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Right Wing Granny

Tag Archives: American economy

The Economy Is Questionable At Best

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I love it when a Democrat is in power–when unemployment rises it is always a surprise–even at Fox News.

On November 3rd, Fox News posted an article about the current state of the American economy.

The article reports:

U.S. job growth slowed more than expected in October, a sign the labor market is finally softening in the face of higher interest rates, stubborn inflation and other economic uncertainties.

Employers added 150,000 jobs in October, the Labor Department said in its monthly payroll report released Friday, missing the 180,000 jobs forecast by Refinitiv economists.

The unemployment rate, meanwhile, unexpectedly ticked up to 3.9% — the highest level in nearly two years. The pickup in the jobless rate suggests that layoffs are on the rise; the survey of households shows that the number of workers laid off rose in October by 92,000 from the previous month.

The unemployment number of 3.9% is not really a good measure of the economy unless it is looked at in relation to the workforce participation rate, currently slightly down at 62.7. Just to give some perspective, the workforce participation rate was 62.8% when President Trump took office in January 2017. It peaked at 63.3 in February 2020 (the ‘stop the spread’ shutdown began in March 2020). The reported unemployment rate is calculated only counting people who are looking for jobs. I suspect that if you counted everyone who is able to work but not working, the number would be much higher.

The article also notes:

The report also contained steep downward revisions to job growth at the end of the summer. Gains for August and September were revised down by a total of 101,000 jobs to a respective 165,000 and 297,000, the government said, suggesting that the labor market is weaker than it previously appeared.

The bottom line here is that the economy is not really growing although inflation is. For further details, please follow the link above to read the entire article.

 

It’s The Economy, Stupid!

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It’s the economy, stupid! Those were the words Bill Clinton used to win the 1992 election. The economy was slowly rebounding from the bi-partisan tax increases that President Bush had agreed to, but a lot of Americans did not realize that. On Monday, Issues & Insights posted an article about our present economic state.

The article reports:

Once upon a time, Democratic presidents understood how important a healthy economy was. President Bill Clinton and his advisers won two elections living by the mantra, “It’s the economy, stupid.” Get that right, they thought, and everything else follows. But today, Americans think President Joe Biden doesn’t get it, June’s I&I/TIPP Poll shows.

The online I&I/TIPP Poll, taken from May 31-June 2 and including responses from 1,358 adults nationwide, asked the following: “To what extent do you agree or disagree with the following statement: The American economy remains strong, as it transitions to steady and stable growth.”

That statement, by the way, was not made up. It’s a direct quotation of what Biden told Americans after the Commerce Department reported in April that real GDP growth in the first quarter was a disappointing 1.1%. It has since been revised up slightly to 1.3%. We did not, when surveying Americans, identify who made that statement.

Do Americans agree with Biden that the economy’s strong, steady and stable? Overall, I&I/TIPP found, 55% of Americans disagreed that the economy “remains strong,” while just 36% agreed. The poll has a margin of error of +/-2.7 percentage points.

The article concludes:

Meanwhile, the World Bank has slashed its growth estimate for the U.S. in half, saying the economy is “likely to remain weak.” That could impact America’s standing around the world.

“Nearly all the economic forces that powered progress and prosperity over the last three decades are fading,” the World Bank warned. “The result could be a lost decade in the making … for the whole world.”

One major indicator of economic misery: weekly wages, adjusted for inflation. The current “recovery” features 26 straight months of shrinking wages, after taking into account not just pay but also inflation and number of hours worked. When real wages decline for middle-class Americans, their standard of living also declines.

…It wasn’t until the economy soured, with roaring inflation and soaring oil prices, that the Watergate scandal really began to gain traction. Americans simply lost patience with someone they saw as both economically incompetent and corrupt. Nixon resigned on Aug. 9, 1974, rather than face almost certain impeachment.

I&I/TIPP publishes timely, unique, and informative data each month on topics of public interest. TIPP’s reputation for polling excellence comes from being the most accurate pollster for the past five presidential elections.

The people who write Issues & Insights are the former editorial board of Investor’s Business Daily. They are very well educated on economic issues.

Fact Checking President Biden’s Recent Speech

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On Sunday, Townhall posted a fact check on President Biden’s recent speech on the economy.

The article reports:

As Biden’s speech kicked off, he claimed that an additional 700,000 construction projects were added across the U.S., however, he largely exaggerated that number. 

The White House issued a correction in the transcript of Biden’s speech saying that only 7,000 construction projects have been created. 

The second false claim Biden made was saying that the cap on senior’s drug spending is in effect now, as of January 1 there is a limit of $2,000 a year on prescription drug costs for seniors.

In reality, the $2,000 annual cap which was in the Democrat’s Inflation Reduction Act that Biden signed last year, won’t take effect for another two years. 

Biden also took credit for millions of people receiving Covid-19 during his time in office, however, former President Trump initiated the rollout of people getting the jab.

In his speech, Biden said that only “3.5 million people” had been fully vaccinated against Covid under Trump, however, 19 million people had already received the first shot before Biden took office. 

The 3.5 million Biden cited was the number of people who had received two shots to complete their primary vaccination series. 

The article concludes:

“My word as a Biden: I’ve never been more optimistic about America’s future than I am today,” the president tweeted on Sunday. 

However, Twitter users felt the exact opposite. 

Rapid Response Director for the RNC Tommy Pigott criticized Biden for misleading the U.S.

“The border is open, real wages are down, energy costs are outrageously high, the Taliban controls Afghanistan, & the cartels are making billions smuggling fentanyl,” Pigott tweeted, adding “there is reason to be “optimistic” though – we have a [House GOP] majority who is working to hold Biden accountable.”

Another user called Biden’s word an absolute “lie,” while another said that “My word as a Biden” is like saying my word as a “Clinton”— meaningless. 

It will be interesting to see if any of the mainstream media does any fact-checking on the speech. The media seems to be participating in the effort to make sure President Biden does not run again in 2024, so it should be interesting to see if any of this is reported in the mainstream media.

Reporting On The American Economy

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On Monday, Issues & Insights posted an article about inflation and the state of the American economy.

