U.S. Economic News
February 18, 2020
U.S. Economic Indicators
The Empire State Manufacturing Survey indicates that business activity picked up in February as the headline index rose 8.1 points to 12.9. The new orders index jumped 15.5 points to 22.1, and the shipments index rose 10.3 points to 18.9; meanwhile, the index for number of employees fell 2.4 points to 6.6, and the hours worked index turned negative, indicating a slightly shorter workweek. NY Fed Report
The NAHB Housing Market Index edged one point lower to 74 in February. NAHB reports that a strong labor market and low interest rates continue to support housing demand, but builder sentiment remains under pressure from rising construction and development costs. NAHB Report
U.S. News
The Wall Street Journal reports that the number of new vehicles purchased by U.S. buyers under the age of 35 fell nearly 4.5% last year as car dealers struggle to attract younger buyers, who tend to be more concerned with affordability than brand loyalty. Younger Americans, already dealing with financial pressures from student loans and rent payments, have been priced out of the market for new vehicles as automakers have shifted production toward higher-priced truck and SUVs. WSJ
According to the New York Times, the combination of millennials’ low inflation expectations and inclination towards early retirement achieved through aggressive saving could leave central bankers with less room to cut interest rates and boost growth in future times of economic trouble. High savings rates, while beneficial on an individual level, can exacerbate what economist Lawrence Summers dubs “secular stagnation,” the low-growth, low-inflation state of many advanced economies. NYT