Market-Moving News[i]
The Week in Review
- JOLTS job openings rose to8.1m
- Nonfarm payrolls rose by 256k, beating expectations of 165k
The Week Ahead
- CPI & PPI
- Retail Sales
Weekly Market Recap
With different data sources telling different stories, last year was confusing for labor market observers. The closely watched Jobs report, for example, leverages two surveys: the establishment survey and the household survey. While both surveys showed impressive job growth in December 2024, the longer-term trends diverge. Since March 2022, the U.S. has added 8.2m jobs according to the establishment survey, but just 3.5m based on the household survey.
Methodology is to blame for this divergence. The establishment survey counts jobs based on business and agency payrolls, allowing it to capture the impacts of immigration. That said, statistical techniques used to estimate the impact of business formations and closures can sway these figures. The household survey, however, weights sample responses from households using population data from the Census Bureau.
Unfortunately, the Census Bureau has struggled to accurately capture the surge in immigration, leading it to understate population growth. Fortunately, annual benchmark revisions in February should help clear some confusion. The 2Q24 Quarterly Census of Employment and Wages, which informs the establishment survey revisions, showed 790k fewer jobs were created in the year ending March 2024 compared to current figures. Moreover, Vintage 2024 Census estimates, which will be applied to this month's household survey data, not only revised net immigration estimates higher by 1.8m for the two-years ending June 2023, but also showed that net immigration totaled a higher-than-expected 2.8m for the year ending June 2024.
As immigration’s impacts crystalize, so too should our view of the labor market. It might look modestly softer, but investors should remember it still supported solid growth in 2024. This should remain the case in 2025 as solid corporate earnings and steady economic activity allow employers to add an average of 150k jobs each month.
Philosophy Quote of the Week[ii]
Cut the Strings That Pull Your Mind
“Understand at last that you have something in you more powerful and divine than what causes the bodily passions and pulls you like a mere puppet. What thoughts now occupy my mind? Is it not fear, suspicion, desire, or something like that?
Marcus Aurelius, Meditations, 12.19
Think of all the interests vying for a share of your wallet for a second of your attention. Food scientists are engineering products to exploit your taste buds. Silicon Valley engineers are designing applications as addictive as gambling. The media is manufacturing stories to provoke outrage and anger.
These are just a small slice of the temptations and forces acting on us – distracting us and pulling us away from the things that truly matter. Marcus, thankfully, was not exposed to these extreme parts of our modern culture. But he knew plenty of distracting sinkholes, too: gossip, the endless call of work, as well as fear, suspicion, lust. Every human being is pulled by these internal and external forces that are increasingly more powerful and harder to resist.
Philosophy is simply asking us to pay careful attention and to strive to be more than a pawn. As Viktor Frankl puts it in The Will to Meaning, “Man is pushed by drives but pulled by values.” These values and inner awareness prevent us from being puppets. Sure, paying attention requires work and awareness, but isn’t that better than being jerked about on a string?
Tax Tips[iii]
Prepare for Upcoming Tax Season, Request a Transcript or Copy of a Prior Year Tax Return
While the freshness of the New Year can still be felt in the air, let’s start talking about preparing for the upcoming tax season.
The first thing to do is to review last year’s tax return. Usually you don’t change much from year to year and the same kind of expenses are incurred every year.
Organize your expense receipts by placing different receipts in an envelope by category of expense, e.g. mortgage interest, real estate taxes, charitable contributions, W-2s, interest income, dividend income, and so on. Putting receipts in envelopes by category helps in visually categorizing your expenses, adding to your preparedness for the upcoming season.
Credit card statements are not receipts. Credit card statements only show how much money you paid and where you spent the money. It does not show what you spent at the location. Therefore, actual receipts are necessary.
You may need copies of your filed tax returns for many reasons. For example, they may help you prepare future returns. You’ll need them if you want to amend a prior year’s return or apply for a loan to buy a home or to start a business. You may also need them if you apply for student aid. If you can’t find your copies, you can request a copy of previous tax return transcripts or actual copies of returns from the IRS. There is a fee the IRS charges for copies of the actual tax returns (but not transcripts).
