MARKETWATCH
"Manufacturers grow at slower but still rapid pace in September, Fed’s Empire survey shows"
By Jeffry Bartash
Published: Sept 17, 2018 9:47 a.m. ET
The numbers:
Factories in the New York region churned out goods at a slower but still-flourishing pace in September, a survey of executives showed.
The Empire State manufacturing index fell to 19 points in September from a 25.6 reading in August that was a 10-month high.
Economists had forecast the index to come in at 23, according to a survey by Econoday.
What happened:
The index for new orders slipped 0.6 points to 16.5 and the shipments index dropped 11.4 points to 14.3.
A measure of what it costs to buy raw and partly finished goods inched up to 46.3 from 45.2, the New York Fed said.
That reflects upward pressure on a variety of materials firms need to produce their goods.
Manufacturers remained optimistic about future growth, though a little less so.
The index measuring expectations six months from now dropped to 30.3 from 34.8.
The index is the first of several regional manufacturing surveys released each month.
They are frequently volatile but taken together, they present one of the timeliest reads on a critically important part of the economy.
Big picture:
The U.S. economy is booming.
Growth surged in the spring and has carried through summer.
Like most other companies, manufacturers say one of their biggest problems is finding enough skilled workers to fill a high number of job openings.
Many companies say they plan to add more workers or increase hours for current employees, and in some cases, they are raising wages.
U.S. tariffs and foreign retaliatory measures, meanwhile, have also made it harder to obtain a steady source of supplies at reasonable prices.
Higher labor and material costs could crimp profits or force companies to pass on price increases to customers.
What they are saying?:
“This is a bit disappointing,” chief economist Ian Shepherdson of Pantheon Economics wrote in a note to clients.
“Our core view remains that the rate of growth of output likely has peaked for this cycle but we see no evidence that a real slowdown is underway.”
Market reaction:
The Dow Jones Industrial Average and the S&P 500 fell slightly in early Monday trades.
The 10-year Treasury yield settled in around 3%, returning close to an eight-year high.
https://www.marketwatch.com/story/manuf ... 2018-09-17
THE ECONOMY
Re: THE ECONOMY
AND HERE IS LARRY "KUDDLES" KUDLOW, THE TV ECONOMIST, TO TELL US WHAT IS GOING ON WITH OUR ECONOMY ...
THE WALL STREET JOURNAL
"Kudlow claims spending, not tax cuts, is culprit in budget deficit"
By Michael S. Derby
Published: Sept 17, 2018 4:33 p.m. ET
A top economic adviser to President Donald Trump said Monday the U.S. is ready to engage in serious trade talks with China, in comments that also shrugged off massive U.S. government budget deficits as largely a function of too much government spending and not tax cuts.
“The trade system around the world has been broken” and “China is the biggest culprit” for the current troubles, Lawrence Kudlow, head of the White House National Economic Council, told a gathering of the Economic Club of New York.
“Do not blame Trump for this."
"He inherited this mess,” Kudlow said.
Kudlow rejected the widely held view that recently passed tax cuts favored by the Trump administration and Republicans have significantly exacerbated what were already high government budget deficits.
“The gap is principally spending too much,” Kudlow said.
“We have to be tougher on spending."
"People are quick to blame deficits on tax cuts, but I don’t buy that,” he said.
The official added he expects the government to run deficits of 4% to 5% of the nation’s GDP, and said “it’s not a catastrophe.”
https://www.marketwatch.com/story/kudlo ... ewer_click
THE WALL STREET JOURNAL
"Kudlow claims spending, not tax cuts, is culprit in budget deficit"
By Michael S. Derby
Published: Sept 17, 2018 4:33 p.m. ET
A top economic adviser to President Donald Trump said Monday the U.S. is ready to engage in serious trade talks with China, in comments that also shrugged off massive U.S. government budget deficits as largely a function of too much government spending and not tax cuts.
“The trade system around the world has been broken” and “China is the biggest culprit” for the current troubles, Lawrence Kudlow, head of the White House National Economic Council, told a gathering of the Economic Club of New York.
“Do not blame Trump for this."
"He inherited this mess,” Kudlow said.
