Banks and the Economy

Manufacturing Sector Growth Slid Back in December

The ISM Manufacturing Index registered 54.1 points in December, down 5.2 percentage points from the previous month, according to the Institute for Supply Management. December’s reading indicates the one-hundred-and-sixteenth consecutive month of expansion in manufacturing, as readings over 50 points denote expansion. Of the eighteen manufacturing industries, eleven reported growth, while six reported contraction. Nine of the eleven manufacturing index ...

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ABA Seeks Stress Test Relief for ‘Category IV’ Regional Banks

In a letter to Federal Reserve Vice Chairman for Supervision Randal Quarles in late December, the American Bankers Association urged the Fed to issue an interim final rule providing relief from the 2019 stress testing cycle for smaller regional institutions (“Category IV banks”).  

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Consumer Confidence Declined in December

The Conference Board Consumer Confidence Index decreased 8.3 points to 128.1 in December. The Present Situation Index decreased 1.1 points to 171.6. The Expectations Index fell 13.2 points to 99.1. “Consumer Confidence decreased in December, following a moderate decline in November,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Expectations regarding job prospects and business conditions ...

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Durable Goods Orders Rose 0.8 percent in November

New orders for manufactured durable goods increased 0.8 percent in November to $250.8 billion, following two consecutive monthly decreases including a 4.3 percent decrease in October, according to the U.S. Census Bureau. Transportation equipment drove the increase, rising 2.9 percent to $87.0 billion over the month. New orders, excluding the transportation sector, decreased 0.3 percent. Excluding defense, new orders decreased ...

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Third Quarter GDP Third Estimate Revised Down to 3.4 percent

Real GDP grew at a seasonally adjusted annual rate of 3.4 percent during the third quarter of 2018, according to the Bureau of Economic Analysis’s third estimate, revised down from the “second” estimate. Personal Consumption and Expenditures (PCE) and exports were revised down, and private inventory investment was revised up. The general picture of economic growth remained the same. Real ...

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FOMC Raises Rates but Lowers Expected 2019 Hikes to Two from Three

At its meeting today, the Federal Open Market Committee (FOMC) unanimously voted to raise the target range for the federal funds rate to 2.25 to 2.5 percent. It was the fourth hike this year. However, the committee signaled only two rate increases next year, down from three in its previous projections. Committee members kept in the language that they expect ...

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Existing-Home Sales Increased in November

Existing-home sales increased 1.9 percent, the second consecutive monthly increase, to a seasonally adjusted annual rate of 5.32 million in November, according to the National Association of Realtors (NAR). This followed a 1.4 percent increase in October. Sales are 7.0 percent below the November 2017 level.Lawrence Yun, NAR chief economist, says two consecutive months of increases is a welcomed sign ...

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Housing Starts Increase in November

Housing starts increased to a seasonally adjusted annual rate of 1.256 million in November, according to the U.S. Department of Commerce. The rise was 3.2 percent above the revised October rate of 1.217 million but is 3.6 percent below the November 2017 rate. Single-family home starts declined 4.6 percent from last month. Housing activity increased in two of the four regions as ...

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Homebuilder Confidence Down in December

The National Association of Home Builders/Wells Fargo Housing Market Index fell to 56 in December, four points below November’s reading. This is the lowest reading since May 2015. “We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs,” said NAHB Chairman Randy Noel, a custom home builder ...

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