The Wall Street pundits are having a harder time pushing their recessionary economic narrative while the results from Main Street continue to beat expectations. Two data points continue to highlight the strength of Main Street: Home Sales and Wage Gains.
President Trump’s MAGAnomic policies are focused on delivering results to the middle-class worker and family. The middle-class American is the engine for a Main Street economy. Growing the middle-class is the key to strengthening the U.S. economy and blocking negative global economic influence. Growing the middle-class is how the U.S. economy continues to be self-sustaining. [We buy/use 80% of our own production.]
Today The National Association of Realtors released data showing existing home sales rose 2.5% to a seasonally adjusted annual rate of 5.42 million units in July. Forecasters only expected 5.39 million units. The U.S. Main Street housing market is very strong.
Because the results defy pundit expectation, Reuters has to ignore the strength of Main Street and put the Wall Street spin on the results. The efforts to keep pushing a negative economic narrative are intense [Trillions At Stake]:
WASHINGTON (Reuters) – U.S. home sales rose more than expected in July, boosted by lower mortgage rates and a strong labor market, signs the Federal Reserve’s shift toward lower interest rates was supporting the economy.
Hopefully everyone can see that now.
It is not interest rates supporting the Main Street economy, it’s the underlying activity. The Fed interest rates are responding to a need within the Wall Street economy. When CTH outlined an ancillary benefit hidden inside Trump’s Main Street policy we noted this expectation. Monetary action by the Fed would now –accidentally– work in favor of the U.S. middle class.
[…] Despite headwinds from a global economic slowdown, the U.S. housing market appears to be strengthening.
The National Association of Realtors said existing home sales rose 2.5% to a seasonally adjusted annual rate of 5.42 million units last month. June’s sales pace was revised slightly higher to 5.29 million units from the previously reported 5.27 million units.
Economists polled by Reuters had forecast existing home sales would rise to a rate of 5.39 million units in July.
The housing sector data appeared to have little impact on stock prices, which rose following upbeat earnings from retailers Lowe’s Cos Inc (LOW.N) and Target Corp (TGT.N) that reinforced confidence in consumer demand. (more)
See the dynamic?
Main Street is buying homes. Main Street is purchasing and spending. Main Street is delivering better earnings to Main Street-centric corporations (Lowes, Target) because Main Street is buying retail goods.
Additionally, the Bureau of Labor Statistics delivers the First Quarter wage results showing Q1 wage growth 2.8 percent year-over-year (national average). However, I would recommend everyone take a look at this BLS report because it breaks down regional wage gains by national market. [Table 1 – See Here] There are 356 counties measured.
What you see is the counties where MAGAnomic policy is having the biggest impact, are the specific counties where the worker wage growth is highest. There are several scores of labor markets where year-over-year wage gains exceed 5, 6, 7 percent and higher.
These wage gains will only get better as the trade policy gets further cemented. The USMCA will push investment into the U.S. for production of goods. The manufacturing shift out of China will push investment into the U.S. for the production of goods. Ongoing demands of reciprocity with the EU will push investment into the U.S. for the production of goods. A U.K-U.S. trade alliance between North American and a doorway into Europe will push investment into the U.S. for the production of goods.
All of these MAGAnomic trade policies push investment into the U.S. for the production of goods. All of these policies benefit Main Street USA.
President Trump is forcing the U.S. multinational corporations to put their investments back into the U.S. for the production of goods.
That’s the Main Street plan. That’s the Main Street policy. We are seeing the multinationals fight, but right now Main Street is winning, and Wall Street is not.
From CTH archives 2016: […]
♦ Inflation on imported durable goods sold in America, while necessary, will ultimately be minimal during this initial period; and expand more significantly as time progresses and off-shored manufacturing finds less and less ways to be productive, skirt tariffs and bottom out their monetary devaluation. Over time, durable good prices will increase – but it will come much later.
♦ Inflation on domestic consumable goods ‘may‘ indeed rise at a faster pace. However, it can be expected that U.S. wage rates will respond faster, naturally faster, than any monetary policy because inflation on fast-turn consumable goods becomes re-coupled to the ability of Main Street wage rates to afford them.
The fiscal policy impact lag, caused by the distance between federal monetary action and the domestic Main Street economy, will now work in our favor. That is, in favor of the middle-class.
Within the aforementioned distance between “X” and “Y”, a result of three decades traveled by two divergent economic engines, is our new economic dimension…. (more)