Author: spring

July’s surprisingly strong retail sales relieved some of the fears that the real cause of sluggish inflation this year is a weakness in the U.S. consumer.

The 0.6 percent jump in July retail sales was the best in seven months and is expected to bump economists’ GDP targets for the third quarter. June headline retail sales were revised from a decline of 0.2 percent to an increase of 0.3 percent.

Third quarter GDP has been tracking around 2.8 percent, according to CNBC/Moody Analytic’s rapid update. Barclays economists Tuesday bumped up their tracking estimate for both second and third quarter GDP by one tenth following the data, and now expect 2.6 percent growth in each.

“The bottom line on this data release is that consumer spending has perked up,” says Ward McCarthy, chief financial economist at Jefferies.

McCarthy says the broad strength in retail sales offset a decline in gasoline station sales, due to falling gasoline prices. Continue Reading

Goldman Sachs added Biogen to its Americas Conviction List, highlighting the biotech company’s lead pipeline Alzheimer’s drug as possibly one of the first to successfully prevent or slow the progression of the disease.

“Biogen has a broad Alzheimer’s disease portfolio, which, if successful, would allow it to access a greenfield, blockbuster market opportunity,” wrote Goldman analyst Terence Flynn. “It is difficult to overstate the growing societal burden of Alzheimer’s disease. … By 2050, one new case of Alzheimer’s disease is expected to develop every 33 seconds in the United States.”

Cambridge, Massachusetts-based Biogen focuses on discovering and developing therapies for neurological and hematologic disorders including multiple sclerosis and hemophilia. Through a partnership with Eisai, the companies have two Alzheimer’s drugs in late-stage development, both of which could be huge money generators.

Goldman projects that sales of one of the drugs, Aducanumab, could reach $12 billion. Continue Reading

There is new evidence that raising the minimum wage pushes business owners to replace low-skilled workers with automation. And it shows that old, young, female and black low-skilled workers face the highest levels of unemployment after a minimum wage increase.

Economists Grace Lordan of the London School of Economics and David Neumark of UC Irvine studied 35 years of government census data for their working paper, which was released in August, titled “People Versus Machines: The Impact of Minimum Wages on Automatable Jobs.”

“Based on [current population survey] data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers,” the study says. Continue Reading