Publications - Keybridge LLC

U.S. Economic News

July 31, 2018

U.S. Economic Indicators

Real disposable personal income rose 0.3% in June while real personal consumption expenditures (PCE) increased 0.3%. The PCE price index edged up 0.1% (up 2.2% Y/Y) and the core price index also inched up 0.1% (up 1.9% Y/Y). BEA Report

According to the Employment Cost Index, compensation costs for civilian workers rose 0.6% in the second quarter and are up 2.8% on the year. Wages and salaries were up 2.8% on the year and benefit costs were up 2.9%. BLS Report

The Conference Board’s Consumer Confidence Index inched up from 127.1 (revised) in June to 127.4 in July. The increase was driven by an improvement in the Present Situation Index, while the Expectations Index declined. Conference Board Report

U.S. News

The Financial Times reports that U.S. manufacturers are struggling to recruit millennials. Some manufacturers say that the inability to hire young workers is their top growth limiter and are expanding apprenticeship programs to help fill the 3.4 million manufacturing jobs projected to open over the next decade. FT

U.S. Economic News

July 27, 2018

U.S. Economic Indicators

The first estimate of Q2 GDP indicates that the U.S. economy expanded at an annualized rate of 4.1%, mostly in line with the consensus estimate of 4.2%. The reading reflects robust consumer spending, business investment, net exports, and government spending. BEA Report

The University of Michigan Consumer Sentiment Index edged down 0.3 point to 97.9 in the final July reading, but is up 4.5 points on the year. The Index of Consumer Expectations rose 1.0 point to 87.3, while the Current Economic Conditions Index dropped 2.1 points to 114.4. Report

U.S. News

Former Council of Economic Advisers Chair Martin Feldstein writes in a Wall Street Journal op-ed that the Federal Reserve should be raising interest rates even if inflation isn’t accelerating sharply. Feldstein contends that the Fed needs to leave itself room to cut interest rates in the event of an economic downturn, which he believes could be caused by a sharp drop in asset prices, prices that have been inflated by near-zero interest rates. WSJ

U.S. Economic News

July 26, 2018

U.S. Economic Indicators

New orders of manufactured durable goods rose 1.0% in June after declining 0.3% (revised) in May, and are up 8.4% year-over-year. Excluding transportation, new orders were up 0.4% (up 8.1% Y/Y). Census Bureau Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $68.3 billion in June from $64.8 billion in May. Meanwhile, both wholesale and retail inventories were unchanged. Census Bureau Report

Initial jobless claims rose 9,000 to 217,000 last week. The four-week moving average decreased 2,750 to 218,000. DOL Report

U.S. News

The Wall Street Journal reports that the U.S. and E.U. have agreed to hold off on further tariffs while the two sides negotiate a more open trade relationship. The agreement comes amidst an escalating trade conflict that has seen the U.S. threaten to impose across-the-board tariffs on European cars following recent retaliatory tariffs by the E.U. WSJ

United States: Fracking Reinvention — What It Means for Foreign Policy

July 25, 2018

Technological advances in hydraulic fracturing made during the 2014-16 period have allowed U.S. producers to extract oil and gas with greater profitability even at lower energy prices. The resulting increase in production coming out of the Permian Basin will make the United States the leading global crude oil producer starting in 2018 – an unthinkable development 10 years ago. In this analysis, Keybridge examines the fundamental shift in energy production and how it will alter U.S. foreign policy.

U.S. Economic News

July 24, 2018

U.S. Economic Indicators

The FHFA House Price Index shows that U.S. house prices rose 0.2% in May and were up 6.4% from the same period last year. House prices rose on a monthly basis in seven of nine census divisions, with the largest gains coming in the East South Central division. Report

U.S. News

The Wall Street Journal reports that escalating trade tensions with China threaten to harm U.S. crude oil exports. China was the second-largest consumer of U.S. crude oil exports behind Canada in 2017, though U.S. imports only make up 3% of Chinese imports, meaning that U.S. exporters are likely to suffer more than Chinese consumers if China were to place tariffs on U.S. crude oil. WSJ

Josh Zumbrun of the Wall Street Journal writes that a new IMF report concludes that the U.S. is the largest driver of global current account imbalances and that it continues to adopt policies that are likely to increase imbalances in years to come. The IMF report points to policies that have worsened government deficits, such as tax cuts and increased federal spending, that are likely to worsen the U.S. current account deficit and could pose a threat to the global economy. WSJ