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U.S. Economic Indicators

The Empire State Manufacturing Survey indicates that business activity increased in July, as the headline index rose 17.4 points to 17.2 – its first positive reading since February. The new orders index rose 14.5 points to 13.9, the shipments index rose 15.2 points to 18.5, and the index for the number of employees rose 3.9 points to 0.4. NY Fed Report

Industrial production increased 5.4% in June but is down 10.8% year-over-year. Capacity utilization increased 3.5 points to 68.6. Fed Report

U.S. News

The Wall Street Journal reports that spending on cars and homes by higher-income consumers, encouraged by historically low interest rates, is helping support the U.S. economy during the downturn. Sales of pricier vehicles, luxury homes, and other big-ticket goods are outpacing expectations as the coronavirus weighs heavily on spending on services. WSJ

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 6.2 points to 100.6 in June as eight components improved and two weakened. Sales expectations and the economic outlook improved, while earnings trends and expected credit conditions declined. NFIB Report

Consumer prices increased 0.6% in June (up 0.6% from a year ago) after falling 0.1% in May. The “core” CPI, which excludes food and energy, rose 0.2% in June – the first monthly increase since February – and is up 1.2% from last year. BLS Report

U.S. News

The Washington Post reports that White House officials have expressed willingness to extend a narrower version of enhanced unemployment benefits as economists warn that an abrupt withdrawal of government support could impede economic recovery. Lawmakers are running out of time to reach a compromise on what an extension could look like as the current $600 per week bonus is set to expire at the end of this month. WaPo

U.S. News

The Washington Post reports that tens of thousands of workers throughout the country are still waiting to receive unemployment payments after the flood of applications earlier in the pandemic overwhelmed state unemployment systems. The delay in disbursing benefits has frustrated workers who have been forced to default on debt payments and turn to food banks and other safety net programs to make ends meet as they wait for claims to be reviewed and benefits to be paid out. WaPo

Bloomberg reports that discrepancies in reported data for Paycheck Protection Program (PPP) loans raise concerns about the accuracy of estimates for the number of jobs saved by the program. The lack of consistent reporting by lenders and applicants for businesses’ number of employees could present challenges for small businesses applying for loan forgiveness as the program requires that a certain level of jobs be maintained to qualify. Bloomberg

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand fell 0.2% in June and is down 0.8% year-over-year. The core – which removes the volatile prices of food, energy, and trade services – rose 0.3% in June, the largest increase since January, but is down 0.1% from a year ago. BLS Report

U.S. News

The Washington Post reports that state transportation departments face an estimated $50 billion shortfall in funding due to the loss of tax revenue from gasoline, forcing states to delay much-needed infrastructure projects. Transportation organizations are urging Congress to close the budget gap in an additional stimulus package, arguing that such a measure would help bring back jobs and provide a boost to productivity. WaPo

Bloomberg reports that U.S. banks are expected to reveal their worst quarterly performance since the financial crisis when second quarter results are released next week. Banks have combated the rise in unemployment and consumer spending slowdown by increasing loan-loss provisions to post-2008 highs, a hit to earnings that has been partially offset by trading revenue and refinancing activity. Bloomberg

U.S. Economic Indicators

Initial jobless claims fell 99,000 to 1,314,000 last week. The four-week moving average fell 63,000 to 1,437,250. DOL Report

U.S. News

The Wall Street Journal reports that despite a rocky start to the Main Street Lending Program, Federal Reserve officials overseeing the program expect it to provide critical insurance if rising coronavirus cases cause the economic disruption to worsen. Since its creation in April, the program has suffered from limited interest from both banks and borrowers, though Fed officials remain resolute that loans through the program will eventually take off. WSJ

According to the Washington Post, in an effort to limit the size of the coming relief package, conservative lawmakers and White House officials are deliberating reducing the income threshold for a second round of stimulus payments. However, the persistent economic turmoil of the crisis alongside the high administrative burden of more targeted payments lead some experts to believe that GOP leadership is likely to back off the proposal to curb payments. WaPo