THE ECONOMY

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Wed Nov 27, 2019 1:40 p

MARKETWATCH

"U.S. consumer confidence falls for the fourth month in a row on labor-market worries"


By Jeffry Bartash

Published: Nov 26, 2019 10:31 a.m. ET

Consumers are still fairly confident in the U.S. economy overall, but they are a bit more worried about the labor market heading into the holiday season.

The numbers:

Consumer confidence fell in November for the fourth month in a row as Americans expressed more worries about the U.S. labor market, but they remained generally upbeat about the economy heading into the holiday season.

The consumer confidence index slipped to 125.5 this month from a revised 126.1 in October, the Conference Board said Tuesday.

That’s the lowest level since the early spring.

Economists polled by MarketWatch had forecast a reading of 128.2.

The index of consumer confidence touched an 18-year peak just over a year ago, but it’s fallen in the wake of persistent trade tensions with China that have sapped the U.S. and global economy.

What happened:

American were a bit less optimistic about the state of the economy right now, but they expect it to improve a bit in the months ahead.

The so-called present situation index dipped to 166.9 from 173.

Yet a gauge that looks at expectations six months from now rose to 97.9 from 94.5.

“Overall, confidence levels are still high and should support solid spending during this holiday season,” said Lynn Franco, director of economic indicators at the privately run Conference Board.

The consumer confidence survey measures how Americans view their own financial well-being, job prospects and overall business conditions.

Big picture:

A healthy economy requires confident consumers and Americans are still fairly confident in the economy.

Hiring has tapered off and jobs aren’t quite as easy to find, but unemployment is near a 50-year low, layoffs are scarce and wages are rising steadily.

Businesses are less confident largely because of a trade war with China that’s dented exports, raised costs and cut into profits.

The U.S. and China are striving to strike a “phase-one” agreement, but companies are unlikely to boost spending and investment until trade tensions ease.

What they are saying?

“While the consumer confidence reading wasn’t what we were looking for, the index remains elevated and we therefore still have confidence in consumers’ ability to prop up the economy,” economist Katherine Judge of CIBC World Markets told clients in a note.

Market reaction:

The Dow Jones Industrial Average and S&P 500 rose slightly in Tuesday trades after a negative opening.

The 10-year Treasury yield was little changed 1.74%.

https://www.marketwatch.com/story/consu ... 2019-11-26

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Wed Nov 27, 2019 1:40 p

MARKETWATCH

"U.S. trade deficit in goods falls 5.7% in October to a 17-month low"


By Jeffry Bartash

Published: Nov 26, 2019 9:49 a.m. ET

The numbers:

The nation’s trade deficit in goods fell almost 6% in October to a 17-month low in what was probably a temporary dropoff tied to the dispute with China and resulting U.S. tariffs.

The trade gap in goods fell to $66.5 billion in October from a revised $70.5 billion in the prior month, according to advanced figures released by the government.

Economists surveyed by MarketWatch had forecast a $71.8 billion gap

Even with the big drop in October, the U.S. is still likely to post the biggest trade deficit in 2019 in 11 years.

The advanced report also revealed an 0.2% increase in wholesale inventories in October and a 0.3% gain in retail inventories.

All three advanced figures suggest gross domestic product could be higher in the fourth quarter than Wall Street has been forecasting.

What happened:

Imports of foreign-made goods declined by $5 billion to $201.8 billion in October, likely reflecting a recent pattern of up-and-down figures depending on the timing of new U.S. tariffs on China.

Companies rushed to import consumer goods in August before scheduled U.S. tariffs went into effect and that appears to explain the decline in imports in October.

Exports of U.S. goods slipped by a smaller $900 million to $135.3 billion.

Most trading between countries involves goods such as autos, airplanes, oil, chemicals, electronics, clothing and the like.

The full October trade report comes out next week and includes services.

The U.S. has run a surplus for years in services such as banking, tourism and entertainment, but they reflect a smaller portion of overall trade.

