With the recent headlines surrounding the current state of the market, and recession talks still lingering, we are taking a deeper dive into key factors that we believe investors should keep an eye on, such as:<\/p>\n\n\n\n
Inflation Falls to 8.5% \u2013 Is It a Sign That Rising Prices Have Peaked? <\/strong>The Labor Department reported on Wednesday that inflation \u2013 as measured by the consumer price index (CPI) \u2013 rose 8.5% year-over-year in July, which was a smaller increase than the 9.1% y-o-y rate posted in June. Importantly, the month-over-month inflation reading for July was flat from June, which is key in determining whether inflation has peaked or not. At this stage, it is too early to tell \u2013 several months of inflation data will be needed to confirm the peak. One of the main drivers of falling prices came from the energy sector, as gas prices fell 7.7% from June to July. Falling gas prices are good for consumers, but they are also very volatile \u2013 meaning we could just as easily see a spike later in the year due to supply disruptions or further complications tied to the war. Inflation pressures persisted in other areas of the economy as energy prices fell. Food prices were up 1.3% from June to July and 13.1% year-over-year, which marked the fastest annual rate of change since 1979. Equity markets shifted into rally mode with the relation of inflation figures, as easing price pressures may open the door for the Federal Reserve to slow the pace of rate increases in the months ahead. Market watchers are focused on the decision at the September 20-21 policy meeting, which at this stage amounts to a 50 or a 75-basis point increase.1<\/sup><\/p>\n\n\n\n _________________________________________________________________________<\/p>\n\n\n\n Have Recession Concerns? Here\u2019s What to Do<\/a><\/u><\/strong><\/p>\n\n\n\n Even with inflation easing, some investors are still fearing a possible recession. We suggest that investors prepare for any market outcome. <\/p>\n\n\n\n If you\u2019re at or near retirement, a recession may require pivoting your retirement investing strategy. The market turbulence and uncertainty are scary\u2014but now is the time to take action and prepare yourself for the coming months. It\u2019s important to understand the following \u2013<\/p>\n\n\n\n ____________________________________________________________________________<\/p>\n\n\n\n Wage Growth and Productivity Declines Suggest Price Pressures May Stick Around \u2013 <\/strong>Wage pressures in a tight labor market may also act as a countervailing force to falling prices elsewhere in the economy, a factor that many Fed-watchers do not seem to be giving much weight to. The Labor Department this week also reported that average hourly wages rose by 5.2% year-over-year in July, which marks seven straight months of wage increases exceeding 5%. It is widely known that employers are having a challenging time finding enough workers, particularly in hospitality and service industries, and rising wages are one method being used to retain key workers. Wage growth is inflationary by itself, but there is also the downstream effect of businesses needing to pass along the higher costs of labor to consumers, in the form of higher prices. This phenomenon is often referred to as the wage-price spiral. While wages and price pressures rise, US labor productivity has been falling \u2013 another headwind to falling prices. If workers are being paid more while producing less, it sets up a negative outlook for inflation down the road.3<\/sup><\/p>\n\n\n\n The \u201cJobful Recession\u201d is a Global Phenomenon \u2013 <\/strong>Official figures from the Bureau of Economic Research show that the US economy contracted in the first two quarters of 2022. The jobs market suggests otherwise. In the US, 372,000 jobs were added in June and payrolls increased by over 500,000 in July, with the Labor Department reporting that there are still a seasonally adjusted 10+ million open jobs in the economy. Indeed, payroll growth in the US economy has continued to defy weakening output, with more jobs being secured in the first six months than any other post-WWII period when the economy was technically contracting. This \u201cjobful recession\u201d scenario is a global phenomenon that exists in other developed economies like Germany, Japan, and New Zealand. In Germany, the unemployment rate is hovering at a 40-year low even as an energy crisis has curbed manufacturing output. In New Zealand, GDP also fell in Q1 of this year while the unemployment rate sits at 3.3%, a historically low figure. This disconnect between plentiful jobs and weakening output makes this \u2018global recession\u2019 \u2013 if it is one \u2013 different from any other in history.4<\/sup><\/p>\n\n\n\n What Can Investors Do as Recession Talks Linger? <\/strong>If you\u2019re at or near retirement, a recession may require pivoting your retirement investing strategy. Even though the market hasn\u2019t hit a recession, it\u2019s better to be prepared for it. In order to do this, it\u2019s important to understand how recessions work, how long they last, and how to potentially protect yourself and your family from long-term damage to your assets and security. We can help you with our free guide, A Recession is Coming: 6 Insights to Know Now So You\u2019re Prepared<\/em>.5<\/sup><\/strong><\/a><\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide today. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather this one. Don\u2019t wait\u2014get this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" The “jobful” recession is a global phenomenon, inflation slows down but too early to say if it has peaked, wages rise while productivity falls.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-11874","post","type-post","status-publish","format-standard","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11874","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=11874"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11874\/revisions"}],"predecessor-version":[{"id":11876,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/11874\/revisions\/11876"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=11874"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=11874"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=11874"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/u><\/strong>If you have $500,000 or more to invest, get our free guide. You\u2019ll learn the scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather a potential one. Don\u2019t wait\u2014get this guide today!
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Download Your Copy Today:\u00a0A Recession is Coming: 6 Insights to Know You\u2019re Prepared<\/em><\/a><\/u><\/strong>2<\/sup><\/u><\/a><\/strong><\/em><\/p>\n\n\n\n