US Economy Remains Strong
The Chicago Fed National Activity Index (CFNAI) rebounded to +0.43 in June from -0.45 in May, pointing to a rebound in U.S. economic growth in June, the Chicago Federal Reserve Bank announced on Monday.
The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. A positive index reading corresponds to growth above trend and a negative index reading indicates growth below trend.
Forty-five of the individual indicators made positive contributions to the CFNAI in June, while 40 made negative contributions, according to the Chicago Fed.
Among them, production-related indicators contributed +0.36 to the CFNAI in June, up from -0.56 in May. Manufacturing industrial production increased 0.8 percent in June after declining 1.0 percent in May. The sales, orders, and inventories category made a contribution of +0.06 to the CFNAI in June, up slightly from +0.03 in May.
Employment-related indicators contributed +0.08 to the CFNAI in June, down slightly from +0.11 in May. Non-farm payrolls increased by 213,000 in June after rising by 244,000 in May. The contribution of the personal consumption and housing category to the CFNAI ticked down to -0.06 in June from -0.04 in May. Housing starts decreased to 1,173,000 annualized units in June from 1,337,000 in May, and housing permits moved down to 1,273,000 annualized units in June from 1,301,000 in the previous month.
Meanwhile, the index’s three-month moving average, CFNAI-MA3, edged up to +0.16 in June from +0.10 in May.
World Trade Organization (WTO) Director-General Roberto Azevedo on Tuesday outlined economic and systemic threats posed by growing tensions in global trade and called on “everyone who believes in trade as a force for good” to speak up in its defense.
“Members are well aware of the growing crisis in global trade. Tensions are growing. New measures are being announced with increasing frequency,” Azevedo said at a closed meeting of the full WTO membership today.
He said there is real and justified concern about the escalation occurring in his speech carried on the WTO website.
“Whether or not you call it a trade war, certainly the first shots have been fired. Continued escalation would risk a major economic impact, which would pose a serious threat to jobs, growth, and recovery in all countries,” said the WTO chief.
He noted that there is also a potential systemic impact, which poses a greater long-term threat, particularly if countries begin to “accept this tit-for-tat dynamic as the new normal.”
Members have a duty to alert people to the potential risks and consequences, said Azevedo. He added that he has been consulting with members on the issues, and meeting with leaders and ministers.
“Trade touches all of our lives. So I am calling on everyone who believes in trade as a force for good to speak up. Now is the time,” said Azevedo.
He said there might be some progress as leaders are increasingly aware and engaged in WTO issues, in a way he has not seen before.
“There is renewed engagement from many members on systemic issues, bringing more focus on the WTO and how it can be improved,” said Azevedo, noting that this could, “potentially help us to find a path out of the current crisis.”
The director-general also addressed the impasse in appointments to the Appellate Body of the WTO’s Dispute Settlement body, stressing the gravity of the situation and the need for members to engage with renewed urgency.
WTO members had on Friday again failed to agree on the initiation of the selection process to fill three vacancies on its Appellate Body, as the United States said it could not accept a proposal backed by 67 members calling for the start of the selection process as soon as possible.