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

U.S. Economic News

U.S. Economic News

September 13, 2017

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand rose 0.2% in August and is up 2.4% since August of last year.  The core — which removes the volatile prices of food, energy, and trade services — also increased 0.2% and is up 1.9% on the year.  BLS Report

U.S. News

The Wall Street Journal reports that the median inflation-adjusted U.S. household income rose to a new record of $59,039 in 2016. While government officials cautioned against historical comparisons due to methodological changes, the number reflects the current economic expansion which, at nine years, is the third-longest such expansion in U.S. history. WSJ

Eric Morath of the Wall Street Journal argues that the current record-high number of job openings may overstate the tightness of the labor market. Morath writes that a glut of openings in low-skill jobs as well as lower search costs for employers could be driving the increase in openings, and that we would expect faster wage growth if the labor market were truly tight. WSJ

According to the Financial Times, Hurricanes Harvey and Irma are unlikely to cause enough economic damage to alter the Federal Reserve’s rate hike path. While many expect the damage from the storms to detract 0.5 — 0.8% from third quarter GDP growth, the economic effects will likely only be transitory and thus will not warrant response from the Fed. FT

U.S. Economic News

U.S. Economic News

September 12, 2017

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 0.1 point to 105.3 in August, as four of the components rose, five fell, and one was unchanged. The share of small business owners who plan to make capital expenditures in the next three to six months rose to its highest level since 2006.  NFIB Report

U.S. News

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated there were 6.2 million job openings at the end of July, little changed from June.  Hires edged up to 5.5 million and the quits rate inched up to 2.2%.  BLS Report

According to the Wall Street Journal, OPEC oil production fell last month for the first time since April. OPEC production declined by 0.24% or about 79,000 barrels per day in August, mostly due to production cuts by Libya, Gabon, Venezuela, and Iraq. WSJ

The Wall Street Journal reports that Treasury Secretary Mnuchin says that the Republican tax reform plan will aim to exclude service-sector firms from enjoying “pass-through” tax rates. Secretary Mnuchin emphasized that any Republican tax plan would seek both to eliminate tax loopholes and to encourage job creation. WSJ

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