The services balance doesn’t change much from month to month.

In September the total U.S. trade deficit was $52.5 billion.

Big picture:

The U.S. has run large trade deficits for years and nothing has really changed despite on-and-off efforts to reduce them.

Even though Trump administration tariffs have caused Chinese imports to decline, imports from other countries have risen.


Higher deficits subtract from gross domestic product, though rising inventories add to GDP.

What they are saying?

“A smaller trade deficit and an increase in inventories in October both work toward raising [fourth-quarter] GDP growth,” said chief economist Stephen Stanley of Amherst Pierpont Securities.

Market reaction:

The Dow Jones Industrial Average and S&P 500 fell slightly in Tuesday trades.

The 10-year Treasury yield was little changed 1.74%.

https://www.marketwatch.com/story/us-tr ... 2019-11-26

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Thu Nov 28, 2019 1:40 p

MARKETWATCH

"Fed Beige Book sees slight pickup in U.S. economy just ahead of the holiday season"


By Jeffry Bartash

Published: Nov 27, 2019 2:22 p.m. ET

The outlook:

The U.S. economy expanded “modestly” from October through mid-November and the outlook “generally remained positive,” according to the Federal Reserve’s latest findings.

The Fed’s Beige Book was slightly more upbeat compared to its previous assessment last month, when the central bank said the economy was expanding at a “slight to modest pace.”

Since then the stock market has surged to record highs, reflecting fresh optimism that the U.S. and China will soon agree to a so-called “skinny” trade deal that reduces tensions between the world’s two largest economies.

The Beige Book is basically a summary of anecdotes collected by the central bank from business contacts across the country to get a sense of how the economy is performing.

What happened:

The Fed found evidence of a small pickup in the downtrodden manufacturing side of the economy, though overall conditions are still fairly weak.

The dispute with China has hurt exports and made businesses reluctant to invest.

Auto sales, tourism and housing all showed improvement over the past month and a half.

Home sales have benefited from a drop in mortgage rates, the Fed said, though a shortage of properties for sales continued to act as a brake on the industry.

Skilled labor remained in short supply, most companies said.

Hiring has slowed in large part due to weaker economy, but those seeking to add workers complained about a persistent “lack of qualified applicants.”

The tight labor market has pushed up wages, but for the most part companies haven’t been able to pass on those higher costs to their customers.

“Firms’s ability to raise prices to cover higher costs remain limited,” the Beige Book said.

The latest Beige Book covers the period of October through Nov. 18.

Big picture:

The U.S. has slowed since the spring, but it’s growing fast enough to keep the economy out of recession and extend a record expansion now in its 11th year.

A trio of interest-rate cuts by the Fed since July are also helping to support growth by reducing the cost of borrowing.

The economy can’t grow much faster than 2%, however, so long as the U.S. trade war with China remains on the front-burner.

The dispute has hurt the world’s two largest economies and the negative effects have spread around the world.

Interesting anecdotes:

• “Sales expectations were optimistic for the holiday season and beyond,” the Boston Fed said based on information gleaned from retailers.

• Fewer customers are paying cash to buy high-end houses and apartments in New York City, perhaps ‘a signal that investors have largely left the market,’” the New York Fed said.

• “Construction contractors indicated that typical winter layoffs have been delayed this year,” the Cleveland Fed said.

Builders are trying to finish more projects to take advantage of the spike in demand caused by falling mortgage rates.

• “A food retailer said that while tariffs had increased costs, the company ‘cannot raise prices on a whim’ because of fierce competition,” the Cleveland Fed said.

• “Some small trucking companies that had opened to meet high demand in recent years went out of business, easing pressures on driver availability and wages,” the Minneapolis Fed said.

• ”Manufacturers facing slow demand again reported cutting hours rather than laying off workers because they were worried the tight labor market would make it too difficult to hire when demand recovered,” the Chicago Fed said.

