Publications

U.S. Economic Indicators

Initial jobless claims decreased 2,000 to 228,000 last week. The four-week moving average rose 7,750 to 220,250. DOL Report

The headline Producer Price Index (“PPI”) for final demand rose 0.2% in April and is up 2.2% since April of last year. The core — which removes volatile prices of food, energy, and trade services — rose 0.4% in April and is up 2.2% from a year ago. BLS Report

The U.S. trade deficit increased from $49.3 billion in February (revised) to $50.0 billion in March. The goods deficit rose by $0.5 billion while the services surplus decreased by $0.2 billion. Census Bureau Report

U.S. News

The Financial Times reports that China has vowed to retaliate with “necessary countermeasures” if the U.S. proceeds with implementing higher tariffs on Chinese goods on Friday. The U.S. intends to raise tariffs to 25% for products exported from China starting Friday, excluding goods currently in transit and buying negotiators extra time before U.S. consumers and businesses feel the full effects of the tariff hike. FT

U.S. Economic Indicators

The U.S. economy added 263,000 jobs in April, well above consensus. The unemployment rate declined to 3.6%, the labor force participation rate edged down to 62.8%, and average hourly earnings annual growth remained at 3.2%. BLS Report

The ISM Non-Manufacturing Index declined 0.6 percentage point to 55.5 in April. The New Orders Index fell 0.9 percentage point to 58.1, while the Employment Index declined 2.2 percentage points to 53.7. ISM Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit widened to $71.4 billion in March from $70.9 billion in February. Meanwhile, wholesale inventories were unchanged and retail inventories edged down 0.3%. Census Bureau Report

U.S. News

According to the Wall Street Journal, Ginnie Mae —  the government-backed firm that promotes home ownership — is cracking down on “churning,” a practice in which lenders push borrowers to repeatedly refinance to boost the fees paid to lenders. Refinancing shortens the life of mortgage bonds, reducing the attractiveness of the entire pool of loans to investors. WSJ

According to the Financial Times, Mexico has signaled that it will not ratify the USMCA trade deal until the U.S. removes the steel and aluminum tariffs imposed last year. Mexican and U.S. trade officials are meeting this week to negotiate a resolution, with both countries anxious for Congress to ratify the agreement before going into recess in August. FT

U.S. Economic Indicators

Initial jobless claims were 230,000, unchanged from last week. The four-week moving average rose 6,500 to 212,500. DOL Report

New factory orders for manufactured goods increased 1.9% in March following a 0.3% (revised) decline in February, and are up 1.7% compared to last year. New orders excluding transportation rose 0.8% while new orders for nondefense capital goods excluding aircraft rose 1.4%. Census Bureau Report

Nonfarm business sector labor productivity increased 3.6% in Q1 and is up 2.4% from Q1 of last year. Hours worked increased 0.5% in Q1 and unit labor costs fell 0.9%. BLS Report

U.S. News

The Wall Street Journal reports that Federal Reserve officials voted Wednesday to leave interest rates unchanged, reaffirming their commitment to a wait-and-see approach. Fed Chairman Jerome Powell downplayed concerns that persistently low inflation may reflect underlying economic weakness, suggesting instead that recent price decreases could prove transitory. WSJ

U.S. Economic Indicators

The ADP Employment Report shows that private-sector employment increased by 275,000 jobs in April, well above expectations of 180,000. The services sector added 223,000 jobs, while the goods-producing sector added 52,000 jobs. ADP Report

The ISM Manufacturing Index decreased 2.5 percentage points to 52.8 in April. The Employment Index fell 5.1 percentage points to 52.4, while the New Orders Index fell 5.7 percentage points to 51.7. ISM Report

Construction spending fell 0.9% in March to an annualized rate of $1.28 trillion. Public construction decreased 1.3% while private construction decreased 0.7%. Census Bureau Report

U.S. News

According to the Wall Street Journal, the recent rise in the effective federal funds rate may prompt Federal Reserve officials to lower the interest on excess reserves (IOER) rate. The Fed uses IOER to set the top end of the target federal funds rate range and lowered it twice last year; such actions, however, can reduce market confidence in the Fed’s policy tools. WSJ

U.S. Economic Indicators

The Conference Board’s Consumer Confidence Index rose from 124.2 (revised) in March to 129.2 in April. Consumer Confidence partially rebounded following a decline in March, driven by positive consumer assessments of current and short-term economic conditions. Conference Board Report

The National Association of Realtors pending home sales index rose 3.8% in March (down 1.2% Y/Y).  NAR reports that consumer sentiment about home buying is positive due to extremely favorable mortgage rates. NAR Report

U.S. News

The Wall Street Journal reports that the eurozone’s GDP rose at a 1.5% annualized pace in the first quarter of 2019, an acceleration from 0.9% growth in the fourth quarter of last year. Although the eurozone’s expansion trailed that of the U.S., unexpectedly strong consumer spending in France and business investment in Spain have allayed the need for additional stimulus from the European Central Bank in the near term. WSJ

According to the Wall Street Journal, muted inflation estimates for March reflected the largest monthly drop in apparel prices on record after the Bureau of Labor Statistics gathered price data directly from department stores as part of a broader shift in data collection methods. Researchers have found that official numbers tend to overstate inflation and understate productivity growth, suggesting that the Fed has kept interest rates higher than necessary in recent years. WSJ