Thursday, March 23, 2017

More and More Millionaires

The number of millionaire households in America increased by 400,000 in 2016, reaching a new record of 10.8 million, according to a new study from the Spectrem Group. There are now 1.4 million households worth $5 million or more and 156,000 households worth $25 million or more.

Since the 2008 financial crisis, the number of millionaire households has grown every year, adding a total of 4 million millionaire household since then. The stats mean that more than one out of every 10 households in America is worth $1 million or more.

Mass affluent households, those with a net worth between $100,000 and $1 million not including their primary residence, grew to 28.97 million last year. That's an increase of 500,000 over 2012, and of 3.77 million over the post-recession low of 25.2 million.

Wednesday, March 22, 2017

A Down Day Ends the Streak

The S&P 500 ended its streak of 109 trading days without a 1 percent  decline yesterday, when it fell by 1.24 percent.  This was the first 1 percent drop for the index since October 11, 2016.

The Dow Jones Industrial Average also halted a streak of 109 days without a 1 percent decline, when it dropped by 1.1 percent. In the history of the indexes, there had only been 11 other prior streaks of 100-plus days without a 1 percent decline.

The S&P 500’s streak without a 1 percent down day was the longest since the one that ended May 18, 1995. The Dow’s was the longest since the one that ended September 20, 1993.

Tuesday, March 21, 2017

The Happiest Place on Earth

Are Americans happy? According to the 2017 World Happiness Report, an annual ranking of 155 countries published by the Sustainable Development Solutions Network, the United States ranks at No. 14 in the world, down a spot from last year.

The U.S. has never cracked the top 10 since the rankings were first published in 2012, when it came in at No. 11. The report involved polling of 1,000 residents per country by research organization Gallup.

At No. 1? Norway, up from No. 4 last year, followed by Denmark (last year’s No. 1), Iceland and Switzerland. These four countries rank highly on all the main factors found to support happiness: caring, freedom, generosity, honesty, health, income and good governance. “Their averages are so close that small changes can re-order the rankings from year to year,” the report said.

Monday, March 20, 2017

Dueling GDP Estimates

What does the Fed think of the economy in the first quarter, which comes to a close in a couple of weeks? It depends on which Federal Reserve Bank you ask.

The Federal Reserve Banks of Atlanta and New York both publish trackers that gather and crunch data as it comes in, as part of their mandate to evaluate how the economy is faring. The Atlanta Fed’s GDPNow tracker is projecting that first-quarter GDP growth will be particularly weak, at only 0.9 percent. The New York Fed’s Nowcast, by contrast, is forecasting a far stronger economy, with first-quarter growth at 2.8 percent as of Friday.

Early in January, the New York Fed’s estimate was just 1.5 percent, but it started rising sharply late in that month, first on strong manufacturing data, and then on particularly robust readings of business and consumer sentiment. We'll find out if they're right when the first estimate of GDP comes in on April 28.

Friday, March 17, 2017

More Hiring, More Quitting

Both hiring and quitting edged up in January, which can be taken as signs of optimism among both employers and workers. The rate of hiring rose to 3.7 percent in January from 3.6 percent in December, , according to new figures from the Labor Department.

The rate of quitting, which tends to rise when people are more confident about their prospects elsewhere, rose to 2.2 percent in January from 2.1 percent the prior month. January’s quits rate matches the recent peak set in December 2015.

The openings rate, defined as job openings as a share of total employment and available jobs, held at 3.7 percent last month. It has maintained roughly that rate since August 2016. The trend in openings since the summer could suggest there is less potential for hiring to accelerate, as employers added to jobs at the best the rate in 15 years during 2014 and 2015.

Thursday, March 16, 2017

The Fed Hike

As expected, the Federal Reserve has raised its benchmark interest rate for the second time in three months and forecast two additional hikes this year. The move reflects a consistently solid U.S. economy and will likely mean higher rates on some consumer and business loans.

The Fed hiked its Fed funds rate by 0.25 percent, to between 0.75 and 1 percent. The policy statement cited the strengthening labor market and improving economy as reasons for the hike, but it noted the pace of expansion is just “moderate.”

The Fed’s “dot plot” still indicates three rate hikes this year and next, but it inched up in 2019, when it projected the median Fed funds rate could be 3 percent, instead of its 2.9 percent forecast last December. The Fed still projects the long run “neutral” rate of Fed funds is 3 percent.

Wednesday, March 15, 2017

The Cost of the Snowstorm

The winter storm that’s blasting our area may end up being only a one-day affair, but it may be  severe enough to make a noticeable dent in  the economy. The storm is so severe, the disruptions from it will likely show up in the first-quarter report on the growth of the U.S. economy, research firm Oxford Economics predicted.

Oxford estimates that disruptions to business activity could shave up to 0.2 percentage points off of first quarter GDP. They note that their forecast for the quarter has been an already low 1.1 percent.

The Northeast region contributes roughly $3 trillion in annual output to the U.S. GDP, which equals about $12 billion daily. Assuming a loss of 10  to 20 percent of overall output on Tuesday, that would add up to a loss of about $2.4 billion worth of activity.