Industrial production shows strength in manufacturing

Here’s how much the Israel-Ukraine aid bill added to the deficit

54 minutes ago

The federal budget now has more red ink than it did in February, thanks to the big federal spending bills passed in the meantime.

A report by the Congressional Budget Office on Tuesday showed the government will spend $1.9 trillion more than it collects in taxes in 2024, up 27% from the most recent estimate by the nonpartisan Research Office in February. A major contributor to the deepening deficit was a $95 billion spending package passed in April to send military aid to Israel, Ukraine and Taiwan.

A few billions here, a few billions, and soon it starts to add up: New budget projections include estimates of how much President Joe Biden’s proposed student loan forgiveness plan would cost ($145 billion); New spending from the bipartisan budget bill passed in March ($60 billion). The office raised its estimate of how much Medicare will cost this year ($50 billion) and the fact that all the money the Federal Deposit Insurance Corporation spent bailing out depositors has not been repaid as quickly as CBO had hoped. Last spring after a string of bank failures.

Taking the longer view, the federal deficit will be 10% higher in 2034 than it was in February.

Industrial production shows strength in manufacturing

4 hours 27 minutes ago

U.S. industrial production had its biggest increase in a year on signs of renewed strength in the manufacturing sector.

Federal Reserve data showed industrial production rose 0.9% in May, beating the 0.4% increase economists had surveyed. The Wall Street Journal and Dow Jones Newswire. Capacity utilization also came in at 78.7%, a tick ahead of expectations.

READ  Indonesia Sharia Economic Festival 2023 records IDR 28.9 trillion transactions

That led to productivity gains in manufacturing, followed by increases in consumer goods and business equipment, noted BMO Capital Markets senior economist Sal Gwatiri, who said the report suggested „the economy hasn’t lost all of its resilience.”

However, Wells Fargo economists Shannon Seery Green and Tim Quinlan noted that the industry still faces several downsides, such as higher interest rates and borrowing costs from lower consumer demand.

„Despite some recent signs of life in the manufacturing sector, we continue to expect only a gradual recovery to emerge,” Wells Fargo economists wrote. „Inventory dynamics are always a challenge to assess in real-time, and despite the potential for some inventory build-up in May, we do not believe manufacturers are overstocking today.”

Meanwhile, U.S. business inventories rose 0.3% in April, after a slight decline in March, according to Census Bureau data released on Tuesday. The results were in line with economists’ predictions.

— Terry Lane

Retail sales fall short of expectations in May

6 hours 30 minutes ago

Stores are doing less business as American consumers’ budgets struggle to keep up with inflation and high interest rates.

Retail sales rose 0.1% from April to May, the Census Bureau reported on Tuesday.1

That was less than the 0.2% increase forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. On top of that, April sales figures were revised downward to a 0.2% decline, not flat as the bureau initially reported in May.

This could be the start of a reversal in the strong consumer spending that buoyed the economy during the pandemic recovery.

READ  Reuters' Tangen indicates that business confidence in the Japanese economy is improving

„Overall, May’s retail sales data is consistent with consumers gradually losing their swagger,” wrote Wells Fargo economists Tim Quinlan and Shannon Seery Crane.

Read more about the retail sales report here.

Dodaj komentarz

Twój adres e-mail nie zostanie opublikowany. Wymagane pola są oznaczone *