Prosperity Partners Blog
Steady Freddie Job Growth
The U.S. Bureau of Labor Statistics (BLS) reported that nonfarm payrolls rose by 216,000 in December, while October and November were revised down by a total of 71,000. The unemployment rate held steady at 3.7% in December.
The Blockbuster Year Few Expected
A December 29th Wall Street Journal title summed the year up: What Did Wall Street Get Right About Markets This Year? Not Much. “Usually, recessions sneak up on us. CEOs never talk about recessions,” Zandi said. “Now it seems CEOs are falling over themselves to say we’re falling into a recession.
Home Prices Defy Conventional Wisdom
Mortgage rates have soared, and home sales are down sharply. Conventional wisdom would suggest that prices should be down. But housing prices have defied expectations, rising to record heights and locking first-time buyers out of the market.
Ensuring Smooth Communication: Whitelisting Our New Domain
As our company transitions from www.fdpwm.com to www.prosperity-pwm.com, we want to ensure seamless communication with our valued clients. Whitelisting our new domain is crucial to prevent important messages from being lost in spam folders.
The Most Consequential Fed Meeting of the Year
The meeting held by the Federal Reserve last week was the most consequential gathering of central bankers this year. The Fed held the fed funds rate at 5.25 – 5.50% as expected, but in so many words, the Fed pivoted on its rate stance.
Jobs Report – Nothing New
The latest jobs report did little to alter the economic outlook. Instead, it was a steady-as-she-goes report. Nonfarm payrolls grew by 199,000 in November, according to the U.S. Bureau of Labor Statistics (BLS). It was nearly in line with the consensus forecast among economists of 190,000 (CNBC). The unemployment rate fell to 3.7% in November from 3.9% in October.
Bond Reversal Powers November Advance
Many things influence the direction of stocks. Corporate profits, economic growth, general market sentiment, inflation, and interest rates are among those variables. At any given point, the influence of various factors on stocks will fluctuate. In 2022, investors were predominantly concerned about the Fed’s efforts to combat inflation.
Softer Inflation Raises Odds the Fed is Done
The U.S. Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) was unchanged in October from the prior month. It is up 3.2% from a year ago. Excluding volatile food and energy prices, the core CPI rose 0.2%. The core CPI is up 4% compared to one year ago, which represents the smallest increase since September 2021.
Signs of Softening
U.S. economic growth in the third quarter accelerated sharply, growing at an annual pace of 4.9%, according to last month’s report by the U.S. Bureau of Economic Analysis. But GDP (Gross Domestic Product) data are backward-looking. It’s a snapshot from July through September. We’re well into November.
Soft Landing or Recession
So far this year, forecasts for a recession or a soft landing have failed to materialize. What is a soft landing? Economic growth slows, the rate of inflation slows, but the economy stays out of a recession. In other words, the economy is not too hot or too cold.
Breakneck Speed
The U.S. Bureau of Economic Analysis (BEA) reported last week that Gross Domestic Product (GDP), which is the largest measure of goods and services for the economy, expanded at an annual pace of 4.9% in the third quarter.
Disconnect
I recognize we’re getting a bit granular reviewing just one week of market action, but quickly, last week’s volatility was tied primarily to worries about rising bond yields amid a continued stream of strong economic data, not what’s happening in the Middle East.