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The Fed’s Dilemma Isn’t Going Away Under Powell Inflation and wage increases continue to undershoot  expectations at the same time the central bank confronts forces pressuring it to credit tightening.

  • February 2, 2018
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With the pickup in global economic growth, central banks — except for Japan’s — are shifting to tightening from extremely easy money, including massive quantitative easing and trivial, if not negative, short-term interest rates. The Federal Reserve has raised its target for the federal funds rate five times since December 2015 and is suggesting three

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U.S. gains 200,000 jobs in January; wage growth hits 8 1/2-year high

  • February 2, 2018
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The U.S. generated 200,000 new jobs in January and yearly wage growth hit an eight-and-a-half-year high, highlighting the strongest labor market in two decades. Economists polled by MarketWatch had predicted a 190,000 increase in nonfarm jobs. The unemployment rate was unchanged at a 17-year low of 4.1%. The big news was a strong gain in

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Construction spending climbs for fifth month to new record

  • February 1, 2018
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The Commerce Department reported a 0.7% gain in construction spending in December, and a 2.6% advance over the last 12 months. That’s the fifth monthly gain in a row and a record high. November’s previously reported 0.8% gain was revised lower to show a 0.6% increase.

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ISM manufacturing index slips to 59.1 in January

  • February 1, 2018
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The Institute for Supply Management said its manufacturing index in January slipped to 59.1% from 59.3% in December. Economists polled by MarketWatch expected a reading of 58.6%. Separately, IHS Markit said its manufacturing PMI remained steady at a final reading of 55.5 in January from the flash estimate. This was up from 55.1 in December.

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U.S. productivity dips 0.1% in fourth quarter, ends 2017 on sour note

  • February 1, 2018
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The productivity of American firms and workers fell at a 0.1% annual pace in the fourth quarter. Economists polled forecast a 0.2% gain. Output — goods and services produced — rose 3.2% in the fourth quarter. Yet hours worked grew slightly faster at 3.3%. The difference between the two led to the small decline in

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Jobless claims fall slightly to 230,000, layoffs extremely low

  • February 1, 2018
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The number of people who applied for unemployment benefits in late January fell by 1,000 to 230,000, keeping initial U.S. jobless claims near a 45-year low. Economists polled had forecast a 240,000 reading in the seven days ended January 27. The more stable monthly average of claims fell by 5,000 to 234,500, the government said

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Fed will be forced to raise rates more rapidly than expected because of accelerating economy

  • February 1, 2018
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The Fed may be forced to raise rates more rapidly than the market is anticipating due to accelerating economic conditions. Economists, fund managers and strategists now see the funds rate ending 2018 at 2.24 percent, up about a quarter point from the prior survey. Respondents continue to be unenthused about the outlook for stocks, seeing

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U.S. 10-year yield jumps above 2.75%, highest since April 2014

  • February 1, 2018
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U.S. yields continued higher on Thursday, with the rate on the 10-year benchmark note rising 4 basis points to 2.75%. The gain comes after a choppy session on Wednesday when yields initially popped after the Federal Reserve struck a hawkish in its policy statement, but then ended little changed on the day. UBS on Thursday

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Fed expects inflation ‘to move up’ in 2018, signaling March rate hike

  • January 31, 2018
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The Federal Reserve on Wednesday left a key short-term U.S. interest rate unchanged, but the central bank also said it expects inflation “to move up this year” in a sign it’s likely to hike rates at its next meeting in March. The central bank said inflation is likely to stabilize around its 2% target, dropping

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Pending home sales eke out 0.5 percent gain in December as supply shrinks to record low

  • January 31, 2018
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The supply crisis is hitting housing hard, as strong demand quickly eats up what few listings there are. Home shoppers signed 0.5 percent more contracts to buy existing homes in December compared to November, according to the National Association of Realtors. The supply of homes for sale at the end of December fell to the

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