Please note that Portnoff Financial has joined with Tempus Wealth Planning and some information here may no longer be applicable. Please contact Jeremy Portnoff at 949-226-8342 (CA) or 732-226-3113 (NJ) for additional information.  We apologize for any confusion while we are in transition. 

West Coast Phone: 949-226-8342
East Coast Phone: 732-226-3113


Economic Update for the Week of 10/12/2012

Earnings season has started with Alcoa reporting flat earnings and the stock selling off hard. We also saw warnings from companies like AMD reporting a sharp turn-down in PC sales with a few upside surprises such as JPMorgan. Not too unexpected, earnings are coming in soft. This is why the upbeat employment numbers are confusing and why the markets seemed to not react to QE3.

US jobless claims dramatically feel by 30,000 to 339,000 on expectations of 370,000 which is the best level (lowest) since 2008. It is looking like Q3 will be a declining quarter, so to see unemployment drop to 7.8% is a bit strange. There are no signs that employment is improving from a business standpoint, only a government statistic standpoint. I do not believe there is a conspiracy here in the positive employment numbers. We've known for a very long time that the employment numbers are surveys and contain many adjustments as it is. It is possible that the Bureau of Labor Statistics is in the process of changing their seasonal adjustment models and thus we may likely see these numbers revised next week to be more in line with the trend we've seen as of late. 

US Producer Price Index was up 1.1% mostly due to food and energy which if removed, the core rate was flat. Rising food and energy affect how much people can spend on discretionary items and with an expected increase in taxes in 2013, expect to see further economic weakness. 

Greek unemployment tops 25%! The fewer people working the less tax revenue a government receives. Conclusion: Greece is bankrupt and they will default, again.

Login to post comments.