Economic activity is growing at an accelerated rate as oil prices reach a bottom.
The Chicago Federal Reserve announced early Monday morning that economic growth accelerated in November. The Fed’s three-month moving average from economic activity rose to 0.48 in November, up nine basis points from October.
U.S. stocks saw an unusual day of price swings Tuesday as investors mulled the significance of an interest rate hike in Russia and falling oil prices.
U.S. equities fell, rose, and fell again on Tuesday as traders assessed the significance of a falling Russian ruble, which fell over 6% Tuesday morning. The Russian currency saw so much increased volatility that some retail brokers halted trading of the ruble against the U.S. dollar, as fears of illiquidity mounted. Brokerage FXCM was one of the firms to suspend USD/RUB trading.
American consumers are the most confident in their purchasing power since January 2007, thanks to falling oil prices and an improving domestic job market.
On a backdrop of falling bond yields, deflationary risks, and falling stock prices, American consumers are feeling decidedly upbeat. The Thomson Reuters and University of Michigan preliminary December Consumer Sentiment index rose to 93.8, up 5.6% from the prior month and above economists’ expectations. Falling gasoline prices and unemployment claims, which are at their lowest since 2000, are helping Americans spend more.
Stronger demand for services could drive the United States GDP growth rate higher, causing many investment banks to turn bullish just as U.S. stocks see a wide selloff.
Service industry revenue rose 5% year-over-year in the third quarter of 2014, far above analysts’ expectations. Economists are attributing the surprise surge to greater discretionary purchasing power amongst American consumers as oil prices fall. The news caused analysts at JP Morgan to upgrade GDP expectations from 4.3% to 4.4%, while Barclays raised their expectation from 4.1% to 4.2%.
Recent data indicate that the US supply of currency significantly dropped in October. Represented by the “True Austrian Money Supply”, the money supply metric that is regarded to be the most preferred and broadest aggregate, the amount of money in America has fallen since September. The TMS2 announced that the year over year growth was a disappointing 7.7% October, which is a significant drop from September’s 8.3% rate.
For many, the annual Black Friday chaos commences the official beginning of the season. Retailers throughout the United States begin to enhance their efforts to sell by offering greater discounts and opening earlier to attract more shoppers. Often times, the general consensus seems to be that heavy spending on Black Friday is a sparkling sign for the American economy. However, less reliance upon seasonal discounts for consumerism would indicate a more confident customer, and better economic health overall.
Despite a strong rise in GDP growth, above expectations, U.S. stocks saw mixed performance on Tuesday as investors mulled the chances of an interest rate hike amidst broader economic growth.
Economic growth moderated in the U.S. in October even as confidence in growth reached a post-crisis high, new data from the Federal Reserve shows.
The Chicago Fed National Activity Index fell 15 basis points to 0.14 in October. Productivity fell as the CFNAI production indicator fell to -0.01 from +0.18 in September, indicating that total economic production was slowing. Manufacturing remained strong despite the fall in production elsewhere in the economy, seeing a 0.2% rise in productivity for the second month in a row.
The U.S. is resisting severe economic headwinds to global markets, according to a new release from the Federal Reserve.
In a public statement, the Fed said they see a “limited impact from global slowdown” on the United States economy, which is seeing steady improvement after its slow recovery from the 2008 global financial crisis. The Federal Reserve Open Market Committee acknowledged that “recent foreign economic developments” were one of many significant “downside risks” currently facing the United States.
The Federal Reserve (The Fed) has finally ended ‘quantitative easing’ (QE), a policy that forced trillions of US dollars into the financial system. The jury will be out for some time on whether or not the QE strategy worked, and what will ultimately be the consequences. For now, the Federal Reserve’s main policy committee has suggested that there has been a substantial improvement in the labor market, and that there is underlying strength in the economy on a broader scale.
