Publications

U.S. Economic Indicators

Privately-owned housing starts fell 11.2% in December to a seasonally adjusted annual rate of 1.08 million (down 10.9% year-over-year). Housing permits rose 0.3% to a 1.33 million annual pace in December and are up 0.5% on the year.  Census Bureau Report

The Conference Board’s Consumer Confidence Index rose from 121.7 in January to 131.4 in February. February’s increase, after three months of consecutive declines, rebounded as consumers continue to view business and labor market conditions favorably.  Conference Board Report

U.S. News

Michael S. Derby of the Wall Street Journal reports that President Trump’s decision to delay the expanded trade tariffs on Chinese imports likely reduced the risk of higher U.S. inflation, according to new research by the San Francisco Fed. The report states that had President Trump imposed a 25% tariff on all imports from China, consumer prices would have rose 0.4 percentage point. WSJ

The Wall Street Journal reports that Federal Reserve Vice Chairman Richard Clarida said slowing global growth is an important factor behind the Federal Reserve’s decision to put interest rate hikes on hold. In addition to stalling U.S. exports, a global economic slowdown could also negatively influence financial and asset markets, a primary vehicle for monetary policy. WSJ

U.S. Economic Indicators

The Chicago Fed National Activity Index fell from +0.05 (revised) in December to -0.43 in January. The employment and sales, orders, and inventories categories contributed positively, while the production and the personal consumption and housing categories contributed negatively. Chicago Fed Report

The U.S. Census Bureau reports that wholesale merchant inventories edged up 1.1% in December to $661.8 billion. Inventories were up 7.3% year-over-year. Census Report

U.S. News

The Wall Street Journal reports that President Trump stated he would delay an increase in tariffs of 25% on $200 billion of Chinese goods set to take effect at the end of this week, citing progress on issues such as intellectual property and technology transfer. In recent talks, Beijing offered to increase purchases of U.S. farm and energy products and services, ease restrictions on U.S. firms, and improve protection of U.S. intellectual property rights. WSJ

Nick Timiraos of the Wall Street Journal reports that top Federal Reserve officials said Friday the central bank could stop reducing its Treasury holdings from its $4 trillion balance portfolio in the latter half of the year before maintaining its holdings for some time. Determining the end of the balance sheet run-off depends in part on how low reserves can fall before putting upward pressures on the Federal Funds Rate. WSJ

U.S. News

The Wall Street Journal reports that the Trump administration is relying on the Chinese leader’s special envoy, Liu He, to accept new restrictions that are controversial in Beijing. Critical steps still need to be taken, such as China producing a list of price-distorting subsidies to eliminate. WSJ

Sam Fleming reports for the Financial Times that Federal Reserve officials are rethinking their strategy for steering the U.S. economy as they grapple with unexpectedly tepid price growth. Shortfalls relative to the Fed’s 2.0 percent target have prompted officials to shelve plans for further rate hikes amid consumer expectations for inflation at its lowest levels in half a century over the coming five years. FT

U.S. Economic Indicators

Initial jobless claims fell 23,000 to 216,000 last week. The four-week moving average rose 4,000 to 235,750. DOL Report

New orders of manufactured durable goods rose 1.2% in December after rising 1.0% (revised) in November, and are up 8.1% year to date.  Excluding transportation, new orders edged up 0.1% (up 7.0% YTD).  Census Bureau Report

Existing home sales decreased 1.2% to a seasonally adjusted annual rate of 4.94 million in January, and are 8.5% below year-ago levels. NAR notes that existing home sales are likely to have reached a cyclical low, however moderating home prices, rising household income, and lower mortgage rates are expected to raise home sales. NAR Report

The Conference Board’s Leading Economic Index declined 0.1% to 111.3 in January. The slight decrease suggests economic growth may be peaking. Conference Board Report

U.S. News

Nick Timiraos of the Wall Street Journal reports that most Federal Reserve officials last month indicated they were ready to end the run off of the central bank’s $4 trillion balance sheet this year and believed an action plan should be released soon. The Fed began to shrink its balance sheet in 2018, and believed an announcement regarding a halt in that action would provide more certainty in the process of normalizing the Fed’s balance sheet. WSJ

U.S. News

The Wall Street Journal reports that President Trump has firmly indicated that the U.S. may not increase tariffs on Chinese goods on March 1, as scheduled. Trump and his advisors are considering a meeting with President Xi in the coming weeks, which would effectively act as the new deadline for a trade deal. WSJ

According to the Wall Street Journal, market participants are growing confident that the European Central Bank will soon attempt to boost the eurozone’s ailing economy by reinstituting its program of providing cheap long-term loans to the banking system. The eurozone’s slowing economy comes at a time when the central bank has already expended resources to boost growth, having ended its nearly $3 trillion bond buying program in December and lowering key interest rates into negative territory. WSJ