In today\u2019s Steady Investor, we look at key questions\ninvestors are asking, and factors that we believe are currently impacting the\nmarket such as:<\/p>\n\n\n\n
What We All Knew is\nNow Official: The U.S. Entered a Recession in February <\/strong>\u2013 Official data\nusually takes several months \u2013 or even years \u2013 to confirm an economic\nrecession. But the swiftness and steepness of this economic contraction made\nconfirmation this time around much easier. The National Bureau of Economic\nResearch (NBER) announced this week that the U.S. economy officially entered a\nrecession in February, which marked the end of the longest economic expansion\non record (128 months). There are reasons to also believe that this economic\nrecession could wind up being the shortest on record \u2013 initial jobless claims\npeaked in March and employers actually added 2.5 million jobs last month,\nblowing nearly every estimate out of the water. Because the economic\ncontraction was so severe to the downside, the estimated 2.5 million jobs ended\nup being the most jobs added in a single month on record, dating back to 1948.\nThe stock market appears \u2013 at least for now \u2013 to be confirming that the\neconomic recession is over, though it remains to be seen how quickly the\neconomy can reclaim lost jobs and return to pre-pandemic growth levels. On a\nglobal scale, the world has never before seen so many countries enter a\nrecession at the same time, even when considering the Great Depression and\nGreat Recession.1<\/sup> <\/p>\n\n\n\n __________________________________________________________________________<\/p>\n\n\n\n See How You Can Navigate This Recession<\/strong><\/a> The\nmarket turbulence and uncertainty are scary\u2014but now is the time to take action\nand prepare yourself for the coming months. It\u2019s important to understand how\nrecessions work, how long they last, and how to potentially protect yourself\nand your family from long-term damage to your assets and security. We can help\nyou with our free guide, The Economy is in Recession: 5 Insights to Navigate\nYour Way Through It.2<\/sup><\/em><\/p>\n\n\n\n If you\nhave $500,000 or more to invest, get our free guide today. You\u2019ll learn the\nmost scope and impact of recessions, and get our viewpoint on the most\nimportant moves you can make to weather this one. Don\u2019t wait\u2014get this guide\ntoday!<\/p>\n\n\n\n Download Your Copy Today: <\/a>The Economy is in Recession: 5 Insights to Navigate Your Way Through It<\/a><\/em><\/strong><\/p>\n\n\n\n __________________________________________________________________________<\/p>\n\n\n\n What the Unclear Jobs\nData Teaches Us \u2013 <\/strong>Though the U.S. economy was said to have added 2.5\nmillion jobs in May, the unemployment data is arguably fuzzy at best. The\npandemic has created all sorts of challenges to accurately detailing the\nunemployment picture, with the U.S. Labor Department issuing \u201cmisclassification\nerror\u201d warnings for three months straight. At issue is how workers and\nnon-workers are classifying themselves on Labor Department surveys. Many\nrespondents are classifying themselves as \u201cemployed but absent from work,\u201d\nwhich the Labor Department believes should deem them \u201cunemployed.\u201d The Census\nBureau is also having difficulty gathering data, as in-person interviews have\ndeclined substantially and as fewer people respond to its Current Population\nSurvey. 3<\/sup> There are two takeaways we can garner from the unclear\ndata in the labor markets. First, the errors in counting do not change the\nbigger picture: Americans without jobs remains at a historically high point,\nwith tens of millions of Americans currently out of work. The second takeaway\nis the most important, in our view: when trying to ascertain a complete picture\nof the U.S. economy, one should not rely on a single data point, such as the\nunemployment figures. Myriad data points are needed to gain meaningful\nmacroeconomic insights. <\/p>\n\n\n\n The Fed Likely to\nKeep Pressure on Interest Rates \u2013 <\/strong>Federal Reserve Chairman, Jerome Powell,\nmade some comments on Wednesday that indicated the Fed\u2019s medium-term outlook on\ninterest rates. The takeaway: interest rates are likely to remain low for\nyears. Chairman Powell said the central bank has no plans to raise interest\nrates through 2022, and that they will continue to purchase Treasury and\nmortgage securities at a consistent pace for the foreseeable future, putting\ndownward pressure on the long end of the interest rate curve. The Fed\u2019s\naccommodative approach is good news for businesses and mortgage borrowers, but\nbad news for savers and banks \u2013 assuming the yield curve remains flat. <\/p>\n\n\n\n Some Major Retailers\nSee Better-Than-Expected Sales Figures \u2013 <\/strong>Small signs of life are starting\nto emerge in the Consumer Discretionary sector, as U.S. consumers step back out\ninto the economy to shop. Two anecdotal pieces of data this week came from\nMacy\u2019s and Kohl\u2019s, two popular big box stores. Macy\u2019s said sales at reopened\nstores are down 50% as compared to before the pandemic, which is actually far\nbetter than the estimated -85% decline. Kohl\u2019s said this week that sales were\ndown 25%, which again is better than expectations. Macy\u2019s expects to have 400\nlocations reopened this week, and Kohl\u2019s has already reopened most stores\nacross the country. 5<\/sup> Consumer confidence is rising. <\/p>\n\n\n\n How Can You Navigate the Current Recession?<\/strong> There are\nmany unknowns and fears surrounding the current recession and pandemic. While the market turbulence and\nuncertainty are scary, now is not the time to sit back but instead to take\naction and prepare yourself for the coming months. It\u2019s important to understand\nhow recessions work, how long they last, and how to potentially protect\nyourself and your family from long-term damage to your assets and security. We\ncan help you with our free guide – The Economy is in Recession: 5 Insights\nto Navigate Your Way Through It.2<\/sup><\/em><\/p>\n\n\n\n If you\nhave $500,000 or more to invest, get our free guide today. You\u2019ll learn the\nmost scope and impact of recessions, and get our viewpoint on the most\nimportant moves you can make to weather this one. Don\u2019t wait\u2014get this guide\ntoday.<\/p>\n","protected":false},"excerpt":{"rendered":" \u201cBig box\u201d store sales show consumer confidence rising, job loss data is unclear, recession began in February<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-8692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8692","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=8692"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8692\/revisions"}],"predecessor-version":[{"id":10592,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8692\/revisions\/10592"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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It remains to be seen just how quickly the U.S. economy can recover from the current recession. In our view, this uncertainty can leave many investors, especially those nearing or in retirement, fearful of what\u2019s to come. If you\u2019re at or near retirement, this recession may require pivoting your retirement investing strategy.<\/p>\n\n\n\n