Weekly Market Update: May 22, 2017
What We Learned Last Week
- Industrial activity is rebounding, according to the Federal Reserve’s latest estimates.
- The number of applications for unemployment insurance benefits continues to drift down. They’re averaging 244,000 weekly applications so far this year, down from 263,000 weekly last year. This trend indicates that the US economy is still expanding faster than its potential growth rate. The stable economic backdrop contrasts with perceptions that are heavily influenced by the volatile political environment.
- Petroleum prices recovered to the $50 level, supported by an assumption that Organization of the Petroleum Exporting Countries (OPEC) will stick to and indicate that it will extend its production cuts when members meet at this week’s May 25 meeting. Key producers agreed late last year to lower output by 1.8 million barrels daily; US petroleum output has only partially offset that by rising by 750 thousand barrels daily.
What We Expect to See in the Week Ahead
- This week’s light calendar features more information on housing activity in April, preliminary estimates of international trade and a report on the volatile durable goods sector.
- Minutes of the Federal Open Market Committee’s (FOMC) March policy meeting aren’t likely to shed any new light on expected actions at the June 13-14 policy meeting, ahead of the next round of economic reports.
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