Publications

U.S. Economic Indicators

The ISM Manufacturing Index rose 3.1 points to 50.9 in January, returning to expansionary territory for the first time since July 2019. The Employment Index rose 1.4 points to 46.6, while the New Orders Index rose 4.4 points to 52.0. ISM Report

Construction spending declined 0.2% in December to an annualized rate of $1.33 trillion. Private construction fell 0.1% and public construction fell 0.4%. Census Bureau Report

U.S. News

According to the Washington Post, efforts to contain the Chinese coronavirus threaten to cut off U.S. manufacturers from critical parts and materials produced in China. Even if Chinese factories are able to resume normal operations in a week or two (which seems unlikely), there will be lasting supply constraints from commercial flight cancellations that reduce overall space available for trans-Pacific shipments. WaPo

The Wall Street Journal reports that U.S. businesses are being granted fewer exemptions from tariffs on Chinese imports, with the approval rate for the most recent tranche of tariffs falling to just 3% compared to 35% for previous rounds of levies. More than 4,500 companies have requested at least one exemption, arguing that they have no viable or cost-effective alternatives to Chinese products. WSJ

U.S. Economic Indicators

The University of Michigan Consumer Sentiment Index rose 0.5 points to 99.8 in the final January reading and is up 8.6 points from January of last year. The Index of Consumer Expectations rose 1.6 points to 90.5, while the Current Economic Conditions Index fell 1.1 points to 114.4. University of Michigan

Real disposable personal income declined 0.1% in December, while real personal consumption expenditures (PCE) ticked up 0.1%. The PCE price index rose 0.3% (up 1.6% Y/Y), and the core price index rose 0.2% (up 1.6% Y/Y). BEA Report

U.S. News

The Wall Street Journal reports that eurozone economic growth slowed to a six-year low in 2019, reflecting both near-term weakness in the auto manufacturing sector and longer-term issues stemming from an aging population and a lack of high-growth sectors. Although the manufacturing sector is expected to steady this year as global demand gradually improves, the slump may continue or worsen depending on developments in E.U-U.S. and E.U.-U.K. trade relationships. WSJ

U.S. Economic Indicators

The advance estimate of 2019 Q4 GDP indicates that the U.S. economy expanded at an annualized rate of 2.1% in the fourth quarter, in line with consensus estimates. The increase in real GDP reflects positive contributions from net exports, consumer spending, government spending, and residential investment that were partly offset by negative contributions from business investment and private inventories. BEA Report

Initial jobless claims fell 7,000 to 216,000 last week. The four-week moving average fell 1,750 to 214,500. DOL Report

U.S. News

The Washington Post reports that the Fed left interest rates unchanged on Wednesday, consistent with expectations as the U.S. economy continues to grow at a slow but steady pace. However, central bank officials noted that they are monitoring a number of risks that could impact the global and U.S. economies, including ongoing trade tensions and the coronavirus outbreak. WaPo

U.S. Economic Indicators

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $68.3 billion in December from $63.0 billion in November. Meanwhile, wholesale inventories edged down 0.1% and retail inventories were unchanged. Census Bureau Report

The National Association of Realtors pending home sales index fell 4.9% in December (up 4.6% Y/Y).  NAR reports that the ongoing shortage of affordable housing options remains a long-term concern. NAR Report

U.S. News

According to the Wall Street Journal, the latest projections by the Congressional Budget Office show that the national debt and federal budget deficits are on track to reach their highest levels since World War II over the next decade. Debt held by the public is projected to reach 98% of GDP by 2030, resulting from the combination of tax cuts and increased spending on social safety net programs. WSJ

The New York Times reports that the Wuhan coronavirus outbreak is testing the global economy’s dependence on China, as industries ranging from manufacturing to tourism brace for hits to first-quarter production and profits. Some foreign-owned companies are already making plans to temporarily change supply chains until the crisis abates, but uncertainty surrounding the ultimate extent of the virus has left others paralyzed as they wait for more information. NYT

U.S. Economic Indicators

New orders of manufactured durable goods rose 2.4% in December after falling 3.1% (revised) in November and are down 1.5% compared to a year ago. Excluding transportation, new orders declined 0.1% last month (up 0.3% from last year). Census Bureau Report

The Conference Board’s Consumer Confidence Index rose from 128.2 (revised) in December to 131.6 in January. The improvement was driven primarily by improvement in consumers’ assessment of the current job market and expectations for future job prospects. Conference Board Report

U.S. News

The New York Times reports that President Trump has announced plans to broaden tariffs on steel and aluminum imports to include products made with steel and aluminum inputs. Imports of certain steel- and aluminum-containing goods, which are not subject to the same tariffs as the unfinished metals, have risen notably since the original tariffs went into place, hurting domestic producers. NYT