The economy continues a positive trend, evidenced by continued (though slowing) job growth. Inflation appears to be holding steady near 3%, still off of the Fed target.

This is good news. Are we heading for a soft landing, meaning we avoid recession and inflation hits the Fed’s 2% target? Maybe, but economist Scott Sumner says “it’s the last 1% that is the hardest.”

• Housing remains a huge discussion point in our meetings. The average price of a new home sold is 10.4% lower than it was last year. But are homes really cheaper? Not exactly. This price drop is a reflection of home builders building smaller and cheaper-made homes. Adjusting for size and quality of homes, home prices have actually increased between 3.9% and 6% in the past year.

• On the same topic, here is an excellent explanation of why housing is expensive, explained using the economic principle “elasticity of supply.”

• A Nationwide survey found that 1/3 of investors think the country will go into recession if their preferred candidate does not win the 2024 presidential election. We’ve learned that that predicting your preferred party’s election performance is NOT a sound investment strategy.

• On a lighter note, the first speeding ticket was issued in 1896 to a UK man who was doing 8mph in a 2mph zone. He was pursued by police on a bicycle for 5 miles.

*content source: IRS.gov