The Democrats and their pals in the lame stream media continue to insist that the economy is headed into a recession based on some spurious signal from the bond markets. They insist this is the direct result of PDJT’s economic policies. Now I would agree that the signal in the bond market that lasted about an hour a couple of weeks ago is the result of government policies, just not ours. Central banks overseas caused the effect when they continued to affirm negative interest rates and when foreign governments continued to devalue their currencies in relation to the US.
So how is the economy doing? Last week U.S. economic data included the Labor Department’s report on initial filings for unemployment benefits that continue to be at historically low levels. No state was triggered “on” the Extended Benefits program during the week ending August 31. Insured unemployment benefits are at low levels not seen in many decades.
Over at the Commerce Department Reuters reported that housing starts reached a 12 year high. Keep in mind that housing generally lags behind other jumps in retail sales because housing is the biggest financial commitment made by most Americans. Since PDJT took office wages and worker benefits have increased substantially. More and more people feel financially comfortable in making a big commitment like buying a house.
Manufacturing activity continued its expansion according to the Philadelphia Fed. The Commerce Department announced that August retail sales growth continued to out pace analysts’ predictions. All of this has led Bloomberg economists to announce that they are cancelling the recession.
Allianz Group chief economic advisor, Mohamed El-Erian, accurately describes what is happening. The U.S. economy is strong. However, the multinationals on Wall Street, who are heavily invested overseas especially in China right now, are exposed. Thus, there’s a disconnect between Main Street that is experiencing strong wage growth in a tight labor market and Wall Street with its market volatility due to this exposure.
So it appears that the only thing that could cause a recession in the US would be consumers buying into the nonsense pushed by those who are trying to damage the economy for their own political objectives.