Publications

U.S. Economic Indicators

The ISM Non-Manufacturing Index fell 1.4 points to 53.7 in July. The New Orders Index declined 1.7 points to 54.1, while the Employment Index rose 1.2 points to 56.2. ISM Report

U.S. News

The Financial Times reports that China has allowed the renminbi to weaken to its lowest level against the dollar since the global financial crisis, blaming trade protectionism and tariffs on Chinese goods for weakening the currency. China has turned to the renminbi as it runs out of policy options for coping with the trade war with the U.S.; the decline in the renminbi likely represents the beginning of a broader wave of depreciation among Asian currencies. FT

Jim Tankersley and Ben Casselman report for the New York Times that changes in the mortgage-interest deduction under the 2017 tax overhaul that reduced the number of homeowners eligible for deductions have not depressed housing prices or activity, as some experts predicted. While housing markets have cooled in many areas of the country, the slowdown in price growth most likely reflects an inevitable deceleration after several years of prices rising faster than wages. NYT

U.S. Economic Indicators

The U.S. economy added 164,000 jobs in July, in line with expectations. The unemployment rate remained at 3.7%, the labor force participation rate was little changed at 63.0%, and average hourly earnings annual growth edged up to 3.2%. BLS Report

New factory orders for manufactured goods rose 0.6% in June following a 1.3% decrease in May and are up 0.2% compared to a year ago. New orders excluding transportation rose 0.1%, and new orders for nondefense capital goods excluding aircraft increased 1.5%. Census Bureau Report

The U.S. trade deficit decreased from $55.3 billion in May (revised) to $55.2 billion in June. The goods deficit fell by $0.8 billion while the services surplus fell by $0.6 billion. Census Bureau Report

The University of Michigan Consumer Sentiment Index rose 0.2 point to 98.4 in the final July reading and is up 0.5 point from July of last year. The Index of Consumer Expectations rose 1.2 points to 90.5, while the Current Economic Conditions Index fell 1.2 points to 110.7. University of Michigan

U.S. News

The Financial Times reports that China has announced it will retaliate if the U.S. moves forward with imposing a 10% tariff on $300 billion worth of Chinese goods next month. While Chinese officials have yet to identify specific retaliatory measures, U.S. companies are concerned they will face slower customs clearance, more inspections, and delayed approval for licenses. FT

U.S. Economic Indicators

The ISM Manufacturing Index edged down 0.5 percentage point to 51.2 in July. The Employment Index fell 2.8 percentage points to 51.7, while the New Orders Index rose 0.8 percentage point to 50.8. ISM Report

Construction spending declined 1.3% in June to an annualized rate of $1.29 trillion. Private construction fell 0.4% while public construction decreased 3.7%. Census Bureau Report

Initial jobless claims rose 8,000 to 215,000 last week. The four-week moving average fell 1,750 to 211,500. DOL Report

U.S. News

According to the Wall Street Journal, U.S. corporate tax cuts enacted in 2017 have reduced the tax advantages of reincorporating abroad — a move known as corporate inversion — to the point where many companies are reestablishing U.S. addresses. Although foreign addresses still confer a slight tax advantage, it is no longer enough to outweigh the reputational and political costs of inversion. WSJ

The New York Times reports that the anticipated increase in housing demand due to the sharp decline in mortgage rates since 2018 has been largely outweighed by the effect of rising home prices. The muted response of the housing market to a decline in mortgage rates, one of the key ways Fed rate cuts are transmitted to the broader economy, suggests the Fed may have a much harder time fighting the next economic slowdown. NYT

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 156,000 jobs in July, in line with expectations of 155,000. The services sector added 146,000 jobs, while the goods-producing sector added 9,000 jobs. ADP Report

U.S. News

According to the Wall Street Journal, the lack of significant progress in trade negotiations between the U.S. and China is partly the result of Beijing’s strategy of patiently waiting for better terms rather than hurrying into a deal. China’s willingness to agree to key U.S. demands will depend largely on the success of Beijing’s attempts to stimulate the domestic economy and prevent China’s slowdown from worsening. WSJ

Paul Hannon reports for the Wall Street Journal that weak second-quarter E.U. growth is a fresh indication of faltering momentum in the global economy, as the manufacturing sector grapples with persistent trade tensions and faltering global demand. The U.S. Federal Reserve is one of a number of central banks around the world easing or considering easing monetary policy in response to economic weakness abroad. WSJ

U.S. Economic Indicators

Real disposable personal income rose 0.3% in June after rising 0.2% (revised) in May, while real personal consumption expenditure (PCE) rose 0.2%. The PCE price index rose 0.1% (up 1.4% Y/Y) and the core price index rose 0.2% (up 1.6% Y/Y). BEA Report

The Conference Board’s Consumer Confidence Index rose from 124.3 (revised) in June to 135.7 in July. Consumer Confidence rebounded to its highest level this year amid renewed consumer optimism surrounding current and future business and labor market conditions. Conference Board Report

The National Association of Realtors pending home sales index rose 2.8% in June (up 1.6% Y/Y).  NAR reports that the second consecutive monthly increase in contract signings is the start of a positive trend driven by a strong job market, rising home values, and low mortgage rates. NAR Report

U.S. News

Greg Ip of the Wall Street Journal reports that a likely reduction in the European Central Bank’s already-negative policy rate adds pressure on the Federal Reserve to lower interest rates to prevent U.S. rates from diverging too much from foreign interest rates. Central banks keep domestic rates in line with foreign rates in order to avoid depreciating their domestic currency, and this practice results in lower interest rates and stronger demand in each country. WSJ