U.S. Economic News

U.S. Economic News

June 21, 2017

U.S. Economic Indicators

Existing home sales rose 1.1% to a seasonally adjusted annual rate of 5.62 million in May, and are 2.7% above year-ago levels.  The rebound of sales in May after a weakening in April was driven by a strong labor market and moderating mortgage rates, according to NAR.  NAR Report

U.S. News

Charles Evans, President of the Federal Reserve Bank of Chicago, says the Fed can wait until the end of the year to decide whether to raise interest rates again but may start shrinking its balance sheet sooner.  Evans believes that the Fed should wait to see if weaker inflation is transitory or here to stay. WSJ

Martin Wolf of the Financial Times argues that the Federal Reserve is ahead of other central banks in normalizing monetary policy and that the Fed should keep its 2% inflation target. Wolf asserts that the central bank should refrain from further rate hikes for the time being to allow inflation to rise above 2% for a sustained period, allowing Fed officials to prove that their 2% goal is not an upper limit, but a “symmetrical target.” FT

U.S. Economic News

U.S. Economic News

June 20, 2017

 U.S. News

The Wall Street Journal reports that House Speaker Paul Ryan will announce in a speech today that he is still confident that Congress can enact comprehensive tax reform in 2017. However, Republican efforts to pass tax reform face significant hurdles, including disagreement on the substance of the tax reform and the need to first pass both healthcare reform and a federal budget. WSJ

Jason Furman and Rohit Kumar argue in an op-ed that the federal debt limit should be repealed because it no longer effectively constrains how much the government can spend. The authors argue that the debt limit is hardly ever observed and that brinksmanship over its extension is harmful to the U.S. economy and raises borrowing costs for the federal government. WSJ

U.S. Economic News

U.S. Economic News

June 19, 2017

U.S. News

Jacob Schlesinger of the Wall Street Journal writes that President Trump’s plan to curb steel imports for “national security” reasons has the potential to destabilize the global trade regime. Schlesinger argues that U.S. trading partners will likely impose similar restrictions on U.S. exports in response to any steel import restrictions, which could lead to an all-out trade war. WSJ

The Wall Street Journal reports that financial market volatility has approached record lows around the world in recent months. The authors attribute this to healthy consumer spending and rebounding corporate profits, which have supported equity valuations worldwide. WSJ

U.S. Economic News

U.S. Economic News

June 16, 2017

U.S. Economic Indicators

Privately-owned housing starts fell 5.5% in May to a seasonally adjusted annual rate of 1.09 million (down 2.4% year-over-year) and have fallen for three straight months. Housing permits declined 4.9% to a 1.17 million annual pace in May and are down 0.8% on the year.  Census Bureau Report

The University of Michigan Consumer Sentiment Index dropped 2.6 points to 94.5 in the preliminary June reading but is up 1.0 point on the year.  The index for consumer expectations fell 3.0 points and the index for current economic conditions dropped 2.1 points.  Report

U.S. News

The Wall Street Journal reports that U.S. agricultural exports to Mexico dropped precipitously in early 2017 as uncertainty regarding the renegotiation of the North American Free Trade Agreement (“NAFTA”) abounds.  Analysts say that Mexican companies are beginning to buy more agricultural and food products from other countries, as they grow increasingly concerned about the possibility of tariffs or other trade barriers with the U.S. WSJ

U.S. Economic News

U.S. Economic News

June 15, 2017

U.S. Economic Indicators

Initial jobless claims decreased 8,000 to 237,000 last week.  The four-week moving average rose 1,000 to 243,000. DOL Report
 
Industrial production was unchanged in May (up 2.2% Y/Y) after rising 1.1% (revised) in the previous month. 
Capacity utilization edged down 0.1 percentage point to 76.6.  Fed Report
 
The NAHB Housing Market Index fell 2.0 points to 67.0 in June, slightly below consensus.  
While the outlook for the coming months remains strong, builder confidence has weakened somewhat due to shortages of skilled labor and available lots.   NAHB Report

U.S. News

The Federal Reserve announced another interest rate hike yesterday, in line with expectations.  Fed officials also maintained their outlook for at least one more rate hike this year, and spelled out plans to start reducing the central bank’s massive balance sheet. WSJ

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