Kudlow rejected the widely held view that recently passed tax cuts favored by the Trump administration and Republicans have significantly exacerbated what were already high government budget deficits.
“The gap is principally spending too much,” Kudlow said.
“We have to be tougher on spending."
"People are quick to blame deficits on tax cuts, but I don’t buy that,” he said.
The official added he expects the government to run deficits of 4% to 5% of the nation’s GDP, and said “it’s not a catastrophe.”
https://www.marketwatch.com/story/kudlo ... ewer_click
Re: THE ECONOMY
THE WALL STREET JOURNAL
"Trump to impose tariffs on another $200 billion in Chinese goods"
By Jacob M. Schlesinger and Vivian Salama
Published: Sept 18, 2018 5:21 a.m. ET
WASHINGTON — President Trump said Monday he will impose new tariffs on about $200 billion in Chinese goods and threatened to add hundreds of billions more as part of his campaign to pressure Beijing to change its commercial practices, escalating trade tensions between the world’s two largest economies.
The 10% tax on Chinese imports will take effect on Sept. 24 and will rise to 25% at the end of the year, according to administration officials.
The tariffs will affect thousands of goods ranging from luggage to seafood, extending the impact of Trump’s aggressive tariff policy for the first time to a broad population of American consumers.
Chinese trade practices “plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” Trump said in a statement.
China’s Commerce Ministry on Tuesday vowed unspecified countermeasures, saying in a brief statement on its website that China “has no choice but to undertake synchronous retaliation” to defend its interests and the global free-trade order.
The U.S. tariff plan has created “new uncertainty” for negotiations between the two countries, said the statement, which was attributed to an unnamed spokesman.
https://www.marketwatch.com/story/trump ... 2018-09-17
"Trump to impose tariffs on another $200 billion in Chinese goods"
By Jacob M. Schlesinger and Vivian Salama
Published: Sept 18, 2018 5:21 a.m. ET
WASHINGTON — President Trump said Monday he will impose new tariffs on about $200 billion in Chinese goods and threatened to add hundreds of billions more as part of his campaign to pressure Beijing to change its commercial practices, escalating trade tensions between the world’s two largest economies.
The 10% tax on Chinese imports will take effect on Sept. 24 and will rise to 25% at the end of the year, according to administration officials.
The tariffs will affect thousands of goods ranging from luggage to seafood, extending the impact of Trump’s aggressive tariff policy for the first time to a broad population of American consumers.
Chinese trade practices “plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” Trump said in a statement.
China’s Commerce Ministry on Tuesday vowed unspecified countermeasures, saying in a brief statement on its website that China “has no choice but to undertake synchronous retaliation” to defend its interests and the global free-trade order.
The U.S. tariff plan has created “new uncertainty” for negotiations between the two countries, said the statement, which was attributed to an unnamed spokesman.
https://www.marketwatch.com/story/trump ... 2018-09-17
Re: THE ECONOMY
MARKETWATCH
"U.S. current-account deficit sinks 17%"
By Jeffry Bartash
Published: Sept 19, 2018 11:22 a.m. ET
The numbers:
The U.S. current-account deficit fell 17% in the second quarter and touched the lowest level in three years, though the dropoff is unlikely to last.
The deficit dropped to $101.5 billion from a revised $121.7 billion in the first quarter, the government said Wednesday.
The current account includes not just trade but also investments made abroad as well as personal cash transfers such as foreign workers sending money home.
What happened:
The U.S. recorded a much smaller trade deficit in goods and a bigger surplus in services such as banking and tourism.
Exports of U.S.-produced oil, industrial supplies and agricultural goods, mainly soybeans, climbed sharply in the spring.
In the case of soybeans, American sellers and foreign buyers sought to strike deals before Chinese retaliatory tariffs took effect.
The Trump tax cuts, meanwhile, have spurred companies to shift billions of dollars in earnings from affiliates abroad to their parent companies in the U.S.
For example, reinvested earnings fell $166.8 billion in the first quarter and an additional $42.7 billion in the second quarter.
Those big drops are linked to the repatriation of profits held abroad to back home.
