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Job Growth Continues to Amaze

U.S. equity markets were mostly flat last week. However, the big news cam on the jobs front. An astonishing 528,000 were added in July. That means the U.S. economy has recovered all jobs lost since the pandemic began in 2020. Analysts had expected about 250,000 jobs to be added. The unemployment rate dropped slightly to 3.5%, where it was in February 2020.

The chart below from the Labor Department is a stark reminder of just how strong the U.S. economy is. After the sharp falloff from the pandemic, employers have been eager to rehire workers while dealing with the effects of supply-chain issues. It has not been easy for companies, as we will see in the next chart.

Supply-chain issues are a major concern for employers. However, finding qualified workers is even more challenging. The chart below from the Labor Department shows about 10.5 million job openings (down from over 11 million a few weeks ago). Currently, there are about six million looking for work in the U.S. It’s hard to understand the disconnect but some of it has to do with not enough “qualified” workers. Many jobs needed require special skills. I am not sure how much accounts for the shortfall but when I find the answer, I’ll write about it here.

 

On the earnings front, about 87% of companies in the S&P 500 have reported results. Of those reporting, 75% have reported earnings per share above analyst estimates. Inflation is still a concern but we’re even seeing some good news on that front. Gasoline has been dropping for seven straight weeks. Many stations now have gas selling below $4 a gallon.

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The Markets and Economy

 

  • According to McKinsey & Co., 40% of the 13,000 workers surveyed between February and April of this year are considering quitting their current jobs within the next three-six months.

 

  • If Congress passes the Inflation Reduction Act, Americans can expect more audits. One provision will increase the IRS budget by $79 billion over the next decade. More than half of that amount will be used for enforcement through hiring and increased audits.

 

  • OPEC and its allies agreed to a small increase in oil production as the S. and other major economies called for more crude output.

 

  • The Bank of England warned the K. will fall into recession as it raised interest rates by the most in 27 years. The bank raised interest rates to 1.75% as it tries to fight inflation expected to 13% .

 

  • When the pandemic started in January 2020, the median sales price of an existing home was $266,300. In June 2022, the median sales price of an existing home was $416,000 according to the National Association of Realtors.

 

  • The American Trucking Association’s index for hired-truck-tonnage increased 2.7% in June after rising 0.3% in May. The index now stands at 120.1, close to its pre-pandemic record high.

 

Total household debt has risen to a record $16 trillion according to the Federal Reserve Bank of New York. The increased borrowing is due to higher prices, a result of inflation.

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The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results.

This newsletter was prepared by David M. Kover®. To unsubscribe from the Weekly Market Update please write us at 555 Eastport Centre Dr., Suite B, Valparaiso, IN 46383 or click this link:  Unsubscribe .

Note: All figures exclude reinvested dividends (if any). Sources: Bloomberg, Dorsey Wright & Associates, Inc. and The Wall Street Journal. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

Securities offered through Triad Advisors, LLC, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, LLC, an SEC-registered investment adviser. Resources Investment Advisors. LLC and Vertical Financial Group are not affiliated with Triad Advisors, LLC.

David M. Kover, Thomas H. Parker, Bradford E. Harris, Laura T. Scobee, Joseph B. Thaman & Brett M. Dankowski are registered to recommend securities offered through Triad Advisors, member FINRA/ SIPC. Investment advice offered through Resources Investment Advisors, Inc., an SEC-registered investment adviser. Resources Investment Advisors, Inc. and Vertical Financial Group are not affiliated with Triad Advisors.