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U.S. Economic News

June 2, 2017

U.S. Economic Indicators

The U.S. economy added 138,000 jobs in May, below consensus. The unemployment rate dropped to 4.3%, average hourly earnings rose 2.5% Y/Y, and the labor force participation rate fell to 62.7%. BLS Report

The U.S. trade deficit rose from $45.3 billion in March (revised) to $47.6 billion in April. The goods deficit increased $2.3 billion while the services surplus declined less than $0.1 billion. Census Bureau Report

U.S. News

The Wall Street Journal writes that the Federal Reserve faces mixed signals from the economy as unemployment remains low yet inflation has struggled to pick up. Fed officials have focused on labor market strength in recent months, which they say will eventually cause inflationary pressures in the economy. WSJ

U.S. Economic News

June 1, 2017

U.S. Economic Indicators

Initial jobless claims jumped 13,000 to 248,000 last week. The four-week moving average rose 2,500 to 238,000. DOL Report

The ADP Employment Report shows that private-sector employment increased by 253,000 jobs in May, well above expectations of 170,000. The services sector added 205,000 jobs and the goods-producing sector added 48,000 jobs. ADP Report

The ISM Manufacturing Index inched up 0.1 percentage point to 54.9 in May. The new orders index rose 2.0 percentage points to 59.5 and the employment index increased 1.5 percentage points to 53.5. ISM Report

Construction spending decreased 1.4% in April to an annualized rate of roughly $1.2 trillion. Public construction fell 3.7% and private construction decreased 0.7%. Census Report

U.S. Economic News

May 31, 2017

U.S. Economic Indicators

The National Association of Realtors pending home sales index fell 1.3% to 109.8 in April (down 3.3% Y/Y). NAR attributes the decrease to weak supply which has made homes increasingly unaffordable to the average consumer. NAR Report

U.S. News

According to the New York Times, Federal Reserve Governor Lael Brainard says that the Fed should raise interest rates soon despite recent signs that inflation has retreated from the Fed’s target. Brainard believes that the Fed should raise rates in June, although if inflationary pressures do not return then the path for future rate hikes may be less clear. NYT

The Wall Street Journal reports that while Federal Reserve officials are likely to raise interest rates at their June meeting, the looming debt ceiling debate may slow the pace of future hikes. Now that the debt ceiling may be reached sooner than expected, there is worry that a bitter fight over spending may throw markets into turmoil, which could necessitate a delay of further rate hikes. WSJ

U.S. Economic News

May 30, 2017

U.S. Economic Indicators

Real disposable personal income and real personal consumption expenditures (PCE) both rose 0.2% in April. The PCE price index and core price index also rose 0.2% (up 1.7% and 1.5% Y/Y, respectively). BEA Report

The Conference Board’s Consumer Confidence Index fell from 119.4 to 117.9 in May, but still remains historically strong. The decline was driven by a decrease in the expectations index while the present situation index remained largely unchanged. Conference Board Report

U.S. News

The Wall Street Journal reports that credit scores for U.S. consumers reached a record high early in 2017. As the economy continues to recover from the recent recession, improving credit scores mean banks are more willing to lend at lower interest rates, which could boost consumer activity. WSJ

Richard Rubin of the Wall Street Journal reports that congressional Republicans’ effort to reform the U.S. tax code continues to face significant hurdles. While politicians from both sides of the aisle support tax reform, there is little agreement about the exact type and size of tax cuts, as well as how to account for lost revenue. WSJ

U.S. Economic News

May 26, 2017

U.S. Economic Indicators

New orders of manufactured durable goods fell 0.7% in April after increasing 2.3% in March (revised), and are up 2.2% year-over-year. Excluding transportation, new orders fell 0.4% (up 3.8% Y/Y). Census Bureau Report

The second estimate of Q1 GDP indicates that the U.S. economy expanded at an annualized rate of 1.2%, above the initial estimate. The revised reading reflects slight improvements to consumer spending, residential & business investment, and net exports, while inventories worsened somewhat. BEA

The University of Michigan Consumer Sentiment Index inched up 0.1 point to 97.1 in the final May reading and is up 2.4 points on the year. The index for consumer expectations rose 0.7 point while the index for current economic conditions fell 1.0 point. Report

U.S. News

Former Treasury Secretary Larry Summers says that secular stagnation has proven to be as serious a problem as he previously thought. Summers argues that persistently slow economic growth, low inflation, and low interest rates all support his secular stagnation hypothesis he introduced in 2013. WSJ