Tag Archives: CNBC

The September Jobs Report Is Out

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The September jobs report was delayed because of the government shutdown. It is now out.

CNBC reported on November 20:

  • Nonfarm payrolls increased by 119,000 in September, up from the 4,000 jobs lost in August following a downward revision, according to a long-delayed report Thursday from the BLS.
  • The unemployment rate edged higher to 4.4%, the highest it’s been since October 2021. A broader measure edged lower to 8%.
  • Average hourly earnings increased 0.2% for the month and 3.8% from a year ago, compared to respective forecasts for 0.3% and 3.7%.
  • The report ends a data drought on the labor market that began in early September and continued through the record 44-day government shutdown.

The workforce participation rate eased up slightly to 62.4. Notice also that average hourly earnings increased slightly for the month and 3.8 per for the year. People also have more spending money due to the lower cost of gasoline.

The article notes:

The total level of those employed rose by 251,000 while the labor force increased by 470,000 to a fresh record of 171.2 million. The participation rate, which measures the share of the working-age population either working or seeking employment, edged higher to 62.4, the highest since May.

The rolls of full-time employment swelled by 673,000 while part-times fell by 573,000.

The article concludes:

The lack of comprehensive indicators has presented a challenge for Fed officials, who cut their benchmark interest rate in both September and October but face a tougher decision in December. Officials at the October meeting noted the difficulty in navigating policy without the usual array of economic metrics to rely on, and there was a significant inclination to forgo a December cut, according to meeting minutes released Wednesday.

With September’s payrolls count released, the BLS is preparing the first influx of other data in coming months. The bureau on Wednesday announced it will release jobs data for October and November simultaneously on Dec. 16. October’s numbers will not include the customary unemployment rate calculation as that comes from a survey of households that will not be able to be completed because of the shutdown.

It will be interesting to see the October and November numbers. Despite what the mainstream media is telling us, the economy seems to be turning around–jobs are increasing and the rate of inflation is slowing going down.

What Happens Next

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The Senate has voted to end the government shutdown. CNBC posted an article on Monday (updated Tuesday) explaining what happens next.

The article reports:

  • The Senate passed a bill to end the U.S. government shutdown.
  • House Speaker Mike Johnson called for House members to travel to Washington, D.C., so that they can vote as soon as possible on the deal.
  • To end the shutdown, the House needs to pass the Senate bill, and then President Donald Trump must sign it into law.

There are some grumblings among more liberal Democrats that they will try to stop the bill in the House, but I don’t think they will succeed.

The article notes:

House members were told that votes on the deal could begin by 4 p.m. ET on Wednesday.

Before the Senate vote, Johnson refused to commit to the deal’s key guarantee to Democrats: that Congress will hold a separate vote in December on potentially extending enhanced Affordable Care Act subsidies. That vote would be on a bill of the Democrats’ choosing, according to the Senate agreement.

“I’m not committing to it or not committing to it,” Johnson, R-La., said Monday on CNN.

Those subsidies, which are due to expire at the end of December, help reduce the cost of individual health insurance plans for more than 20 million Americans.

What the article fails to mention is that the subsidies go to the insurance companies rather than to the people buying the insurance. The insurance companies have no incentive to lower premiums or cut costs. The impact of the subsidies going to the insurance companies on the price of insurance is similar to what happened to college tuition when the government got involved in the student loan program. When you take away incentive to lower prices, prices do not get lowered.

The article concludes:

The Senate deal would fund the government through the end of January; reverse all shutdown-related layoffs of federal employees; and guarantee that all federal workers will be paid their normal salaries during the shutdown.

The deal also includes provisions for a bipartisan budget process and prevents the White House from using continuing resolutions to fund the government.

CRs have been repeatedly used to avoid government shutdowns, but are controversial because they frequently avoid lawmakers having to make decisions about long-term funding of the government that a normal budget would resolve.

The deal would also fund, through September, the SNAP program, which helps feed 42 million Americans through food stamps.

Under a federal law passed in 2019, government employees who are furloughed during a shutdown must be paid for the time they were out of work at their standard rate of pay “at the earliest date possible, regardless of scheduled pay dates.”

These Are The Numbers

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Om Tuesday, CNBC posted an article reporting that because the government is currently shut down, Automatic Data Processing (ADP) will now release a four-week average weekly change in employment with a two-week lag every Tuesday.

The article reports:

Private sector employers added an average 14,250 jobs per week over the past four weeks, according to new preliminary data being released by ADP, a turnaround from the negative September numbers.

Stepping into the void created by the government shutdown, ADP will now release a four-week average weekly change in employment with a two-week lag every Tuesday. Today’s number is the four-week average ended Oct. 11.

“ADP’s near real-time employment data, released weekly, will now provide an even clearer picture of the labor market at this critical time for the economy … providing a dynamic view of job creation and loss at an unprecedented level of weekly detail,” said Nela Richardson, chief economist at ADP.

This preliminary data will be different from the better-known and closely followed National Employment Report, generally released on the Wednesday before the government’s payroll number. The NER measures the monthly change in job growth during the week that contains the 12th of the month and provides detail of job growth by sector.

I am looking forward to more accurate numbers than were previously reported by the government during the Biden administration.

Some Good News About The Economy

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On Wednesday, CNBC reported the following:

  • Gross domestic product jumped to 3% for the second quarter, better than the 2.3% estimate and reversing a 0.5% decline in the prior period.
  • Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period.
  • While exports declined 1.8% during the period, imports fell 30.3%, reversing a 37.9% surge in Q1.
  • President Donald Trump responded to the GDP report with a fresh demand for the Federal Reserve to lower interest rates.

In another article posted on Wednesday, CNBC reported:

  • Private payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast for an increase of 64,000.
  • Wages rose at a 4.4% annual pace for the month, about in line with recent trends.

The first article mentioned reports:

The U.S. economy grew at a much stronger-than-expected pace in the second quarter, powered by a turnaround in the trade balance and renewed consumer strength, the Commerce Department reported Wednesday.

Gross domestic product, a sum of goods and services activity across the sprawling U.S. economy, jumped 3% for the April through June period, according to figures adjusted for seasonality and inflation.

