Immigrants Are Keeping America Young — And The Economy Growing

This article explores some of the truths about immigration that are actually benefiting the U.S. First off, the native-U.S. population and labor force participation rate are declining as more and more baby-boomers enter retirement, and birth rates decrease. However, the increasing amount of young immigrants is maintaining growth in the U.S. economy in contrast to economies like Japan where the aging population is creating more and more of a problem. Immigrants in the U.S. do not really steal jobs away from U.S.-natives according to economists. Instead they take the lower-skilled jobs that no one is willing to have anyway; but, many immigrants are entrepreneurial and actually much more likely to start a business than a U.S.-native. So, although there is increasing reinforcement to the negative connotation of immigration, there are actually many positive gains that are keeping our economy afloat while other 'old' countries are in decline.

http://fivethirtyeight.com/features/immigrants-are-keeping-america-young-and-the-economy-growing/

Venezuela is now the World's Worst Economy

After a complete breakdown of the Democratic System in Venezuela they are definitely one of the world's worst economies.  They are currently in their third year of a recession and are predicted to stay in this recession until 2019, this year they are also expected to have around -10% GDP growth this year.  With one dollar today being able to get you 1,262 Bolivars their inflation is expected to rise 475% while the prices of goods are skyrocketing.  A big reason for all of this is that their oil is not selling, which makes up about 95% of their exports.  They have not kept up with the maintenance on their oil facilities and also have neglected to pay the companies that extract their oil for them.  Their food shortages were also severe earlier this year going months without basic things such as milk, eggs, bread and cheese, only recently have they lifted the ban food imports and price controls which is putting food back on the shelves, although these prices are so high Venezuelans can't afford it.  Another reason for their falling economy is that they are literally running out of cash, to pay off their debt to Switzerland this year they shipped them gold bars.  Their economy is so bad even China, who has long been their ally and helped them financially, has stopped lending them money.  Overall this can not be good for intertanital trade and markets since their currency and goods are so overpriced.

http://money.cnn.com/2016/10/25/news/economy/venezuela-breaking-point/index.html?iid=SF_River

Q3 GDP beats Expectations

Economists expected U.S. GDP to grow 2.5% in the 3rd quarter following growth of 1.4% in the Q2. The U.S. economy outpaced these expectations with increases in exports and inventory investment fueling a 2.9% jump in GDP. Although consumer spending continues to lag, this is expected to change with the upcoming holiday season that generally boosts Q4. This growth is a good sign for the U.S. economy, which many believed was stalling and showing signs of weakness. Despite Donald Trump's constant negativity, the nation is gaining confidence in the economy and we look to be on pace for a fed rate hike in December. We will be watching the fed closely over the next couple of days for indications on upcoming monetary policy.

http://www.cnbc.com/2016/10/28/us-advance-q3-gdp.html

Final Fed Meeting and Final Jobs Report Before Election Day

The article talks mainly about how the economy is doing before the meeting that the Fed is going to have before the presidential elections. In general it says that the economy is doing well, but that this is not going to make the Fed to change the interest rates mainly because they are scared of what could happen with the economy after the elections. Since they don't know what the elections could cause, they say that they are going to wait until the meeting that the Fed is having on December to change the interest rates. Most of the people believe the Fed is going to raise the interest rate this year but also most of them believe this is going to be in December and not before because they want to wait for the results of the election. Also they talk about how the economy could affect the decision the people take in the elections, because Trump has criticized that the economy is doing really bad and that they are not creating enough jobs as they should, but economist say this is because the Unemployment level is low (5%), and that even if the economy is not ideal that it is in good shape and that democrats are doing a good job in general. The article also talks about other countries, for example they talk about how well England's economy is doing compared to what economist were predicting after the decision of the Brexit for leaving the European Union. They say the economy is doing well and that it hasn't slowed down as much as they were expecting it to, one of the reasons why they say this is happening is because the central bank cut its benchmark interest rate to 0.25%, which is the lowest level in its 322 year history.

http://www.nytimes.com/2016/10/31/business/final-fed-meeting-and-final-jobs-report-before-election-day.html?_r=0

Substantial increases in Chinese investment

Due to the recent slowdown in economic growth for China, companies like the HNA group, and China Travel Academy are doing their best to make sure that with the recent spike of Chinese tourism to America, will benefit China as much as possible. China sees the hospitality industry in America a safe place to invest because of China's recent influence on tourism, and thus airline and insurance industries, are looking to invest in American hotels. 

"In April, an HNA division announced it was buying Carlson Hotels, which owns Radisson and several other brands. Last month, Anbang Insurance Group completed the purchase of 15 American hotels in a deal worth more than $5bn, including the JW Marriott Essex House in New York, the Westin St. Francis in San Francisco, the InterContinental in Chicago, a Four Seasons in Washington, DC, and two Ritz-Carlton resorts. And just last week came the news that China Life Insurance Co. is leading an investment group that is buying a $2bn stake in a collection of 280 American establishments."

