U.S. Economic News

U.S. Economic News

July 27, 2018

U.S. Economic Indicators

The first estimate of Q2 GDP indicates that the U.S. economy expanded at an annualized rate of 4.1%, mostly in line with the consensus estimate of 4.2%. The reading reflects robust consumer spending, business investment, net exports, and government spending. BEA Report
 
The University of Michigan Consumer Sentiment Index edged down 0.3 point to 97.9 in the final July reading, but is up 4.5 points on the year. The Index of Consumer Expectations rose 1.0 point to 87.3, while the Current Economic Conditions Index dropped 2.1 points to 114.4. Report

U.S. News

Former Council of Economic Advisers Chair Martin Feldstein writes in a Wall Street Journal op-ed that the Federal Reserve should be raising interest rates even if inflation isn’t accelerating sharply. Feldstein contends that the Fed needs to leave itself room to cut interest rates in the event of an economic downturn, which he believes could be caused by a sharp drop in asset prices, prices that have been inflated by near-zero interest rates. WSJ

U.S. Economic News

U.S. Economic News

July 26, 2018

U.S. Economic Indicators

New orders of manufactured durable goods rose 1.0% in June after declining 0.3% (revised) in May, and are up 8.4% year-over-year. Excluding transportation, new orders were up 0.4% (up 8.1% Y/Y).  Census Bureau Report
 
The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $68.3 billion in June from $64.8 billion in May.
Meanwhile, both wholesale and retail inventories were unchanged. Census Bureau Report
 
Initial jobless claims rose 9,000 to 217,000 last week.
The four-week moving average decreased 2,750 to 218,000.  DOL Report

U.S. News

The Wall Street Journal reports that the U.S. and E.U. have agreed to hold off on further tariffs while the two sides negotiate a more open trade relationship. The agreement comes amidst an escalating trade conflict that has seen the U.S. threaten to impose across-the-board tariffs on European cars following recent retaliatory tariffs by the E.U. WSJ

United States: Fracking Reinvention — What It Means for Foreign Policy

United States: Fracking Reinvention — What It Means for Foreign Policy

July 25, 2018

Technological advances in hydraulic fracturing made during the 2014-16 period have allowed U.S. producers to extract oil and gas with greater profitability even at lower energy prices. The resulting increase in production coming out of the Permian Basin will make the United States the leading global crude oil producer starting in 2018 – an unthinkable development 10 years ago. In this analysis, Keybridge examines the fundamental shift in energy production and how it will alter U.S. foreign policy.

Related Documents: Key Insight – U.S. Energy Independence – July 2018

U.S. Economic News

U.S. Economic News

July 24, 2018

U.S. Economic Indicators

The FHFA House Price Index shows that U.S. house prices rose 0.2% in May and were up 6.4% from the same period last year. House prices rose on a monthly basis in seven of nine census divisions, with the largest gains coming in the East South Central division. Report

U.S. News

The Wall Street Journal reports that escalating trade tensions with China threaten to harm U.S. crude oil exports. China was the second-largest consumer of U.S. crude oil exports behind Canada in 2017, though U.S. imports only make up 3% of Chinese imports, meaning that U.S. exporters are likely to suffer more than Chinese consumers if China were to place tariffs on U.S. crude oil. WSJ

Josh Zumbrun of the Wall Street Journal writes that a new IMF report concludes that the U.S. is the largest driver of global current account imbalances and that it continues to adopt policies that are likely to increase imbalances in years to come. The IMF report points to policies that have worsened government deficits, such as tax cuts and increased federal spending, that are likely to worsen the U.S. current account deficit and could pose a threat to the global economy. WSJ

U.S. Economic News

U.S. Economic News

July 23, 2018

U.S. Economic Indicators

Existing home sales edged down 0.6% to a seasonally adjusted annual rate of 5.38 million in June, and are 2.2% below year-ago levels.  NAR notes a dire shortage of homes for sale have caused home sales to decline on an annual basis for four straight months.  NAR Report
 
The Chicago Fed National Activity Index rebounded from -0.45 (revised) in May to +0.43 in June. 
The production, sales, and employment components made positive contributions while the personal consumption & housing component contributed negatively. Chicago Fed Report

U.S. News

Jason Douglas of the Wall Street Journal writes that the biggest losers from a global trade war are likely to be smaller nations that depend heavily on global supply chains. Douglas points out that nations such as Taiwan, Hungary, the Czech Republic, and South Korea all have over 60% of their exports linked to global supply chains, meaning that a wide-reaching trade war would be more likely to create price pressures for domestic exporters in those countries. WSJ

According to the Washington Post, older workers are increasingly struggling to find work and have seen slower wage growth than the rest of the labor market. Data also show that many older workers are working part-time jobs and are taking longer to find new jobs despite a historically tight labor market, which may suggest that employers are favoring younger workers over more experienced workers. WaPo

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