Inflation Cools, Stocks Rise, the Lingering Deficit Problem, and a Girl!

October 14, 2024

INFLATION COOLS LESS THAN EXPECTED:  The Consumer Price Index increased 0.2% in September. Over the course of that last twelve months, the CPI is up 2.4%, down from 2.5% last month, but more than the 2.3% that was generally expected. That is still the lowest twelve month number since February of 2021.

U.S. STOCKS HITTING NEW HIGHS AGAIN:  The S&P 500 hit a new all-time high again last week. Inflation numbers came in higher than expected, but not so high to rattle the markets, or to worry investors that the Fed will not insert a quarter of a percentage point rate cut at their next meeting. The hurricanes and the Boeing strike played a negative role, but not enough to prevent a positive week. 

LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.  

WEEKLY JOBLESS CLAIMS SPIKE: According to the U.S. Department of Labor, there were 258,000 initial jobless claims for the week ending October 5, a jump of 33,000 and the highest level in over a year. There may have been some hurricane-related filings, a trend which will likely continue following into the next couple of weeks.

THE DEFICIT THING:  The U.S. budget deficit topped $1.8 trillion in the latest fiscal year. Payments for interest and programs for older Americans drove the rising deficit. The U.S. government collected $4.92 trillion in revenue and spent $6.75 trillion for the fiscal year that ended September 30. These are numbers provided by the Congressional Budget Office. The deficit in 2023 was $1.7 trillion.

SOCIAL SECURITY RECIPIENTS GET A 2.5% RAISE: This coming year, Social Security benefits will increase by 2.5%, the smallest increase in four years. On average, Social Security retirement benefits will increase by about $50 per month beginning in January. Over the last decade, the average increase has been 2.6%. One year ago, the increase was 3.2%. 

IS THE ECONOMY GROWING?:  According to the Bank of America, the U.S. gross domestic product is growing at a 2.6% rate this quarter. Goldman Sachs believes the rate is 3.2%. The Atlanta Fed also believes the current rate is 3.2%.

USED CAR PRICES:  Used car prices rose dramatically in 2020 and 2021. I nursed my older car along not wanting to buy in that environment. Many people had no choice and had to buy at highly inflated prices. Those prices have been coming down slowly but surely. In September, prices for used cars were 5.3% lower than a year prior. My car finally, and decisively, gave up the ghost last week. As is my custom, I bought a late model used car for cash (trying to set a good example for my clients).

IT'S A.....GIRL!:  Well, my son-in-law and daughter put champagne flutes into a cake last weekend. The person who made the cake that was the only one who knew the sex of the baby growing in my daughter Molly's body. It's a girl! The inside was pink. We are now looking forward to meeting our newest granddaughter in March. It is very exciting. For those keeping count, that is number six.

Have a great week!

Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545

dmacgray@stonecropadvisors.com

"Sometimes things go wrong, even when you're doing your best. That just shows that none of us are perfect. So I keep trying with all my heart, and if that's not good enough, I'm not going to hang my head." Luis Tiant, beloved Red Sox baseball player who died last week, at age 84.

"I can do all things." Philippians 4:13 (ESV)

SOURCES:

U.S. STOCKS HITTING NEW HIGHS AGAIN: https://www.investors.com/news/stock-market-rallies-sp-500-dow-highs-tesla-robotaxi-jpmorgan/

WEEKLY JOBLESS CLAIMS SPIKE: https://www.dol.gov/ui/data.pdf

SOCIAL SECURITY RECIPIENTS GET A 2.5% RAISE: https://www.ssa.gov/news/press/releases/2024/#2024-10-10

INFLATION COOLS LESS THAN EXPECTED: https://www.bls.gov/news.release/cpi.nr0.htm

THE DEFICIT THING: https://www.wsj.com/politics/policy/budget-deficit-national-debt-2024-079d8d13?mod=Searchresults_pos1&page=1

IS THE ECONOMY GROWING?: https://www.calculatedriskblog.com/2024/10/q3-gdp-tracking-around-3_11.html

USED CAR PRICES: https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html

(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved

Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission. 

SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.