Economy

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With tariffs and trade wars front and center the US trade deficit has been a hot topic. In July the US had a $50.1 billion deficit up from the revised $45.7 billion in June. The deficit with China was $36.83 billion likely to fuel the tariff threats from the U.S. to China.

Manufacturing surged in August as measured by the ISM by 61.3 from an expected 57.6. However that is just half the story, 15 minutes earlier US August final Markit Manufacturing  was reported as the lowest since November 2017  with PMI 54.7 vs 54.5 expected. Sceptism should be applied to both reports.

The American consumer appears to be not thrown off by trade wars and divisive politics. The record high stock markets have helped fuel consumer confidence to the highest level in 18 years as measured by the US Conference Board in August.

The German Bundesbank in it's monthly report said that Germany's growth in the third quater may be somewhat slower than the first half of the year. The central bank said the economy is on a 'sound' path driven by household consumption'

Australia saw much stronger than expected full time jobs growth in July, however the employment change number was lower. The unemployment rate edged down to 5.3% with June employment revised higher suggesting shrinking spare capacity in the labor market.

With tariffs and trade wars now dinner conversation the US trade deficit has been a hot topic. In June the US had a $46.3 billion deficit up from the $43.2 billion in May. The deficit with China was $32.5 billion.

U.S. July non farm payrolls were lower at 157,000 then the expected 193,000, following may when NFP added 248,000 jobs. We are still digesting the effect trade wars will have on jobs with tensions affecting employers.

Real gross domestic product (GDP) increased 4.1% in the second quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. Core PCE +2.0% vs +2.2% expected

US housing starts in June fell 12.3% to 1173k reversing the May surge of 1337K  which was a 11 year high. Mortgage data was also weak today. Housing numbers have been falling for a few months after a big jump in 2017 with the Fed raising rates.

U.S. June non farm payrolls were higher at 213,000 then the expected 195,000, following May when NFP added 244,000 jobs. We are still digesting the effect trade wars will have on jobs. Fed rates have doubt after hourly earnings.

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