Free Weekly Forecast
May 13, 2019
As the White House prepares to amplify the duties as a route to damage the Chinese economy, opponents are intensifying their efforts to counter what they say is a misguided attempt by the administration to portray the tariffs as anything but a tax on American consumers. “We’re paying that tariff. I want there to be no mistake that the consumer is paying for these tariffs. I wish China was paying them. I certainly would feel better about it that way,” Brent Bible, a soybean farmer in Lafayette, Indiana, said on Thursday on a call arranged by advocacy groups Tariffs Hurt the Heartland and the National Retail Federation. – Joe Williams, “Burdened by Trump’s Tariffs, Small Businesses, Others Mount Last Minute Plea.,” Fox News Network, May 9, 2019.
Don’t underestimate the power of the “Trump put.” Analysts say the stock market has been hanging in after trade talks with China hit a rough spot because investors believe a deal is coming, and they also expect President Donald Trump to take action if the stock market looks like it is heading for a real meltdown. The “put” is the belief that Trump will not let the stock market collapse, since he views it as a measure of his own success. On Friday, stocks cut steep losses and turned positive, after Treasury Secretary Steven Mnuchin said talks with Chinese Vice Premier Liu He were “constructive,” as they ended for the day. – Patti Domm, “The ‘Trump Put’ Saves Stocks as Investors Bet the President Won’t Let the Market Collapse.” https://www.cnbc.com, May 10, 2019.
May 06, 2019
The U.S. jobs machine kept humming along in April, adding a robust 263,000 new hires while the unemployment rate fell to 3.6%, the lowest in a generation, the Labor Department reported Friday. Nonfarm payroll growth easily beat Wall Street expectations of 190,000 and a 3.8% jobless rate. Average hourly earnings growth held at 3.2% over the past year, a notch below Dow Jones estimates of 3.3%. Unemployment was last this low in December 1969 when it hit 3.5%. At a time when many economists see a tight labor market, big job growth continues as the economic expansion is just a few months away from being the longest in history. – Jeff Cox, “Jobs Surge in April, Unemployment Rate Falls to the Lowest Since 1969,” https://www.cnbc.com, May 3, 2019.
President Donald Trump tweeted that he wants the economy to “go up like a rocket,” ratcheting up his efforts to badger the Federal Reserve into slashing interest rates… The Fed, as expected, left its key interest rate unchanged Wednesday after a two-day meeting… Here’s the rub: Trump is cheer leading for an excessively large rate cut for the wrong reasons, economists say. And his proposal, if enacted, carries unpalatable risks for a relatively modest reward, even putting aside the potentially bigger hazard that the Fed would jeopardize the public’s confidence in its independence if it were to follow Trump’s advice. –Paul Davidson, “Trump: Rate Cuts Would Make Economy Soar,” USA Today, May 3, 2019.