Inflation cooled in June, according to Labor Department data. Compared to the +9.1% inflation rate in the 12 months through June 30, the consumer price index (CPI) in the 12 months through July 31 increased by +8.5%. The Standard Poor’s 500 rallied +2.1%. However, just because inflation cooled in July and may even have peaked does not mean the worst of the financial economic turbulence is behind us. For long-term retirement investors and ..
When the Bureau of Economic Analysis announced on Thursday, July 28th that gross domestic product shrank by nine-tenths of 1% in the second quarter, the economy was teetering on recession, but stocks rose sharply – by 1.2% that day! and another 1.4% the following day!..
The nation created twice as many new jobs as expected in July, according to the July employment situation report. It is likely to mean that, despite two consecutive quarters of negative economic growth, the United States is not in a recession but is undergoing an inventory correction. That’s one of multiple concurrent anomalies making the financial economic outlook more complicated than in living memory. As a rule of thu..
In the three tumultuous months of the second quarter, the Federal Reserve of Atlanta’s algorithm for estimating quarterly economic growth was far more accurate than consensus forecasts by leading economists. That’s unusual. The Atlanta Fed’s GDPNow predictions are sometimes wildly wrong. Though consensus forecasts of economists are far from perfect, the humans have been more reliable than the GDPNow algorithm. The Fe..
Real disposable personal income (DPI) per capita in the United States declined from $46,985 to $45,356 in the past 12 months, according to data released today by the U.S. Bureau of Labor Statistics. Consumer buying power shrunk by -3.5%. Here’s the breakdown of income and spending, crucial factors in the consumer driven economy of the U.S: Disposable personal income was up +3.3% compared to June 2021 – before adjusting for inflation. Inflatio..
Volatility in the stock market has increased. Recently we actually hit some down days of -3.6% and -4% in the stock market. That shakes people up. But remember why you bought stocks. The basic axiom of investing in the stock market is that you deliberately looked for an asset class that was volatile. After all, if you don't own an asset class that's going to be volatile, why are you entitled to 10% long-term total return in the stock ..
Housing slumped again and the Leading Economic Indicator Index plunged for a third straight month, but the consensus forecast of leading economists is for no recession. The economy remains on the edge of a recession but the stock market this past week acted like the worst of the bear market may be over. Housing starts dropped for a second straight month. However, permits to start construction of a new single-family home are “holding up,” acco..
By our count, the bear market of 2022 is the latest of more than 20 market crises that came and went since 1957. The bear market of 2022 began June 13, when the Standard & Poor’s 500 index closed more than -20% lower than its all-time closing high on January 3, 2022. No one knows how long the bear market will last. The average bear market in modern history lasts about 11 months. On the other hand, having come off its low of June 16, this be..
Retail sales climbed by +8.8% in the 12 months through June, according to the release Friday at 8:30 a.m., by the Census Bureau. The news brightened the near-term economic outlook, and it sparked a +1.9% one-day surge in stock prices. The sharp rally in stocks followed Wednesday’s worse-than-expected inflation release showing the Consumer Price Index (CPI) soared +9.1% in the same 12-month period through June. To be clear, the +8.8% retail sale..
In 2017, the Tax Cuts & Jobs Act of 2018 (TCJA) effectively repealed estate tax by doubling the amount of wealth that could be transferred tax exempt from $5.5 to $11.2 million. In 2022, lifetime and post-mortem gifts of $12.06 million are exempt from taxation. Allowing joint filers (read: couples) to pass $25 million to their heirs tax-free redefined the rules of estate planning not only for the top one-half of 1% of taxpayers, it also rewro..
The U.S. economy added 372,000 new jobs in June, easing fears of a recession. Strong job creation makes a three-quarter of 1% rate hike likely on July 27, when the Federal Reserve releases its next policy statement. The Wednesday, July 13, 8:30 a.m. ET, Consumer Price Index (CPI) release is the next important economic indicator to watch. If the pace of inflation eases, as measured by the CPI, then a “soft landing” could still be possible, and..
In 2022, the lifetime exemption from gift and estate tax is $12.06 million. Under current law, which is unlikely to be changed in Congress, the exemption rises annually through 2025 based on the inflation rate. With inflation in the first half of 2022 soaring at an annual rate of 8.6%, the exemption from estate and gift taxes will be about $12,180,000 in 2023. After 2022, inflation is expected to revert to its historical norm of 3%, so an estimat..
Bad news on the economy and stock market seem to be mounting, which may be a good sign. Here’s the bad and good news a long-term investor needs to know. The second quarter ended on Thursday, June 30, 2022, with the Standard & Poor’s losing -16.5% in the three-month period. It was the worst quarter since the onset of the pandemic in the first quarter of 2020, when stocks plunged -19.6%. The first-half of 2022 was the worst six-..
Bear markets in stocks tend to bring out investment deals and scams preying on fear. With the bear market becoming official on June 13, when the Standard &Poor’s 500 index closed more than -20% lower than its January 3 all-time high close of 4,796.56, please be aware that investment pitches and outright scams that prey on fear become more believable in bear markets. In an exuberant bull market in stocks, speculative investments are more eas..