That topped the Dow Jones estimate for 2.3% and helped reverse a decline of 0.5% for the first quarter that came largely due to a huge drop in imports, which subtract from the total, as well as weak consumer spending amid tariff concerns.

Financial markets reacted little to the report, with stock index futures mixed and Treasury yields higher.

“The word of the summer for the economy is ‘resilient,’” said Heather Long, chief economist at Navy Federal Credit Union. “The consumer is hanging in there, but still on edge until the trade deals are done.”

The second article reports:

Hiring at private companies rebounded at a stronger than expected pace in July, indicating the labor market is holding its ground, ADP reported Wednesday.

Payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast from economists for an increase of 64,000. The June number was revised up from an initially reported loss of 33,000.

Though the pace of hiring is well off where it stood last year, the June total was the best since March and consistent with a slowing but still fairly vibrant jobs picture.

“Our hiring and pay data are broadly indicative of a healthy economy,” ADP chief economist Nela Richardson said. “Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient.”

At the present time, it looks as if hiring a businessman as President was a good choice for the economy.

A Statement That Makes The Deep State Tremble

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The Federal Reserve is a misnamed sketchy operation. There is a book and a YouTube video called “The Creature From Jekyll Island” that explains the dirty tricks involved in the creation of the Federal Reserve and its true purpose. The Federal Reserve is neither federal nor a reserve. Auditing the fed is a really good idea that the fed has avoided for years.

On Monday, Hot Air posted an article quoting CNBC:

Treasury Secretary Scott Bessent on Monday suggested a review of the Federal Reserve that would go beyond the current controversy over building renovations and look at its overall function.

“What we need to do is examine the entire Federal Reserve institution and whether they have been successful,” Bessent said during an interview on CNBC’s “Squawk Box.” “Has the organization succeeded in its mission? If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why has this happened.”

The article also quotes Senator Rand Paul:

Dr. Rand Paul (R-KY) has reintroduced the Federal Reserve Transparency Act, famously known as “Audit the Fed” legislation to require a full audit of the Federal Reserve’s operations and increase congressional oversight of its decision-making. In conjunction with the bill’s reintroduction, Senator Paul also released the latest edition of his Waste Report, which exposed the Federal Reserve’s $600 million cost overrun on renovations to its Washington, D.C. headquarters—now projected to cost taxpayers $2.5 billion in total. The report underscores the lack of transparency and accountability at the Fed, which remains exempt from a full audit by Congress or the Government Accountability Office.

“No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” said Dr. Paul. “It’s long past time for Congress to stop shirking its duty and hold the Federal Reserve accountable.”

“It is Congress’ duty to hold the Fed accountable,” said Senator Marsha Blackburn (R-TN). “For too long, the Federal Reserve has operated behind closed doors while making decisions that impact the American economy. Throughout my service in Congress, I have worked to audit the Fed, and this legislation is necessary to shine a light on the Fed’s operations and provide transparency to Congress and American taxpayers.”

The year 1913 was a horrible year for the Democratic Republic of America. That year gave us the federal income tax, the federal reserve, and the direct election of U.S. Senators. All three of those things need to go away.

Sanity Returns To The Auto Industry

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Electric cars may be a good idea if you live in a city with a temperate climate, but they are a problem if you live in a place with very cold winters or if you plan a long trip. Cold weather significantly impacts the life of the battery, and a long trip in an electric vehicle requires planning based on where the car chargers are and whether they are fast-charging or slow-charging. There may be a future for electric cars, but I believe some more tweaking of the technology is necessary. Ultimately, the free market should determine the success or failure of electric cars–not the government.

On Tuesday, Breitbart reported:

General Motors has announced plans to expand production of gas-powered vehicles and SUVs in Michigan as well as the manufacturing of pickup trucks.

The Detroit-based auto manufacturer said in a statement on Tuesday that it will “begin production of the Cadillac Escalade, as well as the Chevrolet Silverado and GMC Sierra light duty pickups at Orion Assembly in early 2027 to help meet continued strong customer demand.”

According to CNBC, the Escalade is produced in Arlington, Texas, while the Silverado and Sierra trucks are made at an assembly plant in Fort Wayne, Indiana, which will continue to produce the vehicles.

The article concludes:

While GM has seen a surge in EV sales recently, overall customer demand for EVs have not met expectations.

“For years, the automotive industry has been in a state of EV euphoria. Automakers trotted out optimistic sales forecasts for electric models and announced ambitious targets for EV growth. Wall Street boosted valuations for legacy automakers and startup entrants alike, based in part on their visions for an EV future,” CNBC reported.

“Now the hype is dwindling, and companies are again cheering consumer choice. Automakers from Ford Motor and General Motors to Mercedes-Benz, Volkswagen, Jaguar Land Rover and Aston Martin are scaling back or delaying their electric vehicle plans,” it added.

The Latest Inflation Numbers

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When reading statistics about anything, remember that a good statistician can make numbers say anything he wants them to say. With that in mind, I think the June inflation numbers look really good.

On Tuesday, CNBC reported:

  • The consumer price index, a broad-based measure of goods and services costs, increased 0.3% on the month, putting the 12-month inflation rate at 2.7%, in line with expectations.
  • Core inflation picked up 0.2% on the month, with the annual rate moving to 2.9%, with the annual rate in line with estimates.
  • While the evidence in June was mixed on how much influence tariffs had over prices, there were signs that the duties are having an impact. Apparel and home furnishing prices rose, though vehicle prices fell.

…Excluding volatile food and energy prices, core inflation picked up 0.2% on the month, with the annual rate moving to 2.9%, with the annual rate in line with estimates. The monthly level was slightly below the outlook for a 0.3% gain.

Inflation in June 2022 was 9.1 percent, but began going down slowly after that. Somehow, though, even when the rate of inflation comes down, the price of everything does not go back to where it started.

The article concludes:

Amid the previously muted inflation ratings, Trump has been urging the Federal Reserve to lower interest rates, which it has not done since December. The president has insisted that tariffs are not aggravating inflation, and has contended that the Fed’s refusal to ease is raising the costs the U.S. has to pay on its burgeoning debt and deficit problem.

