ISM Non-Manufacturing Index

The ISM Non-Manufacturing Index helps determine the overall economic strength of the services sector.  Components evaluated are employment, business activity, new orders, and supplier deliveries, which are then compiled into an index.  The nonmanufacturing sector represents a much larger share of the overall U.S. economy when compared to the manufacturing sector, making up approximately 80%; the sector’s economic weight makes …

ISM Manufacturing Index

The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall conditions by looking at factors such as orders for durable goods, industrial production, and hiring. It gives a general direction rather than the specific strength of the factory sector and manufacturing activity in the U.S. A reading above 50 is an indicator that …

Unemployment Rate

The US Unemployment Rate measures the percentage of total employees in the United States that are a part of the labor force but are without a job. It is one of the most widely followed indicators of the health of the US labor market and economy. Historically, the US Unemployment Rate reached as high as 10.80% in 1982 and 9.9% …

Chicago PMI

Chicago PMI is a composite index of business conditions in the Chicago area. Data from Chicagoland firms is collected by the financial news firm, Market News International, through manufacturing and non-manufacturing surveys sent to businesses. A drop in demand for goods is reflected in businesses’ responses in the Chicago PMI survey, which, is in turn, reflected in a lower index …

Personal Consumption Expenditures

Consumer spending, measured by Personal Consumption Expenditures (PCE), makes up approximately two-thirds of the economy and is a direct measure of purchasing activity. PCE is a reliable indication of inflation because it is calculated from data acquired directly from the GDP report and businesses. We see where consumers are spending their dollars, whether it be durable and nondurable goods, or …

Existing Home Sales

Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built.  Existing home sales give an indication of the demand for housing.  While home resales may not generate new construction jobs as housing starts do, they have a similar effect on consumer spending as people purchase items for their new home. Existing …

The Case for Increasing Roth Contributions

Roth IRAs have always been valuable tools in the retirement and legacy world. Then late in 2019, the SECURE Act made tax-deferred inherited accounts, like regular IRA’s or 401k’s a 10-year ticking tax bomb for heirs. Shortly after, the 2020 CARES act injected trillions of dollars back into the economy, inflating the US’s growing debt. This article will start with …

Producer Price Index

The Producer Price Index (PPI) looks at the average change in selling prices from the viewpoint of domestic producers of both goods and services. Three areas of production are observed: industry-based, commodity-based, and commodity-based final demand-intermediate demand. Investors look to the producer price index, which is a more relevant way of gauging inflation than CPI because of the large basket …

Protecting Your Client’s Investments in the Face of Divorce

Published on FamilyLawyerMagazine.com by Diana Shepherdon, June 11, 2020 The key is to find an objective divorce financial expert who is also a licensed financial and investment professional and has a solid understanding of financial considerations in a divorce. This can make all the difference when protecting your client’s investments in the face of divorce. Here are the rights and …

Job Openings and Labor Turnover Survey

The JOLTs report is the Job Openings and Labor Turnover Survey that tracks several trends in evaluating the labor market. Through JOLTs, we can see voluntary and involuntary separations from employment in addition to new job openings and hires that have taken place. Job openings from February to March have decreased 11.61% from 7.0 million to 6.19 million in total. …

U.S. Initial Jobless Claims

US Initial Jobless Claims, provided by the US Department of Labor, provides underlying data on how many new people have filed for unemployment benefits in the previous week. Given this, one can gauge market conditions in the US economy concerning employment; as more new individuals file for unemployment benefits, fewer individuals in the economy have jobs. Historically, initial jobless claims …

Consumer Spending and Personal Income

Consumer spending, measured by Personal Consumption Expenditures (PCE), makes up approximately two-thirds of the economy and is a direct measure of purchasing activity. PCE is a reliable indication of inflation because it is calculated from data acquired directly from the GDP report and businesses. We see where consumers are spending their dollars, whether it be durable and non-durable goods, or …

Single Premium Immediate Annuities

A Single Premium Immediate Annuity (SPIA) is an exchange of a lump sum (premium) for a stream of income (annuity) until the covered person dies. An SPIA may be beneficial to a financial situation, but there are several pros and cons to consider. First, an illustration of how an SPIA works and its value. Next, a discussion of the pros …

Gifting Opportunities in a Low-Interest-Rate Environment

In early 2020, the Fed cut down their rate to zero to stimulate the economy. We have since learned this was far less effective to the overall market than planned, but individuals can still benefit significantly. An earlier post on charitable contributions discussed some new rules to increase donations for the tax year 2020. This article will dive further into attractive giving …

The government definitely wanted to throw a big stick to keep the economy rolling.

