U.S. Economic News

U.S. Economic News

March 24, 2020

U.S. Economic Indicators

New home sales declined 4.4% in February to a seasonally adjusted annual pace of 765,000 but were up 14.3% from year-ago levels. The median sales price rose to $345,900 and the inventory of new homes edged up to 5.0 months at the current sales rate. Census Bureau Report

U.S. News

The Financial Times reports that business activity in the eurozone plummeted to a record low in March, according to the IHS Markit composite purchasing managers’ index reading of 31.34 – the equivalent of an 8% annualized decline in GDP. Consumer-facing industries, such as transportation and hotels, were the hardest hit, with the French finance minister comparing the recent deterioration to the worldwide economic depression of 1929. FT

According to the New York Times, Senate Democrats and Secretary Mnuchin announced they were close to an agreement on a nearly $2 trillion coronavirus stimulus package, raising hopes that Congress could pass the measure by Tuesday evening. As talks progressed late Monday night, it appeared that a key dispute had been resolved regarding oversight of the $500 billion stabilization fund to bail out distressed companies; other bill provisions include increased funding for struggling hospitals and a large expansion of the unemployment insurance program. NYT

U.S. Economic News

U.S. Economic News

March 23, 2020

U.S. Economic Indicators

The Chicago Fed National Activity Index improved from -0.33 (revised) in January to +0.16 in February, though the report notes that the data for February are unlikely to have been affected much by the COVID-19 outbreak. Measures of production, personal consumption & housing, and employment contributed positively to the headline index, while the indicator for sales, orders, & inventories subtracted from the headline index. Chicago Fed Report

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The Wall Street Journal reports that the Fed is massively expanding lending programs aimed at keeping credit markets functioning, expanding its facilities to include corporate and municipal debt while setting no upper bound on its purchase of Treasury and mortgage securities. A proposal currently before Congress would provide $425 billion to the Treasury, allowing the Fed to support riskier types of financing without having to be as concerned with bearing credit losses. WSJ

According to the Washington Post, Senate leadership and Trump officials are resuming talks this morning after Democrats blocked the latest coronavirus stimulus bill from advancing Sunday night, citing a lack of provisions for helping households, hospitals, and health professionals. The enormous stimulus bill under consideration aims to pump money into the economy through payments to individuals and businesses to stem the tide of layoffs and the sharp contraction in consumer spending. WaPo

U.S. Economic News

U.S. Economic News

March 20, 2020

U.S. Economic Indicators

Existing home sales rose 6.5% to a seasonally adjusted annual rate of 5.77 million in February and were up 7.2% compared to a year ago. Home sales declined in the Northeast but increased in the South, West, and Midwest. NAR Report

U.S. News

The Wall Street Journal reports that the U.S. is considering a number of policy interventions including diplomatic action and domestic production cuts to get Russia and Saudi Arabia to back down from their current oil price standoff. The Energy Department has already announced plans to purchase at least 30 million barrels from domestic producers in an effort to prop up the U.S. oil sector as already-struggling producers are hit hard by the historic drop in prices. WSJ

According to the Washington Post, the massive economic stimulus bill released by Senate Republicans this week is facing attacks from all sides as lawmakers disagree about the structure of direct payments and size of loans to airlines and other industries. Disputes over the contents of the bill threaten lawmakers’ ambitious timeline for getting the legislation through the Senate by Monday in a frantic effort to mitigate the rapidly-multiplying economic consequences of the coronavirus spread. WaPo

U.S. Economic News

U.S. Economic News

March 19, 2020

U.S. Economic Indicators

The Conference Board’s Leading Economic Index (“LEI”) ticked up 0.1 point in February following a 0.7 point increase in January, though the Conference Board notes that the LEI has yet to reflect the impact of the Covid-19 pandemic that escalated in the U.S. in early March. The improvement in the LEI was driven by a recovery in manufacturing that will likely be short-lived due to ongoing global supply chain disruptions and falling demand. Conference Board Report

Initial jobless claims increased 70,000 to 281,000 last week, the highest level for initial claims since September 2017. The four-week moving average rose 16,500 to 232,250. DOL Report

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The Wall Street Journal reports that the pandemic is hitting local government finances hard as state and city officials increase spending to combat the public health crisis while losing revenue due to the cessation of economic activity. While some localities have amassed large rainy-day funds to draw from during downturns, an extended fiscal crunch will likely necessitate budget cuts, job losses, and federal assistance for many state and local governments. WSJ

According to the New York Times, the Federal Reserve announced it will extend emergency loans to money market mutual funds, a major savings vehicle for millions of Americans with a total value of around $3.8 trillion. The move is the latest in a series of steps the Fed has taken to keep financial markets functioning during the coronavirus pandemic and avoid a repeat of the huge money market fund losses experienced during the 2008 financial crisis. NYT

U.S. Economic News

U.S. Economic News

March 18, 2020

U.S. Economic Indicators

Privately-owned housing starts fell 1.5% in February to a seasonally adjusted annual rate of 1.60 million (up 39.2% year-over-year). Housing permits fell 5.5% to a 1.46 million annual pace in February but are up 13.8% from last year. Census Bureau Report

U.S. News

The New York Times reports that the Trump administration is calling for Congress to act quickly on a $1 trillion stimulus package to counteract the economic impacts of the coronavirus pandemic, including $250 billion in direct check payments to Americans. Secretary Mnuchin reportedly stated that direct cash payments would cover two weeks of pay and be sent out by the end of April, with additional payments possible if the crisis persists. NYT

According to the Wall Street Journal, the U.S. Travel Association projects that U.S. travel spending will plunge by $355 billion this year and cost 4.6 million American jobs – enough to raise the overall unemployment rate to 6.3% from 3.5%. The spread of coronavirus and government restrictions have created an existential crisis for the global travel industry as companies ranging from big airlines to small tour guides are being forced to shut slash payrolls and even shut down. WSJ