U.S. Economic News

U.S. Economic News

June 27, 2016

U.S. Economic News

Greg Ip of the Wall Street Journal argues that Britain’s vote to leave the European Union has cast a shadow over the global economy — and that politics, not economics, will determine how deep a shadow it is. According to Ip, the referendum’s key takeaway is that sovereignty and nationalism now rival economics as drivers of voter sentiment, which will tilt politics in the direction of less openness, slower growth, and less predictable policies. WSJ

In an effort to measure the size of the U.S. “gig economy,” the Commerce Department recently proposed a new term for the sector called “digital matching firms.”  The term — which will aid future data collection — encompasses firms that: (1) use technology such as mobile apps to facilitate peer-to-peer transactions; (2) rely on user-based rating systems for quality control; (3) offer workers providing services flexibility in deciding their typical hours; and (4) rely on workers to use their own tools or assets to provide a service.  WSJ

Ian Talley and David Harrison argue in the Wall Street Journal that the UK’s decision to exit the European Union will shake the American economy by strengthening the dollar, weighing on business confidence, and tightening financial conditions.  While the “Brexit” decision has become the latest in a long list of headwinds contributing to sluggish U.S. growth, the authors believe that the economy is healthy enough to weather the storm.  WSJ

U.S. Economic News

U.S. Economic News

June 24, 2016

U.S. Economic Indicators

New orders of manufactured durable goods decreased 2.2% in May, following an increase of 3.3% in April, but were up 1.7% year-over-year.  Excluding transportation, new orders fell 0.3% (down 0.5% Y/Y).  Census Bureau Report

The University of Michigan Consumer Sentiment Index dipped 1.2 points to 93.5 in June and is down 2.6 points on the year.  The index for consumer expectations fell 2.5 points, while the index for current economic conditions rose 0.9 points.  Report

U.S. Economic News

Ian Talley of the Wall Street Journal argues that Britain’s exit from the European Union is not enough to nudge the U.S. economy into contraction, but could jolt global markets and drive up the value of the dollar.   The “Brexit” could also weaken U.S. diplomatic leverage in Europe and upend corporate strategies of U.S. companies based in London. WSJ

U.S. Economic News

U.S. Economic News

June 23, 2016

U.S. Economic Indicators

New home sales declined 6.0% to a seasonally adjusted annual pace of 551,000 in May following a revised pace of 586,000 in March, but are 8.7% above year-ago levels.  The median sales price fell from $320,200 to $290,400, while the inventory of new homes rose from 4.1 months to 4.7 months at the current sales rate.  Census Bureau Report

Jobless claims decreased 18,000 to 259,000 last week, suggesting that the job market may be showing some resilience after May’s slowdown in hiring.  The four-week moving average declined 2,250 to 267,000.  DOL Report, WSJ

The Conference Board’s Leading Economic Index (LEI) for the U.S. declined 0.2 percent in May, following a 0.6 percent increase in April and a 0.1 percent increase in March.  The decline is largely attributable to a sharp increase in initial claims for unemployment insurance.  Conference Board Report

U.S. Economic News

Greg Ip of the Wall Street Journal predicts that the impacts of Britain leaving the European Union would be subtle, gradual, and global.  Specifically, Ip believes that a potential “Brexit” would further unravel global integration, which could undermine growth prospects already clouded by aging populations and “miserable” productivity. WSJ

According to a new report from the U.S. Conference of Mayors, roughly two-thirds of U.S. cities have rebounded from the recession and are now at peak employment, pushing wages higher and generating more disposable income for households. However, the authors note that the outlook is not uniformly positive; while growth is robust in the South and the West of the U.S., cities with high exposure to the energy and manufacturing sectors continue to struggle.  WSJ

The International Monetary Fund warned yesterday that the U.S. faces economic headwinds and “pernicious” trends — including a shrinking middle class — that could stunt growth in the long term.   IMF economists noted that the U.S. economy was in “good shape,”  but that recent weak employment and other data may reflect the economy’s lower potential growth rate.  FT

U.S. Economic News

U.S. Economic News

June 22, 2016

U.S. Economic Indicators

The FHFA House Price Index rose 0.2% in April after increasing 0.8% in March (revised), and is up 5.9% on the year. Prices rose the most in the New England census division (up 1.4% this month), which includes Maine, New Hampshire, and Connecticut.  FHFA Report

Existing home sales grew 1.8% to a seasonally adjusted annual rate of 5.53 million in May — the highest pace in almost a decade, and 4.5% above year-ago levels.  NAR attributes the increase to ultra-low mortgage rates and increased equity among repeat home buyers.  NAR Report

U.S. Economic News

In her semiannual testimony to the Senate Banking Committee yesterday, Federal Reserve Chairwoman Janet Yellen said that she would tread carefully when gauging whether to lift short-term interest rates again.  Ms. Yellen noted that the central bank is still assessing whether the U.S.  recovery remains on track, and officials see “considerable uncertainty” about the economic outlook in light of weaker hiring numbers, soft investment, and the UK’s referendum on its membership in the European Union.  FT

A new report from Harvard University’s Joint Center for Housing Studies reveals thatalthough the housing market is recovering overall, large parts of the country are being left behind due to deepening income inequality.  Specifically, the report finds that the rental affordability crisis persists for the middle class, and that the number of families living in poor neighborhoods has more than doubled since 2000.   WSJ

U.S. Economic News

U.S. Economic News

June 21, 2016

 U.S. Economic News

A new White House study examines the causes of falling labor force participation rates among men.  The Council of Economic Advisers attributes the decline to a reduction in the demand for low-skilled labor, and notes a sharp divergence in male participation rates by educational attainment and ethnicity. WSJ

New research from the Urban Institute finds that the U.S. upper middle class is larger and richer than it has ever been, expanding from about 12% of the population 1979 to a new record of nearly 30% in 2014. The author notes that any discussion of inequality that is limited to the 1% “misses a lot of the picture” because it ignores the large inequality between the growing upper middle class and the middle and lower middle classes.  WSJ

According to a new report by the World Trade Organization (WTO), G20 economies introduced new protectionist trade measures at the fastest pace since the financial crisis between mid-October of last year and mid-May 2016.  WTO observed that the trend coincides with a slowdown in both global trade and overall growth, and warned against the dangers of increased protectionist political rhetoric. FT

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