The article includes the following:

Ronald Reagan, in his 1980 campaign for president, updated Harry Truman’s useful definitions of two key economic terms.

“It’s a recession,” Truman had intoned, “when your neighbor loses his job. It’s a depression when you lose yours.”

To which The Gipper appended, entertainingly: “And recovery is when Jimmy Carter loses his.”

The article notes:

These articulations sprang to mind in pondering the variations of inflation measurements advanced by economists to determine whether price growth is “easing,” as the counterfeit chief executive would have one believe.

Should the focus be the “headline” Consumer Price Index? The one the Bureau of Labor Statistics describes as “a measure of the average change over time in the prices paid by urban consumers for a representative basket of consumer goods and services” (listed on the chart below)? Should the guide be a CPI subset referred to as “core inflation,” which excises “more volatile” food and energy prices? And how about the latest craze: “super core inflation?”

According to Fortune magazine, super core “does not have an established definition” but “refers to price measures that exclude sectors that economists feel distort the broader inflation figure.”  Economists like Paul Krugman (yeah, we know; kind of like discussing “military intelligence”) surmise that super core leaves out not just food and energy but also housing.

The article concludes:

Yet both the spending and the inflationary outcome – a dragon that had been largely slain since the Reagan Administration – are now revived for one reason: provide another set of tools of power and oppression.

The spending is to get citizenry and businesses alike hooked on federal largess. Inflation is another means of weakening the populace and private institutions as their labor and investment yields less and, in yet another spiral, they get all the more dependent on Uncle Sam and its cohort of crony capitalists.

The cynical, midterms-oriented pause in the upward price of fuel, occasioned by further manipulation of energy markets in the form of petroleum reserve releases, is only a stall in this brutal power play.

No matter the Fed’s efforts to run twice as fast – and come up with new fictions when it comes to measuring the real price of the dollar – there is no way for the central bankers even to stay in the same place when Jerome Powell’s exertions are swept under by a continued flood of Inflation Reduction Act and Omnibus(t) largess and excess.

Meanwhile, this correspondent will continue to define inflation as what it is: the loss of his dwindling dollars’ buying power. And relief, again paraphrasing The Great Communicator, as the prospect of another loss of power: Joe Biden’s.

Hang unto your hats. Unless Congress develops a spine to stop the spending, the future looks a little shaky.

Bringing A Meme To Life

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On Sunday, BizPacReview posted an article about a meme coming to life.

The article reports:

President Joe Biden made a Baskin Robbins run while in Portland, Oregon, on Saturday and broke the internet when, with a mouthful of ice cream, he casually told a reporter that the U.S. “economy is strong as hell” and blamed the rest of the world for inflation.

“I’m not concerned about the strength of the dollar. I’m concerned about the rest of the world. Does that make sense?” Biden said.

When asked if he could explain his statement, Biden, while chewing on his waffle cone, stated, “Our economy is strong as hell. Inflation is worldwide. It’s worse off everywhere else than it is in the United States. So, the problem is the lack of economic growth and sound policy in other countries, not so much ours. It’s worldwide inflation. It’s consequential.”

The comment comes on the heels of the latest Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics, which revealed that core inflation has reached a new 40-year high.

And in that stunning moment, Joe Biden brought a months-old meme that has been circling the internet to life.

The article includes the meme:

President Biden is President of America–not of the world. It would be nice if he were concerned about inflation in America.

The article concludes:

So it’s hard to imagine, as more and more Americans are making tough choices between things like food and gas to get to work, what Joe Biden could possibly do to boost anyone’s confidence.

But, as one user on Twitter noted, “They can get him to do and say anything with ice cream.”

I wonder what world our President lives in.

From Recovery To Shortages

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Issues & Insights posted an article today about what almost eighteen months of the Biden administration has done to the American economy.

The article reports:

It’s taken President Joe Biden and his fellow Democrats all of 16 months to turn the land of plenty into one plagued by empty shelves and rationing. Well, Biden did promise to “transform” America, but how many voters knew that this is what he had in mind?

The latest in the growing list of shortages is the chronic and dangerous scarcity of baby formula that is causing new parents to scramble to find supplies and stores to ration how much customers can buy. The latest industry data show that 40% of America’s baby formula supplies are out of stock, up from 29% in March and 11% last fall.

This is a potentially deadly situation if parents can’t get the food they need for their babies or try to make their own formula. As CNN reports, “Specialized formula is even harder to locate amid the widespread shortage. Parents are driving to neighboring states to try their luck, and many are pleading for help on social media, imploring strangers to share or even barter any extra supply they may have.”

One industry observer said that “supply chain issues, product recalls and historic inflation” are driving the baby formula crisis. As it turns out, Biden is at least partially responsible for all of those.

His spending spree fueled the price spiral, his “rescue” plan exacerbated labor shortages and supply chain problems, and, as Just the News reports, “gross incompetence by federal officials on Biden’s watch … inflamed a baby formula shortage now panicking parents nationwide.”

A whistleblower had alerted the Food and Drug Administration last October about contamination problems at an Abbott Nutrition plant in Michigan. But Biden officials didn’t get around to recalling the formula until late February, when the industry was already under pressure from Biden-fueled labor shortages and price hikes.

The article also mentions other shortages:

  • “New York Hospitals Battle Supply Shortages”
  • “Over Half of Consumers Report Grocery and Food Shortages”
  • “Fertilizer shortage could cause food shortages in Michigan”
  • “Inflation, shortages could delay Georgia road projects”
  • “Cold Stone Creamery continues to deal with shortages”
  • “April auto sales fall on shortages; Honda at 3-day supply”
  • “California officials warn of summer power shortages, blackouts”
  • “Labor and Materials Shortages Prompt New Approaches to Building and Design”
  • “Worker shortages hamper U.S. private payrolls, services sector in April”
  • “Trucker shortage causing supply chain disruptions”
  • “Diesel fuel is in short supply as prices surge”

This is either gross incompetence of an intentional destruction of the fabric of
America. Either way, it needs to be slowed down by the mid-term elections. Hopefully that will happen.

How To Restore The American Economy

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On Friday, The Daily Signal posted an article listing three basic ways to restore the American economy.

