The State Of The American Economy

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.

Why Not To Elect Joe Biden

Dan Bongino shared an article on his website yesterday that lists 15 reasons not to vote for Joe Biden. Here is the list:

1) Joe Biden is 77 years old, seems to have difficulty working a full day, and has rather famously and significantly deteriorated mentally.

2) Joe Biden has been in politics since 1972. Do you think someone who has been in office that long without accomplishing much is going to sweep in and change everything for the better?

3) Biden has promised to halt all construction on a border wall, cancel the bilateral agreement with Mexico that stops many illegals from making it here, end deportations for anyone other than felons, and push through a massive amnesty for illegal aliens.

4) Joe Biden plans to ban the sale of new AR-15s and then demand that owners of AR-15s sell them to the government or sign up on a gun registry.

5) Biden has publicly said he no longer supports the Hyde Rule, which prevents federal money from being used for abortion.

6) Biden has noted that he is open to locking the country down again over Coronavirus.

7) Biden has said numerous times that he intends to ban fracking.

8) Biden is extremely liberal.

9) Joe Biden, who has a reputation for putting his hands all over women, was credibly accused of sexual assault by his former aide, Tara Reade.

10) Biden publicly admitted that he had advised Obama not to go through with the raid that killed Osama Bin Laden.

11) Electing Joe Biden after months of rioting by liberals in liberal cities will send a message that Americans are okay with that kind of behavior.

12) Both Biden and his VP, Kamala Harris, refuse to say whether they will attempt to add more justices to the Supreme Court.

13) Joe Biden has signaled that he’s open to getting rid of the legislative filibuster in the Senate, which is extremely dangerous and has the potential to destabilize our Republic.

14) Kamala Harris was arguably the single most liberal member of the Senate and Joe Biden, who seems too feeble to finish his term, made her his vice-presidential running mate.

15) Barack Obama and Joe Biden presided over the slowest post-war economic recovery in American history. Is that the guy you want shepherding the economy after the economic damage caused by Corona and the lockdowns?

Obviously there are more reasons not to elect Joe Biden, but that is one person’s list.

The Five Questions That Will Determine The Presidential Election In November

The New York Sun posted an article yesterday by Conrad Black. The article lists the five things that will determine who wins the presidential election in November.

These are the five things listed in the article:

    • Can the President override the Democratic press’s thunderous campaign to terrorize the country over the coronavirus?

    • Can the president successfully connect Vice President Biden’s campaign to the hooligans, anti-white racists, and urban guerrillas who effectively are being encouraged by the corrupt Democratic mayors of many of the nation’s largest cities?

    • Will the economic recovery and the decline in the unemployment generated by the COVID-19 shutdown continue at its recent pace and strengthen the economy as a pro-Trump electoral argument?

    • Will the Republicans make adequately clear to the country the authoritarian and Marxist implications of the Biden-Sanders unity document?

    • Will special counsel John Durham indict senior members of the Obama Administration over their handling of the spurious allegation of collusion between Donald Trump and the Russian government in the 2016 election and Justice Department violations of the Foreign Intelligence Surveillance Act (FISA), and how will Mr. Biden himself come through it?

The coronavirus has given us some insight into what unbridled government authority can do. Some of the regulations put in place by governors and mayors were based on common sense–things your mother told you when you were young like wash you hands, cover your mouth when you cough or sneeze, and don’t hang around with sick people. Other regulations were simply power grabs to prevent Americans from exercising their First Amendment rights–churches in Nevada restricted to a lower percentage of occupancy than casinos, protests to open businesses criticized and shut down while other protests (that included looting and riots) were allowed to continue. We have had a taste of out-of-control government in recent months. A vote for Joe Biden and whoever he chooses as his running mate will give us more of the same. Joe Biden has already stated that he wants to reassemble the Obama team–the group that gave us anemic economic growth, Benghazi where our ambassador was murdered followed by lying about it on television, ISIS, politicization of the Justice Department, and too many other scandals to mention.

The voters will choose. We need to pray for wisdom in voting and an honest election.

The Delusional Candidate

Yesterday One America News posted an article detailing some recent statements by presidential candidate Joe Biden.

The article reports:

Joe Biden is campaigning to roll back President Trump’s tax cuts. The former vice president made his case Wednesday in his hometown of Scranton, Pennsylvania.

Biden touted his middle class background and announced his intent to hike the corporate tax rate from 21 percent to 28 percent. He claimed the repeal would help the middle class by hitting the wealthy and corporations.

“The wealthy didn’t need [tax cuts] in the first place,” said Biden. “Corporations have spent them on stock buybacks.”

