Weekly Economic Update: October 14, 2019

The Markets (as of market close October 11, 2019)

Last week, the United States and China had reached a “substantial, phase-one” agreement to resolve the trade war between the economic giants. Essentially, the United States agreed to hold off on the imposition of additional tariffs on Chinese imports, while China agreed to ramp up the purchase of U.S. agricultural products. Buoyed by the prospects of a further trade accord, investors dove into the market, sending each of the major indexes higher by the close of trading last week. Both the Dow and Nasdaq rose by almost 1.0%, followed by the Russell 2000 and the S&P 500. However, the biggest mover was the Global Dow, which surged almost 2.0%. With money moving to stocks, gold and 10-year Treasuries saw their respective prices slip.


  • Inflationary pressures remained subdued in September. The Consumer Price Index was unchanged last month after rising 0.1% in August. Over the last 12 months, the CPI has increased 1.7%.
  • Producers of goods and services at the wholesale level saw their prices drop by 0.3% in September following two consecutive monthly increases. Over the past 12 months, producer prices are up 1.4%. This report, coupled with the CPI, supports expectations that the Federal Reserve will cut interest rates at least one more time this year.
  • Higher fuel prices drove import prices 0.2% higher in September following a 0.2% drop in August. Over the past 12 months, import prices are down 1.6%. Exports fell 0.2% last month after decreasing 0.6% in August. Since September 2018, export prices have also fallen 1.6%.
  • According to the Bureau of Labor Statistics Job Openings and Labor Turnover report (JOLTS), the number of job openings slipped by a little more than 100,000 from July. The number of hires also fell by about 200,000, as did the number of separations. Over the 12 months ended in August, hires totaled 69.5 million and separations totaled 67.1 million, yielding a net employment gain of 2.4 million.


A few economic reports worth reviewing are out this week. The retail sales report for September, which measures prices retailers of consumer goods and services receive, is another important indicator of inflationary pressures. August saw retail sales increase by 0.4%. Total sales for the June 2019 through August 2019 period were up 3.7% from the same period a year ago. Non-store (online) retailers continue to see sales grow — up 1.6% for the month and 16.0% since August 2018. The report on new residential construction is also out this week. August showed strong growth in building permits and housing starts, which should add to needed inventory for new residential properties for the fall. Another report out this week is the Federal Reserve’s statement on industrial production. August saw industrial production rise 0.6% after falling 0.1% in July. Manufacturing also increased 0.5% for the month — both encouraging signs for the manufacturing sector.