The article reports:

1) Make the 2017 tax cuts permanent: The Tax Cuts and Jobs Act has been one of the most successful pieces of legislation in recent years. Despite that, many of its critical provisions are set to expire in 2025 if Congress does not act soon.

For most Americans, the most important aspect of the Tax Cuts and Jobs Act that is set to retire is the individual income-tax cuts. That provision cut taxes for 80% of Americans, saving individuals an estimated $1,400 annually, with lower- and middle-income Americans benefiting the most.

If Congress lets this provision of the act expire, middle-class families are likely to pay over $1,000 more in taxes annually.

…2) Eliminate special tariffs: Politicians continually peddle the falsehood that tariffs help working-class Americans, but that couldn’t be further from the truth. Tariffs are an inherently regressive form of tax that places an undue burden on lower- and middle-income families.

Since 2018, Americans have paid more than $280 million in extra taxes to buy washing machines and washing machine parts from abroad. That has directly contributed to the steep rise in prices of laundry equipment, which was up 7.9% year-over-year in January.

Unfortunately, that was not the only sector negatively affected by tariffs. Americans have paid more than $12 billion in tariffs on imports of aluminum and steel since 2018.

Steel and aluminum are crucial inputs for countless manufactured goods, but the automotive industry has been one of the hardest hit. The price of new vehicles rose more than 12% year-over-year in January.

…3) End the war on conventional fuels: The damaging effects of bad policy might not be more obvious in any other area of the economy than in the energy sector.

Energy prices rose nearly 27% year-over-year in January, based on the Consumer Price Index, with gasoline and natural gas rising 40% and 23.9%, respectively.

Washington’s war on conventional fuels is clearly contributing to the rapid increase in prices of basic sources of energy that Americans use every day to heat their homes and get to work.

Not only has Washington made it harder to transport fuel (for example, by canceling or slow-walking new pipeline construction), but it has also made it more difficult and expensive to produce natural gas, coal, and oil here in the United States, creating an avoidable reliance on foreign imports.

The administration has proposed or issued new regulations burdening nearly every aspect of conventional energy markets, from financing to consumer use.

Other holdover policies—some decades or even a century old—are increasing costs and inefficiency in energy markets. For example, unnecessary regulations and mandates have increased the costs of gasoline and have put economic pressure on refineries, some of which have had to close or downsize.

Please follow the link to the article for further information.

Leadership Decisions Have Consequences

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On Friday, Just the News posted an article about President Biden’s first 100+ days in office.

The article notes:

President Biden entered the Oval Office nearly four months ago and immediately signed dozens of executive orders and made sweeping legislative proposals aimed at rolling back the policies of former President Donald Trump. Early in the Biden presidency, the United States is now facing a series of emerging crises that critics attribute directly to these reversals of Trump-era policies and positions.

“Weak leadership is the cause of all of these crises,” freshman Rep. Lauren Boebert (R-Colo.) told the John Solomon Reports podcast, citing the surge of illegal immigration, the disabling Colonial Pipeline hack, and the flare-up of violence in the Middle East.

The article notes the actions President Biden took regarding America’s southern border:

…The legislation Biden has sent to Congress suggests he may wish to create a system that offers a pathway to citizenship to the illegal immigrants that have flooded into the country since January.

The number of people who would be granted citizenship without necessarily understanding the history or culture of America could change our country drastically. In the past, we have strongly encouraged immigrants to assimilate. The number of immigrants currently crossing the border illegally would be very difficult for America to take in and help resettle.

The article also notes the impact of the Biden administration’s policies on the American economy:

The strength of the economy was the crowning achievement of the Trump presidency, at least until the pandemic. President Biden inherited high rates of joblessness, mostly caused by continued COVID-19 restrictions that depress economic activity. In theory, job creation should increase as restrictions are lifted. However, last week’s dismal jobs report coupled with a current annual inflation rate of 4.2%, according to the White House Council of Economic Advisers, indicate that Biden’s economic policy measures may be misfiring across the board.

…Biden has repeatedly said that he does not believe the enhanced benefits had a “measurable” impact on the jobs numbers. Yet, even as he is dismissing widespread concerns about the disincentivizing effects of the enhanced benefits, he promised earlier this week that his administration is “going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.”

“It’s just not a good deal for these workers to go back on the job,” said economist Stephen Moore.

Please follow the link above to read the entire article. The policies of the Biden administration are not working for the benefit of all Americans. Simply ending the policies of President Trump has not been a wise governing strategy.

 

Good News From The Manufacturing Sector

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One America News reported yesterday that U.S. factory activity accelerated to its highest level in nearly 2-1/2 years in December.

The article reports:

The strength in manufacturing reported by the Institute for Supply Management (ISM) on Tuesday likely helped to soften the blow on the economy in the fourth quarter from the relentless spread of COVID-19 and government delays in approving another rescue package to help businesses and the unemployed.

The article also notes that there are bottlenecks in the supply chains due to the increased number of coronavirus cases.

The article also concludes:

The ISM’s forward-looking new orders sub-index rose to a reading of 67.9 last month from 65.1 in November. Strong orders growth boosted manufacturing employment, which had contracted in November. The ISM’s manufacturing employment gauge rebounded to 51.5 from a reading of 48.4 in November.

But the supply chain gridlock is driving up costs for manufacturers. The survey’s prices paid index jumped to a reading of 77.6 last month, the highest since May 2018, from 65.4 in November. That raises the risk of higher inflation this year, though high unemployment could limit price pressures.

The labor market has lost steam in tandem with the economy since job growth peaked at a record 4.781 million in June.

According to an early Reuters survey of economists, nonfarm payrolls probably increased by 100,000 jobs last month after rising by 245,000 in November. That would mean the economy recouped about 12.5 million of the 22.2 million jobs lost in March and April. The government is scheduled to publish December’s employment report on Friday.

Manufacturing has come back to America because of the trade policies of President Trump. People in areas of the country that have had high unemployment for years have gotten their manufacturing jobs back. It is a pretty safe bet that under Joe Biden, China will take over American manufacturing again and the American worker will be out of luck.

