Publications

U.S. Economic Indicators

The ISM Non-Manufacturing Index dropped 1.3 percentage points to 56.7 in January. The New Orders Index dropped 5.0 percentage points to 57.7 while the Employment Index rose 1.2 percentage points to 57.8. ISM Report

U.S. News

The Wall Street Journal reports that a recent survey conducted by the Fed found a growing minority of banks reported tightening standards for some loans in the fourth quarter and expected loan demand and performance to weaken. This finding suggests that an increasing number of institutions are anticipating a lending slowdown in 2019. WSJ

Paul Hannon reports for the Wall Street Journal that Europe’s economy had a weak start to 2019, as Italy remains stuck in recession and uncertainty around Britain’s exit from the E.U. has dragged on U.K. growth. The eurozone’s economy slowed more sharply than expected in 2018 and appear set to cool further this year. WSJ

The Financial Times reports that Europe would be the biggest winner of a U.S.-China tariff war by picking up the largest portion of bilateral trade diverted from the two largest economies. A report, published by the U.N.’s trade and investment body, concluded that tariffs imposed by Beijing and Washington would do little to protect their domestic economies because most of the trade would switch to other countries, particularly the E.U. FT

U.S. Economic Indicators

New factory orders for manufactured goods decreased 0.6% in November following a 2.1% (revised) drop in October, but are up 7.9% year to date. New orders excluding transportation fell 1.3% while new orders for nondefense capital goods excluding aircraft fell 0.6%. Census Bureau Report

U.S. News

According to the Wall Street Journal, Dallas Federal Reserve Bank President Robert Kaplan believes the Fed will halt interest rate increases until at least the summer. A slowing global economy, tight financial conditions, and muted inflationary pressures all contributed to the Fed’s recent decision to keep the target rate between 2.25% and 2.50%. WSJ

Ruth Simon of the Wall Street Journal reports that after a strong 2018, many small businesses are becoming more cautious about their investment and hiring plans. Small businesses are responding to early signs of slowing sales, tariffs, volatile financial markets, and residual effects of the government shutdown, according to a survey conducted for the Wall Street Journal. WSJ

The Wall Street Journal reports that the weakness in global trade flows is worsening more quickly than expected. Although the U.S. and China are reportedly moving closer to a deal that would end their trade war, a rapidly-dimming global expansion and tight financial conditions have dampened demand for exports. WSJ

U.S. Economic Indicators

The U.S. economy added 304,000 jobs in January, far above consensus. The unemployment rate rose to 4.0%, the labor force participation rate edged up to 63.2%, and average hourly earnings annual growth edged down to 3.2%. BLS Report

The ISM Manufacturing Index increased 2.3 percentage points to 56.6 in December. The Employment Index edged down 0.5 percentage point to 55.5 while the New Orders Index rose 6.9 percentage points to 58.2.  ISM Report

Construction spending rose 0.8% in November to an annualized rate of $1.3 trillion.  Public construction fell 0.9% while private construction increased 1.3%.  Census Report

The U.S. Census Bureau reports that wholesale merchant inventories edged up 0.3% in November to $654.0 billion. Inventories were up 6.5% year-over-year. Census Report

U.S. Economic Indicators

Initial jobless claims rose 53,000 to 253,000 last week. The four-week moving average rose 5,000 to 220,250. DOL Report

New home sales jumped 16.9% to a seasonally adjusted annual pace of 657,000 in November, but are 7.7% below the November 2017 rate.  The median sales price fell to $302,400 and the inventory of new homes declined to 6.0 months at the current sales rate. Census Bureau Report

U.S. News

Brian Blackstone reports for the Wall Street Journal that a slowing global economy and low inflation has central banks around the world reconsidering plans to gradually reduce the financial stimulus from markets and the banking system. The Federal Reserve signaled in Wednesday’s policy meeting that they would pause raising rates until it is known if weakness abroad and political uncertainty will drag down U.S. growth. WSJ

According to the Wall Street Journal, China has placed its hopes on another meeting between President Trump and Chinese President Xi Jinping to help solve the trade dispute between the two countries. A high level trade delegation from China has proposed that the presidents meet in the Chinese city Hainan in late February. WSJ

The Wall Street Journal reports that the eurozone economy grew at the weakest pace in four years in 2018, with a further slowdown likely as the currency area grapples with political tensions and weak demand for its exports. The slowdown feeds concerns about the global expansion, which is weakening for various reasons across a number of major countries. WSJ

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 213,000 jobs in January, above expectations of 174,000. The services sector added 145,000 jobs and the goods-producing sector added 68,000 jobs. ADP Report

The National Association of Realtors pending home sales index eased 2.2% in December (down 9.8% Y/Y), the twelfth straight month of annual decreases. NAR points to stock market volatility hurting consumer confidence, as well as record high home prices and higher mortgage rates as potential causes for December’s drop. NAR Report

U.S. News

The Wall Street Journal reports that the Fed is expected to hold rates steady at their policy meeting today. Since the beginning of 2019, Fed officials have signaled they are willing to stop raising rates until they determine if slowing global growth and volatile financial markets have dampened the U.S. outlook. WSJ

Kate Davidson of the Wall Street Journal reports that the Treasury plans to scale back its borrowing plans in early 2019 after increasing borrowing last year due to tax cuts. Overall, the Treasury expects to issue $365 billion in debt during the first quarter of 2019 and $83 billion during the second quarter. WSJ