Money Talk Podcast

Landaas & Company newsletter  December edition now available.

Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Tom Pappenfus

(with Max Hoelzl, Joel Dresang, engineered by Kevin Lofy)

Week in Review (Nov. 28-Dec. 2, 2022)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

Higher mortgage rates continued to slow housing price increases in September, as the year-to-year gain decelerated for the sixth month in a row. The S&P CoreLogic Case-Shiller national index rose 10.6% from September 2021, down from a 13% gain in August and a record rise of nearly 21% in March. Adjusted for seasonal fluctuations, the price index actually declined from the month before, as it did for all 20 cities in a composite index. A spokesman for S&P said Federal Reserve increases in interest rates should continue to raise financing costs for housing, which likely will further slow prices.

Concerns about inflation—especially gas prices—lowered consumer confidence in November, the Conference Board reported. The business research group said consumer assessments of current conditions suggested “the economy has lost momentum” heading into year-end. It called short-term outlook “gloomy.” Consumers’ expectations of inflation rose to the highest level since July, even though inflation generally and gas prices particularly have dropped in recent weeks. The Conference Board said in a statement that the likelihood of recession remained high.

Wednesday

The U.S. economy grew faster than previously estimated in the third quarter, rising at an annual pace of 2.9%, the Bureau of Economic Analysis reported. Stronger consumer spending on health care and other services, greater business investments and increased exports of industrial materials helped push gross domestic product higher than the prior estimate of 2.6%. Without annualizing the figures, inflation-adjusted GDP grew 1.9% from the third quarter of 2021 and was up 5.5% from the quarter just before the COVID pandemic. The Federal Reserve’s favorite measure of inflation, the personal consumption expenditure index, rose 6.3% from the year before, down from 6.6% in the second quarter.

The Bureau of Labor Statistics said job openings receded in October, sinking for the fifth time in seven months. Employers posted 10.3 million openings, down from a record 11.8 million in March. The number of hires also fell, for the seventh time in eight months. Still, openings continued to outnumber the 6 million unemployed job seekers in October, supporting worker confidence. Some 4 million workers quit their jobs in October, down slightly from September but still historically high.

In a sign that residential real estate sales will continue to erode, pending home sales data sank in October for the fifth month in a row. The index of contract signings, from the National Association of Realtors, declined nearly 5% from September and was down 37% from the year before. The trade group cited the highest mortgage rates in 20 years as a deterrent to home buyers, but it also suggested rates peaked in mid-November, having declined in the last couple of weeks.

Thursday

The four-week moving average for initial unemployment claims rose for the seventh time in nine weeks, reaching its highest point since early September. An indicator of layoffs, the average continued a short-term trend of creeping up but remained 38% below the 55-year average. The Labor Department also reported that a total 1.5 million Americans claimed unemployment compensation in the latest week, up 2% from the week before but down from 2.1 million the year before.

A key driver of the U.S. economy, consumer spending, outpaced personal income in October. The Bureau of Economic Analysis said spending rose by 0.8% from September while income gained 0.7%. Adjusted for inflation, spending advanced 0.5%, vs. a 0.4% increase in income. As a result, the personal saving rate dropped to 2.3% of disposable income, the lowest since mid-2005. The same report showed the Personal Consumption Expenditures index, the Fed’s favorite measure of inflation, rose 6% from the year before, the lowest rate since December.

Manufacturing receded in November for the first time since May 2020, according to the Institute for Supply Management. The trade group’s survey of manufacturing executives showed companies preparing for lower output after six months of weakening orders. Production grew at a slower pace in November, but components for new orders and employment contracted. On the other hand, supplier deliveries reached their strongest measurement since 2012.

A cutback in residential spending led to a 0.3% decline in the pace of construction spending in October. The Commerce Department said the annual rate of expenditures fell for the second time in three months after hitting an all-time high of $1.8 trillion in June. Despite the monthly setback, construction spending in October was still 9% above the year-ago level. Housing, which accounts for half of construction spending, declined 0.3% from September’s pace and was up 8.5% from the year before.

