Publications

U.S. Economic Indicators

The U.S. economy lost 701,000 jobs in March, far more than consensus estimates. The unemployment rate rose to 4.4%, the labor force participation rate fell to 62.7%, and average hourly earnings annual growth was 3.1%. BLS Report

The ISM Non-Manufacturing Index fell 4.8 points to 52.5 in March. The New Orders Index fell 10.2 points to 52.9, while the Employment Index declined 8.6 points to 47.0. ISM Report

U.S. News

The Wall Street Journal reports that Saudi Arabia and Russia are set to lead a virtual summit next week to discuss reducing oil production by at least 6 million barrels a day – contingent on cooperation from U.S. producers. Oil prices surged following the announcement of upcoming negotiations, but analysts note that join production curbs will be more difficult to enact in the U.S. because of American antitrust laws. WSJ

U.S. Economic Indicators

Initial jobless claims increased 3,341,000 to 6,648,000 last week, setting a new high for the history of the series. The four-week moving average rose 1,607,750 to 2,612,000. DOL Report

The U.S. trade deficit decreased from $45.5 billion (revised) in January to $39.9 billion in February. The goods deficit fell by $5.9 billion while the services surplus fell by $0.4 billion. Census Bureau Report

New factory orders for manufactured goods were virtually unchanged in February following a 0.5% (revised) decrease in January. New orders excluding transportation edged down 0.9%, while new orders for nondefense capital goods excluding aircraft also fell 0.9%. Census Bureau Report

U.S. News

According to the Financial Times, surging demand for drugs and protective gear has given new urgency to calls from a growing group of bipartisan lawmakers for medical supply companies to reduce reliance on Chinese supply chains. Policymakers have acknowledged that crafting policies to encourage reshoring of drug and medical equipment production will be difficult, given the challenges of altering complex supply networks and the need for financial incentives. FT

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment decreased by 27,000 jobs in March, contracting far less than expected; however, the report only uses data through March 12 and does not reflect the impact of COVID-19 for the full month. The service sector lost 18,000 jobs, while the goods-producing sector lost 9,000 jobs. ADP Report

The ISM Manufacturing Index fell 1.0 point to 49.1 in March, falling below 50 and into contractionary territory. The Employment Index fell 3.1 points to 43.8, while the New Orders Index fell 7.6 points to 42.2. ISM Report

Construction spending declined 1.3% in February to an annualized rate of $1.37 trillion. Private construction fell 1.2% and public construction fell 1.5%. Census Bureau Report

U.S. News

The Wall Street Journal reports that the $350 billion in government-guaranteed small business loans under the Small Business Administration’s Paycheck Protection Program will provide business owners with loans at just 0.5% interest that will be forgiven if funds are spent on rent, payroll, or utilities and payrolls are maintained for at least 2 months. Although the SBA will not have to directly approve the loans, which businesses can access through their usual lenders,  concerns remain that loan officers will be unable to quickly process all of the applications given the overwhelming demand. WSJ

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index decreased sharply from 132.6 (revised) in February to 120.0 in March. Consumers’ short-term outlook deteriorated notably, though the Conference Board notes that the cutoff date for preliminary results was March 19, meaning further declines are likely to follow. Conference Board Report

U.S. News

According to the Wall Street Journal, the federal government is working this week to release funds from the coronavirus stimulus package to states to boost jobless benefits as record numbers of Americans file for unemployment. However, whether those payments actually reach workers will depend on how successfully states are able to administer their own unemployment systems, many of which are already overburdened and experiencing significant delays. WSJ

The Financial Times reports that the Fed has set up a new temporary facility to allow foreign central banks to convert their U.S. Treasury holdings into dollars, helping to meet the global demand for safe assets amid the coronavirus pandemic. The Fed move is likely to help countries that already have a significant stockpile of foreign reserves, but can do little to help countries without preexisting reserves. FT

U.S. Economic Indicators

The National Association of Realtors pending home sales index rose 2.4% in February (up 9.4% Y/Y). NAR notes that there will be a lengthier stay of inventory in the market over the coming months due to reduced short-term demand from the coronavirus-induced shutdown. NAR Report

U.S. News

According to the Financial Times, U.S. companies are urgently seeking guidelines from the Treasury and the Fed to clarify the loan conditions for the $454bn in funds set aside for businesses during the coronavirus pandemic. There is considerable uncertainty regarding which firms may have conditions waived, which firms will have to divest equity stakes to the federal government, and whether especially troubled borrowers will be eligible for any aid at all. FT

The Wall Street Journal reports that the surge in unemployment claims in Pennsylvania last week, representing 5.8% of the state’s workforce, likely foreshadows the future of states around the country as administrative delays in processing claims get resolved. Pennsylvania’s spike in claims was much higher than harder-hit, more populous states like New York and California, suggesting claims in those states are likely to rise substantially in the coming weeks. WSJ