Bob’s Journal for 3/7

Fraud Losses Hit a Record in 2023

Frauds and scams took a record amount of money from U.S. adults in 2023, according to the Federal Trade Commission.

While the media like to report about the big scams, most crooks seem to try to stay under the radar with smaller hauls. A total of about $10 billion was lost to scams in 2023, but that amount was spread over about 690,000 people, with median amount lost per victim of about $500.

The authorities who investigate financial frauds aren’t well staffed and don’t have enough resources to look into all the scams. They tend to focus their resources on the larger or more widespread crimes. So, crooks are more likely to avoid investigation by keeping the losses of each victim relatively small.

Financial scams soared during 2021 and 2022. The FTC estimated losses of $3.5 billion in 2020. That jumped to $6.0 billion in 2021 and $8.9 billion in 2022.

While 2023’s growth was more modest, the incidence of financial fraud continues to increase.

The frauds that increased the most in 2023 are known as business impostor scams. These frauds are when crooks attempt to impersonate a well-known or trusted organization, such as a major retailer or tech support firm.

Those types of crimes increased by 18% from 2022 to 2023.

Related to them are the government impersonation scams, which increased 15%.

In both types of scams, the crooks generally send emails that appear to come from the respected entity and encourage the recipient to click on a link, open an attached file, or respond.

Once the recipient is engaged, the crooks have various ways of obtaining personal or payment card information or implanting malware on a computer.

Telephone calls are used in other variations of the scams.

The best advice is to be suspicious of all unsolicited emails and telephone calls. Alerts and other messages that pop up on computer screens also should be viewed skeptically.

Also, don’t be pressured to act quickly. Take your time and discuss the situation with friends or family.

If the communication might be legitimate, contact the organization through other means that you know are legitimate. You can go to the entity’s website to verify its telephone number or email addresses.

Americans Have Big Gaps in Retirement Income Knowledge

Most American adults have poor knowledge of retirement income issues, according to a study of Americans age 50 and older undertaken by The American College of Financial Services.

The overall average score was only 31% out of a possible 100%.

The participants did best in the subject areas with which they are likely to have some experience: inflation, housing and Medicare.

But participants did poorly in several areas, especially one which should influence many retirement income and financial decisions.

Only about a quarter of participants had a good understanding of longevity and life expectancy.

That’s important, because a person’s perception of life expectancy influences decisions they make about long-term care, guaranteed lifetime income, spending plans and more.

Most Americans underestimate longevity. Underestimating life expectancy can lead to decisions that cause underfinancing of the later years of retirement.

Only 27% correctly identified the life expectancy of a 65-year-old man. Fewer than one in five expected to live past age 89, though actuarial data puts the number much higher.

On a related issue, most respondents correctly answered only one of five questions about long-term care.

A solid retirement plan requires good data about two key issues.

One issue is how much the desired standard of living will cost, especially in the long term after inflation is factored in.

The other issue is life expectancy, or how long retirement is likely to last. I’ve discussed life expectancy in detail in my books and some episodes of the Spotlight Series.

You also can obtain reasonable estimates of your life expectancy by using some of the tools at www.lifeexpectancycalculators.com.

Global Stock Markets Might Be Catching Up

There are early signs that U.S. stocks might not continue to deliver returns that are superior to the rest of the world’s markets. Other stock markets have been catching up.

For the year to date and for the last 12 months, only Japan has had consistently higher stock returns than the United States. A big part of the outperformance of U.S. markets over the last 12 months stems from their surge in November and December 2023.

But there was a turnaround in the five days that ended on Feb. 27.

Major indexes in China, German, Italy and France all delivered higher returns than the S&P 500, according to Bespoke Investment Group.

The broad-based MSCI All-Country World Index (excluding the United States) is slightly ahead of the United States over the last four weeks.

It is too early to declare a change in the longer-term trends. But quality companies around the globe sell at lower valuations than their U.S. counterparts, and that’s not likely to continue indefinitely.

The Data

Personal income increased 1% in January after rising 0.3% in December. The January increase was the highest in a year. A major contributor to the jump was the annual Social Security cost of living adjustment.

