After a volatile week US stocks ended with modest losses. The big news on the week was the Federal Reserve decided not to raise interest rates. The FED cited concerns over global growth. Foreign stocks generally performed better than US stocks and emerging markets generally performed better than developed foreign stocks. Treasury bonds rose and yields fell on the Fed’s decision. The dollar also declined. Commodity prices were mixed as oil rose based on an unexpected drawdown in US inventories. In economic numbers this week:
- The Federal Reserve reported that US Industrial Production (manufacturing, utilities and mining) fell 0.4% in August, the sixth time in eight months and worse than estimates. Capacity utilization fell from 78.0% to 77.6%. Manufacturing output fell by 0.5%. From a year ago manufacturing output was up 1.4%. Non-auto business equipment and consumer goods rose 0.4% in August.
- The Commerce Department reported:
- Retail sales rose a seasonally adjusted 0.2% in August. July was revised to a 0.7% gain. Excluding autos the gain was 0.1% in August. Excluding gasoline, retail sales rose by 0.4 in August and 4.4% from a year ago. Retail sales were up 2.2% from a year ago.
- Housing starts fell a seasonally adjusted 3% in August. Both multifamily and single family home starts declined.
- New applications for homebuilding permits, however, rose 3.5%.
- The Census Bureau reported that median annual household income adjusted for inflation fell 1.5% in 2014. Incomes adjusted for inflation are 6.5% below their 2007 levels.
- The Labor Department reported:
- The consumer-price index fell 0.1% in August mainly due to lower gasoline prices. Excluding the volatile food and energy categories prices rose 0.1%. From a year ago consumer prices were up only 0.2% and core prices, excluding food and energy were up only 0.2%.
- First time claims for unemployment fell by 11,000 to a seasonally adjusted 264,000 in the prior week. The four week moving average of claims fell 3,250 to 272,500.
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Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
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Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
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These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.
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