Larry Kudlow has fully immersed himself in MAGA.  The evolution from supporter to believer likely comes from the increase in proximity to President Trump and the resolve therein.   Good stuff.
In this segment the Chairman of the National Economic Council discusses the background of the U.S. -v- China trade reset and the long-term goal of open global markets with Zero tariffs, Zero non-trade barriers and Zero subsidies.

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Everyone has a role to play…
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The Bureau of Labor Statistics (BLS) released the July 2018 employment report today (full pdf with tables below) highlighting continued growth in jobs.  Overall private employment gained 170,000 jobs, while government employment decreased 13,000 jobs for a net gain of 156,000 new jobs.   The BLS unemployment rate dropped to 3.9%.
[*Note this footnote:  “The change in total nonfarm payroll employment for May was revised up to +268,000, and the change for June was revised up to +248,000. With these revisions, employment gains in May and June combined were 59,000 more than previously reported.”]  Huh, funny that…. some revision eh?
July’s labor participation is holding steady at 62.9%, with 155,965,000 employed within the U.S. workforce. (Table A-1)
Blue and White-collar Main Street jobs continue to lead the MAGAnomic resurgence. (table B-1) Construction jobs increased 19,000 jobs; manufacturing gained 37,000 jobs; and trade/transportation and utilities gaining 15,000.
With extra cash in their pockets, the U.S. worker/consumer continued to spend and retail employment added 7,100 new workers in July.   (Table B1) Interestingly, and reinforcing a long-ago CTH prediction, the consumer spending growth (leading to increases in employment) is specifically in the consumable goods sector (food, clothing, etc.).   This is connected to the increase in work-time (table B2); an oft overlooked aspect to the economy.
Truck transportation gained 4,400 jobs in July (everyone needs truckers), which is in line with the high wage growth (3.4%) within this sub-set of the transportation industry.

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President Trump has moved into Phase II of the U.S./China confrontation.  Part of that confrontation is to use the inherent weakness of the Chinese economy against them.  To understand the weakness is to understand the China ‘One-Belt / ‘One-World‘ economic trade strategy.  Here’s an outline of the economic battle-space we are witnessing.
People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy –manufacturing– they do have economic strength.
However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.
Lets take a stroll and discuss.
China is a central planning economy. Meaning it never was an outcropping of natural economic conditions. China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.
This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is.
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As POTUS Trump and the U.S. trade team target ever increasing tariff pressure upon Beijing to change their behavior, keep a close eye on North Korea. Given the zero-sum approach of the Chinese; and their history of weaponizing the DPRK; we could expect to see Beijing roll out nuclear antagonism again in an overt effort to gain concessions.
Commerce Secretary Wilbur Ross discusses the need to hit China with even more economic pressure. WATCH:

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Main Street U.S.A., the American worker and the American farmer know what is at stake. The globalist Wall Street financial class, and their financial media, can gripe and moan, but that is not going to deter President Trump from this critical trade reset.  When Secretary Ross says: “we’re going to win this“, he speaks with knowledge of who controls the maximum leverage…. it ain’t Chairman Xi.
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In June and July last year it became obvious President Trump was going to initiate a full-frontal geopolitical confrontation with China based on their ambitions for economic conquest.  We labeled the confrontation: Eagle -vs- Red Dragon.
Specifically around: intellectual property theft; massive U.S. trade imbalances; imposed tariffs, and ridiculous non-tariff barriers put in place by China, we anticipated the conflict would eventually force Beijing to drop the Panda mask and expose their economic intentions.  Additionally there was clarity within President Trump’s approach for any observer who was willing to accept the history of Mr. Trump’s views on the larger issues. In short, POTUS Trump will not back down.
In March of 2018 U.S. Trade Representative Robert Lighthizer completed a section 301 review of China’s trade practices.  [SEE HERE] Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce.  However, as talks with China progressed, President Trump shelved the 301 action to see where negotiations would end-up.
Due to the severity of communist ideology, and the intransigence of China to make any modification to their global economic plans, Chairman Xi Jinping made the strategic decision to elevate the confrontation in full Red Dragon mode.  The May and June, 2018, negotiations between the U.S. and China provided no progress.  The 301 review of China is now pulled back off the shelf, and President Trump assembles his trade-war strategy:
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The ADP national employment report is a monthly measure of the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of companies served by ADP. The report measures approximately 24 million U.S. workers along with employment trends in collaboration with Moody’s Analytics.

For July 2018, ADP has calculated payroll increases of 219,000 new jobs including 23,000 more manufacturing jobs created as an outcome of a resurgence in manufacturing and goods-producing industries. In the last 19 months, the U.S. has added 836,000 manufacturing jobs.  [For contrast: in the 19 month period preceding President Trump’s MAGA-Magic-manufacturing growth, only 26,000 manufacturing jobs were created.]

(Via CNBC) Private payrolls in the U.S. increased by more than expected last month as companies get a boost from lower corporate taxes, ADP and Moody’s Analytics said Wednesday.
Jobs in the U.S. increased by 219,000 in July, while economists polled by Reuters expected a gain of 185,000. July’s job gains were the best since February, when 241,000 jobs were added. Jobs growth for the previous month was also revised up to 181,000 from 177,000.

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Several days ago I noticed a well-connected Canadian business analyst, Manny Montenegrino, had a considerable assembly of facts, examples, data-points and details to support his proposition that Canadian Prime Minister Justin Trudeau was intentionally collapsing his own economy.
After going through the evidence, weighing it against our own research, and looking closely at the political network of like-minded followers associating with PM Trudeau (mostly avowed Marxists), Montenegrino’s theory appears very solid:

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Apparently our CTH suspicions were correct; this is interesting.  Canadian Foreign Minister Chrystia Freeland is scheduled to leave Canada on Tuesday for a meeting of ASEAN foreign ministers in Singapore…. Meanwhile U.S. Trade Representative Robert Lighthizer and a high-level Mexican team -consisting of both incoming AMLO and exiting Nieto delegations- will be meeting again to determine the details of a bilateral trade deal.

Mexican Economy Minister Ildefonso Guajardo is from the outgoing Pena Nieto administration and was part of the crew supporting the Canadian position; ie. the plan to continue exploiting the NAFTA loophole.  However, Mexican president-elect Andres Manuel Lopez Obrador (AMLO) has selected Jesus Seade as his lead person for trade negotiations and appears more willing to engage in a bilateral trade deal with the U.S.
AMLO’s Jesus Seade, Minister Ildefonso Guajardo and Ambassador Robert Lighthizer are meeting again this Thursday to put the outline of a deal together; while Canada is sidelined from the discussion.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association in Canada, said: “I wouldn’t be surprised if the Americans and the Mexicans came to some resolution on that piece (autos) and then the Americans flip it back to Canada and say ‘Take it or leave it’.”  That is exactly what CTH anticipated was going to happen.
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U.S. President Donald Trump and Italian Prime Minister Giuseppe Conte will be holding a joint press conference immediately following their bilateral meeting at the White House. Anticipated start time 2:00pm EST:
UPDATE: Video Added

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Maria Bartiromo has an exclusive interview with Vice President Mike Pence to discuss the state of the economy and the ongoing administration policies therein.  VP Pence discusses the ongoing trade negotiations and the possibility of an agreement in principle between the U.S. and Mexico; a specific assignment for U.S.T.R. Robert Lighthizer.

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