Publications

U.S. Economic Indicators

The January Empire State Manufacturing Survey indicated that industrial activity in the New York region grew at a slower rate this month, as the headline index declined 8 points to 3.9, its lowest level in over a year.  The new orders index fell 10 points to 3.5, the shipments index was little changed at 17.9, and the index for number of employees fell to 7.4; meanwhile, hours worked remained steady.  NY Fed Report

The headline Producer Price Index (“PPI”) for final demand eased 0.2% in December but is up 2.5% since December of last year. The core — which removes the volatile prices of food, energy, and trade services — was unchanged but is up 2.8% year-over-year. BLS Report

U.S. News

According the Wall Street Journal, the economic outlook for Europe and the world darkened after growth in Germany slowed sharply last year due to easing exports to China and less domestic demand. Economists fear Germany’s slowdown will be a channel through which the slowing Chinese economy can harm other economies. WSJ

The Financial Times reports that the partial government shutdown is making it more difficult for U.S. business to receive approval for new products, obtain import licenses, and receive clarity on regulatory changes. Economists expect that the uncertain business conditions coupled with the lack of paychecks for 800,000 government employees could reduce GDP by at least $2 billion per week. FT

U.S. News

According to the Wall Street Journal, Chinese exports unexpectedly declined in December, falling 4.4 percent from a year ago. December’s decline followed a nine-month surge in China’s exports as companies frontloaded orders to avoid tariffs. WSJ

Paul Hannon of the Wall Street Journal reports that the United States and other large economies are set for a further slowdown this year, according to leading indicators released by the OECD. These warnings come amid signs that some components of the global economy are slowing more rapidly than previously thought. WSJ

The Wall Street Journal reports that economic reports in emerging and developed markets have been below expectations, causing Citigroup’s leading indexes to fall to their lowest levels since June. The decline is driven by lukewarm figures from China and Europe, as well as a drop in a U.S. manufacturing activity. WSJ

U.S. Economic Indicators

Consumer prices declined 0.1% in December (up 1.9% on the year).  The “core” CPI, which excludes food and energy, increased 0.2% in November and is up 2.2% on the year.  BLS Report

U.S. News

Nick Timiraos of the Wall Street Journal reports that internal discussions at the Fed are heating up over the make-up of the central bank’s balance sheet when it is done shrinking those holdings. The talks suggest the Fed is considering a larger portfolio than previously thought and may be weighted toward short-term Treasury securities. WSJ

The Wall Street Journal reports that economists they surveyed see a growing risk of recession in the U.S., though few identified a specific trigger. Many economists that were surveyed view China trade tensions and rising interest rates as potential triggers, while others pointed to U.S. exposure to slowdowns in other major economies like China, Europe, and Japan. WSJ

U.S. Economic Indicators

Initial jobless claims fell 17,000 to 216,000 last week. The four-week moving average increased 2,500 to 221,750. DOL Report

U.S. News

The Wall Street Journal reports that countries that are not involved in the U.S. and China trade conflict are waiting for both sides to reach a deal to avoid damage from a lengthy fight, despite many potentially benefiting from the dispute. Regions including South America and Southeast Asia have an opportunity to attract manufacturing exporters trying to avoid U.S. tariffs on Chinese products. WSJ

Nick Timiraos of the Wall Street Journal reports that Federal Reserve officials have signaled they are unlikely to raise interest rates for at least a few months while they assess the impact of recent market volatility on the U.S. economy. Despite voting unanimously to raise rates last month officials, were more cautious about their policy path. WSJ

U.S. News

According to the Wall Street Journal, the World Bank cut its forecasts for global growth in 2019 and 2020, as factors such as trade tensions and financial-market instability weigh on the global economy. The World Bank lowered its global growth rate by 0.1 percentage point for both years, with cuts coming from both advanced and emerging economies. WSJ

The Wall Street Journal reports that Chicago Fed President Charles Evans stated the Fed can take some time before raising rates again amid an uncertain economic outlook. According to Evans, the Fed has capacity to further analyze economic data before changing the course of monetary policy due to inflation showing few signs of rising above 2 percent. WSJ

Justin Lahart of the Wall Street Journal reports that the housing market slump could be signaling the U.S. economy’s sensitivity to rising interest rates. Despite current rates being low by historical standards, housing may have grown dependent on the low-rate environment that prevailed since 2008. WSJ

The Financial Times reports that James Bullard, President of the St. Louis Fed, warned that the U.S. risks entering a recession if the Fed continues raising rates. Bullard, who will be a voting member of the FOMC in 2019, submits that rates are at an optimal level after nine increases since December 2015. FT