New home building dropped sharply in July by 9.6%. Rising inflation has radically increased builder costs and the increase in interest rates has seemingly turned the market around.
The Federal Reserve’s moves to increase their Fed Funds rate is beginning to cool the economy. Since interest rates have increased, buyers can no longer afford the higher prices that newly built homes were demanding.
Since building and buying homes are both tied to economic expectations and interest rates, the housing market is normally one of the first places where rising interest rates are felt. This is obviously a good thing for the economy, but I wouldn’t be in a hurry to think that we’re out of the woods quite yet.
Overall retail sales were flat in the month of July, holding steady at the June 2022 numbers. This occurred while spending at gas stations fell 1.8% and vehicle sales decreased another 1.6% as a result of higher fuel costs.
Strong retail sales combined with the tight labor markets and high inflation tell me that the Fed will probably continue raising interest rates into the middle of next year. Only time will tell how far the economy will need to contract before the Fed eases off on the increases.
Let me leave you with this.
2021 S Corp and Partnership returns that are on extension are due no later than Thursday, September 15th. We have less than a month to complete those returns prior to the Failure to File penalties being assessed.
If you have not sent in your monthly work, send it in today. If you have not answered your year-end questions, please get those answers in.
As we get closer to the deadline, we’ll get busier; much busier. This will mean that it will be more difficult for us to guarantee that your returns are completed in a timely fashion.
Further, I’m still running into entrepreneurs who haven’t yet claimed the Employee Retention Credit. This will allow you to get a check from the government for up to $26,000 per employee.
Time is running out. I don’t want you to miss this opportunity. If you have not yet claimed this money, please contact us today.
*Words from our exceptional leadership