Median US Q2 GDP Growth Estimate Continues To Hold At 2.0%

Projected US economic output for the second quarter is holding steady at 2.0%, based on the median for a set of nowcasts compiled by The Capital Spectator. The estimate reflects a slowdown from Q1’s 3.1% gain, but the softer increase in expected economic activity for the current quarter appears to have stabilized. Today’s median nowcast is unchanged from the moderate 2.0% estimate published two weeks ago.

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Macro Briefing: 25 June 2019

Iran says new sanctions end diplomacy with US: NBC
US tariffs on China reshaping global trade: Bloomberg
Trump attacks the Federal Reserve, again, in tweets: WSJ
Gold rally continues, rising to highest price since 2013: MW
US dollar falls to 3-month low against euro: Reuters
Biggest US banks pass Federal Reserve’s stress test: P&I
Manufacturing growth in Texas picked up in June: Dallas Fed
Below-trend US expansion continued in May: Chicago Fed

Macro Briefing: 24 June 2019

US plans to roll out new sanctions on Iran: Bloomberg
Trump: deportations to start in 2 weeks without immigration reform: Politico
How this week’s Trump-Xi meeting could influence markets: MW
Bonds, stocks and currencies moving in sync more often: WSJ
German business sentiment continues to deteriorate in June: Reuters
Turkey’s Erdogan suffers political setback in Istanbul election: Reuters
If value investing’s dead, here’s why: CNBC
PMI survey data shows US economic output virtually flat in June: IHS Markit
US existing home sales rebounded in May: MW

Book Bits | 22 June 2019

Not Working: Where Have All the Good Jobs Gone?
By David G. Blanchflower
Summary via publisher (Princeton U. Press)
Don’t trust low unemployment numbers as proof that the labor market is doing fine—it isn’t. Not Working is about those who can’t find full-time work at a decent wage—the underemployed—and how their plight is contributing to widespread despair, a worsening drug epidemic, and the unchecked rise of right-wing populism. In this revelatory and outspoken book, David Blanchflower draws on his acclaimed work in the economics of labor and well-being to explain why today’s postrecession economy is vastly different from what came before. He calls out our leaders and policymakers for failing to see the Great Recession coming, and for their continued failure to address one of the most unacknowledged social catastrophes of our time. Blanchflower shows how many workers are underemployed or have simply given up trying to find a well-paying job, how wage growth has not returned to prerecession levels despite rosy employment indicators, and how general prosperity has not returned since the crash of 2008.
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Macro Briefing: 21 June 2019

Trump approved strike on Iran, then cancels attack: CNBC
Hong Kong protests resume over controversial extradition bill: CNN
Eurozone growth remains weak but output picks up (slightly) in June: IHS Markit
Japanese mfg conditions weaken in June; new orders fall sharply: IHS Markit
US stock market (S&P 500) closes at record high after Fed’s rate-cut hints: WSJ
Philly Fed Mfg Index falls sharply in June, signals near-neutral reading: MW
US jobless claims fell last week, pointing to strong labor market: CB
Gold surges to six-year high:

Iran Shoots Down US Military Drone Near Persian Gulf

A US official confirmed that a surface-to-air missile shot down an American drone over the Strait of Hormuz, the gateway to the Persian Gulf, a critical shipping lane for oil exports from the Middle East. Iran also said that it shot down a drone as a warning to the US. The news threatens to further escalate rising tension between the US and Iran. Here’s a summary of key issues on this still-evolving story:

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Macro Briefing: 20 June 2019

Iran shoots down US drone over the Strait of Hormuz: CNN
China’s Xi meets N. Korea’s Kim in Pyongyang: NY Times
US considering new restrictions on issuing H-1B visas to foreigners: Reuters
Fed leaves rates unchanged, hints at possible cuts later in year: Reuters
Former Fed governor warns: removing Powell could bring market ‘turmoil’: CNBC
US housing investments rise to record high: WSJ
Fed leaves 2019 GDP growth forecast unchanged at 2.1%: Federal Reserve
10-year Treasury yield falls below 2.0%, lowest since November 2016: Bloomberg

US Business Cycle Risk Report | 19 June 2019

US economic growth has slowed recently and several key economic indicators are painting a mixed profile about the near-term outlook. The modestly wobbly numbers of late have convinced some analysts to warn that a recession is near. Perhaps, but the data overall still align with a moderate expansion and an econometric projection of the macro trend (via a broad set of indicators listed below) continues to anticipate a low probability of a downturn through July.
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