Skip to Content

Weekly Economic Update: August 29, 2023

Presented by Nicholas Wealth Management

Mixed signals lead to mixed returns Markets didn’t know which direction to go last week as they tried to decide which had more weight: the good news or the not-so-good news. On the good side, the labor market appears strong, as the weekly jobless claims report came in at 230,000, the lowest level in three weeks. And the housing sector appears to be coming out of its slump somewhat; in July, new home sales reached their highest level since early 2022 in July, even though the 30-year fixed mortgage rate hasn’t been this high since 2001. On the other hand, second-quarter results from several retailers revealed a cautious picture of consumers. People have been relying heavily on their credit cards to get them by, and both Macy’s and Nordstrom reported a rise in credit card late payments and delinquencies. Several retailers — including Dollar Tree and Dick’s Sporting Goods — noted that earnings suffered from losses to theft. And existing home sales missed expectations, showing the housing industry still has a ways to go before finding its footing. In the wake of these mixed signals, on Friday, Federal Reserve Chairman Jerome Powell gave his post-meeting remarks from Jackson Hole. Powell acknowledged that higher rates and tightening bank lending standards were cooling the economy but noted that economic growth remained above its longer-term trend. He concluded his remarks by saying, “As is often the case, we are navigating by the stars under cloudy skies.” So is the Fed done raising rates? Not necessarily. Powell’s comments left the door open for additional rate hikes in the coming months. “Given how far we have come, at coming meetings we are in a position to proceed carefully,” he said. “We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data.” But, Powell continued, “We will keep at it until the job is done.” Powell’s comments caused fluctuations in both stock benchmarks and bond yields to end the week. The 10-year Treasury note came off its high of 4.33 on Monday and dipped slightly to 4.23 by the end of the week. Still, the economy remains surprisingly resilient. Some estimates are even putting third-quarter growth on pace to greatly exceed 2%. Some economists say this may mean that the neutral rate of interest — the rate that promotes stable economic growth and inflation — may have been pushed permanently higher.
  • AE Wealth Management, LLC (“AEWM”) is an SEC Registered Investment Adviser (RIA) located in Topeka, Kansas. Registration does not denote any level of skill or qualification. The advisory firm providing you this report is an independent financial services firm and is not an affiliate company of AE Wealth Management, LLC. AEWM works with a variety of independent advisors. Some of the advisors are Investment Adviser Representatives (IAR) who provide investment advisory services through AEWM. Some of the advisors are Registered Investment Advisers providing investment advisory services that incorporate some of the products available through AEWM.
    Information regarding the RIA offering the investment advisory services can be found at
    Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
    The information and opinions contained herein, provided by third parties, have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by AE Wealth Management.
    This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy a security or insurance product.