The two reasons given for this surge in investment is that (1) the slow in growth in China is frustrating and prompting investment abroad, and (2) vertical integration in the tourism industry is expected to have a large impact on travel. 
In all China's investment is hoping to catch and return as much abroad spending as possible back to their own economy, further improving their growth. This also means that the US economy is not reaping all of its rewards for the hospitality industry it has created, and our growth may be slowed as a result. 


http://www.economist.com/blogs/gulliver/2016/10/rooms-growth
 

US weekly jobless claims total 258,000 vs 255,000 estimate

The percentage of  total Americans who filed for unemployment benefits fell in the previous week, indicating towards prolonged labor market strength and firming economic growth.

A Labor Department analyst said there were no out of the ordiinary factors influencing last week's data.

The four-week average of continuing claims dropped down 64,500 between the September and October survey periods, which implies that the unemployment rate could fall this month from 5 percent in September.
http://www.cnbc.com/2016/10/27/us-weekly-jobless-claims-oct-22-2016.html

Where the Next Crisis Will Come From (Peter Coy of BloombergBusinessweek)

There happens to be a weird occurrence of financial meltdowns occurring in years ending in "7" in recent history.  With that said, next year is 2017.  The article cited at the bottom of this post, breaks down the potential vulnerabilities of our global economy.  The IMF Global Financial Stability Report that was released earlier this month cites three major areas of concern for our global economy:
1. the unsettled political climate "which makes entrenched problems harder to tackle"
2. some weak financial institutions in developed markets
3. heavy corporate debts in emerging markets

The area of concern that worries me the most and puts our global economy in major vulnerability is the role that "heavy corporate debts play in emerging markets." Peter Coy stated an important point on the role that debt plays on our economy, "Debt fuels growth but also makes borrowers brittle. Debtors keep owing money even if they lose the ability to repay. If they default, their lenders are damaged and sometimes default on their own obligations, and so the dominoes fall."

With that point made, because of low interest rates holding big banks back from helping boost their funds to help them in crisis time will big banks fail again in the year ahead due to this lingering debt issue?

https://www.bloomberg.com/news/articles/2016-10-20/where-the-next-crisis-will-come-from

US advance Q3 gross domestic product up 2.9%, vs 2.5% increase expected

This article discussed how the U.S. economy has grown grew at its fastest pace in two years in the third quarter. It lists that the main reasons for this was a surge in exports and a rebound in inventory investment which caused a slowdown in consumer spending.

It was the strongest growth rate since the third quarter of 2014. GDP ended up increasing at a 2.9 percent annual rate. Luke Bartholomew, who is a fixed income investment manager at Aberdeen Asset Management in London, believes that “…the U.S. is roughly on track. It's a natural bounce back following a pretty underwhelming year so far".

The article also discussed the surge in soybean exports that helped to shrink the trade deficit in the third quarter as exports increased at a 10 percent rate.

Some other factors to the newfound economic growth discussed were that business inventories went up causing a 0.61 percentage point to GDP growth and spending on nonresidential structures increased at a 5.4 percent rate in the third quarter.

http://www.cnbc.com/2016/10/28/us-advance-q3-gdp.html

Australia hasn't had a recession in 25 years.

Australia has not had a recession in 25 years, and the central bank is part of that huge achievement.  The central bank has been able to keep interest rates low or near negative territory.  It doesn't strictly aim for a two percent inflation rate. Instead, the central bank aims for two to three percent inflation averaged over the business cycle.  It is amazing to see that the Australian central bank puts so much importance to average over the inflation time that it actually works for the Australian economy.

https://www.weforum.org/agenda/2016/09/australia-hasnt-had-a-recession-in-25-years-this-is-what-the-rest-of-the-world-can-learn?utm_content=buffer10fdc&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Here’s What’s Going Right, and Wrong, in the U.S. Economy

The economy has significantly improved since the last recession. The article talks about both the negative and positive aspects of the current economy.First of all it discusses the GDP and how it has improved over time. The economy grew at 4.2 percent , excluding the inventories.Also,consumption is the biggest component of the US economy.  Personal expenditure grew by 4.2 percent this year. The increase in consumption has lead to a shrinkage of the investment According to the article, "The simple fact is that consumers are driving the economic train now, and businesses are pulling back." 

Consumers Drove the Economy This Spring

Contribution to second-quarter G.D.P. growth

Personal consumption expenditures

Net exports

Business investment in intellectual property

Government expenditures

Business investment in equipment

Business investment in structures

Residential investment

Change in inventories

2.8%

0.2%

0.1%

-0.2%

-0.2%

-0.2%

-0.2%

-1.2%

Source: Bureau of Economic Analysis

Source  :

http://www.nytimes.com/2016/07/30/upshot/heres-whats-going-right-and-wrong-in-the-us-economy.html?rref=collection%2Ftimestopic%2FUnited%20States%20Economy

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