New Home Sales, Jobs, GDP and PCE, Alcohol, and a Winner Chicken Dinner!
What’s Going On
New home sales came in at a three-year high at an annualized 800,000 units this month vs. 650,000 last month, as expected.
It seems the builders are trying to sell their inventory.
39% of builders said they cut prices an average of 5%.
Initial jobless claims came in lower than expected, at 218,000 vs. 235,000 expected and 232,000 the month before.
It shows the labor market is holding up, which is good, but throws some water on the idea of lowering interest rates, and that’s what everyone wants.
GDP was revised up to 3.8% for Q2, from 3.3%. The main drivers were:
Stronger consumer spending: that was revised up from 1.6% growth to 2.5% growth for Q2.
Growth in business fixed investments
Imports fell more than initially expected. That’s what happens when many companies purchase their stuff in Q1 to avoid tariffs.
And the stuff in Q2 is more expensive because of tariffs, so you may buy less of it. Hence, imports decreased.
The PCE index – Personal Consumption Expenditures – came in at expectations of a 0.3% increase for the month of August. The monthly core, which excludes food and fuel costs, came in at 0.2%, down from 0.3% the previous month.
Annually, inflationary increases per the PCE were 2.7% and 2.9% for total and core, respectively.
There is definite pressure on prices, but most of it seems to be driven by the services sector and not manufacturing.
Bits & Pieces
The OBBB, or One Big Beautiful Bill, changed many things, as Captain Obvious would say. One is the increased threshold for the casino to issue you a W-2G.
If you know what the W-2G is, you should probably call 1-800- Gambler.
It has increased from $1200 to $2000. This takes effect for winnings in 2026.
Basically, the government won’t know about any winnings less than $2000 in 2026.
As if private equity hasn’t messed around with enough things already…
Private Equity, or PE to the MBA snobs, may be coming to a 401k near you.
While you may feel the pull of the dark side, resist. Just stay with a nice S&P index fund.
If not, you might as well throw PE in with your crypto and gold holdings.
Student loans forgiven after 2025 will be taxed, per the OBBB.
Forgiven loans have been non-taxable since 2021. Not anymore.
Package delivery costs will be increasing.
FedEx announced a 6% to 7% increase in 2026 with higher surcharges.
It’s likely UPS will follow suit.
The office vacancy rate hit a new record in Q2: 20.6%.
AI doesn’t take up space in a cube, and the ones who like to be in an office, the Boomers, only make up 15% of the workforce now.
Those Boomers are no longer in control…
Speaking of Boomers… Alcohol Use is Down
Thanks, Zoomers; well, that’s more for me. Seriously, folks…
The share of adults who say they drink alcohol hit a record low 54% according to Gallup.
From 1997 to 2023, at least 60% of Americans reported drinking alcohol.
Only 6% of respondents say it's good for you.
53% say moderate drinking, two or fewer drinks a day, is unhealthy.
66% of young adults say drinking is bad, compared with 38% in 2015.
Perhaps in the zest for 90’s nostalgia, Zima will make a comeback.
A record low 24% of adult drinkers reported having a drink in the last 24 hours, while 40% said that it had been more than a week since they last had an adult beverage.
Darn kids ruin everything – Hey, get off my lawn!! And stop smoking weed!!!
Winner, Winner, Chicken Dinner!
In February of last year, I talked about Bill Shufelt, John Walker, and Athletic Brewing and how they methodically put together a business plan to create the best-selling non-alcoholic beer.
He saw a need and took the steps to hit a home run.
This time, different people, different product, same determination.
Oh, and it’s chicken.
This is the story of a Michelin star chef, a stand-up comedian, and two brothers. All were childhood friends.
Dave Kopushyan, the chef, was putting all of his effort into vegetarian creations at very high-end restaurants. Arman Oganesyan, the comedian, whose idea of fine dining was Lunchables, told him that chicken was where it was at.
So, after months of eating all types of fried chicken in L.A. and going through YouTube to learn about every recipe concoction out there, they found their secret ingredient.
Pickle juice.
So, they pooled $900, bought a canopy tent, tables, chairs, a fryer, a heater lamp, and set up in an empty lot owned by the parents of childhood friends Tommy and Gary Rubenyan.
Ever hear of the food website Eater? Neither have I, but they raved about the chicken.
The next day, there was a line at the parking lot waiting for them.
“We’re going to need a bigger fryer.”
They had planned ahead, so when opportunity knocked, they were ready to open their first store.
That was done in months.
Then, two things happened. A fellow who had previously invested in Wetzel’s Pretzels and Blaze Pizza called. He led a 50% investment in their company in 2019. That brought in another investor, one of the founders of Wetzel’s Pretzels, who took over as CEO.
In eight years, they opened 315 locations and earlier this year, Roark Capital took ownership of 70% of the company, at a valuation of… $1,000,000,000.
That company would be Dave’s Hot Chicken.
Dave is the chief culinary officer, and Arman is the chief brand officer.
Evidently, still the same guys, but probably with nicer cars.
Like Athletic Brewing, the founders of Dave’s had a vision and thoroughly tested the taste of their chicken until they found the perfect recipe. They were not afraid to let go of ‘control’; they let professionals who had done it before, scale their business and grow it. It’s not a bad thing to bring in other folks. It just may take some time to find the right ones.
Timing can be everything. The increase in beef prices, along with the negative publicity for red meat, has boosted demand for chicken, not the rubber chicken you get at conferences. Dave’s Hot Chicken certainly benefited. As I mentioned in an earlier segment, the reduction in alcohol use will impact the revenue and profits of restaurants and bars, so if you are in that industry, you should probably plan for that to continue. That’s also where Athletic Brewing had good timing to introduce its line of non-alcoholic beers.
Sometimes it's better to be lucky than good. Regardless, there should always be a plan.
