U.S. Economic News

U.S. Economic News

September 1, 2017

U.S. Economic Indicators

The U.S. economy added 156,000 jobs in August, below consensus.  The unemployment rate inched up to 4.4%, the labor force participation rate held steady at 62.9%, and average hourly earnings rose 2.5% Y/Y.  BLS Report
 
The ISM Manufacturing Index rose 2.5 percentage points to 58.8 in August. 
The new orders index edged down 0.1 percentage point to 60.3 and the employment index increased 4.7 percentage points to 59.9.  ISM Report
 
Construction spending fell 0.6% in July to an annualized rate of $1.21 trillion. 
Public construction declined 1.4% and private construction edged down 0.4%.  Census Report
 
The University of Michigan Consumer Sentiment Index rose 3.4 points to 96.8 in the final August reading and is up 7.0 points on the year.
 The Index of Consumer Expectations jumped 7.2 points to 87.7, but the Current Economic Conditions Index fell 2.5 points to 110.9.  Report

U.S. News

The Wall Street Journal reports that Treasury Secretary Mnuchin says that the Trump administration and top Congressional Republicans will release a more detailed tax plan in the coming weeks.  After Congress returns from its August recess, leaders are set to meet with the administration to hash out a more comprehensive framework for making tax cuts and simplifying the tax code. WSJ

U.S. Economic News

U.S. Economic News

August 31, 2017

U.S. Economic Indicators

Real disposable personal income and real personal consumption expenditures (PCE) both rose 0.2% in July. The PCE and the core price indices both edged up 0.1% (each up 1.4% Y/Y). BEA Report

The National Association of Realtors pending home sales index fell 0.8% to 109.1 in July (down 1.3% Y/Y).  NAR says that “staggering inventory woes” continue to stall contract activity as affordability worsens in many key markets.  NAR Report
 
Initial jobless claims rose 1,000 to 236,000 last week. 
 The four-week moving average fell 1,250 to 236,750. DOL Report

U.S. News

Patricia Cohen of the New York Times writes that despite Republican efforts to incentivize American firms to repatriate profits held abroad, there is often little effect on real investment as a result of repatriation. Cohen argues that profits brought back to the U.S. from overseas are largely used to pay dividends to shareholders or buy back stock, not to reinvest. NYT

U.S. Economic News

U.S. Economic News

August 30, 2017

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 237,000 jobs in August, well above expectations of 185,000.  The services sector added 204,000 jobs and the goods-producing sector added 33,000 jobs.  ADP Report
 
The second estimate of Q2 GDP indicates that the U.S. economy expanded at an annualized rate of 3.0%, above the initial estimate of 2.6%.
The reading mainly reflects upward revisions of personal consumption expenditures and nonresidential fixed investment.  BEA

U.S. News

According to the Wall Street Journal, hotel developers are slowing down new construction as some markets are becoming overbuilt. Many developers rushed to build as the economy recovered from the deep recession, though declining revenues and escalating labor and materials costs have slowed growth in recent months. WSJ

Vipal Monga of the Wall Street Journal writes that Republican plans to scale back tax deductions on corporate interest could harm the U.S. bond market. If the Republican tax plan eliminates net interest payment deductions from taxable income, companies may shift borrowing to foreign countries where the tax deductions still exist, thereby weakening U.S. capital markets. WSJ

The Financial Times reports that Moody’s has upgraded its growth forecasts for the European Union while slashing its forecast for U.S. growth. Moody’s says that the U.S. economy has been weaker than expected and points to subdued infrastructure investment in 2017 as a factor hindering economic growth. FT

U.S. Economic News

U.S. Economic News

August 29, 2017

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index rose from 120.0 to 122.9 in August.  The increase was driven by increases in both the Present Situation Index and the Expectations Index.  Conference Board Report

U.S. News

The Wall Street Journal reports that one of the key points of debate in the renegotiation of the North American Free Trade Agreement (“NAFTA”) is the stubbornly low Mexican minimum wage, which currently sits at $4.50 a day. American negotiators argue that Mexico’s low wages create unfair competition for U.S. and Canadian workers, and that Mexico should raise minimum wages and enact stronger labor standards. WSJ

According to the New York Times, Hurricane Harvey is expected to cause tens of billions of dollars in damage, though many expect the region to recover quickly and some even anticipate a boost to Houston’s economic activity from rebuilding efforts. Economists say that while the catastrophic storm will temporarily shut-in a significant portion of refining capacity, the effects of rebuilding homes and replacing vehicles could last into the fourth quarter of 2017 and beyond. NYT

The Wall Street Journal writes that Hurricane Harvey will test the resilience of the U.S. shale industry. The industry, which has lost an estimated 400,000 to 500,000 barrels per day of production due to the storm, faces the risk of some shut-down wells not returning to pre-storm production levels. WSJ

U.S. Economic News

U.S. Economic News

August 28, 2017

U.S. Economic Indicators

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit increased 1.7% in July.  Meanwhile, wholesale inventories rose 0.4% while retail inventories fell 0.2%.  Census Bureau Report

U.S. News

The Wall Street Journal reports that Federal Reserve Bank of Dallas President Robert Kaplan believes the Fed should begin shrinking its balance sheet “very soon.”  The statement comes in advance of the Fed’s September policy meeting, after which officials are expected to announce the balance sheet reduction, though persistently weak inflation has forced some officials to reevaluate that timeline. WSJ

According to the Wall Street Journal, some large U.S. companies oppose a proposal by Congressional Republicans to establish a minimum corporate tax on both domestic and foreign profits. The companies said in a comment letter to the Senate Finance Committee that the proposed tax would disproportionately burden American companies and favor foreign-based firms. WSJ

Sam Fleming of the Financial Times reports that Cleveland Fed President Loretta Mester believes recent, weak inflation is not a sign of weakness in the U.S. economy and should not interrupt the current pace of rate hikes. Mester also contended that the Fed should act to raise interest rates to get ahead of any sudden inflation spikes. FT

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