U.S. Economy Powers Up: Restaurant Jobs, Factory Orders Up, Housing Red Hot
Zacks Investment Management provides insight into the biggest news stories, and key factors that we believe are currently impacting the market such as:
- U.S. economy powers higher in Q1
- Job openings flooding the restaurant industry
- The rise of manufacturing and factory orders
- The housing market stays red hot
U.S. Economy Powers Higher in Q1 – As expected, the U.S. economy roared back to life in the first quarter, growing at a +6.4% annualized rate and leaving the economy just shy of its pre-pandemic GDP peak. With demand continuing apace, and with continued strength in jobs, manufacturing, and housing as described below, the U.S. appears highly likely to grow to its largest size ever (as measured by GDP) in the second quarter. In fact, nominal GDP – which is not adjusted for inflation – has already posted an all-time high, so not much growth is required to reach a new real GDP record. Compare the U.S.’s economic rebound from Covid-19 with the nation’s economic rebound from the 2008 Global Financial Crisis, and one will discover an apples-to-oranges comparison. It took the economy some 3 years to reach a new high after the financial crisis, compared to just over a year this time around. The U.S. economy was bolstered by record fiscal and monetary stimulus and a consumer armed with savings and stimulus payments. Personal consumption expenditures grew +10.7% in Q1, driving a significant portion of overall economic gains.1
Looking for a Lower-Risk, Income Producing Investment?
As we witness the economy slowly recovering, investors, especially those who are trying to build their retirement portfolio, are seeking more financial options. For investors looking to avoid the price volatility of common stocks, there is an option for a lower-risk, income producing-investment.
We recommend, preferred securities, that pay regular dividends and avoid the price volatility of common stocks. Sometimes called “a stock that acts like a bond,” preferred securities offer a fixed dividend that is often higher than the company’s bonds. As you plan your retirement, we want you to feel secure in a strategy that meets your financial goals. In our Zacks’ Preferred Income Strategy Guide, we provide helpful information so you can learn more about this investment option.
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:
Learn About Zacks’ Preferred Income Strategies!2
Job Openings Flood the Restaurant Industry – 2020 was a rough year for restaurants, to say the least. But as vaccinations pick up and restrictions get loosened, restaurants are shifting from trying to lure customers to trying to lure employees. In nationwide surveys of restaurant chains and independent restaurants, the consensus is that they are having difficulty finding enough workers to fill out kitchens and dining rooms. Some restaurants are getting crafty to encourage employees to return – Jimmy John’s sandwich restaurant is offering signing bonuses, Chipotle is offering college tuition for 6+ month employees interested in a food/agriculture degree, and Taco Bell is offering paid family leave to managers. McDonald’s is entering the fray, too, exploring what benefits and pay they can offer to attract new workers. Sales at bars and restaurants climbed 13.4% in March as compared to February, which is the biggest jump since last summer.3
Manufacturing and Factory Orders Continue Apace – U.S. orders for durable goods, which are designed to last at least 3 years, rose 0.5% month-over-month in March, which marks 10 out of 11 months of growth. Manufacturers are also reporting robust hiring activity, adding personnel, increasing hours, and pushing up wages. The manufacturing survey’s employment index – which measures wages and benefits – is at its highest level ever. The Dallas Federal Reserve released data this week underscoring the broad-based strength. In it, they found business activity at its strongest since June 2018 with new orders eclipsing their highest levels on record.4
Housing Market Stays Red Hot – The U.S. housing market continues its strong ascent, with home price growth pushing through to a 15-year high in February. Strength in the housing market is a result of classic supply and demand forces: the number of homes for sale approached a record low, while demand for houses continues apace on the heels of low mortgage rates and a desire to relocate out of cities to suburban houses with more remote workspace. The S&P CoreLogic Case-Shiller National Home Price Index rose 12% from February 2020 to February 2021, which marks the highest annual rate of price growth since February 2006 – which, it should be noted, is around when the housing bubble burst in the previous cycle.5
Where to Turn for a Lower-risk, Income Producing Investment? – Currently, the economy is on its way to recovery, and even though we can’t predict the future, there are ways you can better plan and protect your investments in retirement. Many investors may be wondering where to turn for a lower-risk, income-producing investment. We recommend Preferred Securities, and to help you understand exactly how it can benefit your financial future, we have created a Zacks Preferred Income Strategy Guide.6
This guide will help you learn more about preferred securities and generating cash flow and income with our Preferred Income Strategy. You’ll find helpful information including:
- How preferred securities work and how they differ from stocks and bonds
- Pros and cons of preferred securities for retirement investors
- Why preferred securities can help diversify a portfolio
- The added advantage of preferred securities if a company fails
- Plus, many more reasons for retirement investors to consider this income-generating strategy
If you have $500,000 or more to invest and want to learn more, click on the link below:
2 Zacks Investment Management reserves the right to amend the terms or rescind the free Stable Income, Controlled Risk: The Zacks Preferred Income Strategy offer at any time and for any reason at its discretion.
3 Wall Street Journal. April 25, 2021. https://www.wsj.com/articles/restaurants-serve-up-signing-bonuses-higher-pay-to-win-back-workers-11619359201
4 Wall Street Journal. April 26, 2021. https://www.wsj.com/articles/u-s-durable-goods-orders-rebound-following-dip-11619442529
5 Wall Street Journal. April 27, 2021. https://www.wsj.com/articles/u-s-home-price-growth-accelerated-in-february-11619528430
6 Zacks Investment Management reserves the right to amend the terms or rescind the free Stable Income, Controlled Risk: The Zacks Preferred Income Strategy offer at any time and for any reason at its discretion.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.
This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting, or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and opinions given in this document without seeking the services of competent and professional investment, legal, tax, or accounting counsel. Publication and distribution of this document is not intended to create, and the information and opinions contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors, or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.
Any projections, targets, or estimates in this document are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Recipients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this document.
Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable.
Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.
It is not possible to invest directly in an index. Investors pursuing a strategy similar to an index may experience higher or lower returns, which will be reduced by fees and expenses.