Financial and Economic Brief - May 16, 2017by © Liberty Publishing, Inc.
NY Manufacturing Drops in May
According to the Federal Reserve Bank of New York, manufacturing in New York State dropped for the first time in seven months to minus 1 in May, from 5.2 in April (a reading below zero is an indication of contraction). The cause? New orders fell and shipments grew more slowly. The index measures the outlook in New York, but provides an early read on nationwide factory output. U.S. factories have been expanding since the fall, after an 18-month fall caused by low oil prices, which decreased orders for drilling equipment.
Energy Ministers Agree to Extend Cuts
The energy ministers of Saudi Arabia (OPEC) and Russia (non-OPEC) recently met and agreed to do “whatever it takes to achieve the desired goal of stabilizing the market.” OPEC and some non-OPEC oil producers agreed in December to cut output by 1.8 million barrels per day for six months to help stabilize oil prices. The Saudi and Russian ministers agreed they would lobby other producers to achieve “full consensus” on extending the policy of restraint. Oil prices rose on Monday, with U.S. crude futures trading at more than $49 a barrel. The supply cut has helped prices bounce back from a low of $26 a barrel.
U.S. China Beef Deal
President Trump and his trade team took steps to clear two trade disputes with China that have negatively affected the U.S. livestock business for years. Starting later this year, U.S. cattle ranchers will be able to sell their beef in China, which has refused American imports since 2003 due to mad cow disease. The U.S. beef industry has been wanting to reopen the Chinese market for many years. A breakthrough came in September when China announced its intent to lift the ban. The push to reopen the Chinese beef market was aided by the U.S. approval to allow fully-cooked Chinese chicken to enter the U.S.