Over the past month, there has been much speculation by financial market participants that the Federal Reserve is preparing to pare back or change the outright composition of its $120 billion in monthly asset purchases—$80 billion in treasuries and $40 billion in mortgage-backed securities—that have damped rates along the entire maturity spectrum as well as ... READ MORE >
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Labor market improvement is not a one-way street: jobless claims increase to 412,000
First-time jobless claims increased to 412,000 for the week ending June 12 from a revised 375,000 previously, the government said on Thursday. However, the top-line increase remains well below the 529,200 13-week moving average within the series, implying that conditions for further improvement remain intact. That being said, the recent six consecutive ... READ MORE >
Initial jobless claims: Still elevated as another benefits cliff looms
First-time jobless claims held steady at 787,000 for the week ending Jan. 2, while the number of those claiming unemployment benefits stands at 19.1 million, the Labor Department reported Thursday. First-time claims for federal Pandemic Unemployment Assistance rest at 161,400. Continuing claims fell to 5.07 million. Seasonal factors at the turn of the ... READ MORE >
Holiday sales to limp forward as pandemic weighs on economy
Holiday spending is likely to advance at a tepid 0.5% pace as households still reeling from the pandemic pull back on traditional and experiential holiday outlays. This forecast is optimistic compared to the 4.6% decline in 2008, the last holiday season that took place during a recession. And it is analogous to the 2009 spending season, when purchases ... READ MORE >
June Consumer Price Index: Inflation not a risk to near-term economic outlook
Rising energy and gasoline prices accounted for roughly half of the 0.6% increase month over month inside the June Consumer Price Index report and should prove transient due to easing demand on the back of an intensifying pandemic. That increase, for the most part, is the recovery in oil and gasoline prices following the pandemic-induced collapse in ... READ MORE >
Hiring expected to slow in September jobs report
The labor market is expected to continue to lose steam in September, with the total change in employment likely increasing by 115,000 jobs on the month, and the unemployment rate likely rising to 3.8%. Given the slowdown in domestic manufacturing activity and goods production, we note there is downside risk to our top line forecast when the report is ... READ MORE >
US manufacturing activity hits 10-year low point
Contraction in U.S. manufacturing is continuing, with activity reaching a ten-year low in September, as economic and political uncertainty weigh on the industrial sector. According to the latest Institute for Supply Management report, manufacturing reached its lowest point since June 2009 after a second straight month of slowing. The index registered ... READ MORE >
Economic growth is running out of steam, RSM data shows
The U.S. economy likely grew at a 2.0% yearly rate in July and August, a drop from the 2.3% yearly rate of U.S. real GDP growth in the first quarter, according to the RSM US Real GDP Index (see chart below). (The index is based on a subset of indicators used by the National Bureau of Economic Research.) So far the domestic economy has absorbed two ... READ MORE >
The RSM Brexit Stress Index moves up amid global financial backlash and domestic slowdown
The RSM Brexit Stress Index moved up again this week, showing significantly higher levels of stress after the United States escalated its trade war with China and the Chinese renminbi was devalued against the U.S. dollar, causing upheaval in the global markets. The composite index, which measures economic stress surrounding Britain’s impending departure ... READ MORE >
Trade war takes dangerous turn toward currency wars: What could happen next?
Chinese fiscal and monetary authorities permitted the yuan early this week to slip below the important psychological level of 7 to the dollar for the first time since 2008. It was a retaliatory measure by China against President Trump’s threat to impose an additional 10% tariff on $300 billion in Chinese exports, beginning Sept. 1. The Chinese government ... READ MORE >