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Markets Tread Water, Mixed Economic News, Long-Term Care, and Celebration

  • Writer: Doug MacGray
    Doug MacGray
  • Sep 28, 2025
  • 5 min read

September 28, 2025


MARKETS BOUNCE BACK ON FRIDAY, BUT END THE WEEK NEGATIVE: Stock markets have been on an extended rally, and as rallies continue, investors get concerned. "How long can this last?" This creates more nervousness and more volatility. This past week, markets drifted up, then down for three straight days, and then up on Friday. The current economic data points (see below) seem to be giving investors overall confidence that we are not on the brink of a recession. The second quarter GDP (see below) shows a lot of economic activity. Weekly jobless claims were down, and durable goods orders were up (see below). This, along with the optimism that the Fed will lower rates one more time before year-end, is keeping nervous investors happy for the moment.



LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.




THE PCE INFLATION INDEX UP SLIGHTLY: The Fed closely watches the Personal Consumption Expenditures index as an alternative gauge on inflation. In August, it was up 0.6%. It was up 2.7% year-over-year. That is up slightly from 2.6% in July. Excluding food and energy, the PCE Core index was up 2.9% year-over-year, the same as last month.


Q2 U.S. ECONOMY PERFORMED BETTER THAN THOUGHT: The Bureau of Economic Analysis issued its final reading for real Gross Domestic Product (GDP) growth for the second quarter. The annualized growth rate was revised up to 3.8% due to stronger consumer spending and business investment. From 2019 to 2024, average real GDP growth was 2.4%.


ORDERS FOR DURABLE GOODS UP IN AUGUST: New orders for durable goods were up 2.9% in August. The rise was largely due to a good month for commercial and defense aircraft, which tend to skew the numbers because of the uneven nature of that industry and the size of the orders. If you remove aircraft, orders for durable goods were up 0.4%.

HOME SALES: According to the National Association of Realtors, sales of existing homes in the U.S decreased by 0.2% in August. Sales in August were 1.8% higher than one year ago. On the other hand, sales of new homes jumped by 20.5% in August and were 15.4% higher than one year ago.


NEW RESTRICTION ON SAVINGS FOR OLDER WORKERS: Currently, workers aged 50 and older are allowed to contribute more to 401 (k) s than their younger co-workers. These are called "catch-up" contributions. For 401ks, workers 50 and older can add an extra $7,500 to the $23,500 limit for a total of $31,000 in 2025. A new "super" catch-up contribution increases this to $11,250. Beginning next year, there will be a restriction on the usage of these catch-up contributions. If in the prior tax year the employee had $145,000 or more in wages, then that worker no longer has the option of using the catch-up contributions for traditional, pre-tax contributions. The contributions can still be made, but they must be Roth contributions. This $145,000 number is indexed for inflation and will likely increase each year.


HOW MANY AMERICANS NEED LONG-TERM CARE?: According to a recent research paper by the U.S. Department of Health and Human Services, 56% of Americans turning 65 are likely to develop a condition requiring long-term care. While this sounds alarmingly high, “long-term care” in this report included both paid care and unpaid care delivered by family members and friends. 45% of Americans aged 65 and older are anticipated to need some form of paid care in their lifetimes, with an average duration of 0.8 years. Only 4.4% of this group will need care that lasts longer than five years. 10% will need paid care that lasts between two and five years. Women are more likely to need paid long-term care than men, and the duration tends to be longer. 51% of women aged 65 and older will need paid long-term care. 39% of men will need such care. Currently, 63% of nursing home residents are women. 51% of unmarried people over 65 will need paid long-term care, but only 43% for those who are married.


HOW MUCH MONEY DO PEOPLE SPEND IN RETIREMENT?: According to a comprehensive study by the Rand Corporation a few years ago, real spending by individuals and married couples over the age of 65 decreases by between 1 and 2% per year, on average, for the rest of their lives. While inflation might cause overall expenses to increase, the real rate of spending decreases. In the study, this decline was observed in all economic groups, including the most well-to-do. The reasons for spending declines, therefore, do not seem to be caused by economic constraints, but by choice. When asked why spending had decreased, the majority of individuals reported less enjoyment from spending on travel, dining out, leisure activities, and new stuff (appliances, clothes, and cars). As stated in a similar study, “when anticipating spending needs in retirement, a reasonable guide is to expect modestly declining total spending (in real terms) over the course of retirement. This is because age-related factors reduce the desire to spend on a range of 24 types of spending, and those reductions outweigh the increase in spending on health care for most households.


CELEBRATION: Last week, Stonecrop Wealth Advisors had the pleasure of publicly celebrating Logan MacGray's promotion to President of the company. All of Stonecrop's full-time employees were there, along with many of our clients and friends. We had dinner and drinks along with a few words by yours truly, followed by Logan. It was wonderful to see so many well-wishers as we celebrate the beginning of this next chapter of Stonecrop. It was held at our headquarters building in downtown West Chester on a beautiful night.



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. ®

Chairman and CEO

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545




"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett


"Go to the ant, you sluggard, consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest." Proverbs 6:6-8


SOURCES:

HOW MANY AMERICANS NEED LONG-TERM CARE:

https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf AND https://www.morningstar.com/retirement/how-likely-are-you-need-long-term-care AND https://www.theseniorlist.com/nursing-homes/statistics/ AND https://www.morningstar.com/retirement/how-likely-are-you-need-long-term-care

HOW MUCH MONEY DO PEOPLE SPEND IN RETIREMENT?: Spending Trajectories After Age 65, Hurd and Rohwedder, 2022, AND https://www.nber.org/system/files/working_papers/w30460/w30460.pdf, at pages 23-24

HOME SALES: https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-0-2-decrease-in-august AND https://www.ftportfolios.com/Commentary/EconomicResearch/2025/9/24/new-single-family-home-sales-jumped-20.5percent-in-august

(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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