Economic reports from this week showed mostly positive developments, but concerns remain over a potential debt-ceiling crisis and high oil prices, according to the most recent Weekly Chemistry and Economic Report from the American Chemistry Council (ACC; Washington, D.C.; www.americanchemistry.com).
Data on new home sales suggest that the recovery in the homebuilding sector continues to advance, ACC said, and personal incomes in the U.S. grew by the fastest rate since February, with solid gains in wages. This suggest improving momentum from the labor market, the ACC report stated.
Further, new orders for non-defense capital goods (excluding aircraft) rose, signaling improved manufacturing activity in the future, the report said.
However, a potential crisis over the U.S. debt ceiling is a concern, ACC said. The country is likely to reach its borrowing limit in mid-October. Legislative debate over raising the debt ceiling, as well as passing the Federal budget for 2014 “may foster renewed uncertainty for businesses and consumers,” the ACC report said.
Also, the high price of crude oil presents a risk to the economy. “Prices above $115/bbl (Brent crude) will likely erode economic growth,” ACC said, as they have in the past. At the current $109/bbl, concern remains, ACC notes.