Publications

U.S. News

Bloomberg reports that the blockage of the Suez Canal will negatively impact global trade long after backlogged vessels are again able to pass through the waters. The canal’s closure over the past week has affected hundreds of thousands of containers – roughly equal to the number pulled out of the market at the start of the pandemic – and is expected to worsen global equipment shortages, port congestion, and shipping times for the next several months. Bloomberg

The Wall Street Journal reports that many Chinese exporters are increasing their prices, deepening international concern over the potential for widespread inflation. In the past, Chinese factories staffed by cheap labor were often a force for driving global prices down, but a combination of supply chain bottlenecks, the rising costs of raw materials, and volatile markets is now putting upward pressure on Chinese manufacturers. WSJ

U.S. Economic Indicators

Real disposable personal income decreased 8.2% in February, while real personal consumption expenditures (PCE) decreased 1.2%. The PCE price index rose 0.2% (up 1.6% Y/Y), and the core price index rose 0.1% (up 1.4% Y/Y). BEA Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $86.7 billion in February from $84.6 billion in January. Meanwhile, wholesale inventories rose 0.5% and retail inventories were unchanged. Census Bureau Report

The University of Michigan Consumer Sentiment Index increased 8.1 points to 84.9 in the final March reading but is still down 4.2 points from March of last year. The Index of Consumer Expectations rose 9.0 points to 79.7, while the Current Economic Conditions Index rose 6.8 points to 93.0. University of Michigan

U.S. Economic Indicators

The third and final estimate of Q4 GDP indicates that the U.S. economy expanded at an annualized rate of 4.3% in the fourth quarter, up slightly from the prior estimate of 4.1%. The updated estimates primarily reflected upward revisions to inventories and government spending that were partly offset by downward revisions to business investment and consumer spending. BEA Report

Initial jobless claims decreased 97,000 to 684,000 last week. The four-week moving average decreased 13,000 to 736,000. DOL Report

U.S. Economic Indicators

New orders of manufactured durable goods fell 1.1% in February after increasing 3.5% (revised) in January. Excluding transportation, new orders fell 0.9% after increasing 1.6% the month before. Census Bureau Report

U.S. News

The Wall Street Journal reports that a surge is factory output is testing already strained global supply chains, with manufacturers in most countries reporting lengthening delivery times and rising prices for inputs as well as growing backlogs of orders. Analysts point to the “two-speed nature” of the global economic recovery as manufacturers see strong consumer demand even as social distancing weighs on the service sector. WSJ

U.S. Economic Indicators

New home sales fell 18.2% in February to a seasonally adjusted annual pace of 775,000 but were up 8.2% above year-ago levels. The median sales price decreased to $349,400 and the inventory of new homes rose to 4.8 months at the current sales rate. Census Bureau Report

U.S. News

Bloomberg reports that business investment growth will be a key factor in shaping the pace of the U.S. economic recovery in 2021. Nonresidential fixed (business) investment has performed well recently – outpacing consumer spending in Q4 of 2020 by the most since 2011 – and further growth is expected as a result of both the fulfillment of postponed capital expenditure plans and more structural shifts to the economy that have occurred during the pandemic. Bloomberg