The document summarizes recent market indicators and economic trends: - Volatility has decreased this year as markets reach new highs, though uncertainty can rise temporarily. Investors should stay disciplined. - Major central banks are keeping interest rates low and expanding their balance sheets to support economic growth. - Declining labor force participation, retiring baby boomers, technology advances, and globalization are long-term factors impacting the job market. - Job openings remain high as companies hire in anticipation of future demand. - Inflation has begun to increase as the economy reaches new peaks following the Federal Reserve's actions to support markets.

1. Market Indicators
Paul Caylor, CDFA, CFP, CKA, RICP | President & Wealth Advisor | July 26,
2021

2. • Volatility has fallen this year as the economy expands and the market reaches new all-time highs.
• However, it is not unusual for uncertainty to rise for short periods without notice.
• Volatility is a normal part of investing. Investors should stay disciplined by looking past short-term
market turbulence.

3. • Major central banks continue to keep rates low and increase their balance sheets.
• The BoJ and ECB continue to expand their balance sheets and keep rates low as well.

4. • The labor force participation rate is simply the percentage of the working age population in the labor
force.
• The declining labor force participation rate has clearly been a defining factor during this cycle.
• This is a result of long-term trends such as retiring baby boomers, advances in technology, and
globalization.

5. • Job openings tend to rise when the economy is strong.
• Companies hire in anticipation of future demand and workers are more likely to be employed.
• Despite the recession, job openings are still near historic highs.

6. • CPI is a commonly cited measure of inflation. It uses a basket of goods and services to track price changes
for consumers.
• In order to measure the underlying trend in inflation, rather than temporary shocks to food and energy,
economists often focus on Core CPI.
• Inflation has begun to heat up as the economy reaches new historic peaks.

7. • Prior to the 2017 tax reform, the U.S. had the highest corporate tax rate among major industrialized
countries.
• The enacted tax reform plan lowered the corporate tax rate to 21%, below the OECD average of 22%.
• However, corporate taxes are expected to increase to about 28% to fund programs such as infrastructure
spending.

8. • This chart shows that the federal debt has been rising over the past decade relative to GDP.
• What matters is whether the economy can support the level of debt. Thus, it is important to compare it to
GDP.
• Net debt adjusts for debt held within the government. This is a better picture of the debt situation,
although it has risen as well.

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Market and Economic Chartbook
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