U.S. Economic News

U.S. Economic News

September 23, 2019

U.S. Economic Indicators

The Chicago Fed National Activity Index rose from -0.41 in July to 0.10 in August. Indicators of employment, consumption, and sales, orders, & inventories made negative contributions to the Index, while production-related indicators contributed positively. Chicago Fed Report

U.S. News

Paul Kiernan of the Wall Street Journal reports that the personal saving rate has risen from just 3.7% in 2010 to 8.2% in 2019, even though saving usually declines as consumer optimism rises during economic expansions. While some of the uptick in the average saving rate could be due to increased caution among consumers after the last recession or aging baby boomers preparing for retirement, most of the bump can be attributed to wealthy households holding onto gains from the 2018 tax cuts. WSJ

The Financial Times reports that investors are increasingly concerned about a global recession, with the likelihood of a downturn in the next year standing at over 50%, according to a recent survey of asset managers. Survey respondents expressed a dimming outlook for business confidence, corporate earnings, and U.S. employment over the next year. FT

U.S. Economic News

U.S. Economic News

September 20, 2019

U.S. News

According to the Wall Street Journal, St. Louis Fed leader James Bullard stated the central bank should have reduced rates by 50 basis points at its latest meeting to provide insurance against continued weak inflation and elevated downside risks. Bullard was one of three Fed officials to vote against Wednesday’s quarter-point rate cut, but was the only dissenter who favored reducing rates aggressively in the present and raising them later if economic risks failed to materialize. WSJ

The Washington Post reports that the U.S. is temporarily exempting more than 400 Chinese products from tariffs imposed last year as a result of over 1,100 exclusion requests filed by U.S. companies. The U.S. exemptions follow China’s move to cancel or ease tariffs on a variety of U.S. products ahead of high-level trade talks planned for next month. WaPo

U.S. Economic News

U.S. Economic News

September 19, 2019

U.S. Economic Indicators

The Conference Board’s Leading Economic Index (“LEI”) was unchanged in August following a 0.4% increase in July. Improvements in housing permits and credit conditions offset weakness from manufacturing and the interest rate spread. Conference Board Report

Existing home sales rose 1.3% to a seasonally adjusted annual rate of 5.49 million in August and are up 2.6% compared to a year ago. NAR notes that falling mortgage rates are luring buyers into the market, though low inventory numbers continue to push up prices. NAR Report

Initial jobless claims rose 2,000 to 208,000 last week. The four-week moving average fell 750 to 212,250. DOL Report

U.S. News

According to the Wall Street Journal, the split among Fed officials over the central bank’s quarter-point rate cut Wednesday is symptomatic of broader disagreement among officials about the extent to which trade tensions and slowing global growth will affect the U.S. economy. Statements by Fed Chairman Jerome Powell appear to leave the door open for further rate reductions amid concern that trade policy uncertainty may be weighing on business investment and manufacturing activity. WSJ

The Financial Times reports that the OECD has downgraded its global growth projection by 0.3 percentage point to 2.9 percent, the weakest performance since the 2008-09 financial crisis. It warned that the global economic outlook is “increasingly fragile and uncertain,” urging countries to remove tit-for-tat trade barriers and implement fiscal stimulus measures. FT

U.S. Economic News

U.S. Economic News

September 18, 2019

U.S. Economic Indicators

Privately-owned housing starts jumped 12.3% in August to a seasonally adjusted annual rate of 1.36 million (up 6.6% year-over-year). Housing permits rose 7.7% to a 1.42 million annual pace in August and are up 12.0% from last year. Census Bureau Report

U.S. News

The Financial Times reports that the federal funds rate jumped above the central bank’s 2-2.25% target this morning after the Fed made $75 billion in short-term funding available in a second attempt to steady the market for overnight lending. A combination of factors had dramatically reduced the amount of cash available relative to demand, sending the repo rate surging to a record high.  FT

Greg Ip of the Wall Street Journal reports that the American and global economies are experiencing a series of supply shocks, ranging from the attack on Saudi oil production to auto strikes in the U.S., that together threaten to undermine growth and push up inflation. While such supply-side incidents may not carry as much weight as in the past, they could still exert notable inflationary pressure in an economy potentially at full employment. WSJ

U.S. Economic News

U.S. Economic News

September 17, 2019

U.S. Economic Indicators

Industrial production rose 0.6% in August (up 0.4% year-over-year) after declining 0.1% in July. Capacity utilization rose 0.4 point to 77.9 in August. Fed Report

The NAHB Housing Market Index rose 1.0 point to 68.0 in August. The sub-index for current sales conditions rose while the sub-index of sales expectations edged down slightly. NAHB Report

U.S. News

The Wall Street Journal reports that the U.S. and Japan are moving ahead with a limited trade agreement that would lower Japanese tariffs on U.S. agricultural goods and protect Japan from U.S. tariffs on auto imports. The two countries are expected to formally sign the agreement later this month while leaving open the possibility of reaching a broader, comprehensive trade agreement in the future. WSJ