Good News On The Economic Front

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CNBC reported the following yesterday:

  • Nonfarm payrolls increased by 638,000 in October and the unemployment rate fell to 6.9%.
  • Economists surveyed by Dow Jones had forecast 530,000 and 7.7%, respectively.
  • Hospitality and professional and business services showed the biggest gains. Government job losses subtracted from the total.

Meanwhile, the Bureau of Labor Statistics reported that the Workforce Participation Rate went from 61.4 in September to 61.7 in October.

CNBC reports:

Employment growth was better than expected in October and the unemployment rate fell sharply even as the U.S. faces the challenge of surging coronavirus cases and the impact they could have on the nascent economic recovery.

The Labor Department reported Friday that nonfarm payrolls increased by 638,000 and the unemployment rate was at 6.9%. Economists surveyed by Dow Jones had been looking for a payroll gain of 530,000 and an unemployment rate of 7.7%, a touch lower than the September level of 7.9%.

October’s gain was just slightly off the September pace of 672,000.

I have asked this questions before. Why is growth always better than expected when a Republican is in the White House?

We are in an economic recovery. That recovery will continue if President Trump continues in office. That recovery will come to a screeching halt if Joe Biden becomes President.

 

Good Economic News

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CNBC is reporting today that America’s Gross Domestic Product grew at a rate of 33.1% annualized during the third quarter. It was anticipated that the growth rate would be 32 %.

The article reports:

Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday.

Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department’s initial estimate for the period.

The gain came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones. The previous post-World War II record was the 16.7% burst in the first quarter of 1950.

Markets reacted positively to the news, with Wall Street erasing a loss at the open and turning mostly positive.

The article includes two Tweets that provide insight into the election:

Please note that Joe Biden gives no facts to back up his claims. We are not out of the woods yet with the coronavirus, but we are moving forward. The Democrats in the House of Representatives have chosen to hold the stimulus package hostage to their pet projects to prevent the help to those who need it from being disbursed. I suspect that the funds will be allocated after the election.

The State Of The American Economy

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Townhall posted an article today about some of the economic indicators that show that the American economy is rapidly recovering from the self-inflicted recession.

The article reports:

Breaking news: The US economy is roaring! Over the last few months, we have witnessed the sharpest economic snapback in US history. While many are still out of work, the future looks increasingly promising for those seeking employment. One would think that we were still mired in the deepest throes of April’s COVID-19 crisis if you take heed of the media’s narrative in recent weeks. It is clear the Democrats and Joe Biden are making the pandemic their closing argument for the 2020 election. But why? The economy is a losing argument for the Left.

The article cites some of the economic indicators that signal a strong recovery:

The commodity market is a clear window into the cost of goods and the level of demand that exists. As the Coronavirus shut down economies all over the world, global goods demand collapsed. Most notably was the oil market, as energy fuels the economy as a whole. Supply was steady, but a massive collapse in activity that forms demand left producers with a supply glut. The supply/demand gap was so large that oil futures (commodities trade primarily in the futures market) actually went negative, a historic event.

Just 7 months later the market has not only stabilized, but also has rebounded significantly. Oil, itself, is up over 100% from levels seen this Spring. This is a sound indicator of the resumption of robust economic activity. We are now escaping from economic contraction and are closing in on expansion. As consumers travel more and demand comes back for finished goods, the oil market will continue to flourish. This is one of many reasons why the Third Quarter GDP measure, to be released at the end of October only days before the election, will show the most significant rise in US history. The commodities market isn’t limited to oil. There are other very useful economic gauges within the basic goods market.

One of the most important, in terms of assessing global activity, is copper. Copper is a basic material used throughout manufacturing. The copper market collapsed this Spring along with all other raw goods during the crisis. At its low, copper was trading down roughly 35%. As activity has roared back to life, copper has been on an absolute tear. As of this writing, copper is up over 50% above its COVID lows, and is, in fact, higher than the market was trading pre-COVID. That’s a very promising signal emanating from the commodity market.

Please follow the link above to read the entire article. There is a large body of indicators showing that the economy is on the path to full recovery. The majority of states still closed down are blue states, and the leaders of those states will have to answer to the voters. Meanwhile, the economic policies of the Trump administration are working their magic.

Good News

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Just the News posted an article with the following headline today, “U.S. weekly jobless claims remain below 1 million, 860,000 new claims made last week. The figure was slightly lower than economists predicted.” Why are the predictions always negative during a Republican administration?

The article reports:

The number of Americans filing for first-time unemployment benefits totaled 860,000 last week, the Labor Department reported Thursday.

The number was slightly lower number than the predicted 875,000. Several weeks ago, the weekly jobless figure fell below 1 million for the first time since late March and has remained below that threshold.

This week’s figure is down slightly from the previous week’s 893,000 number.

Despite the high number of coronavirus-related layoffs, U.S. employers in August replaces nearly 11 million of the initial 22 million jobs lost during the onset of the pandemic. Hiring rates over the summer have continued to climb and, in conjunction with several other indicators of an active economy, point toward a steady shift away from the pandemic-induced economic shutdown.

President Trump is a businessman. He understands how business works. He will rebuild the American economy. Joe Biden will not. It is that simple. Look at the anemic economic growth between 2008 and 2016, and then compare that to the economic growth before the pandemic and as we are coming out of the pandemic.

Just to provide some perspective, in January 2009, the Workforce Participation Rate was 65.7. In October 2016, it was 62.8. In January 2019, it was still at 62.8. In February 2020, the Workforce Participation rate was 63.4. After dropping to 60.2 in April, it was at 61.7 in August. The Workforce Participation Rate represents the number of Americans employed or looking for work. If you want to keep this number high, vote for President Trump. If you want unemployment to rise and the number of Americans working to shrink, vote for Joe Biden. Joe Biden’s tax plan will very quickly stifle the economic growth that we have seen under President Trump.

The Trump Economy

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Newsmax posted an article today about the state of the American economy.

The article reports:

Companies in the U.S. ramped up hiring at the start of the year, taking on the most workers since May 2015 and indicating the labor market remains robust, a report on private payrolls showed Wednesday.

