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Longest U.S. Expansion Keeps Rolling By Fulbright Financial Consulting, PA, Durham, NC

Longest U.S. Expansion Keeps Rolling Third quarter economic growth was just revised upward, and the new monthly personal income figure over the last 12 months, after adjusting for inflation, accelerated sharply. This newly released data confirms that the 10-year-old expansion — already the longest in post-War history — is likely to continue at a modest sustainable pace in the months ahead. First, let’s look at the upward revision to gross domestic product. These are the four components of economic growth — consumers, business investment, exports net of imports, and state and local government spending. Every quarter, the government issues three estimates of the growth rate. The first estimate, released three weeks ago, was for a third-quarter growth rate of 1.93%. The new figure, 2.13%, is the first in a series of three revised estimates released by the Bureau of Economic Analysis before the final third GDP figure for the quarter ended September 30th, will be released on January 10th. An upward revision of 10% is sizable, and most of it came from growth in the rate of business investment, hinting at a bottom in this key factor in the wealth of the nation. This new data confirmed that U.S. growth is being driven by consumer strength and low inflation.

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Retirement Income Reality Check by Fulbright Financial Consulting PA

With stocks hovering around an all-time record high, a growing likelihood of a Federal income tax rate hike by 2021, and the deadline for end-of-year tax tactics closing in fast, this is a timely reminder to run a reality check on your retirement income plan. An unusual confluence of tax, financial-market and political factors make this a particularly good time for high-income and high net worth individuals to check their retirement income plan. Let’s get specific about current conditions: In 2019, the federal government is spending a trillion dollars more than it collected in revenue, and at the end of 2018, the national debt totaled $22 trillion Meanwhile, changing political winds could sweep in higher federal tax rates. Managing your tax bracket now — in case of a hike in federal income tax brackets — could lower your tax bill, not just for 2019 but in the year or two ahead, as well. Proactive tax planning before the end of 2019 may be especially timely for business owners with an interest in a pass-through entity, like an LLC, S corp, or sole proprietorship.

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Find The Major Economic Trend Hidden In This Picture By Fulbright Financial Consulting, PA

Major economic trends are always unfolding but are hidden in plain sight. Along these, only if you know what to look for would you see the spectacular After the Commerce Department released the latest monthly retail sales figures on Friday morning, the financial press and financial cable TV reported that October’s three-tenths of 1% uptick allayed fears of a recession but was nothing spectacular. The press totally missed the hidden trend in the economic picture by not adjusting retail sales for inflation. Inflation is at a long-term low and is not showing any sign of returning anytime soon to its performance in the 1970s, 80s and 90s. A low inflation rate masks strong real growth in consumer spending, but spotting it in the current investment picture requires a trained eye. Viewed from a prudent professional perspective, the newly released retail sales data helps explain why stock prices have been breaking records. Answers to life’s questions are often right in front of us, but we don’t see them. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting at 919-544-0398, and don't hesitate to share this video with people who might benefit from our work.

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Is The New Record High In Stocks Irrational? By Fulbright Financial Consulting, PA

When stocks repeatedly break new all-time highs, as they have done in recent weeks, you have to start wonder if investors are growing irrational, overly exuberant. Here are the facts. These four charts show the latest reading of key fundamental economic factors driving record financial market prices. Let’s start with the latest figures on the nation’s gross domestic product. Third quarter growth tallied by the federal government’s Bureau of Economic Analysis came in at 1.93%. The net of three of the four factors in economic growth — business investment, net exports, and state and local government spending — did not contribute to growth but consumer strength offset them and was the source of the 1.93% quarterly growth rate for the U.S.

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Despite Frights, Can The Expension Continue? By Fulbright Financial Consulting, PA

The nation is in a trade war with China, the manufacturing sector has fallen into a recession, and an impeachment of the President fraught with political uncertainty is under way. With so many frights haunting investors this Halloween, it’s important to note that the worst stock market scares of the past year all followed actions by the Federal Reserve Board, and the Fed has been able to avert Wall Street’s worst fears. An economic growth rate of about 1.8% annually is sustainable as long as the Fed does not make a policy mistake, which is always possible. Fed mistakes have caused every recession in modern history. But a subtle trend shown here is that the nation’s central bank has been able to lengthen the business cycle in recent decades. Fed Chairman Powell has said the Fed may be able to extend the current cycle of growth in gross domestic product well beyond the 123 months already achieved. Central banks have learned how to better manage national economies, a sign of progress in the modern era that has unfolded slowly in the post-War period. Since Alexander Hamilton revolutionized central banking in 1790, the United States has learned from its mistakes. The Fed used new modern tactics to stop the world financial system from collapsing in 2008 and its three-stage quantitative easing program — a central bank tactic never before attempted in a major economy — helped refinance this long expansion. The Fed is more nimble and quick to change monetary policy before economic growth is choked by high lending-rates, and the speed of information has accelerated the time it takes to promulgate monetary policy shifts. As Halloween sweeps by and the stock market hovers near a record high and seems vulnerable to frightening risks, watch the actions of the Fed in extending the expansion. Please contact us at 919-354-0368 or fulbrightteam@moneyful.com with any questions or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.

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Can The U.S. Survive With Just 5% Of GDP From Manufacturing? By Fulbright Financial Consulting, PA.

