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February 9, 2025
JANUARY EMPLOYMENT: 143,000 net new jobs were added to the U.S. economy in January, much lower than the prior two months. The Bureau of Labor Statistics also revised the numbers for November and December, finding that there were 100,00 more jobs in those two months. The unemployment rate decreased from 4.2% to 4.1%. January's number shows a solid month, but a cooling trend. These are numbers that will keep the Fed in a "wait and see" mode regarding interest rates.
SLIGHT DECLINE IN A CHOPPY WEEK: U.S. stocks moved around on the trade war escalation, more fourth quarter corporate earnings reports, and the January labor report (see above). Tariffs were in the news all week, and the uncertainty moved the markets. This will remain an unfolding story that will not be smooth. Ford and General Motors stock declined due largely to tariff talk. Apple and Nvidia stock also declined. On the other hand, Spotify announced its first ever full year of profitability and its stock soared. Mattel stock also climbed with a positive earnings report, and comments made by its CEO explaining that it is set up, with a diversified supply chain, to withstand any tariff tumult.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
CONSTRUCTION SPENDING UP IN DECEMBER: In December, construction spending in the U.S. was 4.3% higher than one year ago. Private construction spending was up 6.0% year over year.
CONSUMERS GETTING NERVOUS?: The University of Michigan conducts a closely watched, ongoing survey of consumer sentiment. According to that survey, consumer sentiment has recently dropped by about 5%. Consumers are worried about the effects of tariffs, stock market volatility, inflation, and litigation surrounding executive orders, according to the publishers of this survey.
....AND YET THEY ARE BULLISH ON THE ECONOMY?: Seemingly in contrast to the above, Gallup just released poll results showing that 53% of Americans believe the economy will grow over the next six months. That is the highest score for this poll since 2005, according to Gallup. How the consumer is feeling is important because consumer spending is the primary driver of the U.S. economy.
RADICAL CHANGE IN WHAT WE DRIVE: The mix of light vehicle sales in the U.S. has changed dramatically over time. Below, the red line represents light trucks and SUVs. The blue line represents passenger cars. Currently, a record 82% of light vehicle sales are light trucks or SUVs.
HEAVY TRUCK SALES: A drop in heavy truck sales in the U.S. is often a leading indicator of a recession. So we watch the data. In January, heavy truck sales were up 4.6% from a year ago.
CHINA AND DEFLATION: While most nations of the world fret over their inflation numbers, China has been facing the opposite fear, deflation. In December, the annual increase in consumer prices in China was 0.1%. Thus, China cheered its January number which showed 0.5% year over year consumer inflation. In December, food prices showed a 0.5% decline, but January's data coming from China shows a 0.4% increase. China's producer price index dropped 2.3% from a year earlier. That index is often a leading indicator as to where consumer prices will go. The producer price index in China has been in deflation for over two years.
MERRY CHRISTMAS TO ME: My younger son gave me a wonderful Christmas gift. He and I got to go to the Sixers-Celtics game last Sunday night. As you can see, our seats were great! My best estimate is that at least 25% of the crowd was cheering for the visiting Celtics. I know this does not land well with the locals, but I grew up in Massachusetts, and love the Celtics. Fortunately for me, despite trailing most of the game, by a lot, my C's came back to win. It did not help the Sixers that they had an all star team wearing street clothes on the bench (see below). My son and I rooted for different teams, but we had a great time.
PERSPECTIVE: In my involvement with a worldwide nonprofit, I have come to know some individuals doing incredible things in a variety of countries in Latin America and Africa. One of these individuals from Ghana just posted this on social media (see below). I have seen these people and occasionally bought from them.
Have a great week!
Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.
Douglas R. MacGray, J.D., C.F.P. ®
President
Stonecrop Wealth Advisors, LLC
Direct | Cell | Fax
(610) 628 4545
"In order to discover the character of people we have only to observe what they love." St. Augustine
"Without wood a fire goes out; without gossip a quarrel dies down." Proverbs 26:20
SOURCES:
JANUARY EMPLOYMENT: https://www.bls.gov/news.release/empsit.nr0.htm
SLIGHT DECLINE IN A CHOPPY WEEK: https://seekingalpha.com/article/4756348-what-moved-markets-this-week AND https://www.wsj.com/finance/stocks/the-score-constellation-mattel-amazon-and-more-stocks-that-defined-the-week-b819538c?mod=finance_lead_pos5
RADICAL CHANGE IN WHAT WE DRIVE: https://www.calculatedriskblog.com/2025/02/the-changing-mix-of-light-vehicle-sales.html
HEAVY TRUCK SALES: https://www.calculatedriskblog.com/2025/02/heavy-truck-sales-increased-5-yoy-in.html
CONSTRUCTION SPENDING UP IN DECEMBER: https://www.census.gov/construction/c30/current/index.html
CHINA AND DEFLATION: https://www.wsj.com/economy/chinas-consumer-inflation-accelerated-in-january-78f44f4d?mod=economy_lead_story
CONSUMERS GETTING NERVOUS?: https://www.wsj.com/economy/consumers/americans-jittery-over-inflation-university-of-michigan-survey-suggests-1476cf39?mod=economy_lead_pos5
....AND YET THEY ARE BULLISH ON THE ECONOMY?: https://www.pressreader.com/usa/asbury-park-press/20250205/281522231785025
(c) 2025 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved
Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.
SDG
*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.
*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.
*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.
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