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.
(more…)
The second quarter Gross Domestic Product growth result will be released tomorrow. The Q2 GDP growth rate is historically the worst quarter of the year. A growth rate higher than 1.5 percent will be a strong indicator the U.S. economy remains on track for a cumulative year of around three percent.
In the latest economic releases the orders for durable goods “unexpectedly” jumped in June [2 percent], again indicating the overall strength of the U.S. economy and strong consumer purchasing. Additionally the trade in goods deficit “unexpectedly” declined 1.2 percent in June as more manufacturers “surprisingly” shift production back to the U.S, and domestic consumers are “unexpectedly” loyal to USA.
Every economic indicator is positive, and each series of released data shows the U.S. economy is increasingly strong. Despite the empirical data, media reporting on economic forecasts continue to convey a negative slant disconnected from what is happening.
WASHINGTON (Reuters) – New orders for key U.S.-made capital goods surged in June, suggesting some improvement in business investment, but economic growth is still expected to have slowed sharply in the second quarter amid weaker exports and a smaller inventory build.
The U.S. worker initiative is one of the least discussed success stories in the landscape of MAGAnomics. At the heart of the program is a new-era retraining program through a partnership between private companies and the education sector. There are programs ongoing throughout the nation and it really is a remarkable success.
UPDATE: Video Added
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:
(more…)
The U.S. Department of Justice has announced a new and broad review of on-line tech companies to investigate if their activity is violating antitrust laws. The DOJ announcement explains: “Review Focuses on Practices that Create or Maintain Structural Impediments to Greater Competition and User Benefits.”
According to the Wall Street Journal, “The new antitrust inquiry … could ratchet up the already considerable regulatory pressures facing the top U.S. tech firms. The review is designed to go above and beyond recent plans for scrutinizing the tech sector that were crafted by the department and the Federal Trade Commission.”
Full Press Release: The Department of Justice announced today that the Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.
Boris Johnson has succeeded in beating his nearest rival Jeremy Hunt for leadership of the conservative party in the U.K. thereby becoming the next Prime Minister. One of the priority challenges for Prime Minister Johnson will be navigating a successful Brexit.
A full three years after the British electorate voted to leave the European Union, the elites in Britain have continued to stymie the referendum in their effort to remain attached to the communal values of the collective society. Thus gave rapid rise, recently, to the Brexit Party as a national force led by Nigel Farage. It’s the UK version of ‘deplorables’ vs ‘elites’.
The British Parliament is filled with elected members who stand in opposition to the majority of the British citizenry. It is amid this professionally political and elitist disconnect that Boris Johnson must now attempt to deliver Brexit, while the purchased politicians of both institutional parties will oppose his effort. [Sound familiar?]
(more…)
As the week begins, it’s worthwhile reemphasizing the value of President Trump, and how the focused, albeit at times pragmatic, policy is received by the larger U.S. electorate. This interview is representative of the silent majority voice; some silent no more:
Well, there it is…. Right there in a poll [full pdf below] of eleven southern states conducted by NBC over two weeks we see the reason why the DNC, political leadership and media are whipping up false accusations of racial anxiety against President Trump.
The majority of those polled see improvements in race relationships,… and their approval of President Trump is higher…. and their view of the economy is more optimistic…. and the number one issue is immigration.
All empirical points that help President Trump and simultaneously destroy the Democrat narrative. That recently released NBC polling result is exactly behind why Trump’s political opposition had to make a fast move against his administration.
(more…)
Bernie Sanders is upset that his campaign workers have gone to the media with their concerns about Bernie’s wage hypocrisy. “It does bother me that people are going outside of the process and going to the media,” he said. “That is really not acceptable. It is really not what labor negotiations are about, and it’s improper,” he grumbled.
The campaign pay and benefit issue is a little funny considering how Bernie Sanders holds himself up as the global arbiter of all that is righteous and indignant about worker’s pay. In essence Bernie is the self-appointed Che’ Guevara of the current presidential candidate pool.
The problem is that capitalist Bernie is in a fight with communist Bernie. As a capitalist Bernie wants to count all of the benefits (healthcare payments, reimbursement, etc) as well as a fixed salary as part of the collective pay package of $36k per year.
Keeping the strict salary system in place means Capitalist Bernie can demand a six-day workweek, 60 hrs per week, and retain a $36k/yr minimal payroll per worker. Meanwhile communist Bernie wants to apply a standard $15/hr wage, for every hour and time-and-a-half beyond forty hours, to the rest of American business. [A tad hypocritical.]
(more…)