Tag Archive for: financial planning

July Jobs Report Shows Evidence of Economic Slowdown: What It Means for the U.S. Economy Ahead

July Jobs Report Highlights Sharp Slowdown in U.S. Economy

The July jobs report fuels debate over the U.S. economy. Its data shows a weak labor market. The report hints that growth fades more than standard counts show.

Key Takeaways from the July Jobs Report

  • Nonfarm payrolls increased by only 73,000, a number that falls well short of modest forecasts.
  • The job numbers for May and June drop. The three‐month average sits at 35,000 – less than one third of last year’s pace.
  • The soft labor market makes it seem that the economy cools down more than GDP numbers reveal.

Luke Tilley, Chief Economist at Wilmington Trust, said,
"We see a slow down across our economy. I ask if it may turn into a recession."
He sees a 50% chance of a recession. He ties long tariff effects to lower spending by consumers and businesses. In Q1 2025, spending accounted for 68% of all activity.

Tariff Effects and Price Changes

Tilley points out tariffs set under President Donald Trump make imports cost more. This fact cuts spending on travel, fun, and leisure. The result is that price rises stay low despite the extra fees.

Mixed Signals: GDP Growth vs. Weak Job Numbers

GDP grew at a seasonally adjusted annual rate of 3% in Q2 2025, yet the first half of the year averaged only about 1.2% growth. Consumer spending barely grew by 1%. A boost in Q2 came when imports dropped. Firms had moved many orders forward in Q1 from the threat of higher fees.

Economists stay cautious:

  • Gus Faucher, Chief Economist at PNC, expects slow growth later in 2025 and early 2026 but does not call a recession. He points out that higher tariff fees add risk.
  • Goldman Sachs sees growth dropping to nearly 1% in the last two quarters. This drop comes from weaker job gains, extra fees, lower spending, and cuts in cash help.

Political and Policy Views

White House staff say the economy stays sound and expect fixes with President Trump’s One Big Beautiful Bill Act.

After the report, President Trump attacked the data. He called the figures "FAKED" and "RIGGED" on social media and fired the head of the Bureau of Labor Statistics.

Kevin Hassett, National Economic Council Director, noted the revised numbers with care. He stressed that basic strengths still exist and there is hope for the rest of the year.

Fed Watch: Rates and Outlook

The Federal Reserve kept interest rates steady. Fed staff see the labor market as strong but may relook if new data shows more weakness.

Other pointers suggest strain:

  • Housing data shows fewer buyers even as prices and mortgage rates stay high. A 30‐year fixed rate nears 7%.
  • Factory orders dropped by 4.8% in July, the largest fall since early 2024.
  • The Conference Board’s Employment Trends Index hit its lowest mark since late 2024. Experts like Jim Paulsen see these signals as ways to read a coming downturn.

Market Mood and Investor Views

The stock market shows strength amid these risks. The Dow Jones fell 1.7% over the past month, yet a Monday rally came as hopes grew for a lasting U.S.-EU tariff pact.

George Mateyo, Chief Investment Officer at Key Private Bank, said,
"There has been much calm as many expect good times to hold on. Still, doubt is high, and we advise clients to move funds from riskier areas."

Market views on Fed moves shift quickly. Chances of a rate cut in September now near 90% as key reports and Fed talks come up.

Conclusion

The July jobs report shows that the U.S. economy slows down. This news makes policy makers and investors watch close. A full recession is not a sure call, yet growth seems set to drop in the coming months. Tariff fees and lower spending add tension to the scene.

Stay tuned as more news comes in to help guide you through these uncertain times.

Goldman Sachs Predicts Housing Market to Drag Down Economic Growth by 8% in Coming Months

Housing Market to Remain Weakest Sector of U.S. Economy in Second Half of 2025, Goldman Sachs Predicts

Published August 4, 2025 — 9:05 AM EDT

The U.S. housing market shows slow growth. Goldman Sachs sees the market drag the economy in the year’s second half. Jan Hatzius, chief economist, states residential investment will drop by 8% compared with fall 2024. Each word links closely to its neighbor to help you read with ease.

Key Factors Behind Housing Market Weakness

• High mortgage costs squeeze buyers. Buyers pay more, and they sometimes pay upfront to lower their interest rate. This choice shows that home costs hurt purchase power.

• Fewer new families form as immigration slows. Measures by President Donald Trump on illegal crossings lower the pace at which households come together.

• Job data shows weak hiring. The July report on nonfarm payrolls falls short. Revised figures for May and June also count lower job growth.

Multifamily and Single-Family Construction Trends

• Builders of multifamily apartments hold back on new projects. Developer worries keep new apartment complexes low.

• Starts on single-family homes feel the pinch. Fewer new homes begin construction as builder hope declines.

Residential Investment as a Drag on Growth

Goldman Sachs sees building, renovating, and home repairs pull down economic growth. This part of the market moves jobs, spending, and related work. The slow pace sends ripples through other economic parts.

Economic Context and Outlook

Raising a broad concern, Goldman Sachs fits the slow housing market into the wider U.S. picture. Some parts of the economy run strong, but weak home buying power, fewer new families, and low hiring pull down activity. Policy makers and investors watch these shifts closely.

For those who need stable homes—prospective buyers, real estate builders, and construction teams—this news signals tougher days ahead without a clear fix soon.

