U.S. Economic News

U.S. Economic News

March 17, 2020

U.S. Economic Indicators

Retail sales fell 0.5% in February (up 4.3% from February a year ago). Core sales — which exclude autos, gasoline, building materials, and food services —  were unchanged. Census Bureau Report

Industrial production rose 0.6% in February (unchanged year-over-year) after falling 0.5% (revised) in January. Capacity utilization increased 0.4 point to 77.0 in February. Fed Report

Business inventories declined 0.1% in January but were up 1.0% from January of last year. Manufacturers’ sales declined 0.5% in January but ticked up 0.1% compared to a year ago. Census Bureau Report

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated that the number of job openings increased to 7.0 million in JanuaryThe number of hires was little changed at 5.8 million, while the quits rate was unchanged at 2.3 percent. BLS Report

U.S. Economic News

U.S. Economic News

March 16, 2020

U.S. Economic Indicators

The Empire State Manufacturing Survey indicates that business activity declined in March, as the headline index fell 34.4 points to -21.5, its lowest level since 2009. The new orders index dropped 31.4 points to -9.3, and the shipments index fell 20.6 points to -1.7; meanwhile, the index for number of employees declined 8.1 points to -1.5, and the hours worked index fell 9.6 points to -10.6. NY Fed Report

U.S. News

The Wall Street Journal reports that the Fed has announced a reduction in the federal-funds rate target range to 0 – 25 basis points and a $700 billion round of quantitative easing as part of a series of actions aimed at stabilizing markets as the novel coronavirus pushes the U.S. economy toward a recession. The severity and length of the economic fallout will depend on the Fed’s ability to keep liquidity flowing, the extent of coronavirus testing capabilities, and the success of fiscal stimulus measures intended to boost demand. WSJ

The Financial Times reports that the effects of the coronavirus are beginning to ripple through the real economy as service firms, those most dependent on human contact, start suffering losses. While the early consequences of the coronavirus outbreak were largely supply chain disruptions, the spread of the virus in the U.S. is beginning to threaten smaller service companies like restaurant and bar owners with low cash reverses and already-limited credit access. FT

U.S. Economic News

U.S. Economic News

March 13, 2020

U.S. Economic Indicators

The University of Michigan Consumer Sentiment Index fell 5.1 points to 95.9 in the preliminary March reading and is down 2.5 points from March of last year. The Index of Consumer Expectations fell 6.8 points to 85.3, while the Current Economic Conditions Index declined 2.3 points to 112.5. University of Michigan

U.S. News

The New York Times reports that after a day of negotiations between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin, Congress is nearing a deal with the White House on economic stimulus measures in response to the coronavirus pandemic. The sweeping legislation will include free virus testing, assistance for lower-income families, and small business support, and is expected to be passed by the House today and sent to the Senate for a vote early next week. NYT

According to the Wall Street journal, many triple-B rated corporate bonds are at risk of being downgraded to junk status amid economic fallout from the coronavirus and collapsing oil prices. Yields on triple-B bonds saw their biggest two-day jump since the financial crisis on Wednesday, further intensifying the credit crunch for companies at the lower end of the investment-grade market. WSJ

U.S. Economic News

U.S. Economic News

March 12, 2020

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand fell 0.6% in February but is up 1.3% from February of last year. The core — which removes volatile prices of food, energy, and trade services — ticked down 0.1% (up 1.4% from a year ago). BLS Report

Initial jobless claims declined by 4,000 to 211,000 last week. The four-week moving average rose 1,250 to 214,000. DOL Report

U.S. News

According to the Wall Street Journal, investors’ hasty retreat from risky assets as stock prices plunge and the oil price war intensifies has raised concerns that the pain might spread to the real economy by constraining lending. Shares in the largest financial institutions have dropped over 30% over the past few weeks as the post-financial crisis regulatory regime faces its first real test. WSJ

U.S. Economic News

U.S. Economic News

March 11, 2020

U.S. Economic Indicators

Consumer prices rose 0.1% in February (up 2.3% from a year ago). The “core” CPI, which excludes food and energy, increased 0.2% in February and is up 2.4% from last year. BLS Report

U.S. News

The Wall Street Journal reports that the U.S. Treasury is likely to push back the April 15 tax filing deadline as a part of an effort to mitigate the economic consequences of the coronavirus on households and businesses. While delaying required tax payments would effectively operate as a bridge loan for struggling individuals and businesses, it could also force the Treasury to temporarily increase borrowing due to the short-term loss of tax revenues. WSJ

Gwynn Guilford writes for the Wall Street Journal that although falling mortgages rates should boost housing activity somewhat amid coronavirus fears, the lower contribution of the housing sector to overall GDP growth since the housing bubble suggests it may not help overall growth as much as hoped. Supply constraints in the form of higher land costs, restrictive zoning, and scarce labor, coupled with softer demand as renting becomes more and more popular, mean that lower mortgage rates will primarily contribute to refinancing activity rather than lead to new housing starts. WSJ