Driving in the Fog, Consumer Confidence, Housing, CalSavers, Who is Bill Hendricks, and holiday charity.
“What do you do if you’re driving in the fog? You slow down, of course.”
Those are Fed Chair Jerome Powell’s words, not mine.
Speaking of being in a fog, the PCE – Personal Consumption Expenditures - Index numbers this week were… not released. The government is still closed – hence the fog.
The Fed did estimate that the PCE is likely at 2.8%.
However… they still lowered the Fed Funds Rate by ¼ percentage point. That brings the overnight funds rate in the range of 3.75% to 4.00%.
That also drops the Prime lending rate to 7.0%. That’s good news for business borrowers and many home equity borrowers.
0.25% on $500,000 is $1,250. That’ll make a nice addition to the employee Christmas pool.
Keep in mind that the Fed has a dual mandate: maximum employment and stable prices for the American people.
Right now, they are a little nervous about the stable employment part, given the low new job numbers over the summer.
And the lack of numbers we have now.
Chair Powell also said the following: “…a further reduction in the policy rate at the December meeting is not a foregone conclusion.”
I don’t think people were expecting that. Rates may not come down in December.
Fun Fact: The president and CEO of the Federal Reserve Bank of Kansas City, Jeff Schmid, voted against lowering rates. In 2008, he was the president of Mutual of Omaha Bank (yes, The Wild Kingdom people – boomer alert), which took over the bank where I was working. I drove him around the Inland Empire, showing him the territory.
That’s the closest I’ll ever come to knowing someone at the Fed.
In Other News…
In spite of consumer confidence going down overall, consumers are feeling more optimistic about the labor market outlook, per the Conference Board.
ADP issues its jobs report on Wednesday. Last month saw job losses of 32,000, but pay increases of 4.5%. Look for that report this week. Why? It will give an indication of whether the Fed will continue to drop rates or hold firm.
U.S. Home Turnover Rate
2.8% of homes changed hands in 2025. So, is that good or bad?
Well, it’s the lowest turnover rate in 30 years.
There were 37.7% fewer homes sold this year than during the middle of the pandemic, when folks were heading out of town. Yep, there is a slowdown.
For perspective, it was 31.2% fewer homes than sold in 2019, before the pandemic.
In related news, the U.S. Home national price posted a meager gain of 1.5%. With inflation at 2.8%, that means that the value of an average home went down 1.3%. Roughly.
California and Small Business
If you have 1 to 5 employees, you now get to do what every other business in California has been doing for a while: offer a retirement plan. That must be done by December 31.
If you have not already done so, you must register for CalSavers by December 31, 2025, if you do not have a qualified plan such as a 401 (k), 403b, SEP IRA, or SIMPLE IRA.
FYI, CalSavers is a state-sponsored retirement savings program.
Now, before you get all worked up about one more thing you must do as a business owner…
There is no cost to the business – only employees contribute.
Employees have to opt out; otherwise, they are automatically enrolled at 5% of their wages unless they state otherwise.
The accounts are portable and can go from company to company.
Yes, there is the time cost of making sure you stay within state regulations on this, but that’s why California regulations have spawned an enormous industry of consultants.
Or you can reach out to your friendly CPA.
Coincidentally, this segment was brought to you by Wilson Ivanova, CPAs. No money traded hands, but they did give me the idea for the segment.
Who is Bill Hendricks?
To add to that, who is Diane Hendricks?
Bill was born in 1904 in Grand Prairie, Texas, and grew up with a strong sense of civic responsibility that would come to define his life. After earning his degree from the University of Texas, he began a career in advertising and communications.
He was also in the United States Marine Corps Reserve.
In 1947, his wife, Diane made a handmade doll and thought it would be nice for a child to receive it for Christmas. She asked her husband to find such a charity.
At the time, he was working in public relations and advertising at Warner Bros. Studios, so if there was a charity that could do this, he could find it.
As it turns out, there wasn’t any. So she said to him, “Start one!”
As an officer in the Marine Corps Reserve, he utilized his contacts and organized a toy drive in Los Angeles, placing collection bins outside movie theaters and community centers.
The first year’s effort yielded more than 5,000 toys, all distributed to local children in need.
The success of the operation compelled him to focus nationally, and in 1948, the Marine Corps officially adopted his initiative as a nationwide program.
Marines across the country were organizing toy drives in their own communities, bringing joy to countless families during the holidays.
Bill died in 1992 at the age of 87, and by then, millions of toys had been given to children in need. Diane preceded him in death in 1988.
The organization he started? You’ve probably guessed it.
Toys for Tots.
As a personal friend and as a favor to Bill, Walt Disney designed the first Toys for Tots poster, which included a miniature three-car train that was subsequently adopted as the Toys for Tots logo.
Both Bill and Diane are recognized as co-founders.
All of this impact from a couple that never had children.
From many perspectives, the United States is one of the most generous countries in the world. We are approaching, and some would say we are in, the holiday season. While the gift of time, talent, and treasure should be throughout the year, the focus really comes into play around Thanksgiving and Christmas. Organize your company, division, or department around a local charity that you care about. Of course, many of you support your local church, but here are a few others that come to mind for me:
All of these organizations can use help during the holidays. Some are local to Southern California, and a couple have a national presence; regardless, your participation is key, and it builds teamwork within your organization. It should also give you a warm, fuzzy feeling, and that’s the best part.