The current account reveals if a country is a net lender or debtor.
The current account deficit was 2% of GDP in the second quarter.
That’s down from 2.4% in the first quarter and well below a peak of 6.3% in 2005.
Big picture:
The U.S. has run large deficits in the current account for years in both good times and bad without much affect on the economy.
By and large it reflects chronic deficits in trade, which are a drag on gross domestic product.
While President Trump vows to slash huge trade deficits, the U.S. is on track to post the biggest annual gap in a decade despite the imposition of widespread tariffs on foreign goods.
As a result, economists predict the current-account deficit will worsen in upcoming quarters.
What they are saying?:
“We look for the current account deficit to gradually widen to about 2.5% of GDP over the coming quarters,“ Oren Klachkin of Oxford Economics wrote in a note.
“Slower global growth, a stronger dollar, and trade uncertainty will weigh on exports while upbeat domestic demand will keep a steady pull on imports.”
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in Wednesday trades and returned close to record highs.
The 10-year Treasury yield has moved above 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/us-cu ... 2018-09-19
"U.S. current-account deficit sinks 17%"
By Jeffry Bartash
Published: Sept 19, 2018 11:22 a.m. ET
The numbers:
The U.S. current-account deficit fell 17% in the second quarter and touched the lowest level in three years, though the dropoff is unlikely to last.
The deficit dropped to $101.5 billion from a revised $121.7 billion in the first quarter, the government said Wednesday.
The current account includes not just trade but also investments made abroad as well as personal cash transfers such as foreign workers sending money home.
What happened:
The U.S. recorded a much smaller trade deficit in goods and a bigger surplus in services such as banking and tourism.
Exports of U.S.-produced oil, industrial supplies and agricultural goods, mainly soybeans, climbed sharply in the spring.
In the case of soybeans, American sellers and foreign buyers sought to strike deals before Chinese retaliatory tariffs took effect.
The Trump tax cuts, meanwhile, have spurred companies to shift billions of dollars in earnings from affiliates abroad to their parent companies in the U.S.
For example, reinvested earnings fell $166.8 billion in the first quarter and an additional $42.7 billion in the second quarter.
Those big drops are linked to the repatriation of profits held abroad to back home.
The current account reveals if a country is a net lender or debtor.
The current account deficit was 2% of GDP in the second quarter.
That’s down from 2.4% in the first quarter and well below a peak of 6.3% in 2005.
Big picture:
The U.S. has run large deficits in the current account for years in both good times and bad without much affect on the economy.
By and large it reflects chronic deficits in trade, which are a drag on gross domestic product.
While President Trump vows to slash huge trade deficits, the U.S. is on track to post the biggest annual gap in a decade despite the imposition of widespread tariffs on foreign goods.
As a result, economists predict the current-account deficit will worsen in upcoming quarters.
What they are saying?:
“We look for the current account deficit to gradually widen to about 2.5% of GDP over the coming quarters,“ Oren Klachkin of Oxford Economics wrote in a note.
“Slower global growth, a stronger dollar, and trade uncertainty will weigh on exports while upbeat domestic demand will keep a steady pull on imports.”
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in Wednesday trades and returned close to record highs.
The 10-year Treasury yield has moved above 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/us-cu ... 2018-09-19
Re: THE ECONOMY
THE WALL STREET JOURNAL
"China retaliates with tariffs on $60 billion of U.S. goods"
By Lingling Wei and Jacob M. Schlesinger
Published: Sept 19, 2018 6:56 a.m. ET
The Chinese government said Tuesday it plans to impose new tariffs on $60 billion in U.S. exports, prompting President Trump to reiterate a threat to punch back by hitting Chinese goods worth more than four times that much.
Beijing also weighed whether to stick with plans for upcoming bilateral talks aimed at easing the conflict of retaliation and counter-retaliation, escalated by Trump’s Monday announcement of new import taxes on $200 billion in Chinese goods.
Trump responded to China’s $60 billion pledge later Tuesday by declaring that “if there’s retaliation against our farmers and our industrial workers and our ranchers, if any of that goes on we are going to kick in another $257 billion.”
