Weekly Economic & Financial Commentary: Two Steps Back and One Step Forward
|Weekly Economic & Financial Commentary
U.S. Review Two Steps Back and One Step Forward
- Retail sales stumbled again in April, falling 0.2%. Core retail sales were flat and suggest the Q2’s bounceback in consumer spending may not be as strong as previously thought.
- Output in the manufacturing sector fell 0.5% in April. The industry was already struggling before the recent trade war escalation due to slower global growth and the stronger dollar.
- Housing starts increased 5.7% in April and point to residential investment growing in Q2 for the first time in six quarters.
Global Review
Global Trade Relations Continue to Dominate Headlines
- Trade tensions between the U.S. and China continue to escalate, with China officially announcing reciprocal tariffs on $60B of U.S. exports. Chinese state media suggested trade negotiations are on hold for now; however, President Trump has indicated he will meet with President Xi at the G20 summit to discuss trade relations between the two countries.
- Despite deteriorating trade relations with China, President Trump has delayed imposing tariffs on autos and auto parts for 180 days. Optimism surrounding the USMCA trade agreement has increased as media reports suggest the U.S., Mexico and Canada are close to a deal to lift tariffs on steel and aluminum.
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