After yesterday’s piece on how many economic indicators are starting to move back to normal, it was nice to have the Fed ratify my point. The Fed has been buying $80 billion per month of Treasury securities and $40 billion per month of mortgage-backed securities. Yesterday, the Fed announced that, effective immediately, it would be cutting $10 billion per month from its Treasury purchases and $5 billion from the mortgage purchases for at least the next two months. Plus, it has the expectation that the drawdown will continue into next year—and possibly accelerate. This is a necessary first step in taking monetary policy back to normal.
Commonwealth
Returning to a Normal Economy
As we deal with the daily rush of news and data—the elections, the Fed meeting, earnings, and so forth—it is easy to lose sight of the bigger picture. Yes, there is a lot going on. Some of it is good, some of it is bad, and most of it is somewhere in the middle. But if we step back a bit, we can see that, on the whole, we are returning as a country to something like normal, at least on an economic basis.
Market Thoughts for November 2021 [Video]
After a difficult September, the markets saw a bounce in October. Both the Nasdaq and the S&P gained more than 7 percent, and the Dow was up almost 6 percent. These results were driven by the stabilization of key economic data. Job growth declined in September, but a higher October result is expected as labor demand remains strong. Plus, consumer confidence has stabilized.
Monday Update: GDP Growth Slows in Third Quarter
Last week, a number of important economic data releases gave us updates on consumer confidence, business spending, personal income and spending, and the third-quarter GDP report. The first look at third-quarter GDP growth showed that the pace of the economic recovery slowed during the quarter, largely driven by a slowdown in personal consumption growth. This will be another busy week for updates, with a focus on business confidence, the results from the Fed’s November meeting, and the October employment report.
Quick Hits on the Markets and Economy
I am still in Atlanta this morning, after a terrific watch party with about two dozen of our advisors, sponsors, and guests. It was great to see everyone and especially to meet some new people. That said, today is another travel day, headed back from Atlanta to Boston. So, let’s take some quick hits on news items that intrigued me.
Could the Job Market Get Even Tighter?
Thinking about the constraints I mentioned yesterday, I want to dig a bit deeper into the employment and jobs question. As I wrote last week, I expect the jobs market to stay tight. There are now more jobs out there than there are workers. Unless something drastic changes, that is likely to remain the case. As job growth continues to outpace workforce growth, that situation is likely to force changes, including increased automation.
Olivia has joined Riverstone Wealth Partners providing her expertise gained from her 15 plus years in management. Olivia has provided services within the financial industry, mortgage industry, and in the non-profit sector. Olivia thrives on providing stellar customer service, accomplishing all goals set before her, and doing the right thing. Olivia’s degree in Business Management allowed her to take on roles that ultimately led her to Riverstone Wealth Partners. Olivia is currently pursuing another degree with an emphasizes in Human Resources, which she has learned over time… is her passion!
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Alec joined Riverstone after starting out his post college career on the operations side of an international logistics company working as an account executive. Graduating with a BA in Economics from the University of Illinois at Urbana-Champaign, he quickly developed a strong interest in the financial world. A lifetime resident of the Chicagoland area, Alec is an avid fan of his hometown sports teams. He is also an enthusiast of outdoor activities like fishing, camping, and hiking whenever possible.
Carol has a wide variety of experiences and has worked mainly with not-for-profit organizations. She spent 20 years in fundraising and 15 years teaching in the Illinois school system while she raised her younger children. Carol lives in Sugar Grove with her husband, Ron, and their Golden Retriever, Charley. She has four children and two grandchildren. When she’s not working, Carol enjoys spending time with friends and family, running, fishing, bible study, and watching her grandchildren play sports.
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