Nonfarm payrolls…

Increased 372,000 in June. beating the consensus expected 265,000.
What does it mean – Overall, good news and really strong numbers for the economy. Payroll gains grew by 539,000 per month in Q1 and 375,000 per month in Q2. The big issue is the participation levels continue to fall.

Wage earners or the labor force dropped 353,000 in June…

While unemployment remains at 3.6%, we continue to see the participation rate fall.
What does it mean – Expect the trend to continue as more baby boomers start to retire and the gig economy (Uber, Lyft, Door Dash and Grub Hub) continues to struggle due to high gas prices. Unemployment remained at a low 3.6%, the participation rate (the share of adults who are either working or looking for work) slipped to 62.2% from a prior 62.3%.

Civilian employment declines…

Civilian employment, an alternative measure of jobs that includes small-business start-ups.
What does it mean – Down 315,000 in June. While not often spoken about, small business start ups are the life blood of our economy. Policy that helps or hurts risk takers ultimately finds its way into the economy.

Remember, big businesses love barriers to entry and while they will speak out against regulations, they often are backing regulations if it helps build a moat around their business. President Eisenhower warned us about the unholy alliance between government and big business when he delivered his speech about the military-industrial complex. He worried about, “The total influence — economic, political, even spiritual — is felt in every city, every state house, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.”

It is that very behavior we are faced with in several other industries. A perfect example of this today is Facebook and Twitter going to Washington and asking for more regulation on free speech on the internet. Another would be the pharmaceutical industry. It takes $ hundreds of millions to get a drug to the market. Due to this high cost and rightfully so, many startups are acquired or fail before their product ever sees the market.

I am not against regulations. We need to protect our citizenry against the temptation that comes from a close relationship between government and private industry. I am merely pointing out the heavy hand of regulations and its cost on society. Free speech, healthcare, manufacturing, energy, etc. All are seeing the high cost associated with the increase of government intervention. And in some cases, like the drug industry, the very bureaucracies (CDC and FDA) and unelected employees of our government who are hired to safeguard society are being rewarded in sharing of the fees from patents in the drug industry. Our elected leaders influenced by K Street and the lobbyists. You might even call it bribery. We should all be asking ourselves, who actually has our best interest at hand? Simply put, is the fox guarding the hen house? Is there an unholy alliance between big business and government that is hurting business creation? Or are we a society that has matured and become apathetic and more risk adverse.

Housing…

Sellers start to drop prices
What does it mean – from the chart below, Redfin did not give us the data from 2008 to 2012, but I have to believe we are going to see similar data as the fed will continue to raise rates to fight of inflation which is eating folks out of house and home.

Welcome home…

US continues to see more and more companies returning to America.
What does it mean – Check out the chart below. The American dream is real. Businesses recognize the value of the rule of law, intellectual property protection, a healthy job market and an at will employment vs. mandates. They are seeking talented, educated work force that is motivated. And finally, a low corporate tax rate.

If Governor Newsom helped businesses, lowered taxes in CA, reduced and eliminated burdensome regulation on everything businesses build, makes, or grows. Enforces the rule of law, he would not have to run silly adds in FL attacking a governor who gets it and is open for business. Poor CA. It was not long ago we were the envy of the nation.

Could you imagine seeing 150 companies come back to CA from FL and TX.
Reminds me of the old Beach Boys song, California Dreaming. Enjoy the song. Let’s keep making every day the very best.

https://www.youtube.com/watch?v=zBHz_V59RpM

Let’s roll America,

Doug De Groote, CFP®, MBA, CTC
Managing Director

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

The post What Happened Last Week and What It Means to You: July 8th, 2022 appeared first on DeGroote.

Economy Created 390,000 new jobs…

Better than expected but growth rate continues to slow.
What does it mean – Unemployment up from 3.5% to 3.6%. Yet there are still over 10 million less Americans working today than pre shutdown.

If you want a job, you can get one…

Job Opening and Labor Turnover Survey showed there were 11.4 million job vacancies in the U.S. at the end of April.
What does it mean – Government policy is getting in the way of the free markets. Employment is available but employers are forced to compete with the government and the multitude of government programs that were originally designed to help people but are now being used to sustain government dependency. This is unsustainable. Margaret Thatcher said it best, “The problem with socialism, is you eventually run out of other people’s money.”

Small business payrolls shrink…

Businesses with fewer than 50 employees lost 91,000 workers last month according to ADP.
What does it mean – Midsize and large companies are benefitting from better access to capital and tougher barriers to entry for small companies due to regulations and the overall difficult economic environment.

American families will face rising electricity bills…

While many have felt the pinch of inflation at the store or fueling up their car, your electricity bill is on its way up.
What does it mean – According to the Federal Energy Regulatory Commission the wholesale electric markets for the summer have future prices trading between 77% and 233% higher than last year. While many states are regulated and will not be able to pass on the complete increase right away, this means that we will see rates continue to go up for some time if we do not solve our energy crisis. Drill baby drill!

Below is a great graph showing the increase in gas prices, wind, and solar. Check out nuclear, coal and hydro (I imagine CA citizens wish they had those dams the government ordered destroyed back. Not only would they have more water but maybe more hydroelectric energy). California is now finding out the hard way that leadership and policies matter.

