Last week, investors and economists were expecting the United States to add close to 1 Million Jobs in April! The number came in with a “huge numerical” miss, suggesting 266,000 jobs were created.
The talk was a-buzz! Economists were razor-quick to suggest the number reported was “seasonally” adjusted and will be adjusted much higher. Many of the brokerage firms also chimed in, saying the number will be adjusted much higher. Question – did they think that was a possibility prior to the number being released?
President Biden, on the other hand, decided to hold a press conference. His message: we are making great progress since he took over, however the low jobs number indicates we very much need to pass his 2 new plans that total approximately 4 Trillion Dollars of new spending. I have to wonder, if the jobs number would have been 1 Million (as expected), would President Biden have said “our plan is working perfectly, we now need to make sure the progress continues, so pass the plans and let’s dish out the dough?”
Others are suggesting the reason for the weak jobs report; many people who are unemployed are collecting more money than if they went back to work, so they simply are choosing the larger paycheck. When asked that question in his Press Conference, President Biden quickly responded there is no evidence this is true. Keep in mind, this trend of paying unemployed greater wages than when working, started under President Trump, and he did it twice.
So, WHO is correct? Are we adding significant jobs, or has the pace slowed? I lean toward we are adding significant jobs and the number will be adjusted higher. However, it’s hard to argue against that additional funds create an incentive for many, NOT to go back to work.
Taxes – Who Pays??
This morning on CNBC, it was reported that the top 1% of income earners in 2018 paid over 40% of all Federal Income Tax. They suggested this is the largest percentage on record. This was after the “gift” to the wealthy, from President Trump’s Tax Cut. The main reason for the additional taxes is the SALT limitation also initiated under Trump. Most of you who are reading this report are hit with the SALT limitation, even though you may not be in that top 1% of income earners.
For me personally, I believe this will mark two Presidents in a row that have increased “my” income taxes. Interestingly…. one President was a self-proclaimed “Conservative Republican” and the other a Democrat. Actually, now that I think about, it’s three Presidents in a row that have increased, or will be, increasing taxes.
My strong feeling is, I do believe revenue (taxes) needs to increase; however, we first must take care of the promises we’ve made to our Baby Boomers, making sure Medicare and Social Security benefits will remain as-is, and NOT be reduced. Most of us have already paid our fair share. If you don’t believe me, look at page #3 of your annual Social Security Statement.
Markets for the Week
All major stock indexes were higher last week, except the Nasdaq Composite which is highly comprised of technology related stocks. For the week, the Dow Jones rose 2.72%, the S&P 500 1.26%, the Russell 2000 Small Cap .25% and Nasdaq surrendered (1.48%).
Over the pond Foreign stocks rose 2.63% and Emerging Market stocks .10%.
Bond yields fell slightly as the 10 Year US Treasury yield finished the week @ 1.58%.
The 10 Year started 2021 @ .91%, rose to 1.75% on March 31st and has pulled back since.
The Consumer Price Index number is do out this week and is expected to be large. Will this move yields higher? We’ll find out shortly!