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Weekly Economic Update

MidAmerica Financial Resources Presents:

 

WEEKLY ECONOMIC UPDATE

 

 

 

WEEKLYQUOTE

“Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.”

- Socrates

 

 

WEEKLYTIP

Ideally, a college student should have just one credit card with a reasonable interest rate, a good rewards program, and no annual fee.

 

WEEKLYRIDDLE

What force and strength cannot get through, it with gentle touch can do. People in many halls would stand were it not in their hand. What is it?

 

Lastweek’sriddle:

I am a port city in Canada, a state in southeast Australia, a big lake in Africa, and a renowned queen. What is my name?

 

Lastweek’sanswer:

Victoria.

 

 

 

 

August 31, 2015

STOCKS CORRECT, THEN REBOUND

After the record 1,000-point plunge the Dow Jones Industrial Average took Monday morning, all three major U.S. benchmarks ended up falling below correction levels – but then an impressive recovery began. Bargain-hunters, an interest rate cut by China’s central bank, and a surge in gasoline and oil prices helped turn things around, and the big three all managed weekly gains. The S&P 500 rose 0.89% for the week to 1,988.87, the Nasdaq advanced 0.32% to 4,828.33, and the Dow added 1.10% to reach 16,643.01. WTI crude had its best week since 2009, climbing 11.8% to a NYMEX close of $45.22 Friday.1,2

GOOD NEWS FROM MAIN STREET

Personal spending improved 0.3% in July, matching the June increase. Commerce Department data also showed personal incomes rising 0.4% for a fourth straight month. The Conference Board’s consumer confidence index jumped 10.5 points to a 101.5 reading for August; the University of Michigan’s final August consumer sentiment index declined just a point from its initial reading to 91.9.2,3

ASSORTED GAINS IN THE HOUSING SECTOR

New home buying increased 5.4% in July, the Commerce Department stated last week; the median new home price was up 2.0% year-over-year. Existing home prices (as measured by the 20-city S&P/Case-Shiller home price index) were up 5.0% annually through June. The National Association of Realtors noted a 0.5% rise for its pending home sales index in July, taking its annual advance to 7.4%.4,5

Q2 GROWTH REVISED TO 3.7%

The BEA’s second estimate of Q2 GDP was 1.4% higher than its first, reflecting reassessments of government and personal spending, business investment and inventories. Orders for capital goods also surprised to the upside last week: they rose 2.0% overall in July, 0.6% minus transportation orders.3,5

THIS WEEK: On Monday, China releases its official factory and service sector PMIs for August. ISM issues its August manufacturing PMI on Tuesday, which is also when Bob Evans, Dollar Tree, and H&R Block report earnings. On Wednesday, Wall Street looks at ADP’s August employment change report, July factory orders data, a new Federal Reserve Beige Book, and Q2 results from Five Below and Navistar. Thursday, ISM’s August service sector PMI and the latest Challenger job cuts report accompany new initial claims figures and earnings from Campbell Soup, Lands’ End, and VeriFone. The August Labor Department jobs report arrives Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-6.62

-2.56

+12.79

+5.91

NASDAQ

+1.95

+5.94

+24.84

+12.59

S&P 500

-3.40

-0.39

+17.36

+6.41

REAL YIELD

8/28 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.58%

0.23%

1.05%

1.79%


Sources: wsj.com, bigcharts.com, treasury.gov - 8/28/156,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

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Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - reuters.com/article/2015/08/28/us-markets-global-idUSKCN0QX01U20150828 [8/28/15]

2 - thestreet.com/story/13270473/1/stocks-end-frantic-week-with-only-modest-gains.html [8/28/15]

3 - briefing.com/investor/calendars/economic/2015/08/24-28 [8/28/15]

4 - usatoday.com/story/money/business/2015/08/25/new-home-sales-july/32295169/ [8/25/15]

5 - news.morningstar.com/articlenet/article.aspx?id=713100 [8/27/15]

6 - markets.wsj.com/us [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F28%2F14&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F28%2F14&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F28%2F14&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F27%2F10&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F27%2F10&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F27%2F10&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F29%2F05&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F29%2F05&x=0&y=0 [8/28/15]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F29%2F05&x=0&y=0 [8/28/15]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/28/15]

9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/28/15]

 

 


Why Does the Wage Gap Between Men & Women Persist?