Friday

U.S. employers added 263,000 jobs in November, slowing down from its 2022 pace of 392,000 jobs a month, which was below the 2021 average of 562,000. Still, employment reached 1 million positions above the peak prior to the COVID pandemic. Since April 2020, 23 million jobs have returned to the economy, according to data from the Bureau of Labor Statistics. The leisure and hospitality industry accounted for one-third of the job gains in November, though it employs less than one-tenth of all workers. It remains 980,000 jobs (5.8%) below its staffing in February 2020. Average wages rose 5.1% from November 2021, the 19th consecutive month in which wages did not keep pace with overall inflation. The same report showed the unemployment rate staying at 3.7%, near its lowest level in more than 50 years.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11462, up 235 points or 2.1%

Standard & Poor’s 500 – 4072, up 46 points or 1.1%

Dow Jones Industrial – 34429, up 82 points or  0.2%

10-year U.S. Treasury Note – 3.52%, down 0.18 point

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Landaas & Company newsletter  December edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Mike Hoelzl

(with Max Hoelzl, engineered by Jason Scuglik)

In a special Thanksgiving Money Talk Podcast, investment advisors from Landaas & Company discuss wise ways investors can plan to charitably share their wealth. Among the topics:

Gifting appreciated securities

Qualified charitable distributions from retirement accounts

Donor-advised funds

Learn more

IRS Publication 526, Charitable Contributions

Charitable Contributions, IRS Tax Topic

An IRS FAQ on qualified charitable distributions from IRAs

ONLINE GUIDES FOR SCRUTINIZING CHARITIES:

BBB Wise Giving Alliance

Charity Navigator

Charity Watch

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11226, up 80 points or 0.7%

Standard & Poor’s 500 – 4026, up 60 points or 1.5%

Dow Jones Industrial – 34347, up 599 points or  1.8%

10-year U.S. Treasury Note – 3.7%, down 0.12 point

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Landaas & Company newsletter  November edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Mike Hoelzl

(with Max Hoelzl and Joel Dresang engineered by Jason Scuglik)

Week in Review (Nov. 14-18, 2022)

Significant Economic Indicators & Reports

Monday

No major announcements

Tuesday

Inflation on the wholesale level continued to moderate in October. The Producer Price Index rose by 0.2% from September and was up 8% from the year before, the Bureau of Labor Statistics reported. The one-year gain was the sixth deceleration in seven months after reaching a high of 11.7% in March. The cost of services overall dropped in October, based on the index. The increase in the cost for goods was fueled by a 5.7% rise in gasoline prices. Excluding volatile costs for food, energy and trade services, the so-called core Producer Price Index rose 5.4% from October 2021, the lowest rate in 17 months.

Wednesday

Retail sales continued growing in October, rising 1.3% from September and up 0.8% when adjusted for inflation. Led by a 4% rise in sales at gas stations, which would include higher prices, 10 of the 13 retail categories registered gains in October. Compared to the year before, every category except electronics and appliance stores increased in sales, an 8.3% gain overall. Data from the Commerce Department indicate consumer spending keeps rising despite higher inflation and interest rates. Retail sales through October were up 32% from the onset of the COVID-19 pandemic and up nearly 15% when adjusted for inflation.

The Federal Reserve reported a slight decline in industrial production in October, the second setback in three months and the fourth in six months. A drop in oil and mining output contributed to the decline. Manufacturing production rose for the fourth month in a row. Total output stayed above its level in February 2020, just before the pandemic, for its 12th consecutive month. Industries’ capacity utilization rate, an early indicator of inflation, edged down from September but remained above the 50-year average for the eighth month in a row.

Thursday

Housing construction data signaled continued softening in October, as the annual pace of building permits and housing starts receded. A report from the Commerce Department showed new authorizations and new construction for single-family houses at their lowest rates since the pandemic recession. Demand for housing has been slowing as mortgage rates have ratcheted up as a result of Federal Reserve interest rate increases. At the same time, the rate of housing units already under construction hit another record in October, reaching the highest level in data going back to 1970.

The four-week moving average for initial unemployment claims rose for the fifth time in seven weeks, going 15% above the mark just before the pandemic. Labor Department data showed the four-week average at 221,000 new applications, which was still 40% below the 55-year average, suggesting the relative tightness of the labor market. Total claims rose nearly 2% in the latest week to almost 1.3 million, which was down from 2.6 million the year before.

