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What Happened Last Week and What It Means to You: Week Ending October 27, 2023

Week Ending October 27, 2023

GDP up 4.9%…Driven by consumer spending. GDP provided a real surprise for Halloween.

What does it mean – It must be “retail therapy”. While the world is squeezing in from every direction, and life gets a bit rough, Americans go shopping. The current GDP report looks like the American consumers are fully employed and feel flush with cash even though their savings are at historically low levels. In fact, you have to go back to just before the 2008 correction to find savings rates this low. Not to mention their credit cards in many cases are nearly maxed out.


The facts about GDP… The United States Economy grew by 4.9 percent in the third quarter according to the advance estimate for real GDP released by the U.S. Bureau of Economic Analysis on Thursday morning. This beat the consensus expectation of 4.3 percent by .6%.

What does it mean – Wow. How did this happen? First, you need to know how they measure GDP and how the components work. Let’s remember, it’s measured by the government and often gets confused with reality and how they would love for you to feel.

So, what is GDP? GDP = consumption plus investment plus government spending plus net exports.

How did we get 4.9% growth when the world seems to be struggling to pay its bills?

  1. American consumer went on a shopping spree.
  2. American consumers are in debt – American credit card debt hits a record $1 trillion in this year’s third quarter.
  3. The annual interest charge for retail credit cards is at a record 29% this year.
  4. Americans’ personal savings rate registered 3.9% this past quarter. The long-term average is roughly 9%.
  5. Government spending is out of control and growing. Your government racked up a $1.7 trillion deficit this past year.
  6. This report highlighted the power of the consumer. But know this. The consumer does not represent 68% of GDP. According to economist Mark Skousen, “GDP only measures the value of final output. It deliberately leaves out a big chunk of the economy – intermediate production or goods-in-process at the commodity, manufacturing, and wholesale stages – to avoid double counting.”

Skousen goes on to say, “that consumer consumption merely constitutes perhaps 30% of GDP.” He went on to say, “I calculated total spending (sales or receipts) in the economy at all stages to be more than double GDP… By this measure — which I have dubbed gross domestic expenditures, or GDE – consumption represents only about 30% of the economy, while business investment (including intermediate output) represents over 50%.”


41.2% of adults are having difficulties paying household bills…The Census Bureau found that almost half of our adult population is struggling to keep up with paying household expenses.

What does it mean – While this is the highest level on record since the Census Bureau has been asking this question, what is most concerning is that this number is concentrated in the most educated part of the population.

According to Torsten Slok, chief economist of Apollo Global Management, “the difficulties with paying household expenses were concentrated among households with a college degree, making between $50,000 and $150,000.

This is causing many to ask not only how, but why. Some are saying it is because of the student loan holiday the government gave to borrowers during Covid. This allowed them to redirect those funds meant for paying their student loans to other fixed expenses like new cars and boats. Someone should have told all those college graduates that nothing is free. Actually, taxpayers should demand a fiscally responsible Congress that would have never allowed this.

Since the government took over ALL Lending in 2010 and banks no longer are lending to students, the exact opposite has happened. Taxpayers were promised that they would not lend to anyone who could breathe only to find out that they lent to future graduates who subscribe to “retail therapy” when they are broke.

Here is a look at the current loans owned by the taxpayer. Up more than $1 trillion since 2010. No longer are responsible private lenders making sure the student can repay a loan based on their degree, but now, the credit check is much like that of the real estate market in 2006. “If you can fog a mirror, you can get a lone.” No wonder our universities no longer champion debate and free speech but demand safe spaces and therapy dogs.

Household incomes continue to grow…While forced increasing of minimum wage has accounted for much of the increase in household income as the lower income continues to benefit from a         rising minimum wage. The UAW is about to get a huge increase further driving up the cost of transportation.

What does it mean – Attention all Kmart Shoppers, “Trouble on aisle 13”. The chart below says it all. Massive bump in personal income due to “COVID Bucks” followed by a lifestyle that is unsustainable and feeling the effects of inflation.

Fuel prices on the way up and so is inflation…Look no further than this administration’s blind eye to reality.

What does it mean – This administration’s continued refusal to drill in the US and open up our pipelines will only continue to contribute to higher fuel prices, more expensive energy, the funding of Iran, and never-ending wars in the Middle East. As prices soar, this administration has allowed Iranian oil embargos to expire. Directly contributing to the funding of Iran and its proxies.

Worst of all, you, the taxpayer, is now going to have to pay an exorbitant premium to replenish the Strategic Petroleum Reserve (SPR) because this administration drained it in 2022 for political purposes and has yet to refill it leaving us at the lowest levels in modern history.

What is amazing, is Democrats slammed the Trump administration in 2020 for attempting to top off the SPR at a time when prices were around $25 per barrel as COVID-19 lockdowns slashed demand, saying that a replenishment would be a handout for Big Oil. Got to ask who is handing out money now to Big Oil and our enemies in the Middle East and Venezuela? West Texas Crude is now over $86 a barrel.

