Employment

During the month of March 2019, 196,000 jobs were created by employers

which has been an over 100% increase as compared to the previous month

which had a low figure of only 33,000. This is a good sign for the USA

economy which is in seemingly in a never-ending trade war saga with China.

Unemployment rate has stayed at a steady 3.8 percent which is close to its

lowest level in 50 years. 

It isn't all good news though as the trade war with China is having its side effects.

Investment is slowing down and the effects of President Trump's $1.5 trillion tax

is wearing off. 

https://www.independent.co.uk/news/business/news/us-jobs-report-donald-trump-nonfarm-
payrolls-a8856676.html

Andrew Yang Says Economic Incentives Are Crucial for Climate Action

The aftermath of Hurricane Dorian again reminds us of how catastrophic climate change is to our world. 2020 Democratic presidential candidate Andrew Yang believes that people respond to incentives. Incentives need to be given to combat climate change, towards a greener economy since fear of the Earth becoming uninhabitable isn’t enough for corporations to decrease their carbon footprint. Farmers would be taught more sustainable practices. Yang plans to introduce a carbon tax at $40/ton initially but later increase it up to $100/ton. He would use a portion of this tax to set up measures for cleaner energy with the other portion going towards his plan for universal basic income. He believes that when people are less worried about their primary responsibilities (e.g food, shelter etc.) they will make more of an effort to focus on climate change. This all sounds great but it’s easier said than done, the question is if he is actually elected will he enforce these plans?



https://www.nytimes.com/live/2019/democrats-climate-town-hall/andrew-yang-climate-change

Dorian’s wrath causes cancellation of more than 1,200 flights

https://www.cnbc.com/2019/09/02/hurricane-dorian-category-4-storm-cancels-more-than-1200-flights.html

Hurricane Dorian has reached a Category 5 hurricane as of Sunday morning. The hurricane has altered its path. As a result, AccuWeather now estimates a total damage and economic loss will be about $8-10 billion. This estimation is based on an analysis incorporating independent methods to evaluate all direct and indirect impacts of the storm based on a variety of sources. The storm has hit the Bahamas and has "pounded the southeastern seaboard". The article I have attached states that due to the strength of Dorian, it has forced multiple airports to close until Tuesday. This has contributed to more than 1,200 flight cancellations in the U.S. As of 12:05am on Tuesday, 1,484 flights into and out of the U.S. have been cancelled and 3,964 have been delayed. Many large airports have closed. Orlando International Airport plans to close today, 242 departures have been cancelled coming out of Fort Lauderdale, and Freeport-Grand Bahama International Airport is under several feet of water.
The mass cancellation of flights in and out of the U.S. may impact the economy slightly. Many people attempt to make last attempt trips during Labor Day weekend, and many of those flights have been cancelled as a result of this storm. Many of the costs in the economic loss come as a result of losses to the travel and tourism industry, including cancelled vacations, cancelled flights, lost revenue to hotels, cruise lines diverted, and expenses in preparation for the storm.

The EPA propose a plan to relax methane emission regulations

The regulations being lifted include those that require oil and gas companies to limit methane leaks from wells, pipelines, and storage. The EPA describes the rules as "unnecessary and duplicative regulatory burdens." There is an open 60-day public comment period that is sure to create some amount of public unrest, especially considering the future of transportation, environmental change, and natural resource usages.

Trump Ordered U.S. Companies to Leave China. Is That Possible?

https://www.nytimes.com/2019/08/24/business/trump-china-trade.html

Before his annual trip to the G-7 Summit, President Trump threatened China with the withdrawal of all US companies from the country. China is a key player in the global economy, they make 25% of the worlds manufactured goods. Forcing companies to leave China so quickly is going to hurt the companies. A more long term process of relocating is already underway. It is unlikely that these companies will move home because of low unemployment rates.

Hurricane Dorian Causing ‘Catastrophic Conditions’ in Northwestern Bahamas

As now category 5 hurricane, Hurricane Dorian, gets closer and closer to landfall, many parts of the Southeast U.S and the islands in the Gulf Coast prepare for what could be one of the biggest hurricanes in recent history. Storms like these can cause an enormous economic shock to entire geographical areas. They cause people to evacuate whole towns and also many have to very quickly. Then when they get back entire towns can be basically washed away. Because of this, many decision makers have to put plans into action in order to get everyone out and in places that will be safe. This can cause an entire towns economy to be put on halt for a period of time. This impacts many small business owners due to the fact that they may have to go that period of time without making money. How can businesses best react in order to cushion the inevitable hurt that it will cause them?



