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Economic Update 07/22/13


Gas prices soared 6.3% last month, and they contributed greatly to the jump in the Consumer Price Index. Core inflation (minus food and energy prices) increased just 0.2% in June. As the headline CPI advanced only once during March-May, does this signal mounting inflation pressures? Maybe not. Looking deeper into the CPI, annualized core inflation actually decreased last month to 1.6%. That is the smallest yearly rise for that indicator in two years.


The Commerce Department noted a 0.4% gain in U.S. retail purchases in June, following a 0.5% rise in May. Auto and truck sales were up 1.8% last month (in the last 12 months, the gain has been 11.4%). While vehicle sales improved, consumers bought less in other retail categories. That left the core retail sales advance at 0.2% for June – the weakest number since January.


The Conference Board’s leading economic index showed no advance last month; it was up 0.2% in May and 0.8% in April. The good news is that in the past six months, the LEI has advanced to 95.3, approaching the 100 mark it started at in 2004.


A 0.71% weekly advance took the broad benchmark to 1,692.09 at the closing bell Friday – it had never settled higher. While the NASDAQ pulled back 0.35% last week to 3,587.61, the Dow wrapped up the week at a fresh high of 15,543.74 after a 0.51% gain across five trading days. The CBOE VIX settled at just 12.56 Friday.

THIS WEEK: NAR presents its June existing home sales report Monday and Texas Instruments, McDonald’s, Halliburton, Hasbro, Kimberly-Clark and Netflix will all report earnings. On Tuesday, earnings from Broadcom, Discover Financial, Apple, Altria, DuPont, Travelers, United Tech, UPS, AT&T and Electronic Arts complement the latest FHFA home price index. Quarterly results from Caterpillar, Visa, Qualcomm, GlaxoSmithKline, Boeing, Eli Lilly, Ford, PepsiCo, Facebook, Akamai and Baidu appear Wednesday, along with Census Bureau data on June new home sales. Thursday brings new initial claims figures, durable goods orders data for June and earnings from Credit Suisse, Colgate-Palmolive, Starbucks, Bristol-Myers, GM, 3M, Sirius XM,, Gilead Sciences and Zynga. On Friday, Tyco presents Q2 results and the final July consumer sentiment index from the University of Michigan appears.

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Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.

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