Reviewing Indicators of the Economy’s Health For This Year
April 6, 2023
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Cody Moore, and I am a Partner and Wealth Advisor at Wealth E&P. If you're a parent in the Atlanta area, we hope you're having a great spring break and are getting to spend some quality time with your families.
Today I wanted to take a look at the City National Rochdale speedometers that we watch here at Wealth E&P. It's been a couple of months since we've taken a look at them together, so I wanted to give everyone an update as we head into Q2 of this year. As a refresher, these are forward-looking about 6 to 9 months into the future and are more macro or big-picture trends across the economy as a whole.
Two of the indicators that have recently ticked down are the labor market and credit demand. One of the Fed’s goals when raising interest rates and the work they've been doing on the economy has been to slow down the pace of the labor market. Over the last few months, we've seen the data come back and that has started to slow. Even though this has ticked down into neutral and into a sort of “worse” territory, it's not really a bad thing when we take a look at it compared to inflation. The credit demand and availability are really banks and banking and their ability to lend credit, loans, and things like that to the public and consumers. This has ticked down, but it’s not too surprising considering all of the news of what has happened over the last few weeks, such as Silicon Valley Bank and those banking failures.
Overall, the outlook for the next 6 to 9 months is still fairly negative here. Our outlook and expectation for the year is for annual GDP to be about flat. With that said, it's a good time to still be cautious, make sure you're aware of where your portfolios are at, and manage for that risk. If you’re a Wealth E&P client, we are monitoring these things daily and are staying on top of it in your portfolios. If you've got any questions for our team, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute! We hope you all have a great week.
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