U.S. Economic News

U.S. Economic News

July 11, 2017

U.S. Economic Indicators

The NFIB Small Business Optimism Index edged down 0.9 point to 103.6 in June, as five of the components fell, four rose, and one was unchanged. The Index still remains historically strong, but has fallen 2.3 points since January as small business expectations for substantial policy reforms have faded.  NFIB Report
 
The U.S. Census Bureau reports that wholesale merchant inventories rose 0.4% in May to $593.9 billion.  
Inventories were up 1.9% year-over-year.  Census Report

U.S. News

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely watched measure of labor market health, indicated there were 5.7 million job openings at the end of May, a decline from April.  Hires increased to 5.5 million and the quits rate was little changed at 2.2%.  BLS Report
 
The Wall Street Journal reports that President Trump will nominate Randal Quarles as the Federal Reserve’s top official in charge of regulating large banks.
If confirmed, Quarles would also serve as a member of the Board of Governors, meaning he would vote on monetary policy decisions. WSJ
 
According to the Wall Street Journal, a new report from the International Energy Agency (“IEA”) largely attributes a global uptick in oil and gas field investments in 2017 to the resurgence of the U.S. shale industry.
 IEA says that U.S. producers have focused on smaller, simpler projects as opposed to enormous megaprojects, which has allowed for exceptional productivity gains and ever-lower breakeven prices. WSJ

U.S. Economic News

U.S. Economic News

July 10, 2017

 

U.S. News

Paul Hannon and David Harrison of the Wall Street Journal write that as central bankers around the world begin to tighten monetary policy, inflation has been falling. Despite nearly a decade of loose monetary policy, many G20 nations face weak inflation, bringing into question the traditional link between healthy economies and rising prices. WSJ

The Financial Times reports that the U.S. auto industry faces both declining sales and employment, undermining much of the sector’s recovery since the recent recession. The authors point to the exhaustion of “pent-up demand” from the recession and the rise of ride-hailing apps as two factors contributing to the decline. FT

The Wall Street Journal reports that leading indicators from the OECD suggest that growth in the U.S. this year may be weaker than previously expected.  The fading possibility of substantial tax reform or infrastructure spending occurring in 2017 has driven the downward revisions to OECD projections for the U.S. WSJ

U.S. Economic News

U.S. Economic News

July 7, 2017

U.S. Economic Indicators

The U.S. economy added 222,000 jobs in June, above consensus.  The unemployment rate edged up to 4.4% as the labor force participation rate rose to 62.8%, and average hourly earnings rose 2.5% Y/Y.  BLS Report

U.S. News

Federal Reserve governor Jerome Powell says that the U.S. housing finance system is in drastic need of reform. In recent remarks, Powell called for Congress to encourage private investment into Fannie Mae and Freddie Mac in order to shield taxpayers from credit risk. WSJ

The Financial Times reports that Fed officials disagree about the timing of the reduction of the Fed’s balance sheet. While some officials believe that the Fed should wait until September to act, other officials say that the U.S. economy is at risk of overheating and the Fed should act sooner. FT

According to the Washington Post, mortgage rates have surged in recent weeks due to uncertainty regarding future moves by the Fed. Borrowing rates increased when the Fed confirmed that it will begin unwinding its massive balance sheet in the near future, which should have largely the same effect as a rate hike, though market watchers are unsure of the magnitude of the effect. WaPo

U.S. Economic News

U.S. Economic News

July 6, 2017

U.S. Economic Indicators

Initial jobless claims rose 4,000 to 248,000 last week.  The four-week moving average rose 750 to 243,000. DOL Report

The ADP Employment Report shows that private-sector employment increased by 158,000 jobs in June, below expectations of 180,000.  The services sector added 158,000 jobs while the goods-producing sector added zero jobs.  ADP Report
 
The ISM Non-Manufacturing Index edged up 0.5 percentage point to 57.4 in June. 
The new orders index rose 2.8 percentage points to 60.5, while the employment index decreased 2.0 percentage points to 55.8. ISM Report

The U.S. trade deficit fell from $47.6 billion in April (revised) to $46.5 billion in May.  The goods deficit decreased $0.9 billion while the services surplus edged up $0.2 billion.  Census Bureau Report

U.S. Economic News

U.S. Economic News

July 5, 2017

U.S. Economic Indicators

New factory orders for manufactured goods fell 0.8% in May following a 0.3% drop in April, but are up 4.8% on the year. New orders excluding transportation dipped 0.3% while new orders for nondefense capital goods excluding aircraft edged up 0.2%.  Census Bureau Report

U.S. News

Greg Ip of the Wall Street Journal writes that the U.S. economy currently has all the preconditions necessary for a recession. Ip highlights factors such as a healed labor market, exceptionally high asset valuations, tightening monetary policy, and exceedingly low volatility as common precursors to economic downturns. WSJ

The Wall Street Journal reports that the Federal Reserve is expected in September to announce a move to begin shrinking its balance sheet. Experts expect the Fed to hold off on another rate hike until December in order to assess markets’ response to the unprecedented unloading of assets. WSJ

Neil Irwin of the New York Times writes that Americans’ outlook for the U.S. economy has soared after the November presidential election but actual economic activity has been tepid.  Irwin argues that despite the sustained gains in almost every measure of consumer and business confidence actual spending and investment have been slowed by policy uncertainty and weak wage growth. NYT

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