Friday

The Conference Board said its leading economic indicators declined in October for the eighth consecutive month. The business research group said its index fell 0.8% from September and was down 3.2% in the latest six months. That was a reversal from a 0.5% increase in the previous six months. Based on the index, the Conference Board said the U.S. economy may already be in recession. If not, it forecast that a downturn would occur before the end of the year and last until mid-2023. Among the weakening gauges cited by the group were consumer outlook, inflation, interest rates, housing construction and manufacturing.

The National Association of Realtors reported a drop in existing home sales in October, the ninth decline in as many months. The trade group blamed rising mortgage rates for sliding sales, which fell 5.9% in October to an annual rate of 4.4 million single-family houses, town houses, condos and co-ops. That was 28% below the 6.2-million sales rate in October 2021. Even as sales softened, prices continued to climb. The median price of $379,000 in October was 6.6% higher than the year before, marking the 128th consecutive increase.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11146, down 177 points or 1.6%

Standard & Poor’s 500 – 3966, down 27 points or 0.7%

Dow Jones Industrial – 33748, no change

10-year U.S. Treasury Note – 3.82%, up 0.01 point

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Landaas & Company newsletter  November edition now available.

Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Kendall Bauer

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (Nov. 7-11, 2022)

Significant Economic Indicators & Reports

Monday

The Federal Reserve reported that revolving consumer credit rose at an annual rate of 8.7% in September. The increase suggests consumer spending – which drives about two-thirds of the U.S. economy – remained resilient in the face of high inflation and rising interest rates. It also indicates consumers are financing more of their spending as government subsidies from the onset of the COVID-19 pandemic have dwindled and as wage increases have not kept up with inflation. The pace of credit card debt slowed from an 18% annual rate in August and was the slowest since May. The indicator took two years to recover from its pre-pandemic peak. It took a decade to recover from the financial collapse and the Great Recession.

Tuesday

No major releases

Wednesday

No major releases

Thursday

The broadest measure of inflation showed price increases easing in October, though they’re still outpacing Federal Reserve Board targets. The Consumer Price Index gained 0.4% from September and 7.7% from October 2021. Shelter costs, the price of gasoline and food bills weighed heavily on the monthly increase, though food prices rose at the slowest pace since December, the Bureau of Labor Statistics reported. The year-to-year inflation rate marked four months of declines from 9.1% in June, which was the steepest pace since 1982. The core CPI, which excludes the volatile categories of food and energy, rose 0.3% from September, the lowest in three months. Compared to October 2021, the core CPI was up 6.3%, just under the 6.6% peak hit in September, the highest in 40 years. The Fed’s long-range target for inflation is 2%.

The four-week moving average for initial unemployment claims declined marginally for the second week in a row. Data from the Labor Department showed the four-week average still down 41% from its 55-year average but 14% above its low just before the COVID-19 pandemic. Nearly 1.3 million Americans were claiming jobless benefits in the latest week, up 1% from the week before but down from 2.6 million the year before.

Friday

The University of Michigan said consumer sentiment declined from the end of October, losing about half of the gains made since slumping to an all-time low in June. Uncertainty from global factors and U.S. election outcomes mean continued instability for sentiment, which economists consider key to consumer spending. Survey respondents registered broad declines in their both their outlooks and their assessments of current conditions. Rising interest rates and high inflation dampened plans to buy big-ticket durable goods. Expectations for inflation were little changed at about 5% for a year from now and around 3% long term.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11323, up 848 points or 8.1%

Standard & Poor’s 500 – 3993, up 222 points or 5.9%

Dow Jones Industrial – 33748, up 1343 points or 4.1%

10-year U.S. Treasury Note – 3.81%, down 0.32 point

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Landaas newsletter subscribers return to the newsletter via e-mail.

Landaas & Company newsletter  November edition now available.

Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Adam Baley

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Oct. 31-Nov. 4, 2022)

Significant Economic Indicators & Reports

Monday

no significant reports

Tuesday

The manufacturing sector expanded in October for the 29th month in a row, though at the slowest rate in that stretch, according to the Institute for Supply Management. The trade group’s index, based on surveys of industry purchase managers, suggested further weakening in the sector with new orders contracting for the second month in a row. Employment grew after shrinking in September, though employers reported being more careful about adding to staff. As demand has receded, the group reported supplier deliveries have been the smoothest since 2009.

