Inflation Slightly Hotter Than Expected, But Doesn\u2019t Change Rate Outlook \u2013 <\/strong>The U.S. Labor Department released the latest inflation data on Tuesday, and prices ran a bit hotter than expected. According to the consumer price index (CPI) measure of inflation, prices increased by 3.2% in February from a year earlier, which was slightly higher than consensus expectations for a 3.1% rise.1<\/sup><\/p>\n\n\n\n Source: Federal Reserve Bank of St. Louis2<\/sup><\/em><\/strong><\/p>\n\n\n\n Tax Planning? Get Our User-Friendly Guide for 2024<\/u><\/strong> Our free guide, Tax Planning in 2024: A User-Friendly Guide2<\/sup><\/a><\/u><\/em><\/strong>, aims to simplify the complexities of tax laws and empower individuals and business owners to make strategic decisions that minimize tax liability. It also covers a range of key tax issues, such as:<\/p>\n\n\n\n If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy: Digging into the numbers a bit more, we find that gas prices and \u2018shelter costs\u2019 accounted for over 60% of the monthly increase, which we would argue helps explain why the stock market rallied after the CPI report\u2019s release. Gas prices are notoriously volatile, and do not factor much into the Fed\u2019s thinking on underlying inflation. And we\u2019ve written before that shelter costs play a much bigger role in the CPI calculation than they do in the Fed\u2019s preferred inflation measure, the PCE price index. All told, the latest CPI release likely does not move the needle on the Fed\u2019s outlook for rates, reinforcing the market\u2019s expectations for three rate cuts in 2024. The equity market has also taken some level of solace in the recent jobs report, which included downward revisions to December and January payrolls and showed decelerating wage growth. <\/p>\n\n\n\n The U.K. Economy Appears to Be Turning a Corner \u2013 <\/strong>The U.K. economy has been in something of a rut over the past few quarters, still struggling to fend off high inflation and experiencing a much less compelling post-pandemic recovery than the U.S. The tides may be turning. In January, the U.K. economy finally returned to growth, with GDP rising by 0.2% month-over-month \u2013 better than the 0.1% expected. This modest growth follows a contraction in the second half of last year, which was unique among the Group of Seven large rich countries \u2013 all of which saw expansion over that period. Flipping back to growth is an important development not only for the U.K. but also for the global economy, a signal that economic growth is broadening. The U.K. has a services-based economy where consumer spending is crucial, much like the U.S. It helps that real wages (adjusted for inflation) are rising again, up 1.8% in the three months through January.4<\/sup><\/p>\n\n\n\n Americans are Feeling Better About Retirement \u2013 <\/strong>Many stories about retirement tend to highlight Americans\u2019 overwhelming lack of preparedness. These stories still ring true today. But there are also some positive developments to highlight, which point to an improving retirement picture for many Americans. One study released this week from Vanguard illustrates these improvements. It found that Americans are saving into retirement accounts at record rates, with 43% of workers increasing the percentage of their paycheck saved into a 401(k) \u2013 compared to just 8% who decreased the percentage saved, and 2% who stopped altogether. One key factor that has been helping the retirement picture is automatic enrollment, which Vanguard says about 60% of its plans have. Of those plans, 60% of employees keep the deferral rate of 4% or higher. These trends, combined with a strong stock market in 2023, have led to average account balances at Vanguard increasing by 19% over the past year.5<\/sup><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2024\/03\/pic1-2-1024x350.png\")
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While tax planning might not be the most thrilling topic, it’s a crucial component of your financial strategy.<\/p>\n\n\n\n\n
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Download <\/a><\/u>Tax Planning in 2024: A User-Friendly Guide3<\/sup><\/u><\/a><\/em><\/strong><\/p>\n\n\n\n