Consumer spending active in midst of uncertainty. For the second consecutive month, core retail sales generated 4.5 percent annual growth as the softening economic outlook had little effect on shopping habits. While spending has moderated relative to last year, consumption trends are gaining traction, setting the stage for a potentially strong holiday season.
Fed remains accommodative. In an effort to lengthen the economic runway, the Federal Reserve on Oct. 30 cut the overnight rate by 25 basis points for the third time in 100 days. Domestic growth has been moderating this year, falling to 1.9 percent in the third quarter as the trade war with China curtailed exports and ebbed inventory investment. With tariffs on Chinese goods increasingly coming into play, the economy could face additional pressure, but… Read More
Job growth continues at subdued but consistent pace. Organizations added about 136,000 positions in September, slightly down from the 168,000 roles filled in August. The more modest rate of employment growth nevertheless exceeded the number of new entrants into the workforce, sustaining the current labor shortage. Employers’ staffing needs will support the hiring of about 2 million personnel by year end. Potential economic headwinds, originating from trade tensions and other factors, create some risk of… Read More
Unemployment stays flat as hiring activity trends down. Employers created 130,000 jobs in August, the lowest monthly total since May. Year to date, approximately 1.3 million people have been added to payrolls, compared with 1.9 million during the same time period in 2018. While employment growth slowed, the total number of unemployed remained about the same month to month, maintaining a jobless rate of 3.7 percent.
Brief yield-curve inversion sparks volatility. The short-lived inversion of the 10-year and two-year Treasury yield curve sparked significant financial market volatility as the closely monitored sign of an impending recession delivered a warning alert. Despite efforts by the Federal Reserve and generally strong economic metrics, including steady job creation, low inflation, above-average retail sales growth and elevated small-business confidence, financial markets remain concerned about ongoing trade disputes with China. The flight to safety sparked by… Read More
Fed has increasingly accommodative stance as trade battles weigh on economy. At its latest meeting, the Federal Reserve showed a greater willingness to ease policy rates in the near term. Chairman Powell pointed to weaker inflation and economic data, together with uncertainty amid trade tensions between the United States and China. The Fed reinforced its willingness to let inflation rise above the 2 percent level going forward, a no-table shift in its historical policy framework… Read More
Mortgage rates falling but home sales still soft. Though mortgage rates have declined 80 basis points since they peaked last November, single-family home sales remain sluggish. An increased preference for rentals, the limited number of entry-level homes for sale and caution surrounding the economic outlook are restraining buyers. Move-up homebuyers are less active in the market than in previous cycles, while renters are choosing to remain in apartments. Rentals are also attracting some baby boomers… Read More
Recent hiring trends fall below pre-tax stimulus job growth. Employers created 224,000 jobs in June, bringing the total so far this year to 1.03 million. That is the lowest first-half sum since 2010, although comparable periods in 2016 and 2017 reported only slightly higher employment growth. The fiscal stimulus from tax reform encouraged greater hiring in 2018, but as those effects fade, staffs are expanding at a slower pace, further hindered by historically low unemployment.
Hiring softens, unemployment rate unchanged in May. Employers added 75,000 jobs last month, maintaining a historically low unemployment rate of 3.6 percent. Downward revisions to March and April’s figures offset June’s gains, taking the average number of new hires to 164,000 per month in 2019. Last year, a monthly average of 223,000 jobs were created.
Consumption rise supported by diverse drivers. Retail spending picked up in June, climbing 3.8 percent on an annual basis for the third time in the past four months. Stable consumption is supported by a strong economic foundation, highlighted by continued job creation and healthy inflation. The Fed will likely cut interest rates at the end of July, providing a boost to the economy.