Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated. A registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus, brought to you each and every Wednesday morning, right here on KROS. Well, this is Nate. James joining me again today. A little pleasant walk up the hill today. It looks like it’s going to start warming up a little bit after a few cooler days, but as we were talking, hard to believe we are mid-July. Summer is flying right on by, as we always say. You get past the 4th of July, it seems to just take off right there into August, but hopefully, summer continues for a little bit and there’s some nice days to enjoy it out there.
James Nelson:
Yeah, no doubt. It’s-
Nate Kreinbrink:
All-Star game last night, so that’s the middle of summer, and the back half of that time, so.
James Nelson:
Exactly. These kids are going to be back in school here before we know it. Yeah, it’s been good and hopefully, everybody’s been able to enjoy the summer so far.
Nate Kreinbrink:
Been a good one, been a good one. Obviously, busy and always full of everything, but get out there and enjoy it while you can. Today’s program, I know we’ve talked a lot over the last couple of weeks regarding taxes. I know we’ve had Andy Ferguson. We’ve had Mike van Zuden with NelsonCorp Tax Solutions in the last couple of weeks, hitting some of those topics from the tax world that have been in, most specifically the Child Tax Credit that was out there, what people should be looking at from there.
Nate Kreinbrink:
Obviously, some of the delays in filings that they are seeing, as far as some of those returns from the IRS and a few other ones. Obviously, all equally important. If you have questions on those, obviously by all means, give them a call. We’d be happy to sit down with you during this time where they have a little more free time to go over your individual situation. But wanted to talk a little bit more on a term that has been around obviously forever, but over the last year and a half more specifically, and that’s the unemployment rate that we have seen.
Nate Kreinbrink:
Obviously, the unemployment rate has been in headlines, obviously pre-pandemic, but obviously, during the pandemic. And then as we’re transitioning to this phase that we’re at right now, looking at the unemployment rate, how that’s affecting it, but there’s another index, another chart that we follow a little bit that doesn’t quite get as much publicity as the unemployment rate and that’s the US quit rate. Maybe talk a little bit as far as what that chart shows, and what we’re looking at and how that fits into everything as a whole.
James Nelson:
Yeah, definitely. So if anybody’s been watching the unemployment numbers, they’ve seen them tick up just a little bit in the month of July, which is a little disappointing because things are recovering and we hope to stand that trend. But like most things with the economy and markets, there’s a lot of nuance here. So even with that unemployment ticking up, there is a little bit of good news and that’s the quit rate that Nate referred to.
James Nelson:
And the quit rate is basically a chart that looks at individuals quitting their job compared to a percentage of total unemployment. So if there’s a lot of people quitting their job, there’s a lot of confidence out there. And that suggests that the labor market’s tightening. So with that, we’re seeing the all-time quit rate number at an all-time high, I should say. So that’s good news. Again, the unemployment’s one thing, the quit rate’s another.
James Nelson:
So we see a lot of people feeling comfortable to leave a job and feel comfortable that they’re going to land a new job in a very short amount of time. So unemployment metrics came in a little bit soft, but the quit rate and other measures, job openings is another one, came in pretty high and pretty solid. So it still suggests that we’re on the road to recovery here. We’re going to see some things change later this year as it relates to unemployment benefits and whatnot. But the quit rate, that’s basically an all-time high right now, and that is a positive for the US economy.
Nate Kreinbrink:
Right. And I think as you said, I’m understanding what that is, where we’re currently at is always important to look at, but it’s also important to see where we see this going here in the second half of the year. And as you mentioned, I mean, right now, continuing jobless claims are at around the 14 million level. I mean, that’s obviously a pretty high number, but significantly lower than what the pandemic peak was last year.
Nate Kreinbrink:
Obviously one of the biggest changes, as you mentioned, coming along down here the second half of the year is the expiration of the pandemic unemployment assistance and emergency compensation, which is set to go away in September and currently makes up about 10 to 11 million of this ongoing claims. So again, as that expires there in September, we may see more people going back to work and seeing how that factors into the overall economy is going to be important to watch, to see where that number is, which again as we said, is currently right around the 14 million level.
Nate Kreinbrink:
But again, seeing as people that assistance and they’re heading into September, people going back, looking for work, how that affects it and what that does to the economy as well.
James Nelson:
Yeah. And it makes you wonder if there’s going to be a little bit more urgency with some of these people seeking employment, knowing that those benefits are coming to a halt here in a couple of months. It’s also probably a good thing for a few of the sectors that have been dealing with labor shortages. We’ve all heard about that. Construction being a big one, hospitality, restaurants in general, a lot of them have been dealing with labor shortages. And again, wages have been growing, so a lot of these people that may have had those jobs have found other jobs.
