Breaking News
Sep 26, 2024
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Initial weekly jobless claims decreased 4,000 to 218,000 at the end of the last week, the U.S. Department of Labor reported Thursday.
Jobless claims dropped to a 4-month low, and continuing claims rose 13,000 to 1.834 million in the previous week.
Despite the recent decline in jobless claims, labor market conditions have softened from a year ago and earlier months in the year as employers avoid adding new staff.
Investors are now awaiting the release of monthly nonfarm payroll data, which could provide additional insights into the current conditions of the labor market. -
New orders for manufactured durable goods were nearly unchanged from the previous month in August, the U.S. Census Bureau reported Thursday.
New order growth slowed sharply from the 9.8% surge in July, which was the highest rate of growth in four years.
The better-than-expected orders contrasted with the growing pessimism about manufacturing sector activities, suggesting that the current slowdown may be temporary.
New orders excluding transportation increased 0.5%, and excluding volatile defense goods eased 0.2%.
On an annual basis, new orders for durable goods declined 1.3%.
Non-defense capital goods orders declined 1.3% from the previous month in August, and excluding volatile aircraft orders rose 0.2%.
From the previous year, non-defense capital goods orders dropped 6.5%, and excluding aircraft rose 0.3%.
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The sale of single-family houses in August declined 4.7% from the previous month to a seasonally adjusted annual rate of 716,000. the U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday.
The single-family house sale declined from the July's revised rate of 751,000, but is 9.8% higher than the estimate of 652,00 in August of last year.
The new home month of supply decreased by 1.3% from a year ago and rose by 6.8% form the previous month to a supply of 7.8 months at the current sales rate.
The median sales price of new houses sold in August 2024 was $420,600, and the average price was $492,700.
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On Monday, the manufacturing and service sector activities survey kicked off a busy week of economic releases.
The S&P Global Flash U.S. Composite PMI declined to 54.4 in September from 54.6 in August.
The private sector activity growth remained strong, suggesting a robust economic expansion in the third quarter.
Growth in the service sector remained strong, but it edged lower to 55.4 in September from 55.7 in August, but the contraction in manufacturing deepened to 47 from 47.9 in the previous month.
Prices for goods and services rose at the fastest pace since March; input costs advanced the most in a year.
Investors are looking forward to the release of the PCE price index, an alternative measure of inflation, amid expectations of a monthly increase of 0.2%.
Second quarter GDP growth revision, durable goods orders, and new and pending home sales data are also set to be released this week. -
Housing starts and completions in August rebounded sharply, according to the latest data released by the U.S. Census Bureau.
Seasonally adjusted housing starts rose 9.6% from the previous month to an annual rate of 1.356 million, and July starts were revised higher to 1.236 million.
Housing starts rose 3.9% from a year ago, driven by the increase in the South and in the West.
Seasonally adjusted building permits increased 4.9% from the previous month to 1.475 million, and July permits were revised to 1.406 million.
On an annual basis, building permits decreased 6.5% from an annual rate of 1.578 million in the month a year ago.
Housing completions in August rose 9.2% from the previous month to 1.788 million, and July completions were revised to 1.637 million.
On an annual basis, housing completions surged 30.2% from an annual rate of 1.373 million in the month a year ago.
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The Federal Reserve lowered its key lending rate by 50 basis points, responding to the softening labor market and weakening inflation.
The rate-setting committee lowered the fed funds rate range to between 4.75% and 5.0%.
The committee also estimated that an additional 50 basis points are likely over the next two meetings before the end of the year, indicating that policymakers believe inflation has been tamed.
“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent and judges that the risks to achieving its employment and inflation goals are roughly in balance,” noted the statement released by the Federal Open Market Committee.
The Federal Reserve lowered rates for the first time since March 2020 after holding rates at an elevated level for more than a year.
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Retail and food services sales increased 0.1% from the previous month in August as consumers showed resilience despite growing anxieties about the economic slowdown.
The sales data adjusted for seasonal and calendar effects but not for inflation.
The monthly growth slowed sharply from the revised 1.1% increase in the previous month.
On an annual basis, retail sales growth eased to 2.1%, a slowdown in growth for the third month in a row, the U.S. Commerce Department reported Tuesday.
Retail trade sales were up 0.1% from July and up 2.0% from last year, and nonstore retail sales were up 7.8%, while sales at food services and drinking places were up 2.7%, respectively.
Sales at gasoline stores decreased 1.2% following the fall in gasoline prices, and electronics and appliance store sales eased 0.7%.
Meanwhile, retail sales excluding food services, auto dealers, building materials stores, and gas stations, which are used to calculate GDP, were up 0.3%, following an upwardly revised 0.4% rise in July.
The Fed's lowering of inflation will only stoke inflationary forces in the months ahead, sending another ripple of higher prices.
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Consumer price inflation in August slipped for the fifth month in a row to 2.5%, largely because of the weakness in energy prices, the Bureau of Labor Statistics reported Wednesday.
Energy costs declined 4% compared to a rise of 1% in the previous month, overshadowed by the increase in housing inflation to 5.2% from 5.1% in July.
On a monthly basis, inflation held steady at 0.2%, matching the rate in the previous month, driven by a 0.5% rise in shelter costs.
Core inflation, which excludes volatile food and energy prices, steadied at a three-year low of 3.2%, indicating slow progress in weakening well-anchored inflation.
After the inflation report, investors still held out for at least a 25 basis points rate cut next week.
Despite the widely anticipated rate cut, inflation is well-anchored in the economy, and rates are far from restrictive, as the U.S. economy is still adding jobs above the long-term average and GDP is expanding at a faster rate than 2%.
Moreover, an interest rate cut is not likely to alter the long-term structural issues with the economy, international trade competitiveness, widening inequality, and entrenched poverty.
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Semiconductor-related stocks were under pressure after Nvidia's current quarter sales outlook fell short of some analysts high expectations.
Nvidia, the leading artificial intelligence technology player, and dramatic transformation of the company have attracted worldwide attention, catapulting the company's valuation above one trillion only a few months ago.
The company's results are now viewed as a proxy for artificial intelligence spending by tech companies and provide critical support for the tech stock rally in 2024.
Nvidia said revenue in the fiscal second quarter ending in July soared 122% to $30 billion, net income advanced 168% to $16.6 billion from $6.2 billion, and earnings per share rose to 67 cents from 25 cents a year ago.
The company guided revenue in the current quarter of $32.5 billion, which fell short of some investors lofty expectations. -
Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results.
Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago.
For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago.
Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2.
The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents.
The company also announced its plans to cut 7% of its global workforce.
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