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Weekly Economic Update
December 18, 2017
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The Markets (as of market close December 15, 2017)
The major stock market indexes closed last week in the black, led by the Nasdaq and the Dow, both of which climbed over 1.00%. Stocks appear to have followed the ebb and flow of the proposed tax plan, which seems to have enough support for congressional passage this week. Investors may see a lowering of corporate taxes as leading to an increase in company profits and value. A 25 basis point increase in the federal funds rate did not seem to have much of an impact on investors.
The price of crude oil (WTI) climbed slightly and the price of gold (COMEX) rose.
Last Week’s Economic Headlines
- Not unexpectedly, the Federal Open Market Committee decided to raise the target range for the federal funds rate 25 basis points to 1.25%-1.50%. This marks the third such rate increase in 2017. The Committee based this rate hike on continued strengthening of the labor market and rising economic activity. Despite hurricane-related disruptions, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Inflation on a 12-month basis is expected to remain somewhat below 2% in the near term but to stabilize around the Committee’s 2% objective over the medium term.
- Producer prices increased 0.4% in November, the same increase as in each of the previous two months. Over the last 12 months, producer prices are up 3.1%, which is the largest 12-month price gain since the 12-month period ended January 2012.
- The increase in producer prices may be impacting consumer prices. The Consumer Price Index (CPI) rose 0.4% in November and is up 2.2% over the past 12 months. Energy prices rose 3.9% for the month and accounted for about three-fourths of the increase in the CPI. The index for all items less food and energy increased a marginal 0.1%, and is up 1.7% over the 12 months ended in November.
- November retail sales were $492.7 billion, an increase of 0.8% from the previous month, and 5.8% above November 2016. Retail sales excluding auto sales increased 1.0% in November. Gasoline station sales increased 2.8% for the month and are up 12.2% over last November. Non-store (online) retail sales climbed 2.5% in November and are 10.4% ahead ofNovember 2016 sales.
- The number of job openings dipped by about 181,000 in October compared to September, according to the latest Job Openings and Labor Turnover report from the Bureau of Labor Statistics. Job openings have been at or near record high levels since June. Job openings increased in accommodation and food services (+94,000), construction (+48,000), and real estate and rental and leasing (+40,000). Job openings decreased in wholesale trade (-90,000), finance and insurance (-47,000), information (-32,000), and nondurable goods manufacturing (-26,000). In October, hires increased to 5.6 million and separations were little changed at 5.2 million. Over the 12 months ended in October, hires totaled 64.3 million and separations totaled 62.2 million, yielding a net employment gain of 2.1 million.
- The federal deficit for November soared to $138.5 billion, about $75 billion higher than the October deficit and $1.8 billion higher than the November 2016 deficit. Total government receipts for November were $208.4 billion, and total government outlays were $346.9 billion. Over the first two months of the 2018 fiscal year, the deficit stands at $201.8 billion, which is 10.6% greater than the deficit over the same period last fiscal year.
- U.S. import prices rose 0.7% in November after ticking up 0.1% in October. Higher prices for fuel drove the increase in November as nonfuel prices recorded no change. Import fuel prices rose 22.2% over the past year, driven by a 24.1% increase in petroleum prices. U.S. export prices increased 0.5% in November following a 0.1% advance the previous month. Export prices advanced 3.1% over the past 12 months and have not recorded an over-the-year decrease since the index fell 0.2% in November 2016.
- According to the Federal Reserve, industrial production moved up 0.2% in November after posting an upwardly revised increase of 1.2% in October. Manufacturing production also rose 0.2% in November, its third consecutive monthly gain. The output of utilities dropped 1.9%. The index for mining increased 2.0%. The index for mining increased 2.0%, as oil and gas extraction returned to normal levels after being held down in October by Hurricane Nate. Excluding the post-hurricane rebound in oil and gas extraction, total industrial production would have been unchanged in November. Total industrial production was 3.4% above its year-earlier level.