James Nelson:
There’s the quit rate that we go back to. They’re moving up and found a new job paying more. So it’s left a lot of these jobs vacant here recently. The other thing that we’re keeping an eye on later this year is the infrastructure bill, whether it’s one trillion or two trillion, whatever the number ends up being, if it gets passed, it’s certainly going to create a lot of jobs. And right now, the estimation is we’re short about 500,000 construction workers.
James Nelson:
This could bring that number up to about 1,500,000, as far as a labor shortage in the construction and labor field as it relates to the infrastructure bill. So that’s a big gap, and something we’re keeping an eye on. Time will tell if it gets done and how this infrastructure bill is structured. But there’s a lot of momentum, I think, behind that. And in one way, shape, or form, I’m guessing that probably gets done this year.
Nate Kreinbrink:
Right, and I think as we go through some of these things, I think it’s just important to point out that this is just one of the things that we continue to monitor when we make decisions as far as what we own, why we own it, and what we’re looking at going forward. Because as we said, I mean, there’s no direct correlation between the unemployment rate or the US quit rate in as far as how markets are going to be, but it’s a piece of the puzzle that has an impact to it.
Nate Kreinbrink:
And again, history doesn’t necessarily repeat itself exactly but as we say, it often times rhymes. And looking at where we’re at on some of these levels, looking at previously in history where those levels have fell and where they translate from there is important for us to have a little bit of an idea, as far as what to be invested in, what sectors to be invested in. We talk all the time as far as knowing what you own, when you own it, and why you own it.
Nate Kreinbrink:
This is one of those pieces that goes into it, to know that okay, these are the data that we are looking at, this is why we’re invested in things and being able to see if there are opportunities out there, what we can do to take advantage of them. If there’s specific sectors that may respond either positively or negatively to what is going on in these different areas.
James Nelson:
It’s interesting to look at the wage growth and inflation. Both of those have been trending up over the last year, year and a half. And it’s going to be interesting to see how that plays out going forward. Does inflation, keep ticking up? If it does, areas like stocks in general and tips all of a sudden look a little bit more attractive. If it levels off, that’s a good thing in certain ways too. The biggest beneficiaries, I guess so far in the recovery, since spending has been up, consumer spending specifically, a lot of consumer spending driving this recovery. Hospitality and retail have been big-time beneficiaries of this latest advance.
James Nelson:
So it’ll be interesting to see how that plays out and if it continues and again, we’re going to find out here with some of these things like unemployment and whatnot expiring here in a couple of months, what the market or what the economy really looks like here to finish the year.
Nate Kreinbrink:
Right, and I think the big thing is if you have questions, give us a call. I mean, we don’t expect people to continue to go out, search US quit rate, and start looking at how they should be invested.
James Nelson:
Why not?
Nate Kreinbrink:
But again, understand that there’s more to it than just picking a certain fund or whatever it is in your 401(k) plan. If you have a personal investment account, looking at those things, but having questions and say, “Hey, am I even in the right path? Am I on the right track to be invested? I don’t really know what I am. I’ve put money into it. I’ve had it in there forever. I don’t know what to do.” And this is some of the things again that we discuss and look at to see okay, are you looking at your risk? Are you allocated to mirror that risk, I think is the biggest thing? And helping people get to that comfort level, as far as their allocations, their money that they have invested to be sure that they’re not taking any unnecessary risks when they don’t necessarily need to.
James Nelson:
And that goes for the stock and bond market, right, Nate?
Nate Kreinbrink:
Absolutely, they’re-
James Nelson:
I mean, the bond market’s almost as volatile as the stock market these days. So, yeah.
Nate Kreinbrink:
Right now it is, yes.
James Nelson:
Give us a call-
Nate Kreinbrink:
Those so-called safe investments that they have.
James Nelson:
Yeah, not so safe recently, but yeah, give us a call if there’s any questions or if you’d like to evaluate your personal situation, we’re happy to do it.
Nate Kreinbrink:
So I did want to mention real quick that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of July will be donated to the Clinton YWCA Half-Marathon event. James, as always, appreciate you joining me this morning.
James Nelson:
Absolutely.
Nate Kreinbrink:
Again, Nate and James with NelsonCorp Wealth Management, bringing you this week’s Financial Focus. Thanks again for tuning in, and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly.
Announcer:
Registered representatives securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.NelsonCorp.com.