- Mastering Financial Content
- Posts
- đź“° The Weekly Scoop
Hey there, can you believe a fully-customizable newsletter like this only takes 5 minutes to make?
With Share Scoops Pro Content Suite, you can pull together timely news and educational bites into a post or email in seconds—keeping your clients engaged and coming back for more!
Try it free for 30 days with code 30DSCOOPTRIAL before November 15th.
Hi there, welcome back to the Weekly Scoop from your trusted team at your favorite financial institution! We’ll keep you informed on everything that affects your work, home, and wallet.
Now, here’s what you need to know this week:
Photo: Getty Images
Unemployment is still low, but hiring has slowed.
The Labor Department reported that employers added just 12,000 jobs in October—the smallest increase since 2020 and far below economists' expectations. This marks a significant drop from the 223,000 jobs added in September, and previous months were also revised downward by a total of 112,000 jobs. Hiring was likely affected by disruptions from recent hurricanes and strikes at Boeing and the US ports, which particularly impacted sectors like manufacturing, where jobs fell by 46,000—the largest decline since April 2020. Despite the weak hiring, the unemployment rate held steady at 4.1%, and wages continued to rise modestly, with average hourly earnings up 0.4% from the previous month and 4% year-over-year.
Americans got a shot of optimism in October despite the uncertainty around the election.
According to the Conference Board, consumer confidence in the economy surged 11% in October, the biggest jump since March 2021, to the highest level in nine months. The surge of optimism surprised economists because election uncertainty often weighs on people’s confidence. One thing driving the optimism is the strength of the jobs market, where hiring has stayed relatively consistent, and wages have kept growing. More survey respondents plan to buy a new car than at any time since 2020, and the appetite for spending extended across several big-ticket items and appliances. Consumer spending powers two-thirds of the economy, so positive vibes can translate to real growth.
People keep spending enough to support the economy.
The Commerce Department reported that the economy expanded at a 2.8% annual rate in the third quarter, a bit below the 3.1% economists expected and down from 3.0% in the spring. Strong consumer spending, which makes up about two-thirds of economic activity, jumped 3.7%—the best since early 2023—and was a significant driver of growth. Federal government spending also surged by 9.7%, mainly due to a 14.9% increase in defense spending. However, a rise in imports, which counts against growth in the Gross Domestic Product (GDP) calculation, offset some of these gains. Despite higher borrowing costs and price concerns, resilient spending continues to fuel the economy.
🔍Gross Domestic Product (GDP) is how we track how much stuff the economy is producing. The actual number (~$29 trillion) doesn't matter as much as the direction and magnitude. We track the growth rate of real GDP (inflation-adjusted) to know whether the economy is expanding or contracting from the previous quarter.
Corporate profits are growing, but not as rapidly as in previous years.
According to FactSet's latest report, 70% of S&P 500 companies reported their third-quarter results, and 75% earned more profit than investors expected. This matches the 10-year average but falls slightly below the 5-year average of 77%. However, companies aren’t exceeding expectations by the same magnitude as usual—reporting profits just 4.6% above estimates, compared to the typical 6.8% over the past decade. Overall, earnings have increased by 5.1% compared to the same quarter last year, marking the fifth consecutive quarter of growth. Sectors like Communication Services and Health Care are leading the gains, while the Energy sector is seeing declines that weigh on the overall performance. This slowdown in profit growth might temper stock market gains, potentially affecting your investments or retirement savings.
Photo: Al Drago, New York Times
A drop in mortgage rates got buyers off the sideline last month.
New home sales in the US reached their highest level in nearly 18 months. According to the Commerce Department's Census Bureau, the number of new single-family home sales jumped 4.1% in September to an annual rate of 738,000 units, more than economists expected. This surge was likely driven by cheaper mortgage rates in September. Rates fell to their lowest point in over a year and a half as the Federal Reserve began easing some of its restrictive policies aimed at controlling inflation. However, rates have climbed back up recently, which might cool future sales. If you're considering buying a new home, this trend likely shows buyer competition will increase as mortgage rates come back down.
Photo: Getty Images
What we’re talking about this week:
đź’ˇ How much should I have in my savings account?
Building savings is a core aspect of budgeting, and it always starts with a thorough review of our expenses. Once we know how much we’re spending, we can figure out a target savings account balance.
We can’t have too much savings. The important thing to watch is how much we have in cash versus other investments. If we have enough to cover our short-term expenses with a buffer for emergencies, we will often consider investing extra long-term savings in assets like stocks that could grow more over time.
Finding the right amount for our emergency cash savings isn’t an exact science. We’re planning for an emergency, such as a health issue or getting laid off. The average length of unemployment is roughly 4-5 months, so 3-6 months offers a rough estimate of the cash we might need to cover our expenses if we lose our job. The more expenses or dependents we have, the more savings we should consider building.
That’s it for this week!
Give me a call with any questions you might have.
See you next week,
Your favorite financial resource
