August Market Commentary

Strong second-quarter gross domestic product (GDP) figures and steady job gains helped to contribute to higher stock prices, despite financial losses caused by Hurricane Harvey. Emerging market stocks continued their positive momentum in August and were up 2.23% (28.29% for 2017). The S&P 500 was slightly positive at 0.31% (11.93% in 2017) while international developed stocks were about flat (17.05% in 2017).

Key Monthly Economic News 

  • Employment: In July, job growth expanded by 209,000 and the unemployment rate slid 0.1 percentage point to 4.3%, representing about 7.0 million unemployed persons. Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain of 187,000 in 2016. 
  • Interest rates: The Federal Open Market Committee did not meet in August, so the target federal funds rate range remained at 1.00%-1.25%. Inflation has been stagnant as of late. Thus the September meeting may conclude without a rate increase. 
  • GDP: The gross domestic product expanded over the second quarter at an annual rate of 3.0%, according to the second estimate from the Bureau of Economic Analysis. The first-quarter GDP grew at an annualized rate of 1.2%. 
  • Inflation: Consumer prices rose a scant 0.1% in July, after recording no change in June. For the 12 months ended in July, consumer prices are up 1.7%, a mark that remains below the Fed's 2.0% target for inflation. Core prices, which exclude food and energy, edged up 0.1% in July, the same increase as June, and are up 1.7% year-over-year. 
  • Consumer sentiment: The Conference Board Consumer Confidence Index® for August rose to 122.9, up from July's revised 120.0. Consumers expressed growing confidence in current economic conditions, but were reticent about future economic prospects. 

As always: stay disciplined and focus on those things you can control.

To Your Prosperity, 

Kevin Kroskey, CFP®, MBA

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