Here's information on your federal tax return information that is helpful and how to get your old returns or transcripts:
- A tax return transcript shows most line items from the tax return that you filed. It also includes items from any accompanying forms and schedules that you filed. It doesn’t reflect any changes you or the IRS made after you filed your original return.
- A tax account transcript includes your marital status, the type of return you filed, your AGI and taxable income. It also includes any changes you or the IRS made to your return after you filed it.
- You can get your returns by phone, mail or fax within 5-10 days from the time the IRS receives your request. You can request copies by going to the IRS website and using their Get Transcript You can also call 800-908-9946 to order by phone. The IRS also has an app you can use to order a transcript: IRS2Go.
- You’ll need Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a Tax Account Transcript should use Form 4506-T, Request for Transcript of Tax Return.
- If you need a copy of your filed and processed tax return, there is a fee for each tax year. Use Form 4506, Request for Copy of Tax Return, to make the request. Mail it to the IRS address listed on the form for your area. Copies are generally available for the current year and past six years. You should allow 75 days for delivery.
- If you live in a federally declared disaster area, you can get a free copy of your tax return. Visit the IRS website for more information about disaster relief.
After you have copies of last year’s return or transcript, contact your accountant or tax preparer as soon as possible and schedule an appointment. Most accountants pre-schedule their appointments and send letters out the first or second week of January. If you wait until the last minute you will end up paying more to have your tax return prepared. Tax preparers put a premium on the stress taxpayers place on them by waiting until the last minute.
If you have changed your name or marital status, let the Social Security Administration (SSA) and the IRS know! If the name on the return does not agree with the Social Security Number (SSN), both at the SSA and at the IRS, the refund for your personal tax return may delayed if not disallowed. This can cost a great deal of time, money and stress. The average taxpayer will lose about $2,000 in tax savings for each person who does not have a matching name and SSN. This also includes minor children!
Key Points
- Acquire and examine a copy of last year’s tax return or transcript.
- Organize your expenses with envelopes or digitally!
- Ensure you schedule your tax appointment early!
- Verify SSNs with the IRS and SSA to ensure they are correct!
Remember – always contact your tax professional for help! That’s what you pay them for!
Financial Fitness Checkup[iv]
Our 2025 Financial Fitness Checkup highlights the importance of proactively managing various aspects of personal finance to prepare for life’s changes and challenges. This comprehensive checklist encourages individuals to evaluate their goals, family dynamics, health, work, business, and financial circumstances, ensuring they remain on track toward financial security.
By reflecting on potential life changes—such as marriage, a new child, retirement, or caring for an elderly parent—the review process helps address shifting priorities. Similarly, assessing major financial decisions, including significant purchases, home renovations, or business expansions, ensures that spending aligns with long-term goals. It’s also an opportunity to revisit estate plans, ensuring wills, trusts, and beneficiaries are up to date.
The Checkup emphasizes health-related considerations, encouraging individuals to evaluate health coverage, address out-of-pocket costs, and plan for aging-related challenges. Retirement planning, a cornerstone of financial security, also takes center stage. From understanding required minimum distributions to maximizing retirement contributions, the review provides insights into how to prepare for the future.
Additionally, the document stresses the importance of reducing tax burdens, managing debt, and strengthening financial resilience. Whether planning for significant changes in income or navigating financial disagreements with a spouse, the Checkup serves as a valuable guide to improve organization and alleviate stress.
In summary, the 2025 Financial Fitness Checkup offers a holistic approach to financial planning. By addressing current needs while preparing for future changes, individuals can secure peace of mind and financial stability in the years to come.
Take control of your financial future today. Schedule your 2025 Financial Fitness Checkup with Mission Financial Planners and start building a more secure tomorrow. Call us at 888-339-0093 or visit www.missionfinancialplanners.com to get started!
[i]https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/market-insights/wmr/weekly_market_recap.pdf. Accessed 01.14.2025. See page 2 for important disclosures.
[ii] Holiday, Ryan. The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. Kindle edition, page 22. Accessed 01.14.2025.
[iii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, pages 15-18. Accessed 01.14.2025.
[iv]http://www.horsesmouth.com/shop/readpdf.aspx?i=18T0w&f=Jzdt&s=l, accessed 01.14.2025