Employment at businesses increased by 291,000 in January after a revised 199,000 gain in the previous month, according to data from the ADP Research Institute.

The article includes the following statistics:

  • The larger-than-expected gain was broad-based and included the biggest advance in service industry payrolls since February 2016, including a record surge in hiring at leisure and hospitality companies in data back to 2002.
  • The report is in line with last week’s statement from Federal Reserve policy makers following their meeting on interest rates. The Fed said that “job gains have been solid, on average, in recent months.”
  • Economists monitor the ADP data for clues about the government’s job report. The Labor Department’s employment data due Friday is expected to show a 150,000 gain in private payrolls and an unemployment rate remaining at a 50-year-low of 3.5%.
  • The government figures will also include annual revisions. In August, the Labor Department’s preliminary benchmark projections showed the number of workers added to payrolls will probably be revised down by 501,000 in the year through March 2019. ADP’s report follows a different methodology than the government’s, and the two do not directly correlate with each other.
  • ADP report showed goods-producing payrolls rose 54,000 in January, while service-provider employment increased 237,000.
  • Hiring in construction jumped 47,000, the most in a year, and manufacturing showed a 10,000 increase in January, which was the biggest gain in 11 months.
  • Payrolls at small businesses increased by 94,000 last month, the most since July 2018; rose 128,000 at medium-sized companies and 69,000 at large firms.
  • ADP’s payroll data represent about 411,000 firms employing nearly 24 million workers in the U.S.

President Trump was mocked during the election campaign for saying he could bring back manufacturing jobs and turn the economy around. His trade agreements have done what other politicians considered impossible. I should note that people who think something is impossible don’t attempt to accomplish it. Maybe we need to elect people who are willing to attempt the impossible rather than those who simply make empty promises.

Good News For The American Economy

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Breitbart posted an article today about the latest jobs numbers.

The article reports:

The U.S. private sector added 202,000 positions in December, according to an estimate from ADP and Moody’s Analytics.

This far outpaced the 150,000 new hires forecast by economists. In addition, ADP revised its November estimate dramatically higher, from 67,000 to 160,000.

Somehow when there is a Republican President, the actual numbers are generally  higher than the predictions.

The article concludes:

The report suggests that the labor market ended 2019 in a position of rising strength. The Labor Department will release its report on the jobs situation on Friday. Economists expect that to show a gain of 160,000 private and public sector jobs.

Medium sized businesses, those with between 50 and 499 employees, led the way in job growth, adding 88,000 jobs. Larger businesses added 69,000 and smaller firms added 45,000, ADP/Moody’s said.

Despite the very high number of new positions in December, Moody’s Analytics chief economist Mark Zandi said that job gains “continue to moderate.”

“Manufacturers, energy producers and small companies have been shedding jobs. Unemployment is low, but will begin to rise if job growth slows much further,” Zandi said

“As 2019 came to a close, we saw expanded payrolls in December,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The service providers posted the largest gain since April, driven mainly by professional and business services. Job creation was strong across companies of all sizes, led predominantly by midsized companies.”.

The economy continues to do well under the command of an experienced businessman. Let’s keep it that way!

The Quiet Revolution In American Shopping

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One America News posted an article today about the changing habits of shoppers in America.

The article reports:

U.S. shoppers made more purchases online on Black Friday than in the mall – hurting traffic and sales at brick-and-mortar stores, according to data that offered a glimpse into what is still one of the busiest shopping days of the year.

For the first time in several years, however, store traffic on Thanksgiving evening grew – indicating a shift in when consumers are leaving their homes to shop. It is also a sign of how Thursday evening store openings have continued to hurt what has traditionally been a day that kicked off the U.S. holiday season.

The importance on the shopping calendar of Black Friday, or the day after the U.S. Thanksgiving Day holiday, has waned in recent years. This is due to the choice by many retailers to open their stores on Thursday evening, as well as to early holiday promotions and year-round discounts. However, it is increasingly turning into a day when shoppers do not necessarily flock to stores but spend heavily online.

Also, for most retail chains, Black Friday store traffic and sales data is not necessarily grim as consumers continue to spend, consultants said. Winning the transaction, whether online or in-store, has now become more important for retailers than where it occurs.

Most major stores have followed the example of Amazon, making things available online (with options of in-store pick up). Shoppers can now find an item online, place an order, have it delivered, or go to their local store to pick it up immediately or within a day or two.

The article concludes:

Shopper traffic on Thanksgiving evening increased by 2.3%year-over-year but was dragged down by Black Friday, which fell 6.2% from a year ago.

Brian Field, senior director of global retail consulting for ShopperTrak, said the traditional pattern of shoppers visiting stores has been disrupted not only by online shopping but by offerings like “buy online and pick up in store,” a growing category, which is not included in store traffic count on Black Friday.

“What all of this really boils down to is the customer journey has changed, now it can start anywhere online, in-store and end anywhere … and it is about making sure the customer makes the purchase and stays loyal to the brands more than where it happens,” he said.

Preliminary data from analytics firm RetailNext showed net sales at brick-and-mortar stores on Black Friday fell 1.6%, which the firm said is slower than in previous years. No data was yet available for actual spending in stores.

The National Retail Federation had forecast U.S. holiday retail sales over the two months in 2019 will increase between 3.8% and 4.2% from a year ago, for a total of $727.9 billion to $730.7 billion. That compares with an average annual increase of 3.7% over the past five years.

Consumer spending is a major part of the health of the American economy. The increase in holiday retail sales is part of what keeps our economy growing and thriving.

It’s Hard To Remove A Sitting President When The Economy Is Good

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It is hard to remove a sitting President when the economy is good. That rule applies to attempts to impeach the President, and the rule also applies to elections. One impact of a strong economy is that people who are making good money and feel relatively secure in their jobs are less likely to engage in class warfare. Class warfare is one of the Democrat’s most frequently used weapons.

Yesterday One America News posted an article about the current state of the American economy.

The article reports:

The latest macroeconomic data is suggesting the chances of a U.S. recession have reduced in recent weeks due to steady consumer spending. According to a recent poll by Morning Consult, consumer confidence has rebounded over the past four weeks due to ongoing job creation, gains in wages and a soft price inflation.

