Today's Scoop:

Hey friends, it’s been a heck of a week and an even bigger month. Thanks for supporting us through it all. More huge updates are on the way. Stay tuned for a big summer from Share Scoops!

Here’s what you need to know today…

1. The US economy slowed in the first quarter.

2. The government needs to figure out its debt problem fast.

3. The housing market turned sour in March.

S&P 500: 4,135.35
1Mo: +4% | 1Yr: -4% | 5Yr: +55%

The market snapped back today as surprisingly upbeat corporate financial reports helped investors move past the concerns about the banking system from earlier in the week.

US economic growth slowed in the first three months of the year. The Commerce Department reported real gross domestic product rose at an annualized rate of 1.1% in the first quarter, slower than the 2.6% growth rate for the fourth quarter.[🤓] Consumer spending, which powers about two-thirds of the economy, stayed pretty strong, despite higher living costs. Businesses invested in less equipment and machinery. Spending on home construction continues to slump.

The housing market turned sour in March. The National Association of Realtors (NAR) said pending home sales tumbled last month unexpectedly after a three-month rebound. Last week, the NAR reported the number of existing home sales dropped by 2.4% in March. New home sales, a smaller portion of all homes, jumped, but there’s not a lot of supply in the market. Fewer available homes, high prices, and high mortgage rates have deterred buyers and sellers.

The government needs to figure out its debt issues fast before the Treasury can’t pay its bills. Congress directs the Treasury to spend money (on defense, infrastructure, etc.), and the Treasury pays from its income (taxes) or charges to the credit card (issues Treasury bonds). Congress has directed the Treasury to spend more than it can afford, and it has already hit its credit limit. Only Congress can raise the limit. In some unknown amount of time, maybe 1-4 months, the Treasury won’t be able to pay the bills. The impacts of that are unprecedented and could push the US economy and the world into a downward spiral. So it’s very unlikely Congress chooses not to raise the debt ceiling, but it’s a major risk. The House passed its first proposal to raise the debt ceiling, but there are still a lot of negotiations left.

Click to dig in & vote your reaction, see how others feel

• Disney sues Florida Gov DeSantis, escalating legal battle

• Mattel sales tumble, but Barbie’s on the way

• Meta signals a rebound in ad sales, but metaverse loses billions

• Caterpillar paints an optimistic picture of construction

• Southwest Airlines is still reeling from its holiday quagmire

(These links only work for 24 hours while the story is live)

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is how we track how much stuff the economy is producing. The actual number (~$26 trillion) doesn't matter as much as the direction and magnitude. We track the growth rate of real GDP (inflation-adjusted) to know whether the economy is expanding or contracting from the previous quarter.

The reporting style can be a bit confusing. The main number you hear will be an annualized growth rate (+1.1%), representing how much the GDP would increase/decrease if the economy hypothetically grew at that rate for an entire year. It's different from how much our production increased/decreased quarter-to-quarter (+0.3%) and not representative of the growth/decline over the past year (+1.6%). Annualizing the past quarter’s change makes the backward-looking number a little more forward-looking.

Use our vetted resources to level up your financial wellness. View & compare more services.

Here are our top priorities for today’s challenges:

1. Rising Rates & More Layoffs: Make sure you have an emergency savings in cash. Use SaveBetter to make sure your savings account pays you at least 4%.

2. Higher Living Costs & Tighter Budgets: Make sure to avoid debt by tracking your spending, building savings, and spending carefully. We use Guac to save while spending and get cash back on 200+ brands.

3. Volatile Markets: Automate your investment contributions to take the emotions out of it. We use M1 to automate banking and investing in one place.

4. Hidden Opportunities: Down markets are a good time to hunt for bargains if you have the savings. We’ve made a lot of money from Motley Fool’s stock picks.

Based on your feedback, recruiting 1 new member now earns you $10 free in our Scoop Shop, and a 2nd recruit gives you exclusive access to schedule a personal finance coaching call with our Certified Financial Educator!

Just share your link below!