Statistics means never having to say your certain, and that was certainly true last week.
The employment report, which was released on Friday, was a bit short on jobs. Analysts had predicted employers would add about 162,000 new jobs during May, according to CNBC. Instead, a paltry 38,000 jobs added to payrolls.
The United States Department of Labor focused on the fact the United States has experienced 75 consecutive months of private-sector jobs growth, as well as the significant decline in unemployment. The unemployment rate fell from 5.0 percent to 4.7 percent - but it was largely attributed to Americans leaving the labor force.
The anemic employment report triggered concern that U.S. economic recovery may be slowing. That, in turn, means the Federal Reserve may not implement measures designed to push interest rates higher during its June meeting.
Barron's reported the Standard & Poor's 500 Index finished the week flat. The Dow Jones Industrial Index moved slightly lower, and the NASDAQ showed a slight gain.
WHAT ARE YOUR WAGES WORTH? We've written about The Economist's Big Mac Index, which is a lighthearted way to gauge whether countries' currencies are at the correct levels - just compare the price of a hamburger in each country. At the start of the year, you could buy a Big Mac pretty cheaply in Russia ($1.53), Hong Kong ($2.48), or Taiwan ($2.08).
There are differences in how much things cost from state-to-state, too. Pew Research Center used federal wage data to determine which regions of the United States had the lowest and highest wages after adjusting for differences in cost-of-living:
The highest weekly wages for 3rd Quarter 2015, after adjusting for cost-of-living, were found in:
- San Jose-Sunnyvale-Santa Clara, California
- California-Lexington Park, Maryland
- San Francisco-Oakland-Hayward, California
- Seattle-Tacoma-Bellevue, Washington.
The lowest wages, after adjustment, were paid in:
- Yakima, Washington
- Wenatchee, Washington
- Logan, Utah-Idaho
- Grants Pass, Oregon.
Quote of the Week
"The best fishermen I know try not to make the same mistakes over and over again; instead they strive to make new and interesting mistakes and to remember what they learned from them."
--John Gierach, American author (and fisherman)
Golf Tip of the Week
Use Your Buttons
To hit better wedges and chips, you need to use a whole-body pivot instead of just your arms and hands. Instead of relying on your hands in the shot, turn your upper body so that your shirt buttons are turned beyond the target at finish. Ideally, you want your whole body to turn and use the energy of your body's rotation to power the shot.
Financial Question of the Week
Should I convert to a Roth IRA?
Turning your individual retirement account into a Roth IRA is not a totally black-and-white decision. In order to make a smart choice, you must first understand the rules, especially relevant tax laws.
Traditional IRAs are largely based on income tax deferral, which means you get a tax break on your contributions in the current year. In retirement, your withdrawals incur income tax. With a Roth IRA, you make after-tax contributions to the plan while your investment earnings incur no income taxes, and on the back end you again pay no income tax on withdrawals from the plan.
Roth IRAs hold another advantage, one that becomes increasingly important as you age through retirement. Virtually every other tax-sheltered plan requires you to begin taking required minimum distributions (RMDs) no later than 70½. Roth IRAs stand alone among plans as they do not require RMDs. This allows you to continue accumulating money in your Roth during the time when you must draw down the balances of your other retirement accounts - possibly reducing the risk that you'll outlive your money.
Everybody's situation is different, so it's important to focus on what may make sense for you. Ask yourself a few questions to help determine the factors that matter most in making your decision.
- How does your tax situation impact your decision?
- What effect could future market performance or your plans for retirement have?
- What other considerations might impact your decision?
Please contact my office if you would like help estimating the potential long-term tax and financial impact of converting to a Roth IRA.