Even without a resolution of the trade negotiations with China, consumers are feeling confident.

The article concludes:

Retail sales have also increased going into the holiday shopping season, beating previous expectations. Consumer spending makes up for roughly 70 percent of America’s GDP growth. Many experts have tied the ongoing stable expansion to President Trump’s economic policies.

“I think on the whole, this economy has been remarkable. It’s taken the headwinds of the trade wars pretty successfully…and we’re still chugging along at roughly two percent. I think that’s an accomplishment.” – Douglas Holtz-Eakin, President of the American Action Forum

A separate report from S&P Global found the probability of a U.S. recession in the coming year has dropped from 35 to 30 percent since August of this year.

I personally would like to see the probability of a U.S. recession at 0 percent, but I don’t know if I would trust the media to report that number even if it occurred.

Moving American Energy Forward

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The Hill posted an article yesterday stating that the Nebraska Supreme Court ruled Friday that construction of the Keystone XL Pipeline is in the public interest.

The article reports:

The decision paves the way for construction to begin on the heavily stalled gas pipeline project.

Environmental groups who challenged the permit in court denounced the ruling Friday as failing to consider the environmental impacts of the pipeline’s construction.

“It’s disappointing that the court ignored key concerns about property rights and irreparable damage to natural resources, including threats to the endangered whooping crane, but today’s ruling does nothing to change the fact that Keystone XL faces overwhelming public opposition and ongoing legal challenges and simply never will be built,” said Ken Winston, attorney for the Nebraska Sierra Club, in a statement.

“The fight to stop this pipeline is far from over.”

The pipeline still faces further hurdles, including a federal lawsuit in Montana seeking to block construction there, as well as ongoing opposition from Native American tribes throughout Nebraska and South Dakota that have pledged to protest if construction is approved. 

The 1,179-mile pipeline has been in commission since 2010.

Former President Obama rejected the Keystone XL Pipeline plan, which aims to transport crude oil from Canada through the U.S., but it was revived under Trump, who approved a permit in 2017.

When President Obama rejected the Keystone XL Pipeline, he was providing additional income for his friend Warren Buffett.

In April 2014, I reported:

The friendship between President Obama and Warren Buffett is not news. Warren Buffett supported President Obama’s tax increase proposals saying that his secretary paid higher taxes than he did. The failure of the Obama Administration to permit the Keystone Pipeline to be built allows the Burlington Northern Santa Fe railroad, owned by Berkshire Hathaway, owned by Warren Buffett, to transport the oil (see rightwinggranny.com) from the oil fields to other areas of the United States.

One thing to consider when evaluating the pipeline is the fact that the pipeline is actually the safest way to transport the oil. Pipelines have better environmental safety records than trucks or trains.

As America moves to solidify its energy independence, the Keystone XL Pipeline will be an important part of that effort. Those opposing it are working against the American economy and against American national security.

We Have Seen This Play Before

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The American economy is based on consumerism. Americans buy things and the economy continues. It is a rather delicate balance that can be manipulated for political purposes. We are currently watching an attempt to manipulate that economy for political purposes–President Trump’s strongest positive for re-election is the impact his administration has had on the economy. If the Democrats can ruin the economy, they might have a chance to win the presidency in 2020. After watching their behavior for the past two years, I am not surprised by any tactic they might use. So how are the Democrats and their friends in the media attempting to impact the economy?

The Associated Press reported today:

The threat of a recession doesn’t seem so remote anymore for investors in financial markets.

The yield on the closely watched 10-year Treasury fell so low Wednesday that, for the first time since 2007, it briefly crossed a threshold that has correctly predicted many past recessions. Weak economic data from Germany and China added to recent signals of a global slowdown.

That spooked investors, who responded by dumping stocks, sending the Dow Jones Industrial Average into an 800-point skid, its biggest drop of the year. The S&P 500 index dropped nearly 3% as the market erased all of its gains from a rally the day before. Tech stocks and banks led the broad sell-off. Retailers came under especially heavy selling pressure after Macy’s issued a dismal earnings report and cut its full-year forecast.

The article goes on to list things that the writer is convinced are evidence of an imminent recession. But let’s step back a minute. The American economy is cyclical. We have been in a growth spike for the past two years due to tax cuts and deregulation. Those factors are not changing. Unemployment is at historic lows. There are more jobs than workers. There is no evidence of that changing. We might be due for a correction in the stock market, but it’s not time to panic.

This tactic has been used before. In 1990, President George H.W. Bush agreed to a tax bill with the Democrats. The agreement broke his pledge of ‘no new taxes’, but it also did something else. The tax increase on luxury items worked its way through the economy causing a recession. Workers in industries making ‘luxury items’ lost their jobs are sales of these items decreased due to the tax increases. As those workers lost their jobs, they stopped going out to dinner, traveling, and doing the things that people do when economic times are good. People in service industries and tourism lost their jobs. The impact trickled through the economy, and we were in a recession. We were coming out of the recession during the campaign, but the media failed to note that.

In the coming days, watch for a media narrative of ‘the sky is falling’. That narrative will be in play for the next year in order to convince American voters to vote Democrat.

The only way to crash this economy is to panic the public. Large investors in the market with a political agenda can begin that process. The media can fan the flames.

The fundamentals of the American economy are strong. If Americans refuse to play along with a media-created financial panic, all will be well.

If They Really Believed What They Are Saying, Would Their Behavior Change?

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The Gateway Pundit reported the following today:

A slew of A-list celebrities have flocked to Sicily, Italy on private jets and massive yachts to discuss the woes of global warming caused, they say, by things like private jets and massive yachts.

The founders of Google invited a a throng of the rich and famous,  including former President Barack Obama, Prince Harry, actor Leonardo DiCaprio and singer Katy Perry for a huge party they’ve dubbed Google Camp.

“The three-day event will focus on fighting climate change — though it’s unknown how much time the attendees will spend discussing their own effect on the environment, such as the scores of private jets they arrived in and the mega yachts many have been staying on,” reports the New York Post.

