A good day for a MAGAnomic pause and reminder…
In 2015 we discussed candidate Trump’s economic positions and how they would impact the economy.  CTH anticipated that MAGAnomics would be reversing three decades of federal reserve monetary policy. After about a year of analysis and discussion, in 2016 CTH presented a theory: “A new Dimension in Modern Economics“.

CTH shared a possibility of what could happen if Trump Economic Policy was shifted to favor Main St. over Wall St.  One aspect we presented was how Federal Reserve monetary policy would be oddly disconnected from its ability to influence inflation… Today:

SAN DIEGO (Reuters) – The Federal Reserve could find itself fighting too-low inflation for years to come, San Francisco Federal Reserve President Mary Daly said on Friday, and may need a new policy framework to lift inflation back up to the Fed’s 2% goal.
“We don’t have a really good understanding of why it’s been so difficult to get inflation back up,” Daly said at the annual American Economics Association meeting in San Diego.

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American voters responded to the fraudulent impeachment effort in a big financial way for President Trump in the fourth quarter.  The campaign announced a massive $46 million influx which doesn’t count the amount raised by the RNC.

WASHINGTON (Reuters) – President Donald Trump’s re-election campaign raised $46 million in the fourth quarter of 2019, a major haul that was boosted by a surge of donations in the wake of the Democrats’ impeachment bid, a senior campaign official said on Thursday.
[…] The Trump campaign begins the 2020 re-election year with cash on hand of $102.7 million, the official told Reuters, an amount that will help his bid to compete in more states beyond those that carried him to his improbable victory in 2016.

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The 2020 Davos economic conference will be a little more important to watch this year (as it was in 2017) due to the completed U.S. Trade Agreements (S Korea, Japan, Mexico, Canada, and China) and the predicted focus for the Trump administration to pivot from Asia to the EU and U.K. for the next critical phase of the ‘America-First’ global trade reset.

As a result of the recent U.K. election, pending Brexit, a favorable $7.5 billion WTO ruling and USTR Lighthizer’s new $2.4 billion EU targeted tariff program, the administration has significant advantages going into a trade discussion with the EU in 2020.
Team USA has the world’s strongest economy, the largest market, legally bolstered tariff authority and a quiver full of powerful economic arrows.
Meanwhile Team EU has: (1) the UK leaving; (2) severe drops in German industrial manufacturing; (3) a shrinking French economy; (4) yellow-vests in the streets; and (5) demands for greater economic autonomy from many key member states.
Overlay Germany, France and Italy large economy challenges such as: their promise to meet NATO obligations – and their attachment to the strangling Paris Climate Treaty, and the EU’s collective economic position is precarious at best.

WHITE HOUSE – Today, President Donald J. Trump announced the Presidential Delegation that will attend the World Economic Forum in Davos-Klosters, Switzerland, from January 20 to January 24, 2020.

The Honorable Steven Mnuchin, Secretary of the Treasury, will lead the delegation.

Members of the Presidential Delegation:

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Earlier today, via Tweet, President Trump announced the ‘phase-one’ agreement between the U.S. and China will be signed January 15, 2020.

As U.S. Trade Representative Robert Lighthizer previously stated this very challenging agreement will be the first-ever attempted trade deal between a state-run economy and a free-market economy.   It will take time to see if communist China will actually follow-through on the terms and conditions.
Ambassador Lighthizer noted the principle challenge is generating an enforceable set of standards -within a written agreement- between a totally controlled communist economic system (China) and a free-market system (USA). No other nation has ever tried, and there is no preexisting trade agreement to facilitate a mapping. What Lighthizer was/is constructing will be what all nations will start to use going forward. This is historic stuff.
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White House Manufacturing and Trade Advisor Peter Navarro discusses the state of the U.S. economy heading into 2020. The Fox crew uses the strawman poll: “some people feel”, to create a narrative that cannot easily be countered; however, the reality in the economic stats cannot be refuted.
Main Street workers are confident; wages continue to increase; inflation is low –  employment is high, consumer spending is strong and the future looks bright.

