There is a lot of banter amid the punditry class of trade and finance watchers surrounding a statement from Chinese Commerce spokesman Gao Feng claiming that U.S. and China negotiators were discussing a ‘phased’ roll-back of U.S. tariffs as part of a trade deal. However, a note of very strong caution should be applied.

On its face the Beijing-central claim is essentially an accurate portrayal of a dynamic long discussed.  The tariffs were initially imposed to reset the outlook of China.  In any negotiation with China a concession of current status is a non-starter.  By natural disposition Beijing refuses to cede already won ground. This is their historic approach.
Therefore when engaging in any negotiations with China it is necessary to reset the baseline.  China has to naturally feel losses; the economic landscape must be changed around them without their participation; in order for for them to consider negotiation.
The punishing U.S. tariffs accomplished this objective; the Beijing baseline status has been changed.  The bamboo forest is significantly less than it was two years ago, and now China wants to recapture lost position. Their current status indicates exactly that dynamic.
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Unemployment claims dropped by 8,000 last week showcasing a very strong job market for all sectors of employment.  The U.S. Dept of Labor Report shows continued strong jobs growth surprising most economic pundits.

(DOL Report – pdf page 4)

(Reuters) – The number of Americans filing applications for unemployment benefits fell more than expected last week, consistent with strong labor market conditions and continued job growth.

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National Economic Council Chairman Larry Kudlow appears on Fox Business to discuss the latest excellent jobs report and the overall strength of the U.S. economy.
Additional points of interest discussed are the U.S-China trade negotiations, the status of the internal Beijing communist control over their economy and the ongoing issues with the EU.  Lots of good MAGAnomic news.

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Jumpin’ ju-ju bones, the October jobs report has blown away all expectations in every possible metric.  It’s not just the top-line job gains, the two month revisions are huge.
The Bureau of Labor Statistics (BLS) report for October shows 128,000 job gains; and that number includes absorption for negative impacts due to -20,000 census workers coming off federal payrolls, and -42,000 striking auto-workers.  Far better employment numbers than all projections and estimations.
Additionally, the prior two months had massive upward revisions. August was revised up by 51,000 (from +168,000 to +219,000), and the change for September was revised up by 44,000 (from +136,000 to +180,000). With these revisions, employment gains in August and September combined were 95,000 more than previously reported (BLS Link).

“The October jobs report is unambiguously positive for the US economic outlook,” said Citigroup economist Andrew Hollenhorst. “Above-consensus hiring in October, together with upward revisions to prior months, is consistent with our view that job growth will maintain a pace of 130-150K per month. Wage growth remaining at 3.0% should further support incomes and consumption-led growth.”  (link)

The strong employment results are so strong the results now have all of the financial pundits reassessing their prior perspectives on the state of the U.S. economy.
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Wait,… what? Who cancelled the recession?

Remember when the financial media and democrats were assuring everyone the U.S. economy was g.u.a.r.a.n.t.e.e.d to enter a recessionary phase? Well, apparently MAGA Trump cancelled it… with the help of millions of U.S. middle-class workers who are spending their wage increases, bigly.
The Bureau of Economic Analysis releases the third quarter (Q3) GDP growth estimate today, and the overall Q3 GDP growth is +1.9 percent. However, behind the economic growth stats the scale of U.S. Main Street strength is the real story.

[BEA pdf link – table 3]

Main Street consumer spending was up $64 billion on goods and $36 billion on services. As those who follow MAGAnomics closely will remember, the Main Street economy is founded upon middle-class spending. Strong jobs, wage growth, low taxes, low inflation, and low energy costs, means more disposable income.  Disposable income grew 4.5% in the third quarter.
The U.S. economy is strong because approximately 80% of everything produced inside our economy is consumed inside our economy. As long as the underlying jobs market stays strong, consumer spending leads to self-fulfilling economic expansion. Main Street is doing very well.
The weakness is Wall Street investment into expanded production of goods in the U.S.
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White House manufacturing policy advisor Peter Navarro discusses the lack of action from Speaker Pelosi on ratification of the USMCA.
As CTH has outlined since the July 2019 alliance meeting between Pelosi and Canadian Prime Minister Justin Trudeau, the strongest likelihood is the House will table the ratification vote until after the 2020 election. It is a strategic political decision.

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Earlier today President Trump held a cabinet meeting and permitted the U.S. media to stay in attendance for the first hour.  No U.S. President has ever allowed this level of transparency in government.  After brief statements, the president took multiple questions from the assembled press pool. [Video and Transcript Below]

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[Transcript] – THE PRESIDENT: Okay. Thank you very much. We have a Cabinet meeting. We’ll have a few questions after grace. And, if you would, Ben, please do the honors.

SECRETARY CARSON: Our kind Father in Heaven, we’re so thankful for the many blessings that you have bestowed upon us in this country. And we’re thankful for the people of courage who have been here before us, who have fought hard for the rights of our country.

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Leftists love to trot out Christine Lagarde as the pontificating elite to defend their multinational interests.  Recently the former IMF leader was elected to take control of the European Central Bank.   As a direct result, Ms. Lagarde is now taking an adverse position toward a strong U.S. economy and decrying the ‘America-First’ policies of President Trump that have removed the tentacles of global financial control.
If you follow trade, finance and the interests of the multinationals, this is actually quite funny.  In this first brief interview segment Ms. Lagarde, has the elitist audacity to warn President Trump that lowering U.S. interest rates defeats the agenda of the EU.  She doesn’t put it in those terms, but watch and we’ll explain:

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Notice how Lagarde magnanimously claims that lowering interest rates when the U.S. economy is strong, and the U.S. unemployment rate is at historic lows, could lead to rising prices inside the U.S.  Too damned funny; how very kind of the EU to be worried about U.S. consumers… (pro tip: they ain’t).
What she’s really worried about is the dynamic that President Trump has created that is crushing the globalists. Let’s expand.
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Speaker Nancy Pelosi has a plan, at least the collective ideology behind her has a plan.  Her recent trip to Jordan and Afghanistan are part of that plan; everything is essentially connected.    Pelosi will do whatever is needed to hamper the U.S. economy in an effort to weaken President Trump’s relection bid.  Blocking the USMCA is part of that aspect.
The visit to Jordan and Afghanistan was purposeful ground work in preparing to seed the narrative that President Trump’s withdrawal from mid-east conflict is evidence of dangerous foreign policy.  Again, just like the USMCA stall, the larger goal is to weaken the President in advance of 2020.  Everything is connected.
National Economic Council Director Larry Kudlow appears to be realizing the Democrat’s hatred for ‘America-First’, which weakens their personal financial position, is their driving ideology.

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Commerce Secretary Wilbur Ross discusses the negotiations with China and the possibility of agreement on ‘Phase-1’ aspects prior to December.  Secretary Ross is not necessarily optimistic the agreement will be made based on Beijing’s outlook toward the enforcement mechanisms and forced compliance. Ross also discusses Brexit from the position of mutual benefit.
On the subject of USMCA Secretary Ross outlines the only reason for Democrats to hold back ratification is Pelosi’s politics. [Only 20 legislative days left in 2019] Mr. Ross discusses the options if Pelosi refuses to take up ratification.  On this subject the commerce secretary does not sound optimistic.

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