U.S. Economic News

U.S. Economic News

June 10, 2020

U.S. Economic Indicators

Consumer prices fell 0.1% in May (up 0.1% from a year ago) after falling 0.8% in April. The “core” CPI, which excludes food and energy, fell 0.1% in May – marking an unprecedented three months of consecutive declines – and is up 1.2% from last year. BLS Report

U.S. News

Ahead of today’s FOMC meeting, the Wall Street Journal reports that the Fed is widely expected to reaffirm their intent to keep interest rates near zero for the foreseeable future, and to provide clarification on current Treasury purchasing policies. The central bank is also set to release projections for interest rates, unemployment, and inflation after forgoing the quarterly projections in March. WSJ

The Financial Times reports that the OECD expects a 6% contraction in the global economy by the end of 2020, cautioning that a second wave of coronavirus could knock 10% off output by the end of 2021 compared to previous projections. While the OECD notes that the pace of economic recovery will vary by country, they stress that global cooperation on treatment and vaccine development is critical to restore economic conditions and living standards to pre-pandemic levels. FT

U.S. Economic News

U.S. Economic News

June 9, 2020

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 3.5 points to 94.4 in May as eight components improved and two weakened. Sales expectations and plans to increase employment improved, while current job openings declined. NFIB Report

The Job Openings and Labor Turnover Survey (“JOLTS”) report indicated that the number of job openings fell 965,000 to 5.0 million in April. The number of hires decreased to a series low of 3.5 million, and the quits rate fell to 1.4 percent. BLS Report

U.S. News

The Washington Post reports that the U.S. officially fell into a recession in February per the National Bureau of Economic Research’s Business Cycle Dating Committee, formally marking the end of a record 128-month expansion. Recessions typically refer to two consecutive quarters of contraction, but the collapse in production and consumption activity from the coronavirus pandemic was severe and widespread enough for the committee to mark the downturn as a recession even if it ultimately proves to be relatively brief. WaPo

U.S. Economic News

U.S. Economic News

June 8, 2020

U.S. News

The Financial Times reports that the rise in overworked and stranded crew aboard international shipping vessels due to coronavirus-related travel restrictions poses an increasing threat to global trade flows. More than one-fifth of the world’s commercial vessel crew have been affected by virus restrictions, and with 80% of global trade by volume carried by seafaring vessels, the shipping industry has warned that the resulting supply chain disruptions could pose a major threat to the global economic recovery. FT

According to the Wall Street Journal, Fed officials are considering whether to use unlimited Treasury purchases to cap certain yields at low levels, a WWII-era policy tool that would reinforce the central bank’s commitment to hold interest rates near zero for the foreseeable future. The U.S. central bank is closely monitoring the impacts of a rate cap recently set by Australia’s central bank, which it has so far managed to maintain without significant asset buying. WSJ

U.S. Economic News

U.S. Economic News

June 5, 2020

U.S. Economic Indicators

The U.S. economy gained 2.5 million jobs in May, despite consensus expectations that 7.7 million would be lost. The unemployment rate decreased to 13.3% and labor force participation increased from 60.2% to 60.8%. BLS Report

U.S. News

The New York Times reports that several states are revoking unemployment benefits for workers who turn down job offers due to fears of contracting the coronavirus while at work. This reality may help businesses recall workers more quickly as they try to reopen and avoid closing permanently, but also puts workers worried about the virus in the difficult position of choosing between physical health and financial security. NYT

According to the Financial Times, increases in vehicle traffic, car sales, and flights combined with a fall in panic purchases all suggest consumer confidence is improving after bottoming out in late March and early April. However, a full recovery of consumer demand will be restricted by social distancing rules, travel bans, and the speed at which consumers can feel safe returning to ‘normal’ life. FT

U.S. Economic News

U.S. Economic News

June 4, 2020

U.S. Economic Indicators

The U.S. trade deficit increased from $42.3 billion (revised) in March to $49.4 billion in April. The goods deficit rose by $5.8 billion while the services surplus fell by $1.3 billion. Census Bureau Report

Nonfarm business sector labor productivity decreased 0.9% in 2020 Q1 (revised) but rose 0.7% compared to the previous year. Hours worked decreased 5.6% and unit labor costs rose 5.1%. BLS Report

Initial jobless claims fell 249,000 to 1,877,000 last week. The four-week moving average decreased 324,750 to 2,284,000. DOL Report

U.S. News

The Washington Post reports that almost half of commercial rents went unpaid in May, increasing financial pressure on landlords, property managers, and cash-strapped local governments. Small business are particularly vulnerable to the rent crisis, though recent changes to the Paycheck Protection Program could alleviate strain by increasing the percentage of funds that can be used towards rent. WaPo