Markets, Economy

Weekly Kickstart (09/05/2017-09/08/2017)

9/5/17 7:00 AM

/iStock-462756183.jpgThe market rebound continued last week, as the S&P 500 jumped by 1.37 percent to 2,476.55. That gain left the benchmark index up a solid 10.62 percent year-to-date, and just 0.18 percent below the all-time closing high. As for performance during the month of August, the S&P 500 experienced a few scares (spikes in volatility) but still managed to post a 0.05 percent gain, the 5th monthly increase in a row. Participants in tax-advantaged 401(k) plans fared even better in August, according to new data from the Employee Benefit Research Institute (EBRI). For example, the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers rose by 1.80 percent last month, while older workers (55-64) with more than 20 years of tenure saw their 401(k) balances rise by an average of 0.70 percent.

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Even more impressive is that since the start of 2015, the average 401(k) account balance for younger, less-tenured workers has surged by 137.0 percent, while the S&P 500 has gained just 20.0 percent (through the end of August 2017). Older, more-tenured workers saw their 401(k) balances rise by an average of “only” 27.3 percent during this same period, not surprising since these individuals tend to have much larger accounts that are less sensitive to both contribution size and market fluctuations. More importantly, these substantial gains should provide further evidence of how effective consistent participation in a tax-advantaged savings vehicle can be when trying to amass a significant retirement nest egg. Additional assistance is available through the use of dollar-cost averaging and regularly consulting with a professional financial advisor. As always, we are here to help with any questions you may have.

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To recap a few of the things we learned about the economy last week, the positives included that consumer sentiment firmed (ahead of Harvey), gauges of both national and regional manufacturing activity improved, private-sector payrolls jumped, initial jobless claims held near a record low, domestic inflation pressures softened, and U.S. gross domestic product (GDP) during the second quarter of 2017 grew by more than previously estimated. As for the negatives, the nation’s trade gap widened, pending home sales declined, construction spending fell, corporate layoff announcements rose, consumer spending lifted by less than expected, small business hiring continued to moderate, nonfarm payrolls growth cooled, the unemployment rate (U-3) ticked higher, and wage growth remained sluggish. This holiday-shortened week the pace of economic data slows down considerably but there are still a few important reports on manufacturing, services sector activity, productivity, consumers, and employment scheduled to be released.

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**A more detailed snapshot of the U.S. economy can be found here.**

What To Watch:

Monday

  • US Holiday: Labor Day
  • Markets Closed

Tuesday

Wednesday

Thursday

Friday

  


 

Sources: Econoday, EBRI, FRBSL

Post author: Charles Couch

Disclosures