STA Weekly Report – Will US Consumers Keep the Economy on Track?
Written by Luke Patterson | Monday, August 12th, 2019
INSIDE THIS EDITION:
Will US Consumers Keep the Economy on Track?
Weekly Snapshot of Global Asset Class Performance
Caring for Aging Parents 401k Plan Manager
These dynamics also have investors wondering whether the US economy is a step closer to the next recession. The answer may largely depend on US consumers, whose spending power makes up two-thirds of US GDP.
The labor market remains strong with more job openings than unemployed persons. The unemployment rate is comfortably sitting at 3.7%, a multi-decade low not seen since 1969.
And the job market is likely to stay tight. Small businesses that employ almost half of the country’s total workforce remains optimistic over future hiring plans, which has historically translated to a low unemployment rate.
Although wage growth momentum has cooled, the pace of growth is still near post-crisis highs and well above CPI inflation. Solid wage growth boosts confidence of US consumers, who, in turn, support the continued growth of US retail sales.
Thanks to lower interest rates, mortgage applications have recovered from its 2018 trough. This should support the housing sector, which is a sizeable component of US GDP.
In contrast to the financial crisis, US consumers own a much healthier balance sheet today. The household debt service ratio is at a multi-year low. While consumers remain optimistic, they spend wisely and in a sustainable way. A stronger balance sheet also allows consumers to borrow if needed, which can provide a cushion during the next economic downturn.
Overall, US consumers are still in good shape, which should help keep the economy on track and muddling through a period of slower growth.
Weekly Global Asset Class Performance
Although markets have not exhibited dramatic spikes in
downward volatility during 2019, that does not mean that volatility will remain
Luke Patterson, CEO & Chief
Andrei Costas, Senior Investment Analyst
Nan Lu, Senior Investment Analyst
of Your Aging Parents
By Scott A. Bishop, MBA, CPA/PFS, CFP
Mom? Dad? We need to talk
Later this month I will be hosting a very
important episode of the STA Money Hour with author and Journalist Cameron Huddleston. I have been interviewed by and hosted past STA Money
Hour shows with Cameron in the past on “Money Worries”. This issue is near and dear to me as
I have had to deal with this issue with many of my personal family members.
Caring for your aging parents is something you
hope you can handle when the time comes, but it’s the last thing you want to
think about. Whether the time is now or somewhere down the road, there are
steps that you can take to make your life (and theirs) a little easier. Some
people live their entire lives with little or no assistance from family and friends,
but today Americans are living longer than ever before. It’s always better to
The first step you need to take is talking to
your parents. Find out what their needs and wishes are. In some cases, however,
they may be unwilling or unable to talk about their future. This can happen for
a number of reasons, including:
of becoming dependent
toward you for interfering
to burden you with their problems
If such is the case with your parents, you may
need to do as much planning as you can without them. If their safety or health
is in danger, however, you may need to step in as caregiver. The bottom line is
that you need to have a plan. If you’re nervous about talking to your parents,
make a list of topics that you need to discuss. That way, you’ll be less likely
to forget anything. Here are some things that you may need to talk about:
care insurance: Do they have it? If not, should they buy it?
arrangements: Can they still live alone, or is it time to explore other
care decisions: What are their wishes, and who will carry them out?
planning: How can you protect their assets?
planning: Do they have all of the necessary documents (e.g., wills,
What do you expect from your parents, and what do they expect from you?
Preparing a personal data record
Once you’ve opened the lines of communication,
your next step is to prepare a personal data record. This document lists
information that you might need in case your parents become incapacitated or
die. Here’s some information that should be included:
information: Bank accounts, investment accounts, real estate holdings
information: Wills, durable power of attorneys, health-care directives
and burial plans: Prepayment information, final wishes
information: Health-care providers, medication, medical history
information: Policy numbers, company names
information: Names and phone numbers of any professional service providers
of other important records: Keys to safe-deposit boxes, real estate deeds
Be sure to write down the location of
documents and any relevant account numbers. It’s a good idea to make copies of
all of the documents you’ve gathered and keep them in a safe place. This is
especially important if you live far away, because you’ll want the information
readily available in the event of an emergency.
Where will your parents live?
If your parents are like many older folks,
where they live will depend on how healthy they are. As your parents grow
older, their health may deteriorate so much that they can no longer live on
their own. At this point, you may need to find them in-home health care or
health care within a retirement community or nursing home. Or, you may insist
that they come to live with you. If money is an issue, moving in with you may
be the best (or only) option, but you’ll want to give this decision serious
thought. This decision will impact your entire family, so talk about it as a
family first. A lot of help is out there, including friends and extended
family. Don’t be afraid to ask.
Evaluating your parents’ abilities
If you’re concerned about your parents’ mental
or physical capabilities, ask their doctor(s) to recommend a facility for a
geriatric assessment. These assessments can be done at hospitals or clinics.
The evaluation determines your parents’ capabilities for day-to-day activities
(e.g., cooking, housework, personal hygiene, taking medications, making phone
calls). The facility can then refer you and your parents to organizations that
If you can’t be there to care for your
parents, or if you just need some guidance to oversee your parents’ care, a
geriatric care manager (GCM) can also help. Typically, GCMs are nurses or
social workers with experience in geriatric care. They can assess your parents’
ability to live on their own, coordinate round-the-clock care if necessary, or
recommend home health care and other agencies that can help your parents remain
Get support and advice
Don’t try to care for your parents alone. Many
local and national caregiver support groups and community services are
available to help you cope with caring for your aging parents. If you don’t
know where to find help, contact your state’s department of eldercare services.
Or, call (800) 677-1116 to reach the Eldercare Locator, an information and
referral service sponsored by the federal government that can direct you to
resources available nationally or in your area. Some of the services available
in your community may include:
support groups and training
on how to choose a nursing home
or low-cost legal advice
Once you’ve gathered all of the necessary
information, you may find some gaps. Perhaps your mother doesn’t have a
health-care directive, or her will is outdated. You may wish to consult an
attorney or other financial professional whose advice both you and your parents
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