacturing purchasing manager index improved 2.9 points to 57.8, its highest reading since August 2014. ISM’s non-manufacturing PMI rose to 57.4 after a half-point gain; its June reading signaled the 90th straight...

Economic Update, July 3, 2017

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Every individual matters. Every individual has a role to play. Every individual makes a difference.” – Jane Goodall WEEKLY TIP               Millennials who create a budget can get a clear picture of their cash flow and income and thereby figure out exactly how much they can afford to contribute to retirement savings accounts. WEEKLY RIDDLE              I have an eye, yet cannot see the ground around me. I take time to generate, yet in seconds I can dissipate. What am I?       Last week’s riddle: Tom tells Phillip that a faded, worn ten-dollar bill is worth more than a newer one. In what way is he correct?    Last week’s answer: A ten-dollar bill will always be worth more than a newer one (a one-dollar bill).           July 3, 2016     HOUSEHOLD EARNINGS OUTPACE SPENDING According to newly released Department of Commerce data, personal incomes improved 0.4% in May, but personal spending advanced just 0.1% after a 0.4% gain in April. Core consumer prices (minus food and energy costs) rose only 1.4% during the 12 months ending in May.1,2,3     WERE CONSUMERS MORE CONFIDENT IN JUNE? By the looks of the University of Michigan’s monthly household sentiment index, no – that gauge fell 2.0 points to a mark of 95.1. On the other hand, the Conference Board’s consumer confidence index rose 1.3 points to a reading of 118.9.2,3   PENDING HOME SALES WEAKEN A National Association of Realtors report showed housing contract activity declining by 0.8% in May. This follows a 1.7% dip for pending home...

Economic Update, June 26, 2017

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “He that will not sail until all dangers are over, will never put to sea.” – Thomas Fuller WEEKLY TIP               If you are divorcing, make the effort to collect, sort, and catalogue as many financial documents as you can find. As you move further into divorce proceedings, these records may become crucially important. WEEKLY RIDDLE              Tom tells Phillip that a faded, worn ten-dollar bill is worth more than a newer one. In what way is he correct?       Last week’s riddle: What are you able to keep after you give it to someone?    Last week’s answer: Your word.           June 26, 2016     MORE HOMES MOVED IN MAY In a pleasant surprise for economists, both new and existing home sales picked up last month. The National Association of Realtors announced a 1.1% gain for resales, with the average house for sale spending only 27 days on the market. New home buying increased 2.9% in May, resulting in an annualized gain of 8.9%. The average sale price for a new home was $406,400, a record.1     LEADING INDICATORS IMPROVE The Conference Board’s Leading Economic Index rose 0.3% for May, following gains of 0.2% for April and 0.4% for March. Most of the index’s components were positive for May and a steepening interest rate spread, a climb for the Institute for Supply Management’s new orders index, and greater consumer optimism about business and economic conditions were major factors. The LEI was up 3.5% year-over-year through May.2   CRUDE IS ON ITS LONGEST LOSING STREAK IN...

Economic Update, June 19, 2017

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “We learn by example and by direct experience because there are real limits to the adequacy of verbal instruction.” – Malcolm Gladwell WEEKLY TIP               Do you have a child heading off to college this fall? Financially, it may be time for his or her first credit card. One idea: have your son or daughter sign up for a basic, low-limit card through a credit union or independent bank and have the monthly statements sent to you. WEEKLY RIDDLE              What are you able to keep after you give it to someone?       Last week’s riddle: I often stand straight and tall. I can illuminate your wall or hall. If you push me, I may fall. What am I?    Last week’s answer: A candle.           June 19, 2016     FED DELIVERS EXPECTED & UNEXPECTED NEWS As Wall Street anticipated, the Federal Reserve raised interest rates on June 14. The Federal Open Market Committee voted 8-1 to take the benchmark interest rate north by a quarter-point to the 1.00-1.25% range. The Fed also said it would begin to reduce its $4.5 trillion balance sheet at some point “this year” by slowing reinvestments. As a start, it will let $6 billion per month in Treasury holdings run off, along with $4 billion per month in agency debt and mortgage-linked securities. This implies upward pressure on long-term interest rates.1,2        RETAIL SALES, HEADLINE INFLATION BOTH RETREAT The Consumer Price Index declined 0.1% in May, noted the Bureau of Labor Statistics; core consumer inflation rose 0.1%. A bigger May...

Economic Update, June 12, 2017

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Shut out all of your past except that which will help you weather your tomorrows.” – William Osler WEEKLY TIP               One option that might help you leave more of your assets to charity when you pass away: put provisions in your estate planning documents that allow heirs to individually disclaim some or all of their inheritance in favor of a charitable donation. The disclaimed portion of the inheritance that is donated to charity will not be subject to estate tax. WEEKLY RIDDLE              I often stand straight and tall. I can illuminate your wall or hall. If you push me, I may fall. What am I?       Last week’s riddle: What 10-letter word has three consecutive pairs of letters in its middle? (It starts with the letter B.)    Last week’s answer: Bookkeeper.           June 12, 2016     AN UPBEAT REPORT ON THE SERVICE SECTOR The Institute for Supply Management’s May non-manufacturing purchasing manager index displayed a reading of 56.9 last week, showing expansion in U.S. service industries for an eighty-ninth straight month. Although the gauge declined 0.6 points from its April mark, it signaled a solid pace of growth. The index’s employment component rose 6.4 points to a mark of 57.8, as 15 industries added workers in May. The PMI has averaged a reading of 55.9 over the past 12 months.1          FACTORY ORDERS DECLINED IN APRIL According to a new Census Bureau report, they decreased 0.2%. That marked their first month-over-month retreat of 2017. The 0.2% gain for March factory orders, however,...