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Ivanka Trump appears on Face the Nation to discuss the ongoing initiatives around paid family leave.  Ms. Brennan exhibits serious envy as she attempts to position Ms. Trump on the defensive.  However, Ivanka Trump is deeply informed on the nuances, details and challenges of the proposal and easily handles the narrative engineering effort of Brennan.
The family leave topic is a serious policy proposal that crosses into the larger America First economic need for a vibrant U.S. workforce.  Additionally, the topic of balance between family and work is critically important for middle-class and main street workers.  There are currently seven million jobs available and policies that help working families with children have long-term benefits beyond economics.

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Peter Navarro discusses the Trump administration’s trade agenda and some predictions for the state of the Main Street U.S. economy heading into 2020.
Navarro highlights the completed agreements with South Korea, Japan, China phase-1, and the U.S., Mexico, Canada USMCA agreement and what they can deliver next year.

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It really is quite remarkable that President Trump and the economic team could simultaneously diminish the interests of multinationals, focus on Main Street USA, and still create a situation where Wall Street stocks are growing.
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President Trump responded to the Canadian Broadcasting Company (CBC) editing out his appearance in the Christmas movie “Home Alone 2”.
President Trump jokes Justin from Canada likely having a case of the sads after getting called out for not meeting NATO funding obligations and the new trade agreement favorable to American interests.

Too funny.  We will miss this humor in 2025 when Trump leaves office.
It is worth remembering that Canada does not allow competition in their media sector.  The Canadian government considers the news media a protected “cultural industry”; and through a process of subsidizing broadcast all news media is essentially state run media.
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The Dept. of Labor reveals [DATA HERE] initial claims for unemployment fell again last week, creating the following Reuters headline: “The number of Americans filing applications for unemployment benefits fell last week in a sign of ongoing labor market strength.”   Another strong labor report, followed by another media report outlining how the results beat all economic analyst expectations; a consistent theme throughout 2019.

White House – DRIVING A RECORD-SETTING ECONOMY: The booming economy and strong labor market allow Americans of all backgrounds to find work and succeed.
♦ The current labor market revival is not a continuation of past trends, but instead a direct result of President Trump’s pro-growth policies.

• Since President Trump was elected, more than 7 million jobs have been added to our economy – surpassing the Congressional Budget Office’s predictions by 5 million jobs.
• This year, the unemployment rate has fallen to 3.5%, its lowest level in 50 years.
• Unemployment for African Americans, Hispanic Americans, Asian Americans, veterans, individuals with disabilities, and those without a high school diploma have all reached record lows under President Trump.
• The President’s policies are bringing people off the sidelines and into the labor force.
• The prime age labor force has grown by 2.1 million under President Trump.
• The surge in labor demand has resulted in 7 million job openings, which outnumber job seekers by more than 1 million.
• Before President Trump took office, there had never been more recorded job openings than unemployed workers.

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Whooo-doggies, middle-class Americans spent more this holiday shopping season than any year before it.  Despite losing a week due to the late Thanksgiving holiday, total Christmas sales growth was +3.4 percent year-over-year.

(Reuters) […] The holiday shopping season is a crucial period for retailers and can account for up to 40% of annual sales. But this year, Thanksgiving, which traditionally starts the U.S. holiday shopping period, was on Nov. 28, nearly a week later than last year’s Nov. 22, leaving retailers with six fewer days to drive sales between Thanksgiving and Christmas.
E-commerce sales this year made up 14.6% of total retail and rose 18.8% from the 2018 period, according to Mastercard’s data tracking retail sales from Nov. 1 through Christmas Eve. Overall holiday retail sales, excluding autos, rose 3.4%.
“E-commerce sales hit a record high this year with more people doing their holiday shopping online,” said Steve Sadove, senior adviser for Mastercard.

Now watch the Reuters spin…
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