Vorisek Financial Weekly Market Update for September 19, 2018

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Good morning!

The ratio today of working Americans to jobless Americans is 25-to-1, i.e., there are 155.54 million Americans with full-time jobs vs. 6.23 million out-of-work Americans.  But employers are still posting a record number of job listings.  The 6.94 million job openings nationwide are the largest number ever reported by American businesses.  Restless workers are feeling quite confident about the prospects for finding another job.  3.58 million employees quit their jobs just last month.  As a result, wages may continue to climb as employers fight for increasingly mobile employees.  If this occurs, inflation could accelerate, and the Federal Reserve would be forced to raise short-term interest rates again (source: Department of Labor).           

With just one month to go in fiscal year 2018 (i.e., the 12 months ending 9/30/18), the government has incurred an $898 billion deficit.  But September has produced a surplus in each of the last 6 fiscal years (2012-2017), driven by estimated tax payments made by self-employed individuals.  The year’s final full-year deficit number is still likely to be the largest in our country since 2012 (source: Treasury Department).       

After adjusting numerical data from the past for the impact of inflation, the median household income in 2017 ($61,372) is the highest ever recorded in the United States, besting the previous record for median household income ($60,309) set just the year before in 2016.  Before 2016, the peak for median household income was $60,062 set in 1999 (source: Federal Reserve Bank of St. Louis).    

Notable Numbers for the Week:

  1. NONE - As of the end of 2017, 19% of Millennials and 12% of Baby Boomers had no money (either pre-tax or post-tax) invested in the stock market.  Millennials were born between 1981-97 and were ages 20-36 in 2017, while the Baby Boomers were born between 1946-64 and were ages 53-71 in 2017 (source: Vanguard). 

  2. MORE CONCENTRATED - America’s 5 largest banks control 47% of all banking assets, up from 29% in 1998 or 20 years ago (source: Federal Reserve Bank of St. Louis). 

  3. BLANK CHECK - An estimated 44.4% of all US individual taxpayers will legally pay zero federal income tax for tax year 2018 on their Tax Form 1040 that is due 4/15/19 (source: Tax Policy Center).  

  4. BONDS - There is less outstanding municipal bond debt today ($3.8 trillion) than there was in 2010 ($4.0 trillion).  Over the same time period, outstanding Treasury debt has increased +69% to $14.9 trillion (source: SIFMA).

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If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.