The Commerce Department said construction spending rose slightly in September, aided by multi-family housing. At a seasonally adjusted annual rate of $1.8 trillion, expenditures were up 0.2% from the August pace and up 11% from the year before. Spending on residential construction was unchanged from August and up 13% from September 2021, although single-family unit spending declined for both periods. Expenditures on factory construction rose 8% from August and was up 43% from the year before.

Job openings recovered some of their losses in August, suggesting continued strength in the labor market in September. Openings rose 4% to 10.7 million positions, the Bureau of Labor Statistics reported. It was the indicator’s second rise in six months after posting a record 11.9 million openings in March. Demand for workers kept outpacing the number of unemployed jobseekers in September. The number of workers quitting their jobs – a measure of worker confidence – declined slightly for the fifth time in six months but remained historically elevated at 4.1 million.

Wednesday

no significant reports

Thursday

The U.S. trade deficit widened 11.6% in September to $73.3 billion, the Bureau of Economic Analysis reported. Imports rose 1.5%, led by cell phones, semiconductors and pharmaceutical preparations. The value of exports declined 1.1% from August, led by soybeans and crude oil. Through three quarters, the trade gap expanded by 20% from the same time in 2021. Trade deficits detract from the gross domestic product, the chief measure of economic growth.

The four-week moving average for initial unemployment claims declined for the first time in five weeks. Although the level remained 14% above the low point just before the COVID pandemic, it was 41% below the average since 1967. The Labor Department said 1.2 million Americans claimed jobless benefits in the latest week, up 2% from the week before but below the year-before level of 2.7 million claims.

The Bureau of Labor Statistics said the annual rate of worker productivity rose in the third quarter by 0.3%, reversing a decline of 4.1% in the second quarter. Measuring year to year, though, third-quarter productivity sank 1.4% for the third consecutive decline — the first time that happened in data going back to 1982. Over the last four quarters, productivity fell because output, which rose 1.9%, didn’t keep pace with hours worked, which rose 3.4%. Unit labor costs rose 6.1% from the third quarter of 2021, down from a 7.6% increase in the second quarter.

The service sector of the U.S. economy grew in October at the slowest rate in 29 straight months of expansion, according to the Institute for Supply Management. The trade group said its survey of purchasing managers found reports of cooling growth and business activity amid hiring challenges and economic uncertainty. Managers surveyed cited fewer snags from supply chains and logistics compared to earlier in the year.

The Commerce Department said the value of factory orders rose in September for the 18th time in 19 months, led by sales of commercial aircraft. Excluding the volatile transportation category, orders declined slightly from August. Year to year, total orders were 13% higher than they were in September 2021. Excluding transportation, orders were up 12%. Orders for core capital goods, a proxy for business investments, declined 0.4% from August but rose 9.5% from the year before.

Friday

U.S. employers added 261,000 jobs in October, the smallest gain in almost two years but still a sign of labor market resilience amid Federal Reserve efforts to slow the economy. The unemployment rate rose to 3.7% from a 53-year low of 3.5% in September, according to jobs data from the Bureau of Labor Statistics. The jobless rate rose as more wannabe workers entered the labor market. As the Fed has been hoisting interest rates to slow inflation, the average wage rose at a faster pace for the second month in a row. Still, the year-to-year increase in wages fell to 4.7%, the lowest since August 2021.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10475, down 627 points or 5.6%

Standard & Poor’s 500 – 3771, down 130 points or 3.3%

Dow Jones Industrial – 32405, down 457 points or 1.4%

10-year U.S. Treasury Note – 4.13%, up 0.12 point

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Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Tom Pappenfus

(with Max Hoelzl and Joel Dresang, engineered by Kevin Lofy)

Week in Review (Oct. 24-28)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

The year-to-year gain in housing prices slowed more in August than in any month in about three decades of data. The S&P CoreLogic Case-Shiller national home price index rose 13% from August 2021, down from a 15.6% increase in July. And though prices continued advancing at a double-digit pace, August marked the fifth straight month of deceleration since hitting a record high of 20.8% in March. A spokesman for the index said further slowing in price gains should be expected, considering how rising mortgage rates are affecting housing affordability.

