Economic Update and Social Security Information
Dear Clients and Friends,
We hope this email finds you well. A lot of news in recent headlines: debt limits, inflation, and surely after the debt ceiling is resolved, we will be hearing more and more about the elections and the ongoing geopolitical tensions. With that said, there are positives as the economy has been resilient and although inflation is still high, it is starting to trend downwards. In equities, the technology sector, robotics, communications, and artificial intelligence (A.I.) seem to be some of the leaders this year, so far. We do feel that the economy will continue to be wavy, but hopefully not as choppy as the past 3-5 years; we do feel that over time, the general market will go higher than in previous years. In short, there is a lot of bad news in the headlines, and as the market is coming off recent lows, we hopefully have better years ahead. Here are some bullet points on recent news:
- GDP Growth: The economy has experienced moderate growth over the past quarter, driven by increased consumer spending, business investment, infrastructure, and government expenditure. While there may be variations across sectors, overall economic indicators suggest a positive trajectory. Despite this, depending on interest rates and the outcome of the recent rapid increases, there is a higher probability of a recession at some point.
- Employment: The labor market has witnessed improvement. Although still a tight labor market, there has been a positive increase in job creation.
- Inflation: Inflationary pressures have been a point of concern over the past year and even stemming back to COVID. The rise in commodity prices, supply chain disruptions, and increased consumer demand have contributed to higher inflation rates, but recently have shown inflation slowing down. Year over year, April 2023 had an inflation rate of 4.9%*. The Federal Reserve is closely monitoring the situation and may take necessary steps to ensure price stability. They have hinted on a pause on the next rate hike but there is still a chance of an increase in interest rates by 0.25%. With that said, many economists speculate that they will start cutting rates by the end of 2023 or early into 2024, which is already only seven months away.
- Monetary Policy: The central bank has maintained an accommodative stance by keeping interest rates at historically low levels. This approach aims to support borrowing and investment, while managing inflationary risks.
Debt Ceiling Update: The debt ceiling has become a topic of discussion as the government nears its borrowing limit. In the recent news, Congress has tentatively settled many major differences. However, no deal quite yet, but hopefully we are on the verge of a deal..
We also wanted to provide you with the information below. These are the states that do not tax social security income:
Alabama, Arizona, Arkansas, California, Colorado*, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia, West Virginia, Wisconsin, Washington, D.C.
*As of 2023 Colorado no longer taxes Social Security.
States that have no State income tax:
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Reach out to us anytime, we are here for you.
Best Regards,
Todd and The WealthScorz Team