• ”A lack of qualified applicants was cited as the number one reason for not filling open positions over the last three months,” the Kansas City Fed said.

• “A few businesses in higher cost urban areas noted efforts to relocate jobs to lower cost areas of the district in order to contain labor compensation,” the San Francisco Fed said.

Market reaction:

The Dow Jones Industrial Average and S&P 500 were little changed in Wednesday trades, but stock prices remain at or near record highs.

The 10-year Treasury yield edged up to 1.77%.

https://www.marketwatch.com/story/fed-b ... 2019-11-27

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Thu Nov 28, 2019 1:40 p

MARKETWATCH

"U.S. consumer spending climbs again in October even as incomes fall flat"


By Jeffry Bartash

Published: Nov 27, 2019 11:40 a.m. ET

The numbers:

U.S. consumer spending rose in October for the eighth month in a row, a potentially good sign for the holiday shopping season that gets underway after Thanksgiving with Black Friday specials.

Consumer spending increased 0.3% last month, the government said Wednesday.

Economists surveyed by MarketWatch had forecast a 0.2% increase.

A key barometer of inflation, meanwhile, rose a few ticks in October.

Yet inflation has been muffled for the past year and shows little sign of becoming a problem for the economy.

What happened:

Americans spent more on natural gas and electricity in October.

Outlays on other services also increased.


Consumers spent less on new autos and parts.

In somewhat of a surprise, incomes were were unchanged.

Farmers earned less and interest income also declined.

Incomes have only failed to rise four different times in the past five years.

Similarly, disposable income (take-home pay after tax) fell last month for the first time since 2015.

Yet by and large, incomes have been rising at a healthy pace and have supported steady consumer spending.

A high savings rate has also provided a cushion for Americans to spend.

The savings rate slipped last month to 7.8% from 8.1%, but it’s still relatively high.

The Fed’s preferred “PCE” inflation barometer, meanwhile, rose 0.2% in October.

The index showed prices rising at a meager 1.3% pace over the past year, unchanged from the prior month.

That’s still well short of the central bank’s 2% target.

The more closely followed core measure of inflation edged up 0.1% in October.

Over the past year it’s risen 1.6%, down a tick from the prior month.

Big picture:

Torrid consumer spending drove the U.S. economy in the spring and summer.

Rising incomes and a record stock market are likely to help keep spending on the high side in the final months of the year, but it probably won’t be as strong as it was earlier in the year.

What will also help are low interest rates.

The Federal Reserve has cut the cost of borrowing in response to tepid inflation and the threat of lasting damage from the U.S. trade war with China.

What they were saying?

“Consumption growth has moderated in the last three months from an extremely strong pace in March through July,” economists at Citibank noted.

Market reaction:

The Dow Jones Industrial Average and S&P 500 were little changed in Wednesday trades, but stock prices remain at or near record highs.

The 10-year Treasury yield edged up to 1.77%.

https://www.marketwatch.com/story/consu ... 2019-11-27

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Thu Nov 28, 2019 1:40 p

MARKETWATCH

"U.S. durable-goods orders jump 0.6% in October, but mostly for military weapons"


By Jeffry Bartash

Published: Nov 27, 2019 11:25 a.m. ET

The numbers:

Orders for durable goods rose sharply in October, but most of the gain was tied to defense-related goods such as fighter jets and ships.

Bookings for civilian products barely rose, highlighting ongoing softness in the industrial side of the economy that’s constraining U.S. growth.


Orders climbed 0.6% last month, the government said Wednesday.

Economists surveyed by MarketWatch had forecast a 1.1% drop.

Yet if military hardware is stripped out, orders edged up just 0.1%.

What happened:

Orders declined 1.9% for new autos and parts, reflecting a month-long strike at General Motors that hampered production in October.

Orders rose almost 11% for commercial aircraft, suggesting a temporary respite for Boeing amid its ongoing struggle to get its grounded Max 737 jet back into the air.

