Publications

U.S. Economic Indicators

The U.S. economy added 273,000 jobs in February, well above expectations. The unemployment rate was little changed at 3.5%, labor force participation remained at 63.4%, and average hourly earnings annual growth was 3.0%. BLS Report

The U.S. trade deficit decreased from $48.6 billion (revised) in December to $45.3 billion in January. The goods deficit fell by $2.6 billion while the services surplus ticked up $0.6 billion. Census Bureau Report

U.S. News

The Financial Times reports that oil prices plunged 5% to their lowest level in three years as discussions between OPEC and Russia over production cuts threaten to unravel. Analysts note that crude could fall to $30 a barrel if the world’s largest producers can’t come to an agreement, a scenario that Russia and Saudi Arabia are increasingly willing to entertain in an effort to knock high-cost U.S. shale rivals out of the market. FT

The Washington Post reports that Congress approved an $8.3 billion emergency spending package to combat the coronavirus that was signed into law by President Trump this morning. The spending package is primarily aimed at vaccine development and public health assistance, but also authorizes some economic support in the form of loan subsidies for small businesses. WaPo

U.S. Economic Indicators

New factory orders for manufactured goods fell 0.5% in January following a 1.9% (revised) increase in December and are unchanged compared to a year ago. New orders excluding transportation were down 0.1%, while new orders for nondefense capital goods excluding aircraft rose 1.1%. Census Bureau Report

Nonfarm business sector labor productivity increased 1.2% in 2019 Q4 (revised) and was up 1.8% compared to the prior year. Hours worked increased 1.2% and unit labor costs rose 0.9%. BLS Report

Initial jobless claims fell 3,000 to 216,000 last week. The four-week moving average rose 3,250 to 213,000. DOL Report

U.S. News

Peter S. Goodman writes for the New York Times that the global spread of coronavirus has become the latest point of an ongoing backlash against globalization. The outbreak has caused chaos in global supply chains, revealing manufacturers’ slim inventories and lack of preparedness in the face of an unexpected disruption, while providing new ammunition for nationalist political movements. NYT

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 183,000 jobs in February, above expectations. The services sector added 172,000 jobs, while the goods-producing sector added 11,000 jobs. ADP Report

The ISM Non-Manufacturing Index rose 1.8 points to 57.3 in February. The New Orders Index rose 6.9 points to 63.1, while the Employment Index rose 2.5 points to 55.6. ISM Report

U.S. News

The Financial Times reports that the Federal Reserve’s half a percentage point rate cut and subsequent fall in long-term bond yields is expected to cause a record wave of refinancing, a major boon for U.S. homeowners. Households could save billions of dollars as already-low mortgage rates fall even lower, but the banking industry is unlikely to benefit from a surge in refinancing demand as falling rates put downward pressure on mortgage yields. FT

According to the Wall Street Journal, the sharp slowdown in Chinese economic activity due to the coronavirus epidemic is forcing struggling businesses to slash salaries and lay off workers, reducing household incomes and dimming prospects for a rapid recovery. Small and medium-sized companies are especially struggling to maintain operations as they lack the resources of larger, state-owned enterprises. WSJ

U.S. News

The Wall Street Journal reports that G7 finance ministers and central bankers have announced that they stand ready to cooperate on policy measures to combat the impact of Covid-19 on global growth. Economists have warned, however, that governments will be unable to rely solely on lower interest rates to ease virus-related disruptions given that rates are already historically low. WSJ

According to the Financial Times, cash-strapped U.S. shale producers on the verge of bankruptcy are hoping for OPEC production cuts this week to prop up oil prices. The steep decline in demand since the coronavirus outbreak has pushed oil prices further below sustainable levels for many U.S. shale producers. FT

U.S. Economic Indicators

The Conference Board’s Leading Economic Index (“LEI”) rose 0.8 point in January following a 0.3 point decline in December. The improvement in the LEI was driven by a sharp decrease in initial unemployment claims and a rise in housing permits. Conference Board Report

Initial jobless claims rose 4,000 to 210,000 last week. The four-week moving average fell 3,250 to 209,000. DOL Report

U.S. News

Greg Ip reports for the Wall Street Journal that an ongoing, low-intensity trade conflict between the United States and India may be poised to escalate as India ramps up protections for domestic companies in an effort to replicate China’s economic success. Under Prime Minister Narendra Modi, India has opened up to foreign investment on the expectation it would help build domestic champions while simultaneously raising import duties to protect domestic companies from competition with foreign rivals. WSJ

According to the Washington Post, the latest Economic Report of the President predicts the U.S. economy will grow at a 2.4% annual pace this year, missing the President’s target of 3% or higher in the absence of a major infrastructure package and additional Congressional tax cuts. Growth of around 2% or higher is still considered a healthy rate of expansion, consistent with continued job growth and low unemployment. WaPo