Economy Weekly: Week of October 14, 2019
QUOTE OF THE WEEK: “By 2020, tariffs already imposed or announced would shrink global GDP by 0.8%. That is equivalent to the whole economy of Switzerland.” - International Monetary Fund Managing Director Kristalina Georgieva. [CNBC, 10/17/19]
STAT OF THE WEEK: "Just 17% of households reported their financial condition had improved in the last 6 months, down 3 percentage points from a year earlier. Household spending accounts for about 70% of U.S. economic activity as measured by gross domestic product." [Bloomberg, 10/08/19]
ECONOMIC NEWS YOU MAY HAVE MISSED
- U.S. households are struggling to get by financially. According to Bloomberg: “An above-average percentage of consumers – 44% – reported incomes that don’t cover their expenses, or barely cover them, according to a quarterly UBS survey of around 2,100 U.S. respondents. That figure has risen by a percentage point over the last year. And 40% said they had encountered a credit problem like trouble obtaining a credit card or a student loan default, a 3 percentage-point rise from a year ago, the survey said.” [Bloomberg, 10/08/19]
- In September, the manufacturing sector plummeted deeper into contraction. The Washington Post reported: “The U.S. manufacturing index fell to 47.8 in September from 49.1 in August, the worst reading in more than a decade as the industry continues its contraction and companies point to President Donald Trump's escalating trade war with China.” [Washington Post, 10/01/19]
- Job openings sink. Washington Post reporter Heather Long tweeted: “Job openings sink to lowest level since March 2018. This is a clear sign companies are starting to pull back on hiring as the trade war [and] global slowdown take hold. There were 291,000 fewer job openings in August 2019 vs. August 2018.” [Tweet, 10/09/19]
- The global economy is taking a hard hit, in part due to the President’s trade feud with China. From the Wall Street Journal: “The global economy in 2019 is on course for its weakest year of growth since the financial crisis, weighed down by tensions that have slowed international trade to nearly a standstill.” [WSJ, 10/15/19]
- Farmers are growing more pessimistic. The Washington Post reported: “‘Farmers grew much more pessimistic about current conditions on their own farms and in the U.S. agricultural economy in late summer,’ according to the latest installment of the Purdue University/CME Group Ag Economy Barometer, a monthly survey of the sector. Farmers' outlook for making large investments such as machinery or buildings also dropped, for the second month in a row, according to a release describing results of the survey.” [Washington Post, 10/02/19]
- Retail sales fell last month. From MarketWatch: “Sales at U.S. retailers fell in September for the first time in seven months as most stores posted lower receipts, signaling that a widely expected slowdown in consumer spending might under way.” [Market Watch, 10/16/19]