House Ways and Means Committee Chairman Kevin Brady discusses the current economic growth and the GOP policy initiatives behind tax proposals.
Chairman Brady emphasizes an intent to make the current middle-class tax cuts permanent in the next legislative session if Republicans can do well in the midterm election.  One of the benefits from previously ‘unexpected’ (by CBO) MAGAnomic growth is the baseline calculations for ‘revenue neutral’ did not factor in the current GDP growth rate.  [All previous Congressional Budget Office forecasts were underestimated.]
As Rep Brady outlines President Trump is committed to empowering Main Street, not Wall Street, as the driving force behind U.S. economic growth. [The essence of MAGAnomics.]  Every.Single.Trump.Policy targets support to Main Street. Period.

The Commerce Department, Bureau of Economic Analysis (BEA), has released the first estimate of the third quarter GDP growth for June, July and August 2018 (full pdf below).  The rate of economic growth in Q3 is estimated at 3.5%, exceeding most forecasts of slightly more than three percent.  The second quarter growth was 4.2%.
(more…)

The Commerce Department, Bureau of Economic Analysis (BEA), has released the first estimate of the third quarter GDP growth for June, July and August 2018 (full pdf below).  The rate of economic growth in Q3 is estimated at 3.5%, exceeding most forecasts of slightly more than three percent.  The second quarter growth was 4.2%.

“Defying ‘conventional wisdom’ once again, 3.5 percent growth is the latest sign that the Trump economy continues to surge,” said Secretary of Commerce Wilbur Ross. “The President’s actions from deregulation to tax reform have supercharged the American economy, driving it to new heights.”

Overall the 3.5% growth is exceptionally strong.  To see the data bolstering a positive future forecast I would draw attention to Table 2 (lines 43 through 49) and the analysis for net impact over Exports/Imports.  The heavy import number delivered a net subtraction of 1.78% from GDP growth; that’s a result of a large increase in imported durable goods [likely anticipatory holiday inventory buildup].

As you can imagine from your own shopping experiences, durable goods inventories generally climb in the third quarter as companies increase inventory in preparation for holiday sales in quarter four.  The growth in the buildup of this inventory is significantly higher than historic trend; this means companies are forecasting strong consumer demand for goods in Q4, the holiday season.
Further support for a booming Q4 purchase prediction can be found in the current 4% growth of consumer spending.  With wages growing (3.8% avg), and with an incredibly strong jobs market, people are making large purchases with confidence.  Additionally, price data in the current GDP report shows inflation at a 1.6 percent annualized pace.
(more…)

Earlier today President Donald Trump welcomed a group of American workers into the Oval Office for a discussion of removing “red tape” and barriers to economic expansion.

.
[Transcript] – Oval Office – 11:15 A.M. EDT – THE PRESIDENT: Thank you very much, and welcome to the Oval Office. On Monday, I traveled to Florida and Georgia to meet with first responders and to visit with those affected by the devastation of Hurricane Michael. And yesterday, Mike Pence traveled also to the two states and he saw devastation like he’s never seen before. We’re in the same category. It was something. Something horrible.
Thousands of federal employees and military personnel have been deployed to assist in the massive recovery effort. One of the biggest we’ve ever done, and we’ve had some pretty big hurricanes. This was just about at the top.
(more…)

For more than three decades all U.S. economic policy was elevating Wall Street and diminishing Main Street. As a result the middle America blue-collar workers have not had wage gains keeping up with inflation for over 30 years… Then came the era of Trump.

MAGAnomic policy is based around a very simple free-market process.  Increase domestic economic investment; expand new business and expansion in existing business; that expands the need for employment; drive those jobs, jobs, jobs and watch wages rise naturally as employers compete over an increasingly valuable labor pool.

Business Insider – The pharmacy-chain owner Walgreens Boots Alliance announced Thursday that it will make investments of about $150 million to boost mainly its in-store wages in fiscal 2019 in wake of President Donald Trump’s tax reforms.
[…] US retailers are scrambling to keep workers as they look for opportunities with higher pay and attractive benefits. The US unemployment rate fell to a 48-year low of 3.7% in September. According to the Bureau of Labour statistics, there were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago.

