U.S. Economic News

U.S. Economic News

August 13, 2019

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 1.4 points to 104.7 in July as seven components improved, two weakened, and one was unchanged. Capital spending plans and employment expectations improved, while plans to increase inventories were unchanged and expectations for credit conditions eased. NFIB Report

Consumer prices rose 0.3% in July (up 1.8% from a year ago). The “core” CPI, which excludes food and energy, increased 0.3% in July and is up 2.2% from last year. BLS Report

U.S. News

The Wall Street Journal reports that the U.S. has announced it will delay imposing new 10% tariffs on certain Chinese products — including cellphones, laptops, and toys — until December 15, and will remove other goods from the tariff list entirely. The delay softens the impact on U.S. retailers dependent on imports from China and gives negotiators additional time to strike a deal before the new levies go into effect. WSJ

U.S. Economic News

U.S. Economic News

August 12, 2019

U.S. News

According to the Wall Street Journal, Federal Reserve officials are debating whether now is the time to implement a countercyclical capital buffer, a policy tool that allows the Fed to require banks to increase holdings of loss-absorbing capital. Fed officials in favor of the move argue that raising bank capital requirements now will provide a much-needed layer of additional resilience, while others argue that banks’ capital reserves are already sufficiently high. WSJ

Bloomberg News reports that Chinese policymakers are maintaining a cautious approach to monetary policy as they attempt to manage China’s growth slowdown, leaving options open for larger stimulus efforts in case the trade conflict with the U.S. morphs into an all-out currency war. Even with domestic monetary policy unchanged, allowing the yuan to remain weak against the dollar could absorb most of the impact of the latest U.S. tariff increase. Bloomberg

U.S. Economic News

U.S. Economic News

August 9, 2019

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand rose 0.2% in July and was up 1.7% from July of last year. The core — which removes volatile prices of food, energy, and trade services — fell 0.1% in July and was up 1.7% from a year ago. BLS Report

U.S. News

According to the Wall Street Journal, the International Energy Agency recently downgraded its forecast for global oil demand growth for the third time in four months, citing worsening relations between the U.S. and China that could lead to further reductions in trade activity. Global demand for oil between January and May 2019 was at its weakest since 2008, while oil production by non-OPEC countries — including the U.S. — continues to surge. WSJ

The Financial Times reports that the rise of internet shopping and deep discount chains will make it difficult for U.S. retailers affected by the U.S.-China trade war to pass price increases to consumers. Retailers are instead trying to mitigate price increases and protect profit margins by renegotiating contracts with suppliers. FT

U.S. Economic News

U.S. Economic News

August 8, 2019

U.S. Economic Indicators

Initial jobless claims fell 8,000 to 209,000 last week. The four-week moving average rose 250 to 212,250. DOL Report

U.S. News

The Financial Times reports that Chinese exports grew 3.3% year-on-year in July, beating economists’ expectations and reflecting the fact that exports to the U.S. make up a relatively small proportion of China’s total trade. Rising Chinese exports to markets in Southeast Asia have provided a significant cushion against declining trade with the U.S. amid the ongoing trade conflict. FT

According to the Wall Street Journal, inflated bond ratings — one cause of the 2008 financial crisis — persist in the present-day bond market as ratings firms offer increasingly optimistic scores as they fight for market share. Newer challenger firms systemically rate bonds higher than major firms, suggesting that regulation intended to improve rating quality by promoting competition has largely backfired. WSJ

U.S. Economic News

U.S. Economic News

August 7, 2019

U.S. News

According to the Wall Street Journal, the U.S. Treasury has collected more than $63 billion in tariffs since June of last year, up from around $30 billion in annual collections before the trade conflict with China. The U.S. is now on pace to collect around $72 billion in tariffs annually, with collections projected to reach as high as $100 billion if a new 10% tariff is imposed on an additional $300 billion in Chinese goods next month. WSJ

Bloomberg reports that U.S. companies are rapidly running out of warehouse space after packing storage facilities with imported goods in an effort to avoid anticipated tariffs on Chinese imports. The dearth of additional warehouse space means that many companies will be unable to use preemptive stockpiling to mitigate the effects of the next round of tariffs scheduled for September 1. Bloomberg