Central bankers, led by Chair Jerome Powell, have refused to budge. They insist that the U.S. economy is in a strong enough position now that the Fed can afford to wait to see the impact tariffs will have on inflation. Trump in turn has called on Powell to resign and is certain to name someone else to the job when the chair’s term expires in May 2026.

Markets expect the Fed to stay on hold when it meets at the end of July and then cut by a quarter percentage point in September.

The Federal Reserve was established in 1913 for the purpose of concentrating America’s wealth in the New York City Banks (yes, I know that wasn’t what you were told). It needs to go away. For further information, see The Creature from Jekyll Island by G. Edward Griffin.

This Could Be The Start Of Something Big!

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On Friday, CNBC reported the following:

  • With government red ink swelling throughout the year, June saw a surplus of just over $27 billion, following a $316 billion deficit in May.
  • Customs duties totaled about $27 billion for the month, up from $23 billion in May and a 301% gain from June 2024.

CNBC notes:

That brought the fiscal year-to-date deficit to $1.34 trillion, up 5% from a year ago. However, with calendar adjustment, the deficit actually edged lower by 1%. There are three months left in the current fiscal year, which ends Sept. 30.

A 13% increase in receipts from the same month a year ago helped bridge the gap, with outlays down 7%. For the year, receipts are up 7% while spending has risen 6%.

The government last posted a June surplus in 2017, during President Donald Trump’s first term.

Increasing tariff collections are helping shore up the government finances.

Customs duties totaled about $27 billion for the month, up from $23 billion in May and 301% higher than June 2024. On an annual basis, tariff collections have totaled $113 billion, or 86% more than a year ago.

The article notes that the interest on the debt is a major budget item:

Net interest on the $36 trillion national debt totaled $84 billion in June, down slightly from May but still higher than any other category with the exception of Social Security. For the year, net interest — what Treasury pays on the debt it issues minus what it earns on investments — is at $749 billion. Total interest payments are projected at $1.2 trillion for the full fiscal year.

Lowering interest rates would bring down that cost.

The June Jobs Report Is Out

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On June 3rd, Fox Business posted an article about the June Jobs Report. The economy is improving rapidly, but there are still some weak spots.

The article reports:

The U.S. economy added jobs in June at a faster pace than in recent months, despite economic uncertainty stemming from trade, tax and monetary policy.

The Labor Department on Thursday reported that employers added 147,000 jobs in June. That figure was above the estimate of economists polled by LSEG, who projected 110,000 jobs would be added.

The unemployment rate ticked down slightly to 4.1%, which was lower than economists’ expectations of 4.3%.

Job gains in the prior two months were both revised, with job creation in April revised up by 11,000 from a gain of 147,000 to 158,000; and May job gains were revised up by 5,000 from a gain of 139,000 to 144,000. Taken together, employment in April and May was 16,000 jobs higher than previously reported.

The workforce participation rate has remained steady.

I don’t know how to reconcile this information with a post from CNBC on Wednesday that reported:

Private sector hiring unexpectedly contracted in June, payrolls processing firm ADP said Wednesday, in a possible sign that the economy may not be as sturdy as investors believe as they bid the S&P 500 back up to record territory to end the month.

Private payrolls lost 33,000 jobs in June, the ADP report showed, the first decrease since March 2023. Economists polled by Dow Jones forecast an increase of 100,000 for the month. The May job growth figure was revised even lower to just 29,000 jobs added from 37,000.

The article at Fox Business concludes:

“The U.S. job market continues to largely stand tall and sturdy, even as headwinds mount – but it may be a tent increasingly held up by fewer poles,” said Cory Stahle, Indeed Hiring Lab economist. “The headline job gains and surprising dip in unemployment are undoubtedly good news, but for job seekers outside of healthcare and social assistance, local government, and public education, the gains will likely ring hollow.”

The market viewed the June jobs report as solidifying the outlook for the Federal Reserve to leave interest rates unchanged for its fifth consecutive meeting later this month. 

The probability of a 25-basis-point interest rate cut in July declined from 23.8% a day ago to 6.7% on Thursday following the report’s release, according to the CME FedWatch tool.

We need an interest cut now to help with the government’s interest payments and to help the real estate market. Right now the real estate market is being held hostage by the refusal to cut interest rates.

If The Strait Of Hormuz Is Closed, Who Loses?

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On Monday, CNBC posted an article about Iran’s Parliament voting to block the Strait of Hormuz. Twenty percent of the world’s oil is shipped through the Strait of Hormuz.

The article reports:

  • Should Iran follow through on its threat to close the Strait of Hormuz, it could alienate its neighbors and trade partners.
  • But the possibility of a closure of the strait is low, experts said, despite Tehran’s rhetoric around closing the strait.
  • A closure would provoke Iran’s markets in Asia, particularly China, which accounts for a majority of Iranian oil exports.

The article continues:

Data from the U.S. Energy Information Administration revealed that Iran had shipped 1.5 million barrels per day via the Strait of Hormuz in the first quarter of 2025.

Furthermore, a closure would also provoke Iran’s market in Asia, particularly China, which accounts for a majority of Iranian oil exports.

“So very, very little to be achieved, and a lot of self inflicted harm that Iran could do” Hari said.

Her view is supported by Andrew Bishop, senior partner and global head of policy research at advisory firm Signum Global Advisors.

Iran will not want to antagonize China, he said, adding that disrupting supplies will also “put a target” on the country’s own oil production, export infrastructure, and regime “at a time when there is little reason to doubt U.S. and Israeli resolve in being ‘trigger-happy.’”

Clayton Seigle, senior fellow for Energy Security and Climate Change at the Center for Strategic and International Studies said that as China is “very dependent” on oil flows from the Gulf, not just Iran, “its national security interest really would value stabilization of the situation and a de-escalation enabling safe flows of oil and gas through the strait.”

Iran does not need to alienate anyone right now. I am sure many of the Middle Eastern countries are breathing a sigh of relief knowing that Iran at the moment does not have nuclear capability.

The Statistics On The American Economy

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On June 17th, CNBC posted an article on some of the latest economic numbers.

The highlights of the article are:

  • Retail sales declined 0.9%, even more than the 0.6% drop expected from the Dow Jones consensus.
  • However, excluding a series of items such as auto dealers, building materials suppliers, gas stations and others, sales increased 0.4%.
  • The pullback in retail sales came despite surveys showing that consumer sentiment actually increased in May.

