U.S. Economic News

U.S. Economic News

September 20, 2017

U.S. Economic Indicators

Existing home sales fell 1.7% to a seasonally adjusted annual rate of 5.35 million in August, but are 0.2% above year-ago levels.  NAR notes that demand remains healthy, but inventory shortages have put pressure on affordability, limiting the pace of sales.  NAR Report

U.S. News

The New York Times reports that Senate Republicans have agreed to move forward with a budget that would add to the federal deficit in order to allow $1.5 trillion in tax cuts over the next ten years. Republican lawmakers say that the tax cuts will stimulate enough economic growth to offset the increased deficit, though the budget still faces significant hurdles, including budget hawks in the House of Representatives who oppose any increases to the deficit. NYT

Sarah Kent of the Wall Street Journal reports that the North Sea has again become a hotspot for oil investment despite a production decline of 34% since 2000.  Although the North Sea used to be one of the most expensive areas to extract oil, some producers are now reporting average production costs of $15 a barrel and expect those costs to continue to fall in the future. WSJ

According to the Wall Street Journal, the Business Roundtable CEO Economic Outlook shows that big businesses plan to increase hiring in the coming six months. CEOs reportedly see progress on creating a more favorable regulatory environment which has led to rising hiring plans, though CEOs did say that if Congress fails to enact tax reform they would reduce hiring. WSJ

U.S. Economic News

U.S. Economic News

September 19, 2017

U.S. Economic Indicators

Privately-owned housing starts fell 0.8% in August to a seasonally adjusted annual rate of 1.18 million (up 1.4% year-over-year). Housing permits rose 5.7% to a 1.30 million annual pace in August and are up 8.3% on the year.  Census Bureau Report

U.S. News

The New York Times reports that U.S. Trade Representative Robert Lighthizer said that it is unclear whether the U.S., Canada, and Mexico could reach an agreement to overhaul the North American Free Trade Agreement (“NAFTA”). Negotiators say that redesigned NAFTA would need to be largely finished by the end of this year, as looming elections in all three countries are likely to stall talks. NYT

According to The Wall Street Journal, Senate Republicans are considering a budget that would allow for up to $1.5 trillion in tax cuts over the next decade.  If passed, the budget would let Republicans avoid eliminating certain tax breaks to pay for the cuts. WSJ

Nick Timiraos of the Wall Street Journal writes that while the Federal Reserve is set to announce the unwinding of its massive balance sheet, it is unclear what the target size of its portfolio is.  The Fed has maintained a balance sheet of roughly $4.5 trillion since the recent financial crisis, and even after paring back, experts expect the final size of the Fed’s portfolio to be well above the pre-crisis levels due to how the Fed makes changes to short-term interest rates. WSJ

U.S. Economic News

U.S. Economic News

September 18, 2017

U.S. Economic Indicators

The NAHB Housing Market Index fell 3.0 points to 64.0 in September.  The outlook for the next six months weakened as builders expect recent hurricanes to worsen shortages of skilled labor and building materials.  NAHB Report

U.S. News

In a Wall Street Journal op-ed, William Isaac and Richard Kovacevich argue that the Federal Reserve should target a lower inflation rate in the future. The authors contend that low inflation has benefited workers and the American middle class, who have experienced sluggish nominal wage growth but have seen some real income gains due to persistently low inflation. WSJ

The Wall Street Journal reports that new survey data show that business are increasingly using payroll dollars for performance-based pay rather than guaranteed raises. According to the survey, two-thirds of firms plan to use merit pay to encourage employee performance while a quarter of firms said they would reduce or eliminate raises for low performers. WSJ

Patricia Cohen of the New York Times writes that despite record-high median real household incomes in the United States, many Americans still face stagnant wages and rising inequality. Cohen argues that despite higher median earnings, younger generations are actually making less over their careers than older generations, which has contributed to widening inequality. NYT

U.S. Economic News

U.S. Economic News

September 15, 2017

U.S. Economic Indicators

The University of Michigan Consumer Sentiment Index fell 1.5 points to 95.3 in the preliminary September reading but is up 4.1 points on the year.  The Index of Consumer Expectations declined 4.3 points to 83.4, while the Current Economic Conditions Index rose 3.0 points to 113.9.  Report
 
Industrial production fell 0.9% in August (up 1.5% Y/Y), mostly due to the effects of Hurricane Harvey. 
Capacity utilization dropped to 76.1.  Fed Report
 
Retail sales fell 0.2% in August but were up 3.2% on the year. 
Core sales — which excludes autos, gasoline, building materials, and food services — also dropped 0.2%.  Census Bureau Report
  
Business inventories rose 0.2% in July and were up 3.0% from last year. 
Manufacturers’ sales also increased 0.3% from June to July and were up 4.9% on the year. Census Bureau Report

U.S. News

The Wall Street Journal reports that new Census Bureau data show that the share of Americans who moved to a different residence last year fell to its lowest point in a decade. Research shows that the stagnation is entirely driven by people under the age of 29, while older workers and those near retirement age are actually relocating more than in the past. WSJ

U.S. Economic News

U.S. Economic News

September 14, 2017

U.S. Economic Indicators

Consumer prices rose 0.4% in August (up 1.9% on the year) almost entirely due to increases in gasoline and shelter prices.  The “core” CPI, which excludes food and energy, edged up 0.2% in August and is up 1.7% on the year.  BLS Report

U.S. News

The Wall Street Journal reports that Republicans plan to release their tax reform plan during the week of September 25th.  Congressional Republicans also announced that they plan to finish the budget process by mid-October, at which point they could begin voting on the tax plan in hopes of completing the process before year’s end. WSJ

Greg Ip of the Wall Street Journal writes that recent, weak inflation is forcing the Federal Reserve to decide between lowering its inflation target or allowing the economy to overheat. Ip argues that to stimulate inflation, the Fed must allow the unemployment rate to drop even further and leave interest rates unchanged, which could overheat the economy or allow asset bubbles to form. WSJ

According to the Wall Street Journal, sand suppliers have begun buying large tracts of land in West Texas in order to mine and sell the sand to oil drillers in the Permian basin. As energy prices crashed in 2014, drillers were forced to cut costs and produce oil more efficiently, which resulted in greater use of frac sand in horizontal wells. WSJ

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