The Conference Board said its consumer confidence index dipped in October for the first time in three months as concerns grew about inflation. The business research group said holiday sales could be challenging and called consumers’ short-term outlook “dismal.” The group said expectation levels suggested economic recession. At the same time, consumers surveyed increased plans for buying houses, cars and major appliances.

Wednesday

The annual rate of new home sales slowed nearly 11% in September, the third decline in four months, the Commerce Department reported. The volatile indicator was 18% behind its pace in September 2021. Southern states accounted for most of the slowing from August while the south and west were the only regions declining from the year before. Even though sales overall were off, the median price for a new house continued to climb, rising to $470,600 in September, up 14% from the year before. The median time new residences were on the market was one and a half months, the briefest in 47 years of data.

Thursday

Demand for long-lasting manufactured products rose 0.4% in September, the sixth gain in seven months. The Commerce Department said durable goods orders  through the first nine months of 2021 were up 11% from the same time in 2021. Orders for automobiles and commercial aircraft led the monthly increase, but excluding the volatile transportation category showed a 0.5% decline. Year to year, orders excluding transportation rose 8%. Core capital goods orders, a proxy for business investment, fell 0.7% from August and were up 9.5% from September 2021.

The four-week moving average for initial unemployment claims fell for the fourth week in a row, rising 14% above its low point just before the pandemic. The Labor Department reported the new-claim average was still 41% below the 55-year average, a reminder of the relatively tight labor market. In the latest week, 1.2 million Americans claimed jobless benefits, down 0.2% from the week before and down from 2.8 million the year before.

The U.S. economy rose at an annual pace of 2.6% in the third quarter, reversing two previous quarters of shrinking. Adjusted for inflation, gross domestic product reached a record $20 trillion and was up 4.2% from the peak prior to the 2020 recession, according to the Bureau of Economic Analysis. Consumer spending, which generates about 70% of economic activity, advanced at a slower pace than in the second quarter. Spending on housing declined at a 26% annual rate, the worst in six straight quarters of decline. The Federal Reserve Board’s preferred measure of inflation rose 6.3% from the third quarter of 2021, the lowest since a 5.7% rate at the end of 2021 but still far beyond the long-term target of 2%.

Friday

The Bureau of Economic Analysis said consumer spending rose 0.6% in September, as personal income gained 0.4%. The personal saving rate continued to fall, dropping to 3.1% in September, dropping from a record high of 33.8% in April 2020. The personal consumption expenditures index, which the Fed follows for inflation, increased 6.2% in September, the same as in August and the lowest since January. The rate hit a 40-year high of 7% in June.

The National Association of Realtors said its index of pending home sales fell 10.2% in September, the fourth consecutive decline. The trade group said inflation was suppressing buyers, who are less likely to afford houses, as well as sellers, who are reluctant to give up lower-rate mortgages. The association predicted 30-year fixed-rate loans will hover around 7% awhile, about double the mortgage rate of a year ago.

Often a pre-cursor to spending, consumer sentiment rose slightly overall in October but stayed near all-time lows registered this summer, according to a University of Michigan survey. Uncertainty about inflation, policy responses and global security resulted in consumer views “consistent with a recession ahead,” a Michigan economist said. Although attitudes toward current conditions brightened a bit from September, expectations dimmed, especially among upper-income consumers most influenced by the volatile stock market.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11102, up 243 points or 2.2%

Standard & Poor’s 500 – 3901, up 148 points or 4.0%

Dow Jones Industrial – 32861, up 1779 points or 5.7%

10-year U.S. Treasury Note – 4.01%, down 0.20 point

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Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Adam Baley

(with Max Hoelzl, Joel Dresang, engineered by Kevin Lofy, Jason Scuglik)

Week in Review (Oct. 17-21, 2021)

Significant Economic Indicators & Reports

Monday

No major announcements

Tuesday

The Federal Reserve reported that industrial production rose 0.4% in September and capacity utilization remained above its long-term average for the seventh month in a row. The capacity rate, the highest since March 2008, was another sign of inflation because traditionally companies raise prices as they run out of ability to keep up with orders. The monthly report showed production rebounding after a slight decline in August. Factories increased output for the third month in a row, although the pace of such growth slowed in the third quarter, and the production of consumer goods declined. The capacity rate for manufacturing remained above its 50-year average for the 12th month in a row.