“Everything is about global warming, that is the major topic this year,” a source told The Post.

The cost of the extravaganza — $20 million.

According to the Italian press, at least 114 private jets will land at the Palermo airport.

So let me get this straight. The Green New Deal wants to cripple the American economy in the name of saving the earth–no more fossil fuel, no more cows, etc., yet the richest of the rich attend a meeting on fighting climate change in machines with some of the biggest carbon footprints on earth.

I guess if we are all going to die in twelve years because of global warming, they are going to go out in style.

Sometimes The Truth Just Kind Of Slips Out

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The Washington Examiner posted an article today that stated something that most of us know but haven’t seen widely reported in the media.

The article states:

In Europe, you will often hear politically savvy people refer to Green Party politicians as “watermelons.” The reason is that although they might be environmentalist “green” on the outside, these leftists are secretly communist red if you look beneath the surface.

They typically resort to such subterfuge because environmentalism is more popular than Marxism. A former East German communist is bound to be unpopular, but perhaps not so much if he rehabilitates himself as a renewable energy enthusiast.

The case of Rep. Alexandria Ocasio-Cortez, a Democrat from New York, is different in that she openly advertised herself as a socialist in a country with a well-grounded historical aversion to such alien ideologies. But her grand policy initiative, the $93 trillion Green New Deal, was still billed as if it were a legitimate environmentalist idea. We were supposedly trying to save the world from imminent destruction. As Ocasio-Cortez herself put it, “We’re, like, the world is going to end in 12 years if we don’t address climate change.”

When Representative Ocasio-Cortez makes statements like that, this is what she reminds me of:

At any rate, her chief of staff, Saikat Chakrabarti, let the cat out of the bag recently.

The article reports:

Her chief of staff Saikat Chakrabarti (the brains and the money behind her political operation ever since her 2018 primary victory) divulged in an unintentionally blunt comment in the Washington Post that the Green New Deal was not only not based in the science of climate change, but in fact not even designed with climate change in mind. “[I]t wasn’t originally a climate thing at all,” he is quoted as saying.

In other words, it’s not that they looked for a way to save the world, and just happened to find a way that involved full employment pledges, the retrofitting of millions of buildings, income for those unwilling to work, high-speed passenger rail, and the curtailment of plane travel and carnivorousness. That’s precisely backwards. The Green New Deal came about because Chakrabarti wanted to transform the U.S. economy into something more primitive, and environmentalism struck him as the best excuse for doing so.

The American economy currently is working for everyone who chooses to work. When people work, they are aware of how much money the government takes out of their paychecks. That in itself may present a problem for the Democrats running for election in 2020.

When The Public Just Doesn’t Believe Your Lies

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President Trump has been frequently portrayed as a racist. This really defies logic since he received awards for his efforts toward racial harmony before he became a Republican and ran for President. He also literally fought city hall to make Mar-a-Lago open to Jews and black people when other exclusive clubs in the area were closed to those groups. Evidently some people have actually figured out that the charges of racism against the President are false.

Yesterday The Gateway Pundit reported the following:

29% of Black Women Have Favorable or Neutral Opinion of President Trump after 2 Years in Office

That is not good news for the Democrats.

The article continues with a quote from Medium:

Interestingly, 29% of respondents had a favorable or neutral opinion of Donald Trump. Of those polled 16% responded that they “really like him” or “he’s okay”, with an additional almost 13% unsure or undecided, a much different picture than the one portrayed in most media.

“Trump’s numbers with black Democratic women show that his populist message still resonates with many. Given that Sanders also has a heavily populist message, and is currently enjoying strong support in this community, Trump’s numbers shouldn’t be that surprising.

“It’s also important to remember that Hillary Clinton badly underperformed with this group in 2016. Turnout among black Democratic women dropped from around 68% in 2008 and 70% in 2012, to about 64% in 2016.

“I think the take away here is that, to avoid a repeat of 2016, an emotionally resonant populist appeal, delivered in a way voters deem authentic, will be key to turning out this crucial Democratic constituency.“ said Walter Kawecki, the firm’s founder and CEO.

President Trump has done amazing things economically. You have to really have your head in the sand to not be impressed with the current state of the American economy. Minority groups–youth, blacks, women, etc. have all benefited from low unemployment. If the economy continues to roar along, that will make at least a small difference in the 2020 election.

 

Laws Have Consequences

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Yesterday The Conservative Treehouse reported that Toyota has announced the following:

  • By 2021, Toyota will now invest nearly $13 Billion in its U.S. operations with plans to add nearly 600 new jobs at American manufacturing plants
  • Hybrid versions of the popular RAV4 and Lexus ES to be produced in Kentucky for the first time
  • Production capacity increases and building expansions at Toyota’s unit plants in Huntsville, Alabama, Buffalo, West Virginia, Troy, Missouri and Jackson, Tennessee

The article states that this is a direct outcome of the NAFTA replacement USMCA trade deal; and the new 75% rule of origin within the Auto sector.

The article explains:

The guiding decision here relates specifically to the construct of the USMCA (NAFTA replacement).   Toyota was previously focused on multi-billion-dollar investments in Canada as they exploited the NAFTA loophole and procured component parts from Asia for North American assembly and shipment into the U.S. Market.  However, when they renegotiated NAFTA and created the USMCA President Trump and USTR Lighthizer closed closed the loophole.

The new USMCA agreement requires that 75% of automobile parts must be made in North America; and 45% must come from plants with minimum labor costs ($16/hr); or face tariffs to access the U.S. market with the finished good.  As a result Toyota has to either pay a tariff to continue importing Asian component parts, or move the higher-wage component manufacturing directly into the U.S.

Obviously, Toyota chose the latter.

The article explains that Toyota is not the first automobile company to respond to USMCA:

Keep in mind Toyota is not the first Auto manufacturer to respond with increased U.S. investment. Prior to the USMCA German auto-maker BMW began building a $2 billion assembly plant in Mexico. Under the old NAFTA plan most of BMW’s core parts were coming from the EU (steel/aluminum casting components, engines, transmissions etc.) and/or Asia (electronics, upholstery etc).

