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Money Talk Podcast, Friday, Oct. 12, 2018

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Landaas & Company newsletter  October edition now available.

Advisors on This Week’s Show

BOB LANDAAS

MARC AMATEIS

KYLE TETTING

(with Max Hoelzl and Joel Dresang)

Week in Review (Oct. 8-12, 2018)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No major releases.

Tuesday

No major releases.

Wednesday

Rebounding from its first monthly decline since early 2017, wholesale inflation rose in September. Subdued by declines in both food and energy costs, the Producer Price Index gained 0.2%, the Bureau of Labor Statistics reported. The core rate – which excludes food, energy and trade service prices – rose 0.4%, the most in eight months. Overall, the PPI increased 2.6% from the year before, down from a 2.8% pace in August. Year-to-year, the core rate rose 2.9% for the second month in a row.

The nation’s wholesalers stockpiled more supplies in August than analysts expected, as inventory levels rose 1%, outpacing a 0.6% increase in sales, according to the Commerce Department. The inventories-to-sales ratio, a gauge of how lean businesses are operating, didn’t change from July. Year-to-year, wholesale inventories were up 5.3% while sales had risen 9.2%, suggesting that overall, companies weren’t keeping up with customers’ demand.

Thursday

The broadest measure of inflation, the Consumer Price Index, rose 0.1% in September, led by an increase in shelter costs, which was offset by a drop in energy prices. Excluding energy and food costs, the core CPI grew 0.1%, the same as in August. Since September 2017, the CPI rose 2.3%, down from the 2.7% pace of August, according to the Bureau of Labor Statistics. Year-to-year, the core grew 2.2%, which was lower than analysts expected and unchanged from August, possibly allaying fears that inflation is heating up.

The four-week moving average for initial unemployment claims rose for the third week in a row after hitting its lowest level since December 1969. Data from the Labor Department show new jobless applications are 41% below the 51-year average. Claims have been below average every week since the beginning of 2013, underscoring a tight labor market that should encourage consumers to spend more and thus generate greater economic growth.

Friday

The University of Michigan said its preliminary consumer sentiment reading for October declined, although it continued to remain at a favorable level historically. Heightened expectations for inflation and weakened optimism for income resulted in a diminished outlook for personal finances. Attitudes toward current conditions as well as overall expectations narrowed slightly. Despite ongoing White House criticism of the Federal Reserve Board, consumer confidence in government economic policies rose to a 15-year high.

Where the Markets Closed for the Week

  • Nasdaq – 7,497, down 292 points or 3.7%
  • Standard & Poor’s 500 – 2,767, down 119 points or 4.1%
  • 10-year U.S. Treasury Note – 3.14%, down 0.08 point
  • Dow Jones Industrial– 25,335, down 1,112 points or 4.2%

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