US ECONOMY: “Detox Period”

Posted on March 8, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

AGREE or DISAGREE?

By Staff Reporters

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US Treasury Secretary Scott Bessent made waves yesterday with his comment that the American economy is facing a “detox period.”

Should we be seeing that this economy that we inherited [is] starting to roll a bit? Sure. And look, there’s going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked, and we’ve become addicted to this government spending, and there’s going to be a detox period. There’s going to be a detox” .

Bessent, a former hedge-fund manager, said during a CNBC interview.

“Employment should be from private companies, not from government. And I’m confident, if we have the right policies, it will be a very smooth transition.”

Bessent said, in an apparent reference to the layoffs of federal workers executed in large part by the entity known as the Department of Government Efficiency, which is run by Trump adviser Elon Musk.

AGREE OR DISAGREE?

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LABOR DEPARTMENT: US Jobs

Posted on July 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

US ECONOMY

By Staff Reporters

The Labor Department just reported that the U.S. added 206,000 jobs last month, slightly beating expectations. But the unemployment rate ticked up to 4.1%, a sign of slack in a labor market that has been remarkably strong even in the face of high interest rates.

There were other signs as well that the job market continues to cool. Average hourly earnings were up 3.9% in June from a year earlier, marking their smallest gain since 2021. The jobs counts for both April and May were revised lower. The labor force participation rate, the share of working-age people who were employed or seeking work, ticked up—an indication that more people are entering the labor market.

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U.S. ECONOMY: Perhaps a “Soft Landing” After All?

Posted on December 12, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

YET- HEALTH CARE IS GROWING!

By Staff Reporters

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The US economy is looking like it could avoid a downturn and achieve a soft landing after all. US employers added a more-than-expected 199,000 workers to their payrolls last month, the Bureau of Labor Statistics said recently. The solid result calmed many analysts’ fears that a steeper economic slowdown is imminent due to the Federal Reserve’s earlier interest rate hikes. And, it brings us closer to the coveted “soft landing” scenario, in which the Fed tames inflation on the economy. For example:

  • The unemployment rate unexpectedly ticked down for the first time since July, to 3.7%.
  • Average hourly pay increased by 0.4% and is now up 4% for the year, beating the projected pace of annual price growth.
  • But the job market isn’t quite what it used to be

Last month’s 199-k jobs created were below the average of 240,000 added in the preceding 12 months. Plus, November hiring was confined to just a handful of industries:

  • Healthcare and the government were responsible for two-thirds of the headcount growth, adding 77,000 and 49,000 jobs, respectively.
  • The manufacturing sector gained 28,000 workers—but that was largely due to folks returning to work after striking against the Big Three automakers.
  • CITE: https://www.r2library.com/Resource/Title/082610254

Finally, in another sign that employers might be pulling back from on-boarding new people, the Labor Department reported earlier this week that job openings in late October were at their lowest since March 2021.

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DAILY UPDATE: “Soft Economic Landing” and Paramount Pictures Corporation

Posted on December 11, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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The S&P 500 heads into the week at its highest level of the year after Friday’s solid jobs report suggested that the Fed could be all clear for a “soft landing”—bringing inflation back to normal without sending the economy into a recession. The S&P and Dow have posted gains for six straight weeks, their longest streak since 2019.

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But, the week’s big winner was Paramount, which spiked on reports that Shari Redstone might sell the entertainment giant.

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US CREDIT: Rating Downgraded by Fitch

Posted on August 2, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

WARNING!

By Staff Reporters

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Fitch, the credit assessor knocked the US’ credit rating from the gold-standard AAA to AA+, citing the country’s growing debt burden and the “erosion of governance” (a reference to political standoffs over the debt ceiling).

LINK: https://www.fitchratings.com/

The last time the US received a credit downgrade was in 2011, when S&P sent it to AA+, causing market mayhem. Past and present US economic officials said Fitch was off its rocker for the decision. Former Treasury Secretary Larry Summers called it “bizarre and inept” given the current strength of the US economy.

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“We Can Never Know About The Days [FINANCIAL MARKETS] To Come”

Posted on April 20, 2016 by Dr. David Edward Marcinko MBA MEd CMP™

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AS CARLY SIMON USED TO SING …

ArtBy Arthur Chalekian GEPC

[Financial Consultant]

However, that doesn’t stop anyone from making educated guesses about the future of companies, financial markets, and economies.

So, as we enter the second quarter, investment and business professionals have been offering their insights:

  • McKinsey & Company’s March Economic Conditions Snapshot indicated 80 percent of surveyed executives “… expect demand for their companies’ products and services will grow or stay the same in the coming months, and a majority believe (as they have in every survey since 2011) their companies’ profits will increase.” However, they are not as optimistic about the global economy as they were in December. About one-half of executives in developed and emerging markets said economic conditions globally are worse than they were six months ago
  • The Wall Street Journal’s April 2016 Economic Forecasting Survey, which queries 60 economists, reported three-of-four survey participants expect a Fed rate hike in June. Few expect a recession during the next 12 months, putting the odds at 19 percent. Almost one-half stated global risks were the greatest threat to the U.S. economy, followed by financial conditions, a slowdown in consumer spending, falling corporate profits, and U.S. politics.
  • PIMCO’s Cyclical Outlook predicts China’s gross domestic product (GDP) growth may be in the 5.5 to 6.5 percent range. The target is 6.5 percent. In addition, a gradual devaluation of the yuan is possible, although China’s currency policy often produces unexpected twists and turns.
  • BlackRock Investment Institute’s second quarter outlook centered on three themes. First, returns are likely to remain muted in the future. Second, monetary policies appear to be less divergent, which could be a positive for some markets. Third, volatility may persist as the Federal Reserve normalizes monetary policy. Diversity and careful asset selection are likely to be critical in this environment.

