Articles
Small Wins
11.11.2022
I’ve got four small wins for you this week.
When it seems like there’s a flood of bad news and everything is unpredictable, I think it’s important to highlight the bright spots when we see them.
Small Win #1: The economy bounced back in Q3
U.S. economic growth made a comeback last quarter – the economy grew 2.6% after shrinking in the first half of 2022. That’s good news because it means we’re not in a recession (yet).1
But, there are a couple of caveats we should pay attention to:
This data is only a first estimate. It’ll be revised twice more before it’s final.
A recession is still more likely than not, with an uncertain growth picture for 2023.2
Small Win #2: The Social Security Administration announced the biggest cost-of-living adjustment (COLA) in four decades
Because of this year’s red-hot inflation, Social Security beneficiaries will see a COLA of 8.7% in 2023.3
On top of the (tiny) drop in 2023 Medicare Part B premiums, this is good news for the retirees (and low-income kids and families) who have seen inflation take a big bite out of their income.3
Small Win #3: The stock market closed out its best month in decades
After weeks of volatility and selling pressure, stocks had a banner month in October, with the Dow marking its best month since 1976 and its best October ever.4
These types of rallies are common in a bear market and are a potent reminder of why selling during a downturn is generally a bad idea.
Small Win #4: Inflation in October was well below expectations
CPI data for both the month and year over year printed lower than expected, sending interest lower and the equity markets higher. Some economists think that we may have seen the peak of inflation.5
Is the bear market over? Is the bottom behind us?
There’s no way to know for sure. The Federal Reserve’s decision to hike interest rates 0.75% is likely to weigh further on markets, though there’s some indication they may consider slowing the pace of hikes in the future.6
So, let’s stay flexible and remember that those good and bad market days often cluster.
Bottom line: The overall market and economic picture looks as uncertain and hazy as ever. But there are good weeks (and months) and small wins along the way. Let’s take a moment to appreciate them.
Chris Kittrell is a Principal with Rather & Kittrell.
1. https://www.cnn.com/2022/10/27/economy/us-gdp-third-quarter-initial/index.html
3. https://www.cpapracticeadvisor.com/2022/10/13/social-security-to-increase-8-7-percent-in-2023/71728/
4. https://www.kiplinger.com/investing/in-october-stocks-soared-is-the-bear-market-dead