Economy

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US Consumer price inflation (CPI) for  February was 0.2% as expected. YoY was 1.5% less than expected. However real average hourly earnings rose 1.9% higher than the previous month. Bottom line is the Federal Reserve remains as clueless about inflation and wages as before.

China released February inflation reports with the consumer price index (CPI), which rose by 1.5 percent year on year as expected but under the CPI target for 2019 of 3 percent. The Producer price index (PPI)rose 0.1 percent y/y under the expected 0.2 percent.

The U.S. jobs report for February disappointed with the lowest NFP jobs since Sept 2017 with just 20k new jobs under an expected 190k and down from January's robust 311k new NFP jobs. It had been the best four month stretch of gains since 2014. Unemployment fell to 3.8% 48 year lows.

The Chinese February trade data were a huge miss with exports down in Yuan terms -16.6% Y/Y from an expected gain of +6.6%. Imports were also missed -0.3% y/y versus an expected +6.2%. Chinese trade balance was CNY 34.46bn from an expected CNY 252.3bn.

The US trade deficit in December rose from the prior month to $59.8 billion seeing the gap widen in 2018 to a 10-year high of $621 billion as goods deficits with China, Mexico, EU widened to records. Tax cuts boosted domestic demand for imports as the strong dollar and retaliatory tariffs hurt exports.

Auto and auto parts companies impact U.S. economic growth which is a debt led consumer economy. With spiralling auto debt it affects the whole finance pyramid. The U.S. auto industry helps drive industrial production, service and finance industries and insight into consumer trends.

Real gross domestic product (GDP) increased 2.6% in the fourth quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. Core PCE +1.7% vs +1.6% expected

China's Official PMI's for February all worsened and missed expectations, highlighting the weakness of the economy and the weight of debt in relation to its economy. The debt load is expected to climb by three to four percentage points in it's the debt-to-GDP ratio.

Oil prices have risen since the December lows on hopes the Russians cut production,despite Russia at new production highs and despite promises in the past. Sanctions are biting and even official unemployment rates are rising, Russia needs income to sate it's huge poor population.

The US trade deficit in November came in 11% lower than estimates, following the October blowout, the largest since 2008. The US had a $49.3 billion deficit upown from $55.7 billion in October with imports falling. The deficit with China fell $2.8 billion to $35.4 Billion.

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