The article concludes:

The pullback in retail sales came despite surveys showing that consumer sentiment actually improved in May, though compared with levels that had been falling through the year. The ongoing trade war ignited by President Trump’s tariffs had dented consumer and business optimism, though an easing in some of the rhetoric amid a 90-day negotiating period has led to better readings.

GDP declined at a 0.2% annualized pace in the first quarter but is projected to rebound. Second-quarter growth heading into the retail sales release was pegged at 3.8%, according to the Atlanta Federal Reserve’s GDPNow tracker of rolling data. The gauge will be updated later Tuesday.

In other economic news Tuesday, import prices were flat against a forecast for a 0.1% decline, according to the Bureau of Labor Statistics. Export prices fell 0.9%.

We are in an economic transition period right now. I am hopeful that when the smoke clears, income taxes will be lower, the amount of revenue going to the government because of tariffs and the fact that revenue increases when taxes are lower (see laffer curve), government spending will be down, and Americans will have higher wages and more buying power.

About Those Tariffs…

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On Sunday, CNBC reported the following:

China’s exports growth missed expectations in May, dragged down by a sharp decline in shipments to the U.S., with analysts saying effects of the Beijing-Washington trade truce will be visible in June data.

Chinese exports to the U.S. plunged 34.5% from a year ago, marking the sharpest drop since February 2020, according to Wind Information, when the Covid-19 pandemic disrupted trade. Imports from the U.S. dropped over 18%, and China’s trade surplus with America shrank by 41.55% year on year to $18 billion.

Overall exports rose 4.8% last month in U.S. dollar terms from a year earlier, customs data showed Monday, shy of Reuters’ poll estimates of a 5% jump.

Imports plunged 3.4% in May from a year earlier, a drastic drop compared to economists’ expectations of a 0.9% fall. Imports had been declining this year, largely owed to sluggish domestic demand.

That was largely offset by its shipment to the Southeast Asian bloc, which jumped nearly 15% from a year, and those to European Union countries and Africa, which rose 12% and over 33%, respectively.

The article concludes:

While noting that it took time for the recovering demand to feed through to actual shipments, Huang cautioned that the existing tariffs are unlikely to be reduced further, if not hiked again, and will lead to slower export growth by year-end.

Chinese Vice Premier and lead trade representative He Lifeng is expected to meet with the U.S. trade negotiation team led by Treasury Secretary Scott Bessent in London later in the day for renewed trade talks.

The second-round of meetings come after tensions flared up again between the two sides, as they accused each other of violating the Geneva trade agreement.

Washington had blamed Beijing for slow-walking its pledge to approve the export of additional critical minerals to the U.S., while China criticized the U.S. decision to impose new restrictions on Chinese student visas and additional export restrictions on chips.

China’s Ministry of Commerce said on Saturday that it would continue to review and approve applications for export of rare earths, citing growing demand for the minerals in robotics and new energy vehicle sectors.

The trade negotiations are needed by both countries. Neither America nor China has a totally winning hand. We need China’s rare earth minerals, and China needs the American markets. There is some major unrest in China among workers as manufacturing slows in reaction to declining exports to America. I also expect that there will be some grumbling among Americans who may (at least temporarily) be paying higher prices for some products.

The Trump Presidency And Your Wallet

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On Friday, Breitbart posted an article about the impact of the Trump economy on personal income.

The article reports:

Americans’ personal income in the first four months of 2025 is “almost triple the expectations,” making for a “great” start of the year, CNBC’s Rick Santelli exclaimed on the air, urging viewers to “give credit” to the Trump administration.

The longtime CNBC editor revealed the “powerful” numbers on Friday morning, sharing that personal income increased 0.8 percent in April. 

“This is a great four-month start to any year,” he said.

“When you look at income, for the first four months of the year, they’re powerful numbers — up 0.6 in January, up 0.7 in February, up 0.5 last month, up 0.8 this month. This is a great four-month start to any year.”

Santelli also lauded the fact that 0.8 percent is the “strongest” income month-over-month jump since May 2021, when it was 1.9 percent.

He went on to lament how the Trump administration is “criticized for just about anything under the sun,” despite the president’s “transparency” and positive accomplishments.

The article concludes:

“This administration is criticized for just about anything under the sun. I’ve never ever in my lifetime had glimpses into the politics of an administration in the form of transparency like this one. Why don’t we… give credit where credit is due?”

Part of the reason for the increase in consumer spending power is the lowering of the rate of inflation.

On Friday, The Daily Caller reported:

President Donald Trump achieved an economic victory after a prominent inflation reading dropped to its lowest reading in four years.

The personal consumption expenditures (PCE) index, one of The Federal Reserve’s primary inflation measurement models, showed a decrease in inflation in April 2025 to a level not seen since March 2021, according to a Commerce Department report.

The index, which measures goods and services spending, showed an increase of $47.8 billion, or 0.2%, with major gains in housing and health care the report stated.

In April, the PCE and Core PCE, which measures without noting volatile food and energy prices, both rose by only 0.1% from the previous month, according to the report. The consumer price index also indicated a drop in inflation to a four-year low as well, with a seasonal adjusted 0.2% in April, as reported by the Daily Caller News Foundation earlier this month.

This is the economic relief Americans needed. If Congress would just pass the spending cuts recommended by the Department of Government Efficiency (DOGE), Americans would enjoy more financial freedom.

Views On The Trump Economy Are Slowly Changing

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The Democrat rant that ‘the economic sky is falling’ seems to have fallen on deaf ears. The economy is slowly coming back after four years of inflation and slow job growth. The workforce participation rate is steady, but climbing slightly, and inflation is somewhat under control. We can all rejoice in the significant drop in gasoline prices.

On May 27th, CNBC posted the following headline:

Consumer confidence for May was much stronger than expected on optimism for trade deals

I love how when a Republican is in the White House, good news is always unexpected.

The article reports:

Consumer optimism got a much-needed boost in May on hopes for trade pace between the U.S. and China, according to a survey Tuesday.

The Conference Board’s Consumer Confidence Index leaped to 98.0, a 12.3-point increase from April and much better than the Dow Jones consensus estimate for 86.0.

