Month: January 2020

By Thomas Cooley and Peter Rupert

The BEA announced that real GDP for Q4 increased 2.08%, nearly the same rate as in Q3. Real GDP increased 2.3% in 2019, 2.9% in 2018 and 2.4% in 2017. Personal consumption expenditures moderated, growing 1.8% and was up 2.6% in 2019. Gross private domestic investment fell considerably, down 6.1%, after falling 1.0% in Q3 and 6.3% in Q2. Non-residential structures fell by 10.1% and fell by 9.9% in Q3, 11.1% in Q2 and was down 4.4% in 2019.

The FOMC announcement seemed a yawner with nothing much to report other than that they are maintaining their stance from the last meeting. Boeings ongoing problems, the Coronavirus Epidemic, and the vagaries of the trade wars represent looming concerns for the economy. The outlook for the first quarter of 2020 is distinctly cloudy.

By Thomas Cooley and Peter Rupert

The BLS announced that payroll employment in December rose 145,000 with 139,000 in the private sector. October saw 4,000 in downward revisions and November down 10,000. Manufacturing declined by 12,000 while the construction sector gained 20,000.

Average weekly hours of work remained at 34.3 for the third straight month. Average hours are the lowest they have been since 2011 suggesting less intense use of the labor force. Average hourly earnings rose slightly to $28.32 from $28.29.

BTW, women are now 50% of the total nonfarm workforce.

Overall the data are consistent with the view of an economy that is growing at a most pace. The unemployment rate remains at a fifty year low, jobs are growing but more slowly and wages are keeping growing in real terms but at a slow rate.

All of this suggests that the Fed has achieved its goal of a soft landing at the end of a record expansion. Few will anticipate more stimulus from monetary policy.