Commerce Secretary Wilbur Ross appears on Fox News with Stuart Varney to discuss a change in federal hiring policy. However, within the interview Ross notes some key economic data that has a very solid predictor value for economic growth.
Both the spending rates and the savings rates for Americans are at all time highs. The COVID-19 lockdown has limited purchase options, leading to less initial spending; however, consumers have a lot of recent cash reserve as shown in their rate of savings.
Ross is right, within this dynamic, as soon as economic limits are removed, the spending will boost the economy very quickly.
Jumpin’ ju-ju bones… New home sales jumped a whopping 16.6% in May, blowing past the estimates of a 2.9% rise. The May increase in sales is nearly 13 percent higher than the same month one year ago.
Home sales are a key indicator of economic health because purchases of homes requires (1) income, a stable job; and (2) an optimistic financial outlook from the buyer.
Sales of new single-family homes jumped 16.6% in May from April, to a seasonally adjusted annualized pace of 676,000, the Census Bureau reported Tuesday. The median economist estimate was for 640,000, according to Bloomberg data.
In addition to a larger-than-expected monthly surge, May sales were nearly 13% higher than a year ago. As the US economy reopens, people are flocking back to the housing market in droves — the rosy sales are a rebound from three months of declines ending in April. (LINK)
In the economic balancing act toward China Larry Kudlow represents the good cop, Peter Navarro represents the bad cop and President Trump navigates the market responses. Neither person is factually in conflict with the other; the nuance is in the expression and each person has a role to play. Sometimes teeth, sometimes not. It depends on need.
Last night trade advisor Peter Navarro noted the U.S. position with China and trade is still in a state of serious conflict. This is accurate, and a more confrontational posture has been expressed by President Trump. Today Larry Kudlow moderates the Navarro position to lessen the Wall St. concern over a looming decoupling. It’s all a dance.
The need for nuance becomes clear as we watch Stuart Varney pushing the Wall Street concern angle on behalf of U.S. multinationals. The administration does not want to spook the stock market while they deal with a China confrontation. WATCH:
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Kudlow represents the panda mask. Navarro represents the eagles claw. President Trump advances or retracts each position as he controls the market response. The objective is a slow, steady, smiling decoupling that doesn’t unnerve anyone… but the direction is always toward the decoupling.
President Trump is delivering the proverbial economic death by a thousand paper cuts.
White House Trade Policy Advisor Peter Navarro outlines what many CTH readers are aware of. John Bolton begged for the job and enlisted Sean Hannity and Mark Levin to get advanced recommendations. That’s how he got in. However, as National Security Advisor John Bolton never understood the President Trump doctrine, using economics to achieve national security objectives. Underline it, highlight it, that’s the primary issue.
In this interview Navarro goes full wolverine on Bolton, and deservedly so. What Navarro outlines is the truthful reality. You can tell because it aligns at every level with what we watched every day while John Bolton was in the administration. God bless Navarro for truthfully calling the baby ugly. WATCH:
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John Bolton felt unimportant in the world of geopolitics because President Trump relied on the economic team of Secretary Mnuchin, Secretary Ross, USTR Lighthizer and Trade Advisor Peter Navarro to achieve national security objectives.
Bolton was the knuckledragger at the end of the table, useful as leverage, where Trump could point to him and say lets make a deal to keep the warmongers like this guy out of the picture. Bolton’s biggest problem was with that Trump doctrine.
This hearing might be a little too wonky for some, but not too many other policy issues touch 100% of American lives. U.S. Trade Representative Robert Lighthizer will be delivering testimony today outlining the 2020 trade policy agenda.
The testimony is before the House Ways and Means Committee, and will be livestreamed on the committee website [SEE HERE] and below at 10:00am ET from the Longworth House Office Building. USTR Lighthizer is the sole witness.
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Lighthizer will also be testifying to the Senate Finance Committee at 3:00pm. [LINK]
U.S. Senator Josh Hawley delivered a speech on the floor of the senate that deserves some attention. The larger issue outlined by Senator Halwey surrounds the recent Supreme Court Bowstock decision authored by Justice Gorsuch. However, in overlaying the judicial outcome, Hawley hits on the central issue he calls the “conservative bargain.”