Much of the positive sentiment, according to board officials, came from developments in the U.S.-China trade impasse, most notably President Donald Trump’s halting of the most severe tariffs on May 12.

“The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, the Conference Board’s senior economist for global indicators.

May’s rebound followed five straight months of declines. Consumers and investors had grown sour on economic prospects amid the intensifying trade war that Trump has launched against U.S. global trading partners, with China a particular target.

I think all of us consumers feel optimistic when we don’t have to mortgage our house to buy a steak or fill up our gas tank.

The article concludes:

The present situation index increased to 135.9, up 4.8 points, and the expectations index posted a major surge to 72.8, a 17.4 point gain. Investors also showed more optimism, with 44% now expecting stocks to be higher over the next 12 months, up 6.4 percentage points from April.

Views on the labor market also improved, with 19.2% of respondents expecting more jobs to be available in the next six months, compared to 13.9% in April. At the same time, 26.6% expect fewer jobs, down from 32.4%.

Survey officials said sentiment improved across age, income and political affiliation, though noting that the “strongest improvements” came from Republicans.

Let’s hope Congress can pass laws that keep this going.

Good News About The American Economy

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On Wednesday, CNBC reported that retail sales were up during the month of March.

The article reports:

Points
  • The advanced estimate of retail sales showed an increase of 1.4% on the month, better than the 1.2% Dow Jones estimate and higher than the 0.2% increase in February.
  • Excluding autos, the numbers also were stronger than expected, with sales up 0.5% compared with the 0.3% forecast.

Consumer spending was stronger than expected in March as demand remained high despite declining sentiment, the Commerce Department reported Wednesday.

The advanced estimate of retail sales showed an increase of 1.4% on the month, better than the 1.2% Dow Jones estimate and higher than the 0.2% increase in February. The year-over-year rise was 4.6%, according to numbers adjusted for seasonality but not prices, while the monthly increase was the biggest since January 2023.

Excluding autos, the numbers also were stronger than expected, with sales up 0.5% compared with the 0.3% forecast. Economists expected the auto sales number to jump as buyers tried to get ahead of President Donald Trump’s aggressive tariffs.

Motor vehicle and parts dealers reported a surge of 5.3% in sales.

The reading points to spending holding strong despite the crosscurrents of looming tariffs and expectations that the economy is weakening.

Obviously, part of the increase is due to the fear that as the tariffs kick in, prices will increase. However, it does indicate that Americans have enough trust in the future to buy things.

The article concludes:

The retail report counters multiple recent sentiment readings that show widespread fear that Trump’s tariffs will sink the economy into recession and spike prices. Last week, the closely watched University of Michigan consumer sentiment survey posted its second-lowest reading ever and expectations for one-year inflation were the highest since 1981.

Aside from the big move in auto-related sales, sporting goods, hobby and music stores saw a 2.4% increase, while building material and garden stores rose 3.3%. Food service and drinking places were up 1.8%, while gasoline stations reported a 2.5% decline as prices fell during the month.

As gas prices go down, consumers have more money to spend. That also may be part of the increase in retail sales.

Every Little Bit Helps

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On Wednesday, CNBC reported that the inflation rate went down in February.

The article reports:

  • The consumer price index for both all-items and core increased 0.2% in February, slightly below expectations.
  • On an annual basis, headline inflation was at 2.8%, while core was at 3.1%. Both also were 0.1 percentage point below the Wall Street consensus and the previous month’s levels.
  • The report provided some relief as consumers and businesses worry about the looming impact tariffs might have on inflation

The article concludes:

“The February CPI (Consumer Price Index) release showed further signs of progress on underlying inflation, with the pace of price increases moderating after January’s strong release,” said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. “While the Fed is still likely to remain on hold at this month’s meeting, the combination of easing inflationary pressures and rising downside risks to growth suggest that the Fed is moving closer to continuing its easing cycle.”

The Fed meets next week and is widely expected to hold its key borrowing rate in a target range between 4.25%-4.5%.

Economic growth is trending negative in the first quarter, according to the Atlanta Fed’s GDPNow tracker of incoming data. The measure has pegged Q1 growth at a 2.4% decline, which would be the first negative growth quarter in three years.

I would like to remind everyone that even though President Trump has been ‘flooding the zone,’ we are only less than two months into the Trump presidency. Gas prices are going down and egg prices are going down. Both of those are good things. As far other economic new is concerned, I don’t necessarily believe the initial figures when they come out. Remember the revisions on job creation during the Biden administration. The people who told those lies may still be working for their government, and I suspect their goal is not to make President Trump look good.

The Federal Reserve has not been America’s friend for a long time. It didn’t even start out that way. If you read The Creature From Jekyll Island by G. Edward Griffin, you will find out that the true purpose of the Federal Reserve was to concentrate America’s wealth among the New York City banks. They should lower interest rates slightly, but I doubt they will.

It Doesn’t Pay To Lie To People Who Know The Truth

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On Tuesday, Townhall posted an article about a recent appearance on CNBC by Secretary of Commerce Gina Raimondo. It did not go according to the Secretary’s plan.

The article reports:

Secretary of Commerce Gina Raimondo needs to stop going on CNBC. It might be time for anyone in the Biden-Harris orbit to drop going on a network that reports on the economy because they know the talking points, the spin for this shoddy economy left to us by this administration. Raimondo tried to sell the Democratic Party line on it, but Squawk Box co-host Joe Kernen wouldn’t allow this propaganda to go unchallenged.

He torched Raimondo, adding that there was no recession under Donald Trump, wages were up, the stock market was booming, and the tariff policy he pushed was continued under Biden. Raimondo was trying to paint a picture of economic chaos, only for Kernen to say that everything is in shambles and wages are down under Biden. There’s also an open border and crime crisis engulfing the nation.

These are facts. They are inconvenient to some Americans, but they are facts.

The article notes:

All Raimondo could say was that’s not true, without citing any facts to push against the reality that Biden’s America is one heaping lawless wasteland with no economic activity. The stock market performance right now isn’t sustainable, with everyone and their mother warning that a reset is coming. The unemployment that Democrats like to attach to Trump was over the hysterics brought about by COVID.

