When the two-part employment report from the Bureau of Labor Statistics (BLS) was issued on Friday, the news was modestly positive: from its business “establishment” data it noted that employment increased by 162,000, a little less than expected but not far from the average of 175,000 new jobs a month that the economy has been generating for the last three months. The estimates for May and June were revised downward slightly but
Tag Archives: Recession
Jobs Reports Show the US Turning into a Part Time Worker Economy
- Monday, 07 September 2020 08:54
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Fed Sees Inflation Coming, Raises Rates to Head it Off
- Friday, 23 March 2018 09:09
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This article appeared online at TheNewAmerican.com on Thursday, March 22, 2018:
Following the unanimous and much-anticipated decision by the Federal Reserve to raise interest rates by another quarter of a percent on Wednesday, the new chairman, Jerome Powell, said, “The economic outlook has strengthened in recent months. Several factors are supporting this outlook: fiscal policy [i.e., Trump’s tax cuts to individuals and corporations] has become more stimulative, ongoing job gains are boosting incomes and confidence, foreign growth is on a firm trajectory, and overall financial conditions remain accommodative.”
This raises the question:
Is the Federal Reserve Working Against Trump’s Reelection in 2020?
- Friday, 23 March 2018 09:03
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This article was published by The McAlvany Intelligence Advisor on Friday, March 23, 2018:
Short-Run Phillips Curve before and after Expansionary Policy
In politics, according to FDR, there are no coincidences. He famously said that “in politics if something happens you can be sure it was planned that way.” The announcement by Trump that he has filed for reelection in 2020 and the pronouncement by the Federal Reserve following it may just be one of those “planned” coincidences.
The pronouncement from Jerome Powell, the new head of the Fed, was, on the surface, comforting:
Despite Stock Sell-off, Few See Recession
- Saturday, 10 February 2018 06:53
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This article appeared online at TheNewAmerican.com on Friday, February 9, 2018:
Barbara Friedberg must be feeling pretty good right about now. Last October she made “10 Bold Stock Market Predictions for 2018,” and already she is scoring five out of 10:
Value stocks will triumph;
Cash will be king;
Inflation will inch up;
Market volatility will return; and
Bonds will offer higher yields.
The jury is still out on her prediction that “the Bull Market [in stocks] will end in 2018.”
Friedberg is no lightweight. She is a former portfolio manager and has taught finance and investments at several universities. She authored a popular book in 2014, How to Get Rich Without Winning the Lottery.
Despite the mantra that stocks’ performance is often a harbinger for future economic performance, few at present agree with her about the bull market in stocks being over.
The sell-off (which appears to be continuing as this is being written) in stocks is impressive. The Dow Jones Industrial Average (DJIA, or The Dow) has lost 3,227 points since its high on January 26, or 12 percent, while the S&P 500 Index (SPX) has dropped by 290 points, or 10 percent, since then as well. This is into “correction” territory and should be drawing negative outlooks on the future of the U.S. economy from every quarter.
But they can’t be found. Aside from perma-bears Michael Snyder and David Stockman, few of the usual suspects can be found who agree with Friedberg. When the Wall Street Journal polled its economists, they remained adamant about the health of the economy: GDP will continue to grow and unemployment will continue to drop:
The U.S. Economy is Built on Papier-mâché and Politicians’ Promises
- Thursday, 02 November 2017 05:32
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This article was published by The McAlvany Intelligence Advisor on Wednesday, November 1, 2017:
What a perfect definition of the American economy! Papier-mâché is defined as a “composite material consisting of paper pieces of pulp, sometimes reinforced with textiles, bound with an adhesive such as glue, starch, or wallpaper paste.” Add in a dose of political promises that everyone knows cannot be kept – not even close – and we have the American economy.
