U.S. Economic News

U.S. Economic News

February 23, 2018

U.S. News

Andrew Van Dam of the Washington Post writes that most of the decline since 1999 in the share of Americans with jobs is due to an aging population. Van Dam also points to recent research that shows that the rest of the decline in the share of Americans with jobs can be explained by trade with China and the rise of robots, while other common explanations such as immigration have had little to no effect. WaPo

The Financial Times reports that rising interest rates and recent changes to the U.S. tax code are squeezing major utility companies. Due to the relatively regular flow of earnings and dividends from these highly-regulated utilities, their shares traditionally behave more like bonds, thus falling when interest rates are expected to rise. FT

U.S. Economic News

U.S. Economic News

February 22, 2018

U.S. Economic Indicators

Initial jobless claims fell 7,000 to 222,000 last week. The four-week moving average decreased 2,250 to 226,000.  DOL Report

U.S. News

The Wall Street Journal reports that Federal Reserve Vice Chair Randal Quarles believes that the Fed should continue to gradually raise interest rates over the course of 2018. Quarles also said that the U.S. economy appears to be performing well and that monetary policy remains accommodative, which could mean that the “investment drought” that has afflicted the U.S. in recent years may be lifting. WSJ

Harriet Torry of the Wall Street Journal writes that a new study from the McKinsey Global Institute shows that the adoption of new technologies may cause U.S. productivity growth to rebound in coming years. The study shows that the widespread adoption of new technologies can take decades, meaning that the productivity benefits of digitization may still take years to be realized. WSJ

U.S. Economic News

U.S. Economic News

February 21, 2018

U.S. Economic Indicators

Existing home sales fell 3.2% to a seasonally adjusted annual rate of 5.38 million in January, and are 4.8% below year-ago levels.  NAR notes that January marked the largest year-over-year decline in existing home sales since 2014, as an utter lack of inventory and the resulting high prices forced many prospective buyers out of the market.  NAR Report

U.S. News

According to the Wall Street Journal, the bipartisan spending agreement reached by U.S. lawmakers has caused economists to raise expectations for Federal Reserve rate hikes this year. Market-watchers expect that the expanded government spending, along with recently-passed tax cuts, will provide a fiscal stimulus that will cause inflationary pressures to build more rapidly than before. WSJ

Greg Ip of the Wall Street Journal reports that increasing U.S. oil production has changed the relationship between oil prices and economic momentum in the U.S. Though higher oil prices used to be tied to slower economic growth, the surge in U.S. oil production means that the burden of increasing prices is increasingly offset by expanding energy investment, production, and jobs. WSJ

U.S. Economic News

U.S. Economic News

February 20, 2018

U.S. News

The Financial Times reports that the possibility of U.S. tariffs on steel and aluminum imports provided stock market boosts to some of Europe’s largest steel producers. The Commerce Department on Friday recommended substantial tariffs on imports of steel and aluminum, which would normally be unwelcome to foreign firms, though many European metals producers have operations in the U.S. that would stand to benefit from protectionist policies. FT

According to the Wall Street Journal, while tariffs on imported solar panels may slow the expansion of solar capacity, government mandates requiring the use of renewable energy will likely mean that solar capacity should keep expanding. The cost of solar panels has continued to decline as storage technology has improved and firms have been stockpiling panels in advance of the tariffs, meaning that they will likely be able to comply with government mandates to build new solar installations. WSJ

U.S. Economic News

U.S. Economic News

February 16, 2018

U.S. Economic Indicators

Privately-owned housing starts jumped 9.7% in January to a seasonally adjusted annual rate of 1.33 million (up 7.3% year-over-year). Housing permits rose 7.4% to a 1.40 million annual pace in January and are up 7.4% on the year.  Census Bureau Report
 
The University of Michigan Consumer Sentiment Index rose 4.2 points to 99.9 in the preliminary February reading, and is up 3.6 points on the year.
The Index of Consumer Expectations rose 3.9 points to 90.2, while the Current Economic Conditions Index increased 4.6 points to 115.1. Report

U.S. News

The Wall Street Journal reports that National Economic Council Director Gary Cohn does not believe that recent tax cuts and other fiscal stimuli would cause inflation to accelerate and overheat the economy. Cohn also said that the U.S. knows how to deal with inflation, which could be spurred by increasing deficits, but does not know how to deal with deflation. WSJ

According to the Wall Street Journal, a new report from the Brookings Institution shows that many borrowers who take out so-called “jumbo” student loans of more than $50,000 fail to repay their debt. As of 2014 there were roughly 5 million borrowers with “jumbo” loan balances that represent 58% of all U.S. student debt, which could become problematic as interest rates rise and it becomes more difficult to refinance existing debt. WSJ

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