- In the week ended December 9, the advance figure for initial claims for unemployment insurance was 225,000, a decrease of 11,000 from the previous week’s level. The advance insured unemployment rate slipped to 1.3%. The advance number of those receiving unemployment insurance benefits during the week ended December 2 was 1,886,000, a decrease of 27,000 from the previous week’s level, which was revised up 5,000.
Eye on the Week Ahead
The week before Christmas is a busy one for economic news. The third and final report on the gross domestic product for the third quarter is available this week, along with November’s monthly report on sales of new and existing homes.
From all us at BWFA we wish you a continued safe and peaceful holiday season!
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Retirement:
What You Need to Know
Tuesday, December 19, 2017
11:45 AM – 1:00 PM
Lunch to be provided
Are you prepared for retirement?
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Managing Director,
Wealth Management
Only 5 seats left!
Sign up today!
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Baltimore-Washington Financial Advisors invites you to this interactive workshop discussion on:
This discussion will include:
- Avoiding the common mistakes
- Have you saved enough?
- Creating a vision – where will you live, what will you be doing, who will you live near?
- Evaluating your retirement savings
- Social Security
- Healthcare options/choices
- Creating a retirement paycheck
- Tax implications
- Asset allocation strategies for retirement
Come join us as we discuss these issues and more!
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Internship Open House
Thursday, December 28, 2017
11:30 AM – 1:00 PM
Lunch to be provided
INTERNS WANTED!
BWFA is looking for college students with an interest in the financial services.
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Rob Carpenter
President and CEO
Meghan Manas
Director of Client Services
Managing Director,
Wealth Management
Rachel Duncan
Tax Advisor
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Do you have a family member or friend who is in college and taking an interest in the various fields the financial services have to offer?
If so…
Baltimore-Washington Financial Advisors invites your college student to an interactive workshop on the internship opportunities available at BWFA.
Topics to include:
- Overview of Financial Services
- Tax Planning
- Financial Planning
- Customer Service
- Investment Portfolio Management
- Business Services
- Marketing
Please come prepared with copies of your resume! We will be scheduling interviews after the presentation.
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Social Security
Tuesday, January 16, 2018
11:45 AM – 1:00 PM
Lunch to be provided
Are you confused by
Social Security benefits?
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invites you to this interactive workshop discussion.
Topics to include:
- How work, age and marital status affect your benefits
- Synchronizing your spousal benfits
- Minimizing taxes on your benefits
- Integrating Social Security with other retirement income
Please join us as we discuss these issues and more.
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Wellness: Self-Care Strategies for the Aging Brain
Thursday, January 18, 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invites you to a wellness Seminar Series with Dr. Emily Telfair, N.D.
Topics to include:
- Exploring the relationshipbetween Food and Mood
- Learning about nutrients that boost cognitive function
- Preventing dementia with healthy blood sugar managment
- Calming stress and improving memory through mindfulness meditation
Please join us as we discuss these issues and more.
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Making the Most of Medicare
Tuesday, January 23, 2018
11:45 AM – 1:00 PM
Lunch to be provided
90% of Medicare Enrollees over-pay. Will you?
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invites you to join us for an informative discussion on the relevant details of Medicare.
Topics to include:
- How to enroll?
- What are the costs?
- How to choose the right plan
- Where to find additional resources
- How to “shop smart” for medicare
Please join us as we discuss these topics and more.
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State of Residence in Retirement
Thursday, January 25, 2018
11:45 AM – 1:00 PM
Lunch to be provided
Which state is best for you?
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invites you to join us for an informative discussion on where you will live in retirement.
Topics to include:
- What state is best?
- How much will it cost to stay in Maryland?
- How to decide where you will retire
- Should you purchase or rent?
- Healthcare costs by state
- Differences in state and local income taxes
- Estate planning and estate taxes by state
- Property and sales tax by state
- Cost of living by state
Please join us as we discuss these topics and more.
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