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A government shutdown caused lower economic activity in the US.

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A government shutdown caused lower economic activity in the US.
March 07
09:00 2019

According to the Fed’s review, the growth of business activity in the United States has fallen to the level of “weak” and “low-key”. This phenomenon is recorded almost throughout the country.

The agency says that a temporary shutdown of government structures has caused deterioration of the indicator. Because of this, such industries as trade, a car market, tourist industry, real estate and processing industry have suffered.

Statistics on population expenditure remains uncertain and varies greatly in different regions. During the interviews, many respondents said that the cold weather and the growth in lending rates had become the reason for the decline in retail and auto sales.

There is a growth in the industry. Despite this, there are talks in many regions about the decrease in demand and the growth in production costs caused by an increase in import duties and a difficult situation in foreign trade.

The index has shown a moderate growth in non-financial services.

There are small changes in the construction sphere. Houses are being constructed at the same pace; in some regions it has increased slightly. Selling of houses has shown a slight decline. The cost growth of houses has dropped. The number of homes sold has increased slightly, but still remains low.

Most districts report on growing employment. At the same time there is a large shortage of personnel especially in IT, industry, freight and construction. Due to the lack of workers, some regions show a decline in the employment growth.

Almost in all regions there is an increase in salaries and it concerns the jobs of all levels. In addition to raising wages, more rewards have appeared.

Most of the districts maintain a slight price increase. At the same time, the costs of companies increase faster than the cost of goods; the main reason is the import duties.  Some regions say about a reduction in fuel prices.

The Fed’s review is published two weeks before the Fed’s meeting. The data for the publication are provided by the twelve FRBs. The meeting of the management of the Central Bank is scheduled for March 19-20.

 

The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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