U.S. Economic News

U.S. Economic News

June 4, 2019

U.S. Economic Indicators

New factory orders for manufactured goods decreased 0.8% in April following a 1.3% increase in March and are up 1.6% compared to a year ago. New orders excluding transportation rose 0.3% while new orders for nondefense capital goods excluding aircraft fell 1.0%. Census Bureau Report

U.S. News

The Wall Street Journal reports that Federal Reserve Chairman Jerome Powell announced that the central bank is closely monitoring escalating trade tensions and may cut rates if the economic outlook deteriorates. Additionally, with inflation holding below the Fed’s 2% target for the past several months, officials are concerned that persistently low inflation will pull down consumers’ expectations of future inflation and have a negative effect on actual future prices. WSJ

According to the Wall Street Journal, President Trump has announced that he expects U.S. tariffs on Mexican goods to go into effect next week as scheduled despite ongoing negotiations to resolve the immigration dispute. The proposed tariffs would affect all Mexican exports to the U.S., starting at 5% on June 10 and rising each month to 25% by October. WSJ

U.S. Economic News

U.S. Economic News

June 3, 2019

U.S. Economic Indicators

The ISM Manufacturing Index decreased 0.7 percentage point to 52.1 in May. The Employment Index rose 1.3 percentage points to 53.7, while the New Orders Index rose 1.0 percentage point to 52.7. ISM Report

Construction spending was essentially unchanged in April at an annualized rate of $1.30 trillion. Public construction rose 4.8% while private construction decreased 1.7%. Census Bureau Report

U.S. News

According to the Wall Street Journal, both China and Mexico have signaled that they are still willing to negotiate with the U.S. over escalating trade issues. Over the weekend, China released a policy paper indicating both China’s willingness to engage in a trade war and openness to returning to negotiations, while Mexico rushed a delegation to the U.S. to resolve immigration issues before the U.S. imposes punitive tariffs on Mexican goods. WSJ

U.S. Economic News

U.S. Economic News

May 31, 2019

U.S. Economic Indicators

Real disposable personal income increased 0.1% in April after falling 0.2% in March, while real personal consumption expenditure (PCE) was unchanged. The PCE price index increased 0.3% (up 1.5% Y/Y) and the core price index increased 0.2% (up 1.6% Y/Y) in April. BEA Report

The University of Michigan Consumer Sentiment Index rose 2.8 points to 100.0 in the final May reading and is up 2.0 points from last year. The Index of Consumer Expectations increased 6.1 points to 93.5, while the Current Economic Conditions Index fell 2.3 points to 110.0. University of Michigan

U.S. News

According to the Wall Street Journal, the U.S. has announced it will impose increasing tariffs, starting at 5%, on all Mexican exports to the U.S. beginning June 10 in an effort to pressure Mexico to deter the flow Central American migrants to the southern border. Business groups have expressed concerns that the tariffs will lead to retaliation against U.S. farm products and manufactured goods. WSJ

The Financial Times reports that an official measure of Chinese factory activity slowed to a ten-year low in May, suggesting that trade tensions and banking troubles will continue to drag down China’s economic growth. Experts expect Chinese policymakers to ease credit access for banks to promote lending to smaller companies, though the government’s recent bank takeover—the first in 18 years—is expected to tighten credit access in the short run. FT

U.S. Economic News

U.S. Economic News

May 30, 2019

U.S. Economic Indicators

The second estimate of Q1 GDP indicates that the U.S. economy expanded at an annualized rate of 3.1%, down slightly from April’s advance estimate of 3.2%. The reading reflects downward revisions in nonresidential fixed investment and private inventories, while exports and consumption spending were revised upward. BEA Report

Initial jobless claims increased 3,000 to 215,000 last week. The four-week moving average fell 3,750 to 216,750. DOL Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $72.1 billion in April from $71.9 billion in March. Meanwhile, wholesale inventories rose 0.7% and retail inventories increased 0.5%. Census Bureau Report

The National Association of Realtors Pending Home Sales Index decreased 1.5% in April (down 2.0% Y/Y).  NAR reports that the outlook is favorable due to rising mortgage applications and consumer confidence. NAR Report

U.S. News

Nick Timiraos reports for the Wall Street Journal that the U.S.-China trade spat is complicating the Federal Reserve’s “wait-and-see” approach to monetary policy, as the trade fight scenario involves assumptions around hard-to-predict geopolitical trends. Fearing miscalibrated monetary policy, Fed officials are unlikely to pre-emptively adjust interest rates. WSJ

U.S. Economic News

U.S. Economic News

May 29, 2019

U.S. News

The Wall Street Journal reports that the U.S. Treasury Department declined to designate China as a currency manipulator in its latest semiannual report but acknowledged significant concerns about China’s currency practices. The Treasury is closely monitoring China and other countries for signs of intentional currency devaluation to make exports more attractive to U.S. markets. WSJ

According to the Financial Times, China’s state planning body has suggested using rare earth metal exports as leverage in the trade conflict with the U.S. China dominates the global supply of rare earth metals, but currently exports very few directly to the U.S. FT

The Financial Times reports that investors are anticipating the Fed will cut rates twice in 2019, countering the effects of slowing global economic growth exacerbated by the U.S.-China trade war. Although futures prices have been signaling a rate cut for several months, Fed officials have maintained that their next move could be in either direction. FT