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Economic Briefing Report

With a handful of economic indicators indicating a moderate or high level of risk warrants some vigilance.  However, the majority of the more prominent indicators such as GDP, unemployment, and inflation are showing low signs of risk.

Comments on this week’s report:

  • The yield curve remains relatively flat as the 10-year minus 2-year spread sits at 0.25% while the 10-year minus 3-month is inverted at -0.11%, indicating a moderate to high level of risk.
  • Industrial Production was growing at a concerning 0.87% last month but has since recovered and is now growing at a relatively strong year-over-year rate of 2.05%.
  • Growth in total business inventories continues to grow at a stable year-over-year rate of 5.30%, up from 5.05% the month prior.
  • The amount of commercial loans issued has slowed down slightly as its year-over-year rate falls from 7.62% to 7.41%, but still does not indicate any high degree of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

The overall risk of the economy remains relatively low, as such indicators as unemployment, GDP, and inflation remain at healthy levels.  However, some indicators such as treasury spreads, industrial production, corporate profits, and CFNAI indicate things could be slowing down.

Comments on this week’s report:

  • The yield curve remains relatively flat as the 10-year minus 2-year spread sits at 0.25% while the 10-year minus 3-month is inverted at -0.14%, indicating a moderate to high level of risk.
  • Job growth, as measured by total nonfarm payrolls, slowed down as its year-over-year growth rate dropped from 1.71% to 1.58%, however it still indicates a low level of risk. Meanwhile the unemployment rate remains near all-time lows at 3.6%.
  • The core Consumer Price Index (CPI), a measure of retail inflation, dropped from 2.06% to 1.99% yet still remains comfortably near 2.0% and shows no sign of risk.
  • The University of Michigan Consumer Sentiment Index has been trending lower over the past year but still remains relatively high and shows no immediate sign of risk.
  • Corporate profits are slowing as its year-over-year growth rate sits at a relatively low 1.64%. Should growth in corporate profits continue to slow, a moderate or high level of risk may be warranted.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

More economic indicators are now indicating a moderate level of (and some a high level of) risk as what is anticipated to be a prolonged trade war between the U.S. and China weighs on such indicators as Industrial Production, New Orders of Durable Goods, and Chicago Fed National Activity Index: Production and Income.

Comments on this week’s report:

  • The spread between the 10-year treasury yield and the 2-year treasury yield remains vary narrow at 0.19%, while the 10-year minus 3-month spread is inverted at -0.21% and indicates a high level of risk.
  • Real GDP (which is adjusted for inflation) was revised slightly downward but continues to grow at a strong year-over-year rate of 3.18%, and does not indicate any sign of risk.
  • Core Personal Consumption Expenditures (PCE), a measure of inflation, continues to grow at a relatively low year-over-year rate of 1.57% when compared to the Fed’s 2.0% target, and indicates a moderate level of risk.
  • Corporate profits are growing at a very strong 11.15% year-over-year rate, however, this may be overstated due to the -12.70% drop it experienced a year ago (as indicated in its 3-year trend).
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

As what is anticipated to be a prolonged trade war between the U.S. and China, economic indicators such as Industrial Production, Durable Goods Orders, and the Chicago Fed National Activity Index: Production and Income move from a low level of risk to moderate or even high level of risk (for Industrial Production).  However, some of the more prominent indicators such as GDP growth, inflation, and unemployment still indicate a low level of risk.

Comments on this week’s report:

  • Treasury spreads remain historically very narrow as the 10-year minus 2-year sits at 0.18% and the 10-year minus 3-month spread sits at 0.0%.
  • Growth in new orders of durable goods has changed from a low to moderate level of risk as its year-over-year rate of change drops from 0.82% to -0.05%.
  • The St. Louis Financial Stress Index remains near all-time lows at -1.25 (readings below zero indicate below average financial stress) and does not show any sign of risk.
  • The Case-Shiller Composite Home Price Index continues to grow at a sustainable 2.63% and currently indicates a low level of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

The U.S. economy is showing a relatively higher level of risk as the CFNAI three-month average continues to trend away from zero, treasury spreads remain historically very narrow, and industrial production growth slows significantly.  However, the overall economy is not showing any immediate sign of a recession as GDP continues to grow at a strong rate, inflation remains near a sustainable 2.00%, and unemployment sits near all-time lows.

Comments on this week’s report:

  • Treasury spreads remain historically very narrow as the 10-year minus 2-year sits at 0.21% and the 10-year minus 3-month spread at -0.1%.
  • The Chicago Fed National Activity Index (CFNAI) 3-month moving average remains below zero for the third consecutive month as is drops from -0.24 to -0.32, indicating a moderate level of risk.
  • Industrial Production growth indicates a high level of risk as its year-over-year rate drops from 2.32% to 0.89%.
  • Growth in housing still indicates a moderate level of risk despite its year-over-year rate increasing from -12.13% to -2.53% as it still remains below 0.00%.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

Despite a slight increase in the number of economic indicators going from a “low” level of risk to a “moderate” level of risk, the overall economy continues to look healthy as GDP grows at a year-over-year rate of 3.21%, inflation remains near 2.00%, and unemployment remains near all-time lows.

