Commerce Secretary Wilbur Ross appears with Charles Payne to discuss the latest economic data and the Q2 GDP release. Within the interview Secretary Ross explains the information behind the data; the status of the USMCA and Pelosi’s motives to delay ratification; the baseline for the U.S-China trade discussions, and the position of the administration to advance the economic interests of the U.S. above all others.
The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019. The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.
The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.
The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook. With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China). This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.
The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy. CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.
Wall Street wants bad news because Wall Street wants a lower fed rate. As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”…. Sometimes you just have to laugh.
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This is funny. No, really, it is actually funny. Yesterday the International Monetary Fund (IMF) revised its outlook of the global economy. If you read the IMF prior “dire forecast” from July 17th –yes, only a week ago– you’ll discover the humor aspect.
The IMF is now upgrading their forecast of U.S. economic growth; and admitting -in essence- that President Trump’s America-First agenda is relocating global wealth back to the primary host nation known as the U.S.A. The increase in their forecast isn’t a small increase, it is essentially adding .3 percent (from 2.3% to 2.6%) or $60 billion more.
However, you’d have to go through two-thirds of the Reuters press coverage of the IMF release; and plow through a littany of doom and gloom; before you found this obscure reference: “The IMF raised its forecast for U.S. economic growth to 2.6% in 2019, but left its 2020 forecast for 1.9% growth unchanged.” Apparently the economic team at Reuters has a sad… harrumph!
Even the Washington Post, despite their earnest efforts, couldn’t actually put a negative spin on the new IMF projection:
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Excellent interview by Charles Payne as White House Manufacturing Policy Advisor Peter Navarro outlines how the strategic road map of MAGAnomics is converging. If you want to see the future, listen to how Navarro outlines what’s coming.
The six MAGAnomic components to pay attention to include: ♦changes to the Universal Postal Union (UPU); ♦HUD Opportunity Zones; ♦America First raw material policy for infrastructure; ♦retail sales strength; ♦the current status of the U.S-China negotiations; and ♦the USMCA ratification.
The Commerce Department has released the first advanced estimate of retail sales and consumer spending for June. Core retail sales increased 0.7 percent last month (very strong), and 3.8 percent year-over-year; very strong retail sales.
Retail sales is an important component to the U.S. economy as more than two-thirds of our GDP is based from retail sales. In essence, one of the unique attributes to the U.S. economy is that we buy lots of stuff. Actually, the U.S. consumer buys almost three-quarters of everything produced. We are -for the most part- self-sustaining; we do not necessarily need to depend on exports. When the U.S. consumer is buying stuff the internal economy is strong.
WASHINGTON (Reuters) – U.S. retail sales increased more than expected in June, pointing to strong consumer spending, which could help to blunt some of the drag on the economy from weak business investment.
[…] Economists polled by Reuters had forecast retail sales edging up 0.1% in June. Compared to June last year, retail sales advanced 3.4%.
Peter Thiel has a rather alarming concern surrounding the possibility that Google Inc. is working with China, specifically to the intended detriment of the United States.
Given the political ideology of the ‘Big Club’; and their severe aversion to U.S. President Donald Trump…. well, it wouldn’t be surprising to discover a Google-China alignment.
Earlier today China reported the Chinese economy grew at its lowest rate in 27 years. This report follows additional information of more companies exiting China while the U.S-China trade conflict continues.
National Economic Council Director Larry Kudlow discusses the future of USMCA, and the vote decision of Speaker Nancy Pelosi; the ongoing renewed U.S. trade talks with China; President Trump’s Made in America Showcase and the overall state of the U.S. economy.
We had to wait a few weeks to see how the Beijing communists and Xi Jinping hardliners were positioned for new trade talks; and now things make sense.
Initially it seemed at odds with Beijing’s prior position to restart U.S-China trade negotiations with Vice-Premier Liu He. The prior three months of negotiation came to a collapse when Beijing resoundingly rejected the trade terms organized by Liu He. If the Red Dragon was so opposed to conciliatory terms, why would team Xi restart with the same negotiator? Now it makes sense, they didn’t.
China’s Commerce Minister Zhong Shan has been assigned the role to harden the position of the communist regime and override any panda presentations by Liu He. Vice-Premier Liu retains the panda mask, but Zhong is the ultimate control agent. The message within Zhong’s placement tells the true nature of the Chinese position: Trade War !
Beijing attempts to downplay the position of their hard-line commerce addition, but the reality of the re-started trade discussions tells a more fulsome story. Chairman Xi took the strategically presented bait and is going to engage in full confrontational trade war with President Trump and the U.S. team.
SCMP – The participation of China’s Commerce Minister in the latest trade discussion with the United States was “normal”, China’s Ministry of Commerce said on Thursday, playing down the eye-catching change in Beijing’s negotiating team.
White House National Economic Council Director Larry Kudlow on the U.S.-China trade talks where recontact has been established and now officially restarted. As noted, President Trump is in no hurry; the status-quo is leverage in our favor.
Additionally Director Kudlow discusses the potential benefits of the USMCA trade deal and whether the Federal Reserve should lower interest rates.
Gordon Chang appears on Fox News with Charles Payne (filling in for Bartiromo) to discuss the downstream consequences from the G20 meeting between President Trump and Chinese Chairman Xi Jinping.
While he generally frames the picture accurately, lately Chang has been hit or miss. He accurately outlines how a win/win trade deal is not possible from the perspective of Beijing and their zero-sum outlook; however, he misses on the issues around Huawei; misses the entire hostage dynamic with Kim Jong Un; and then hits again on Hong Kong.