Personal consumption expenditures rose by 0.2% in January, following a 0.7% increase in December. Spending on services increased while spending on goods declined.

The Personal Consumption Expenditure (PCE) Price Index increased by 0.3% in January after rising 0.1% in December. Over 12 months, the index increased 2.4% through January and 2.6% through December.

The Fed’s preferred inflation measure, the core PCE Price Index (the PCE Price Index excluding food and energy), rose 0.4% in January after rising 0.1% in December.

Over 12 months, the core PCE Price Index gained 2.8% through January and 2.9% through December.

The ISM Manufacturing Index fell to 47.8 in February from 49.1 in January.

The ISM Services Index declined to 52.6 in February after reaching 53.4 in January.

The PMI Manufacturing Index rose to 52.2 in February from 50.7 in January.

The PMI Services Index fell slightly in February to 52.3. It was 52.5 in January.

The PMI Composite Index for the economy was 52.5 in February, up from 52.0 in January.

The Consumer Sentiment Index from the University of Michigan was 76.9 at the end of February. That’s down from 79.6 in mid-February and 79 at the end of January. It is still the second-highest level in the last 12 months.

Both the current conditions and future expectations components of the index declined while inflationary expectations increased.

Pending home sales fell 4.9% in January, following a 5.7% decline in December.

Over 12 months, pending home sales are down 8.8% through January after climbing 1.3% through December.

Factory orders fell 3.6% in January, following a 0.3% decline in December. The January decline is the highest since April 2020.

Transportation was a major factor in the decline. Factory orders, excluding transportation, fell 0.8% in January and 0.3% in December.

The Kansas City Fed Manufacturing Index was 3 in February after being negative 17 in January. The February level is the highest since August 2023 and one of only three positive readings in the last 12 months.

There were 140,000 new private sector jobs created in February, according to the ADP Employment Report. That’s up from 111,000 new jobs in January.

There were 8.863 million unfilled job openings in January, according to the JOLTS (Job Openings and Labor Turnover Survey) report. That’s 26,000 fewer openings than in December and the lowest level in three months.

Job openings hit a recent low of 8.685 million in October 2023.

In January 2024, the number of people quitting jobs hit its lowest level since January 2021. There were 3.385 million job quits in January, down 54,000 from December.

New unemployment claims increased by 13,000 to 215,000 in the latest week.

Continuing claims, which lag a week behind new claims, increased to 1.905 million from 1.860 million. The latest number is the highest since November.

The Markets

The S&P 500 rose 0.05% for the week ended with Tuesday’s close. The Dow Jones Industrial Average lost 0.89%. The Russell 2000 fell 0.13%. The All-Country World Index (excluding U.S. stocks) declined 0.10%. Emerging market equities dropped 1.16%.

Long-term treasuries rose 3.01% for the week. Investment-grade bonds increased 1.05%. Treasury Inflation-Protected Securities (TIPS) added 1.79%. High-yield bonds gained 0.44%.

The dollar was unchanged.

Energy-based commodities fell 0.52%. Broader-based commodities rose 1.04%. Gold gained 4.92%.

Bob’s News & Updates

My latest book is “Retirement Watch: The Essential Guide to Retiring in the 2020s.” Learn more and order by clicking here and here. You can be among the first to write a review.

My previous book, “Where’s My Money: Secrets to Getting the Most out of Your Social Security,” is receiving mostly five-star reviews on Amazon for telling you clearly what your benefit options are in different situations and how to determine the best choice for you. You can find it on amazon.com or Regnery.com.

The number of regular viewers for my Retirement Watch Spotlight Series continues to increase. You should sign up because I make in-depth presentations of key retirement finance topics. You can watch these online seminars from the comfort of your home or office at times you choose. To learn more about my new Spotlight Series, click here.

A recent five-star review of my book, “The New Rules of Retirement” on amazon.com said, “A complete retirement guide! One of the best books on this topic!” Click for more details about the revised edition of “The New Rules of Retirement.”

If you’re interested in my books, check my amazon.com author’s page.

I’m a senior contributor to the Forbes.com blog. You can view my contributor page here.