Then Joe Biden claimed that former President Obama is responsible for the current economic success in America:

“Donald Trump inherited a strong economy from Barack and me,” stated the former vice president. “Things were beginning to really move — just like everything else he’s inherited, he’s in the midst of squandering it.”

The article then notes the actual economic facts:

Recent data from the Census Bureau revealed the middle class has experienced an economic boom since President Trump took office. The average family income rose over $5,000 since 2017. Under the Obama administration, household incomes only grew by about $1,000 by the end of eight years.

The main things that increased in the Obama economy were unemployment and the number of people on food stamps. Admittedly, President Obama became President at a difficult economic time, but his policies resulted in the slowest and leanest economic recovery in American history. President Trump’s economic policies have resulted in economic growth in all segments of the economy. The middle class and all minorities are enjoying higher wages and more jobs. A return to the economic policies of President Obama would be a step backward–not a step forward.

The Numbers On The Economy

On March 13th, CNBC posted at article about the impact of President Trump’s economic policies on wages.

The article reports:

The recent jump in paychecks has come with an unusual characteristic, as workers at the lower end of the pay scale are getting the greater benefit.

Average hourly earnings rose 3.4 percent in February from the same period a year ago, according to a Bureau of Labor Statistics report last week. That’s the biggest gain since April 2009 and seventh month in a row that compensation has been 3 percent or better.

What has set this rise apart is that it’s the first time during an economic recovery that began in mid-2009 that the bottom half of earners are benefiting more than the top half — in fact, about twice as much, according to calculations by Goldman Sachs. The trend began in 2018 and has continued into this year, and could be signaling a stronger economy than many experts think.

The article concludes:

“Taken together, our findings suggest a relatively optimistic consumption outlook given solid income growth across income levels,” Choi wrote. “Even if employment growth slows as labor supply constraints start to bind, this should be partially offset by the continued firming of wages, particularly among lower income workers with higher marginal propensities to consume.”

One danger is that higher wages could start to eat into corporate profits, which have doubled since the financial crisis.

However, it could take years for that to be a significant factor, according to an analysis by AB Bernstein.

“While pressure on capital share is likely to remain, that doesn’t mean that profits are going to fall – in fact profits can lose share at a rate up to about 100bps per year [1 percentage point] and still expect to have positive profit growth,” Philipp Carlsson-Szlezak, chief U.S. economist at AB Bernstein, said in a note. “In other words, overall expansion of net value add can be strong enough to protect profit growth even in the face of a rising labor share.”

Carlsson-Szlezak said wage pressures more likely would be felt at a sector level in industries where labor takes a bigger share of output. For example, information technology and extraction likely would feel the least effects, while hospitality and retail would be hit hardest.

The piece of the puzzle that is missing to ensure a continuing strong economy is getting the federal deficit under control. Unfortunately Congress has been unwilling to do this. If it is not done fairly quickly, all of the positive economic growth we have seen under President Trump will evaporate.

Facts Are Such Inconvenient Things

The biggest advantage the Republicans will have in 2020 is a strong economy. Because the Democrats know this, they are trying very hard to downplay the economic recovery that is currently taking place. They have invented some interesting facts in their attempt to do this. However, the alternative media has learned to fact check these attempts to downplay President Trump’s economic success.

Townhall posted an article today that includes some recent fact checking.

The article reports on some recent statement by Kamala Harris:

First, I’m not sure many economists or Republicans cite the stock market as the top indicator of economic health, despite her initial straw man claim. There are many other metrics that are more indicative and more helpful to building that argument, which we’ll mention in a moment.  But it’s also worth pointing out that a robust stock market is not merely good news for people who own stocks, as Harris sarcastically says.  Plenty of workers’ benefit and retirement funds, including those of many public sector employees, are tied into the performance of the stock market — so it’s not just investors who benefit when markets are humming along, and it’s not just investors who feel pain when markets sustain hits. 

Second, in her attempt to downplay the impressive, stable and low US unemployment rate, Harris recycles a claim for which AOC was slapped down by fact-checkers a few months ago.  Even left-leaning Politifact assigned her a “pants on fire” rating.  Harris’ spin is less explicitly clumsy and wrong than AOC’s, as she didn’t specifically state that the low rate is directly attributable to people working more than one job, which makes absolutely no sense — but she does use this argument to undercut the (compelling) argument that the economy is in good shape because so many Americans are employed.  While it’s certainly true that a substantial number of people are working multiple jobs in order to make ends meet, it’s not accurate to pretend that this phenomenon is sufficiently widespread as to justify Harris’ talking point.

