U.S. Economic News

U.S. Economic News

June 24, 2020

U.S. News

The New York Times reports that the IMF revised down its projection for 2020 global growth as the depth of the economic toll from coronavirus became clearer, expecting the global economy will shrink 4.9% this year instead of the 3.0% contraction predicted in April. The revised forecast is consistent with a slow and uneven global economic recovery, with the return to growth impeded by labor market “scarring” from mass job cuts and business closures. NYT

According to the Financial Times, the United States is considering imposing punitive tariffs on an additional $3.1 billion of European goods to take greater advantage of last year’s WTO decision in the ongoing US-EU dispute over aircraft subsidies. The tariff announcement comes as trade tensions between the US and EU are heating up again over the issue of how to tax American technology giants. FT

U.S. Economic News

U.S. Economic News

June 23, 2020

U.S. Economic Indicators

New home sales increased 16.6% in May to a seasonally adjusted annual rate of 676,000 and were up 12.7% from year-ago levels. The median sales price rose to $317,900 and the inventory of new homes declined to 5.6 months at the current sales rate. Census Bureau Report

U.S. News

According to the Financial Times, millions of Americans are at heightened risk of defaulting on their debts as unemployment remains elevated and forbearance periods begin to run out. Non-mortgage subprime debt has risen steadily over the past decade, and while households generally entered the current crisis with stronger balance sheets than before the last recession, personal savings and current forbearance programs may not be enough to bridge the gap to recovery. FT

The Wall Street Journal reports that a bipartisan group of House lawmakers is urging the White House and Federal Reserve to extend temporary debt payment relief to borrowers in the commercial-mortgage-backed securities (CMBS) market. CMBS borrowers, including hard-hit hotel and mall owners, may soon face a surge in foreclosures in the absence of a long-term relief plan. WSJ

U.S. Economic News

U.S. Economic News

June 22, 2020

U.S. Economic Indicators

The Chicago Fed National Activity Index improved from -17.89 in April to +2.61 in May. All four broad categories of indicators – employment; consumption; production; and sales, orders & inventories – contributed positively to the index. Chicago Fed Report

Existing home sales fell 9.7% to a seasonally adjusted annual rate of 3.91 million in May and were down 26.6% compared to year ago. Home sales declined in all four major regions, with the largest decrease occurring in the Northeast. NAR Report

U.S. News

The Wall Street Journal reports that warehouse demand is surging as companies work to retool supply chains to handle increased e-commerce activity and relocate operations closer to consumers. Industrial real estate activity experienced a rapid rebound in May, suggesting that declines early on in the pandemic were due to state lockdowns rather than a structural shift in warehouse demand. WSJ

U.S. Economic News

U.S. Economic News

June 19, 2020

U.S. News

The Washington Post reports that small and midsize businesses are struggling to secure loans through the Fed’s new Main Street Lending Program as many banks are unwilling or unsure if they will participate in the program. Although still in its early stages, changes to the program – including lowering the minimum loan size, extending the length of the loan, and offering banks higher fees as an incentive – could encourage participation among banks and businesses. WaPo

Conor Sen writes for Bloomberg Opinion that the United States could soon face shortages or price increases for goods if the rebound in consumption continues to outpace production as the economy reopens. Retail sales rose 17.7% in May, while industrial production only rose 1.4%, presenting a troubling gap as producers struggle to rebalance inventories and accurately assess demand. Bloomberg

U.S. Economic News

U.S. Economic News

June 18, 2020

U.S. Economic Indicators

Initial jobless claims fell 58,000 to 1,508,000 last week. The four week moving average fell 234,500 to 1,773,500. DOL Report

The Conference Board Leading Economic Index (“LEI”) increased 2.8% in May following a 6.1% decline in April. While improvements in the labor market, housing permits, and stock prices helped bolster the index in May, the large drop between February and April suggests that the economy is unlikely to recover from recessionary territory in the near term. Conference Board Report

U.S. News

According to the Wall Street Journal, more than 100 million student, auto, and personal loans have gone unpaid since the coronavirus hit the United States earlier this year. While the federal stimulus package permits deferred payments for student loans and federally-backed mortgages for now, lenders will not be able to withstand unpaid loans indefinitely and delinquencies may rise sharply as the recession persists. WSJ