Wednesday

The U.S. housing market continued to cool in September as the pace for both housing starts and building permits slowed from post-financial crisis highs reached earlier in the year. Figures from the Commerce Department showed new construction below its pre-pandemic rate for the third month in a row. Starts for single-family houses dipped to their lowest level since May 2020. Housing permits, an indicator of commitments to future homebuilding, rose from their pace in August but only for multi-family units. Single-family housing permits dropped for the seventh month in a row. And though new construction has been slowing, the report showed that the rate of houses under construction reached 1.7 million units in September, the highest in data going back to 1970.

Thursday

The four-week moving average for initial unemployment claims rose for the third week in a row and was 11% higher than its low point just before the pandemic. Still, the measure of employers’ reluctance to let workers go was 43% behind the long-term average, dating back to 1967. According to Labor Department data, total jobless claims fell to 1.2 million in the latest week, down 2.5% from the week before. The year before, total claims reached 3.3 million.

The pace of existing home sales continued sinking in September as mortgage rates rose.  Houses sold at an annual rate of 4.7 million, down 1.5% from August and down 24% from September 2021, the National Association of Realtors reported. It was the slowest pace in a decade. The trade group said despite weakened demand, inventories remained low. One in every four houses sold in September went for more than the asking price. The median price was $348,800, decreasing for the third month in a row from a record $413,800 in June. The median price in September was 8% higher than the year before, marking a record 127 consecutive months of year-to-year price increases.

The Conference Board said its index of leading economic indicators declined 0.4% in September, deepening a negative trend that suggests a U.S. recession before the end of the year. The business research group said its index was down 2.8% in the last six months, following a 1.4% gain in the previous six. Citing high inflation, slowing job growth and rising interest rates, the group forecast a 1.4% economic expansion for 2022 with further slowing into the new year.

Friday

No major announcements

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10860, up 538 points or 5.2%

Standard & Poor’s 500 – 3753, up 170 points or 4.7%

Dow Jones Industrial – 31083, up 1448 points or 4.9%

10-year U.S. Treasury Note – 4.21%, up 0.20 point

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Advisors on This Week’s Show

KYLE TETTING

ART ROTHSCHILD

Kendall Bauer

(with Max Hoelzl, Joel Dresang, engineered by Kevin Lofy, Jason Scuglik)

Week in Review (Oct. 10-14, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No major announcements

Tuesday

No major announcements

Wednesday

Prices on the wholesale level rose in September, the first increase in three months and another reminder of stubbornly high inflation. The Bureau of Labor Statistics said its Producer Price Index rose 0.4% from August largely affected by higher costs for services as well as increases for food and home heating. The core index number, which excludes volatile prices for food, energy and trade services, also rose 0.4%. Compared to the year before, the PPI gained 8.5%, slowing for the third month in a row and the lowest wholesale inflation since July 2021. Core PPI rose 5.6% from September 2021, the same as in August; that was down from as high as 7.1% in March.

Thursday

The Bureau of Labor Statistics said its Consumer Price Index rose at a slower annual pace, though its core rate increased at its fastest since 1982. Considered the broadest measure of inflation, the CPI gained 0.4% from August, led by higher prices for shelter, food and medical care. The core rate, stripping out volatile costs for food and energy, increased by 0.6%. Year to year, headline inflation rose 8.2%, its lowest since February. The core CPI was up 6.6% from the year before, the biggest gain since August 1982. The core increase was led by a 15% rise in shelter costs and a 9% gain in new car prices. Based on CPI data, the Social Security Administration announced an 8.7% adjustment to benefits in 2023. That was the biggest raise for Social Security recipients since an 11.2% boost in 1981.

The four-week moving average for initial unemployment claims rose for the second week in a row but also the second time in nine weeks. Claims averaged 211,500 in the most recent reading from the Labor Department, 43% below the 55-year average. Altogether, more than 1.2 million Americans claimed jobless benefits in the most recent week, up 0.6% from the week before but one-third of the 3.6 million claims one year earlier.

