U.S. Economic News

U.S. Economic News

August 21, 2017

U.S. Economic Indicators

The Chicago Fed National Activity Index fell from 0.16 to -0.01 in July.  The production, sales, and personal consumption and housing components made negative contributions, while the employment component made the sole positive contribution. Chicago Fed Report

U.S. News

Lynn Cook of the Wall Street Journal writes that many smaller American oil firms are increasingly forgoing expensive shale fracking projects in favor of conventional drilling. Companies have been able to reactivate old wells and extract oil profitably at prices as low as $30 a barrel. WSJ

The Wall Street Journal reports that as U.S. natural gas exports begin to arrive in former Soviet-bloc countries, Russian energy companies are starting to fight back. While the U.S. hopes to loosen Russia’s dominance of the European energy market, Russian state-owned companies have been lowering prices, investing in liquefied natural gas facilities, and building new pipelines. WSJ

According to the Wall Street Journal, investors are grappling with increased financial-market volatility and declining performance as doubts about the administration’s legislative agenda emerge. Among the weakest performers in recent weeks are small, domestic firms who would stand to gain from significant tax reform and infrastructure spending. WSJ

U.S. Economic News

U.S. Economic News

August 18, 2017

U.S. Economic Indicators

The University of Michigan Consumer Sentiment Index rose 4.2 points to 97.6 in the preliminary August reading and is up 7.8 points on the year.  The Index of Consumer Expectations jumped to 89.0 but The Current Economic Conditions Index fell 2.4 points to 111.0.  Report

U.S. News

The Wall Street Journal reports that discount clothing stores are proving surprisingly resilient even as the brick-and-mortar retail sector faces challenges from online shopping. Experts say that, while online retailers are continually gaining market share, consumers will continue to favor discount brick-and-mortar retailers as long as prices are competitive. WSJ

According to the Wall Street Journal, new research finds that older students tend to perform better academically. The researchers also found evidence to suggest that the oldest children are more likely to attend college and to graduate from a selective college than the youngest children in a given age cohort. WSJ

Diane Coyle of the Financial Times writes that the increasing concentration of U.S. tech firms is forcing economists to reconsider whether excessive market power is beneficial to consumers. While in the past greater monopoly power often led to higher prices for consumers, economists are unsure how the growing market power of tech firms will affect consumers. FT

U.S. Economic News

U.S. Economic News

August 17, 2017

U.S. Economic Indicators

Initial jobless claims fell 12,000 to 232,000 last week.  The four-week moving average fell 500 to 240,500. DOL Report
 
Industrial production rose 0.2% in July (up 2.2% Y/Y) after rising 0.4% in the previous month. 
Capacity utilization was unchanged at 76.6.  Fed Report

U.S. News

David Harrison of the Wall Street Journal reports that Federal Reserve officials are increasingly divided over the timing of their next rate hike. As low inflation persists, some officials believe that the economy is undergoing a fundamental shift to a low-inflation era, while others believe that the tight labor market could cause a surge in inflation and overheat the economy. WSJ

According to the Wall Street Journal the Henry Hub spot price of natural gas is becoming the global natural gas benchmark. The growing prominence of the Henry Hub price of gas comes as U.S. natural gas exports reach countries all around the world, and experts believe that the U.S. will increasingly become the global price-setter. WSJ

In a Wall Street Journal op-ed., former Vice-Chairman of the Federal Reserve Alan Blinder writes that economic expansions “don’t die of old age,” and that there are no serious short-term threats to current economic expansion. Blinder also writes that, although the current expansion is the third-longest on record, economic indicators suggest that growth will continue for the foreseeable future. WSJ

U.S. Economic News

U.S. Economic News

August 16, 2017

U.S. Economic Indicators

Privately-owned housing starts fell 4.8% in July to a seasonally adjusted annual rate of 1.16 million (down 5.6% year-over-year). Housing permits dropped 4.1% to a 1.22 million annual pace in July but are up 4.1% on the year.  Census Bureau Report

U.S. News

According to the Wall Street Journal, the first topic being debated in the North American Free Trade Agreement (“NAFTA”) renegotiation is the process for settling trade disputes. Canada and Mexico have advocated for retaining the current process in which disputes are submitted to panels of experts who have the authority to overturn tariffs, while the U.S. wishes to eliminate these expert panels. WSJ

The Wall Street Journal reports that despite recent, robust consumer spending, U.S. households are taking on more debt and saving less. Higher debt levels and lower savings rates both could become problematic in the event of an economic downturn or a spike in interest rates, which in turn could weaken retail sales significantly. WSJ

According to the Financial Times, Federal Reserve Board Vice-Chairman Stanley Fischer says that recent efforts to reduce banking regulations are “dangerous and extremely short sighted.” Fischer also stated that while he believes burdensome regulations on small banks should be eased, the new rules governing large institutions should be left in place. FT

Danielle Paquette of the Washington Post writes that despite efforts to bring manufacturing jobs back to the United States, factory workers are quitting their jobs at the highest rate in a decade. Some of the quits are due to retirement and fears of automation, but many are leaving with hopes for better employment elsewhere sparked by the low national unemployment rate. WaPo

U.S. Economic News

U.S. Economic News

August 15, 2017

U.S. Economic Indicators

Retail sales jumped 0.6% in July and were up 4.2% on the year.  Core sales — which excludes autos, gasoline, building materials, and food services — surged 0.6%.  Census Bureau Report
 
The NAHB Housing Market Index rose 4.0 points to 68.0 in August, slightly above consensus.  
The outlook for the next six months improved as strong Q2 GDP growth supported demand, though builders still face a number of supply-side headwinds.  NAHB Report

Business inventories rose 0.5% in June and were up 2.8% from last year.  Manufacturers’ sales increased 0.3% from May to June and were up 4.3% on the year. Census Bureau Report

U.S. News

In a Washington Post op-ed, Oklahoma Senator James Lankford contends that the U.S. trade deficit is a sign of a strong economy and that the administration’s renegotiation of the North American Free Trade Agreement (“NAFTA”) should shift focus away from reducing it. Lankford argues that powerful economies are attractive foreign investment destinations and have higher per-capita purchasing power, two indicators of economic strength that nevertheless add to the trade deficit. WaPo

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