Publications

U.S. Economic Indicators

The July Empire State Manufacturing Survey indicates that business activity rebounded modestly in July, as the headline index rose 12.9 points to 4.3, climbing out of negative territory. The new orders index rose 10.5 points to -1.5, while the shipments index fell 2.5 points to 7.2; meanwhile, the index for number of employees dropped 6.1 points to -9.6 and the hours worked index turned positive, indicating a slightly longer workweek. NY Fed Report

U.S. News

The Financial Times reports that China’s economy grew at its slowest pace in almost three decades as the trade war with the U.S. led to a sharp contraction in exports in the second quarter of 2019. Stronger than expected growth in consumer spending and a boost from tax cuts enacted earlier in the year partially offset some of the effects of reduced exports, supporting Beijing’s assertion that China’s domestic economy is robust enough to withstand a protracted trade conflict. FT

In an op-ed published in the Washington Post, Vice President Mike Pence urges Congress to pass the U.S.-Mexico-Canada Agreement, calling it a “win for all three countries” that would include stringent Mexican labor protections and add an estimated 176,000 new jobs to the U.S. economy. He also noted that the deal would close auto import loopholes by requiring at least 75% of a vehicle to be manufactured with parts made in North America for it to be sold duty-free. WaPo

According to the Wall Street Journal, the current U.S. labor market is far less tight than official unemployment figures suggest, indicating that traditional methods for measuring the health of the job market may be inadequate. Historically low headline unemployment amid muted wage growth and weak inflation may reflect a higher proportion of part-time workers or a rising share of younger Americans attending college instead of looking for work. WSJ

U.S. Economic Indicators

The headline Producer Price Index (“PPI”) for final demand rose 0.1% in June and is up 1.7% from June of last year. The core — which removes volatile prices of food, energy, and trade services — was unchanged in June and is up 2.1% from a year ago. BLS Report

U.S. News

The Wall Street Journal reports that overall Chinese foreign trade declined notably in June, despite Beijing’s efforts to revive domestic demand through tax cuts for businesses and easy credit policies. However, Chinese exports to other Southeast Asia countries surged, reflecting an increase in transshipping to circumvent U.S. tariffs. WSJ

According to the Financial Times, the upcoming corporate earnings reporting period is widely expected to confirm that America’s largest public companies have entered a profit recession — defined as two consecutive quarters of year-on-year earnings declines — for the first time since 2016. In addition to mounting trade concerns and slowing domestic growth, corporate profits are under pressure from higher labor and supply costs. FT

U.S. Economic Indicators

Consumer prices rose 0.1% in June (up 1.6% from a year ago). The “core” CPI, which excludes food and energy, increased 0.3% in June and is up 2.1% from last year. BLS Report

Initial jobless claims decreased 13,000 to 209,000 last week. The four-week moving average fell 3,250 to 219,250. DOL Report

U.S. News

According to the Wall Street Journal, OPEC left its 2019 oil demand growth forecast unchanged in June while reducing its forecast for supply growth for non-cartel countries. The current growth forecast, however, assumes no additional downside risks to supply and demand in the coming months, including escalation of global trade disputes. WSJ

Greg Ip of the Wall Street Journal reports that the current record economic expansion has allowed lower-skilled workers to close the post-recession pay and employment gap with higher-skilled workers. The recent rise in employment for those with less than a college degree has allayed concerns that such workers would be permanently set back because they lacked the skills needed to succeed in a technology-driven economy. WSJ

U.S. News

The Financial Times reports that Federal Reserve Chairman Jerome Powell solidified the case for cutting interest rates in his testimony to Congress that referenced global economic uncertainty and persistently weak inflation. Given the strength of the current labor market, many economists view the Fed’s consideration of rate cuts as an ‘insurance’ policy against a potential slowdown, resulting in just one or two cuts instead of an extended easing cycle. FT

According to the Wall Street Journal, prices for iron ore—the main ingredient in steel—have soared by more than 68% in 2019 as ore supplies stagnate despite booming steel production in the U.S. and China. Chinese steel companies’ profits have fallen 18% this year due to rising ore costs, while U.S. companies leave furnaces idle as profit margins shrink. WSJ

Bloomberg reports that the European Commission has downgraded its 2020 euro-area GDP projection to 1.4% from 1.5% and lowered its inflation forecast to just 1.3%. The latest figures reflect more pronounced weakness in the eurozone economy and fading hopes for a rebound in the second half of 2019. Bloomberg