U.S. Economic News

U.S. Economic News

July 1, 2020

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 2,369,000 jobs in June, below the consensus estimate of 3.5 million. The services sector gained 1,912,000 jobs, while the goods-producing sector gained 457,000 jobs. ADP Report

Construction spending decreased 2.1% in May to an annualized rate of $1.36 trillion. Private construction fell 3.3% and public construction rose 1.2%. Census Bureau Report

The ISM Manufacturing Index rose 9.5 points to 52.6 in June, indicating the sector is in expansion again. The Employment Index rose 10 points to 42.1, while the New Orders Index rose 24.6 points to 56.4. ISM Report

U.S. News

The Washington Post reports that employers are increasingly turning to pay cuts as a means to mitigate job losses during the current crisis, resulting in reduced pay for over 4 million private sector workers while over 6 million workers have been forced to work part-time. More recently, pay cuts have grown increasingly common among higher-paid workers, signaling that the depth of the recession is impacting even the most-typically insulated from financial strain. WaPo

U.S. Economic News

U.S. Economic News

June 30, 2020

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index increased from 85.9 (revised) in May to 98.1 in June. Consumers’ assessment of current conditions and consumers’ short-term outlook for income, business, and labor market conditions improved from last month. Conference Board Report

U.S. News

The Washington Post reports that with the application window for the Paycheck Protection Program set to close at midnight, lawmakers are now deciding how best to allocate the remaining $130 billion in unused funds. While an extension of the program is a possibility, it seems increasingly likely that leftover funds will be redirected towards more targeted policy efforts that better address the changing needs of small businesses. WaPo

The Financial Times reports that U.S. companies are filing for bankruptcy at their fastest pace since 2013, highlighting the strain on company revenues caused by the coronavirus pandemic and subsequent lockdowns. In addition to rising corporate bankruptcies, there are other signs of growing financial distress in capital markets including increases in the number of companies defaulting on their debt and a near-doubling of companies downgraded to triple C plus since the start of the year. FT

U.S. Economic News

U.S. Economic News

June 29, 2020

U.S. Economic Indicators

The National Association of Realtors Pending Home Sales Index rose 44.3% in May (down 5.1% year-over-year). NAR reports that the historic monthly gain in contract signings could be a sign that the housing market is poised to lead the way to a broader economic recovery. NAR Report

U.S. News

The Wall Street Journal reports that banks are cutting back sharply on consumer lending as they struggle to assess borrowers’ creditworthiness as many missed loan payments aren’t reflected in credit reports per certain provisions of the coronavirus stimulus package. As loan originations fall to record lows, lenders are looking at new data sets, including phone records and deposit data, to better assess borrower risk. WSJ

The Financial Times reports that the United States-Mexico-Canada Agreement (USMCA), set to replace NAFTA on Wednesday, is facing a rocky start amid strained supply chains from the pandemic and investor discomfort with recent Mexican policy changes. The current situation could be a golden opportunity for attracting investors to North America as companies seek to diversify supply networks outside of China. FT

U.S. Economic News

U.S. Economic News

June 26, 2020

U.S. Economic Indicators

Real disposable personal income decreased 5.0% in May, while real personal consumption expenditures (PCE) increased 8.1%. The PCE price index rose 0.1% (up 0.5% Y/Y), and the core price index (excluding food and energy) increased 0.1% (up 1.0% Y/Y). BEA Report

The University of Michigan Consumer Sentiment Index rose 5.8 points to 78.1 in the final June reading but is down 25.9 points from June of last year. The Index of Consumer Expectations rose 6.4 points to 72.3, while the Current Economic Conditions Index rose 4.8 points to 87.1. University of Michigan

U.S. News

The Washington Post reports that cash-starved state and local governments are considering steep tax hikes to help close budget deficits exacerbated by the pandemic, a risky move during an economic crisis that could impede recovery. State and local governments have already been forced to cut spending and lay off employees as revenues plummet, a trend likely to continue in the absence of significant federal support for cities and states. WaPo

U.S. Economic News

U.S. Economic News

June 25, 2020

U.S. Economic Indicators

The third estimate of Q1 GDP indicates that the U.S. economy contracted at an annualized rate of 5.0% in the first quarter, unchanged from the prior estimate. For the third estimate, an upward revision to nonresidential fixed investment was offset by downward revisions to private inventories, consumer spending, and exports. BEA Report

Initial jobless claims fell 60,000 to 1,480,000 last week. The four-week moving average decreased 160,750 to 1,620,750. DOL Report

New orders of manufactured durable goods rose 15.8% in May after falling 18.1% (revised) in April. Excluding transportation, new orders rose 4.0% last month after declining 8.2% the month before. Census Bureau Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit expanded to $74.3 billion in May from $70.7 billion in April. Meanwhile, wholesale inventories fell 1.2% and retail inventories fell 6.1%. Census Bureau Report