Happy Friday! The monthly jobs report showed a much different picture from what we have been seeing and experiencing firsthand. The number of new jobs created totaled 531,000 in October, better than the estimates of 450,000. The unemployment rate also dropped to a pandemic low of 4.6%, again, better than expected. Many of these new jobs were in the hospitality and leisure industries where the demand has been the greatest. Wages also rose month over month and now sit 4.9% higher from a year ago. The “pain” points are far from healed but it does appear that individuals are re-engaging to some extent. I spent several days this week on the road, and I can tell you that nearly every restaurant I visited will still paint a different picture. There remains a tremendous amount of need for workers, and I suspect that wages will continue to rise to draw the help needed. At the end of the day, we will simply pay more for the goods and services we want and enjoy.
The financial markets were propelled higher by this news, and we ended the week on a strong note. The Covid concerns continue to decline slowly as evidenced by the drop in the number of reported cases. We are also seeing wider distributions of the vaccine to younger people and additional new therapies and drugs coming to the market. It’s possible that we may truly be at or near herd immunity and the easing of restrictions seems to again be picking up momentum. I think most of us can agree that getting to a new normal is more than welcome, especially as the holidays come upon us.
The infrastructure and spending plans continue to be hotly debated from all sides as a deal gets closer to completion. A late “add” to the plan comes in the form of raising the SALT deduction (state and local taxes) which has impacted many middle and high-income families. As part of the sweeping tax legislation in 2017, a cap of $10,000 was put into place on the SALT deductions that could be taken by individuals. Under the latest proposals, that cap would be raised to $80,000 through 2030. This would be a tremendous relief to many individuals and families as the local, state and property taxes paid in certain areas of our country far exceed the $10,000 threshold. The trading game continues to be played in D.C. as we await the final details.
Have a great weekend!