U.S. Economic News

U.S. Economic News

March 10, 2020

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 0.2 point to 104.5 in February as four components improved and six weakened. Expectations for business conditions and job openings improved, while expectations for sales, capital expenditures, and inventories declined. NFIB Report

U.S. News

James B. Stewart writes for the New York Times that the coronavirus outbreak has put the financial system under intense pressure for the first time since the last financial crisis, unmasking underlying risks as stocks drop and credit markets tighten. One major crack emerging is in risky nonbank corporate lending that swelled during the current expansion but has yet to be tested by rising defaults in a real economic downturn. NYT

The Financial Times reports that President Trump plans to propose a “major” economic relief package to alleviate the consequences of the coronavirus outbreak on the hardest-hit parts of the economy. Spending measures under consideration include a payroll tax and other measures targeted at helping hourly workers and small businesses. FT

U.S. Economic News

U.S. Economic News

March 9, 2020

U.S. News

The Financial Times reports that the unfolding oil price war between Saudi Arabia and Russia is likely to seriously threaten heavily indebted, junk-rated U.S. shale producers. U.S. energy companies in the investment-grade corporate bond market are also at risk from Saudi Arabia’s aggressive production increase, as pressure on cash flows from collapsing oil prices could result in downgrades. FT

According to the Wall Street Journal, the U.S. semiconductor industry is pushing back against proposed changes to Commerce Department regulations that would further reduce sales of U.S. tech products to Chinese companies. The U.S. chip industry argues that in addition to lost revenues, regulations further severing technological ties between the U.S. and China could cede U.S. market leadership to South Korea in the short run and to China in the long run. WSJ

U.S. Economic News

U.S. Economic News

March 6, 2020

U.S. Economic Indicators

The U.S. economy added 273,000 jobs in February, well above expectations. The unemployment rate was little changed at 3.5%, labor force participation remained at 63.4%, and average hourly earnings annual growth was 3.0%. BLS Report

The U.S. trade deficit decreased from $48.6 billion (revised) in December to $45.3 billion in January. The goods deficit fell by $2.6 billion while the services surplus ticked up $0.6 billion. Census Bureau Report

U.S. News

The Financial Times reports that oil prices plunged 5% to their lowest level in three years as discussions between OPEC and Russia over production cuts threaten to unravel. Analysts note that crude could fall to $30 a barrel if the world’s largest producers can’t come to an agreement, a scenario that Russia and Saudi Arabia are increasingly willing to entertain in an effort to knock high-cost U.S. shale rivals out of the market. FT

The Washington Post reports that Congress approved an $8.3 billion emergency spending package to combat the coronavirus that was signed into law by President Trump this morning. The spending package is primarily aimed at vaccine development and public health assistance, but also authorizes some economic support in the form of loan subsidies for small businesses. WaPo

U.S. Economic Indicators

U.S. Economic Indicators

March 5, 2020

U.S. Economic Indicators

New factory orders for manufactured goods fell 0.5% in January following a 1.9% (revised) increase in December and are unchanged compared to a year ago. New orders excluding transportation were down 0.1%, while new orders for nondefense capital goods excluding aircraft rose 1.1%. Census Bureau Report

Nonfarm business sector labor productivity increased 1.2% in 2019 Q4 (revised) and was up 1.8% compared to the prior year. Hours worked increased 1.2% and unit labor costs rose 0.9%. BLS Report

Initial jobless claims fell 3,000 to 216,000 last week. The four-week moving average rose 3,250 to 213,000. DOL Report

U.S. News

Peter S. Goodman writes for the New York Times that the global spread of coronavirus has become the latest point of an ongoing backlash against globalization. The outbreak has caused chaos in global supply chains, revealing manufacturers’ slim inventories and lack of preparedness in the face of an unexpected disruption, while providing new ammunition for nationalist political movements. NYT

U.S. Economic News

U.S. Economic News

March 4, 2020

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 183,000 jobs in February, above expectations. The services sector added 172,000 jobs, while the goods-producing sector added 11,000 jobs. ADP Report

The ISM Non-Manufacturing Index rose 1.8 points to 57.3 in February. The New Orders Index rose 6.9 points to 63.1, while the Employment Index rose 2.5 points to 55.6. ISM Report

U.S. News

The Financial Times reports that the Federal Reserve’s half a percentage point rate cut and subsequent fall in long-term bond yields is expected to cause a record wave of refinancing, a major boon for U.S. homeowners. Households could save billions of dollars as already-low mortgage rates fall even lower, but the banking industry is unlikely to benefit from a surge in refinancing demand as falling rates put downward pressure on mortgage yields. FT

According to the Wall Street Journal, the sharp slowdown in Chinese economic activity due to the coronavirus epidemic is forcing struggling businesses to slash salaries and lay off workers, reducing household incomes and dimming prospects for a rapid recovery. Small and medium-sized companies are especially struggling to maintain operations as they lack the resources of larger, state-owned enterprises. WSJ