US Inflation

Inflation is still one of the biggest risk factors we’re watching this year

Sep 2, 2023

While inflation is still well below its 2022 peak, the data shows that the fight toward 2% still has pretty far to go. Annual inflation has stubbornly remained above 3%, and the December report shows another tick upward.1While market watchers are hoping the Federal Reserve will cut interest rates soon, policymakers warn easing off too soon could erode progress and cause inflation to “seesaw.”2

It’s likely that the Fed will be cautious and decide to wait for more data before lowering rates. However, the longer they keep interest rates high, the more they risk hurting economic growth. It’s a tough act to balance and we expect the uncertainty to stoke market volatility.

The December jobs report looked strong, but may be masking some pain.

 

The latest employment report showed that the economy added a respectable 216,000 jobs. But many of those new jobs were in the public sector and other industries that aren’t sensitive to the economy.3 Small businesses are lowering their hiring expectations, and manufacturers and service companies cut jobs in December.

Another point of concern: jobs numbers have been revised downward in 11 of the last 12 months, suggesting that the economy may be shifting gears and slowing down.

Geopolitical issues are also adding clouds on the horizon.

Ugly wars in Ukraine and Israel are still burning, and attacks on shipping in the Red Sea are adding fresh concerns about global stability.4 In addition to the cost in human lives and misery, geopolitical uncertainty may weigh on economic growth and inflation.

On a positive note, December retail sales increased more than expected.5

Americans shopped more than anticipated in both November and December, showing that consumers may be in better shape than many economists feared.

While some analysts are already celebrating a “soft landing” and an end to recession worries, we’re still keeping our seatbelts buckled.

 

The economy is still growing, but we’re expecting to see bumps and potholes on the winding road to “normal” inflation levels.

While recession risks have lowered, we’re still watching carefully.

Sources

  1. https://www.msn.com/en-gb/money/other/a-warning-shot-over-the-last-mile-in-the-inflation-battle/ar-AA1n23O5?ocid=finance-verthp-feeds
  2. https://finance.yahoo.com/news/1-feds-bostic-warns-us-122602986.html
  3. https://www.usatoday.com/story/money/2024/01/16/recession-signs-soft-landing-forecasts/72209418007/
  4. https://www.reuters.com/business/red-sea-attack-fears-disrupt-global-trade-patterns-2024-01-16/
  5. https://finance.yahoo.com/news/december-retail-sales-surprise-to-the-upside-133212009.html
  6. https://www.nbcnews.com/politics/congress/congress-announces-tax-deal-expand-child-tax-credit-business-breaks-rcna134067
  7. Chart sources: https://fred.stlouisfed.org/series/CPIAUCNS#0, https://fred.stlouisfed.org/series/FEDFUNDS

Brad Tedrick is an LPL Registered Principal with, and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Vantedge Wealth Management, a registered investment advisor and separate entity from LPL Financial. CA Insurance License #0B47923. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

Some portions of this post copyright (c) 2025 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.
Lessons from Warren Buffett for Today’s Market

Lessons from Warren Buffett for Today’s Market

May 7, 2025

A key principle of investing is that patience, discipline, and maintaining a long-term perspective are what drive financial success. Perhaps no investor has captured this wisdom as eloquently as Warren Buffett over his five-decade career as CEO of Berkshire Hathaway....

Understanding Consumer Debt in a Two-Speed Economy

Understanding Consumer Debt in a Two-Speed Economy

May 2, 2025

The financial health of consumers is an important indicator of the broader economy. Consumer spending represents about 70% of all spending across the economy, and steady purchases are one reason economic growth has exceeded expectations over the past few years....

College Planning: Key Financial Considerations

College Planning: Key Financial Considerations

Apr 29, 2025

Benjamin Franklin once said that “an investment in knowledge pays the best interest.” As many high school seniors prepare to make their final college decisions, families face one of the most significant financial commitments of their lives. The investment in higher...

More Information You Might Like

Holistic Wealth Management

Holistic Wealth Management is an integrated and coordinated approach to all areas of Wealth Management.  At Vantedge Wealth, our advisors create a collaborative environment with clients to find common sense, easy-to-comprehend approaches to their personal finances.