The Bureau of Labor Statistics released its July report of non-farm payrolls last Friday, and the numbers were disappointing. The U.S. economy lost 23,000 jobs vs. an estimate of 83,000 jobs added. Coupled with significant downward revisions in the prior two months, the narrative around the jobs market has started to shift to a more pessimistic one. While most jobs lost were in the government, education and retail sector (seasonality and the end of the World Cup), it was hard to pick a bright spot in the report. Average hourly earnings, the data point I pay the most attention to, also surprised to the downside. This metric measures real (inflation-adjusted) buying power for Americans. When average hourly earnings dips below the broader inflation level, purchasing power decreases. While one month doesn’t make a trend, it is something to pay close attention to. Employment Situation Summary - 2026 M07 Results
Pretty Dour Right? Not So Fast
Building off David’s newsletter last week, Why Stock Markets Rise – and Why People Thrive, I wanted to put a more historical context around the type of earnings season that’s coming to an end. Outside of the pandemic and the year-over-year (YoY) earnings numbers experienced in 2021, earnings growth, beats and upside surprises are at levels well above both 5 and 10-year averages. Excluding the distorted numbers from Alphabet and Amazon – the 2nd quarter of 2026 will deliver:
- Earnings growth of appx 30% (well above the 5 and 10-year averages in the mid-teens)
- Upside earnings surprises (magnitude of earnings beats above estimates) - appx 11% vs. 5 and 10-year average of appx 7%
- Earnings beats – 86% vs. 5 and 10-year averages of 77% FactSet Earnings Insight
Consequently, the market is experiencing another above-average year in terms of total return, with the S&P 500 up over 13% year-to-date. The “Wealth Effect” – the idea that when people who own assets (i.e. sizable investment portfolio) see those assets increase in value, spend more money and power the consumer-driven U.S. economy, is alive and well. It’s hard to see that fading any time soon.
Inflation Data Comes in as Expected
On Wednesday, the most recent CPI (Consumer Price Index) data was released. Both headline and core, which excludes food and energy, came in as expected at 3.4% YoY and 2.5% YoY, respectively. The persistently elevated inflation above the Federal Reserve’s 2% target makes it difficult to see any decrease in interest rates throughout the rest of the year (data dependent, of course).
Financial Planning Corner
Update on 530A Accounts
Since 530A (Trump Accounts) have been discussed at length in prior newsletters, I wanted to provide an update. Recent news has come out that the U.S. Treasury has proposed regulation changing the tax treatment of employer and employee contributions to Trump Accounts. U.S. Treasury Secretary Scott Bessent stated Tuesday, “Today, Treasury is publishing guidance that will help families grow Trump Accounts by allowing employers to contribute up to $2,500 tax-free each year for employees’ dependents and giving employees the option to contribute pre-tax dollars directly to those accounts,” Bessent said. This proposed regulation is open to public comment and a hearing set for later this year, before anything can become final. Your RSWA advisor will keep you abreast of any changes. Trump Accounts to get paycheck contributions, employer matches: Treasury
RSWA News
Owner Announcement!!
We are very excited to share some great news: Gerrit Petersons has become an equity owner of Robinson Smith Wealth Advisors!
Gerrit joined RSWA in 2022, bringing with him more than 15 years of experience in the financial industry, including roles in wealth management, investment consulting, and credit. Since joining our firm, he has become an integral part of both our client service and investment teams.
Gerrit works closely with many of our clients, plays a leadership role on our Investment Committee, and has contributed meaningfully to many areas of the firm. He has also become our in-house expert on a number of the investment strategies we utilize to help clients achieve their financial and investment goals. Shortly after joining RSWA, Gerrit further demonstrated his commitment to the profession by earning his CERTIFIED FINANCIAL PLANNER® certification.
Becoming an owner is an important milestone and reflects both Gerrit’s contributions to RSWA and his commitment to our clients and the future of the firm. We are fortunate to have him as a colleague and now as a fellow owner, and we look forward to all that he will contribute in the years ahead.
Please join the RSWA team in congratulating Gerrit on this well-deserved accomplishment!
Quick Hits:
- One of my favorite times of the year is just over 2 weeks away: 9 college football predictions for 2026 season, including national champion and Heisman winner | SB Nation
- It’s my goal to get to all 30 MLB stadiums – I’m more than halfway there and found this article fascinating: Oldest MLB stadiums: See when every 2026 ballpark opened
- I’m taking three quick trips (all flights) over the next two months and it is making me look more and more at staycations – best spots within a 3 hours drive of Portland: Top Staycations in Maine (Vacation Inspiration!) | HomeToGo
- One of the best mini-series I’ve seen in the last several years (**spoiler alert – if you want to watch – just glance at the title, don’t read the article**): Breaking Down the Twist Ending of Harlan Coben's Mystery Series 'I Will Find You'
Prioritizing Friendships and Experiences
Over the 4th of July weekend, a couple of friends and I met two people who happened to be cousins, visiting from out of state. Little did we know we would end up spending the entire holiday weekend with them (they actually extended their stay an extra day). The infectious energy, similar interests and overall enjoyment of the weekend led them to invite us down to their home state of Texas. While most friend groups have a hard time “getting the group trip out of the group chat” we did not 😊. Just a month after meeting them, the Maine group flew down to Texas to spend a long weekend with them. I told this story to several friends and colleagues, and they probably thought I was crazy, but it’s the type of connections that I so thoroughly enjoy. The time we spent in Texas was just as memorable as in Maine, and we now plan on making it an annual (at least) tradition. Family, friendships and experiences are what make life worth living – so make the most of it!
Quote: “Strong lives are those that are marked by a sense of purpose, connectedness, resilience, and fulfillment.” – Jenifer Fox
Thank you for reading RSWA Financial Advisor Insights! We welcome feedback, and please forward this to a friend! Be well, take care, and stay safe!
