{"id":1004092979,"date":"2014-03-20T05:33:17","date_gmt":"2014-03-20T13:33:17","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004092979"},"modified":"2022-12-05T11:22:29","modified_gmt":"2022-12-05T19:22:29","slug":"economy-watch-tapering-low-interest-rates-continue-state-coincident-indexes-almost-all-up","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/economy-watch-tapering-low-interest-rates-continue-state-coincident-indexes-almost-all-up\/","title":{"rendered":"Economy Watch: Tapering, Low Interest Rates Continue; State Coincident Indexes Almost All Up"},"content":{"rendered":"

By Dees Stribling, Contributing Editor<\/em><\/p>\n

The Federal Open Market Committee said on Wednesday that U.S. economic growth slowed during the winter months, mainly because it\u2019s been a hard winter. Also, labor market indicators were mixed but on balance showed further improvement, with the unemployment rate remaining a little too elevated for the Fed\u2019s liking. Household spending and business fixed investment continued to advance, while the recovery in the housing sector remained slow.<\/p>\n

The central bank also sounded a note that it\u2019s been sounding for a while: Fiscal policy \u2013 namely, that thing called sequester — is stunting economic growth, although the extent of drag is diminishing. Inflation has been running below the committee’s longer-run objective (2 percent), but longer-term inflation expectations have remained stable. In fact, a little too stable: \u201cThe Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance,\u201d the statement said.<\/p>\n

What does all that mean for tapering? Eventually, the Fed got to the point: come April, it\u2019s going to knock another $10 billion off of its asset purchases. That is, beginning next month the Fed will add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and buy longer-term Treasuries at a pace of $30 billion per month instead than $35 billion per month. At the current rate of diminishment, QE3 will be over by the third quarter.<\/p>\n

The Fed also dealt with the question of interest rates. The short answer: they\u2019re not going anywhere, certainly not up anytime soon. \u201cThe Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run,” the statement said.<\/p>\n

State Coincident Indexes Almost All Up<\/strong><\/p>\n

The Federal Reserve Bank of Philadelphia reported on Wednesday that the coincident indexes for 48 states increased month over month in January 2014, and remained stable in two. None dropped. Over the past three months, the indexes increased in 50 states, and none dropped.<\/p>\n

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic, calculates the Philly Fed. The four state-level variables in each coincident index are nonfarm payroll employment; average hours worked in manufacturing; the unemployment rate; and wage and salary disbursements deflated by the U.S. CPI. The trend for each state\u2019s index is set to the trend of its gross domestic product, so long-term growth in the state\u2019s index matches long-term growth in its GDP.<\/p>\n

Investors didn\u2019t seem to like what the FOMC had to say on Wednesday. Late in the day, Wall Street took a dive \u2013 after gains earlier in the week — with the Dow Jones Industrial Average losing 114.02 points, or 0.7 percent. The S&P 500 dropped 0.61 percent and the Nasdaq was down 0.59 percent.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Come April, the Fed is going to knock another $10 billion off of its asset purchases through tapering. The coincident indexes for 48 states increased month over month in January 2014.<\/p>\n","protected":false},"author":952,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742],"tags":[],"class_list":["post-1004092979","post","type-post","status-publish","format-standard","hentry","category-latest"],"acf":[],"yoast_head":"\nEconomy Watch: Tapering, Low Interest Rates Continue; State Coincident Indexes Almost All Up - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/economy-watch-tapering-low-interest-rates-continue-state-coincident-indexes-almost-all-up\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economy Watch: Tapering, Low Interest Rates Continue; State Coincident Indexes Almost All Up\" \/>\n<meta property=\"og:description\" content=\"Come April, the Fed is going to knock another $10 billion off of its asset purchases through tapering. 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