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Showing posts from June, 2018

US Economic Update June-July 2018

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Economic growth appears on track to record a stellar performance in Q2, fueled by strong business investment, tax cuts and an ever-tightening labor market boosting consumer spending. In May, the unemployment rate hit a new low, and growth in retail sales accelerated as consumer confidence remained near a historic high. Furthermore, housing starts picked up in the same month, helped by rising wages and lower taxes boosting household incomes. Survey data for May indicates the private sector has so far been unfazed by current tensions with trade partners, although President Trump’s rapidly escalating rhetoric vis-à-vis China in past weeks could prove damaging to business confidence. The month ahead might represent a critical junction, as new restrictions on investments between Chinese and American firms are set to be unveiled on 30 June, while reciprocal tariffs with China and retaliatory measures from Canada will take effect in early July. 




The exceptional domestic momentum has so far …

Princeton economists find that unions had historical role in helping address income inequality

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Decent read here on how the lack of union membership has allowed for greater wage inequality. My argument is that we are more dealing with a third and fourth industrial revolution, coupled with subsequent labor issues, on a system which greatly rewarded the entrepreneur and capitalistic class. Payroll and wages are - by design - capped at levels. The largest offenders are the largest employers.
 - CH
“The labor market and economy are evolving in a way that’s giving employers increased power over workers,” he said. “Unions were, at least at one point, an important institution for resisting and adding some balance.”
See Link

Census Housing Report

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Sales of new single-family houses in May 2018 were at a seasonally adjusted annual rate of 689,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.7 percent (±14.1 percent)* above the revised April rate of 646,000 and is 14.1 percent (±19.9 percent)* above the May 2017 estimate of 604,000. Sales Price The median sales price of new houses sold in May 2018 was $313,000. The average sales price was $368,500. For Sale Inventory and Months’ Supply The seasonally-adjusted estimate of new houses for sale at the end of May was 299,000. This represents a supply of 5.2 months at the current sales rate.
Census Link

Leading Up To The May 2018 Residential Housing Census Report

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Housing in America is going full blast. All across the spectrum there is activity and it seems to be increasing despite recent rate hikes. The independent builder is starting to creep out into the spectrum and speculators are taking on more risk. - CH
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 20.3 percent (±14.4 percent) above the May 2017 rate of 1,122,000...
https://www.census.gov/construction/nrc/pdf/newresconst.pdf

Central America and Caribbean Economic Outlook Worsens

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REAL SECTOR | Growth momentum stays solid in most countries, although Puerto Rico distorts the regional picture Preliminary estimates suggest the economy of Central America and the Caribbean remained largely in good shape at the outset of the year, with growth expected to have reached 2.1% annually in Q1. This marks a 0.6 percentage-point downward revision compared to last month’s estimate, largely driven by a larger expected contraction in Puerto Rico, one of the region’s largest economies in nominal GDP terms. However, excluding Puerto Rico, the region’s Q1 growth figure would have seen only a mild downward revision compared to last month’s forecast. The Dominican Republic has been the region’s standout performer so far this year, with the economy buoyed by monetary stimulus that has spurred credit growth. Following a stellar Q1 GDP reading, economic activity increased at an over one-year high in April, spearheaded by the construction sector. New hotel, residential housing and ener…

Consumer Price Index May 2018

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From The BLS:
Over the last 12 months, food prices increased 1.2 percent, with prices for food away from home rising 2.7 percent, and prices for food at home rising 0.1 percent. Prices for meats, poultry, fish, and eggs increased 2.3 percent over the last year; that was the only one of the six major grocery store food groups to increase.
Energy prices increased 11.7 percent over the past year, with prices for three of the four major components rising. Gasoline prices increased 21.8 percent, fuel oil prices rose 25.3 percent, and electricity prices increased 1.0 percent. Prices for natural gas fell 0.8 percent over the year.
Prices for all items less food and energy rose 2.2 percent over the past 12 months. Prices for shelter rose 3.5 percent over the last 12 months, and prices for medical care services rose 2.3 percent. Prices that declined over the past 12 months include those for new vehicles, airline fares, used cars and trucks, and communication.