Link to article: https://www.wsj.com/articles/hurricane-dorian-is-upgraded-to-category-5-storm-11567339832?mod=hp_lead_pos5

Suspension of British Parliament

Link to the Article https://www.washingtonpost.com/world/europe/boris-johnson-asked-the-queen-to-suspend-parliament-why-didnt-she-just-say-no/2019/08/30/285aff50-cb2b-11e9-9615-8f1a32962e04_story.html


Recently the new prime minister has asked the queen to recuse parliament for 5 weeks.  While this move in and of itself is not completely out of the norm for a newly selected prime minster, the article succinctly points out that the length is the longest that has been requested in decades and comes at a pivotal moment in the nations history.  As the October 31st brexit deadline approaches Johnson opposition is calling this suspension a ploy to prevent debate and lead to a no deal brexit, something Johnson has publicly supported.  Such a long break in meeting would definitely increase the likelihood a deal will not be reached before the deadline. 

How Politics Constrain the Fedral Reserve and Other Economis

Economies from the United States to the European Union to China are slowing, presenting a challenge for central bankers, whose tools are limited at a time when interest rates remain historically low in much of the world.  In the United States and Britain, central bankers are hoping that trade uncertainty and political strife will not kill long economic expansions. And in other places, economic policy makers have been urging politicians to step up their spending in order to save the economies from tipping into recession. Politicians might be taking this with an eye on their voting bases. President Trump is locked in a trade war with China, with the latest round of tariffs scheduled to take hold on Sept. 1, and he shows no intention of backing down. American tariffs on European automobiles remain a possibility.  Complicating matters is President Trump’s view that what is good economically for other countries is bad for the United States. On Thursday, he once again needled the Federal Reserve Board over Germany’s low interest rates, suggesting that negative interest rates on German bonds were putting the United States at a disadvantage. “Germany sells 30 year bonds offering negative yields,” President Trump wrote on twitter. While central bankers strive to be politically independent and avoid giving elected leaders advice, they have acknowledged that government policies are threatening growth. The Fed cut interest rates for the first time since the Great Recession in July, a move driven in part by Mr. Trump’s trade policies and partly by the broader slowdown in global growth.  

Economic action might be needed sooner rather than later: Recession signals have been flashing in American bond markets, Japan and South Korea are engaging in their own trade war, and consumer and business confidence have taken a hit in many parts of the world. While recession far from guaranteed, it is looking increasingly likely across a number of economies, including the United States. 

Link to article : https://www.nytimes.com/2019/08/22/business/economy/fed-jackson-hole-growth.html

Will America Talk Itself into a Recession? Trump's Advisors Are Worried

Link to Article: https://www.nytimes.com/2019/08/30/business/economy/recession-trump.html

This article states the President Trump's escalating trade war is the main reason that economist, traders and the american public are worried about the possibility of a recession. Also the manufacturing output has slumped and investment has slowed this year so far. President Trump has dismissed any talk of a recession and talked about how strong our economy is. Many economists believe that if there is a recession consumers will not be the cause but rather Trump's trade policies and their uncertainty will most likely be the culprit.

"You Cannot Hire American Here"

Link to article: https://www.npr.org/2019/08/21/752336132/employers-struggle-with-hiring-undocumented-workers-you-cannot-hire-american-her

This article discusses one of the very hot topics in the United States currently, which would be immigration law and enforcement. The article discusses one particular restaurant in the Midwest and the impacts that the immigration raids have been having on them, including: constant fear both of being deported, and of having increasing costs, as well as the worry of who to hire if all of the immigrants were to be deported. The main issue identified by the owner of the restaurant NPR interviewed is that, contrary to what the Trump administration and its proponents claim, it is virtually impossible for her to hire Americans to work in the positions in which her immigrant workers are hired. She states that the wage is too low for any Americans to consider, the work too difficult, and the benefits non existent. In her experience, if she is able to find a documented worker they will show up, likely not sober, for one shift and then ask for their money on the way out, not returning for more shifts. On the other hand, she has found that her undocumented workers are harder working, take the low pay without benefits, and stay for long periods of time. 

How does America’s reliance on undocumented workers affect the overall wage rates? What are some of the other economic implications the changing border situation and the emphasis on removing undocumented immigrants from the country have? 

Germany’s Small Steps Into Stimulus Are Unlikely to Meet Economists’ Hopes

Germany's economy has recently seen losses with the last quarters showing a GDP drop of 0.1%. Projections for the current quarter also indicate a decrease putting the country into recession. Economists globally have urged Germany to increase government spending in order to avoid the looming recession. With Britain leaving the EU next month without much decided, the EU depends on Germany's economy's progress now more than ever before. However, the way the stimulus package is designed, it may take a while to kick in. Some economists believe that if action is not taken right away, it may be too late to avoid the pending disaster, making the stimulus package ineffective. With early elections around the corner, its clear to see Merkel's government is hesitant to implement any unpopular policies, even if they may save the European economy. Only time will tell if the German government acted smart and fast enough.

