Week Ending May 28th, 2021
If you build it, they will come… I always loved that line from Field of Dreams. I can see it now, Uncle Sam siting in the “Thinking Man Pose”, saying to himself, “If we open up, they can get a job.”
What does it mean – Private sector payrolls increased in the month of April by 218,000. Yet, unemployment went from 6.0% in March to 6.1% in April. Currently there are still more openings than people willing to go back to work.
We are now seeing economists question the decision of extended unemployment benefits as it is shrinking the labor pool and creating a disincentive to work.
U.S. inflation surges in April… With over 10 million Americans still out of work, consumer spending is way up.
What does it mean to you – This should go a long way to helping corporate earnings offset the effect of rising inflation on raw materials and labor. For consumers, get ready to pay the piper.
Wages and salaries up 1%… For the second straight month as employers have increased wages.
What does it mean – Companies in states that are open are serious about hiring. It also translated to an increase in spending as mentioned above. PCE or Personal Consumption Expenditures, which excludes food and energy rose .07%.
The day before a long weekend… Historically this is the day that politicians always announce bad news or things they do not want you to be focused on when you are trying to enjoy a long weekend.
What does it mean – The perfect day to tell America that we are going to spend you into oblivion and inflation will continue to rise through the rest of the year.
President Biden released his unprecedented budget today. He is proposing that the Federal government unleash a $6 Trillion budget that does not include several issues that he is wanting to push out to September when the $300 a week unemployment benefits run out. Yikes.
Janett Yellen went on to say, “high annual rates of inflation” will persist through the end of the year.
Charlie Kirk, form Turning Point USA pulled numbers on the following items used to provide energy and housing and to feed the average American. To put this into real dollars, if you had to buy 1 unit of each of the below items you would have had to spend $531.38 in April of 2020. Today you would have to spend $1,840.91. That is a 346% increase in inflation since April of 2020.
Socialism kills… The freer your economy is the better the environment.
What does it mean – This chart speaks volumes!! Capitalism cures!!! Just another valid reason we need to praise capitalism and those who risk everything to build, create and solve the problems society demands and is willing to pay for.
Economic migration… I recently saw a shirt in Austin, TX that said, “build the wall.” The picture was not on the Southern border but all along the western border of Texas with the saying, “Don’t California my Texas.”
What it means – High tax states like CA are “messing with Texas.” Sure, CA has the best beaches, incredible mountains, and awesome weather. All things being equal, the one area you can control is where you live and the taxes you pay at the state and local level.
Always at your service,
Doug De Groote, CFP®, MBA, CTC Managing Director