“The one constant through all the years, Ray, has been baseball. America has rolled by like an army of steamrollers. It has been erased like a blackboard, rebuilt and erased again.”
– James Earl Jones (Field of Dreams).
Since the start of 2020, we have experienced more change than many of us have experienced in such a short time frame in our lifetimes. For investors, change can be disruptive yet also bring opportunity; and right now, there is no shortage of changes to think about.
Change has been building throughout the summer. We have seen a surge of the Delta COVID-19 variant, which has caused many businesses to delay reopening. The economy has faced headwinds due to a disrupted supply chain, labor shortages, and inflation uncertainty. According to the forecasting firm, HIS Markit, the forecast for third quarter gross domestic product (GDP) has been revised from an estimate of 7.8% in July to 3.6% in September.1
In a sign consumers have changed their ways, households have a record $142 trillion in net worth.2 Consumers have started to trim their spending on big-ticket items such as vehicles and furniture. According to one estimate, households have still only spent about 25% of their 2021 stimulus payments.
In September, we saw the expanded federal unemployment benefits come to an end. With the number of job openings in the US almost equal to the number of unemployed, there are no shortages of jobs available for those looking to re-enter the workforce. In addition, the labor shortage has continued to put pressure on wages, so those re-entering will most likely receive higher wages.
Furthermore, in addition to the potential big change at The Federal Reserve next year with Fed Chair Jerome Powell’s term expiring, The Fed is going to start tapering its massive $120 billion per month bond-buying program shortly. Once completed, the expectation is that The Fed will being their interest rate hikes.
Since summer, that’s a lot of change. Like James Earl Jones kindly reminds us: America has rolled by like an army of steamrollers. The outlook for the U.S. economy still looks bright, although headwinds continue to build with inflation elevated and interest rates most likely rising. As we stated in the 2nd quarter newsletter, the good times never last forever, nor do the bad times. The important part is following a prudent investment strategy and sticking to your long-term goals.
1. Wall Street Journal. September 29, 2021. US Economy Set To Pick Up Speed After Delta Driven Downturn
2. Mitch on the Markets. October 11, 2021. Is the U.S. Economy Set to Rebound from Summer Lull?
Around The Firm
We would like to welcome Julie LeFevre to KerberRose Wealth Management. Julie joins the team as a Client Service Associate and will work alongside Dan Wotruba in our Green Bay office.
Julie has more than 25 years of experience in the financial services industry. With a diverse background, she can assist clients throughout the financial planning process to accommodate their individual needs. Julie is an avid quilter and crafter, enjoys traveling, and a good campfire.
Julie earned her Business Administration degree from Lakeland College. She holds her FINRA Series 7, 63, and 65 licenses along with her Wisconsin Life Insurance license.
Dan Wotruba is excited to announce he has received the opportunity to serve on the Austin E. Cofrin School of Business Willie D. Davis Finance and Investment Laboratory Advisory Board.
The Cofrin School of Business is part of the fastest growing university in the UW-System, with business majors increasing from roughly 600 students in 2010 to 1,500 today. During the same period, the underrepresented student population in the Cofrin School of Business has grown from 7% to 17%.
Establishing the Willie D. Davis Finance & Investment Laboratory and Student Managed Investment Fund exemplifies UW-Green Bay’s commitment to community engagement and a problem-focused education.