Economic Indicators (CONT’D FROM PAGE 12)
months. Service-sector spending boosted personal consumption expenditures in February, even as goods purchases declined, with 0.2 percent growth for the month and a healthy 4.9% increase year-over-year. • New single-family home sales eased 4.4 percent in February but remained robust, soaring 14.3 percent year-over-year. Homebuyers reacted favorably to re- duced mortgage rates, a strong labor market and warmer-than-normal winter temperatures. • The personal consumption expenditures deflator inched up 0.1 percent in February for the second straight month. Since February 2019, the PCE deflator has risen 1.8 percent, including at the core level, which excludes food and energy costs. • Especially in light of the current COVID-19 crisis, the Federal Reserve is more concerned with a contracting U.S. and global economy and likely deflationary pres- sures from a downturn. The Fed has undertaken ex- traordinary measures to help prop up the economy and to address credit and liquidity concerns in financial mar- kets. By aggressively purchasing assets, total assets on its balance sheet soared to $5.25 trillion this week, an all-time high and one that will continue to grow. Chad Moutray is Chief Economist for the National As- sociation of Manufacturers (NAM), where he serves as the NAM’s economic forecaster.
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April 13, 2020
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