Can The U.S. Survive With Just 5% Of GDP From Manufacturing? Since September 2018, manufacturing activity plunged from record levels, and officially went into recession territory in August. Manufacturing now accounts for just 11% of total US economic activity and its continued plunge is the source of fears about the future of the American economy. Can the U.S. economy survive if the manufacturing sectors continues to shrink? Here are the facts. In 1950, manufacturing jobs were 37% of total private sector jobs. Today that figure is 10%. Some manufacturing jobs have been replaced by jobs in leisure and hospitality, sectors with lower-paying jobs; but most of the lost manufacturing jobs have been replaced by better-paying jobs in the health care sector, education or professional and business services. These are the latest projections from the Bureau of Labor Services of the sectors of the economy that will experience the fastest job creation rates over the next decade. Health care is projected to grow the fastest by far! Some 34 million new jobs are expected to be created in the health care sector! And professional and business services are expected to add 17 million new jobs to the economy through 2028, and it’s another high paying sector. Growth of jobs in the service sectors of the economy are largely a function of population growth, which means that the more people we add to population, the more jobs will be created in these sectors. Since population growth increases demand for jobs in these services, the U.S. is not only able to survive, but because manufacturing jobs are being replaced by better paying service sector jobs, the American economy can thrive even as manufacturing shrinks. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting , and don't hesitate to share this video with people who might benefit from my work.

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The Population Bust & Your Portfolio By Fulbright Financial Consulting, PA

If you’re retired or a pre-retiree, you probably remember a time when the world worried about the population explosion. Fears of overpopulation, we were told, would cause global food shortages in the final three decades closing the millennium. Well, that never happened! In fact, you can simply forget everything you ever heard about the coming population explosion! Across the world, nation’s are not challenged by a population boom but by a population bust! The world’s largest economic powers need more people — not less! An essay in the current issue of Foreign Affairs, a magazine published by the Council of Foreign Relations, points out a dramatic demographic shift is reshaping economies across the world. The typical pattern of modern economies is to develop a middle class that urbanizes, grows more educated, and more affluent, and then fertility rates collapse. The worldwide population bust is of more than academic interest. A nation’s demographic character is one of the two factors driving its economic growth. The size of a nation’s working age population multiplied by its rate of productivity determines its growth potential. The working age population in China — the world’s No. 2 economic power — is shrinking. So is the world’s third largest economy, Japan, as well as Germany, all of Europe, India and China.In contrast, growth in the U.S. labor force is expected to stay flat for the next decade, when the echo-boom kicks in and continues through 2049. . For the next generation or two of American, the growth in the working age population could figure prominently in the future of the wealth of the nation. The nation’s underlying demographic character is a strong financial economic fundamental for long-term investors in America but have you ever seen it covered in the financial press? We sponsor this financial advisor news service to provide independent, prudent, professional research for long term investors every week. Please contact us with any questions or to set up a meeting, email us at fulbrightteam@moneyful.com and don't hesitate to share this video with people who might benefit from our work.

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Strategic Asset Allocation For The Long Run By Fulbright Financial Consulting, PA

Tons of government, trade association, and private company sponsored data and research about the economy are released every day. We summarize what you need to know to invest intelligently for the long run in this series of videos every week. Much of the economic research is from independent economist Fritz Meyer. Fritz was the senior investment strategist at one of the world’s largest investment companies for over a decade. In 2009, he went independent — so he has no ties to any financial products, no conflicts of interest in analyzing financial economics.

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3rd Quarter Ends Well Despite Trade War, Inverted Yield Curve & Political Crisis By Fulbright Financial Consulting PA

Despite months of frightening financial news, the third quarter ended on September 30 with the stock market only 1.6% off its all-time record high. Including the bear market plunge suffered last Christmas, when the stocks lost 19.8%, the Standard & Poor’s 500 over the last 12 months , showed a return of +2.2%. In the first three quarters of the year, the S&P 500 returned 19%, overcoming a rising tide of fear about the trade war with China, an inversion of the yield curve, a growing chorus of recession predictions, and political crisis. What’s it mean? How does it affect investing? It’s notable that the stock market did not drop on worries about the China trade confrontation or the political crisis — two of the major stories in the news now. The three major stock market drops in the past year were all related to Federal Reserve Board actions. Since the Fed backed off its forecast for rising rates and inflation in January, consumer spending and income have been about as strong as they have ever been in post-War American history! So don’t despair over the various crises and keep an eye on the Fed’s actions in extending the longest economic expansion in modern history in 2020 and beyond. Please contact us with any questions or to set up a meeting, and don't hesitate to share this video with people who might benefit from my work.

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No Recession But A Slower Pace of Growth By Fulbright Financial Consulting, PA

The latest data indicate the economy is not falling into a recession but is growing slower. If it feels like a snail’s pace, you should probably get used to it. The growth potential of the economy is the sum of the change in the working age population plus the change in productivity. That’s straightforward math. What’s it mean? Let’s break down the equation. Here’s the productivity side of the equation, the actual and expected change in the annual rate of productivity from 1948 through 2029. Productivity growth of the U.S. labor force has been in a slow decline over the decades. CBO, a non partisan research arm of the federal government, forecasts average annual gains in productivity lifting slightly to 1.9% through 2029. On the labor force side of the equation, the working age population exploded after world war 2 in the baby boom and peaked again in the late 1970s. Over the decades, growth in the labor force has gradually slowed, and it’s expected to continue to slow over the next decade. The consensus forecast of economists for a 1.7% growth rate for the next five quarters is indeed slower than previous decades, but it should come as no surprise. On the bright side, consumer spending and wages remain strong, and no recession is expected. And productivity in recent years has been much stronger than expected and accelerated sharply in recent months, and if the trend continues, the snail’s pace could get a surprise boost. Please contact us with any questions or to set up a meeting, and don't hesitate to share this video with people who might benefit from my work.

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