Also, no one in the media wants to ask Raimondo and others what happened to the one million jobs never created in 2023. The revised numbers wiped out that figure, discovering they were never created. It’s another damning economic development that Raimondo seemed unfamiliar with, so what does she do all day?

If voters consider the facts and vote for President Trump, we can regain what we have lost under President Biden.

Follow The Money

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On Friday, CNBC reported that the U.S. government has decided not to pursue further charges against FTX founder Sam Bankman-Fried.

The article reports:

  • Prosecutors have decided against pursuing a second trial against disgraced FTX founder Sam Bankman-Fried.
  • In a note to Judge Lewis Kaplan on Friday, the U.S. government said that much of the evidence that would have been presented had already been submitted during the first trial.
  • In November, following a month’s worth of testimony from nearly 20 witnesses, a jury found the former FTX chief executive guilty of all seven criminal counts against him.

The article notes:

The second trial, which had been slated to start in March, addressed an additional set of criminal counts, including conspiracy to bribe foreign officials, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business and substantive securities fraud and commodities fraud. 

Damian Williams, the U.S. attorney for the Southern District of New York, wrote in the letter to the Court that “a second trial would not affect the United States Sentencing Guidelines range for the defendant, because the Court can already consider all of this conduct as relevant conduct when sentencing him for the counts that he was found guilty of at the initial trial.”

I suppose it is just an incredible coincidence that after Sam Bankman-Fried donated $100 million in stolen customer funds to US politicians, the US Government announced they’re dropping six charges against SBF and will not prosecute him for a political campaign finance violation. Any guesses on what the second trial would reveal about campaign finance violations and the people who received funds illegally?

 

It’s Really All A Matter Of Perspective

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CNBC has posted its list of the ten best states in America to live in and its list of the ten worst states in America to live in. When you look at the lists that CNBC has compiled and compare them to how Americans are ‘voting with their feet,’ you really wonder what the people who put together the lists were thinking.

This is the list of the 10 best states to live and work in according to CNBC:

10. Connecticut

8. (tie) Massachusetts

8. (tie) Colorado

7. Washington

6. Oregon

5. Hawaii

4. Minnesota

3. New Jersey

2. Maine

1. Vermont

These are the ten worst states to live and work in according to CNBC:

10. Florida

9. Arkansas

8. Tennessee

7. Indiana

6. Missouri

4. (tie) Alabama

4. (tie) South Carolina

3. Louisiana

2. Oklahoma

1. Texas

Please note that the only state in the ‘best’ places to live that has a Republican governor is Vermont, where Phil Scott is the Governor. The rest are Democrats. Based on the states chosen as ‘best’, I don’t believe there was much consideration given to the cost of living in the ‘best’ states.

Also note that in the ten ‘worst’ states, the only one with a Democrat governor is Louisiana, where John Bel Edwards is Governor. The rest are Republicans.

It is interesting to compare the CNBC list to the relocation habits of Americans. Below is a map posted at world population review illustrating states that have gained population and states that have lost population.

Believe the mainstream media at your own risk!

Actually, The Tax Payers Are The Ones Who Paid For This

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Om Saturday, CNBC posted an article about the Silicon Valley Bank.

The article reports:

  • Silicon Valley Bank employees received their annual bonuses Friday just hours before regulators seized the failing bank, according to people with knowledge of the payments.
  • The payments were for work done in 2022 and had been in process days before the bank’s collapse, these people said.
  • On Friday, SVB CEO Greg Becker addressed workers in a two-minute video in which he said that he no longer made decisions at the 40-year-old bank, according to the sources.

Who made the decision?

The article continues:

On Friday, SVB CEO Greg Becker addressed workers in a two-minute video in which he said that he no longer made decisions at the 40-year-old bank, according to the people.

The size of the payouts couldn’t be determined, but SVB bonuses range from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.

SVB was the highest-paying publicly traded bank in 2018, with employees getting an average of $250,683 for that year, according to Bloomberg.

After its seizure, the FDIC offered SVB employees 45 days of employment, the people said. The bank had 8,528 employees as of December.

A spokesman for the FDIC declined to comment on the bonuses.

There are two sides to this discussion–the employees did earn their bonuses in the prior year and it was customary to pay them at this time, but essentially the taxpayers all over the country were responsible for paying those bonuses. Those are pretty generous bonuses for a business that failed.

On Monday, The New York Post noted that despite what we are being told, the taxpayers will be bailing out the Silicon Valley Bank.

The New York Post reports:

The cost of bailing out two banks that catered to the tech industry will likely be paid by average Americans in the former of more fees, less service and potentially higher taxes — despite President Biden’s pledge otherwise, experts warned Monday.

The dire predictions came as the price of regional bank stocks fell due to fears of further collapses, with trading in more than a dozen of them paused during a massive market sell-off.

The extraordinary rescue announced Sunday night will use the Federal Deposit Insurance Corp.’s Deposit Insurance Fund to make whole all customers of the Silicon Valley Bank and Manhattan’s Signature Bank, which did business with tech startups and the cryptocurrency industry, respectively.

But the fund gets its money in quarterly payments from FDIC-insured banks, which will likely make customers shoulder the burden of any added costs, said William Luther, director of the American Institute for Economic Research’s Sound Money Project.

Hold on to your wallet–President Biden is in the White House.

The Coming Increase In Gasoline Prices

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On Monday, Ed Morrissey at Hot Air reported that the Organization of the Petroleum Exporting Countries (OPEC) is planning a major decrease in oil production in order to get the price of oil back to $100 a barrel.

The article quotes a CNBC article:

An influential alliance of some of the world’s most powerful oil producers is reportedly considering their largest output cut since the start of the coronavirus pandemic this week, a historic move that energy analysts say could push oil prices back toward triple digits.

OPEC and non-OPEC producers, a group often referred to as OPEC+, will meet in Vienna, Austria, on Wednesday to decide on the next phase of production policy.

The oil cartel and its allies are considering an output cut of more than a million barrels per day, according to OPEC+ sources who spoke to Reuters.

“The OPEC ministers are not going to come to Austria for the first time in two years to do nothing. So there’s going to be a cut of some historic kind,” Dan Pickering, CIO of Pickering Energy Partners, said, referring to the group’s first in-person meeting since 2020.

