Publications

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand was unchanged in November and is up 1.1% year-over-year.  The core — which removes the volatile prices of food, energy, and trade services — was also unchanged in November and is up 1.3% from a year ago.  BLS Report
 
Initial jobless claims surged 49,000 to 252,000 last week. The four-week moving average rose 6,250 to 224,000. DOL Report

U.S. News

Nick Timiraos reports for the Wall Street Journal that the Federal Reserve left the fed funds rate unchanged during the December FOMC meeting, indicating they will continue to hold rates steady as economic risks are assessed. Fed Chairman Jerome Powell indicated the economic outlook is favorable, though should the outlook change, he would be willing to adjust the policy rate accordingly. WSJ

According to the Wall Street Journal, U.S. negotiators have offered to slash existing tariffs on $360 billion of Chinese goods in addition to cancelling a new round of levies set to take effect Sunday. In exchange, China would agree to purchase large quantities of U.S. agricultural products, safeguard U.S. intellectual property rights, and allow greater access to the Chinese financial sector. WSJ

U.S. Economic Indicators

Consumer prices rose 0.3% in November (up 2.1% from a year ago). The “core” CPI, which excludes food and energy, increased 0.2% in November and is up 2.3% from last year. BLS Report

U.S. News

Nick Timiraos reports for the Wall Street Journal that Fed officials are likely to hold their benchmark rate steady as they finish up their final rate-setting meeting of the year. Recent statements by Fed leaders indicate that they are comfortable leaving rates on hold in the absence of a significant deterioration of the U.S. economic outlook. WSJ

The Financial Times reports that Congress has just over a week to pass a dozen spending bills to fund the federal government and avoid a shutdown, even as the House prepares to vote on articles of impeachment against President Trump. While both Democrats and Republicans are eager to avoid a repeat of last year’s shutdown, there is concern that Congress will simply run out of time to pass all 12 appropriations bills before the deadline given other pressing matters on the legislative calendar. FT

U.S. Economic Indicators

The NFIB Small Business Optimism Index rose 2.3 points to 104.7 in November as seven components improved, three weakened, and one was unchanged. The increase in the headline index was driven by notable improvements in earnings and confidence that now is a good time to expand. NFIB Report

Nonfarm business sector labor productivity fell 0.2% (revised) in Q3 but was up 1.5% (revised) compared to last year. Hours worked increased 2.5% and unit labor costs rose 2.5%. BLS Report

U.S. News

The Financial Times reports that House Democrats led by Speaker Nancy Pelosi have reached a deal with President Trump to allow ratification of the U.S.-Mexico-Canada Agreement (“USMCA”). Both business groups and trade unions are largely pleased with the USMCA deal, which is almost guaranteed to pass when it comes to a vote before the House and Senate.  FT

According to the Wall Street Journal, U.S. and Chinese trade negotiators have hinted that a fresh round of tariffs set to go into effect on December 15 might be delayed, as the two sides continue to haggle over Chinese purchases of U.S. farm products. The U.S. is planning to impose an additional 15% tariff on $165 billion of Chinese goods on Sunday unless the U.S. suspends the deadline to allow negotiations to continue. WSJ

U.S. News

Nick Timiraos reports for the Wall Street Journal that in addition to there being less room today than in the past for the Fed to stimulate the economy by lowering its benchmark rate, the central bank’s unconventional tools used to spur growth during the last recession likely won’t be as impactful in the next downturn. Long-term interest rates, the ultimate target of bond purchases and forward guidance, are already so low that fiscal policy will have to play a much greater role in countering the next recession. WSJ

According to the New York Times, a new study found that nearly 25% of high-tech U.S. jobs are concentrated in just five metropolitan areas – Boston, Seattle, San Diego, San Francisco, and Silicon Valley. Unlike the manufacturing boom of the 20^th century, low production costs and cheap labor are not enough to attract tech firms to economically depressed areas; rather, cutting-edge industries cluster in cities with highly-educated workers, sophisticated suppliers, and research institutions. NYT

U.S. Economic Indicators

The U.S. economy added 266,000 jobs in November, exceeding expectations. The unemployment rate decreased to 3.5%, the labor force participation rate edged down to 63.2%, and average hourly earnings annual growth was 3.1%. BLS Report

The University of Michigan Consumer Sentiment Index rose 2.4 points to 99.2 in the preliminary December reading and is up 0.9 point from December of last year. The Index of Consumer Expectations rose 1.6 points to 88.9 while the Current Economic Conditions Index rose 3.6 points to 115.2. University of Michigan

U.S. News

The Wall Street Journal reports that Treasury Secretary Steven Mnuchin is working closely with Fed officials to ensure that enough reserves are available to prevent future strain in short-term lending markets. The Fed injected billions of dollars into money markets for the first time since the financial crisis after short-term rates spiked briefly in September. WSJ