On the first Friday of every month, the Bureau of Labor Statistics releases the Employment Situation report (“the jobs report”). Last Friday’s blockbuster jobs report caught many by surprise (me included). 254,000 jobs were added in September, soaring past economists’ estimates of 150,000. Additionally, the unemployment rate decreased by 0.1% to 4.1%, marginally better than the forecast of the rate holding steady at 4.2%. Job growth was strong across multiple industries with leisure and hospitality leading the way with 78,000 new jobs. Wage growth increased 0.4% on the month and was up 4% year-over-year, coming in slightly hotter than expected, with forecasts of 0.3% and 3.8%, respectively. As the chart below highlights, the U.S. economy remains resilient, defying many strategists and economists’ expectations for a recession (almost everyone believed a recession was all but certain to occur in 2023, and look at where we are).
What does this mean for the Fed and short-term rates for the remainder of the year? The robust report strengthens the case for a slower pace of rate cuts, in 25 basis point increments, rather than 50.
Dockworker Strike Update
As my colleague Donovan Ingle wrote last week, tens of thousands of dockworkers across the East Coast and Gulf Coast, represented by the International Longshoremen Association (ILA), went on strike for the first time since 1977. Fortunately, for the broader US economy, the strike was short-lived. The ILA and the United States Maritime Alliance reached a tentative agreement on wages after just three days. While there are other issues outstanding (related to the use of automation), and the two sides will continue to negotiate until the expiration of their existing contract on January 15, 2025, one big hurdle has been cleared. Port workers will see their wages increase by 61.5% over six years. Even though the strike was brief, many experts believe it will take a minimum of three weeks for supply chain congestion and delays to subside. On the bright side, this strike had the potential to be devastating to the economy, and luckily an economic catastrophe has been avoided.
Financial Planning/Investment Strategy Corner
Currently, there are approximately 65 million Americans enrolled in Medicare. Each year, Medicare enrollees have an opportunity to shop around for different coverage during the Open Enrollment Period (OEP). With Medicare’s OEP starting next Tuesday (lasting until December 7th), this is an opportune time to review your existing coverage. Current Medicare enrollees should have received their latest annual notice of change from their provider. This notice will highlight any changes in coverage, costs, etc. If there are changes to your policy that will be detrimental to you, it makes sense to shop around. Below are the options current Medicare enrollees have during the OEP:
- Change from original Medicare to a Medicare Advantage Plan.
- Change from a Medicare Advantage plan to original Medicare.
- Switch from one Medicare Advantage plan to another.
- Join a Medicare drug plan.
- Switch from one Medicare drug plan to another.
- Drop your Medicare drug coverage completely.
- Switch from a Medicare Advantage Plan that doesn't offer drug coverage to one that does.
- Switch from a Medicare Advantage plan that offers drug coverage to a Medicare Advantage Plan that does not.
**source: Medicare vs. Medicare Advantage Open Enrollment (ncoa.org)
** Please consult with a Medicare specialist who can review your options in greater detail. Please reach out to your financial advisor team if you would like a Medicare specialist referral.
RSWA is Growing Again!
We are pleased to announce that we have a new team member - Kjersti Conway! Kjersti is originally from Rutland, Vermont. She studied at the University of Maine, obtaining a Bachelor of Science degree in Financial Economics in 2023. She will be working in our South Portland office, assisting with scheduling, meeting preparation, and supporting the advisory teams. In her spare time, Kjersti likes hanging out with her family, spending time with her cat, or going for a run or a hike. We are excited to have Kjersti on the RSWA team, please join us in welcoming her! And, BTW, her name is pronounced CHAIR-stee! 😊
Quick Hits
- Seeing the devastation that Hurricane Helene brought to the Southeast is heartbreaking. While my hometown was spared, several towns in northeast TN and western NC were destroyed (not to mention the Florida Big Bend region). With Hurricane Milton striking the central west coast of Florida on Wednesday night, leaving a trail of destruction - the help needed is tremendous. Here are a few ways to support the recovery efforts: Best Ways to Donate in the Wake of Hurricane Helene | NC DPS ; Hurricane Helene (tn.gov); Donate to the Florida Disaster Fund - Volunteer Florida
- On a lighter note, October means fall foliage, and we are approaching the peak for many areas in Maine. Here is where and when to go across the state Maine Fall Foliage - When and Where to Visit - Maine DACF
- Good publicity for Portsmouth and Portland 25 Best Places to Retire Affordably | Fortune Well
- Change is never easy, and I’ve experienced many changes recently – both personally and professionally. Here are some tips to help you adapt (easier said than done) 5 Tips for Dealing with Change Professionally & Personally (ogroup.com.au)
Quote
“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” – Thomas Edison
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