This is the cost of America giving up its energy dependence. I can’t emphasize often enough that we were energy independent under President Trump and were able to help the American economy and the American consumer by the domestic production of oil. The election of Joe Biden changed all of that. Even if the Republicans take Congress this year and a Republican becomes President in 2024, it will take a while to bring American energy back to what it was under President Trump. Hopefully the American economy can hold out that long without collapsing.

The article concludes:

Of course, Biden could put the US on a footing that would allow us to dictate not just production levels but also heavily influence oil prices to deny Vladimir Putin his excess revenue stream. Rather than choke off exploration and extraction, Biden could cancel his EO 13990 and reverse his lease-sales policies to encourage more investment in oil and natural gas production. That would unleash massive new resources for both domestic use and export, and even the initial steps would shock oil futures markets into accounting for sudden new production levels from the US. Biden won’t do it, however, because he’s more in thrall of his progressive-environmental Left than he is focused on economic and strategic national-security concerns.

So once again, we’ll be dancing to any tune that OPEC+ plays. It’s yet another reminder of Joe Biden’s 1970s revival in all the wrong ways.

I could have dealt with leisure suits and platform shoes coming back–but I can’t deal with gas lines and ultra-expensive gasoline again.

How Does Loan Forgiveness Work?

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On Wednesday, CNBC posted an article about the tax impact of the student loan forgiveness. Obviously, the loan forgiveness is a cost to the federal government, but is there any financial return?

The article reports:

If you’re poised to benefit from President Joe Biden’s up to $20,000 in student loan forgiveness, you may also be wondering if the erased debt will trigger a tax surprise come April.

The short answer is: It won’t, at least on your federal tax return. 

Biden on Wednesday announced that he will forgive $10,000 in federal student debt for most borrowers, limited to borrowers making less than $125,000 per year, or $250,000 for married couples filing together or heads of households.

He will also cancel up to $20,000 for Pell Grant recipients, Biden said in a tweet.

The article notes how actually paying their student loans has impacted their taxes in the past:

Borrowers with federal or most private student loans are usually able to subtract up to $2,500 a year in interest payments they’ve made on their loans from their gross income, reducing their tax liability.

The deduction is considered “above-the-line,” which means you don’t need to itemize to qualify for the break. 

There are income phaseouts, and individuals who earn above $85,000 and couples who make more than $175,000 in 2022 are not eligible at all. Your lender is supposed to report your interest payments to the IRS on a tax form called a 1098-E, as well as provide you with a copy. You claim the deduction on line 20 of Schedule 1.

Most borrowers haven’t been eligible for the deduction in more than two years because they haven’t been making payments on their loans.

Since March 2020, the government has allowed most borrowers to press the pause button on their payments without interest accruing. “You can claim the student loan interest deduction based only on amounts actually paid,” Kantrowitz (higher education expert Mark Kantrowitz) said.

The article concludes:

If the debt forgiveness cleared your balance entirely, you’ll no longer be able to claim the deduction. Yet you should be eligible if you’re still left with student debt and resume your payments.

More than 12 million taxpayers claimed the student loan interest deduction in 2018, with tax savings of up to $550, according to Kantrowitz.

Just for reference, this is what has happened to college tuition since the government got involved. Since this chart was posted, there have been more increases.

Prepare For Gas Lines

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In the 1970’s we had gas lines. Part of the problem was our reliance on oil from the Middle East and part of the problem was the government’s efforts to keep the cost of gasoline down. Those efforts together created the perfect storm. To put things in perspective, in 1969 a gallon of gas cost $.35 or $2.75 in today’s dollars (according to dollartimes.com). In 1978, a gallon of gas cost $.65 a gallon or $2.99 inflation adjusted (according to CNBC). By 1981, the cost was $1.35 a gallon or $4.46 inflation adjusted (CNBC). With the exception of 2011-2014, gasoline has generally stayed between $2 and $3 a gallon. Right now the price is over $4 a gallon, and obviously that impacts everything Americans buy. The Biden administration desperately wants to lower the price of gasoline before the mid-terms. However, there is some disagreement as to how to do that. The easiest way would be to open up drilling in America and bring back our energy independence, but considering who the Biden administration is beholden to, that is highly unlikely. So we are left with more risky solutions.

On Monday, The Daily Caller posted an article about one suggested solution.

The article reports:

Several economists slammed a Democratic proposal making its way through Congress that would enable energy price controls amid record high fuel costs.

Such a policy, which prohibits private companies from increasing prices regardless of market conditions, would have catastrophic consequences including energy supply shortages and increased inflation, the economists argued in a series of interviews with The Daily Caller News Foundation. Democrats have alleged in recent weeks that inflation is being driven by corporate price gouging and that Big Oil is using the Ukraine crisis as cover to raise prices and boost profits.

Oil is a commodity. It is subject to supply and demand. When America drastically decreased the amount of oil it was producing (under the Biden administration) and the amount of fossil fuel it was exporting, the supply shrank and the cost went up. The war in Ukraine did not help, but the problem was there before the war.

The article continues:

“I just can’t believe they’re dumb enough to do this,” Benjamin Zycher, an economist and senior fellow at the American Enterprise Institute, told TheDCNF in an interview.

“If prices are controlled at below-market clearing levels, then you get shortages because the quantity demanded is greater than the quantity supplied at the legal maximum price,” he continued. “And that’s why you get gasoline lines and allocation controls.”

The House Rules Committee announced that it would review the Consumer Fuel Price Gouging Prevention Act — a bill that enables the president to issue an emergency declaration banning energy prices issued in an “excessive or exploitative manner,” according to its sponsors — on Monday before reporting it to the floor. House Speaker Nancy Pelosi, who told reporters last week that oil and gas companies were exploiting consumers, promised that there would be a floor vote on the legislation this week.

The article concludes:

Economists, meanwhile, have also rebuked the argument that oil companies are price gouging amid the Ukraine crisis.

“[Retail gas stations] don’t necessarily drop their price as rapidly as what wholesale prices and oil prices are doing,” Garrett Golding, a business economist tasked with analyzing energy markets at the Federal Reserve Bank of Dallas, told TheDCNF in an interview. “Some people want to call that price gouging because it’s not in lockstep with where wholesale prices are. But the fact of the matter is, what they’re doing is making back the money that they were losing on the way up and that’s how they stay in business.”

