Bank Of America's 10 Themes Impacting The Economy
In a new report, analysts at Bank of America compiled a list of the top 10 themes that have been impacting the economy in recent weeks. Here’s a breakdown of their list.
1. April Showers
These “showers” are not falling precipitation, but rather the latest employment numbers to drop from the month of April: nonfarm payrolls grew by 223,000, unemployment fell from 5.5 percent to 5.4 percent, labor force participation rate climbed to 62.8 percent and average hourly earnings inched up by 0.1 percent month-over-month.
2. Should The Fed Declare Victory?
The debate rages on about whether the Federal Reserve is doing more good or more harm by maintaining interest rates at zero.
3. Trade deficit weighing on GDP
March’s trade deficit grew to $51.4 billion compared to $35.9 billion in February, leading analysts to cut their Q1 GDP tracking estimate by 0.6 percent.
4. Factory Orders Positive, But Inventory Weak
Factory orders in March were up 2.1 percent over February’s numbers, but weakness in nondurables inventories could have a meaningful impact on overall GDP numbers.
5. Productivity Plunge
Nonfarm productivity fell 1.9 percent quarter-over-quarter in Q1, while labor costs spiked 5.0 percent.
6. Home Prices On The Rise
According to CoreLogic, home prices climbed 5.9 percent year-over-year and 13.3 percent month-over-month in March.
7. Resilient Services
The IMS nonmanufacturing index climbed from 56.5 in March to 57.8 in April.
8. Commercial Real Estate (CRE) Lending Standards Eased
The April Senior Loan Officer Opinion Survey (SLOOS) indicated that banks have loosened standards on their (CRE) lending policies.
9. Jobless Claims Remain On The Down-Low
Initial jobless claims of 265,000 for the week ending May 2 remain near the cycle-low of 262,000 recorded the prior week.
10. Wholesale Inventories Inch Higher
Wholesale inventories climbed 0.1 percent month-over-month in March.
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