He added: “We don’t want to do it, but we’ll probably have no choice.”
People familiar with administration plans said they expected Trump to issue a formal statement over the next few days directing U.S. Trade Representative Robert Lighthizer to begin the process of crafting the next tranche of tariffs that, if fully implemented, would cover virtually all imports of Chinese goods, which totaled $505 billion in 2017.
While the threat of more tariffs might intensify the rhetorical pressure on Beijing, these people stressed, the actual administrative process—including holding public hearings, receiving written public comments, and conducting internal impact studies—would take weeks before any fresh measures would take effect.
Trump said on Tuesday that he was eyeing tariffs on an additional $257 billion in Chinese goods, but the statement he issued on Monday said it was $267 billion.
An administration official said the White House statement citing the $267 billion figure accurately described the policy.
https://www.marketwatch.com/story/china ... 2018-09-19
"China retaliates with tariffs on $60 billion of U.S. goods"
By Lingling Wei and Jacob M. Schlesinger
Published: Sept 19, 2018 6:56 a.m. ET
The Chinese government said Tuesday it plans to impose new tariffs on $60 billion in U.S. exports, prompting President Trump to reiterate a threat to punch back by hitting Chinese goods worth more than four times that much.
Beijing also weighed whether to stick with plans for upcoming bilateral talks aimed at easing the conflict of retaliation and counter-retaliation, escalated by Trump’s Monday announcement of new import taxes on $200 billion in Chinese goods.
Trump responded to China’s $60 billion pledge later Tuesday by declaring that “if there’s retaliation against our farmers and our industrial workers and our ranchers, if any of that goes on we are going to kick in another $257 billion.”
He added: “We don’t want to do it, but we’ll probably have no choice.”
People familiar with administration plans said they expected Trump to issue a formal statement over the next few days directing U.S. Trade Representative Robert Lighthizer to begin the process of crafting the next tranche of tariffs that, if fully implemented, would cover virtually all imports of Chinese goods, which totaled $505 billion in 2017.
While the threat of more tariffs might intensify the rhetorical pressure on Beijing, these people stressed, the actual administrative process—including holding public hearings, receiving written public comments, and conducting internal impact studies—would take weeks before any fresh measures would take effect.
Trump said on Tuesday that he was eyeing tariffs on an additional $257 billion in Chinese goods, but the statement he issued on Monday said it was $267 billion.
An administration official said the White House statement citing the $267 billion figure accurately described the policy.
https://www.marketwatch.com/story/china ... 2018-09-19
Re: THE ECONOMY
THE WALL STREET JOURNAL
"U.S. liquefied natural gas boom threatened by new tariffs from China"
By Georgi Kantchev and Christopher M. Matthews
Published: Sept 18, 2018 4:54 p.m. ET
China’s move to impose tariffs on U.S. liquefied natural gas imperils the ability of a burgeoning industry to export the bounty of American shale.
Retaliating against new Trump administration tariffs on $200 billion in Chinese goods, China on Tuesday issued levies on $60 billion of U.S. products, including a 10% tariff on liquefied natural gas, known as LNG.
Shares of Cheniere Energy Inc., the first U.S. company to export LNG from the U.S. Gulf Coast, rose on the news, as the tariff was lower than a 25% levy China had earlier threatened.
Still, the tariff is bound to have an impact on American LNG exporters, analysts said, making them a potential early victim in the escalating trade battle between the U.S. and China.
China is the biggest source of new global LNG demand as the country steps up efforts to combat air pollution by shifting from coal-powered plants to natural gas and renewable energy sources.
The U.S., which is emerging as a powerhouse in the global gas trade, was expected to mop up a big chunk of that demand.
But tariffs may now hamstring American companies as they negotiate for long-term contracts, experts said.
Fewer long-term contracts could help stall a planned wave of new export terminal projects in the U.S.
Numerous countries are competing with the U.S. as gas becomes a more globally traded commodity, including Australia, Qatar and Russia.
https://www.marketwatch.com/story/us-li ... 2018-09-18
"U.S. liquefied natural gas boom threatened by new tariffs from China"
By Georgi Kantchev and Christopher M. Matthews
Published: Sept 18, 2018 4:54 p.m. ET
China’s move to impose tariffs on U.S. liquefied natural gas imperils the ability of a burgeoning industry to export the bounty of American shale.