Friday

With consumer spending driving about 70% of the U.S. gross domestic product, no change in retail spending in September suggests at least a momentary pause in momentum. Of 13 retail categories, seven experienced lower sales in September, the Commerce Department reported. Among the decliners were gas stations, electronics and appliance centers and furniture stores. Bars, restaurants and grocery stores were among the top gainers. Adjusted for inflation, retail sales fell for the fifth time in seven months and were 13% above the level just before the COVID-19 pandemic.

A preliminary October reading of consumer sentiment suggested that uncertainty continued to dampen outlooks. The survey-based index from the University of Michigan rose marginally from September furthering a gradual recovery from an all-time low in June. suppress expectations amid lingering coronavirus concerns and supply-chain disruptions. Opinions of current conditions rose slightly, but expectations stayed low because of doubts about prices, economies and financial markets globally. Anticipation of higher gas prices in the next year rose for the first time in three months.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10321, down 331 points or 3.1%

Standard & Poor’s 500 – 3584, down 56 points or 1.5%

Dow Jones Industrial – 29644, up 347 points or 1.2%

10-year U.S. Treasury Note – 4.01%, up 0.13 point

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Advisors on This Week’s Show

KYLE TETTING

DAVE SANDSTROM

PAIGE RADKE

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Oct. 3-7, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

The Institute for Supply Management reported that its manufacturing index signaled expansion in September for the 28th month in a row, although at the slowest pace in that period. Based on surveys of purchasing managers, the index showed demand for factory goods contracting but also found supply-chain clogs easing. The trade group said the index suggests the U.S. gross domestic product grew at a 0.8% annual pace in September.

The Commerce Department said the annual rate of construction spending fell in August for the third month in a row. The rate of $1.78 trillion was 8.5% above the year-ago rate. Residential expenditures, which account for more than half of total spending, also declined for the third straight month, but was 49% higher than the level just before the COVID pandemic.

Tuesday

The Commerce Department reported such a slight decline in manufacturing orders in August that it rounded the estimate off to “unchanged.” Orders fell 1% in July and were 13% ahead of where they were in August 2021. Declines in commercial aircraft and automotive orders held back the indicator of industrial demand. Excluding transportation, orders rose 0.2% for the month and were up 12% from the year before. Core capital goods orders, a proxy for business investments, rose 1.4% for the month and were up 10% from August 2021.

Employers reined in on job openings in August, according to the Bureau of Labor Statistics. The number of help-wanted posts declined 6% to 10.1 million openings. Demand for workers still hovered near the highest levels in more than 20 years of data, while the number of active job seekers in August (according to a separate BLS report) was near the lowest in that period. Job openings declined most in the health care field along with retail trades and other services. Hiring rates and separations were little changed from July. The number of workers quitting their jobs – a sign of worker confidence – rose for the first time in three months to 4.1 million.

Wednesday

The U.S. trade deficit shrank 4.3% in August to $67.4 billion. The deficit, which detracts from gross domestic product, narrowed as the value of imports declined at a faster rate than exports. Through the first eight months of 2022, the trade gap grew 24% from the year before as imports rose by 21% and exports increased by 20%.

The U.S. services sector continued expanding in September, though at a slightly slower pace, according to the Institute for Supply Management. The pace of growth also was below the 12-month average. The trade group’s services index showed the 28th consecutive month of growth, expanding all but two of the latest 152 months. Purchase managers surveyed for the index reported improved supply chain efficiency, operating capacity, materials availability and employment.

Thursday

The four-week moving average for initial unemployment claims rose for the first time in eight weeks but only because of a downward revision to the week-before numbers. Data from the Labor Department showed average new applications for jobless benefits remained 44% below the 55-year average. More than 1.2 million Americans were receiving unemployment benefits in the latest week, down 4% from the week before and down from 4.2 million the same week in 2021.