From a distance it looks pretty good. More than pretty good: to the untrained eye the American economy is setting world records, to wit:
U.S. Economy Powers Through Hurricanes, Beats Forecasts With Three-percent Growth in Third Quarter
- Friday, 27 October 2017 12:51
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This article appeared online at TheNewAmerican.com on Friday, October 27, 2017:
Putting in its best six-month performance in three years, the U.S. economy barely skipped a beat in the third quarter, growing at a three-percent annual rate. That was just slightly behind the second quarter, which grew at 3.1 percent, but way ahead of economists who had forecast growth for the third quarter at just 2.5 percent.
The Commerce Department said
Trump’s Growth Target Reduced to 3 Percent
- Tuesday, 18 July 2017 06:09
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This article appeared online at TheNewAmerican.com on Monday, July 17, 2017:
For Mick Mulvaney, President Donald Trump’s director of his Office of Management and Budget (OMB), reality is setting in. On the campaign trail Trump repeatedly promised four percent growth in the GDP (gross domestic product): “We’re bringing it from 1 percent up to 4 percent. And I actually think we can go higher than 4 percent. I think you can go to 5 percent or 6 percent.” (October, 2016). Later that month he doubled down during a speech to an audience in North Carolina: “I’m going to get us to 4 percent growth and create 25 million jobs over a 10-year period.”
Mulvaney’s editorial in the Wall Street Journal on Wednesday was unapologetic: “We are promoting MAGAnomics — and that means sustained 3 percent growth.” This new tag, which incorporates the acronym for “Make America Great Again,” is a play on “Reaganomics” from the 1980s:
Will Mulvaney Have Any More Success with MAGAnomics than Stockman did with Reaganomics?
- Tuesday, 18 July 2017 05:42
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This article was published by The McAlvany Intelligence Advisor on Monday, July 17, 2017:
Mick Mulvaney.
After serving in the House as a Republican representative from Michigan, David Stockman served as President Ronald Reagan’s OMB director from January 1981 until he quit 4½ years later in frustration. He got half of Reaganomics passed – the tax reduction part. He failed in getting the other half passed – the government spending cut part.
Mick Mulvaney is now Trump’s OMB Director after serving in the House as a Republican from South Carolina. And his job is likely to be as difficult and frustrating as was Stockman’s.
It’s far too soon to speculate about Mulvaney.
U.S. Rig Count Up, OPEC Influence Down
- Tuesday, 04 April 2017 05:43
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This article appeared online at TheNewAmerican.com on Monday, April 3, 2017:
An announcement on Friday by Baker Hughes, one of the world’s largest oil-field services companies, put one more nail in OPEC’s coffin. Despite the cartel’s attempt to manipulate world crude-oil prices to its benefit, the oil and gas rig count in the United States jumped by 15 last week and now sits at 824, an increase of 374 in just the last year.
Two days earlier, another nail had been pounded into place:
Harry Dent, Meet Chris Hamilton
- Wednesday, 29 March 2017 07:59
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This article was published by The McAlvany Intelligence Advisor on Wednesday, March 29, 2017:
For years Harry Dent (shown) has attempted to turn his demographic analyses into investment advice, with middling performance. It seems that when his advice doesn’t turn out well, he writes another book.
Take, for example, his The Demographic Cliff: How to Survive and Prosper During the Great Deflation Ahead. He contends that the economy can be traced and tracked using the behavior of consumers as they grow, mature and age. Young people marry, have families, buy homes, automobiles, and gadgets. Their acquisitions peak at around age 45 or so, and then decline over time into retirement.
His “waves” are like seasons:
Wall Street Facing Headwinds as Boomers Forced to Liquidate Their IRAs, 401Ks
- Wednesday, 29 March 2017 07:50
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This article appeared online at TheNewAmerican.com on Tuesday, March 28, 2017:
Under the law those reaching age 70 and a half must start taking their “required minimum distributions” (RMDs) from their various tax-deferred accounts. These include IRAs, 401Ks, profit-sharing plans, and SEPs. The trouble is that there are so many of them, and they control so many assets, that their RMDs are going to put enormous pressure on the stock market, according to Chris Hamilton, writing at his Econimica blog.
