U.S. Economic News

U.S. Economic News

October 5, 2017

U.S. Economic Indicators

New factory orders for manufactured goods rose 1.2% in August following a 3.3% decrease in July, and are up 5.6% on the year. New orders excluding transportation edged up 0.4% while new orders for nondefense capital goods excluding aircraft increased 1.1%. Census Bureau Report
 
The U.S. trade deficit decreased from $43.6 billion in July (revised) to $42.4 billion in August. 
The goods deficit fell $0.9 billion while the services surplus edged up $0.3 billion.  Census Bureau Report
 
Initial jobless claims decreased 12,000 to 260,000 last week. 
 The four-week moving average fell 9,500 to 268,250. DOL Report

U.S. News

The Wall Street Journal reports that Federal Reserve Chair Janet Yellen signaled her support for making sure that banking regulations are not unduly burdensome. Yellen said that community banks mostly avoided the practices that contributed to the financial crisis and that they should not be punished for the actions of larger financial institutions. WSJ

Sharon Nunn of the Wall Street Journal writes that western states are driving the U.S.’ consumer spending growth. Nunn posits that the high-tech sector and expanded trade with Asia are driving the region’s growth, which has consistently outpaced nation-wide growth for six years. WSJ

U.S. Economic News

U.S. Economic News

October 4, 2017

U.S. Economic Indicators

The ISM Non-Manufacturing Index rose 4.5 percentage points to 59.8 in September.  The new orders index increased 5.9 percentage points to 63.0 and the employment index improved 0.6 percentage point to 56.8. ISM Report

The ADP Employment Report shows that private-sector employment increased by 135,000 jobs in September, slightly below expectations of 140,000.  The services sector added 88,000 jobs and the goods-producing sector added 48,000 jobs.  ADP Report

U.S. News

The New York Times reports that Congressional Republicans are backing away from a proposed full repeal of state and local tax (“SALT”) deductions in their tax reform plan. Members of Congress in high-tax states have expressed staunch opposition to eliminating SALT deductions, which would likely raise taxes for citizens in those high-tax states. NYT

According to the Washington Post, only thirty-five percent of consumers who plan to shop during Thanksgiving week plan to shop on “Black Friday,” down from 51% a year ago. Multiple factors have contributed to this decline, including the rise of e-commerce and more spread-out holiday deals. WaPo

U.S. Economic News

U.S. Economic News

October 3, 2017

U.S. News

Martin Lowy argues in a Financial Times op-ed that the true cause of the U.S. housing bubble leading up to the Great Recession was a massive inflow of foreign money into the U.S. Lowy contends that if substantial amounts of foreign capital had not been invested in mortgage-backed securities between 2004 and 2006, private U.S. lenders would not have been able to extend mortgages to unqualified borrowers. FT
 
The Wall Street Journal reports that the connection between economic growth and tax cuts is not as clear-cut as many experts believe. The author argues that previous tax cuts have had mixed results on economic growth, and it is unclear what effect the newly proposed tax cuts will have on the macro-economy. WSJ

U.S. Economic News

U.S. Economic News

October 2, 2017

U.S. Economic Indicators

The ISM Manufacturing Index rose 2.0 percentage points to 60.8 in September.  The new orders index increased 4.3 percentage points to 64.6 and the employment index edged up 0.4 percentage point to 60.3.  ISM Report
 
Construction spending increased 0.5% in August to an annualized rate of $1.22 trillion. 
Public construction rose 0.7% and private construction ticked up 0.4%.  Census Report

U.S. News

Jason Furman, the former chairman of the Council of Economic Advisers, argues in a Wall Street Journal op-ed that any tax cuts need to be revenue-neutral. Furman contends that tax cuts will not generate enough economic growth to offset lost tax revenue, which in turn will balloon the federal debt held by the public. WSJ

Daniel Kruger of the Wall Street Journal writes that long-term bond yields posted their first quarterly gain of the year, indicating that investors may expect a return of inflation later this year. Although inflation expectations moderated earlier in the year as weak consumer prices and a stalled legislative agenda tempered investors’ optimism, the potential for tax cuts by the end of 2017 have given new life to inflation expectations. WSJ

U.S. Economic News

U.S. Economic News

September 29, 2017

U.S. Economic Indicators

Real disposable personal income and real personal consumption expenditures (PCE) both edged down 0.1% in August. The PCE price index rose 0.2% (1.4% Y/Y) and the core price index inched up 0.1% (1.3% Y/Y). BEA Report

The University of Michigan Consumer Sentiment Index fell 1.7 points to 95.1 in the final September reading but is up 3.9 points on the year.  The Index of Consumer Expectations declined 3.3 points to 84.4, while the Current Economic Conditions Index rose 0.8 point to 111.7.  Report

U.S. News

According to the Wall Street Journal, the GOP effort to pass tax reform has hit its first hurdle, as House Republicans from high-tax states have opposed eliminating the state and local tax deductions. Experts expect that the tax reform effort will continue to face roadblocks, as different special interest groups will try to preserve favorable loopholes and deductions. WSJ

The Washington Post reports that Senate Democrats are launching a bipartisan effort to invest $500 billion in infrastructure. Democrats on the Senate Environment and Public Works Committee recently sent a letter to Transportation Secretary Elaine Chao asking to meet about the infrastructure effort, which should receive broad, bipartisan support. WaPo

Jeffrey Sparshott of the Wall Street Journal writes that the National Association of Manufacturers’ (“NAM”) member survey shows that U.S. manufacturers are reporting record-high levels of optimism regarding the direction of the U.S. economy. NAM says that healthy U.S. growth, strengthening foreign demand, and the prospect of tax reform have all boosted its members’ outlook. WSJ

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