Friday

Employers added 263,000 jobs in September, the lowest addition since April 2021 and below the 420,000 average so far in 2022. The Bureau of Labor Statistics reported that payroll jobs rose 0.3% above the level just before the pandemic. Job gains were broadly spread across industries, led by leisure and hospitality, although that group remained 1.1 million or 6.7% behind its pre-pandemic level. A separate household survey showed the unemployment rate dropped to 3.5% in September, tying with July 2022 and February 2020 for the lowest mark in more than 50 years. Some 5.8 million Americans said they want to work but currently weren’t in the job market, 8% of them because of the pandemic.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10652, up 77 points or 0.7%

Standard & Poor’s 500 – 3640, up 54 points or 1.5%

Dow Jones Industrial – 29297, up 572 points or 2.0%

10-year U.S. Treasury Note – 3.88%, up 0.08 point

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Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Mike Hoelzl

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Sept. 26-30, 2022)

Significant Economic Indicators & Reports

Monday

No major reports or releases

Tuesday

The Commerce Department said orders for durable goods declined in August for the second month in a row, reaching a year-to-year increase of 11%. The indicator for manufacturing demand dipped largely because of a downturn in commercial aircraft orders. Excluding transportation equipment, orders rose 0.2% from July and were 8% above their level in August 2021. Core capital goods orders, a proxy for business investments, gained 1.3% from July and were up 10% from the year before.

The annual gain in housing prices slowed to 15.8% in July from 18% in June, the biggest one-month slide in about three decades of data, according to the S&P CoreLogic Case-Shiller home price index. Price increases decelerated for the third month in a row after reaching a record year-to-year jump of 20.6% in April. An S&P economist said housing inflation should continue to ease with more increases in mortgage interest rates.

The Conference Board said its consumer confidence index rose September for the second consecutive month. The business research group said advances in jobs and wages and declines in gas prices helped consumers worry less about inflation. According to the group's survey, purchasing intentions were down for houses but up for cars and appliances. The Conference Board said the outlook for consumer spending looked better through the end of the year but added that high inflation and rising interest rates remained obstacles and recession is still a risk.

Wednesday

With a forecast of mortgage rates nearing 7% in coming months, the National Association of Realtors said its pending home sales index declined 2% in August, the third setback in a row and the seventh in eight months. Contract signings for houses and condominiums dropped 24% from their level in August 2021, the trade group said. The Realtors projected 2022 sales to be fewer than 5.2 million houses, which would be down 15% from 2021. They expect another 7% decline in 2023. Meantime, the association says the median home price for 2022 should be about 10% higher than 2021 with only a 1% increase expected for 2023.

Thursday

The U.S. economy contracted at an annual pace of 0.6% in the second quarter of 2022, the Bureau of Economic Analysis confirmed in a final estimate of the gross domestic product. The decline followed a 1.6% annualized dip in the first quarter. Despite the slower pace, the economy was 1.8% bigger than the year before and 3.5% larger than at the end of 2019, just before the COVID-19 pandemic. The Federal Reserve’s favorite measure of inflation showed a 6.6% increase since the second quarter of 2021, the highest since the fourth quarter of 1981.

The four-week moving average for initial unemployment claims fell for the fifth week in a row, reaching its lowest point since May. At 207,000, the average was 44% below its 55-year average. The Labor Department said 1.3 million Americans were claiming unemployment compensation in the latest week, up slightly from the week before but down from more than 5 million from the year before.

Friday

By far the biggest driver of the U.S. economy, consumer spending rose 0.4% in August, while personal income advanced 0.3%. The Bureau of Economic Analysis reported that personal consumption reached 18% above its pre-pandemic peak. The personal saving rate stayed at 3.5%, the same as July, down from 9.3% in February 2020. The Fed’s favorite inflation gauge showed a 6.2% increase from August 2020 – the lowest since January but still near a 40-year high.

The University of Michigan’s consumer sentiment index rose a smidge in September, only slightly ahead of extremely low levels in the summer. The reading of 58.6 was down from 72.8 the year before. Plans to buy durable goods increased from the August survey, as did one-year projections for economic conditions. Inflation continued to dampen sentiment, but expectations for the inflation rate next year and longer were the lowest in more than a year.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10576, down 292 points or 2.7%

Standard & Poor’s 500 – 3586, down 107 points or 2.9%

Dow Jones Industrial – 28730, down 860 points or 2.9%

10-year U.S. Treasury Note – 3.80%, up 0.11 point

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