It is hard not to start a market update with the following graph.  The economy of the United States is firmly in the hand of the people and their comfort with the state of the Coronavirus.  Ask yourself the following questions: 1.       When would you feel comfortable going to the grocery store? 2.       When would you feel comfortable enough to …

Making Lemonade out of Three COVID Lemons

In light of recent concerns over the economy, we are all worried about the performance of our investment portfolios. The latest pandemic has spiraled the market into a decline that is proving to be unpredictable. With this has come a lot of uncertainty and a few sour lemons. However, there are actions you can take that will help sweeten things …

An Overlooked Opportunity to Reduce Medicare Premiums

The Social Security administration calculates Medicare premiums using a two year look back on Modified Adjusted Gross Income (MAGI). As an example, 2019 MAGI will set Medicare Premiums for 2021. However, if income recently dropped off, current Medicare premiums may not seem fair. Form SSA-44 allows a Medicare participant to claim a life-changing event for a reduction of MAGI. A …

Changes to Charitable Contributions

The CARES Act was signed into law on March 27, 2020 and has already become infamous for rollout issues. However, there are two changes to charitable contribution rules to incentivize donating in 2020. This year is the most tax-effective charitable contributions have been since the Tax Cuts and Jobs Act was put in place. The first provision is a universal …

Chicago Fed National Activity Index

The Chicago Fed National Activity Index (CFNAI) is a weighted average of 85 existing monthly indicators of national economic activity that are divided into four broad categories of data: production & income; employment, unemployment, & hours; personal consumption & housing; and sales, orders, & inventories. It is constructed to have an average value of zero and a standard deviation of one. …

Chemical Activity Barometer

The Chemical Activity Barometer (CAB) is a composite index, which is comprised of indicators drawn from a range of chemicals and sectors, including chlorine, alkalis, pigments, plastic resins, and other selected basic industrial chemicals. It has been shown to provide a lead of 2 to 14 months, with an average lead of 8 months at cycle peaks as determined by …

U.S. Building Permits

US Building Permits, as defined by the Census Bureau, is the approval or authorization by the government to legally work on construction projects in permit-issuing places, in this case, specifically for new privately-owned housing units. An increase in building permits is a leading indicator of the health of the US Housing sector, and often the US economy at large. US …

Housing Starts

Housing starts track the number of new residential construction projects over a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complementary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator. Housing starts fell by -22.25% in March 2020 to an annualized rate of 1.22 million, …

Retail Sales

Retail Sales are the total amount of merchandise and related services sold to consumers. It is considered a sign of strength of U.S. Consumer spending, which accounts for roughly two-thirds of the economy. This indicator also provides insight into which areas of the retail space are experiencing strong sales. Food was excluded in the Retail Sales TTM chart above because of …

Producer Price Index

The Producer Price Index (PPI) looks at the average change in selling prices from the viewpoint of domestic producers of both goods and services. Three areas of production are observed: industry-based, commodity-based, and commodity-based final demand-intermediate demand. Investors look to the producer price index, which is a more relevant way of gauging inflation than CPI because of the large basket …

Consumer Price Index

The Consumer Price Index (CPI) tells us of any inflationary pressures in the economy.  The CPI measures the average price levels of a basket of goods and services purchased by consumers.  The index starts with a base time period (1982-1984, currently) and shows the overall increase since that time. As with many economic indicators, it can be volatile from month …

Job Openings and Labor Turnover

The JOLTs report is the Job Openings and Labor Turnover Survey (as of February 2020) that tracks several trends in evaluating the labor market. Through JOLTs, we can see voluntary and involuntary separations from employment in addition to new job openings and hires that have taken place. Job openings from January to February have decreased by 130,000 from a rate …

M2 Money Stocks

M2 Money Stock refers to the measure of money supply that includes financial assets held mainly by households such as savings deposits, time deposits, and balances in retail money market mutual funds, in addition to more readily-available liquid financial assets as defined by the M1 measure of money, such as currency, traveler’s checks, demand deposits, and other checkable deposits. The …

Oil Prices

The cost of oil is important because of the large amount that is used in American industries and purchased by consumers every day. The price-per-barrel of the West Texas Intermediate oil firm can be used to predict future costs of business; industries heavily reliant on oil and gas consumption like construction and transportation would be more economically affected than industries …

Change in Employment by Industry

This graph displays the seasonally adjusted employment change by industry in March 2020 in thousands. These numbers are calculated by taking the difference between the previous and current months total to jobs per industry to then determine how employment has shifted within a specific month. This chart is a good indicator to determine which industries are contracting or expanding within …

Non-Farm Payrolls

Nonfarm payrolls give an overview of the overall employment outlook of the US economy; nonfarm payrolls do not include those employed in agriculture because of the seasonal nature of their work. This report obtains these numbers from 142,000 businesses and government agencies to track the new jobs added in non-farming sectors of the economy. The unemployment rate is at 3.5%, …

Existing Home Sales

Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built.  Existing home sales give an indication of the demand for housing.  While home resales may not generate new construction jobs as housing starts do, they have a similar effect on consumer spending as people purchase items for their new home. Existing …

30-Year Fixed Mortgage

The 30-year fixed mortgage rate is very important to the home-buying market because it accounts for over 80% of financing. The 30-year fixed mortgage is influenced by the 10-year treasury rate of the Federal Reserve when the 10-year treasury rates fall the 30-year mortgage rate fall as well. The 30-year fixed mortgage increased to 3.65% in March, compared to 3.49% …

Architecture Billings Index

The Architecture Billings Index (ABI) is an indicator of commercial and industrial building activity. The Work-on-the-Boards survey is given to architecture firms each month to report how billing activity performed in the previous month. The ABI is a reliable tool for firms to track architectural movements in the market. Readings above 50 indicate rising levels of construction for non-residential buildings, …