Retaliating against new Trump administration tariffs on $200 billion in Chinese goods, China on Tuesday issued levies on $60 billion of U.S. products, including a 10% tariff on liquefied natural gas, known as LNG.
Shares of Cheniere Energy Inc., the first U.S. company to export LNG from the U.S. Gulf Coast, rose on the news, as the tariff was lower than a 25% levy China had earlier threatened.
Still, the tariff is bound to have an impact on American LNG exporters, analysts said, making them a potential early victim in the escalating trade battle between the U.S. and China.
China is the biggest source of new global LNG demand as the country steps up efforts to combat air pollution by shifting from coal-powered plants to natural gas and renewable energy sources.
The U.S., which is emerging as a powerhouse in the global gas trade, was expected to mop up a big chunk of that demand.
But tariffs may now hamstring American companies as they negotiate for long-term contracts, experts said.
Fewer long-term contracts could help stall a planned wave of new export terminal projects in the U.S.
Numerous countries are competing with the U.S. as gas becomes a more globally traded commodity, including Australia, Qatar and Russia.
https://www.marketwatch.com/story/us-li ... 2018-09-18
Re: THE ECONOMY
MARKETWATCH
"Economy poised to grow 3% or more for the rest of 2018, leading indicators signal"
By Jeffry Bartash
Published: Sept 20, 2018 10:21 a.m. ET
The numbers:
The nine-year-old U.S. expansion is poised for 3% growth in the second half of 2018, according to an index that measures the nation’s economic health.
The leading economic index rose 0.4% August following even stronger gains in the prior two months, the Conference Board said Thursday.
What happened:
The LEI is a gauge of 10 indicators meant to signal peaks and valleys in the business cycle and the broader economy.
Most of the components expanded last month, pointing to a 3% or more growth rate in gross domestic product in the final two quarters of the year.
Big picture:
The booming U.S. economy expanded at heady 4.2% pace in the spring and is forecast to grow at least 3% in the third quarter, based on the most recent MarketWatch forecast.
If the economy keeps it up, the U.S. might boast its first full calendar year of 3% growth since 2005.
What they are saying?
“The leading indicators are consistent with a solid growth scenario in the second half of 2018 and at this stage of a maturing business cycle in the U.S., it doesn’t get much better than this,” said Ataman Ozyildirim, economist at the board.
“The strengths among the LEI’s components were very widespread, further supporting an outlook of above 3.0% growth for the remainder of 2018,” he added.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in early Thursday trades and both hit all-time highs.
The 10-year Treasury yield has climbed to 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/us-ec ... 2018-09-20
"Economy poised to grow 3% or more for the rest of 2018, leading indicators signal"
By Jeffry Bartash
Published: Sept 20, 2018 10:21 a.m. ET
The numbers:
The nine-year-old U.S. expansion is poised for 3% growth in the second half of 2018, according to an index that measures the nation’s economic health.
The leading economic index rose 0.4% August following even stronger gains in the prior two months, the Conference Board said Thursday.
What happened:
The LEI is a gauge of 10 indicators meant to signal peaks and valleys in the business cycle and the broader economy.
Most of the components expanded last month, pointing to a 3% or more growth rate in gross domestic product in the final two quarters of the year.
Big picture:
The booming U.S. economy expanded at heady 4.2% pace in the spring and is forecast to grow at least 3% in the third quarter, based on the most recent MarketWatch forecast.
If the economy keeps it up, the U.S. might boast its first full calendar year of 3% growth since 2005.
What they are saying?
“The leading indicators are consistent with a solid growth scenario in the second half of 2018 and at this stage of a maturing business cycle in the U.S., it doesn’t get much better than this,” said Ataman Ozyildirim, economist at the board.
“The strengths among the LEI’s components were very widespread, further supporting an outlook of above 3.0% growth for the remainder of 2018,” he added.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in early Thursday trades and both hit all-time highs.
