Market Minute with Wealth E&P - 8/10/22

August 10, 2022
Answering the Question: Are We In A Recession?

 

August 10, 2022

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 Wealth Advisor at Wealth E&P’s Alpharetta, Georgia office. Today, we’re going to answer the question: are we in a recession?

So, if you’ve tuned into any news channel lately, you’ve probably heard contradictory stories about whether we are or aren’t in a recession relating back to see that we’ve had 2 consecutive quarters of declining GDP growth. The National Bureau of Economic Research (NBER) officially declares the economy in a recession, and their definition is a significant decline in economic activity that has spread across the economy and that lasts more than a few months.

 

Let’s take a look at the data above from the economy as a whole and draw our own conclusions. To start, average job growth year-to-date is up 457,000; compared to historical averages, that is booming job growth. The unemployment rate is also at a very low rate and at a healthy spot at 3.5%; the rate has declined significantly since 2021.

 

The Nonfarm Payrolls are at a healthy spot as well, as you can see above; last week, they blew the consensus expectations of 250,000 out of the water by a little over twice that amount by coming in at 528,000. This is all a great sign. U.S. wages and salaries are continuing to increase since 2021, and U.S. retail sales are also rising as well. Last week, personal spending, personal income, and durable good orders or demand for the future all beat expectations and help to quell recession fears. On the corporate side of things, 75% of the S&P 500 companies in Q2 have reported positive earnings that beat the consensus expectations for them. This is good news as well.

Hopefully, this answers some questions and shows you some data on why we’re not currently in a recession. However, we do expect to enter into a recession sometime next year, perhaps in Q2 or Q3; we will continue to keep you updated with what the data shows us.

We’re looking forward to seeing everybody on Thursday at our Economic Update Dinner; if you can't make it, we will have the recordings online for you to view. If you have any questions, if you want a risk profile, or if you would like a retirement projection, 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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At Wealth Enhancement & Preservation, we are here to serve as your financial advisor and source of support in the Alpharetta, GA, Cartersville, GA, and Charleston, SC areas. Our advisors are dedicated to simplifying the complexities of the financial world and as your advocate, we strive to learn about your most valued goals and dreams. From individual investors to entrepreneurs, our services are designed for your success.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

 

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