Publications

U.S. Economic Indicators

New orders of manufactured durable goods rose 11.2% in July after increasing 7.7% (revised) in June. Excluding transportation, new orders rose 2.4% last month after rising 4.0% the month before. Census Bureau Report

U.S. News

The Financial Times reports that while a surge in corporate cash holdings helped stave off a wave of business collapses as the pandemic shut down economic activity, too much emergency financing may ultimately slow the economic recovery. Government bailouts may temporarily prop up zombie companies already heading for failure, while more profitable companies flush with cash are keeping it as insurance and holding back investment spending. FT

According to Bloomberg, the Fed is expected to unveil a new approach to monetary policy that relaxes its view towards inflation and tolerates lower unemployment, with short-term rates likely to remain near zero for at least five more years. While in the past the Fed has been concerned with the potential for low unemployment to drive excess inflation, the new strategy emphasizes the benefits of a strong labor market for the economy and society. Bloomberg

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index decreased from 91.7 (revised) in July to 84.8 in August. Consumers’ assessment of current business and labor market conditions decreased sharply, while near-term expectations for jobs, business conditions, and financial prospects declined modestly. Conference Board Report

New home sales increased 13.9% in July to a seasonally adjusted annual pace of 901,000 and were 36.3% above year-ago levels. The median sales price fell to $330,600 and the inventory of new homes declined to 4.0 months at the current sales rate. Census Bureau Report

U.S. News

Andrew Van Dam reports for the Washington Post that a rising share of layoffs once perceived as temporary are becoming permanent, raising fears that longer-term recessionary impacts are beginning to set in. A recent analysis from Harvard economists estimates that permanent unemployment may increase to Great Recession levels by the end of the year, implying significant labor market scarring that could plague the U.S. economy for years to come. WaPo

U.S. Economic Indicators

The Chicago Fed National Activity Index moderated from +5.33 in June to +1.18 in July. Three of the four broad categories of indicators – employment, consumption, and production – contributed positively to the overall index, while the sales, orders, & inventories category contributed negatively. Chicago Fed Report

U.S. News

The Washington Post reports that without the extension of government support to low-income households, millions of Americans are at risk of falling into poverty as the safety net shrinks and federal benefits expire. While the Cares Act proved to be widely successful in keeping families on the margins from dropping below the poverty line, poverty rates will likely rise and exceed the levels observed during the last recession if employment stays around 10% and no additional government support is delivered. WaPo

Bloomberg writes that a majority of economists surveyed by the National Association for Business Economics said the U.S. economy will emerge from recession in the second half of 2020 or at some point in 2021. A majority of respondents see additional federal stimulus as critical to the recovery, while 80% believe there is at least a one-in-four chance of a double-dip recession. Bloomberg

U.S. Economic Indicators

Existing home sales rose 24.7% to a seasonally adjusted annual rate of 5.86 million in July – a record-setting monthly increase – and were up 8.7% compared to a year ago. Monthly home sales increased by double-digits in all major regions. NAR Report

U.S. News

The Washington Post reports that despite improvement in the overall number of mortgage delinquencies last month, serious delinquencies – characterized by three or more missed payments – surged 20% to a 10-year high. The divergence between easing new delinquencies and worsening serious delinquencies is another indication of how the COVID crisis has bifurcated the housing market and the economy more broadly. WaPo

According to the Wall Street Journal, natural gas prices have soared over the last two months but have not triggered a surge in production as producers remain cautious about the trajectory of future demand. Producer reticence to chase high prices will help support the market in the near term, while investors continue to anticipate even higher prices on expectations of a global economic recovery coinciding with the beginning of heating season in the Northern Hemisphere. WSJ

U.S. Economic Indicators

Initial jobless claims rose 135,000 to 1,106,000 last week. The four-week moving average decreased 79,000 to 1,175,750. DOL Report

The Conference Board’s Leading Economic Index (“LEI”) increased 1.4% in July following a 3.0% increase in June. While improvements in manufacturing hours, building permits, and initial unemployment claims helped bolster the LEI in July, the slower pace of improvement suggests that the economic recovery is losing steam. Conference Board Report

U.S. News

Bloomberg reports that many Americans are leaving urban centers and moving to less densely populated areas amid the pandemic, leading to a surge in demand for single-family suburban homes. However, real estate experts are uncertain how long the housing boom can last, as federal aid programs expire and the pace of economic recovery slows. Bloomberg