Week Ending July 23rd, 2021
New home sales fell sharply in June… Sales dropped 6.6% in June and May sales were also revised down 769,000 units to 724,000.
What does it mean – Housing has been hot, but it is not immune to inflation. While the average sale price went up by 12.2% year over year, many builders and prospective buyers are facing higher costs for raw materials and are trying to work through the supply issues like many industries. The supply of new homes remains limited as people flee the cities.
Initial jobless claims increased by 51,000…While the economy is gaining traction, many folks are still willing to forego a paycheck for government welfare.
What does it mean – The federal government and states that are still taking money for Covid relief are in direct competition with the labor market and business. There are over 10 million jobs available since the Wuhan virus allowed the government to shut down businesses and our economy.
Consumer sentiment slips… Down from 99.3 in July of 2020 to 80.8 today.
What does it mean – The list goes on and on. Let’s start with inflation and regulation. Many executive orders have led to more regulation and higher energy and raw material costs.
Wage Growth… The fastest wage growth has been in low-wage sectors.
What does it mean – Your government is overpaying for welfare. Or we are on a path to Universal Basic Income (UBI). It has never worked. Yet, California is already pushing it and so are many large cities. We must ask ourselves, is it wise to pay capable people to do nothing?
How do you pass a $3.5 Trillion dollar infrastructure program… Hire a key member of congress’ wife for $160,000 a year.
What does it mean – Just can’t make this stuff up. One of the largest infrastructure deals in the history of the free world that will affect businesses across many sectors and will add over 3.5 $trillion in new taxes according to Julian Kaplan of Business Insider. Due to the shady rollout by Schumer, Pelosi, and Biden, the much-needed infrastructure bill is already in doubt as its legitimacy and true nature. It is loaded with shady backroom deals and pork to support the nonsense in D.C. None of these folks voting for it have read it. Not because they won’t, because it has not even been printed yet. I guess, “we have to pass the bill so you can find out what’s in it.”
Always at your service,
Doug De Groote, CFP®, MBA, CTC Managing Director