55.7 F
Fort Worth
Tuesday, November 24, 2020
Banking Fed survey finds US economy being hurt by trade battles

Fed survey finds US economy being hurt by trade battles

Other News

Exxon’s oil slick

Exxon Mobil is slashing its capital spending budget for 2020 by 30% due to weak demand caused by the COVID-19 pandemic and a market...

Folk music’s Mark Twain: 7 Essential tracks from John Prine,

NEW YORK (AP) — Some people, the songs just come out of them. For nearly half a century, they tumbled out of John Prine...

Tarrant County records another COVID-19 death

Tarrant County Public Health (TCPH) on Wednesday, April 8 reported that a resident of Euless has died as the result of the COVID-19 virus....

Tradition stymied: A year unlike any since WWII for Augusta

The Masters is so intertwined with Augusta, they added an extra day to spring break.You see, the first full week of April isn't just...

WASHINGTON (AP) — The U.S. economy expanded at a modest pace in September and into October, despite rising trade tensions and weaker global growth that hampered manufacturing, and adverse weather hitting farmers.

In its latest assessment of business conditions around the country, the Federal Reserve reported Wednesday that “persistent trade tensions and slower global growth” were weighing on the economy.

The survey, known as the beige book, will be used by Fed officials when they meet Oct. 29-30 to decide whether to cut interest rates for a third time this year.

Financial markets are expecting another rate cut as the central bank seeks to protect the economic expansion from the fallout from a trade war between the world’s two biggest economies, the United States and China.

The beige book findings will likely be cited by Fed officials who believe the central bank should cut rates again because of rising risks that the nation’s longest recovery, now in its 11th year, could be derailed.

Gus Faucher, chief economist at PNC Financial Services Group, said based on the beige book’s emphasis on areas of weakness he expected the Fed will cut rates again at the October meeting.

“By cutting rates now, the Fed hopes to avoid the need for deeper rate cuts in the future,” he said.

The report, compiled from information gathered by the Fed’s 12 regional banks, said that the banks’ business contacts still expected the economic expansion to continue but many had lowered their outlooks for growth over the next six to 12 months.

The report also found conditions varied by regions. States in the southern and western part of the country generally were more upbeat than regions representing the Midwest and Great Plains.

That disparity likely was influenced by the tough times faced by many farmers. They have been caught between President Donald Trump’s higher tariffs on billions of dollars in Chinese imports and retaliatory tariffs imposed by China, which has also canceled purchases of U.S. farms goods, including soybeans, in an effort to hurt a key Trump constituency.

“Agricultural conditions deteriorated further due to the ongoing impacts of adverse weather, weak commodity prices and trade disruptions,” the Fed report said.

The report found that the initial impact from the General Motors auto strike had been limited, with auto sales described as “robust” during the survey period.

The beige book said that businesses across all regions were having to deal with persistent worker shortages and tight labor market conditions across various skill levels and occupations. This has been an issue as unemployment has continued to fall and in September dipped to a half-century low of 3.5%.

A number of districts reported that manufacturers had reduced employment because of softness in new orders. However, some firms were concerned about the longer-term availability of workers and opted to trim hours rather than lay off employees.

Even with the tight labor markets, wages were described as rising only moderately but some upward pressure was noted for lower-skilled workers in the retail and hospitality industries and for higher-skilled professional and technical workers.

A number of smaller companies reported difficulty matching pay offers from larger firms and many employers were continuing to use non-wage incentives such as increased bonuses and benefits to attract and retain workers.

Price increases were described as modest but both retailers and manufacturers noted rising input costs, often for items that had been hit with new tariffs in the trade war. The report said that retailers were finding more success in passing on the price increases to their customers than U.S. manufacturers were finding.

Trump announced last Friday a temporary truce in the U.S.-China trade battle, saying he had agreed to suspend a tariff hike scheduled to go into effect this week on $250 billion of Chinese imports. He said that the Chinese had agreed to buy $40 billion to $50 billion in U.S. farm products.

While the cease-fire lifted spirts on Wall Street, much more work will be needed to achieve a final deal. Investors have cited this lingering trade uncertainty as a main reason they believe the Fed will feel the need to cut rates again later this month.


Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

Stocks edge higher on Wall Street on latest vaccine hopes

NEW YORK (AP) — U.S. stocks edged higher in morning trading Monday after investors received several pieces of encouraging news on COVID-19 vaccines and...

Mnuchin denies he’s trying to hinder incoming administration

WASHINGTON (AP) — Treasury Secretary Steven Mnuchin denied that he is attempting to limit the choices President-elect Joe Biden will have to promote an...

Bank of America announces $2.65 million jobs initiative for Texas Black and Hispanic-Latino students

Bank of America announced a new multimillion dollar jobs initiative Nov. 19 to help students of color complete the education and training necessary to...

PNC to buy US unit of Spain’s BBVA bank for $11.6 billion

NEW YORK (AP) — PNC Financial Services Group said Monday it is buying the U.S. subsidiary of Spain's BBVA bank for $11.6 billion in...

Banker gets 1-year term for coronavirus relief funds fraud

By MATTHEW BARAKAT Associated PressALEXANDRIA, Va. (AP) — A northern Virginia banker who admitted illegally receiving $1.4 million in fraudulently obtained coronavirus relief funds...