The article further reports:

The February jobs report found that just five percent of the employed population is working more than one job, down from 5.2 percent one year ago.  The experiences of the people who constitute that five percent matter, of course, but they are not evidence of a larger trend — and certainly not a trend that represents a real basis to shrug off the historically-low unemployment rate.  The jobs report that came out on Friday was a major ‘miss’ on a key number, with the US economy adding only 20,000 jobs last month; economists were expecting 180,000.  That’s a potentially concerning data point, underscoring the folly of simply assuming that the current prosperity streak will continue unabated.  But there were positive statistics, too.  The previous two months’ job creation data was revised upward by 12,000, and the overall unemployment rate fell to 3.8 percent.  That marks 12 consecutive months, a full year, with the U3 figure at or below four percent, which is unambiguously good.

The article concludes:

Sustainability is a fair worry for the White House, but as of this moment, the most useful measuring sticks of the US economy are unemployment (3.8 percent), GDP growth (3.1 percent Q4 to Q4), and wage growth (3.4 percent).  All three are impressive.  Harris’ snarky point, therefore, is weak.  

As wages and jobs increase, voters will have to decide whether to believe what they are experiencing or what they are being told.

Economic Policies That Get Results

The Conservative Treehouse posted an article yesterday about the latest Global CFO Council report on the world economy. The Global CFO Council is made up of Chief Financial Officers of the world’s largest 113 companies that combined are worth nearly $5 trillion. Interestingly enough, most of these CFO’s are on the record as being opposed to President Trump’s trade policies.

The article includes the following:

Economic policies matter. We are not reflecting a worldwide economic recovery–we are leading it.

 

Lied To (Again)

Yesterday The New York Post posted an article about the Labor Department‘s December jobs report. I am probably not the only one who wondered why the jobs added number was lower than expected (I see signs of economic recovery all around me–new shops, new construction, formerly unemployed people going back to work, people getting bonuses, etc.). Well, it seems that there was more to the numbers than I thought.

The article reports:

But the number was kept artificially low by a seasonal adjustment that wasn’t comparable to the one done a year earlier, in December 2016.

And it’s unusual for one December’s adjustment to be so different from the previous December.

If the adjustments had been consistent, last Friday’s number would have shown growth of another 133,000. Add the growth that was announced (148,000 jobs) and the seasonal adjustment difference (133,000) and this December’s growth would have been a very, very healthy 281,000 jobs.

How to lie with statistics.

It gets worse:

There was another adjustment that made Friday’s job number look worse than it would have been.

In the December figure released last Friday, the government deducted 38,000 jobs that it thinks were lost but can’t prove were lost because they happened inside very small companies.

A year earlier, in December 2016, only 17,000 jobs were deducted for this reason.

Again, if Labor has simply remained consistent, December’s jobs gains could have been as high as 300,000.

As I’ve explained many times before, the government’s economic statistics are not expected to be completely accurate the first time they are announced — even though Wall Street and the media treat them like they are.

That’s why the government does numerous revisions.

I guess the only numbers we can actually believe are the ones in the final revision!

The Trump Economy

CNBC is reporting today that more private-sector jobs were created in October than economists expected.

The article reports:

The ADP National Employment showed private-sector businesses added 235,000 jobs in the month. ADP was expected to show private employers added 200,000 jobs in October, up from 135,000 in September.

Goods-producing companies benefited strongly with 85,000 new jobs, 62,000 of which came from construction. Manufacturing also saw 22,000 positions added.

…Overall, the service sector accounted for the bulk of the job creation, adding 150,000 jobs. Professional and business services added the most positions, up 109,000. Job losses were seen in the trade, transportation, and information sectors, as well as education.

“The job market rebounded strongly from the hit it took from Hurricanes Harvey and Irma,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. “Resurgence in construction jobs shows the rebuilding is already in full swing. Looking through the hurricane-created volatility, job growth is robust.”

Leisure and hospitality contributed 45,000 to the total while health care and social assistance grew by 44,000.

In terms of business size, job gains were spread evenly, with companies that have more than 500 employees hiring 90,000 while those with fewer than 50 added 79,000.

Part of this growth is the result of deregulation, and part of this growth is in anticipation of tax cuts that will be favorable to the middle class and to business growth. It will be interesting to see how the increase in the number of people re-entering the job market looking for jobs impacts the unemployment numbers that will come out this week.

It’s Not The Unemployment Numbers–It’s The Number Of People Who Have Dropped Out Of The Labor Force

Today’s Daily Caller reported that the percentage of Americans in the labor force has reached a record low–62.8 percent. According to the article, a record high 91,541,000 Americans did not participate in the labor force this October. Since January 2009, more than 11 million people have dropped out of the labor force.
The article concludes:

The economic blog Zero Hedge notes that at the current rate, the number of people not participating in the labor force could exceed those working in about four years.

This is unlike any economic recovery from a recession we have ever had.