The Federal Reserve has two mandates: achieving maximum employment and keeping prices stable. It does this by controlling the money supply and raising or lowering interest rates. The Fed’s fight against inflation has been a common topic in financial news for several months, but not as much coverage has been given to the job market. The economy as a whole has remained robust in this high inflation environment, which has kept unemployment comparatively low.

I thought it might be interesting to look at a little-known recession indicator the Fed uses that is entirely based on unemployment numbers. It’s called the Sahm Rule and we’ll take a look today at whether it is signaling recession.

But before we start on that discussion, let’s take a quick look at the Personal Consumption Expenditures index as reported last week and if it has caused Jerome Powell to change his narrative regarding upcoming interest rate cuts by the Fed.

I hope you aren’t getting nervous by all the chatter about the “Market” at an all-time high. When I started in this business after retiring from the U.S. Army way back in July 1994, the market indexes were a bit lower. The Dow Jones was at 3,764.50, the S&P 500 was at 458.26, and the Nasdaq Composite was at 722.16.

I have learned that the solution to all-time highs was more all-time highs. There have been a few bear markets along the way, but here we are today. I also learned that what the market was doing on any given day didn’t matter unless I needed my money at the time for income or some major expense.

It isn’t your imagination. Virtually everything costs more than it did three years ago. And with inflation stubborn at about 5%, wages have failed to keep up. Add in decades high interest rates and the average consumer is weaving around like a punch-drunk boxer on his way toward the canvas.

It turns out that shutting down the economy for a year and then spending borrowed trillions to keep it all from sliding into the toilet is economically sub-optimal. What are the odds? A course of action so ill-conceived and poorly implemented that it required the full political prowess of two administrations and both parties.

It’s March Madness time! No, not the basketball tournament, but the Federal Open Market Committee meeting starting today! We’ll take a quick look at where the inflation numbers are and how the FOMC will likely respond.

We also see how new car prices have stabilized in the last year and the adoption of electric and hybrid vehicles by U.S. consumers.

In a WSJ article called Half of College Grads Are Working Jobs That Don’t Use Their Degrees, the authors state, “Roughly half of college graduates end up in jobs where their degrees aren’t needed, and that underemployment has lasting implications for workers’ earnings and career paths. More than any other factor analyzed including race, gender and choice of university what a person studies determines their odds of getting on a college-level career track.”

So what is the real value of a college education? Why are our college graduates failing to launch a career that uses what they learned in college? Then add the impact of student loan debt. It’s a real crime to have a large debt load at graduation, and you can’t even use your degree, praying the government will bail you out.

Have you heard of Rare Earth Elements? It wouldn’t surprise me if you hadn’t. But they are a vital part of the modern industrial supply chain and are critical components in many modern necessities.

The Conference Board released its latest reading of the Consumer Confidence Index today. US consumer confidence fell in February for the first time in four months as Americans’ views deteriorated about the outlook for the economy, the job market and financial conditions. The crazy part of The Conference Board report is continued confidence by consumers that the stock market will continue its upward trend.

But first, a quick note regarding the release of last month’s Federal Open Market Committee (FOMC) minutes. Officials indicated at their last meeting that they were not in a rush to cut interest rates. No cuts would be coming until the FOMC held “greater confidence” that inflation is “moving down sustainably to 2 percent.”

While the minutes acknowledged the “solid progress” being made, the committee viewed some of that progress as “idiosyncratic” and possibly due to factors that won’t last.

Let’s take a look at the latest macroeconomic indicators and how the FOMC and the stock markets might react.

The focus today is on retirement. We either look forward to retirement or dread the day that it comes. It comes down to how much you have planned for it, saved for it and accepted that it will happen ready or not. Some hope it will all work out in the end, so they didn’t think much about it. Well hope is not a strategy. We will also talk about handing off your wealth to the next generation. 

Before we start a discussion into what seems like science fiction made real, let’s look into the past. Artificial Intelligence (AI) is a term that was coined by John McCarthy, a legendary American computer and cognitive scientist, in the 1950s. He is widely regarded as one of the "founding fathers" of AI. Alongside other luminaries like Alan Turing, Marvin Minsky, Allen Newell, and Herbert A. Simon, McCarthy played a pivotal role in shaping the field.

McCarthy, a Stanford professor and Turing Award recipient, developed the programming languages known as LISP and ALGOL. LISP was pivotal in AI development and research while ALGOL popularized the concept of time-sharing in computing, allowing multiple users to interact with a computer at the same time – a key concept for those that would expand McCarthy’s work in the decades to come.

Outside of financial reporting, articles on inflation rates usually quote the Consumer Price Index, or CPI. But financial writers in-the-know will reference “the Fed’s preferred measure of inflation,” the Personal Consumption Expenditures price index, or PCE. Today we’ll take a look at the two measures of inflation, how they are determined and why the Federal Reserve prefers one over the other.

But before we dive in, let’s take a look at some of the economic news released last week. Punxsutawney Phil, the famous weather-casting groundhog, didn’t see his shadow last Friday, and so predicted an early spring. Let’s see if the economy looks as rosy.