The 10-year Treasury yield has climbed to 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/us-ec ... 2018-09-20
Re: THE ECONOMY
MARKETWATCH
"Philly Fed manufacturing index rebounds in September"
By Greg Robb
Published: Sept 20, 2018 11:44 a.m. ET
The numbers:
The Philadelphia Fed manufacturing index rebounded in September after slowing sharply in the prior month.
The index rose to a two-month high of 22.9 in September from 11.9 in August, the regional district of the central bank said Thursday.
That was above the MarketWatch-compiled economist consensus for a reading of 19.6.
Any reading above zero indicates improving conditions.
What happened:
The new-orders index jumped 11.5 points to 21.4, and the shipments index rose 3 points to 19.6.
Survey respondents reported diminished price pressures.
Expectations for the next six months showed some moderation.
Big picture:
The index returned to near its average reading for the year.
The Empire State factory index, released Monday, fell 6.6 points to 19 in September, a softer-than-expected reading.
The two regional manufacturing reports are of interest to traders primarily because they are seen as an early forecast of the national Institute for Supply Management factory survey due in two weeks.
The mixed readings could mean a retreat for the ISM factory index in September after it hit a 14-year high in August.
What they are saying?:
“The big picture here, we think, is that the business surveys are peaking, but we don’t expect a rapid decline; the cyclical downshift probably still is some way off, though the imposition of wider tariffs on Chinese imports and the threat of much more to come injects real uncertainty into the outlook,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction:
Stocks rallied Thursday on the back of strong economic data.
https://www.marketwatch.com/story/phill ... 2018-09-20
"Philly Fed manufacturing index rebounds in September"
By Greg Robb
Published: Sept 20, 2018 11:44 a.m. ET
The numbers:
The Philadelphia Fed manufacturing index rebounded in September after slowing sharply in the prior month.
The index rose to a two-month high of 22.9 in September from 11.9 in August, the regional district of the central bank said Thursday.
That was above the MarketWatch-compiled economist consensus for a reading of 19.6.
Any reading above zero indicates improving conditions.
What happened:
The new-orders index jumped 11.5 points to 21.4, and the shipments index rose 3 points to 19.6.
Survey respondents reported diminished price pressures.
Expectations for the next six months showed some moderation.
Big picture:
The index returned to near its average reading for the year.
The Empire State factory index, released Monday, fell 6.6 points to 19 in September, a softer-than-expected reading.
The two regional manufacturing reports are of interest to traders primarily because they are seen as an early forecast of the national Institute for Supply Management factory survey due in two weeks.
The mixed readings could mean a retreat for the ISM factory index in September after it hit a 14-year high in August.
What they are saying?:
“The big picture here, we think, is that the business surveys are peaking, but we don’t expect a rapid decline; the cyclical downshift probably still is some way off, though the imposition of wider tariffs on Chinese imports and the threat of much more to come injects real uncertainty into the outlook,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction:
Stocks rallied Thursday on the back of strong economic data.
https://www.marketwatch.com/story/phill ... 2018-09-20
Re: THE ECONOMY
MARKETWATCH
"Hurricane Florence pushes jobless claims down to new 49-year low"
By Jeffry Bartash
Published: Sept 20, 2018 9:47 a.m. ET
The numbers:
The number of Americans who applied for unemployment benefits in mid-September fell to a fresh 49-year low, partly because of Hurricane Florence but mostly owing to a surging economy.
Initial jobless claims, a rough proxy for layoffs, fell by 3,000 to 201,000 in the seven days ended Sept. 15.
That’s below the 208,000 MarketWatch forecast and marks the lowest level since Nov. 12, 1969.
The monthly average of new claims, meanwhile, slipped by 2,250 to 205,750, the government said Thursday.
That’s also a 49-year low.
The number of people already collecting unemployment benefits declined by 55,000 to 1.65 million.
Known as “continuing” claims, they have fallen to the lowest level since 1973.
What happened:
The storm surge caused by Hurricane Florence in the Carolinas contributed to the low level of claims last week.
Applications in South Carolina fell by an unusually large number, indicating fewer people filed claims due to government office closures and lack of power.
