U.S. Economic News

U.S. Economic News

July 13, 2017

U.S. Economic Indicators

Initial jobless claims fell 3,000 to 247,000 last week.  The four-week moving average rose 2,250 to 245,750. DOL Report

The headline Producer Price Index (“PPI”) for final demand edged up 0.1% in June and is up 2.0% since June of last year.  The core — which removes the volatile prices of food, energy, and trade services — rose 0.2% and is up 2.0% on the year.  BLS Report

U.S. News

According to the Washington Post, new analysis from labor economists at MIT and Utrecht University School of Economics concludes that robots and automation are unlikely to permanently eliminate jobs. The report shows that between 1970 and 2007, employment declines caused by productivity gains were usually followed by even stronger employment gains in other sectors of the economy. WaPo
 
The Wall Street Journal highlights a new report showing that video games increasingly explain the absence of able-bodied young men from the labor force.
The authors conclude that the rise of video games explains 23-46% of the decline in work for young men during the 2000s, and that it will likely be difficult to reverse this behavior. WSJ
 
The Wall Street Journal reports that forecasters have lowered their expectations for economic growth, inflation, and interest rates amid the political gridlock gripping Congress. Congress still has yet to pass a budget, raise the debt ceiling, or enact various policy reforms for healthcare and taxes. WSJ

U.S. Economic News

U.S. Economic News

July 12, 2017

U.S. News

According to the Wall Street Journal, Federal Reserve Chairwoman Janet Yellen said that the Fed will need to continue gradually raising interest rates in order to sustain the current economic expansion, but that rates will not have to rise to levels seen in prior expansions. Yellen also stated that the Fed will begin shrinking its balance sheet if the economy continues to move in a positive direction. WSJ


Nick Timiraos of the Wall Street Journal writes that members of the Council of Economic Advisers under past presidents from both parties have warned against the current administration’s potential steel tariffs. The group of economists warned that steel tariffs would both harm the U.S. economy and relations with key trading partners such as Mexico, Canada, and Brazil. WSJ

 

The Financial Times reports that U.S. oil exports are expected to quadruple within three years and will exceed exports from most members of the Organization of Petroleum Exporting Countries (“OPEC”). Although U.S. exports have climbed steadily since the lifting of the export ban in 2015, the U.S. still imports roughly 8 million barrels of oil a day due to differences between the quality of American and foreign oil. FT

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

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