Comments on this week’s report:

  • Treasury spreads narrow further as the 10-year minus 2-year spread drops from 0.22% to 0.19% and the 10-year minus 3-month spread drops from 0.09% to 0.04%.
  • The core Consumer Price Index (CPI), a measure of inflation, remains comfortably near 2.00% as it increased from 2.04% to 2.06%.
  • The year-over-year growth in the number of business loans issued dropped from 10.01% to 7.50% but still shows a low level of risk as its growth remains historically high.
  • The St. Louis Fed Financial Stress Index remains near all-time lows as it dropped from -1.34 to -1.35 (any reading below zero indicates low levels of financial stress).
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

The overall risk of the U.S. economy to experience a recession remains relatively low as jobs growth picks up, and GDP and inflation continue to grow at sustainable rates.  However, historically narrow treasury spreads and the Chicago Fed National Activity Index (CFNAI) three-month average below zero warrants some vigilance.

Comments on this week’s report:

  • Treasury spreads were little changed and remain historically very narrow as the 10-year minus 2-year spread and the 10-year minus 3-month spread sit at 0.22% and 0.09%, respectively.
  • Job growth continues to grow at a strong rate as the U.S. added 263,000 jobs in April and increased its year-over-year change from 1.72% to 1.76%.
  • As a result of the increase in jobs and virtually unchanged labor force participation rate, the unemployment rate dropped from 3.80% to 3.60%.
  • Wage growth, as measured by the change in average hourly earnings, continues to grow at a sustainable rate as its year-over-year growth increases from 3.33% to 3.37%.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

Despite the fair amount of listed indicators signaling a moderate level of risk, the overall risk of the economy remains relatively low as GDP continues to grow at a strong pace, unemployment remains low, and inflation remains near 2.00%.  However, treasury spreads remain historically very narrow and the CFNAI three-month average remains below zero, which warrants come caution.

Comments on this week’s report:

  • Treasury spreads remain historically very narrow as the 10-year minus 2-year spread and the 10-year minus 3-month spread sit at 0.21% and 0.11%, respectively.
  • GDP growth continues to grow at a relatively strong pace as it year-over-year growth rate increases from 2.97% to 3.21%.
  • Core Personal Consumption Expenditures (PCE), a measure of inflation, slowed as its annual growth rate dropped from 1.68% to 1.55% and now indicates a moderate level of risk.
  • New orders of durable goods was little changed and remains at a low level of risk as its year-over-year rate drops from 2.32% to 2.28%.
  • The University of Michigan’s Consumer Sentiment index increased from 93.80 to 98.40 and now indicates a low level of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

The overall risk of the economy remains moderately higher than it has in the more recent past, but still shows a relatively low amount of risk.  Despite most of the listed indicators showing a “moderate” or “low” level of risk, some vigilance is warranted as the yield curve remains relatively flat and CFNAI remains below zero.

Comments on this week’s report:

  • Treasury spreads remain historically very narrow as the 10-year minus 2-year spread and 10-year minus 3-month spread sit at 0.18% and 0.15%, respectively.
  • Housing starts continue to fall as its year-over-year rate of change dropped from -11.47% to -14.17%, and shows a moderate level of risk.  Should housing starts continue this trend, a high level of risk may be warranted and thereby should be more closely monitored.
  • Growth in total business inventories dropped slightly as its year-over-year change fell from 5.21% to 4.92%, but still shows a low level of risk.
  • The St. Louis Fed Financial Stress Index continues to trend lower as it drops from -1.27 to -1.31 as it nears all-time lows and shows virtually no level of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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Economic Briefing Report

Treasury spreads remain historically very narrow, inflation is growing at a sustainable rate, unemployment is near all-time lows, and the CFNAI 3-month moving average is below zero.  With this in mind, the economy appears to be at a moderately-low level of risk of going into a recession.

Comments on this week’s report:

  • Treasury spreads were little changed with the 10-year minus 2-year dropping one basis point to 0.16% and the 10-year minus 3-month widened by two basis points to 0.09%.  Spreads still remain historically very narrow.
  • The core Consumer Price Index (CPI), a measure of inflation, also saw little change in its year-over-year growth as it dropped from 2.08% to 2.04% and remains comfortably near 2.00%.
  • Industrial production growth dropped as its year-over-year rate fell from 3.47% to 2.77%, yet it still shows a low level of risk as it continues to grow at a fairly sustainable rate.
  • Growth in the amount of commercial business loans saw a moderate decrease as its year-over-year rate dropped from 10.33% to 10.01% and still shows no sign of high or moderate risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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