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Conclusion

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While it’s interesting to read experts’ predictions and expectations for coming months and years, it’s important to remember forecasts are not always accurate. An organization that tracked forecasting results through 2012 found forecasts were correct about 47 percent of the time.

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Cars and Houses Roar the Economy Back to Life?

Posted on November 24, 2015 by Dr. David Edward Marcinko MBA MEd CMP™

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On cars and houses

josh[By Josh Velazquez CMPS]

jvelazquez@bankingunusual.com

The US economy is roaring back to life as measured by the two largest purchases that people make: cars and houses. The interesting thing is that the uptick in sales is not being driven by artificial government incentives.

Instead, consumer demand is the main driver. It’s also interesting to note the impact of housing on your local economy.

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According to data compiled by the Bureau of Economic Analysis (BEA) and the National Association of Realtors (NAR), the value of construction as well as real estate and rental and leasing represents approximately 16.8% of the US economy, but the impact is much larger in some states.

More:

Click here to check out the impact of housing in your state.

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Conclusion

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Eye on the Economy

Posted on September 23, 2015 by Dr. David Edward Marcinko MBA MEd CMP™
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The Federal Reserve Resists Change

[By staff reporters]

DJIA: 16,330.47  -179.72  -1.09%

What to watch

The Federal Reserve [FOMC] announced last week that it will leave the federal funds rate unchanged. Unease concerning the domestic implications of international weakness, particularly with regard to inflation, contributed to the Fed’s decision to delay changing its policy right now.

Why it’s important

The Fed’s decision to stay put indicates that policymakers are not as “reasonably confident” that inflation is heading towards their target of 2% as they’d like to be.

For example, Core Inflation [CI], one key economic measure the Fed is watching, is heading into a third year of running below the Fed’s long-run 2% target rate. While the labor market portion of the Fed’s dual mandate appears in good shape, in part indicated by an unemployment rate within their estimate of full employment, policymakers decided to postpone a decision to raise their policy rate for the first time in nearly a decade, citing concerns around the impact that global economic and financial developments could have on domestic conditions.

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Assessment

According to the Vanguard Group, despite the attention given to the timing of when the Fed starts raising rate, some believe the more important questions are how quickly rates will go up and where they stop. Whether liftoff happens in the coming months or even next year, we expect the Fed to make more measured, staggered rate increases than in previous tightening cycles, especially given the fragility in global economic growth.

This “dovish tightening” will gradually normalize policy in a global environment not yet ready for a positive real fed funds rate.

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Front Matter with Foreword by Jason Dyken MD MBA

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“BY DOCTORS – FOR DOCTORS – PEER REVIEWED – FIDUCIARY FOCUSED”

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Understanding the Domestic “Shadow Economy”

Posted on May 9, 2013 by Dr. David Edward Marcinko MBA MEd CMP™

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Is the US Economy Strong OR Not?

By Dr. David Edward Marcinko MBA

www.CertifiedMedicalPlanner.org

Dr David E Marcinko MBARecently, new highs for the DJIA and some better than expected jobs numbers pointed an outward sign of the US  economy’s continued — though sluggish — recovery from the Great Recession.

Workers in the Shadows

But, there may be another explanation for why consumers keep spending more despite higher payroll taxes and more pain at the gas pump.

Edgar Feige PhD Speaks

That reason is a thriving shadow economy, estimated to have reached as much as $2 trillion last year, according to a study (.pdf file) co-written by Edgar Feige, an economist at the University of Wisconsin-Madison.

Assessment

A shadow economy is one where workers turn to employment that pays under-the-table. While that sometimes includes illegal activity, such as drug dealing, much of the shadow economy today appears to be in areas like service work such as babysitting; medicine, eye, foot and dental care; and working construction jobs for cash.

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Money

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Conclusion

And so, are new medical practice business models like retainer and concierge medicine, direct/private pay, or cash care more or less prone to participation in the underground healthcare economy?

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Physician Household Borrowing and/or Investing

Posted on March 8, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

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Deciding What Works?

[By Staff Reporters]fp-book4

Another way of asking the above titled question might be, “Is it smart for a doctor’s household to build savings while they are getting out of debt?”  

Financial Priorities

In the first instance, the doctor already has debt and would be increasing the terms of any loans by deferring some of the payments to savings, which is equivalent to borrowing the same amount.

In the second instance, the doctor would be taking on debt to save more money. The answer is that it makes sense to borrow money for investment purposes only if the financial gains derived from the investment are larger than the financial benefits of paying off the debt. But, who can know for sure?

www.MedicalBusinessAdvisors.com

Minimum Account Payments

Assuming that a medical professional has more debt than needed, and doesn’t make contributions to a retirement account, the concern becomes: [1] should he/she make minimum payments to the debt and contribute to a retirement account; or [2] should he/she make the maximum payments toward the debt or loans, etc?

Downside Risks

It is important to understand the downside risks of a lower payment strategy. Just as stocks return more than bonds due to their higher risk, the lower payment strategy returns more because of its’ higher risk. Taking on debt to finance an investment is riskier than paying off debt for a number of reasons.

First, the US economy may continue its’ current depressionary spiral, and investments and savings could disappear as financial institutions fail. This would leave the doctor with debt that he or she could not service.

Second, the rate-of-return required to decide whether or not to borrow for investment purposes may not be achieved, leaving the doctor in worse financial shape than if he or she had just paid off the debt.

Assessment

Ultimately, the doctor must decide if the added risks are worth the possible gain. But, the services of a fiduciary financial advisor may also be required. However, some doctors may not be ready to receive the sort of “tough-love” required in this case. 

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Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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