The economy has been at the forefront of the minds of millions of
Americans lately… and for good reason. Now that the elections are
over and the New Year is just around the corner, what can we expect
for the future?
These are important questions to ask as you continue to plan for
your own financial future. USAToday recently
published a report detailing the current state of the economy:
The economy grew modestly in October and early November in nine
of the nation’s 12 Federal Reserve bank districts but Hurricane
Sandy dampened activity in the Northeast, the Fed said
The Fed’s Beige Book said modest growth was reported in the
Cleveland, Richmond, Atlanta, Chicago, Kansas City, Dallas and San
Francisco districts. A “somewhat stronger increase in activity” was
noted in the St. Louis and Minneapolis regions.
The report said the economy weakened in New York, Philadelphia
and Boston, at least partly because of the storm.
Unlike most government statistical reports, the beige book,
released every six weeks, provides an anecdotal snapshot of the
economy based on interviews with businesses across the nation. The
report is named for the color of its cover.
The report largely chronicles a continuation of recent trends,
with consumer spending and the housing market improving modestly as
rising home prices lift consumer confidence. But uncertainty about
Congress’s ability to avert the looming tax increases and spending
cuts known as the fiscal cliff have doused business’s outlook. As a
result, manufacturing and office leasing weakened, while the hiring
outlook was mixed.
In New York, consumer spending looked robust before the
hurricane and merchants expect to recoup sales as residents replace
damaged property. Furniture sales picked up in the Boston and
Chicago areas but fell in Cleveland. And electronics sales were
tepid in Chicago, but consumer technology sales strengthened in San
The good news is that most regions were upbeat about holiday
New York retailers expect to recover sales washed out by the
storm, while Boston businesses expect higher online sales. Still,
possible tax increases due to the fiscal cliff prompted retailers
in the Boston, Cleveland and Chicago areas to say they’re uncertain
about holiday sales.
Hotel bookings, meanwhile, slowed in New York because of the
storm but “bounced back the next week.” The hurricane devastated
businesses in the mid-Atlantic area. Convention activity in the
Southeast, particularly Florida, picked up, though cruise line
bookings were disappointing.
The housing market also continued to improve in most areas. The
Cleveland and Richmond areas said sales were especially strong
among high-priced homes. Kansas City contacts said strong sales
were reducing home inventories.
There’s a lot to digest there-but the bottom line is that there is
reason for optimism as the economy continues to grow. However, the
growth isn’t as rapid as many of us would like to see. And
significant threats remain on the horizon, most immediately because
of the “fiscal cliff” debate in Washington. But beyond that, there
is still the matter of the unsustainably large deficits that our
federal government is racking up. How long can we continue down
this path before inflation becomes a serious problem?
As an investor, it’s important to pay close attention to these
economic developments. If you’d like to learn more about what this
means for YOUR financial future, or if you’re tired of your
portfolio rising and falling on the whims of Wall Street, please
get in touch with us today!