While it has narrowed, a notable inequality remains.

 

Provided by MidAmerica Financial Resources

                                                                                                                                

Last year, the median weekly earnings for an American woman came to $719. Bureau of Labor Statistics data shows that the median weekly earnings for an American man were $152 higher, or 21.1% more.1

 

Calculated over the course of 52 weeks, that means the median yearly pay for a man in America was $45,292 in 2014. Median yearly pay for a woman: $37,388.1

 

The good news, relatively speaking: in the past 35 years, this gap has narrowed. In 1980, women working full-time earned only about 65% of the wages of their male counterparts.2

 

After all these years, why is there still such wage inequality? Two quick explanations are often put forth. One, there is still appreciable wage discrimination against women in the workforce, with mothers being perhaps most affected. Two, some women accept lower-paying jobs or leave work altogether while staying at home with their kids or taking care of ailing relatives.

    

These factors are certainly present in wage inequality, yet so are others that get less media notice.

 

More women work for low pay than men. Citing BLS data, the National Women’s Law Center notes that more than two-thirds of minimum-wage jobs in this country are held by women. In fact, the NWLC found in 2014 that women made up 76% of employees in the ten most common occupations with hourly wages of $10.10 or lower. Even in these low-salaried jobs, full-time working women still made an average of 10% less than their male co-workers.3,4

 

As the Great Recession ebbed, these entry-level jobs were an immediate source of work for many women: 35% of the net employment gain for women from 2009-13 occurred in these fields, compared to 18% of the net employment gain for men. As the number of women in these low-wage occupations markedly exceeds the number of men, this is one of the underpublicized reasons for the continuing wage gap by gender.4

   

Careers in which women predominate pay less than careers in which men predominate. As an example, more than 75% of classroom teachers in America are women (and the median pay for classroom teachers, adjusted for inflation, is essentially where it was in 1970). Only recently have initiatives emerged to encourage women to enter “STEM” career fields (careers rooted in science, technology, math and engineering), which are male-dominated and comparatively high-salaried.5

 

It may be argued that a teacher contributes much more to society than a software engineer, but that argument is not bolstered by the pay gap between those careers. Looking at Payscale.com, the average salary for an elementary school teacher is $40,311 while the average software engineer earns $63,080.6

    

Women do a lot of unpaid work. A mother earns no salary for raising children; a wife earns no salary for taking care of a disabled or seriously ill spouse or partner. Historically, women have left the office to perform this work to greater degree than men have.  This tendency also contributes to the wage gap, as the woman involved may end up choosing lower-paying work or not work at all. 

   

Wage discrimination still exists, and is partly accountable for the differential in median wages between the sexes. There is more to the story, however; the career and life choices women are encouraged or impelled to make also influence the numbers.

   

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@natplan.com.

www.mid-america.us

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

     

Citations.

1 - bls.gov/cps/cpsaat37.htm [2/12/15]

2 - sandiegouniontribune.com/news/2015/may/09/fair-pay/ [5/9/15]

3 - nwlc.org/resource/fair-pay-women-requires-fair-minimum-wage [5/13/15]

4 - nwlc.org/resource/women-are-76-percent-workers-10-largest-low-wage-jobs-and-suffer-10-percent-wage-gap [4/2/14]

5 - nytimes.com/2014/09/07/sunday-review/why-dont-more-men-go-into-teaching.html [9/7/14]

6 - payscale.com/salaries-by-occupation [7/30/15]





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