US core capital goods orders unexpectedly fall in September

Demand for U.S. manufactured capital goods fell in September. The Commerce Department said on Thursday that non-defense capital goods orders also fell during this month at 1.2 percent. However, core capital good orders increased by 1.2 percent since August and shipments rose 0.3 percent. Though spending on equipment liked remained weak in the third quarter. Heavy machinery maker Caterpillar this week reported a 49 percent drop in third-quarter profit from a year ago and lowered it full-year revenue outlook for the second time this year. There were declines in orders for primary metals and fabricated metal products. Orders for machinery and electrical equipment, appliances and components rose last month.    

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U.S. economy posts best growth in 2 years

The U.S. economy grew at an annual rate of 2.9% from July to September, the fastest growth in two years. In addition to overall growth, trade also increased during this quarter. Overall, exports grew by 10%, the best increase in three years, largely due to the expansion of shipments of soybeans to China. This increase in exports has contributed to 200% overall growth of exports to China in the last decade. Although the economy experienced the fastest growth in two years, businesses inventories grew. However, the large amount of unsold items did not harm the growth of the economy. In addition, consumer confidence hit a nine-year high in September, with their spending being another large factor that contributed to the growth. The solid growth increase is helping the Fed in their plan to raise interest rates in December.

This subject has been a very popular topic in the current election. Both candidates have mentioned and promised to increase the amount of economic growth, specifically Trump promised if he is elected president to have a growth rate of 4%. This 2.9% growth rate was the last reported number before voting for the election began. It will be interesting to see how the outcome of the next election will affect the growth rate of the economy.

http://money.cnn.com/2016/10/28/news/economy/us-economic-growth-gdp-third-quarter/

Brexit and it's Global Challenges

Chief economist, Dan O’Brien, discussed the consequences of Great Britain's exit from the European Union. The talk was very informative and explained the many possible outcomes that would result from “Brexit”. Dan O’Brien did not only discuss Brexit, he also spoke about the state of employment in America and how it compares with the rest of Europe. The data was very surprising, it showed that in the last 10 years the United States has had the same decrease in employment as Greece. O’Brien discussed how capitalism does not bring the population closer but rather creates greater separation in the United States as businesses grow. Something else that was discussed was the shift in power that would occur if Great Britain left the EU. What would happen would be a much more German dominated European Union, which would drastically shift the political and economic landscape. In terms of economic landscape, Europe would be much less appealing as a foreign market for the United States. This would actually hurt the United States as Europe is one of the biggest and fastest growing markets in the world. Europe, especially Northern Europe, is also much better than the rest of the world for conducting business thus hurting the global economy. O’Brien also discussed how a Great Britain exit would severely hurt his homeland of Ireland. This would result due to the fact that 25% of Ireland's GDP as exports go to Great Britain. This would have catastrophic consequences for the country and create a recession that could begin a domino effect for other countries in the European Union.

O'Brien, Dan. "Brexit and it's Global Challenges." Ohio Wesleyan University. September 26th, 2016

Change comes in Tech (Bionic/Robo)

"A quiet change is happening in the financial industry at the moment. New technology is changing how markets work and how financial services are administered." (1)

Innovations in technology has propelled society to heights of only imaginable portions that are now reality. Impractical was once word of restriction in regards to progress, but imagination is the human characteristic that allows us to bridge the impossible. Imagination is the foundation of invention and innovation. Noise and men that use to clutter the floors of firms are now replaced by the hum of computers. In the piece, The Future is Bionic not Robo talks about the evolution in technology in the financial advisement market. "Technology presents a huge opportunity in this situation. It can give advisors more effective tools to give more efficient and better reasoned advice. The future of advice is one where the decisions of humans are augmented by technology, not replaced by them. In this sense, advice will be bionic, not exclusively robo." Technology is aiding financial advisors advice their client not just through numbers and figures, but creating a platform for clients and agents to talk and understand one another. Technology is no longer a crutch used for information, but now we can manipulate what we are given for desirable outcomes. It means smarter investments, better efficiency, and promotes a healthy market. In relationship to productivity, technology helps society take the leaps and bounds it needs to make for a brighter and better future.

Reference: 1. The Future is Bionic Not Robo

Impacts of "Trumponomics"

Trump's plans to cease interactions with Mexico by "building a wall" means more than the impact on immigration. His proposed policies could "disrupt the delicate ecosystem" of trade, employment, and manufacturing that crosses the US/Mexico borders every day. Mexico's proximity and current border security (especially for certain locations in California) allow for easy and fast transactions simplifying trade costs. Trade with China is not able to provide these benefits, and although China has aided us with our deficit, Mexico is America's second largest export and America is Mexico's first. This means there is going to be a substantial impact on employment and GDP because of the decrease in Y.
The graph illustrates  benefits of trade specifically with Mexico once NAFTA was passed. The possible impacts of removal of the NAFTA with Mexico would affect all of North America for the worse.