Category: United States

Economists Raise U.S. Employment Expectations on Strong GDP Data

Analysts at two investment banks have raised their estimates for payrolls and wages in two notes released after the U.S. revised upwards their measurements for second quarter GDP.

The Bureau of Economic Analysis announced on Friday that U.S. Gross Domestic Product rose 4.6% in the second quarter, up from prior estimate of a 4.2% growth in GDP. The report said that export growth, greater private inventory investment, and accelerations in nonresidential fixed investments, helped bolster U.S. growth, while imports accelerated in a symbol of growing domestic demand.

Soft Durable Orders, Scared U.S. Consumers Summon Hibernating Bears

Durable orders fell 18.2% in August, causing a large stock selloff in the United States as weak consumer confidence signals a decline in aggregate demand could drag down economic growth.

The Commerce Department announced a plunge in August’s durable goods orders after seeing those same orders rise 22.5% in July, signaling growing uncertainty amongst retailers and manufacturers. The volatility in durable goods data is unusual, and may indicate conflicting views about how strong America’s economic recovery has been.

G20 Warns of Uneven Economies as U.S. Growth Decelerates

The Group of 20 sees greater risks in historically low interest rates in developed nations as more investors are investing in emerging markets to improve returns.

U.S. Retains Stable Outlook on Unchanged Unemployment Rates

Fitch Ratings affirmed its AAA rating on debts and currency issued by the United States, saying that their outlook for the U.S. economy is “stable”. The ratings agency said American has “unparalleled” financing flexibility driven by the U.S. dollar’s status as the world’s most in-demand reserve currency. This currency demand affords America the flexibility to issue more debt and to raise the nation’s total debt load, the agency said, despite concerns that American sovereign debt levels have become unsustainable.

Economic Concerns as Hiring Slows Significantly within the U.S.

Recent hiring numbers have begun to see a significant slowdown within the United States this year, as employers were only capable of adding a further 142,000 jobs to the market. This provided a severe setback for the economic expansion that was never really gaining speed for most of 2014. With the ACA, Sarbanes-Oxley, high taxes, terrible regulations, America continues to shoot itself in the foot.

Millennial Home Ownership: a Dire Future

A Millennial (someone under 35) with a net worth greater than $10,400 is wealthier than half of their peers, according to a recent survey conducted by the Federal Reserve Bank. Explanations for this paltry figure include the post recession income drop, the exponential increase of student debt in recent years, the avoidance of stock-holding among young people and the fact that so few people in this demographic own their homes. 

Federal Reserve to Reduce Bond Purchasing as China Experiments with Loose Lending

The Federal Reserve announced a cut to its bond purchasing program that caused Treasuries to fall and the dollar to strengthen. The Fed also said that the U.S. job market remained lackluster, with the economy improving at a “moderate pace”.

Stocks rallied on the news, while analysts said Fed Chairman Janet Yellen’s comments on the Federal Reserve Open Market Committee signaled a slow pace to rising interest rates, which could help equities remain strong for the rest of 2014.

Poor Americans Debt Burden Highest in History

The poorest Americans now owe 156% of their pretax income to creditors, according to a new study by the Federal Reserve Bank. The poorest have more debt relative to their net worth in American history, owing $1.37 for every dollar they own.

Stagnant wages and diminished purchasing power facing Americans as unemployment rises even with more job openings

The Department of Labor reported a surprising uptick in unemployment claims on Thursday, with 315,000 new claims for the week ending September 6th. That was above the prior week’s reading of 304,000 and above expectations of 300,000. With this increase, the 4-week moving average has risen to 304,000, slightly above the low for 2014 at levels seen at the end of 2007.

Could interest rates rise in the wake of a proposed Federal Reserve rule?

The Federal Reserve announced a proposed change to its forward guidance that could cause bond rates to rise in the United States sooner than expected.

Boston Federal Reserve President Eric Rosengren said that the Federal Reserve may choose to cease forward guidance on monetary policy for market participants, which would allow the central bank to raise the Federal Funds Rate from its historic low of 0.25%. That rate has remained unchanged since it was lowered after the global financial crisis in 2008-2009.