Initial jobless claims improved…

Job market continues to be tight and still on the mend.
What does it mean – The key takeaway from the report is twofold: first, the initial claims level is still a long way from pre-recession levels; and secondly, this report covers the week in which the survey for the August employment report was conducted. The low level of initial jobless claims supports expectations for continued strength in nonfarm payrolls, which of course should support continued tightening moves by the Federal Reserve.

More people working two or more full-time jobs in recent history…

Yet, the US still has more people unemployed and a lower participation rate since the forced shutdown.
What does it mean – Per the graph below we saw real wages increase from 2017 to the beginning of the pandemic and fewer people working more than one job. Since the pandemic and the forced shutdown more and more people are forced to work more hours to keep up with inflation thanks to abysmal monetary policy via the increase of the money supply, combined with reckless fiscal policy through endless increases in government spending.

All about the jobs…

According to the latest PriceWaterhouseCooper (PWC) half of U.S. companies are planning to cut jobs, even as business leaders fret about difficulties hiring and retaining talent
What does it mean – From the song Pompeii by Bastille, “Grey clouds roll over the hills
Bringing darkness from above.” Businesses are now starting to feel the pinch of inflation, higher wages, a messed-up supply chain, the cost of government intervention, etc. I could go on and on, but you get the drift. The only sector that’s booming despite it all is government along with its 87,000 new IRS agents. What we need is a bill passed by both the House and the Senate that limits salaries for DC to the national or state average in average in which they are stationed.

Housing starts in July decreased 9.6% month-over-month…

Sales also decreased the most in 20 years.
What does it mean – Housing is slowing down. Cost of living, increasing interest rates, and now the Inflation Reduction Act will force you to pay more, your hope of moving up is now just hoping you can stay. Increasing corporate taxes and increasing the size of government will surely increase the cost of government to us all.

England and the Eurozone…

Inflation is a global issue.
What does it mean – Like the United States, energy is paramount to a strong economy and low inflation. Take it away and make it less dependable, and more expensive and the cost of everything goes up.

Oil prices fall…

We are all enjoying a few cents savings, but why? Demand destruction.
What does it mean – Economists and business leaders have been warning about Demand destruction for some time. Once prices get too high, people stop using or look for substitutes. Consumer demand for energy has shifted as prices have increased substantially and the government has reduced the ability to process and refine crude and natural gas to keep up with needed demand. Demand destruction is exactly what is happening to the oil price as consumers are starting to use a bit less. With no help from the government drilling or begging won’t change the availability if the government continues to shut down refineries due to the added increase of regulations under this administration. Enjoy the price reprieve in gas while we have it. If we do not change policy, prices are heading back up.

You can’t make this stuff up!!

Starbucks asks Labor Board to suspend mail-in ballot for union elections…

According to CNBC, Starbucks asks labor board to suspend mail-in ballot for union elections, alleging misconduct in voting process.
What does it mean – HMMM-The very company and CEO who promoted mail in balloting on our national election is finding out the truth about voter manipulation and how fraudulent mail-in balloting is the hard way. If passed and Starbucks becomes unionized, I wonder what that will do to the cost of a cup of coffee. Your venti vanilla latte won’t get any cheaper, that’s for sure. I am sure earnings will struggle and we will have to change the name from “three bucks” to “six bucks”. Not to mention due to their support for BLM and ANTIFA, they are now being forced to close many stores in cities ravaged by crime, homelessness, and bad city politics run by left wing DA’s, Mayors, and Governors who let criminals free and homeless destroy the culture and fabric of their once safe cities and states. Look no further than CA, IL, NY, NJ. All seeing Starbucks closing shops along with many other national chains like CVS, Walgreens, Walmart, etc. In Beverly Hills, the boutique chain Kitson just banned masks. Apparently, the robbers and thugs are using the mask mandates as ways to circumvent the rule of law and hide their faces from cameras. Wow…who would have thought? Every store owner in America complained about this and now business and the safety of staff, clients, and innocent bystanders suffers under the fear mongering of the federal, state and local governments.

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: August 19th, 2022 appeared first on DeGroote.

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.

Who’s business is it?…

Since the beginning of COVID, the shutting down of our economy by government mandates at multiple levels gave in to big government and big business and we gave up a bit of our freedom for the perception of safety. Fortunately, even big business is now speaking out.
What does it mean – Business leaders are starting to push back and reclaiming their businesses from the grips of unelected bureaucrats and elected officials with not a clue how the economy really works.

For example, many in the oil industry are mocking President Biden’s tweets on oil and gas. They are asking the intern or whoever approved the recent tweets to enroll in a basic economics class. Jeff Bezos openly disagreeing with the White House on inflation. Elon Musk has been at the front, leading the way and pointing out the hypocrisy in DC and lack of fundamental understanding of how business and the economy really works. Again, our President and most of his staff have never run a business or worked in the private sector. Sure, his team is from the Ivy league and sure, Harvard and Yale are great schools, but at some point, theory gets punched in the face and hard work and facts matter.