Nonetheless, layoffs in the U.S. have been falling steadily for eight years and they soon could drop below 200,000 for the first time in 50 years.
The comparison between now and a half century ago, of course, are not entirely apt.
The rules determining who’s eligible for benefits have changed over time and the nature of the U.S. labor force is much different now than it was in the late 1960s, when the size of the population was much smaller.
Yet by any measure, layoffs in the U.S. are amazing low.
Big picture:
The U.S. economy sped up in the spring, sailed through the summer and is heading into the fall with plenty of steam.
Record job openings, strong hiring, low unemployment and rising incomes are likely to keep the good times going even with the Federal Reserve poised to raise interest rates again.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in early Thursday trades and both hit all-time highs.
The 10-year Treasury yield has climbed to 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/joble ... 2018-09-20
"Hurricane Florence pushes jobless claims down to new 49-year low"
By Jeffry Bartash
Published: Sept 20, 2018 9:47 a.m. ET
The numbers:
The number of Americans who applied for unemployment benefits in mid-September fell to a fresh 49-year low, partly because of Hurricane Florence but mostly owing to a surging economy.
Initial jobless claims, a rough proxy for layoffs, fell by 3,000 to 201,000 in the seven days ended Sept. 15.
That’s below the 208,000 MarketWatch forecast and marks the lowest level since Nov. 12, 1969.
The monthly average of new claims, meanwhile, slipped by 2,250 to 205,750, the government said Thursday.
That’s also a 49-year low.
The number of people already collecting unemployment benefits declined by 55,000 to 1.65 million.
Known as “continuing” claims, they have fallen to the lowest level since 1973.
What happened:
The storm surge caused by Hurricane Florence in the Carolinas contributed to the low level of claims last week.
Applications in South Carolina fell by an unusually large number, indicating fewer people filed claims due to government office closures and lack of power.
Nonetheless, layoffs in the U.S. have been falling steadily for eight years and they soon could drop below 200,000 for the first time in 50 years.
The comparison between now and a half century ago, of course, are not entirely apt.
The rules determining who’s eligible for benefits have changed over time and the nature of the U.S. labor force is much different now than it was in the late 1960s, when the size of the population was much smaller.
Yet by any measure, layoffs in the U.S. are amazing low.
Big picture:
The U.S. economy sped up in the spring, sailed through the summer and is heading into the fall with plenty of steam.
Record job openings, strong hiring, low unemployment and rising incomes are likely to keep the good times going even with the Federal Reserve poised to raise interest rates again.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 rose in early Thursday trades and both hit all-time highs.
The 10-year Treasury yield has climbed to 3% again with the Federal Reserve preparing to raise U.S. interest rates at the end of September.
https://www.marketwatch.com/story/joble ... 2018-09-20
Re: THE ECONOMY
MARKETWATCH
"Household net worth climbs by $2.19 trillion, driven by stock market, house prices"
By Steve Goldstein
Published: Sept 20, 2018 2:06 p.m. ET
The numbers:
Household and nonprofit net worth rose by $2.19 trillion in the second quarter, the Federal Reserve announced Thursday.
That represents a seasonally adjusted annual rise of 2.1% to $106.93 trillion, driven in part by gains in the stock market as well as in the value of real estate.
What happened:
As the economic cycle grows older — and as the real estate sector bemoans a lack of available homes that has driven up house prices — household net worth continues to gain.
It’s important to stress that the Fed report doesn’t represent the experience for the typical household — this is a report about the aggregate.
A separate Fed survey from 2016 showed a little more than half of all families owned stocks, while about two-thirds of households owned homes.
Meanwhile, domestic nonfinancial debt rose 4.6% as business debt also grew by 4.6% and federal government debt jumped by 6.9%.
Household debt grew a more modest 2.9% while state and local government debt actually fell, falling 0.4%.
The cash that corporations are holding on their balance sheet dipped slightly to $4.35 trillion from $4.38 trillion.
The Fed also changed its definition of liquid assets to include the value of companies’ stocks and mutual funds that they hold, a revision that added $2.17 trillion to the total, a notable shift as companies continue to purchase their own stock.
