The U.S. Unemployment Rate Crosses 4% for the First Time Since 2021 \u2013 <\/strong>At first glance, the Labor Department\u2019s jobs report released last Friday looked like great news\u2014the U.S. economy added 206,000 new jobs, slightly beating expectations.1<\/sup><\/p>\n\n\n\n Total Nonfarm Payrolls, Monthly Change Since January 2021<\/strong><\/p>\n\n\n\n 7 Secrets to Building the Ultimate Retirement Portfolio<\/a><\/u><\/strong><\/p>\n\n\n\n As we navigate through the middle of 2024, it\u2019s normal for investors working on their retirement portfolios to have concerns about future market uncertainties.<\/p>\n\n\n\n Navigating through election year can be difficult, but we still believe it is possible to avoid the damage of economic downturns and achieve your retirement goals. However, achieving these goals involves some work: Defining your investing objectives, determining your asset allocation, and managing investments over time.<\/p>\n\n\n\n To help you do this, we are offering readers our free guide that provides a step-by-step blueprint of our customized investing process to potentially help you build a sound retirement portfolio of your own.<\/p>\n\n\n\n If you have $500,000 or more to invest, get this guide to learn our ideas on building and maintaining a retirement portfolio to potentially achieve your long-term goals.<\/p>\n\n\n\n Get our FREE guide:\u00a07 Secrets to Building the Ultimate DIY Retirement Portfolio<\/a><\/u>3<\/a><\/sup><\/strong><\/p>\n\n\n\n But the main takeaway from this report was actually that the jobs market was decisively cooling. The unemployment rate rose to 4.1%, marking the first-time unemployment higher than 4% since 2021. The Labor Department also revised job gains in April and May lower, by a combined 111,000 jobs. And average hourly earnings rose 3.9% year-over-year in June, the smallest increase since 2021. These data points don\u2019t exactly paint a picture of the labor market collapsing. But it does indicate a \u2019leveling off\u2019 within the labor market, which investors largely viewed in a positive light. The reason is that a cooling jobs market\u2014as opposed to a jobs market that\u2019s too hot\u2014gives the Fed some breathing room when it comes to setting monetary policy. The Fed is increasingly aware of the risk that keeping rates too high for too long could lead to more job losses over time, which at this stage would not be a desirable outcome. If inflation continues to trend lower in the coming months, further cooling in the jobs market would be viewed as a strong rationale for cutting rates in the fall\u2014perhaps at the September meeting.<\/p>\n\n\n\n Fed Chairman Jerome Powell Testifies Before Congress \u2013 <\/strong>Federal Reserve Chairman Jerome Powell testified before Congress last week, and market-watchers were probing his comments for any hints for when rate cuts would commence in this cycle. Chairman Powell did not offer any clear signals. But he did slightly reposition the Fed\u2019s stance when it comes to how they\u2019re weighing risks in the economy. In Powell\u2019s words, \u201celevated inflation is not the only risk we face,\u201d adding that \u201cwe\u2019ve seen that the labor market has cooled really significantly across so many measures\u2026it\u2019s not a source of broad inflationary pressures for the economy now.\u201d This statement is important because for much of last year, the Fed was worried that a hot labor market and rising wages were contributing to sticky inflation, and a cooling labor market was essentially a stated goal. With the softer labor market data cited above, Powell conceded that allowing the jobs market to cool too much was surfacing as a key risk, stating that \u201cwe\u2019re very much aware that we have two-sided risks now.\u201d All told, Powell seemed to be positioning for a rate cut later this year, assuming inflation data in the next three months continues to show signs of improving.4<\/sup><\/p>\n\n\n\n Earnings Season Gets Underway. Here\u2019s What to Watch \u2013 <\/strong>With a blink of an eye we\u2019re back in earnings season, and our colleagues at Zacks Investment Research have compiled three key factors to watch for Q2\u2019s reports. The first is that we\u2019ve seen a steadily accelerating earnings growth trend. The chart below shows the year-over-year earnings and revenue growth for the second quarter relative to the preceding four periods and expectations for the following three periods5<\/sup>:<\/p>\n\n\n\n The +8.4% second quarter expected earnings growth rate is the highest we\u2019ve seen in almost two years. The second factor is the favorable development on the revisions front, with estimates for Q2 holding up far better than other recent periods. In the three-month period from the start of the quarter through June 30, Q2 estimates for the S&P 500 index fell the least relative to comparable periods of other recent quarters. The chart below gives us a good visual sense of this favorable revisions trend.<\/p>\n\n\n\n A final factor to watch is the outsized role Technology stocks continue to play, particularly the \u2018Magnificent 7 Stocks.\u2019 Total Tech sector earnings are expected to be up +15.7% from the same period last year on +9.6% higher revenues. Had it not been for the Tech sector\u2019s strong growth, Q2 earnings for the rest of the index would be up only +4.8% (vs. +8.4% otherwise). For the Mag 7 stocks, Q2 earnings are expected to be up +25.5% on +13.2% higher revenues.<\/p>\n\n\n\n Building Your Ultimate Retirement<\/a><\/u><\/strong> – The influential events listed above can affect the economy in different ways. However, there are things you can do now to protect your investments and create a retirement portfolio that meets your financial goals. I recommend reading our guide,\u00a07 Secrets to Building the Ultimate DIY Retirement Portfolio<\/u><\/a><\/strong><\/em>6<\/a><\/sup><\/strong>, which provides a step-by-step blueprint of our customized investing process to potentially help you build a sound retirement portfolio of your own and pursue long-term investing success. Unemployment rate over 4% for first time since 2021, Powell sees “two-sided risks” in current economy, 3 factors to monitor as Q2 earnings roll in.<\/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-13268","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\/13268","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=13268"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13268\/revisions"}],"predecessor-version":[{"id":13273,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13268\/revisions\/13273"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2024\/07\/image-2.png\")
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If you have $500,000 or more to invest, get this guide to learn our ideas on the step-by-step process of building and maintaining a retirement portfolio that will potentially help you reach your goals and enjoy a secure retirement.<\/p>\n","protected":false},"excerpt":{"rendered":"