U.S. Economic News

U.S. Economic News

March 31, 2020

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index decreased sharply from 132.6 (revised) in February to 120.0 in March. Consumers’ short-term outlook deteriorated notably, though the Conference Board notes that the cutoff date for preliminary results was March 19, meaning further declines are likely to follow. Conference Board Report

U.S. News

According to the Wall Street Journal, the federal government is working this week to release funds from the coronavirus stimulus package to states to boost jobless benefits as record numbers of Americans file for unemployment. However, whether those payments actually reach workers will depend on how successfully states are able to administer their own unemployment systems, many of which are already overburdened and experiencing significant delays. WSJ

The Financial Times reports that the Fed has set up a new temporary facility to allow foreign central banks to convert their U.S. Treasury holdings into dollars, helping to meet the global demand for safe assets amid the coronavirus pandemic. The Fed move is likely to help countries that already have a significant stockpile of foreign reserves, but can do little to help countries without preexisting reserves. FT

U.S. Economic News

U.S. Economic News

March 30, 2020

U.S. Economic Indicators

The National Association of Realtors pending home sales index rose 2.4% in February (up 9.4% Y/Y). NAR notes that there will be a lengthier stay of inventory in the market over the coming months due to reduced short-term demand from the coronavirus-induced shutdown. NAR Report

U.S. News

According to the Financial Times, U.S. companies are urgently seeking guidelines from the Treasury and the Fed to clarify the loan conditions for the $454bn in funds set aside for businesses during the coronavirus pandemic. There is considerable uncertainty regarding which firms may have conditions waived, which firms will have to divest equity stakes to the federal government, and whether especially troubled borrowers will be eligible for any aid at all. FT

The Wall Street Journal reports that the surge in unemployment claims in Pennsylvania last week, representing 5.8% of the state’s workforce, likely foreshadows the future of states around the country as administrative delays in processing claims get resolved. Pennsylvania’s spike in claims was much higher than harder-hit, more populous states like New York and California, suggesting claims in those states are likely to rise substantially in the coming weeks. WSJ

U.S. Economic News

U.S. Economic News

March 27, 2020

U.S. Economic Indicators

The University of Michigan Consumer Sentiment Index fell 11.9 points to 89.1 in the final March reading and is down 9.3 points from March of last year. The Index of Consumer Expectations fell 12.4 points to 79.7, while the Current Economic Conditions Index fell 11.1 points to 103.7. University of Michigan

Real disposable personal income increased 0.4% in February, while real personal consumption expenditures (PCE) ticked up 0.1%. The PCE price index rose 0.1% (up 1.8% Y/Y), and the core price index rose 0.2% (up 1.8% Y/Y). BEA Report

U.S. News

The Wall Street Journal reports that the federal government’s two-month extension of the income tax filing deadline is putting a major strain on state government cash flows by reducing the revenue states can expect to receive by the end of the current fiscal year. In some states, income taxes account for roughly a third of total local and state tax collections, suggesting that many states will be forced to cut programs or attempt to borrow at costly rates in order to balance their budgets. WSJ

U.S. Economic News

U.S. Economic News

March 26, 2020

U.S. Economic Indicators

The third estimate of Q4 2019 GDP indicates that the U.S. economy expanded at an annualized rate of 2.1%, unchanged from the prior estimate. The increase in real GDP reflects positive contributions from consumer spending, net exports, government spending, and residential investment that were partly offset by negative contributions from business investment and private inventories. BEA Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit narrowed to $59.9 billion in February from $65.9 billion in January. Meanwhile, wholesale inventories fell 0.5% and retail inventories declined 0.3%. Census Bureau Report

Initial jobless claims increased 3,001,000 to 3,283,000 last week, the highest level of initial claims in the history of the series. The four-week moving average increased 765,750 to 998,250. DOL Report

U.S. News

The Financial Times reports that the U.S. is increasing pressure on Saudi Arabia to back down from its price war with Russia and restore stability to global energy markets. However, with global oil demand widely expected to peak in little more than a decade, the kingdom has a strong incentive to keep prices low to knock out smaller rivals – like U.S. shale producers – to gain a larger share of the remaining market.  FT

U.S. Economic News

U.S. Economic News

March 25, 2020

U.S. Economic Indicators

New orders of manufactured durable goods rose 1.2% in February after rising 0.1% (revised) in January. Excluding transportation, new orders fell 0.6% last month after rising 0.6% the month before. Census Bureau Report

U.S. News

The Washington Post reports that Senate leadership and White House officials have come to an agreement on the $2 trillion coronavirus stimulus package that the Senate is set to vote on later this afternoon. The legislation would create a $367 billion loan program for small businesses, establish a $500 billion lending fund for industries and states, significantly boost unemployment insurance benefits, and send direct payments of $1,200 to many Americans. WaPo

According to the Financial Times, companies are drawing down credit lines at unheard of speeds, drawing at least $124 billion from credit lines in just the last three weeks. While banks have been able to handle the torrent of capital request so far, lending in other areas may suffer if bank capital becomes severely constrained by revolving credit obligations. FT