As the Fed boosts interest rates, companies are getting more exposed to the short end of the curve.
The ratio of short-term debt to the total reached 30.1% from 27.9% in the first quarter, and the highest level since the third quarter of 2009.
One way of measuring stock-market valuation, the ratio of equities to corporate net worth, rose to 116.44% from 115.08% — more or less the same ratio it’s held since the beginning of 2017.
The big picture:
The continued economic boom is bolstering the assets of America, particularly at the upper end of the distribution scale.
At the same time, corporate America, and now the federal government after the passage of tax cuts and spending hikes, are increasingly adding debt.
What they’re saying:
“Household net worth just hit $107 trillion and in relative terms it is at an all-time high of 5.23x nominal GDP."
"What is significant about this is it is coming during a cycle that has been characterized by household de-leveraging."
"It took bubbles of epic proportions in the past to boost net worth/GDP significantly (tech, housing)."
"This time around we have a household balance sheet where liabilities relative to net worth are sitting at a 33-year low."
"Pristine balance sheets coupled with significant momentum from tight labor markets (firming wage growth) and tax reform (firming after-tax income) puts the consumer in a position to continue carrying this cycle for a while,” said economists from RBC Capital Markets.
Market reaction:
This report reflects rather than drives markets.
The Dow Jones Industrial in 2018 has gained 6.8% through Wednesday.
https://www.marketwatch.com/story/house ... ewer_click
"Household net worth climbs by $2.19 trillion, driven by stock market, house prices"
By Steve Goldstein
Published: Sept 20, 2018 2:06 p.m. ET
The numbers:
Household and nonprofit net worth rose by $2.19 trillion in the second quarter, the Federal Reserve announced Thursday.
That represents a seasonally adjusted annual rise of 2.1% to $106.93 trillion, driven in part by gains in the stock market as well as in the value of real estate.
What happened:
As the economic cycle grows older — and as the real estate sector bemoans a lack of available homes that has driven up house prices — household net worth continues to gain.
It’s important to stress that the Fed report doesn’t represent the experience for the typical household — this is a report about the aggregate.
A separate Fed survey from 2016 showed a little more than half of all families owned stocks, while about two-thirds of households owned homes.
Meanwhile, domestic nonfinancial debt rose 4.6% as business debt also grew by 4.6% and federal government debt jumped by 6.9%.
Household debt grew a more modest 2.9% while state and local government debt actually fell, falling 0.4%.
The cash that corporations are holding on their balance sheet dipped slightly to $4.35 trillion from $4.38 trillion.
The Fed also changed its definition of liquid assets to include the value of companies’ stocks and mutual funds that they hold, a revision that added $2.17 trillion to the total, a notable shift as companies continue to purchase their own stock.
As the Fed boosts interest rates, companies are getting more exposed to the short end of the curve.
The ratio of short-term debt to the total reached 30.1% from 27.9% in the first quarter, and the highest level since the third quarter of 2009.
One way of measuring stock-market valuation, the ratio of equities to corporate net worth, rose to 116.44% from 115.08% — more or less the same ratio it’s held since the beginning of 2017.
The big picture:
The continued economic boom is bolstering the assets of America, particularly at the upper end of the distribution scale.
At the same time, corporate America, and now the federal government after the passage of tax cuts and spending hikes, are increasingly adding debt.
What they’re saying:
“Household net worth just hit $107 trillion and in relative terms it is at an all-time high of 5.23x nominal GDP."
"What is significant about this is it is coming during a cycle that has been characterized by household de-leveraging."
"It took bubbles of epic proportions in the past to boost net worth/GDP significantly (tech, housing)."
"This time around we have a household balance sheet where liabilities relative to net worth are sitting at a 33-year low."
"Pristine balance sheets coupled with significant momentum from tight labor markets (firming wage growth) and tax reform (firming after-tax income) puts the consumer in a position to continue carrying this cycle for a while,” said economists from RBC Capital Markets.
Market reaction:
This report reflects rather than drives markets.
The Dow Jones Industrial in 2018 has gained 6.8% through Wednesday.
https://www.marketwatch.com/story/house ... ewer_click