As I said in yesterday’s piece (money lesson from the mortgage crisis), the new cost of home ownership equates to paying over 2x your purchase price, which means rising costs could easily dwarf your wages unless you have a secondary income stream.
Today, I want to discuss another factor that could be widening the gap between your income level and your dreams of a better lifestyle for yourself and your family.
On the one hand, the jobs, stock, and real estate markets make up the economy.
But while the Federal Reserve weighs in on these primary components to make fiscal decisions, the jobs market has held firm, suggesting it can endure higher rates.
Here’s some data circling back to how this could be affecting your investments.
- The Labor Department reported 207,000 filings for unemployment benefits for the week ended September 30, a slight increase of 2,000 from the previous week.
- The Market Reacts: Following the report, stock market futures declined, and Treasury yields moved higher. This indicates labor market data influences most investors’ decisions (and stock market performance) more than many realize.
- While there was an unexpected surge in job openings this week (more labor demand), Automatic Data Processing, Inc. (ADP), a human resources management software and services provider, reported a lower-than-expected increase in private payrolls. This mixed data reflects uncertainty in the labor market, which doesn’t bode well for stocks as it implies the Fed will keep interest rates higher for longer.
Bottom line:
The labor market’s performance is a crucial factor in shaping the Federal Reserve’s monetary policy decisions, and it also influences market reactions and investor sentiment.
But circling back to yesterday’s piece, I’m not bothered about what happens next.
Personally, I like a high-interest rate environment. My money is growing in the safest places, the market rewarded me with an additional income source, and since I don’t owe anyone anything, my cost of existence is well below the cost of goods and consumables.
Perhaps you’d like to live the same way?
My resources are here for use when you’re ready to help yourself.