U.S. Economic News
August 1, 2019
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