Category: United States

The Week in Review: U.S. Economic Data Turns Sour

A substantial number of economic indicators suggest greater weakness in the American economy, as Americans struggle with rising prices, lower demand, and higher default rates.  Jobless claims rose to 278,000, above expectations of 270,000 claims, reaching their highest point in a month, and services demand fell to contraction for the first time since 2013. At 49.7, the services PMI fell to its lowest level since 2010, below expectations of expansionary demand.

Global Deflation Signals Persist, Signaling Economic Slowdown

More signs of a deflationary environment are appearing in Europe and Asia, leading many economists to give up on hopes of stronger growth in the near future.

In Japan, the government sold bonds at negative yields for the first time, while ten-year Japanese government bonds fell to negative yields. Despite the fact that bond buyers are now paying Japan for the privilege of lending the government money, the auction had a high turnout and issues were able to sell to cash-rich institutions looking for a place to park capital.

Optimism Vanishes on Softening Europe, Weak U.S. Production

Despite strong GDP growth at the end of 2015, recent data indicates a softening in global growth that is worrying economists.

In Europe, the European Central Bank announced that it would revisit its stimulus program this month after Eurozone inflation fell to -0.2% for the Consumer Price Index, a sharp reversal from a 0.3% increase in January. Inflation in the CPI has continued to grow weaker throughout 2014 and 2015, despite a broad bond-buying program by the ECB that was designed to cause inflation to rise.

GDP Revision Bolsters Economic Confidence

A sudden and surprising revision to U.S. GDP growth is bringing newfound confidence that the American economy is getting better.

After a number of weakening economic indicators, including rising jobless claims, lower home purchases, and contracting manufacturing activity, the Bureau of Economic Analysis (BEA) revised its estimate for fourth quarter GDP growth in the U.S. to 1% growth, after rising 2% in the third quarter.

The Week in Review: Data Points to Weak U.S. Economy

Several studies this week pointed to worsening economic conditions in the United States.

The Chicago Federal Reserve announced that its National Activity Index rose to just 0.28, slightly better than the contraction in December but still a sign of moribund manufacturing growth, which confirmed an earlier Markit Economics study that showed manufacturing activity was suffering from “softer underlying demand patterns” that were not related to cold weather.

Fed Signals Fear as Consumer Confidence, Manufacturing Falls

A Federal Reserve chairman has warned that the central bank’s policies may be hurting growth as several economic indicators soured.

In an interview with the Financial Times, Dallas Federal Reserve head Robert Kaplan warned of the “downside” to a more tightening monetary policy. Additionally, he noted that the Fed’s previous optimism was possibly too early as inflation and other economic data points became increasingly sluggish in early 2016.

Mixed Signals Indicate an Uneven Economic Recovery in the U.S.

The Chicago Federal Reserve announced Monday that the country is seeing improved economic conditions, which helped bolster a recovering stock market that remains down for the year. “The Chicago Fed National Activity Index (CFNAI) was +0.28 in January, up from −0.34 in December,” the Federal Reserve announced, indicating that economic growth has improved somewhat in the country, although the reading was still a disappointment to some analysts.

U.S. Jobless Claims Fall as Inflation Rises

Prices are going up and unemployment is going down, but companies are still struggling to pay their debts.  Jobless claims fell 7,000 to 262,000, below the 275,000 expected and beneath the 269,000 prior reading, according to a new report by the U.S. Department of Labor.

U.S. Housing Data Turns Positive; Industrial Production Improves

Americans are jumping into the housing market as interest rates on mortgages plummet, and businesses across the country are betting on more demand from consumers.  The Census Bureau reported that privately owned housing starts rose 1.8% year-over-year in January to 1.099 million, with single-family housing starts accounting for two-thirds of the total.

Department of Labor $63.5 Billion Budget for 2017 Stresses Optimism, Training

The Department of Labor has asked for $12.8 billion in discretionary funding on top of $50.7 billion in other mandatory funding to feed training jobs for workers and other programs.  The Department of Labor has asked for the extra $12.8 billion to fund a variety of apprenticeship and worker-training programs, as the agency acknowledges Americans are struggling to compete in the workforce.