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U.S. Economic Indicators

New home sales edged down 0.4% in December to a seasonally adjusted annual pace of 694,000 but were up 23% from December 2018. The median sales price rose to $331,400 and the inventory of new homes edged up to 5.7 months at the current sales rate. Census Bureau Report

U.S. News

The Wall Street Journal reports that home prices and residential investment around the world are cooling, holding back growth prospects for the global economy while making an outright collapse in the housing market less likely. Property markets in global cities became highly synchronized after the financial crisis as investors in search of better yields in a low-interest rate environment bought up properties in major financial hubs. WSJ

According to the Financial Times, the E.U.’s plans to start taxing carbon imports has emerged as a potential new flashpoint in trade ties with the United States, with U.S. officials warning that there will be an official reaction if the new taxes are deemed protectionist in nature. Taxing carbon imports has become a top priority for the E.U. under European Commission president Ursula von der Leyen, creating yet another point of contention as European countries spar with the U.S. over proposed digital services taxes. FT

U.S. News

The Wall Street Journal reports that new warehouse construction in North America is expected to far outpace demand over the next two years, a positive development for tenants seeking better rents but raising concerns about overbuilding. Vacancy rates are still historically low as e-commerce continues to grow, but are forecast to rise to 5.2% by the end of 2021 from 4.6% at the end of last year. WSJ

According to the Financial Times, business activity in the eurozone remained unexpectedly weak in January as a mild improvement in German manufacturing activity was offset by service-sector weakness in France. Eurozone growth is expected to remain subdued in the near term, with concerns about a developing U.S.-E.U. trade battle adding to economic anxieties. FT

U.S. Economic Indicators

Existing home sales rose 3.6% to a seasonally adjusted annual rate of 5.54 million in December and were up 10.8% compared to a year ago. Home sales declined in the Midwest but grew in the Northeast, South, and West last month. NAR Report

The Chicago Fed National Activity Index declined from +0.41 (revised) in November to -0.35 in December. Measures of production, sales, orders, & inventories, and employment subtracted from the headline index, while indicators of personal consumption and housing contributed positively. Chicago Fed Report

U.S. News

The Wall Street Journal reports that the United States has threatened to impose tariffs on $60 billion worth of European autos and auto parts if the E.U. fails to agree to a new trade agreement with the U.S. Key areas of trade tension between the U.S. and Europe include a proposed digital-services tax on American companies and restrictions on American agricultural imports. WSJ

According to the Wall Street Journal, ongoing contraction in the transportation and manufacturing sectors is evidence that economic damage from the trade war is far from over, despite the recent de-escalation of U.S.-China trade tensions. Permanent supply chain shifts away from China may have lasting impacts on regional U.S. shipping volumes, while consumer spending has begun to decelerate in states most exposed to the trade war. NYT

U.S. News

The Wall Street Journal reports that global foreign direct investment fell for a fourth straight year in 2019 to its lowest level in nearly a decade, signaling a slowdown in globalization amid a cooling world economy. Multinational companies have avoided expanding global operations due to regulatory uncertainty, trade tensions, and growing geopolitical risk aversion. WSJ

According to the Washington Post, the IMF’s latest World Economic Outlook report anticipates global growth recovering to 3.3% this year from 2.9% in 2019, largely due to easing U.S.-China trade tensions and monetary stimulus from major central banks. Growth is expected to pick up in emerging European and Latin American markets, while uncertainty remains high for advanced economies dealing with ultra-low interest rates, high wealth inequality, and record levels of corporate debt. WaPo

U.S. Economic Indicators

Privately-owned housing starts rose 16.9% in December to a seasonally adjusted annual rate of 1.61 million (up 40.8% year-over-year). Housing permits fell 3.9% to a 1.42 million annual pace in December but were up 5.8% from last year. Census Bureau Report

Industrial production declined 0.3% in December (down 1.0% year-over-year) after rising 0.8% (revised) in November. Capacity utilization fell 0.4 point to 77.0. Fed Report

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated that the number of job openings fell to 6.8 million in November. The number of hires was little changed at 5.8 million, while the quits rate was unchanged at 2.3 percent. BLS Report

U.S. News

The Wall Street Journal reports that the U.S. Senate easily passed the U.S.-Mexico-Canada Agreement Thursday evening, sending the much-anticipated overhaul of North American trade rules to the President’s desk for approval. Mexico approved the latest version of USMCA last month, leaving ratification by Canada as the final step toward implementation. WSJ