Multiple companies posted their earnings this week; however, most news was dominated by President Biden’s State of the Union address this week. This annual event allows the president to highlight significant accomplishments and plans of his administration for the following year. While many of us realize this is also the time a president touts and even embellishes his accomplishments for their political party, it was abundantly clear there were significant issues facing the country. President Biden took the time to address a few of these items; however, many of us know there is much work to be done to get the economy back on track.
President Biden hyped all the progress the country has made in the last two years, highlighting especially the recent unemployment numbers reflecting a 3.4%, a 50-year low. Biden also talked significantly about creating new jobs; however, he failed to mention all the large companies laying off thousands of employees. Regardless of your political stance, the economy and the country have seen progress as we come out of the COVID era, but we know there’s still a lot of work to do. We’re all too aware of the high costs for nearly everything and the near-record-high inflation still bearing down on the country.
One central question I see going forward is whether President Biden can work with newly elected House Speaker Kevin McCarthy to reach a bipartisan deal regarding the debt ceiling. This will be the first major hurdle for the new GOP-controlled House. The current administration must find common ground to work with both Democrats and Republicans if we are to achieve a balanced budget, reduce inflation, and get the economy back on track. Unfortunately, no quick fix exists that can change inflation overnight, but it’s clear that inflation is robbing families of their valuable purchasing power for everyday products. Without a bipartisan effort moving forward, the country and economy will suffer needlessly.
In other news, Southwest Airlines executives were on Capitol Hill this week to talk about the troubles that unfolded during the Christmas and New Years holidays. If you were one of those filers, then you know all too well the chaos that unfolded with passengers being stranded for days. As expected, it doesn’t appear that there was only one issue that failed Southwest, but multiple variables that seemed to all come to a head during the holidays. While the company’s executives have attempted to paint a rosary picture, the pilot union has stated this was all inevitable and could have been avoided with better staffing and upgraded systems. Southwest’s stock (LUV) has normalized since the holidays but remains significantly down from the past years. The main question will be if the company can make the needed investments in both systems and people to get back on track.
As we approach mid-February, it’s an excellent time to gather your tax documents. Most companies post online or mail out your needed tax documents by the end of January. Additionally, if you prepare your taxes, ensure to research any new tax credits that may be available to you. As part of the recently passed 2022 Inflation Reduction Act, you could qualify for multiple credits depending on the purchase dates. For example, some electric stoves and EV charging stations have tax credits if purchased in the latter part of 2022; however, the hefty $7,500 EV credit might not be available until 2023. Ask your tax preparer if you have one to ensure you take advantage of all credits available to you.