Despite a slowdown in productivity and rising labor unit costs, the economy continues to show strength with initial jobless claims staying near recent lows and factory orders posting solid growth. Initial jobless claims were unchanged last week at 208,000, according to the Bureau of Labor Statistics, ... READ MORE >
Economics
Fed holds rates steady as rebound in inflation hampers progress
Citing a lack of progress in reducing inflation, the Federal Reserve kept its policy rate unchanged at 5.5% at its meeting on Wednesday, the same rate it has had since July. The policy rate continues to be highly restrictive and will keep the economy cool in the coming quarters. In the statement ... READ MORE >
Job openings fall to a three-year low as manufacturing softens
Job openings in March plunged to 8.49 million, the lowest level in three years, according to the Bureau of Labor Statistics on Wednesday. The drop was in line with our forecast that pointed to a cooling labor market where the imbalance between labor demand and supply is narrowing. Our two preferred ... READ MORE >
Labor costs rise, complicating Fed’s decision on rate cuts
The employment cost index accelerated above expectations in the first quarter, complicating the Federal Reserve's decision of when to start cutting its policy rate. The index, a closely watched indicator of labor costs by the Fed, will almost certainly guarantee a more hawkish tone from the central ... READ MORE >
American consumers continue to spend despite sticky inflation
Spending remained strong in March on the heels of robust income growth despite sticky inflation, according to Commerce Department data released on Friday. The data pointed to the underlying strength of the economy and provided a rebuttal of sorts to the disappointing gross domestic product figure ... READ MORE >
GDP growth slows to 1.6% in first quarter, exaggerated by volatile trade and inventory data
Overall growth in U.S. gross domestic product fell to 1.6% in the first quarter, but the slowdown was exaggerated by volatile trade and inventory data, which provided a 1.2% drag on overall activity. Final sales to domestic purchasers, by contrast, which exclude inventories and trade, increased by ... READ MORE >
Business equipment spending grows in March
Shipments of core capital goods rebounded in March, adding to the reasons why the data for gross domestic product should show an upside surprise when it is released on Thursday. The core capital goods shipments data, which excludes defense and aircraft, feeds into the calculation of GDP is a proxy for ... READ MORE >
Regime change: Businesses face higher costs in nominal and real terms
Higher-for-longer now applies to more than just the federal funds policy rate. It means a regime change for companies of all sizes when it comes to the cost of financing expansion or funding their operations. Whether it be high single-digit borrowing costs for large multinationals or double-digit ... READ MORE >
Existing home sales plunge amid stable jobless claims
March proved challenging for the housing market as sales of existing homes plummeted by 4.3%, marking the steepest drop since November 2022, according to the National Association of Realtors on Thursday. This decline mirrors earlier setbacks in housing starts and permits. A significant uptick in ... READ MORE >
Industrial production rebounds as housing starts plunge
Tuesday's mixed data on housing and industrial production shows how both sectors remained on a bumpy path as a result of elevated interest rates. Housing starts dropped by 14.7% to 1.32 million on an annualized rate, the lowest level since last August, while permits, a proxy for future projects, also ... READ MORE >