Stay informed with CNBC for ongoing news on real estate and economic shifts.

Reported by Alex Harring, CNBC
Follow on Twitter: @alex_harring

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Trump Gains Leverage as Fed Governor Adriana Kugler Resigns, Opening a Seat for New Nominee

Fed Governor Adriana Kugler Resigns, Opening Door for Trump to Influence Interest Rate Policy

August 1, 2025 — U.S. monetary policy faces change as Fed Governor Adriana Kugler announced her resignation on Friday. Her exit opens a seat on the Fed’s Board of Governors and on the Federal Open Market Committee (FOMC), which sets the nation’s interest rates.

Key Details of Kugler’s Departure

  • Resignation Announcement: Kugler, 55, sent a letter to President Donald Trump stating she will return to Georgetown University as a professor this fall.
  • Term and Tenure: Her term was to end in January 2026. She was chosen in September 2023 by a Biden administration, filling the seat left by Lael Brainard.
  • Role on FOMC: As a Governor, Kugler held a voting seat on the FOMC. She took part in votes to decide monetary policy, such as changing interest rates.

Implications for Federal Reserve Policy

Kugler’s exit leaves a gap that President Trump may fill with a nominee who backs lower interest rates. Trump showed his support for this change and hinted he would pick someone who shares his views on monetary policy.

  • Trump’s Influence: Two Trump appointees, Christopher Waller and Michelle Bowman, recently opposed the decision to keep the Fed’s benchmark rate. They called for a rate cut. Kugler did not vote on this matter.
  • Allegations on Resignation: Trump said—with no proof—that Kugler left because she clashed with Fed Chair Jerome Powell over interest rate plans.
  • Kugler’s Policy Views: Known for her hawkish stance, Kugler favored holding rates steady until clear signals of inflation changes appeared, amid the effects of tariffs.

Comments from Federal Reserve Chair Powell

Fed Chair Jerome Powell thanked Kugler for her service. He noted her long experience and useful academic views during her term. Powell’s term ends in May 2026, though he might stay on the board afterward.

Wider Context and Future Outlook

  • The open seat gives President Trump more say over the Fed during a time when economic worries about inflation and growth are strong.
  • Trump said he prefers nominees who support cuts in interest rates. He also mentioned the idea of a "shadow chair" who could speak up on the board until Powell leaves.
  • Markets will watch closely because the Fed’s decisions about rates affect borrowing, investment, and the stability of the economy.

Adriana Kugler’s resignation marks an important moment for U.S. economic policy. It gives the Trump administration a chance to guide the future of interest rate policy during a challenging economic period.

Stocks vs. Bonds: Building Your Investment Portfolio

Introduction

Investing can feel overwhelming, especially for beginners trying to decide between stocks and bonds. Both offer unique opportunities to grow wealth, but they come with different risks and rewards. This blog provides a beginner-friendly comparison of stocks and bonds, explaining their roles in a portfolio and how to balance them based on your financial goals. Whether you’re saving for retirement or aiming for short-term gains, understanding these investment options is key to building a solid financial future.

What Are Stocks?

Stocks represent ownership in a company. When you buy a stock, you become a shareholder, owning a small piece of that business. Stocks are traded on exchanges like the NYSE or NASDAQ, and their prices fluctuate based on company performance, market conditions, and investor sentiment. For example, if you buy shares of a tech company like Apple and its value rises due to strong earnings, your investment grows. However, stocks are volatile—prices can drop suddenly due to market downturns or company-specific issues, making them riskier but with potential for high returns.

What Are Bonds?

Bonds are loans you make to a borrower, typically a government or corporation, in exchange for interest payments over a set period. When you buy a bond, you’re essentially lending money, and the issuer promises to repay the principal at maturity while paying you interest along the way. For instance, a U.S. Treasury bond might pay 3% interest annually and return your initial investment after 10 years. Bonds are generally less risky than stocks because they provide steady income and are often backed by reliable issuers, but they offer lower returns and can be affected by interest rate changes.

 

Comparing Risks and Returns

Stocks typically offer higher returns but come with greater risk. Historically, the S&P 500, a stock market index, has averaged annual returns of about 10% before inflation, but it can experience sharp declines, like the 20% drop during the 2020 pandemic. Bonds, on the other hand, are more stable—U.S. Treasury bonds are considered safe because they’re backed by the government—but their returns are lower, often 2-5% annually. Corporate bonds may offer higher yields but carry more risk if the issuer defaults. Your risk tolerance and investment timeline will determine the right mix for you.

Building a Balanced Portfolio

Balancing stocks and bonds in your portfolio depends on your goals, age, and risk tolerance. A common rule of thumb is the “110 minus your age” strategy: subtract your age from 110 to find the percentage of your portfolio that should be in stocks, with the rest in bonds. For example, a 30-year-old might allocate 80% to stocks and 20% to bonds, while a 60-year-old might shift to 50% stocks and 50% bonds to reduce risk as retirement nears. Diversifying within each asset class—such as investing in a mix of tech and healthcare stocks or government and corporate bonds—further minimizes risk while optimizing returns.

Conclusion

Stocks and bonds each play a vital role in a well-rounded investment portfolio, offering a balance of growth and stability. By understanding their differences and aligning them with your financial goals, you can create a strategy that works for you. For more tips on building your portfolio, check out our videos at The Money Grower.