A look at new home sales month-over-month/year-over-year by region…

Northeast (-5.9%/+17.1%); Midwest (-15.1%/-25.5%); South (-19.8%/-36.6%); and West (-13.8%/-12.4%).
What does it mean – The latest report underlines the affordability pressure that has quickly emerged with the spike in mortgage rates. Sales are slowing as fewer buyers can afford the rising rates and cost of living.

Is the Fed finally listening…

Recent reports are starting to show signs that the Fed is slowing the growth rate of money. We will see once reports are released by the Fed.
What does this mean – If true, the fed may be realizing that they have been on the wrong side of inflation and economic science and are finally dealing with reality. Since the insanity of the mandatory shutdown, money supply is up over 39% according to the federal reserve. Rising interest rates will not cure inflation but will slow down demand and hurt the middle and lower class. Volker realized this in the early 80’s and Nobel Laureate Milton Friedman, one of my economic heroes, harped on this throughout the 70’s and his entire career. He was right then, and history will likely prove him right yet again. Mark Twain once said, “History never repeats itself, but it does often rhyme.”

Let’s roll America,

Doug De Groote, CFP®, MBA, CTC
Managing Director

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

The post What Happened Last Week and What It Means to You: June 3rd, 2022 appeared first on DeGroote.

New Zealand hands out money to fight inflation…

Did the leaders of New Zealand ever wonder what caused inflation?
What does it mean – When career politicians and government bureacrats who so desperately want to keep power and yet have never run anything in their life but their mouths are in control of the treasury’s printing press, you can expect greater government spending, the urge to print more money, and more government programs all resulting in higher inflation and more expensive government.

Gas prices soar…

National average hits $4.62 per gallon and over $6 per gallon in California for the first time in its history. That is up $.44 per gallon over the last month and up over 50% over the last year, well before the Russian invasion of Ukraine.
What does it mean – According to AAA, 18 states are already over $5.00 per gallon and many more on the rise. Expect transportation costs to continue climb. This administration is set on devaluing and diminishing your income through higher gas prices which will translate into higher food and neceisities. Totally fixable.

Biden has no intention to relieve oil production…

On Monday President Biden doubled down on his decision to freeze new federal oil and gas drilling leases to tackle climate change.
What does it mean – Fuel prices are going higher and just wait until global demand spikes once China fully re-opens. Yet President Biden himself said that “when it comes to the gas prices, we’re going through an incredible transition” callously praising high fuel prices.

Our President and this administration are very happy to continue to shut down production, freeze leases, drilling permits, and any new pipelines here in America while begging OPEC and our enemies to drill more. Meanwhile, nations like Russian and Venezuela, and enemies of the free world enrich themselves in the process. This is a global wealth transfer that is funding the very people who hate our freedom, not to mention do so with far less environmental regulation and thus turning the climate change argument on its head. You should demand your congressman and senator to vote to end this immediately.

Some good news…

The U.S. $ is on par with the Euro and is also strong against the Yuan.
What does it mean – Good news for the consumer. This will make imports a bit cheaper. Not so good for domestic production.

Fed Banks of Richmond, Philly and NY…

In May all three fed banks showed major decline in factory output activity.
What does it mean – New orders and shipments all are down significantly from the prior month.

New home sales drop 16.6% in April…

Housing is key to economic growth.
What does it mean – Expect the housing market to continue to slow and prices to start coming down as interest rates go up, and all that “free” money continues to create inflation.

Nationwide home listings increased by 9%…

More people are rushing to sell in order to beat a downturn in the housing market.
What does it mean – Sales under contract declined by 3.9% last month and down over 9% from a year ago. This is the slowest we have seen it in over a decade (remember 2009-2011). We are now seeing more sellers in certain parts of the country as they flee poorly run states for vibrant growing states. HMMMMM?

Department of Labor releases data highlighting every states employment numbers…

Not so good for States that favored the shutdown of schools, businesses, and increased government spending.
What does it mean – The numbers are glaring. 100% of states run by Govenors and legislatures that protected individual liberty, limited government, and left decision-making to individuals and private business have more than recovered. Meanwhile all other states run by “big government” beuracrats and Govenors that favor more control and less personal liberty are only back to 87% of pre-pandemic numbers. You can guess which states are run by wich types of governments.

States like FL, TN, AZ, UT, KS, SD, TX and others prospered and are now far ahead of where they where before the pandemic. Ask yourself, not where you want to live, but under what type of leadership and do you want for your state?

Inflation is not going away anytime soon…

Inflation rose 9.57% since April.
What does it mean – You must be getting tired of hearing it from me. But here goes – Policy matters!! Until we change the policy, we will continue down this path.

Predictor-in-Chief Ronald Reagan was not just right but may be the best fortune teller of all time. Just read a few of his predicitons. Trully amazing. Reagan knew that too much government spending and printing of money leads to too much money chasing to few goods. Maufacturers and businesses will not produce more if they are dependent on the government for the supply of buyers. This is why a command-and-control economy like Russia, China, Cuba, and every other marxist country continues to fail over and over again.

Here is Reagan on Johny Carson. It is worth the watch and it is almost as if he is speaking about todays issues. https://www.youtube.com/watch?v=KBB78P4aids

Lets roll America,

Doug De Groote, CFP®, MBA, CTC
Managing Director

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

The post What Happened Last Week and What It Means to You: May 27th, 2022 appeared first on DeGroote.