Weekly Economic Update presented by Meld University

Weekly Riddle:

What can be seen in the middle of March and April but can’t be seen at the beginning or end of either?

Tune in next week for the answer.
(Last week's riddle and answer can be found near the end of this post.)

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Weekly Economic Update

Last Week and the Economy

Consumer prices increased last month but the annual inflation rate slowed modestly. Retail sales continued to expand. Small business owners were slightly more optimistic, but their outlook remains depressed by historical standards.

Last week, the major stock indices tumbled. The S&P 500 lost 4.77% and the Dow Jones Industrial Average [DOW] followed suit, falling 4.13%. The NASDAQ ended the week 5.48% lower and the Russell 2k Small Cap Index also fell by 4.50%. In international markets the MSCI-EAFE Index decreased 2.73%.

Consumer Prices Increased Marginally in August

According to the Bureau of Labor Statistics, the Consumer Price Index [CPI] increased 0.1% in August. Over the last 12 months, prices have risen 8.3%, slightly lower than the annual increase of 8.5% seen in July.

Energy prices declined but were outweighed by increases in shelter, food, and medical care costs. Food prices grew by 0.8% for the month and 11.4% on an annual basis. Shelter costs rose 0.7% in August and 6.2% over the last 12 months, and medical care costs increased 0.8% last month and 5.6% in the past year.

Retail Sales Rose Last Month

In August, retail sales continued to climb, increasing by 0.3% for the month. Over the past year, retail sales have grown 9.1%. However, it is important to note that these figures are adjusted for seasonal variation but not price differences, so inflation is a likely contributor to higher retail sales figures.

Sectors that reported increased sales included motor vehicle and parts dealers, food and beverage stores, bars and restaurants, sporting goods and hobby sellers, and clothing retailers. On the other hand, health and personal care, home furnishing stores, and gas stations were among the sectors with slowing revenues.

Small Business Leaders Are Slightly More Optimistic

The NFIB Small Business Optimism Index rose 1.9 points in August to 91.8. Despite the monthly gain, August marks the eighth consecutive month that the index reading has been below the 48-year average of 98.

In August, the net percentage of small business owners expecting better business conditions improved by 10% to the highest level since February but these levels are still remarkably low by historical standards. Despite the persistent pessimism of small business owners, many indicated that they still intend to hire. Over the next three months, 21% of small business owners intend to add new jobs.

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Weekly Economic Update presented by Meld University
Weekly Economic Update

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Consumer prices rose slightly in August. Retail sales continued to expand. Small business optimism increased but remains low.

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Key Economic Data Points

Unemployment Rate:

FOMC Target Rate:

GDP:

As of August 2022: 3.7% (Next Report: 10/7/22)

As of July 2022: 2.25% – 2.5% (Next Report: 9/21/22)

Q2 2022: -0.6% (Next Report: 9/29/22)

Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis.

Weekly Quote:

Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.
-William A. Ward

The Week Ahead – Economic Data & Events

Monday: Housing Market Index

Tuesday: Housing Starts and Permits

Wednesday: Existing Home Sales, FOMC Announcement, Fed Chair Press Conference

Friday: PMI Composite Flash

Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)

Source: Econoday

The Week Ahead – S&P 500 Companies Reporting Earnings

Monday: AutoZone Inc. (AZO)

Tuesday: Adobe Inc. (ADBE)

Wednesday: General Mills Inc. (GIS), Lennar Corporation Class A (LEN)

Thursday: Accenture Plc Class A (ACN), Costco Wholesale Corporation (COST), Darden Restaurants Inc. (DRI), FactSet Research Systems Inc. (FDS), FedEx Corporation (FDX), DENTSPLY SIRONA Inc. (XRAY)

Source: Finscreener

Weekly Tip:

Investors often focus on budgeting items like income and expenses to judge their financial picture. It is also important to keep track of your net worth which includes your long-term assets and liabilities. With both your net worth and your monthly budget, you can gain a clearer understanding of your true financial position.

a table containing closing figures for the major equity indices

A chart showing closing data for the S&P 500 index last week.

Data Sources for stock and index quotes: Yahoo Finance, WSJ

Join Us for Our Next Meld University Events:

medicare and managing health care expenses in retirement
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Are you or a loved one over age 60, or retiring soon, and wondering: When do I need to sign up for Medicare? How do I sign up?

Navigating the Social Security & Medicare Maze
Navigating the Social Security & Medicare Maze

Complete the Form Below to Sign Up for this Event. You will receive a confirmation email when you sign up. Join us on October 25 at the stunning Birmingham Botanical Gardens to hear from our resident Social Security and Medicare specialist Pat Burris. If you cannot attend this in-person event, be sure to sign up... Read more »

Preparing For Long Term Care Expenses in Retirement
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Long-term care expenses represent a significant threat to your retirement outlook and can deplete a retirement nest egg quickly.

 

Last Week's Riddle and Answer

Last Week's Riddle:
I shave every day, but my beard stays the same. What am I?

Last Week's Answer:
A barber (who shaves others, but not necessarily himself).

Securities Offered Through Triad Advisors, LLC. Member FINRA/SIPC Advisory Services Offered Through Meld Financial Inc. Meld Financial, Inc. and Triad Advisors, LLC. Are Not Related. The information contained herein should not be construed as legal advice or a legal opinion on any factual situation. Its contents are intended for general information purposes only. Always consult with a competent professional service provider for advice on tax, accounting, and other financial matters specific to your situation.

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

Riddles used in this publication may originate from the books: Lateral Thinking Puzzles by Paul Sloane; or from Workspace Solutions, LLC.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

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Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.