U.S. Economic News

U.S. Economic News

January 26, 2018

U.S. Economic Indicators

The first estimate of Q4 GDP indicates that the U.S. economy expanded at an annualized rate of 2.6%, slightly below consensus. The reading reflects healthy consumer spending, business investment, residential investment, as well as strong contributions from government spending. BEA Report
 
The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $71.6 billion in December from $70.0 billion in November.
Meanwhile, wholesale inventories inched up 0.2% and retail inventories also edged up 0.2%. Census Bureau Report
 
New orders of manufactured durable goods jumped 2.9% in December after increasing 1.7% (revised) in November, and are up 5.8% year-over-year.  
Excluding transportation, new orders rose 0.6% (up 6.3% Y/Y).  Census Bureau Report

U.S. News

The Wall Street Journal reports that new tax rules are incentivizing factory owners to implement more automation and robots in their factories. The ability to fully and immediately deduct the cost of equipment purchases for the next five years has driven owners to pull forward investment that they may have otherwise put off due to the old tax structure. WSJ

U.S. Economic News

U.S. Economic News

January 25, 2018

U.S. Economic Indicators

Initial jobless claims increased 17,000 to 233,000 last week. The four-week moving average fell 3,500 to 240,000.  DOL Report

New home sales fell 9.3% to a seasonally adjusted annual pace of 625,000 in December, but are 14.1% above the December 2016 rate.  The median sales price increased to $335,400 and the inventory of new homes jumped to 5.7 months at the current sales rate. Census Bureau Report

U.S. News

Ben Leubsdorf of the Wall Street Journal writes that the recent recovery in U.S. business investment has been driven in large part by the rebound in oil prices. Firming oil prices and healthy global demand have spurred robust investment in nonresidential structures and equipment, including oil rigs and associated infrastructure. WSJ

The Wall Street Journal reports that the Trump administration’s infrastructure push aims to reduce regulations and permitting times in order to encourage spending on infrastructure projects. The infrastructure program proposed by the Trump administration will also seek the majority of its funding from non-federal sources, and fewer regulatory barriers will expand the pool of available funds, supporters say. WSJ

U.S. Economic News

U.S. Economic News

January 24, 2018

U.S. Economic Indicators

Existing home sales fell 3.6% to a seasonally adjusted annual rate of 5.57 million in December, but are 1.1% above year-ago levels.  NAR notes that despite significant headwinds, the housing market performed remarkably well in 2017 and that rising wages should help more first-time buyers purchase homes.  NAR Report
 
The FHFA House Price Index shows that U.S. house prices rose 0.4% in November and were up 6.5% from the same period last year.
  House prices rose on an annual basis in all nine census divisions, with the largest gains coming in the Mountain division. Report

U.S. News

The Wall Street Journal reports that the Senate has confirmed Jerome Powell as the Federal Reserve Chairman. Powell, who was confirmed in an 84-13 vote, will take over in February and is expected to continue Janet Yellen’s approach of cautious and gradual rate hikes. WSJ

According to the Wall Street Journal, Treasury Secretary Mnuchin is unconcerned that eleven nations forged a Trans-Pacific Partnership (“TPP”) agreement after the U.S. withdrew from the deal. Mnuchin reiterated that the Trump administration is amenable to bilateral deals where they do not yet exist and will continue to pursue “America First” trade policy. WSJ

U.S. Economic News

U.S. Economic News

January 23, 2018

 

U.S. News

The Wall Street Journal reports that President Trump has imposed stiff tariffs on imports of solar panels and washing machines. The tariffs, coming after U.S. producers of solar panels and washing machines complained to the administration about a flood of cheap imports, are aimed mainly at Asian manufacturers but apply to imports from nearly every country. WSJ

According to the Wall Street Journal, China’s shift from coal to natural gas has driven up the price of liquefied natural gas (“LNG”) around the world. China still suffers from severe pollution issues, and the shift away from coal should help boost U.S. exports of LNG in the coming years. WSJ

U.S. Economic News

U.S. Economic News

January 22, 2018

U.S. Economic Indicators

The Chicago Fed National Activity Index rose from +0.11 (revised) in November to +0.27 in December.  The production, sales, and employment components made positive contributions while the personal consumption & housing component contributed negatively. Chicago Fed Report

U.S. News

The Wall Street Journal reports that the IMF expects the global economy to accelerate in 2018 due in part to recently-passed tax cuts in the U.S. The IMF revised its estimate for global growth up to 3.9% from 3.7% and also increased its estimate for U.S. growth to 2.7%, up 0.4 percentage point from October. WSJ

According to Harriet Torry of the Wall Street Journal, the economic effects of the government shutdown that began Saturday are expected to be muted. Torry writes that although a significant number of federal workers may be furloughed, which could cause weaker payroll growth, the effects on GDP are expected to be mild, especially if the shutdown is short-lived. WSJ

Nick Timiraos of the Wall Street Journal writes that the recently-passed tax cuts are projected to balloon U.S. federal deficits to a trillion dollars per year, which could make it more difficult for federal stimulus in the event of an economic downturn. Experts warn that worsening deficits and a significant expansion of publicly-held debt will leave future policymakers with less ammunition to enact expansionary policies during the next recession. WSJ

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