This Week In The Economy: Encouraging China GDP Data, How Much Will Boeing’s Woes Impact U.S. Exports? The Lukewarm U.S. Economy

Welcome to a regular snapshot-review of U.S. and international economic news that aims to 1) provide a window into the challenges and decisions facing businesses today, 2) determine the direction of economic policy — such as the speed at which central banks decide to raise interest rates, and 3) assess what the impact will be for consumers.

China’s Q1 Economic Growth Allays Slowdown Concerns

China this week reported decent growth in economic activity in the first quarter, an indication that perhaps fears of an pronounced slowdown in the world’s second largest economy might be premature.

OECD Warns of Difficult Times Ahead For China

The above data dropped in the same week that a report by the Organisation for Economic Co-operation and Development (OECD) blamed slowing investment for the recent “slackening” in China’s economic growth. It said excess capacity in a number of industries weighs on business investment, while infrastructure investment has also weakened as local governments’ borrowing has been reined in.

U.S. Trade Deficit Narrows In Feb, Short-lived Jump In Exports?

The U.S. trade deficit narrowed to $49.4 billion in February from $51.1 billion in January, as the increase in exports outweighed the more measured rise in imports.

U.S. Economy Continues Moderate Growth - Manufacturing Sector Activity Remains Sluggish, Strong Retail Sales, Record Fall In Claims For Unemployment Benefits

The Federal Reserve’s qualitative assessment of U.S. economic conditions — commonly known as the Beige Book — was released this week, and economic activity is said to have expanded at a “slight-to-moderate pace” in March and early April. The outlook among those interviewed for the report is same to be for more of the same in the months ahead.

Source: FTN Financial, U.S. Census Bureau

The U.S. Labor Department reported this week that initial claims for state unemployment benefits fell last week by 5,000 to 192,000 — the lowest level for initial claims since September 6, 1969 when it was 182,000. The 4-week moving average, which is less volatile than the weekly number, was 201,250, the lowest level for this average since November 1, 1969 when it was 200,500.

Meanwhile the housing market continues to stumble along, with applications for permits to build private homes down 1.7% in March compared to February, and -7.8% vs. the same month a year ago. Breaking ground on building new homes also took a dive, as privately‐owned housing starts in March were at an annual rate of 1,139,000 — 0.3% below February and a whopping 14.2% below March 2018.

In The News….

Germany, Europe’s largest economy, lowers expectations for economic growth — predicting weakest expansion in six years.

Chart du Jour — The Industries Driving U.S. Economic Growth In 2018

Founder — SW4 Insights. Public policy junkie and Central Bank Watcher. Recovering journalist and former Senior Director at Hamilton Place Strategies

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