The Baby Boom population cohort is nearly 80 million people, and those born in 1946 are now 71, with millions following right behind. The top one percent own or control about one-third of that cohort’s assets, while the top 10 percent own more than two-thirds, according to the Congressional Budget Office.
The real question, according to Hamilton, is this:
Americans Eating Out Less Thanks to Higher Prices
- Saturday, 25 February 2017 06:56
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This article appeared online at TheNewAmerican.com on Friday, February 24, 2017:
A Reuters/Ipsos survey released on Tuesday revealed that one-third of U.S. adults are eating out less frequently than they were just three months ago. Two-thirds of those staying home said it was because of higher restaurant prices. This news comes on top of reports that restaurant traffic was flat for all of 2016. In fact, the industry as a whole has gained just one percent in traffic since 2009.
Apologists for the industry offered all manner of explanations:
Ford Cancels Plans for Mexico Plant, Shifts 700 jobs to United States
- Thursday, 05 January 2017 06:57
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This article appeared online at TheNewAmerican.com on Wednesday, January 4, 2017:
Ford Motor Company Headquarters, Dearborn, Mi.
When Bill Ford, Ford Motor Company’s executive chairman, called President-elect Donald Trump on Tuesday to inform him of his company’s decision to cancel its plans to build a new plant in Mexico and instead shift some of those new jobs to Michigan, liberal eyebrows were raised. Was this a “capitulation” to Trump? Was it a “sell-out?” Was it a “peace offering?”
CNN’s Poppy Harlow interviewed Ford’s president and chief operating officer Mark Fields following the company’s announcement, attacking him mercilessly with loaded questions. She peppered him with insinuations that
Trump’s Treasury Secretary Nominee Wants to Sell Fannie Mae, Freddie Mac
- Friday, 02 December 2016 06:47
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This article appeared online at TheNewAmerican.com on Thursday, December 1, 2016:
The Colonial Revival headquarters of Fannie Mae
In an interview on FOX Business Network’s Mornings With Maria on Wednesday, Donald Trump’s nominee for treasury secretary, Steve Mnuchin, said one of Trump’s “top 10” priorities was to sell government-sponsored mortgage giants Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC). Referred to colloquially as Fannie Mae and Freddie Mac respectively, Mnuchin told Maria:
Saudi Arabia to Sell $10 Billion in Bonds to Shore Up Its Finances
- Wednesday, 19 October 2016 04:53
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This article appeared online at TheNewAmerican.com on Wednesday, October 19, 2016:
Coat of Arms of Saudi Arabia
Oil ministers from Saudi Arabia have been traveling the world doing investment “roadshows” to promote their $10-billion bond offering that hits the markets this week. In so doing, they must disclose the risks investors could be taking, and then price the bonds according to those risks.
The Saudis appear to be paying the price for losing their bet about American oil producers. In November 2014 they made a massive wager that they could
Behind the Jobs Report: Weakness in Manufacturing, Transportation
- Friday, 07 October 2016 13:17
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This article appeared online at TheNewAmerican.com on Friday, October 7, 2016:
The headline number from Friday’s jobs report was a tepid 156,000 new jobs created in September. Not only did this number fall short of economists’ expectations of 170,000, it was 19-percent below the average job growth of the last three months and 22 percent below the level of monthly job growth of 229,000 in 2015.
The Bureau of Labor Statistics, the agency reporting from inside the Labor Department, was none too sanguine itself in reporting the results:
The Global Recession Claims its First Victim: Hanjin Shipping
- Saturday, 10 September 2016 05:21
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This article was published by The McAlvany Intelligence Advisor on Friday, September 9, 2016:
One of Hanjin’s container ships looking for a place to unload.
When the question about a tree falling in the forest is asked, it’s usually posed as a philosophical one: “If a tree falls in a forest and no one is around to hear it, does it make a sound?” The question is never asked: “What if someone is around who doesn’t want to hear it?”
That appears to explain the kept media’s deafness over the state of the global economy. Even when the Wall Street Journal reported on the bankruptcy of Hanjin Shipping, the world’s seventh largest container shipping company, not one word was spent on asking why. Instead
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