Hurricane Helene, GDP, PCE, Congress, Boar's Head, LUV, and Rates and Relief.
This Week, Economically Speaking
First off, Hurricane Helene. This will have an economic impact in employment numbers and other facets in the weeks ahead. While the impact is usually regional, it can spread nationally.
Second, the Q2 revised GDP numbers were released and… there were no changes. It’s staying at 3%. That’s pretty good, folks.
Q1 was 1.6%. The expectations for Q3 are 3%, too.
Plug that into your budget for 2025.
Third was the Personal Consumption Expenditures Index or the PCE for us economic experts in the know. This is the index that the Federal Open Market Committee gives the most weight to for measuring inflation.
It continued to drop ever so slightly.
It came in with a monthly increase of 0.1%, down from a 0.2% increase last month.
If you take out food and fuel, aka “core,” it still came in month over month at 0.1%.
The stock market liked this.
The annual PCE Index increase was 2.2%, and the core index was still at 2.7%.
Decreasing fuel costs helped get it to 2.2% overall, but core remains stubbornly higher than the fed would like.
At the end of the day, it’s fuel and food that impact most of us.
There were other measurements:
Personal income increased less than expected at 0.2%
Pending home sales were up 0.6%
Consumer confidence was down to 98.7 from 103.3 the previous month
Going into this week: Fed Chairman Powell speaks again, the ADP numbers come out, and the non-farm payroll figures are released. In two weeks, we hear about the Consumer Price Index.
The question going forward is, how much will the Fed cut rates in November?
An 86-Day Punt
Congress voted to fund the government for another 86 days, through December 20.
This assures the federal government will be funded until that time.
No worries if the NORAD Santa tracker will be impacted.
That’s the North American Aerospace Defense Command Santa Tracker. It’s real, and it tracks Santa.
In a shutdown, the military stays funded, so we will still know where Santa is on Christmas Eve as he makes his way around the world.
Bits & Pieces
Boar’s Head Liverwurst, manufactured in Jarratt, Virginia, was found contaminated with listeria and has killed 10 people. The results of plant inspections were not pretty.
If senior management actually made it to that plant and actually saw what was described in the inspection report, criminal charges should be presented. Regardless, the civil suit will be impressive.
Comparisons were made to Chipotle's issues with tainted food that made about 1100 folks sick. No one died, but Chipotle was still fined $25,000,000.
DirecTV and Dish are getting closer to finalizing their merger agreement.
Combined, they have 20,000,000 subscribers. I’m guessing pretty much all Boomers.
I’m looking forward to my $205 monthly DirecTV subscription going down.
And more channels. ROTFLMAO!
Southwest Airlines
They are changing the way seats are assigned. Or rather, they are assigning seats starting in 2026.
When I first started traveling Southwest, the exit seats faced each other.
Yep, the whole flight, there were six folks on the plane that flew backwards and got to look directly at the people sitting in front of them.
It might have been more people, now that I think about it.
It was a bit awkward. Unless you had a drink ticket.
With rates declining recently, I thought it would be worth mentioning what some current rates are. Most are from BankRate.com:
30-year mortgage – 6.08% average, a two-year low.
10-year treasury note – 3.75%
7.49% Home Equity Line of Credit
Personal Savings account - 5.11% Western Alliance Bank
Money Market account – 4.05% - Everbank
1 year CD – 4.5% - Goldman Sachs
6 month CD – 5.25% - Amerant Bank
Don’t let your cash just sit around. Even $5000 at 5.25% will get you $131 for six months. According to Microsoft Pilot AI, you can buy an Instapot; or a 12-month subscription to Kindle; or wireless Beats headphones.
Or it can sit around in your checking account. Just sayin’.
Hurricane Helene – a kick in the teeth to the Southern United States
It’s hard to overstate the impact of that hurricane. 30 inches of rain over 3 days will leave 3,000,000 people without power. It’ll be a while before things get squared away in many of these communities. By ‘a while’ I mean weeks, if not months.
Sadly, the new ‘news cycle’ will not mention Helene in the national news by next Friday.
The American Red Cross and the Salvation Army are the two organizations known for having the capacity to help in these types of situations. Click on the links to make a donation. Or choose an organization or family to help on GoFundMe.
It Bears Repeating…
As a business owner, it’s your responsibility to make sure you have some sort of emergency kit that will cover your workplace and the employees who work in it. You have to keep in mind that some natural disasters come with warnings but many don’t. You absolutely should have a disaster plan for the unannounced and unexpected. Whether it’s a hurricane, tornado, fire, flood, earthquake, or an employee having a medical emergency on premises, you need to at least have thought about what the plan is not only for your business, but your employees.
Admittedly, it’s hard to execute that plan when your business is floating down the street. Or buried under ruble from an earthquake or tornado.
But you should have it in place anyway.
To wrap it up…
Economically, things are starting to settle down, depending on which part of the country you are in.
Watch your quality control – personally. Don’t be a Boar’s Head.
Even if you have a tested strategy like Southwest, sometimes you need to make a change, particularly when it can add revenue and increase margins.
Have a plan in place for the unexpected. Don’t think you’ll have time to figure out what to do when you have two feet of water in your plant. Write it down.
It’s the 4th Quarter. Make it happen.
