While impeachment dominated the headlines this week, there was also plenty of big news on the trade front, most notably the long-awaited signing of the Trump administration’s “phase one” trade deal with China.
So what’s in the deal? Plenty of ink has been spilled about China’s commitment to purchase an additional $200 billion of U.S. goods and services over the next two years. For reference, U.S. exports to China totaled $185 billion in 2017, the baseline year, meaning that they would have to increase a whopping 54% in 2020 to keep pace.
Continue reading “New Trade Deals Give Trump a Political Boost Amid Impeachment Turmoil”
Barring some last-minute hiccups, a deal to ratify the new North American free trade pact appears to be in place, giving President Trump a major political victory and U.S. farmers and businesses some much-needed good news.
Plenty has been said about the politics of the deal, which comes after months of negotiations and amid a divisive impeachment inquiry in Congress. Perhaps the most surprising development was the endorsement of AFL-CIO President Richard Trumka; anyone with a passing knowledge of U.S. politics knows organized labor is no friend of free trade agreements. Continue reading “New North American Free Trade Deal Brings Welcome Relief to Businesses”
Look for the number of jobs added to the economy in November to top 190,000 when the Bureau of Labor Statistics releases its employment report this Friday at https://www.bls.gov/ces/news.htm. That will be good news for the economy, but remember: The number will be inflated by including 42,000 General Motors workers returning from their now-ended strike. If the Friday release is much below 190k, that would indicate a slowing economy compared with previous reports.
It will also be of interest to see if the unemployment rate ticks up to 3.7% or not. A bump up would signal a bit of a slowdown. Finally, what happens to wage growth will provide an indication of the degree of tightness in the labor market. Wage growth has moderated since August, despite low unemployment. Perhaps companies are holding the line while uncertainty lingers over whether or how much the economy will slow down in 2020.
Continue reading “What To Expect From The Economy This Week”
Evidence so far indicates that fourth quarter GDP growth will be even slower than the third quarter’s 1.9% gain.
While consumers are likely to spend enough to make it a pretty good holiday sales season for retailers, businesses remain cautious, cutting back their spending on equipment and adding to inventories at a reduced pace. The labor strike at General Motors, though now resolved, forced production cutbacks in both September and October. Manufacturing activity in general is being dragged down by poor prospects for the global economy. Continue reading “Will a Slowing Economy Carry Over into 2020?”
Amazon’s self-created “Christmas in July” sales holiday is coming. The retail juggernaut launches its fifth annual “Amazon Prime Day” at 12 a.m. PDT July 15, which runs until 11:59 p.m. PDT July 16. Amazon boasts that this 48-hour sale bonanza will offer Amazon Prime customers a variety of deals on products—from tech items such as Amazon Fire TV, Amazon Alexa, smartwatches and headphones, to kitchen appliances and bedding.
But that doesn’t mean that its competitors such as eBay, Target, Walmart, Kohls and Bed, Bath & Beyond are taking this sitting down. These rival retail giants are firing back with deals of their own.
Continue reading “Amazon’s ‘Christmas in July’ Forces the Retail World to Respond”
The stock market rallied strongly on Nov. 28 as Federal Reserve Chairman Jerome Powell made a dovish comment. Powell said that rates are “just below” the Fed’s targeted neutral level, which most Fed watchers consider to be 3%. This came after Powell called rates a “long way from neutral” on Oct. 3, provoking a major reaction in the financial markets.
Wall Street read his latest remark as a signal that the once-a-quarter rate hikes will stop sooner than expected. The Fed plan was to raise rates four more times. We expect hikes for sure in December and March, and likely in June. But the September 2019 hike looks to be off the table. Continue reading “Fed Puts Fewer Interest Rate Hikes in Wall Street’s Stocking”
Hurricane Irma punched Florida hard, but she failed to deliver a knockout blow to the state’s top industry – tourism.
The Sunshine State’s most popular tourist destinations, including Orlando-area theme parks and coastal beaches, are fine, as are most hotels and resorts. The mega storm hit during one of Florida’s slowest tourism periods, buying precious time to rebuild ahead of the busy winter season. Continue reading “Florida tourism will bounce back from Hurricane Irma”
Hurricane Harvey will ding third quarter GDP but boost the fourth quarter. Much of the Texas coast, including Houston — the nation’s fifth-largest metro area — was shut down for over a week because of the storm. As business resumes after Labor Day, it will be operating at about 80% of normal staffing levels for a while. That is likely to knock 0.3 percentage points off of U.S. GDP growth in the third quarter, resulting in a pace of about 2.5%. However, as more folks return to work, the economy will likely see a boost to GDP in the fourth quarter. Likewise, the national employment report for September is likely to come in weak, with a gain of fewer than 100,000 jobs, but the following months will show larger than average gains. Continue reading “The Economic Toll of Hurricane Harvey”
Houston is still reeling from Hurricane Harvey, a record-breaking tropical storm that has drenched the Texas coast with an estimated 21 trillion gallons of water since Aug. 25 and inflicted untold damage on both lives and property.
As with previous hurricanes, many people are asking: What could have been done differently this time to mitigate the damage? And what can be done to prepare for the next storm?
Continue reading “Hurricane-Proofing a City: How Houston Should Prepare for the Next Big Storm”
Consumer and business confidence soared after the presidential election because of the belief that President Trump’s policies on spending, tax cuts, health care and regulatory reform would give the economy a boost. So, what will be the impact on the economy if political gridlock prevents or delays Trump from delivering what he promised?
For starters, let’s assume a government shutdown is avoided. Congress will need to pass a bill known as a continuing resolution by April 28 in order to keep federal agencies funded and operating. If they fail, the reduction in federal spending would ding second-quarter growth and inhibit the economy’s ability to recover from a weak first quarter. Continue reading “How Will Political Gridlock Affect the Economy?”