Publications

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand rose 0.1% in August and was up 1.8% from August of last year. The core — which removes volatile prices of food, energy, and trade services — rose 0.4% in August and was up 1.9% from a year ago. BLS Report

U.S. News

According to the Wall Street Journal, median American household income remained essentially flat in 2018 after three consecutive years of growth, according to recent figures from the U.S. Census Bureau. Income growth over the past 10 years has been weaker than expected given the tightness of the U.S. labor market, partly due to the ability of employers to hold down wages by adopting more technology and the declining share of workers in labor unions. WSJ

The Financial Times reports that pessimism about revenue prospects among U.S. companies operating in China is mainly due to concerns about the overall slowing of Chinese growth, rather than impacts from U.S. tariffs. The proportion of companies expecting revenue growth in China this year is down sharply, as Chinese growth slows to its lowest level since the early 1990s. FT

U.S. Economic Indicators

The NFIB Small Business Optimism Index fell 1.6 points to 103.1 in August as three components improved, six weakened, and one was unchanged. Capital spending plans and earnings expectations improved, while plans for increasing employment and inventories eased. NFIB Report

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely-watched measure of labor market health, indicated there were 7.2 million job openings at the end of July, essentially unchanged from June. Hires inched up to 6.0 million, while the quits rate was little changed at 2.4 percent. BLS Report

U.S. News

According to the Financial Times, U.S. retailers are dropping Chinese suppliers in response to tariffs and switching to countries such as Vietnam, Cambodia, and Thailand to source their goods. While U.S. tariffs have accelerated retailers’ need to pull out of China, many already had plans in place to shift supply chains out of the country amid rising labor costs. FT

The Financial Times reports that global manufacturing activity, particularly in the auto industry, is experiencing its most severe and geographically widespread downturn in at least six years as pressure mounts from the U.S.-China trade war. Manufacturing activity among car producers across the globe has reached near-record lows and is likely to continue to ease as sentiment among manufacturers remains weak. FT

U.S. News

The Wall Street Journal reports that a key reason for current low interest rates across the globe is the buildup of debt held by governments, businesses, and households following the Great Recession, which made it difficult for central banks to raise rates. Although taking on debt helped pull economies out of the slowdown, it also left companies and consumers highly sensitive to rate hikes and more likely to pull back on spending if economic conditions weaken. WSJ

According to the Financial Times, exports from China fell more than anticipated last month as U.S. buyers did not front-load orders as much as expected before new tariffs went into effect on September 1. The weak export data comes amid announcements by Chinese officials of new, aggressive stimulus measures that signal Beijing’s increasing concern over the impact of the trade war. FT

U.S. Economic Indicators

The U.S. economy added 130,000 jobs in August, below expectations. The unemployment rate remained at 3.7%, the labor force participation rate edged up to 63.2%, and average hourly earnings annual growth edged down to 3.2%. BLS Report

U.S. News

The Wall Street Journal reports that a recent study by Fed economists found that uncertainty over trade policy is likely to reduce U.S. economic output by more than 1% through early 2020. The study reported that uncertainty in the first half of 2018 reduced economic output by around 0.8%, with the wave of renewed uncertainty since May 2019 likely to put downward pressure on growth well into next year. WSJ

The Financial Times reports that Vietnam has pledged to import more U.S. goods, including energy and agricultural products, to avoid the impression that it is profiting unfairly from the U.S.-China trade war. Vietnamese officials are concerned that as more U.S. companies shift operations from China to Vietnam, the U.S. could respond by imposing punitive tariffs on Vietnamese goods as well. FT

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 195,000 jobs in August, well above expectations of 150,000. The services sector added 184,000 jobs, while the goods-producing sector added 11,000 jobs. ADP Report

Initial jobless claims rose 1,000 to 217,000 last week. The four-week moving average increased 1,500 to 216,250. DOL Report

New factory orders for manufactured goods rose 1.4% in July following a 0.5% increase in June and are up 0.4% compared to a year ago. New orders excluding transportation rose 0.3% while new orders for nondefense capital goods excluding aircraft rose 0.2%. Census Bureau Report

The ISM Non-Manufacturing Index rose 2.7 points to 56.4 in August. The New Orders Index rose 6.2 points to 60.3, while the Employment Index fell 3.1 points to 53.1. ISM Report 

Nonfarm business sector labor productivity increased 2.3% in Q2 and rose 1.8% compared to last year. Hours worked fell 0.4% and unit labor costs rose 2.6% (revised). BLS Report