However, under the USMCA the Mexico BMW assembly plant has to source 75% of the total component parts from the U.S, Canada and Mexico; with 45% of those parts from facilities paying $16/hr.

The result was BMW needing to quickly modify their supply chain, build auto parts in the U.S. and Mexico, or they would end up paying a tariff on the assembled final product.

Like Toyota, BMW made the financial decision to open a new engine and transmission manufacturing plant in South Carolina…. exactly as Trump and Lighthizer planned.

And don’t forget Fiat Chrysler made a similar announcement in February: “The automaker says it will hire 6,500 workers and invest $4.5 billion by adding a new assembly plant in Detroit and boosting production at five existing factories.”

Like him or not, President Trump is a businessman who is doing things that are helping the American economy and the average worker.

How Is The Economy Doing?

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The mainstream media spends a lot of time criticizing President Trump. He is characterized as someone who is totally incompetent, undisciplined in his decision making, volatile, stupid, uneducated, etc. Yet it is somewhat amazing what this man has accomplished in less than two years–with the drag of constant accusations and investigations, a hostile press that simply ignores anything he has accomplished, and a Congress that has been less than supportive.

The Conservative Treehouse posted an article today that highlights how the Trump economy is doing.

Here are some of the highlights:

As CTH anticipated the first tabulated holiday sales report via Mastercard® shows the results of a very strong consumer confidence level.  The first report highlights a very strong 5.1% increase in holiday purchases:

“Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade”…

~ Craig Johnson, president of Customer Growth Partners

…Wall Street is being impacted by their multinational reliance which is heavily weighted toward global investments. Main Street is driven by the actual U.S.A. checkbook economic factors. This is the modern disconnect. After decades of Wall Street companies investing overseas, and generating investment products that are fundamentally detached from the U.S. economy, they do not benefit from a strong U.S. economy. However, Main Street directly gains from internal U.S. economic growth.

…If you understand the basic elements behind the new dimension in American economics, you already understand how three decades of DC legislative, monetary and regulatory policy was structured to benefit Wall Street and not Main Street. The intentional shift in monetary policy is what created the distance between two entirely divergent economic engines.

The support of Main Street instead of Wall Street is one of many reasons the Washington establishment hates President Trump. Under establishment politicians Wall Street and rich investors have done very well in recent years–at the expense of Main Street. President Trump has changed that. I strongly suggest that you follow the link and read the entire article at The Conservative Treehouse. It explains in detail how President Trump’s economic policies have changed the dynamics of the American economy.

The article concludes:

Bottom Line: U.S. companies who have actual connection to a growing U.S. economy can succeed; based on the advantages of the new economic environment and MAGA policy, specifically in the areas of manufacturing, trade and the ancillary consumer benefactors.

Meanwhile U.S. investment assets (multinational investment portfolios) that are disconnected from the actual results of those benefiting U.S. companies, and as a consequence also disconnected from the U.S. economic expansion, can simultaneously drop in value even though the U.S. economy is thriving.

The American economy is improving for average Americans. The elites who have profited greatly in recent years while the rest of us struggled do not like that. Be prepared for an outright onslaught of negative news about President Trump as the middle class continues to prosper.

The Economy Under President Trump

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I am not an economist, but I have learned over the years to listen to the people with the best track records on analysis. One of those people is Stephen Moore, who posted an article at The Wall Street Journal yesterday.

The article reports:

Liberals are tripping over themselves to explain why the economy has performed so much better under Donald Trump than it did under Barack Obama. The economy has grown by nearly 4% over the past six months, and the final number for 2018 is expected to come in at between 3% and 3.5%. The U.S. growth rate has doubled since Mr. Obama’s last year in office.

When Mr. Trump was elected, many Democratic pundits predicted an economic and stock-market meltdown. Then the economy started surging and they abruptly changed their tune, arguing that Mr. Trump was simply riding a global growth wave. That narrative was shattered when U.S. growth kept steaming ahead even as global growth—especially in China and Germany—stalled.

The people who predicted an economic crash if President Trump was elected are now saying that the tax cuts have given us a ‘sugar high’, and the market will crash when the sugar wears off. That makes about as much sense as President Obama taking credit for the move toward American energy independence.

The article continues:

The real contradiction in the “sugar high” argument is that it ignores the slow growth of the Obama years, which featured an avalanche of debt spending. Deficits as a share of GDP were 9.8% in 2009, 8.6% in 2010, 8.3% in 2011 and 6.7% in 2012. Where was the sugar high then? Instead of the expected burst in output coming out of the 2008-09 recession, borrowing more than $1 trillion a year for four years yielded the worst recovery since the Great Depression. Even excluding 2009, Mr. Obama’s deficits averaged more than 5% of GDP throughout the rest of his presidency but produced less growth than Mr. Trump has with lower deficits.

This wasn’t what Keynesians expected. Mr. Obama’s economic team predicted 4% growth every year coming out of the recession. Instead the “sugar high” from record peacetime deficits produced measly 2% growth. By 2016 GDP was running about $2 trillion below the trend line of a normal recovery.

The fastest growth rate over the past three decades was recorded in Bill Clinton’s second term, when federal government spending fell from 21.5% to 18% of GDP and deficits disappeared into surpluses. So much for the idea that deficit spending is a stimulant.

Mr. Trump’s fiscal policies have produced more growth than Mr. Obama’s because they were designed to incentivize businesses to invest, hire and produce more here at home. The Obama “stimulus,” by contrast, went for food stamps, unemployment benefits, ObamaCare subsidies, “cash for clunkers” and failed green energy handouts.

The article concludes:

Those pushing the “sugar high” fallacy also don’t realize that the Trump tax cuts aren’t going away soon. The 2017 business tax cuts can’t cause a recession in 2019 or 2020 because they don’t expire until 2025. They aren’t sugar pills.

The biggest threats to the economic boom and financial markets today are a deflationary Federal Reserve and the specter of a global trade war. Solve those problems and the American economy can keep flying high on its own power. And Mr. Trump’s critics will be proved wrong again.

When you decrease taxes and regulations on businesses, we all gain. That combination, if allowed to continue, will bring us continued economic growth.