Golding and fellow Dallas Fed economist Lutz Kilian published a May 10 paper laying out why gasoline prices haven’t risen and fallen in lockstep with oil prices over the last few months. They said pump prices are also affected by operating expenses such as rent, delivery charges and credit card fees, and that prices are set by retail gas stations, not oil drillers.

Democratic Reps. Kim Schrier and Katie Porter, the sponsors of the Sponsors of the Consumer Fuel Price Gouging Prevention Act, and Pelosi didn’t immediately respond to requests for comment from TheDCNF.

Democratic Massachusetts Sen. Elizabeth Warren introduced similar legislation Thursday that would implement a federal ban on “unconscionably excessive price increases.” House Democrats, led by Illinois Rep. Jan Schakowsky, unveiled a companion to Warren’s legislation.

Democrats are not likely to let facts get in the way of increasing federal control over our lives.

Does Your Government Work For You?

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Yesterday The Washington Times posted an article about President Biden’s $1.75 trillion expansion of the federal safety net.

The article reports:

An analysis by the Tax Foundation, a nonpartisan fiscal watchdog, estimates that President Biden’s $1.75 trillion expansion of the federal safety net could kill more than 103,000 jobs over the next decade and add $750 billion to the federal deficit.

The estimate is based on a thorough analysis of the White House’s spending “framework” and the corresponding 1,684-page bill text released by House Speaker Nancy Pelosi, California Democrat. Experts from the Tax Foundation say the proposal would fall far short of White House promises.

“We estimate that the House bill would reduce long-run economic output by nearly 0.4% and eliminate about 103,000 full-time equivalent jobs in the United States,” the experts wrote. “It would also reduce average after-tax incomes for the top 80 percent of taxpayers over the long run.”

It should be shouted everywhere that according to a CNBC article posted in August 2021, more than 100 million U.S. households, or 61% of all taxpayers, paid no federal income taxes last year, according to a report from the Tax Policy Center. Think about that for a minute. If you are not paying taxes, why should you care how much the government is spending or how much the government is planning to raise taxes? This is not a good situation.

The article at The Washington Times concludes:

Mr. Biden is backing a 5% “wealth tax” on those with adjusted gross income above $10 million. The figure jumps to 8% on adjusted gross income over $25 million.

“I can’t think of a single time when the middle class has done well but the wealthy haven’t done very well,” Mr. Biden said. “I can think of many times, including now, when the wealthy and the superwealthy do very well and the middle class doesn’t do well.”

Despite the rhetoric, Tax Foundation economists say, the provisions would affect all workers by killing more than 29,000 jobs.

The White House did not immediately respond to requests for comment. 

The report was released one day after Sen. Joe Manchin III, West Virginia Democrat, accused his colleagues of engaging in “budget gimmicks” to hide the true cost of the spending package.

“As more of the real details outlined … what I see are shell games and budget gimmicks that make the real cost of this so-called $1.75 trillion bill estimated to be twice as high,” he said. “That is a recipe for economic crisis. None of us should ever misrepresent to the American people what the real cost of legislation is.”

Actually, the middle class did very well during the Trump administration. Trump administration policies helped increase the number of Americans in the middle class.

Does anyone remember the Luxury Tax of 1990.

On September 10, 2011, The American Enterprise Institute posted the following:

Flashback:Wall Street Journal editorial on January 6, 2003

“Most Americans celebrated as the ball fell in Times Square New Year’s Eve. But for auto dealers this new year is especially sweet. January 1 marked the expiration of the federal luxury tax on cars, the last vestige of the destructive luxury tax package in the infamous 1990 budget deal.

Starting in 1991, Washington levied a 10% luxury tax on cars valued above $30,000, boats above $100,000, jewelry and furs above $10,000 and private planes above $250,000. Democrats like Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share and privately about convincing President George H.W. Bush to renounce his “no new taxes” pledge.

But it wasn’t long before even these die-hard class warriors noticed they’d badly missed their mark. The taxes took in $97 million less in their first year than had been projected — for the simple reason that people were buying a lot fewer of these goods. Boat building, a key industry in Messrs. Mitchell and Kennedy’s home states of Maine and Massachusetts, was particularly hard hit. Yacht retailers reported a 77% drop in sales that year, while boat builders estimated layoffs at 25,000. With bipartisan support, all but the car tax was repealed in 1993, and in 1996 Congress voted to phase that out too. January 1 was disappearance day.

The end of any federal tax is such a rarity that it’s well worth celebrating. And the luxury tax lesson of economic damage is worth keeping in mind as politicians begin to wail that President Bush’s new tax proposals aren’t punitive enough on the rich.”

HT: Pete Friedlander

The recession that followed the 1990 luxury tax cost President George H.W. Bush re-election. The Democrats might want to keep that in mind.

 

Not So Good Economic News

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It’s interesting to me that when a Democrat is President, the media paints a very rosy picture in its predictions about job growth and general economic growth. They always seem surprised when the facts don’t live up to their predictions.  When a Republican is President, the media is always surprised when the job numbers are better than the predictions.

CNBC is reporting today that job growth in August was well short of the estimates.

The article reports:

U.S. companies created far fewer jobs than expected in August as the Covid resurgence coincided with cutbacks in hiring, according to a report Wednesday from payroll services firm ADP.

Private payrolls rose just 374,000 for the month, well below the Dow Jones estimate of 600,000 though above July’s 326,000, which was revised downward slightly from initial 330,000 reading.

Most of the new jobs came from leisure and hospitality, which added 201,000 positions in a somewhat hopeful sign that an industry beset by a labor shortage continues to recover.

Education and health services combined to add 59,000 for the month as hospitals in some parts of the country were swamped with virus cases and schools begin to reopen.

“The delta variant of COVID-19 appears to have dented the job market recovery,” said Mark Zandi, chief economist at Moody’s Analytics, which works with ADP on the report. “Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”

The apparent letdown comes at a pivotal time.

The article notes that recent economic growth has been disappointing, blaming the low growth on the Delta variant of Covid. Somehow they fail to mention that President Biden almost instantly reversed the economic policies of the Trump administration which had fueled the recovery from the Covid recession.