July 26, 2022

Reminder: Deadline to File for Connecticut Child Tax Rebate Is Sunday, July 31

Connecticut families may be eligible for up to $750 in tax rebates from the state. The deadline to file for the benefit closes this weekend; it is not an automatic credit.

The application process is fairly straightforward and should only take a few moments; see our June 2nd newsletter for more background. All you’ll need handy is your federal adjusted gross income from your 2021 federal income tax return and the social security numbers for each of your children. Then, just visit https://egov.ct.gov/drschildrebateform/ to complete the form.

The Markets

A lot of people are worried that a recession may be in our future. Some think it may already be here.

Unemployment is low (3.6 percent), and inflation is high (9.1 percent). Both tend to occur when an economy is experiencing strong growth. That makes it difficult to believe the United States is in a recession, but some data is pointing that way.

Last week, the Atlanta Federal Reserve’s GDPNow estimated that economic growth in the United States was -1.6 percent for the second quarter of 2022, after adjusting for inflation. They measured economic growth using gross domestic product or GDP, which is the value of all goods and services produced in the United States over a specific period of time. GDPNow is based on a simple, unadjusted mathematical model. It is not an official reading, and the model tends to be a bit volatile. For example:

• On April 29, when relatively little data was available for the second quarter, it was +1.9 percent.
• On May 17, as retail trade and industrial production statistics filtered in, it was +2.5 percent.
• On July 1, when construction spending and manufacturing data came out, it was -2.1 percent.
• Last week, after housing starts were released, it was -1.6 percent.

The Atlanta Fed’s estimate becomes more accurate as more data is added. It tends to be most accurate near the Bureau of Economic Analysis (BES)’s official GDP release date, reported a source cited by Jeff Cox of CNBC.

Since the United States economy shrank by 1.6 percent in the first quarter of 2022, that would mean the U.S. has experienced two quarters of declining economic growth. Technically, that’s a recession.

Not everyone expects GDP to shrink. Bloomberg surveyed economists and found they anticipate 0.5 percent growth in the second quarter, which would be an improvement on the first quarter.

There is an important distinction between the two quarters. The slowdown in the first quarter was caused by surging imports and slowing exports, which is unusual. The slowdown in the second quarter may be caused by a slowdown in consumer spending, which is the primary driver of U.S. economic growth, and business spending.

The next BEA’s GDP numbers will be released this Thursday, July 28.

Last week, Randall Forsyth of Barron’s reported that major U.S. stock indices ­­­­gained. Yields on shorter maturity Treasuries rose last week, while yields on Treasuries with maturities of one year or longer fell.

Data as of 7/22/22	1-Week	Y-T-D	1-Year	3-Year	5-Year	10-Year
Standard & Poor's 500 Index	2.6%	-16.9%	-9.3%	9.9%	9.9%	11.4%
Dow Jones Global ex-U.S. Index	4.1	-19.0	-19.7	-0.2	-0.1	3.1
10-year Treasury Note (yield only)	2.8	N/A	1.3	2.0	2.3	1.4
Gold (per ounce)	1.8	-4.6	-3.5	6.8	6.7	1.0
Bloomberg Commodity Index	2.7	17.5	22.0	13.8	7.1	-2.0

The Challenges of Dating

As if the pandemic didn’t create enough dating challenges, inflation is now pushing the cost of dating a lot higher. More than 40 percent of people on the dating app Hinge said they think more about the cost of dating today than they did a year ago, especially members of Gen Z (the oldest Gen Zers are age 25), reported Paulina Cachero of Bloomberg.

Instead of meeting for drinks (the cost of alcoholic beverages was up 4 percent year-over-year in June) or sharing a meal in a restaurant (the cost of full-service dining was up 8.9 percent year-over-year in June) many people are opting for less expensive options, such as meeting for coffee, taking a walk, or cooking a meal at home.

Another challenge is keeping up with ever-evolving dating slang. “When you’re looking for love these days, it’s totally possible you might get breadcrumbed and orbited on your way to the soft launch,” reported Ashley Austrew on Dictionary.com. Here are a few definitions to know.

• Breadcrumbing: This is slang for leading someone on. Usually, breadcrumbing is chatting or flirting online through text or social media.
• Orbiting: When an ex – or someone else – stops communicating completely (i.e., they ghosted you) but they immediately offer a reaction when you post a picture or story on social media, they are orbiting you, reported Sophie Lloyd of Newsweek.
• Soft launching: When a product is soft launched, it goes through testing in limited groups. It’s the same with dating. A soft launch gives a person’s friends and followers the chance to get used to the idea of a significant other. It’s a slow-motion version of the boyfriend or girlfriend reveal, reported Kaitlyn Tiffany of The Atlantic.

The bad news is that it’s never easy to learn a new language. The good news is that the price of gas is dropping so the cost of dating should, too.

Weekly Focus – Think About It

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice.”

—Adam Smith, economist and philosopher

Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management

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