The entire speech is worth listening to, as the senator encapsulates many of the frustrations within the recent decision; but the segment at 07:15 cuts to the heart of the distinction between MAGA-Trump republicanism and the pathetic GOPe wing of the Mitch McConnell UniParty. We have previously called this “The Decepticon” WATCH:
U.S. Trade Representative Robert Lighthizer is testifying tomorrow at 10:00am to the House Ways and Means committee; later in the afternoon Ambassador Lighthizer will testify before the Senate Finance Committee.
The New York Times has received an advance copy of USTR Lighthizer’s opening statement, and the liberal publication is apoplectic the Trump administration plans to outline an even more aggressive stance toward the World Trade Organization (WTO).
According to the pearl-clutching Wall St. class, Lighthizer is going to inform congress of Trump/USTR plans to demand tariff reciprocity; and Lighthizer will indeed raise tariffs against any nation that continues to attempt one-sided benefit. [EU will go bananas]
One method to approach tariff inequality would be for the U.S. to lower the import value threshold for non-tariff exemptions. Currently the U.S. does not apply import duties to any product valued under $800. This is a great benefit to China, southeast Asia, and U.S. on-line retailers such as ebay and Amazon; however, the zero tariff threshold hurts U.S. manufacturers because China and other nations do not reciprocate.
It is anticipated that USTR Lighthizer will inform congress the U.S. will lower that import threshold to match the same value level applied by other nations. Obviously the U.S. Chamber of Commerce and the Wall Street multinationals will not like this approach.
Data released by the Commerce Dept [pdf here] shows U.S. shoppers increased spending by a record 17.7% from April to May. The jump in spending was double the amount most economists and forecasters were predicting.
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(Reuters) Retail sales jumped 17.7% last month, the biggest advance since the government started tracking the series in 1992. Sales dropped a record 14.7% in April. Economists polled by Reuters had forecast retail sales would rise 8% in May. (link)
New coronavirus reports from Beijing are very sketchy. According to Chinese authorities they have identified a new strain of coronavirus at a massive wholesale food market in Beijing called the Xinfadi Market. They are blaming “European Salmon”…
Beijing officials have reported 79 cases over the past four days, the biggest concentration of infections since February. The spate of new cases prompted officials in many parts of the city to swiftly bring back tough counter-epidemic measures, with at least three districts entering “war-time mode.”
Measures imposed included erecting round-the-clock security checkpoints, closing schools and sports venues, and reinstating temperature checks at malls, supermarkets and office buildings. CNBC REPORT:
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There have been several economic reports that China’s manufacturing economy is contracting. Considering a desperate dragon…. It would not be out of place to consider that Beijing would react to losing an economic war, or even economic position, by trying to unleash a globally mitigating virus intended to target their geopolitical adversaries [Hong Kong, Taiwan and the U.S.]
This zero-sum outlook is EXACTLY how the Chinese red dragon thinks!
We have been engaged in an undeclared economic war. Perhaps it’s time we made an official and public declaration; and strategically, openly, aligned all U.S. interests toward economic combat.
The U.S. media are in ideological alignment with blue state governors and congressional democrats to hype COVID-19 panic as a method to keep the economy from reopening. To advance this narrative the crowds during mass protects they approve of are ignored; but any crowd at an event they do not align with is used to push panic. Everyone can see this.
The New York manufacturing index shocked everyone earlier today showing a strong rebound. The index “unexpectedly” surged 48 points in June surprising all economic forecasters. Meanwhile, National Economic Council Chairman Larry Kudlow appears on Fox News to discuss the dynamics.
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As Kudlow notes, President Trump is looking to use any potential phase-4 legislative package to inject a massive ‘America First’ boost, via tax incentives for manufacturing business interests to return to the U.S. The administration does not see a need for additional direct spending, bailouts, or continued payments; however, this is an opportunity to provide tax incentives to boost U.S-centric economic activity.
It’s important to remember the dynamic of U.S. multinationals (Wall St), and how many of them align with Democrat and media efforts to hold down the U.S. economy. There are trillions at stake.
