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Market Update- December 2022

Given the down year that nearly all asset classes had in 2022, much attention has been paid to what people think 2023 holds in store. There seems to be a near unanimous consensus that a recession is in the cards, if it hasn't already started.

The primary and very real impact of recessions is people losing their jobs. When this happens to millions of people at the same time, there is a tangible slowdown in the economy that we have not seen since 2008. So far, the large majority of layoffs this year have been in the tech industry, which only employs 2-3% of the US workforce. Currently the overall job market is strong, as there are more open positions than unemployed people to fill them. A second viewpoint on the current economy can be seen through the US consumer, which accounts for 68% of economic activity. Consumer spending set records for the last three months straight, highlighted by record online Black Friday sales for 2022.

Unfortunately, many leading economic indicators are pointing to an actual recession starting in the first half of 2023. As we know from the pandemic, the overall state of the economy can change quickly if the right conditions are in place so it is possible that we could see a dramatic slowdown in the months to come. To further complicate issues, the Federal Reserve's response to a potential recession is another factor to consider. They have repeatedly reminded investors that their intention is to wipe out inflation, regardless of side-effects like a declining stock market and economy. Their tune could quickly change (for the better) if this long awaited recession actually happens.

For those collecting Social Security, SSA has announced the 2023 COLA (Cost of Living Adjustment) of 8.6%. This increase is intended to help retirees keep up with the rising costs of goods and services. This is the second year of historic COLA raises due to rising inflation. As we have mentioned in previous emails, the current trends in inflation look to be receding, however there are still pockets in the economy with continued rising prices.

President Biden’s Student Loan forgiveness plan is in jeopardy in the courts and in response, the administration has announced that they will extend the pause on student loan repayments until their forgiveness plan is approved, or until September of 2023.

We here at Citrus Wealth want to wish everyone a happy and safe holiday and we look forward to speaking with you next year!

Citrus Wealth Management

O: 909.312.4412 // F: 909.312.4441

1461 Ford Street, Suite 103, Redlands, CA 92373

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Blaine Shira and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.

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