The Consumer Price Index for All Urba…

Atlanta Fed CEO On Economic Resilience

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Atlanta Fed president and CEO Raphael Bostic speaks at the Rotary Club of Savannah about the Fed's recent policy move and economic resilience:Bostic sees output growing at a moderately above-trend pace this year and next, then slowing to a pace that corresponds with the longer-run potential of the economy, which is slightly less than 2 percent.Bostic believes that community-based investment is one way to think about the kinds of local investments that help to translate growth into community assets that expand opportunity for people living in conditions of economic distress.Link to transcript - Atlanta Fed

Outlook Worsens In Argentina

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Argentina and the IMF reached a preliminary agreement on 7 June for a three-year USD 50 billion stand-by arrangement that will keep the economy afloat as the government pushes through economic reforms. While the final agreement is still subject to approval by the IMF board, the government pledged to now accelerate economic reforms, including reforming the Central Bank charter, reducing currency interventions and achieving a primary fiscal surplus by the year 2021. These measures are intended to make the economy more resilient to economic shocks and capable of achieving faster economic growth in the medium and long term. However, the tough reforms and fiscal consolidation are expected to have a negative impact on economic growth in the short term and weigh on the ongoing economic recovery. GDP is expected to have expanded solidly in the first quarter due to buoyant growth in the domestic economy. Economic growth is expected to slow sharply from 2017’s strong expansion due to fiscal co…

Splitting Up California is The Right Thing To Do

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Splitting Up California is The Right Thing To Do...
A proposal to split California into 3 states will be on November’s ballot and I support this. While I do not work or live in California I do know the economic problems at hand. And that’s just the start of it. I have to admit I preferred Tim Draper’s idea of 6 California’s w/ San Francisco becoming a tax-free Monte Carlo type area...
But now...."NorCal" can sell water, wine and weed..."SoCal" can survive off taxing the masses, taxing the boarders, farming and ag....and "California" (which will include LA and Santa Barbara) can export Hollywood and tourism....
All kidding aside lets seriously think about this. Imagine if the state of Georgia encompassed South Carolina, North Carolina, Tennessee, Virginia and DC. Despite the fact that I have forever been an economic bear about what "California" is, there is no doubt the state is unmanageable and splitting with debt, over burdened with population (an…

Mounting Geopolitical Risks Threaten Middle East Economic Recovery

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Mounting geopolitical risks threaten MENA’s nascent economic recovery
The Middle East and North Africa’s (MENA) regional economy is gradually recovering from last year’s downturn. Oil-exporting economies are benefiting from the rise in oil prices, allowing some governments to boost spending and taking some pressure off financial markets. While higher oil prices are bad news for oil-importing economies, robust global economic dynamics are buttressing export growth, partially offsetting the deterioration of the current account. According to an estimate prepared by FocusEconomics, the MENA economy grew an aggregated 2.8% year-on-year in the January–March period (previously reported: +2.7% year-on-year), which would represent a noticeable improvement over the 1.0% rise in the October–December period of 2017. Political developments have taken center stage in recent weeks, however, threatening to derail the region’s economic recovery. On 8 May, U.S. President Donald Trump decided to withdr…

Japan: The Economy June 2018

From Mizuho: In the Japan-US summit meeting on April 17-18, issues on North Korea and trade were the main topics. Concerning the trade issue, the two leaders agreed to undertake new trade talks. 
US President Trump addressed the issue of America’s “massive trade deficit with Japan” and showed his determination to slash the deficit, but he did not come up with any specific demands to Japan. He also made no reference to the currency issue, another area of concern. 
While Japan’s Prime Minister Abe expressed his position that “the Trans-Pacific Partnership (TPP) is the best for the US and Japan,” President Trump rejected the idea of returning to the TPP without renegotiating the conditions and emphasized his preference for bilateral talks. The new trade negotiations with the US are expected to be challenging for Japan.
The Japan-US FTA and the US return to the TPP The possibility of initiating the Japan-US FTA talks has been rumored since the outset of the Trump administration. Speculat…