The delays have had a sizable impact on the U.S. economy this year.

On the defense side, orders for capital goods such as ships soared nearly 17% and bookings for military aircraft and parts jumped 18%.

The rest of the report was also a mixed bag.

Orders rose for computers and heavy machinery.

Bookings declined for primary metals and electrical equipment.

A key measure of business investment that excludes defense and aircraft surged 1.2% — the biggest gain since January — but it probably doesn’t signal big gains ahead.

These so-called core orders have fallen over the past year in a sign of persistently weak business spending.

The originally reported 1.2% decline in durable-goods orders in September was revised to show a 1.4% drop.

Big picture:

Businesses have cut back on spending, investment and hiring this year in response to the U.S. trade fight with China and a slowing world economy.

They probably won’t cut investment much further, but they are also unlikely to become more aggressive until trade tensions are dialed down and global growth recovers.

Both nations say they are close to a “phase-one” deal to bridge some of the gap, but the most contentious issues remain.

The ongoing dispute is likely to continue to weigh on the economy in 2020 when President Trump is up for reelection.

What they were saying?

”U.S. durable orders showed a bit more durability than we thought in the face of an auto strike and global growth headwinds,” said senior economist Avery Shenfeld of CIBC World Markets.

Market reaction:

The Dow Jones Industrial Average and S&P 500 were little changed in Wednesday trades, but stock prices remain at or near record highs.

The 10-year Treasury yield edged up to 1.77%.

https://www.marketwatch.com/story/us-du ... 2019-11-27

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Thu Nov 28, 2019 1:40 p

MARKETWATCH

"U.S. jobless claims tumble to 213,000 just before Thanksgiving, back near post recession low"


By Jeffry Bartash

Published: Nov 27, 2019 11:30 a.m. ET

The numbers:

The number of people who applied for unemployment benefits fell sharply in the week before the U.S. Thanksgiving holiday, putting jobless claims back near historic lows and reflecting the persistent strength in the U.S. labor market.

Initial jobless claims declined by 15,000 to 213,000 in the seven days ended Nov. 23, the government said Wednesday.

Last week claims had touched a five-month high.

Economists polled by MarketWatch had forecast new claims to total 220,000 after seasonal adjustments.

The report came out a day earlier due to the U.S. holiday on Thursday.

What happened:

Jobless claims are often volatile during the holiday season that begins in November, a month that includes Veterans Day and Thanksgiving.

Shifting dates of Thanksgiving in particular can play havoc on the government’s efforts to adjust the data for seasonal swings in employment.

That’s what looks to have happened this month.

By and large, jobless claims have ranged around 220,000 or less for most of the year.

The monthly average of new claims, meanwhile, fell by 1,500 to 219,750.

The four-week average gives a more stable view of the labor market than the more volatile weekly number.

The number of people already collecting unemployment benefits, known as continuing claims, declined by 57,000 to 1.64 million.

These claims are still near the lowest level since the early 1970s.

Big picture:

Jobless claims had climbed to a five-month high just ahead of the holiday season, but most of the increase appeared to be tied to the government’s seasonal adjustments.

The General Motors strike strike and major wildfires in California may have also played a role.

Yet there’s little evidence that layoffs are on the rise or that the economy is getting any weaker.

Look for more ups and downs in jobless claims.

Employment often gyrates in November and December as companies take on temporary help to cope with a busy time of the year.

What they were saying?

“It seems likely that this seasonal adjustment difficulty caused the claims data to be elevated in each of the past two weeks."

"We expect that claims will continue to hover around 215,000 going forward,” said Thomas Simons, senior money market economist at Jefferies LLC.

Market reaction:

The Dow Jones Industrial Average and S&P 500 were little changed in Wednesday trades, but stock prices remain at or near record highs.