When the going gets tough, the answer is not Washington or some bloated government program. It is freedom. We just celebrated the greatest gift to the world. The United States of America. Prior to the U.S. most generations thought they would live just like their parents before them. Destined for serfdom and subjects of a government ruled by mans laws.

Our Constitution ensures your freedom through three equal branches of government. Not through a King or through a majority vote, which across the world often leads to tyranny by the majority. But ours is special. How many countries have a Bill of Rights? How many Countries have a constitution protecting those rights and limiting the government’s power? How many countries have enshrined in their founding documents that the government will serve at the pleasure of its citizens and if violated the citizens can change it? How many countries are endowed by their creator and its citizens protected by natural law?

What we need are more Americans thinking things through on our own, with less rules, less mandates, less regulations, less bureaucracy getting in between you and the freedom to own your own destiny. Happy Birthday America. Take the moment to listen to 100-year-old veteran Carl Dekel. Listen to his pride, recognize his wisdom and passion for our country, and the fear he has for our future. Freedom is tough and even harder to keep. https://www.youtube.com/watch?v=wcnQJd_XRQQ

Initial unemployment…

Four week moving average is beginning to slow.
What does it mean – Disturbing news for the job markets. Initial claims increased by 7,250 and continuing claims increased by 5,500. What is concerning is the improving trend we have seen for the last few months has stalled out. Job market may be tightening.

Net exports continue to slide – From the graph above you can clearly see the massive fall off.
What does it mean – It is a culmination of many issues. 1) Bad fiscal policy and slowly letting up on China. 2) As the Fed raises interest rates, our dollar become stronger, and our goods become more expensive. This is seen above and in the fact that imports where up 18.9% vs. 18.3%.

Existing home sales decrease 3.4% month-over-month…

Total sales are down 8.6% from one year ago.
What does it mean – While existing home prices nationally are up 14.8% year-over-year, representing 123^rd consecutive month of year-over-year growth, which is the longest-running streak on record. It is also the first time the median price went above $400,000. The markets have been on a terror and nationally hitting new records. While still a tight market, the west coast was down 5.3% and folks looking to lock in gains and move to low tax states from CA are hitting the bid.

Housing starts down 14.4% month-over-month…

It is about darn time.
What does it mean – This rant has nothing to do with why housing starts are down 14.4%. But everything to do with why it should be down in CA a heck of a lot more.

If you live in CA, your local water district issued a warning if you use to much water. You will be penalized, and they will send you to water jail!!! Not really, they will just dox you and make sure your neighbors know how evil you are and put a governor on your water main. Ok, maybe not dox you. But they will limit your water.

As a CA resident and an American, I am sick of being told what I can and can not use. If I want to pay for it, then it is my choice. My decision and yours too. Seems to work for Obama in Palm Springs, Hawaii, DC, and now his fourth home in the Hamptons. Or how about our climate czar, John Kerry, who travels the world on private planes and uses more energy and water than most the folks on his block combined. Or how about Governor Newsom and his wine vineyards wine vineyards which were miraculously allowed to stay open while everything else shut down in 2020. I am sure he is getting whatever he needs. I can guarantee you they are living by different rules than you and I.

Here is the real science. Since records began in 1895, statewide annual precipitation has ranged from a low of 9.4 inches in 1924 to a high of 41.66 inches in 2017. According to the California Office of Environmental Health Hazard Assessment and the chart below it sure looks like we are tracking just as we have since the beginning of keeping records. Folks, we do not have a water problem. We have a government problem. Just like Smokey the Bear said, “Only you can prevent forest fires”. The same can be said about CA. Keep electing what we have had for the last 30 years, and you will get more of the same. Less water, less energy, less farming, fewer jobs, more homeless, more crime, more waste, more corruption, and less accountability. Are you picking up what I am putting down?

In CA, we have nearly 8 million people here illegally that we know of. We are building massive amounts of low-income housing that is being pushed by the federal and state governments on local municipalities by holding them hostage for state and federal grants, all while we have a “water shortage”. Ask yourself why? What we have is to many people attracted to our state for free handouts. California just announced they are going to give out a $1,000 to people to help fight inflation. Ahhhh, that is inflationary.

Bad policy is what is wrong. It is not a drought issue it is a planning issue and the greed of government officials who live off the property tax, planning fees, and permitting fees to fund their pet projects and secure enough votes to stay elected are driving the bus (over the cliff). Enough is enough. The reality is we have roughly the same rain and snow fall year over year on ten year rolling averages. Yes, we have droughts. Most of CA qualifies as a desert. But for some reason, God sees fit to fill our dams and rivers and aquafers even when we tear them down for the delta smelt, a frog, a bird or what ever else we deem irreplaceable and can be justified by “climate change”. What we need is CA government change.

Let’s roll America,

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

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 1st, 2022 appeared first on DeGroote.