U.S. Economic News

U.S. Economic News

January 31, 2019

U.S. Economic Indicators

Initial jobless claims rose 53,000 to 253,000 last week. The four-week moving average rose 5,000 to 220,250. DOL Report

New home sales jumped 16.9% to a seasonally adjusted annual pace of 657,000 in November, but are 7.7% below the November 2017 rate.  The median sales price fell to $302,400 and the inventory of new homes declined to 6.0 months at the current sales rate. Census Bureau Report

U.S. News

Brian Blackstone reports for the Wall Street Journal that a slowing global economy and low inflation has central banks around the world reconsidering plans to gradually reduce the financial stimulus from markets and the banking system. The Federal Reserve signaled in Wednesday’s policy meeting that they would pause raising rates until it is known if weakness abroad and political uncertainty will drag down U.S. growth. WSJ

According to the Wall Street Journal, China has placed its hopes on another meeting between President Trump and Chinese President Xi Jinping to help solve the trade dispute between the two countries. A high level trade delegation from China has proposed that the presidents meet in the Chinese city Hainan in late February. WSJ

The Wall Street Journal reports that the eurozone economy grew at the weakest pace in four years in 2018, with a further slowdown likely as the currency area grapples with political tensions and weak demand for its exports. The slowdown feeds concerns about the global expansion, which is weakening for various reasons across a number of major countries. WSJ

U.S. Economic News

U.S. Economic News

January 30, 2019

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 213,000 jobs in January, above expectations of 174,000. The services sector added 145,000 jobs and the goods-producing sector added 68,000 jobs. ADP Report

The National Association of Realtors pending home sales index eased 2.2% in December (down 9.8% Y/Y), the twelfth straight month of annual decreases. NAR points to stock market volatility hurting consumer confidence, as well as record high home prices and higher mortgage rates as potential causes for December’s drop. NAR Report

U.S. News

The Wall Street Journal reports that the Fed is expected to hold rates steady at their policy meeting today. Since the beginning of 2019, Fed officials have signaled they are willing to stop raising rates until they determine if slowing global growth and volatile financial markets have dampened the U.S. outlook. WSJ

Kate Davidson of the Wall Street Journal reports that the Treasury plans to scale back its borrowing plans in early 2019 after increasing borrowing last year due to tax cuts. Overall, the Treasury expects to issue $365 billion in debt during the first quarter of 2019 and $83 billion during the second quarter. WSJ

 

U.S. Economic News

U.S. Economic News

January 29, 2019

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index declined from 126.6 in December to 120.2 in January. The decrease was driven by a worsening in the Expectations Index likely due to financial market volatility and the government shutdown.  Conference Board Report

U.S. News

The Wall Street Journal reports that cabinet-level delegations from the U.S. and China will continue trade negotiations on Wednesday, however both parties indicate they are sharply divided. The Chinese delegation plans to offer increased purchases of U.S. farm products and energy, in addition to reformed industrial policies, however they will fight deeper, structural reform of the Chinese economy. WSJ

Kate Davidson of the Wall Street Journal reports that the partial government shutdown that ended Friday will cost the economy about $3 billion in reduced output in 2019, citing a report from the Congressional Budget Office. The report estimates that the 35 day closure will cut about 0.4 percentage point from annualized growth in the first quarter of 2019. WSJ

The Wall Street Journal reports that U.S. Treasury Secretary Steven Mnuchin stated that the criminal charges against Chinese telecommunications firm Huawei will not complicate trade talks this week between the U.S. and China. Mnuchin elaborated, saying that forced technology transfers are part of trade discussions, however security issues will be dealt with separately. WSJ

According to the Wall Street Journal, the Government National Mortgage Association is increasing scrutiny of nonbank mortgage lenders over concerns these lenders could not survive stressed conditions. These changes come with the growing role of nonbank lenders in issuing mortgages and softening housing markets. WSJ

U.S. Economic News

U.S. Economic News

January 28, 2019

U.S. Economic Indicators

The Chicago Fed National Activity Index rose from +0.21 (revised) in November to +0.27 in December. The production and employment indicators contributed positively, while the sales, orders, and inventories category contributed neutrally and personal consumption and housing contributed negatively. Chicago Fed Report

U.S. News

Bob Davis from the Wall Street Journal reports that when U.S. and Chinese trade negotiators begin talks on Wednesday, the role of China’s state-owned companies in its economy will receive a lot of U.S. attention. State owned enterprises have dominated industries that U.S. firms want to enter and will be an obstacle for U.S. negotiators. WSJ

The Wall Street Journal reports that investors blame the stock market’s volatility on the Federal Reserve shrinking its bond portfolio, puzzling Fed officials because there is little volatility in markets where the Fed has actively intervened. The Fed is shrinking its $4 trillion portfolio by allowing Treasury and mortgage securities to mature without replacing them, with about $40 billion expiring per month in recent months. WSJ

According to the Wall Street Journal, a growing number of industrial companies said their sales are softening in China, putting a strong three-year run for U.S. manufacturers in China at risk. U.S. exports to China doubled over the past decade through 2017 to $130 billion per year, as American businesses bet heavily on expanding to China’s growing consumer market. WSJ

U.S. Economic News

U.S. Economic News

January 25, 2019

U.S. News

Nick Timiraos from the Wall Street Journal reports that Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they’d expected when they first began shrinking their balance sheet two years ago. With a pause in interest rate hikes, planning for the Fed’s bond portfolio could be the center of the Federal Open Market Committee’s meeting next week. WSJ

The Wall Street Journal reports that top White House economic advisor Lawrence Kudlow said the administration will seek to fill two Fed Board of Governors vacancies with nominees who do not believe an accelerating economy has to fuel inflation. Kudlow stated that surging productive capacity means more people can work at higher wages without sharp increases in inflation. WSJ

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