U.S. Economic News
August 22, 2019
U.S. Economic Indicators
The Conference Board’s Leading Economic Index (“LEI”) increased 0.5% in July following a 0.1% decline in June. The improvement was driven by housing permits, unemployment claims, stock prices, and credit conditions, although the manufacturing sector remains weak. Conference Board Report
Initial jobless claims fell 12,000 to 209,000 last week. The four-week moving average rose 500 to 214,500. DOL Report
U.S. News
The Washington Post reports that the U.S. federal deficit is set to expand by $800 billion more than expected over the next decade, deepening concerns that policymakers have fewer tools than in the past to bolster the economy in the event of a recession. A wider deficit gives the federal government less room to spend or pass tax cuts, while already-low interest rates leave little room for the Fed to make major cuts. WaPo
According to the Wall Street Journal, Fed officials viewed their move to cut interest rates last month as a mid-cycle “recalibration” of monetary policy rather than the start of a more aggressive easing cycle. The extent to which the Fed may lower rates in the coming months is uncertain, especially given disagreement among Fed officials about whether recent weak inflation is temporary or likely to persist in the absence of intervention. WSJ