Economic Risk Factor Update: December 2018

December 13, 2018

The good news is that confidence continued to be strong last month. Business sentiment remains close to a 21-year high, and consumer confidence remains very close to an 18-year high. Although job growth declined, it was after a very strong month, and it remained at healthy levels. Longer-term interest rates, which had been a concern after a spike, also moderated. Overall, the economic news remains solid, which should support continued growth.

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Economic Risk Factor Update: November 2018

November 6, 2018

The good news is that confidence remained strong last month. Business sentiment bounced back in September to a 21-year high and, despite a small pullback, remains very close to that level. Consumer confidence rose even further, to an 18-year high. Even better, job growth rebounded significantly after a weak month. Overall, the economic news remains solid, which should support continued growth.

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Economic Risk Factor Update: October 2018

October 9, 2018

The good news is that confidence was strong last month. Business sentiment bounced back in a big way, to a 21-year high. Consumer confidence rose even further, to an 18-year high. But the less good news is that job growth weakened on a monthly basis and interest rates rose. For both, though, there are other factors to consider. Job growth, for example, was revised up significantly for previous months, more than offsetting the monthly shortfall and keeping the annual growth figures healthy. Plus, rising interest rates widen the spread, reducing the chance of a yield curve inversion.

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Economic Risk Factor Update: September 2018

September 7, 2018

Last month, I reported that business confidence had pulled back in July and that job growth had weakened. But the data bounced back in the most recent report, for August, suggesting that July was an outlier and the positive trends remain in place. While the question of whether the tariffs are finally starting to have an effect remains open, the current data indicates that, if so, the effect is minor.

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Economic Risk Factor Update: August 2018

August 7, 2018

For the first time in quite a while, we saw disappointing news in the monthly reports for two major data points. First, job growth weakened significantly. Although the prior months were revised upward—more than making up for the shortfall—the question remains as to whether the labor market is getting closer to tapped out. Second, business confidence pulled back significantly. It remains expansionary, but this drop is an unusual move and raises the question of whether the tariffs are finally starting to have an effect.

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Economic Risk Factor Update: July 2018

July 10, 2018

Despite rising concerns as the Fed raised rates and trade tensions ballooned in June, the data remained significantly positive in all four major economic risk factors we track here. Job growth pulled back slightly on a monthly basis, but it continued to accelerate on an annual basis. Consumer confidence remained strong, and business confidence increased—taking the trend back to positive territory. Finally, while the Fed raised interest rates, as expected, it also endorsed the strength of the economic expansion in its statement and press conference, which was helpful. Overall, the strong economic data indicates that growth continues and that the soft spot earlier this year was just that.

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Economic Risk Factor Update: June 2018

June 7, 2018

May’s data improved over an already solid April. Job growth accelerated further, and consumer confidence remained strong. Business confidence also bounced back, taking the trend back to positive territory. Finally, Fed policy continues to be stimulative, which is helpful despite the likely rate increase this month. Overall, the economic data indicates that growth continues and that the recent soft spot may be passing.

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