Publications

U.S. Economic Indicators

Nonfarm business sector labor productivity fell 0.3% in Q3 but was up 1.4% compared to last year. Hours worked increased 2.4% and unit labor costs rose 3.6%. BLS Report

U.S. News

The Wall Street Journal reports that U.S. imports of consumer goods including cellphones, toys, and apparel fell sharply in September, possibly signaling that slowing global growth is spilling into the U.S. economy. Overall imports of consumer goods fell by 4.4%, potentially related to September’s hike in U.S. tariffs on $11 billion worth of Chinese tools, apparel, and electronics. WSJ

According to the Washington Post, experts’ fears of an impending U.S. recession have eased since August as many economic indicators remain on solid footing, and there is new talk of a trade truce between the U.S. and China. The mood of analysts and business leaders has moderated to a cautiously optimistic wait-and-see attitude, as observers await the outcome of trade talks with China and whether or not companies start to pull back on hiring. WaPo

U.S. Economic Indicators

The ISM Non-Manufacturing Index rose 2.1 points to 54.7 in October. The New Orders Index rose 1.9 points to 55.6, while the Employment Index rose 3.3 points to 53.7. ISM Report

The U.S. trade deficit decreased from $55.0 billion (revised) in August to $52.5 billion in September. The goods deficit fell by $2.7 billion while the services surplus fell by $0.1 billion. Census Bureau Report

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated that the number of job opening edged down to 7.0 million in September. The number of hires was little changed at 5.9 million, while the quits rate was essentially unchanged at 2.3 percent. BLS Report

U.S. News

The Wall Street Journal reports that the U.S. federal government has less than three weeks to pass a new short-term funding extension to avert a government shutdown when current funding runs out on November 21. Despite the ongoing House impeachment process and disagreements over funding for a southern border wall, lawmakers are generally optimistic that a shutdown will be avoided with a new continuing resolution while the House and Senate continue to work to pass measures to fund the federal government for the full year 2020. WSJ

Bloomberg reports that independent nonbanks that originate and service risky home loans are more vulnerable than conventional banks in an economic downturn, because they depend on short-term bank credit lines that could be pulled quickly at times of financial stress. Independent mortgage companies currently originate around 70% of home mortgages supported by federal mortgage agencies, including about 90% of the riskier loans backed by Fannie Mae. Bloomberg

U.S. Economic Indicators

New factory orders for manufactured goods declined 0.6% in September following a 0.1% decline in August and are down 0.3% compared to a year ago. New orders excluding transportation were down 0.1%, while new orders for nondefense capital goods excluding aircraft fell 0.6%. Census Bureau Report

U.S. News

Andrew Van Dam and Heather Long report for the Washington Post that despite the health of the labor market on a national level, about one in three U.S. counties have a higher unemployment rate today than a year ago—especially in swing states likely to be key battlegrounds in the 2020 election. Many of the areas experiencing rising joblessness depend on manufacturing and agriculture, sectors hit hard by the trade war with China. WaPo

According to the Wall Street Journal, a new paper by former Fed economists David Reifschneider and David Wilcox argues that average inflation targeting, a new way of potentially bolstering the Fed’s inflation target, would do little to help the central bank fight recessions and persistently low inflation in the post-crisis economy. Under an average inflation targeting framework, the Fed would set an average level for inflation over a given period and over- and under-shoot the target rate as necessary to hit the average path. WSJ

U.S. Economic Indicators

The U.S. economy added 128,000 jobs in October, exceeding expectations. The unemployment edged up to 3.6%, the labor force participation rate rose to 63.3%, and average hourly earnings annual growth increased to 3.0%. BLS Report

The ISM Manufacturing Index rose 0.5 percentage point to 48.3 in October. The Employment Index rose 1.4 percentage points to 47.7, while the New Orders Index rose 1.8 percentage points to 49.1. ISM Report

Construction spending rose 0.5% in September to an annualized rate of $1.29 trillion. Private construction edged up 0.2% while public construction rose 1.5%. Census Bureau Report

U.S. News

According to Bloomberg, U.S.-China trade relations gained an extra layer of tension as China won the support of the WTO in imposing $3.6 billion in sanctions against the United States as part of a trade dispute case predating the current trade war. While the ruling deals with matters unrelated to the current tit-for-tat conflict, it gives Beijing more leverage should tensions escalate. Bloomberg