U.S. Economic News

U.S. Economic News

February 24, 2020

U.S. Economic Indicators

The Chicago Fed National Activity Index increased from -0.51 in December to -0.25 in January. All four broad categories of indicators — employment, consumption, production, and sales, orders, & inventories — improved from December, but only the personal consumption category made a positive contribution to the headline index. Chicago Fed Report

U.S. News

The Wall Street Journal reports that manufacturers and supporting industries across the globe are feeling the pinch as the Chinese coronavirus disrupts supply chains of critical intermediary goods. Countries most reliant on China could see more than half a percentage point erased from 2020 GDP growth, while the global manufacturing sector could lose an estimated $1 trillion in lost output. WSJ

According to the Financial Times, Italy is increasingly likely to slip into a technical recession in the first quarter of 2020 as parts of the country go into lockdown to contain the spread of the Chinese coronavirus. Over the past several years, Italian export growth has slightly outpaced that of France and Germany, suggesting a sharp downturn could threaten the broader eurozone economy. FT

U.S. Economic News

U.S. Economic News

February 21, 2020

U.S. Economic Indicators

Existing home sales fell 1.3% to a seasonally adjusted annual rate of 5.46 million in January, but were up 9.6% compared to a year ago. Significant declines in the West and little to no change in other major U.S. regions dragged down nationwide sales numbers. NAR Report

U.S. News

According to the Washington Post, China’s commitment to purchase roughly $40 billion in U.S. agricultural products this year as part of the phase one trade agreement has been called into question by recent forecasts by the U.S. Department of Agriculture, which anticipate just $14 billion in U.S. agriculture exports to China this year. The spread of the coronavirus adds additional uncertainty, with China’s ability to ramp up imports dependent on a speedy turnaround following eventual abatement of the virus. WaPo

U.S. Economic News

U.S. Economic News

February 20, 2020

U.S. Economic Indicators

The Conference Board’s Leading Economic Index (“LEI”) rose 0.8 point in January following a 0.3 point decline in December. The improvement in the LEI was driven by a sharp decrease in initial unemployment claims and a rise in housing permits. Conference Board Report

Initial jobless claims rose 4,000 to 210,000 last week. The four-week moving average fell 3,250 to 209,000. DOL Report

U.S. News

Greg Ip reports for the Wall Street Journal that an ongoing, low-intensity trade conflict between the United States and India may be poised to escalate as India ramps up protections for domestic companies in an effort to replicate China’s economic success. Under Prime Minister Narendra Modi, India has opened up to foreign investment on the expectation it would help build domestic champions while simultaneously raising import duties to protect domestic companies from competition with foreign rivals. WSJ

According to the Washington Post, the latest Economic Report of the President predicts the U.S. economy will grow at a 2.4% annual pace this year, missing the President’s target of 3% or higher in the absence of a major infrastructure package and additional Congressional tax cuts. Growth of around 2% or higher is still considered a healthy rate of expansion, consistent with continued job growth and low unemployment. WaPo

U.S. Economic News

U.S. Economic News

February 19, 2020

U.S. Economic Indicators

Privately-owned housing starts fell 3.6% in January to a seasonally adjusted annual rate of 1.57 million (up 21% year-over-year). Housing permits rose 9.2% to a 1.55 million annual pace in January (up 18% from last year). Census Bureau Report

The headline Producer Price Index (“PPI”) for final demand rose 0.5% in January and is up 2.1% year-over-year. The core — which removes the volatile prices of food, energy, and trade services —rose 0.4% in January and is up 1.5% from a year ago.  BLS Report

U.S. News

Bloomberg reports that the International Monetary Fund has reiterated that global economic growth is likely to strengthen somewhat in 2020, despite downside risks from the Wuhan coronavirus and trade tensions. The IMF left its January projection for global growth unchanged, projecting an acceleration to 3.3% growth this year from a 2.9% pace in 2019. Bloomberg

U.S. Economic News

U.S. Economic News

February 18, 2020

U.S. Economic Indicators

The Empire State Manufacturing Survey indicates that business activity picked up in February as the headline index rose 8.1 points to 12.9. The new orders index jumped 15.5 points to 22.1, and the shipments index rose 10.3 points to 18.9; meanwhile, the index for number of employees fell 2.4 points to 6.6, and the hours worked index turned negative, indicating a slightly shorter workweek. NY Fed Report

The NAHB Housing Market Index edged one point lower to 74 in February. NAHB reports that a strong labor market and low interest rates continue to support housing demand, but builder sentiment remains under pressure from rising construction and development costs. NAHB Report

U.S. News

The Wall Street Journal reports that the number of new vehicles purchased by U.S. buyers under the age of 35 fell nearly 4.5% last year as car dealers struggle to attract younger buyers, who tend to be more concerned with affordability than brand loyalty. Younger Americans, already dealing with financial pressures from student loans and rent payments, have been priced out of the market for new vehicles as automakers have shifted production toward higher-priced truck and SUVs. WSJ

According to the New York Times, the combination of millennials’ low inflation expectations and inclination towards early retirement achieved through aggressive saving could leave central bankers with less room to cut interest rates and boost growth in future times of economic trouble. High savings rates, while beneficial on an individual level, can exacerbate what economist Lawrence Summers dubs “secular stagnation,” the low-growth, low-inflation state of many advanced economies. NYT