Weekly economic update

Economic Update for July 16, 2018

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

economy

  • Wholesale sales jumped 2.5% in May, the Census Bureau announced.
  • The Producer Price Index for final demand rose 0.3% in June, according to the Bureau of Labor Statistics.
  • The CPI rose 0.1% and core CPI advanced 0.2% in June, the Bureau of Labor Statistics reported.
  • Import prices fell 0.4% and export prices rose 0.3% in June, the Bureau of Labor Statistics stated.

employment

  • Initial jobless claims fell by 18,000 to 214,000 in the week ended July 7, 2018, according to the Labor Department.

profits

  • The estimated earnings growth rate for the S&P 500 Index is 20.0% for the second quarter, according to FactSet. If the final rate is 20.0%, it will be the second highest earnings growth rate since the third quarter of 2010 (34%), the report stated.

emotion

  • The University of Michigan’s index of consumer sentiment fell to 97.1 in July from 98.2 in June.
  • The NFIB small-business optimism index fell 0.6 points to 107.2 in June.
  • The Survey of Consumer Expectations showed no change in inflation expectations in June, according to the New York Federal Reserve.

europe

  • The ZEW Indicator of Economic Sentiment for Germany declined in July.
  • In Germany, exports fell 1.3% in May, the Federal Statistical Office stated.
  • The United Kingdom’s Index of Production fell 0.6% for the three months ending in May, the Office for National Statistics noted.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.

risks

  • The strengthening U.S. dollar, widening credit spreads, and higher oil prices are putting pressure on select emerging-market countries.
  • Worries of dwindling global spare capacity in oil production may cause prices to spike, risking an inflation scare.
  • The Fed appears to be on course to invert the yield curve.