US ECONOMY & POLITICS

U.S. Retail Sales Fell 1.1% in July as Spending Fell Across Categories – Wall Street Journal, 8/17/2021

• Spending at U.S. retailers fell sharply in July, amid cooling purchases of goods and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose.
• Retail sales—a measure of purchases at stores, at restaurants and online—fell 1.1% last month compared with June, the Commerce Department reported Tuesday.
• Excluding autos—a category where supply-chain issues have limited available inventory—sales were down 0.4%.
• Sales dropped across several categories, primarily autos—which was down 3.9%—but also clothing, sporting goods and furniture.
• Restaurants and bars were a bright spot, with sales rising 1.7% over the month, while sales at nonstore retailers—a proxy for online retail sales—fell 3.1%.
• Sales in July were about $91.9 billion, or 17.5%, higher than in February 2020, just before the pandemic’s onset in the U.S.

U.S. Factory Output Rose by Most in Four Months, Lifted by Autos – Bloomberg, 8/17/2021

• Production at U.S. factories strengthened in July by the most in four months, rebounding above pre-pandemic levels and indicating manufacturers are coping with snarled supply chains and shortages.
• The 1.4% increase followed a revised 0.3% drop in June, Federal Reserve data showed Tuesday.
• Total industrial production, which also includes mining and utility output, rose 0.9% in July.
• The Fed’s industrial output report showed production of motor vehicles increased 11.2% last month — the most in a year — after a 5.9% decline the previous month.
• Excluding autos and parts, manufacturing output rose 0.7% after a 0.1% gain.
• Manufacturing capacity utilization, a measure of plant use, jumped to 76.6%, finally breaking above the pre-pandemic level of 75.5%. Total industrial capacity rose to 76.1%.

U.S. Homebuilder Sentiment Drops to 13-Month Low – Bloomberg, 8/17/2021

• U.S. homebuilder sentiment fell to a 13-month low in August amid high prices and costs as well as continuing supply shortages.
• A gauge of builder sentiment decreased for a third month to 75 from a July reading of 80, the largest drop since April 2020, National Association of Home Builders/Wells Fargo data showed Tuesday. The median forecast in a Bloomberg survey of economists called for no change in the index from the month before.
• The report also showed that current sales conditions and prospective buyer traffic fell to levels not seen since July 2020. At the same time, sales expectations for the next six months remained unchanged.
• The Midwest and the South posted decreases in August, reaching the lowest sentiment levels since last summer. Meanwhile, the Northeast and the West slightly rose.

U.S. Single-Family Rents Soar 7.5% in June, Accelerating Pace – Bloomberg, 8/17/2021

• U.S. single-family home rental prices jumped 7.5% in June, showing no sign of abating amid a hot housing market and construction lags.
• The year-over-year pace accelerated from 6.6% in May, which was the biggest percentage gain since at least 2005, according to CoreLogic Inc., which tracks changes nationally.
• The most expensive homes saw the biggest jump in rents, at 9.6%.
• Rent prices are now higher than if they had stayed on their pre-pandemic track.
• Because rents are not as volatile as other items, continuing gains will be harder to reverse, and could fuel inflation in the longer term.
• The highest single-family rent price increases continue to be recorded in the Southwest, with Phoenix and Las Vegas up by 16.5% and 12.9%, respectively, CoreLogic said.

NY region service sector business growth slows in August -NY Fed survey – Reuters, 8/17/2021

• The New York area saw business activity grow at a slower but still significant pace in early August, according to a survey released Tuesday by the New York Federal Reserve.
• The survey’s headline business activity index fell to 27.8 in August from 41.7 in July, moving away from record-setting pace of growth seen over the past few months.
• While still optimistic, business owners were less positive about future conditions than they were in recent months, according to the survey of firms in New York, northern New Jersey and southwestern Connecticut.
• More than half of respondents said they expect employment to increase in the coming months and the index for future employment held near its record high. The survey was conducted between August 2 and August 9.

EUROPE & WORLD

Euro zone growth confirmed at 2% in Q2, employment rises – Reuters, 8/17/2021

• The euro zone economy grew 2% in the second quarter, the European Union statistics office said on Tuesday, confirming its earlier reading as the easing of coronavirus restrictions spurred economic activity after a brief recession.
• In a separate release Eurostat also said that employment in the 19-nation bloc grew 0.5% in the April-June period compared to the previous quarter, in line with forecasts of economists polled by Reuters.
• The quarter-on-quarter growth followed two quarters of GDP decline with the euro zone economy shrinking by 0.6% in the last quarter of 2020 and by 0.3% in January-March.
• Among the euro zone’s largest economies, Spain and Italy posted the largest GDP rises, growing respectively by 2.8% and 2.7% on the quarter, Eurostat data showed, confirming its previous reading.
• Germany and France recorded more moderate GDP increases, respectively of 1.5% and 0.9% on the quarter.

China Unveils New Rules Targeting Anticompetitive Practices by Internet Companies – Wall Street Journal, 8/17/2021

• China issued new draft guidelines that would prevent its internet companies from engaging in anticompetitive practices such as unfairly blocking rival platforms, extending Beijing’s efforts to rein in the powerful technology sector.
• The guidelines, released by China’s State Administration for Market Regulation on Tuesday, include a detailed list of prohibited behaviors that regulators said could harm internet users and limit market competition, including controlling user traffic, blocking competitors’ products and discriminatory pricing.
• Shares of Chinese tech companies declined Tuesday, extending a monthslong slump driven by heightened regulatory oversight.
• Alibaba fell 4.8% and Tencent more than 4%, while short-video specialist Kuaishou Technology, video and gaming group Bilibili, and search giant Baidu fell to record lows.
• The Hang Seng Tech index in Hong Kong, which includes Tencent and Alibaba stocks, has declined some 40% in the past six months.

Taliban Consolidate Control in Afghanistan’s Capital; Thousands Remain Stranded – Wall Street Journal, 8/17/2021

• The Taliban strengthened control of the Afghan capital Tuesday as many stores reopened, traffic police returned to their posts and a senior official from the Islamist movement arrived for contacts with political leaders affiliated with the fallen Afghan republic.
• Later Tuesday, a White House official said Tuesday that the Hamid Karzai International Airport was open and that flights could land and depart, including on the civilian side.
• In Kabul, the Taliban, who proclaimed the Islamic Emirate of Afghanistan when they first seized the country in 1996, have so far refrained from the kind of radical actions that brought world-wide condemnation in the past. They issued an amnesty for government officials and on Tuesday allowed female presenters on television channels.

Factmonster – TODAY in HISTORY

• Robert Fulton’s steamboat, the Clermont, began its trip up the Hudson River to Albany. (1807)
• Prospectors found gold in Alaska, a discovery that set off the Klondike gold rush. (1896)
• U.S. swimmer Michael Phelps won his eighth gold medal, breaking the record set by Mark Spitz in the 1972 Games. Phelps also set the record for the most golds in a single Olympics. (2008)