The 10-year Treasury yield edged up to 1.77%.

https://www.marketwatch.com/story/joble ... 2019-11-27

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Re: THE ECONOMY

Post by thelivyjr » Thu Nov 28, 2019 1:40 p

MARKETWATCH

"U.S. GDP growth in third quarter raised to 2.1% from 1.9%"


By Jeffry Bartash

Published: Nov 27, 2019 8:30 a.m. ET

WASHINGTON (MarketWatch) - The U.S. economy grew at a 2.1% annual pace in the third quarter, a few ticks higher than previously estimated.

Gross domestic product was originally estimated to have grown 1.9%.

The improved figure stemmed mostly from upward revisions in inventories and investment in structures, the government said.

The increase in consumer spending, the main engine of growth, was left at 2.9%.

Business fixed investment was revised to show a 1% drop instead of 1.3%.

The change in the value of inventories or unsold goods was raised to $79.8 billion from $69 billion.

Exports rose a bit faster at 0.9% and imports advanced 0.8% instead of 0.4% as initially reported.

Most other figures in the report were little changed, including inflation.

Meanwhile, the first estimate of corporate earnings in the third quarter showed a scant increase.

Adjusted corporate profits before taxes edged up 0.2%.

For the full year profits are basically running flat vs. 2018.

https://www.marketwatch.com/story/us-gd ... 2019-11-27

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Re: THE ECONOMY

Post by thelivyjr » Mon Dec 02, 2019 1:40 p

MARKETWATCH

"U.S. manufacturing sector slumps further in November: ISM"


By Greg Robb

Published: Dec 2, 2019 4:27 p.m. ET

The numbers:

The Institute for Supply Management said its manufacturing index sank to 48.1% in November from 48.3% in October.

Economists surveyed by MarketWatch had forecast the index would register a reading of 49.2%.

This is the fourth straight sub-50 reading.

Readings below 50% indicate business conditions are getting worse.

What happened:

The key new orders index dipped to 47.2 from 49.1 in October.

Orders haven’t been below this level since April 2009.

Inventories dropped to a 42-month low.

Employment dipped to 46.3.


A similar manufacturing survey by IHS Markit, meanwhile, registered 52.6 in November.

What is the ISM saying?

“Global trade remains the most significant cross-industry issue,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee.

Big picture:

Weak export growth and caution among business leaders is hitting the manufacturing sector hard.

There had been hope that manufacturing was stabilizing, but today’s data throw that theory into questions.

What are economists saying:

“In short, this is a soft report, and the fall in orders, if sustained, suggests the headline index could dip a bit further in December."

"A charitable interpretation — and one consistent with the recent improvement in China’s PMIs — is that the ISM is bouncing along the bottom."

"We’d be surprised to see a further significant decline, but the sector is stuck in a mild recession with little prospect of a real near-term revival,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Market reaction:

Stocks sank after the ISM report was released and never recovered, with the Dow Jones Industrial Average finishing down 260 points and the S&P 500 Index down 27 points.

https://www.marketwatch.com/story/us-ma ... 2019-12-02

thelivyjr
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Re: THE ECONOMY

Post by thelivyjr » Wed Dec 04, 2019 1:40 p

MARKETWATCH

"U.S. private sector job growth slows down sharply in November: ADP"


By Greg Robb

Published: Dec 4, 2019 9:52 a.m. ET

The numbers:

Private-sector employment slowed sharply in November, payroll processor ADP said Wednesday.

Job growth rose 67,000 in the month, the smallest increast since May.


The gain was well below forecasts from economists surveyed by Econoday who expected a gain of 156,000.

What happened:

Large businesses, meaning those with about 500 employees or more, added 27,000 jobs.

Mid-sized enterprises (50-499 employees) added 29,000 positions, while small employers, or those with one to 49 workers, tacked on 11,000 jobs.

Goods-producing sectors such as manufacturing, construction and mining were a weak spot, with 18,000 jobs lost.

That’s the third straight month of job declines in the sector.