(more…)

There has been a great deal of background activity in the past 72 hours surrounding the U.S. and Canada trade negotiations.  However, some of that activity has become more brutally obvious; a deal is not likely to happen.
Against growing visibility the Canadian team of Justin Trudeau and Chrystia Freeland were intent on using opposition to Trump for maximum domestic gain, President Trump declined a bilateral meeting with Justin from Canada at the U.N. General Assembly; and today U.S. Trade Representative Robert Lighthizer told a group an agreement was unlikely.
Additionally, in a video taken today during the U.N. luncheon it is clear President Trump has no time for the political schemes of Justin Trudeau. The moment happens at 02:45 of the video below:

.
It is difficult to see from the video above, however in the camera angles below it is much more transparent.
(more…)

Bloomberg reported earlier today that President Trump was likely to pull the trigger on round #2 of tariffs against $200 billion in Chinese imported goods. Duh. Surprise fail. President Trump has not bluffed on a single tariff initiative since he started executing new U.S. trade policies to reset all trade relationships.
According to Jennifer Jacobs reporting (one of the few reliable) Secretary Ross, Secretary Mnuchin and Ambassador Lighthizer met Thursday to review the current status of ongoing trade deals. This is a good nugget, because it’s likely that same meeting contained the forward instructions toward Lighthizer for the Canada discussions.
According to the report, President Trump, Ross and Lighthizer are adjusting the specifics of the $200 billion Chinese products targeted based on the two-weeks of domestic feedback they received. I would actually anticipate a combination of increased tariffs on the Round #1 sector (25% on $50 billion), and the application of new sectors within the $200 billion Round #2 target.

• Reuters Article Here
• Bloomberg Article Here
• USTR Prior Notification Here

(more…)

Remember the ju-ju bones?… Well….  The U.S. Main Street economic engine is almost firing on all cylinders as brick-and-mortar retailers drop their historic complaints of e-commerce impacting their sales and foot-traffic, and instead begin seeing the real life consequences from a resurgent American middle-class.

Target CEO Brian Cornell: “There’s no doubt that, like others, we’re currently benefiting from a very strong consumer environment — perhaps the strongest I’ve seen in my career.”  “We’re seeing a great consumer response … unprecedented traffic. As we go back and look, we’ve never seen traffic growth like this.” (link)

The growth in retail foot-traffic is a critical KPI for the economy.  Despite economic and business school theory (pushed over the past 20 years), everything of consequence is dependent on a thriving American middle-class; blue and white collar.
(more…)

When discussing or reviewing trade deals, particularly NAFTA, it is important to remember two baselines: (1) The trade reset is President Trump’s personal legacy initiative; it’s personal – ignore media banter – it’s personal; like, the most important thing he ever thinks about. Always. 24/7. (2) President Trump has no multinational corporations or financial interests with leverage/influence over his decision-making.

There are trillions at stake.

We begin:

“We are already looking at all the issues. We might close this, not in a matter of hours, but these days. We still have next week,” Jesus Seade, designated chief negotiator of Mexican President-elect Andres Manuel Lopez Obrador, told reporters.

Here’s where it becomes important to note that U.S. Trade Representative Robert Lighthizer has twice asked Jesus Seade to remain AFTER hours when all other trade officials have concluded discussions. Closed-door conversations between Lighthizer and Seade; and no-one else. [Refer back to the two Trump baselines again]
Next, before reviewing the comments and presentations of the media regarding the U.S. Mexico NAFTA status; again reference the team approach, and the division of responsibility. Today, Secretary of Commerce Wilbur Ross is meeting with the twitchy Chinese delegation – again, their arrival is not a matter of scheduling happenstance; it is directly related to the ongoing 301 hearings that began two-days-ago, Monday.
(more…)

National Economic Council Director Larry Kudlow appears on Fox News to discuss the incredible strength of the economy and how the media is refusing to cover the story.
Chairman Kudlow goes through a series of economic Key Performance Indicators (KPIs) to stress how this specific set of MAGAnomic Main Street policies is delivering real, tangible, financial benefits to the middle-class and average Americans.

(more…)

The National Federation of Independent Businesses (NFIB) is an assembly and survey of small business owners throughout the U.S.  In the latest survey (full pdf here) overall optimism is the second highest ever recorded at 107.9 (the highest reading was 108 in 1983).

The full press release is available here.  The full pdf of the survey is available here. The executive summary outlines the overall content and highlights the sentiment amid Main Street U.S.A.:

[…] Although some panned any celebration of the 4.1 percent second quarter GDP growth, small business owners beg to disagree. At least in the small business sector of the economy, Main Street’s performance over the last 21 months is unprecedented based on reports for the past 45 years by hundreds of thousands of NFIB’s member firms. Owners have never been so optimistic for so long. This has translated to improved employment and investment spending that buoys GDP growth, even at the end of what will be the longest expansion in modern history.
Consumer sentiment is at record high levels. Consumer spending, which accounts for 70 percent of our economy, posted 4 percent growth in Q2. Historically revised data show that consumers have been saving much more than thought, and income gains in recent months have been solid, providing support for spending in the second half. The record levels of firms reporting higher compensation is a clear indication that wages will be rising further in the second half.

(more…)