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

U.S. Economic News

U.S. Economic News

July 3, 2017

U.S. Economic Indicators

The ISM Manufacturing Index rose 2.9 percentage points to 57.8 in June.  The new orders index jumped 4.0 percentage points to 63.5 and the employment index increased 3.7 percentage points to 57.2 ISM Report
 
Construction spending held steady in May at an annualized rate of $1.2 trillion. 
Public construction increased 2.1% while private construction dipped 0.6%. Census Bureau

U.S. News

Ben Leubsdorf of the Wall Street Journal argues that differences in child care policy may explain why female labor force participation is lower in the U.S. than in Canada. Leubsdorf believes that the U.S. should follow Canada’s lead in expanding part-time job opportunities, providing more affordable child care, and extending paid leave following childbirth. WSJ

According to the Wall Street Journal, U.S. car manufacturers observed sharp declines over the first half of 2017 as auto sales fell to 2014 levels. The authors attribute this decline in part to rising vehicle prices, which have deterred consumers from buying. WSJ

U.S. Economic News

U.S. Economic News

June 29, 2017

U.S. Economic Indicators

The third estimate of Q1 GDP indicates that the U.S. economy expanded at an annualized rate of 1.4%, above the prior estimate. The revised reading reflects slight improvements to consumer spending and net exports, while inventories worsened somewhat.  BEA

Initial jobless claims increased 2,000 to 244,000 last week.  The four-week moving average fell 2,750 to 242,250. DOL Report

U.S. News

Ian Talley of the Wall Street Journal argues that although the U.S. economy is in its third-longest expansion, there are a number of key underlying weaknesses. Talley points to increasing levels of public debt, weak investment spending, and an aging workforce as structural headwinds for economic growth. WSJ

Robert Samuelson of the Washington Post writes that the usual relationship between wages and inflation has weakened, meaning that inflation may remain subdued despite an uptick in economic activity. Samuelson states that the breakdown of this relationship may be due to globalization and automation, which have eroded workers’ bargaining power for higher wages. WaPo

U.S. Economic News

U.S. Economic News

June 28, 2017

U.S. Economic Indicators

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit decreased 1.8% in May to $65.9 billion.  Meanwhile, wholesale inventories increased 0.3% and retail inventories rose 0.6%.  Census Bureau Report
 
The National Association of Realtors pending home sales index fell 0.8% to 108.5 in May (down 1.7% Y/Y), marking a three month slump for the index.  
NAR says that critically low supply levels have dragged down the housing market and that we may be approaching a topping off in sales.  NAR Report

U.S. News

Reuters reports Minneapolis Federal Reserve Bank President Neel Kashkari says that the Fed should not be raising interest rates on account of cooling inflation and weak wage growth. Kashkari was the lone dissenting vote against the June interest rate hike, stating that there likely is still slack in labor markets. Reuters
 
The Wall Street Journal reports that about two-thirds of contractors and builders who are having difficulty finding labor are struggling to finish projects on time.  Industry officials warn that if the administration goes ahead with its proposed $1 trillion infrastructure program the labor shortage will get even worse, leading contractors to turn down even more projects than they do today. WSJ
 
Janet Yellen stated on Tuesday that globalization and technological change have been harmful to a large share of the population.
Yellen also said that it is challenging to help those who have lost jobs and suffered on account of offshoring and technological change, as problems like increased death rates and rising drug use have worsened in recent years. WSJ

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