Trade and transportation lost 15,000 jobs.

Service-providing sectors gained 85,000 jobs

Big picture:

Economists use the figures from ADP, the payroll processor for millions of American workers, to get a sense of how many new jobs the U.S. Labor Department employment report is likely to show a few days later, but economists quickly note that ADP is far from infallible.

Prior to the ADP data, economists expected Friday’s government report will show 189,000 jobs created in November up from 128,000 in the prior month, but the increase will include workers returning to General following the end of the four-week strike by the United Auto Workers.

The ADP data is not impacted by the UAW strike.

Overall, economists expect the labor market to cool down as economic growth is currently slowing.

The government’s estimate of job growth has already moderated to 167,000 per month so far this year from 223,000 in 2018.

What ADP said:

“The job market is losing its shine,” said Mark Zandi, chief economist of Moody’s Analytics.

What economists said:

“What today’s number does seem to suggest is that underlying momentum in the U.S. economy is slowing, with the 3-month average of the ADP survey pretty consistent with the circa 1% growth rate we are forecasting for fourth-quarter GDP,” Andrew Grantham, economist CIBC World Markets.

Market reaction:

Stocks were still set to open higher Wednesday on reports that the U.S. and China are closer to a limited deal than President Donald Trump had indicated in comments to reporters on Tuesday.

https://www.marketwatch.com/story/priva ... 2019-12-04

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Re: THE ECONOMY

Post by thelivyjr » Thu Dec 05, 2019 1:40 p

MARKETWATCH

"U.S. economy’s huge service sector slows again in November, ISM finds"


By Jeffry Bartash

Published: Dec 4, 2019 11:14 a.m. ET

Medicare-care providers and segments of the service side of the U.S. economy grew in November at the slowest pace in four months.

The numbers:

The huge service side of the U.S. economy slowed again in November, adding to a slew of evidence pointing to weaker growth toward year end.

The Institute for Supply Management’s survey of service-oriented companies such as hospitals, retailers and restaurants fell to 53.9% in November from 54.7%.


Numbers over 50% are viewed as positive for the economy, but the index has come down sharply from a 13-year high of 60.8% just a little over a year ago.

Even worse, the ISM’s manufacturing gauge stayed below the key 50% cutoff line in November for the fourth straight month.

What happened:

The index for business production in the service sector slumped 5.4 points to 51.6%, dropping to the lowest level since 2010, accounting for most of the decline in the overall survey.

Yet new orders actually rose, as did employment and exports.

The index for employment rose to 55.5% from 53.7%, suggesting an increase in hiring for the holiday season.

At the same time, though, many companies say they have a hard time finding qualified workers with the unemployment rate near a 50-year low.

Altogether, 12 of the 17 industries tracked by ISM said their businesses were expanding.

A year ago all but one were growing.

A similar survey of the service side of the U.S. economy produced by IHS Markit edged up to 51.6% in November from 50.6%.

Big picture:

The U.S. economy has slowed along with the rest of the globe in no small part because of the ongoing trade dispute with China.

The spat between the world’s two largest economies has disrupted supply chains and caused businesses to spend and invest more conservatively.

Farmers and manufacturers have been particularly hard hit.

What they are saying?

“We’re optimistic [because the] economy appears to be on autopilot, despite all the political distractions."

"Stock market seems invincible, trade war with China appears to be in a stalemate,” said an executive at a professional-services firm.

“Tariffs are impacting prices for a broad array of products used in the delivery of services and completion of projects for our clients,’ said an executive at a holding company.

“Numerous suppliers report looking for alternative manufacturing/supply locations outside of China, but with limited or no success so far.”

Market reaction:

The Dow Jones Industrial Average and S&P 500 rose in Wednesday trades for the first time in four days.

The 10-year Treasury yield edged up to 1.74%.

One year ago the yield was above 3%.

https://www.marketwatch.com/story/us-ec ... 2019-12-04

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