Category: United States

Fed Hints at Higher Interest Rates Soon

The Federal Reserve is urging Americans to prepare for higher interest rates that will impact almost all debts, including student loans, mortgages, and credit cards.  Despite interpretations of a dovish Janet Yellen after last week’s remarks that the Federal Reserve would remain patient and pace its interest rate hikes in accordance with data, a more recent speech from the Fed is chastising investors for not preparing themselves for higher interest rates.

U.S. Economy Surges on Higher Incomes, Manufacturing Data

Both incomes and manufacturing activity are growing in America, leading to hopes that the economic recovery is finally here.  Wage growth surged in March as 215,000 new jobs were created in the month, according to the Bureau of Labor Statistics. While the unemployment rate unexpectedly rose to 5%, jobs were gained “in retail trade, construction, and health care.”

The increase in total jobs and a shift towards job growth in higher paid industries helped wages, which were up 2.3% on a year-over-year basis in March.

U.S. Home Prices Continue to Rise

American house prices are continuing to rise at a pace described by one economist as “unsustainable.”   Two indices of home prices showed a sharp increase in prices throughout America, with gains beating inflation in just about every major metropolitan area in the country. According to the S&P Case-Shiller Home Price Index, home prices rose 5.1% in the 10-city composite, while the 20-city composite—, which covers a broader swathe of medium-sized cities—saw a 5.7% year-over-year gain.

U.S. Home Sales Jump Unexpectedly, Housing Prices Continue to Rise

Home sales and home prices are both rising, with sales showing a reversal of recent weakness that could indicate renewed strength in the American housing market.

Although economists warn that home prices are continued to price out a growing number of Americans, home sales rose 3.5% in February. Some parts of the country, however, are much weaker, as the Northeast saw a 0.2% decline in home sales. The Midwest was the strongest performer, with an 11.4% increase in sales. The South rose 2.1% from January, but actually fell from a year ago.

American Workers Earn More, Spend More

Personal incomes and spending are on the rise as higher oil prices boost costs and higher employment lifts wages.  A new study by the Bureau of Economic Analysis showed that personal income rose $23.7 billion in total, or 0.2%, in the month of February. At the same time, personal consumption expenditures (PCE) rose 0.1%, or were up $11 billion.

High GDP Growth Emboldens Optimists, But Job Data Remains Weak

A strong increase in America’s Gross Domestic Product supports optimistic forecasts for America’s economy, but weak jobs data indicates Americans are facing less job security than ever.

America’s GDP rose 1.4% in the 4th quarter of 2015, according to a new study by the Bureau of Economic Analysis. The third estimate for GDP was an improvement from the last estimate of 1.0% GDP growth, and is a result of stronger consumer spending in the American economy.

The Week in Review: Weak Housing, Manufacturing, Retail Data

Several signs of weak demand in the American economy appeared this week, and the bad news was compounded by an increase in jobless claims.  While Americans are buying less goods and services, especially less houses, Americans are also struggling to find and keep jobs. Initial jobless claims rose 6,000 to reach 265,000 this week, according to the Department of Labor, while continuing jobless claims fell slightly to 2.18 million.

U.S. Housing Data Remains Weak

A tapped out American middle class is shying away from an increasingly expensive real estate market.  Several indicators of weak housing activity are pointing to a pause in the 6-year bull run in real estate. Most Americans, facing stagnant wages, job insecurity, and declining economic prospects, sour on the idea of being locked into one house for a long period of time.

Weak Manufacturing, Retail Sales Compound U.S. Woes

Disappointing manufacturing figures and weak retail sales data confirms that America’s economy is struggling, despite cheering from the Federal Reserve.  Manufacturing rose slightly in March, but at a slower pace than in recent months. In addition, slower still since the financial crisis in 2009, according to a new study by Markit Economics.

According to the Markit Flash Purchasing Managers Index, which rose slightly to 51.3 in February, manufacturing activity is “well below the post-crisis average” of 54.1.

U.S. Home Sales Suffer Unprecedented Plummet

American home sales have collapsed despite low interest rates and the expectation of more expensive mortgages just around the corner.  Existing home sales fell 7.1% in February, significantly below expectations. In total, a seasonally adjusted annual rate of 5.08 million home sales were seen in February, representing a modest 2.2% year-over-year increase from the same time a year ago.