Let’s roll America!!

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

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.

Jeannie Ewing-Nicholson

Operations Manager

Jeannie started her career in the Financial Services industry in 1994 with Oppenheimer & Company. As part of the De Groote Financial Group, Jeannie is responsible for the operational needs of the firm including cash management and account administration. With her upbeat attitude and attention to detail, Jeannie provides an efficient streamlines experience to ensure clients meet their goals. Jeannie enjoys travel, outdoor activities, Pilates, and is a football and basketball fan. She resides in Westlake Village with her husband, daughter and son.

Mary-Ellen Lykken

Executive Assistant

Mary-Ellen, Executive Assistant at DFG, keeps the office running smoothly by providing administrative support and assisting with scheduling and organization. With a background in human resource and office management, Mary-Ellen comes from the non-profit and services industries.

Outside of the office, Mary-Ellen is committed to the advancement of independence and productivity for those with disabilities. By telling her story of the challenges and joys of raising a child with complicated disabilities, she hopes to help others navigate similar circumstances.

She is happiest when visiting her two grown sons. Otherwise, you can find her competing on the pickleball courts.

Sara Mariniello

Operations Manager

Sara is new to the financial industry only starting in 2022 when she was hired at De Groote Financial. As Operations Manager, Sara is responsible for all the paperwork surrounding opening accounts and investment paperwork and is also responsible for much of the client communication. Sara has her bachelor’s in science and nursing from Concordia University, Texas and worked as nurse for over a year prior to moving back to California. She loves all things sports and church related and is likely spending every free moment with her Husband visiting family in Texas and New Jersey.

Fadi Ahmed

Chief Operations Officer and Chief Compliance Officer

Fadi works with clients to ensure an exceptional experience. He coordinates and assures the planning process and wealth management tools are at your fingertips to provide the clarity you deserve and the transparency and access to all your accounts. Fadi ensures the data and information is reflective in our planning software. All changes and updates flow through his desk and he coordinates those changes with the rest of our team.

Andrew Krout

Wealth Advisor, Co-Chief Investment Officer

Andrew Krout is a Wealth Advisor at De Groote Financial Group, LLC. He also serves as a Co-Chief Investment Officer for the firm, focused on wealth management.

Previously, Andrew served as CIO with Kelly Financial in Boston Massachusetts since 2013. He is a licensed investment advisor representative and insurance producer. He graduated from Saint Francis University with a bachelor’s degree in both finance and accounting. He is a candidate for CERTIFIED FINANCIAL PLANNER™ designation. Andrew holds life insurance licenses in Massachusetts, New Hampshire and Connecticut.

Andrew is passionate about serving his clients and investment management and how to apply news and current events to investment decisions. He played Division 1 golf in college, and still enjoys playing and watching the sport in his free time.

David Darst

Co-Chief Information Officer

David Martin Darst, CFA is an Investment Advisor to DeGroote Financial Group, specializing in asset allocation and product selection. Previously, David served for 17 years as a Managing Director and Chief Investment Strategist at Morgan Stanley Wealth Management, with the responsibility for Asset Allocation and Investment Strategy. He joined Morgan Stanley in 1996 from Goldman Sachs, where he held Senior Management Posts within the Equities Division and earlier, for six years as Resident Manager of their Private Bank in Zurich.

David is the author of 13 books, including bestsellers The Art of Asset Allocation, 2nd Edition (McGraw-Hill), and The Little Book that Still Saves Your Assets (John Wiley & Sons). He also appears as a frequent guest on CNBC, Bloomberg, FOX, PBS, and others, and has contributed articles across a variety of publications.

David graduated with a BA in Economics from Yale University, and earned his MBA from Harvard Business School. He has lectured extensively at Wharton, Columbia, INSEAD, and New York University Business Schools, and for nine years, David served as a visiting member at Yale College, Yale School of Management, and Harvard Business School. He is a CFA Charterholder and a member of the New York Society of Security Analysts and the CFA Institute. 

Doug De Groote

Managing Director

Doug is a Certified Financial Planner™ (CFP®) with an MBA in Financial Planning, and is an active member of the Financial Planning Association (FPA). Before establishing De Groote Financial Group, Doug founded the United Wealth Management division of United Capital. Prior to that, Doug was a partner at Crowell, Weedon and Co. He regularly contributes to a variety of financial and general media.

Doug’s passion, and what he believes, is that everyone deserves the opportunity; they deserve to have the freedom and responsibility to be pro-active in achieving independence and financial success.

Doug’s life is focused around his family, wife and three children, and making sure they get the foundation that is necessary for them to have the awareness of the opportunities that abound in our great country.

Doug helps increase his client’s awareness and success, to identify and take advantage of opportunities that present themselves and help protect them from some of the pitfalls or obstacles that are thrown in our paths. With regards to their financial circumstances, Doug helps his clients identify their goals, plan for various outcomes and manage their assets to help them make their vision a reality.