Coronavirus may be hurting Asia, but the latest numbers show economic growth is only improving in the U.S.
Manufacturing data from the New York and Philadelphia branches of the Federal Reserve rose more than expected. They cited strong orders and demand. It was the second straight month that both indexes beat estimates, breaking a string of disappointments in 2019.
Those reports were most up to date because they covered February. Several for January also surprised to the upside:
- The Conference Board’s index of leading economic indicators rose 0.8 percent, almost triple the 0.3 percent estimate.
- Housing starts, building permits and existing home sales all came in above forecasts. That’s another sign of recovery in the housing market, which is now putting up structures at its quickest since late 2006.
Finally, the Fed. Back in mid-January weak job growth caused the market to speculate about interest rate cuts by the central bank. But yesterday Vice Chairman Richard Clarida downplayed that hope and described the economy as “strong.”
While Clarida might not be a household name, he was the guy who led the bank to cut rates in late 2018. If the Fed wanted to telegraph a message, Clarida would be the official to drop a hint.
In conclusion, American manufacturing and housing are improving as interest rates remain low. Volatility might be rising in the short-term. But as long as coronavirus remains contained, things keep getting better for the U.S. economy over the longer term.