Letter to Stakeholders, August 2021
Friday, August 06, 4:09 pm EST. The markets have just closed with new highs for both of the large stock indices (S&P 500 and Dow Jones Industrial Average). Market makers are happy because of the short-term economic news: strong company earnings reports, a strong jobs report and a strong unemployment report. The Federal Reserve Bank Presidents have remained mostly steady and though their monetary policy has stoked inflation fears, the available cash has kept the stock market quiet enough for you to enjoy a vacation.
Jobs, Unemployment, Visas, Oh my!
According to many analysts, the labor market boomed last month, adding 943,000 available jobs and correcting June’s report to reflect 938,000 jobs added for that month. As you would expect, the unemployment rate fell from 5.9% to 5.4%. What does that actually represent? A reduction in unemployed persons by about 782,000 people. All of these numbers are compiled and reported (and revised) by the US Department of Labor’s Bureau of Labor Statistics. If you click that link you’ll have access to a 42-page report that goes into great detail about the long-term unemployed (reduced) and persons temporarily laid off (also reduced). This is the kind of data that’s food for politicians, economists and all kinds of talking heads. And they drive sentiment – how large and small investors feel – about the economy.
What about the shortage of labor we keep hearing about? Besides the over 600,000+ COVID-19 deaths, and the 1 million moms of school age children who have had to step back from the workforce, there are also lesser known work-visa problems. Have you ever taken a family vacation to the beach or the local pool and noticed the lifeguards from far off European/Caribbean countries? Those are recipients of the H2-B and J-1 Visas (non-Agricultural workers); those visas got maxed out this year. Without those temporary workers, many of the vacation spots have been struggling to cater to our cabana needs. Why did the Department of Homeland Security have to add 22,000 visas including 6,000 from the “Northern Triangle” of Honduras, Guatemala and El Salvador? Likely to fill the absence of those who were either sick with COVID-19 (35 million) or dead (600,000+) or watching their kids (1 million moms), or maybe a few who were (and are still) reevaluating their job options.
Watching the monthly jobs report is nearly as useless as daily watching the stock market. Our economy is complex and still the biggest in the world. There are many important indicators but to get the whole story of what’s really happening – or what might happen soon – takes an integrated evaluation of all monetary and fiscal policy working through our system. Not many pundits are taking the time to explain in detail their evaluation of all of that. It’s Summer so you probably would listen anyway. Enjoy your vacations.
Speaking of the “Norther Triangle,” last week I had the pleasant opportunity to interview a local hero and social entrepreneur: Ms. Patricia “Paty” Funegra. Ms. Funegra is the Founder and President of La Cocina VA in Arlington, VA and Global Development Advisors. Her TEDx talk, "Food, the Catalyzer for Greatness" alluded to her work at La Cocina serving and empowering women from Honduras, Guatemala and El Salvador. She helped women that would have preferred to stay “home” but saw no other choice but to immigrate here. Her new mission with Global Development Advisors (website pending) is to attack the root problem: the lack of economic development in Central America. Watch and listen here to her goals and her story.
Sharing Financial “Tips”
Here are the financial tips you can share with friends and family for this month:
- Get your vaccine. My alma mater George Mason University is still offering free pokes.
- Retirement Contributions. It’s August. Ensure that you are maxing out your options
- Family Talk. Walk through the family budget. It will probably change this Fall.
To your health!
Jason J. Howell, CFP®, CPWA®, CSRIC®
Jason Howell Company (JHCo.) is an independent, family wealth management firm run by two owners who consider it their family business. Jason J. Howell, CFP®, CPWA®, CSRIC® and Douglas W. Tees, MBA, CFP® are both married to patient wives and are dedicated to their kids.
The firm owners believe that serving families through a process that supports family harmony, preserves family history and nurtures family values is the key to true wealth. It begins with a sustainable Investment Strategy and continues by equipping client families with three (3) tools for creating sustainable wealth. Most JHCo. clients invest their time, talent and treasure in the community. Jason Howell Company enjoys serving clients who go beyond being stockholders to becoming true "stakeholders." JHCo. calls this work total family governance and it's their specialty. We're also pretty good at executive compensation (stock options and grants).
Your Family. Your Values. Your Money.
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