There is actually a day that celebrates menopause. The intent of World Menopause Day is to spread the awareness of menopause. We think most women and any man who’s been around a woman is well aware of menopause. This title, however, is apropos of this week’s stock market, which was hot and cold and hot and cold.
It was good for the stock market that this week had a light flow of economic news. Monday, being a day that celebrated one of the most celebrated and reviled men of the 15th century, no economic news was released.
On Tuesday, the National Federation of Independent Business (NFIB) released one of our favorite monthly reports, their Small Business Optimism Index. This is one of our favorites because it gives insight into the “engine” of the U.S. economy. The NFIB Small Business Optimism Index for September saw a sharp drop to 95.3 points from August’s 96.1 points. This drop was attributed to drops in current job openings and capital spending plans. The silver lining was expectations of small businesses expansion. While on the whole, the Small Business Optimism report seems concerning, expectations of small business expansion bodes well for job seekers and the economy’s long-term outlook.
Auto and gas sales brought down the Commerce Department’s September Retail Sales report on Wednesday faster than CNN brought down the second installation of Crossfire. September retail sales declined 0.3 percent after August’s 0.6 percent increase. The Electronics & Appliances component of this index saw a jump, likely due to Apple’s iPhone sales, no thanks to Bono. The Food Services & Drinking Places component remained strong and suggests that consumers feel comfortable enough to spend their small increases in wages.
As we said weeks ago, we’d prefer to see consumer’s spending drop relative to wage increases. While Retail Sales suggests consumers have cut spending, consumers are spending heavily in a very discretionary area.
Initial jobless claims released on Thursday by the Department of Labor fell by 23,000 last week to 264,000. Not quite as small as Mrs. Obama’s school lunches, this is the smallest this index has been since April 2000. The four-week average, which irons out week-to-week volatility, fell 4,250. Both numbers are good signs for the job market. The National Association of Home Builders (NAHB) then released its October Housing Market Index that showed the housing market is as dysfunctional as a Florida governor’s debate. The Housing Market Index showed that the drop in interest rates increased demand, as it dropped to 54 points from September’s 59 points. Maybe you can refi your mortgage. Ben Bernanke can’t. The problem with this index is the “traffic component”, which dropped 6 points to 41 from September to October. This means that consumers just aren’t buying new houses.
Friday picked up both ours and the stock market’s mood. First, the Commerce Department released its September Housing Starts report, which increased by 6.3 percent since August. Housing starts for multi-family dwellings, typically non-owner occupied rentals, led the surge by 16.7 percent. Note that this does not conflict with Thursday’s Housing Market Index drop. The Housing Market Index highlights individual home transactions and future expectations, not corporate apartment building.
Then the Reuters/University of Michigan’s October Consumer Sentiment Index showed an increase to 84.6 from September’s 86.4, even as President Obama’s credit card gets declined. Don’t go for drinks with Obama and Bernanke. You’ll end up paying. This is the highest level this index has reached since 2007 and may suggest why consumers feel confident enough to frequent bars and restaurants. It seems consumers are spending their modest wage increases on experience things, such as dinners and drink, rather than things-things, such as cars and houses.
This week’s stock market volatility, mainly on the downside, is why we have been recommending readers hold more cash than they typically would. Though jobs are improving, jobs remains a concern. Wages have not kept up with job increases, as evidenced by the Retail Sales report. Lastly, we remain concerned about the unwinding of QE3. Just this week St. Louis Fed President, James Bullard, said Fed policy makers may extend it beyond October. The unwinding of QE3 was meant to decrease bond prices and increase bond yields. Instead, bond yields have been unsettling. Fight the volatility!
Many personal finance blogs, ours included, discuss how to cut spending and increase savings to improve your financial position in the world. To put your financial position into perspective, a Credit Suisse report released Tuesday showed that if you have $3,650 you’re among the wealthiest 50 percent in the world. This makes us consider how often our financial troubles are self-induced. There are ways to combat this, including starting off on the right foot.
Overspending on clothes can do to your wallet what binge drinking can do to your DNA. Each season seems to bring an onslaught of sales enticing enough for even the frooglist consumer. For women, here are seven tips to transition from summer to fall. High fashion doesn’t mean high expense.
Speaking of clothes, consider “pre-owned” options both for buying and selling. Buying pre-owned clothes helps control your budget. Selling pre-owned clothes helps increase your income. Though babies are often the dirtiest of humans, they grow out of clothes the fastest. Here are the benefits to flipping baby clothes, not flipping babies.
One of the many tricks we’ve espoused to improve your financial situation is to put all things money on auto. The less involvement you have in your day-to-day financial management, the better. Create a financial plan, put it on automatic, check it occasionally and watch your financial situation improve no matter where you start. Our buddy at The Becomer has a nice piece to help set your finances on automatic in minutes.
Finally, to get started with your financial plan, sign up for our free semi-monthly newsletter and receive a free copy of Do You Know How to Be #MoneyConscious?. It’s a great way to kick start your financial plan.
That’s what you must know from this week to be #MoneyConscious. Come back every Saturday for our slightly off kilter take on all things money.