https://www.wsj.com/articles/germanys-small-steps-into-stimulus-are-unlikely-to-meet-economists-hopes-11567346410

Jerome Powell on US investments current struggles

The trade war between the US and China has been the main catalyst of US business investments struggles. On August 21st, The Trump administration declared new tariffs on Chinese imports. In response, China imposed new tariffs to counteract the ones placed by the US. This trade uncertainty has caused lower shipment on capital goods because business are less likely to invest with the risk being higher now. Jerome Powell, head of the federal reserve chair, confirms that the trade policy has"a role in the global slowdown and in weak manufacturing and capital spending in the United States". He also believes that in order to continue this prolonged period of economic growth, the US central bank will "act appropriately". The Fed also lowered short term interest rates by 25 basis points which is a sign of the slowing economic growth due the decreases in capital investments. This third quarter slump for business investments can have a negative impact on the GDP for this quarter, and potentially this year if further actions are not taken to improve certainty on trade policy.


https://www.reuters.com/article/us-usa-economy/u-s-business-investment-appears-to-struggle-in-third-quarter-idUSKCN1VG1DV

Tariffs due to the trade war with China have been escalating on goods we import from them, and it's affecting many firms and is ultimately hurting our economy. China is one of the biggest manufacturers for countless companies in the United States, and these huge tariffs are causing a great deal of firms to over pay for these products that are manufactured in China. Imports from China have also increased about 59% since 2008 and is only increasing. Since this is damaging our economy Trump has “demanded U.S. firms move production out of China.” Though many U.S. companies have already done this in the past, it’s important for major companies to take their production elsewhere. The issue is that many U.S. firms also rely on China as a prime source for their manufacturing, especially firms that are in the industrial and technology sectors. Major companies like Boeing and Apple have practically all their products manufactured in China, so it would be hard for them to leave anytime soon. China also makes 25% of all goods around the world, “in part because of the difficulty in finding a sufficient workforce on other countries’ factor floors.” Five years from now I wonder if China will still be a major exporter to the U.S. if this trade war continues.
https://www.cnbc.com/2019/09/01/trump-ordered-us-firms-to-ditch-china-but-many-already-have.html

Here’s why Trump wants to buy Greenland

Trump has proposed the ideas of buying Greenland multiple times, however the Danish Prime Minister has called this concept absurd. The main reason Trump has had such interest in Greenland is because of its increasing geopolitical importance. Their growing geopolitical importance is due to the New North Atlantic shipping lanes opening up due to the melting polar ice caps. Because of the melting the ice caps the new lanes have drastically decreased trade times. Also, natural resources is another reason why Trump is so interested in buying Greenland, their ice caps are abundant with untapped natural resources. China has also showed interest in the North Atlantic shipping lanes, they proposed building new airports and mining facilities on Greenland in 2018. With the trade war going on between the U.S. and China, acquiring Greenland would be a big advantage in our trade war with China. Greenland is also a advantageous location for the U.S armed forces, we have had an agreement with Greenland since the end of World War II to accommodate American military assets on the island. Could you see Trump and the Danish Prime Minister Mette Frederiksen coming to an agreement on Greenland? If so, how would this affect the trade wars with China?

Here is an interesting stance on the inverted yield curve...Kristina Hooper takes a look at other metrics in the economy that helps grasps the bigger picture.  Hooper makes it clear that we are in "unknown terrority" with our economy because of the escalating tariff wars.  She believes that by taking a look at the price of copper, Ism Manufacturing and Non-manufacturing indexes, the consumer expectations gap, and the Composite Index of Leading Economic Indicators that a recession does not appear imminent. What do you think about this type of analysis? Do you think these other indicators are fair enough to look at when it comes to a recession? 
https://www.blog.invesco.us.com/beyond-the-yield-curve-other-economic-indicators-to-watch/?utm_campaign=Beyond+the+yield+curve:+Other+economic+indicators+to+watch&utm_medium=bitly&utm_source=Twitter

Trade War Against Europe would Cause More Harm than China

A trade war against Europe? This probably would not be the smartest move to make. The U.S has profoundly more to lose against Europe than China. There have been subtle incidents between  Europe and the U.S. Experts have said: "There have already been tariffs on European steel  and aluminum — which led the bloc to impose duties of 25% on $2.8 billion of U.S. products in June 2018, and, there’s an ongoing dispute regarding Airbus and Boeing."  In 2018 the U.S had imported $683.9 billion of European goods compared to importing $557.9 billion of China's goods. This may not be an enormous gap between the goods the U.S import from Europe and China, but the number of goods the U.S exports between China and Europe are immersive. The U.S exported $574.5 billion to Europe and only $179.2 billion to China. This would be a huge detriment to the U.S economy considering we exported more than three times more to Europe than to China. If this trade war ever happen this won't only determine the fate of both the U.S and Europe's economy, but possibly other countries too. 

https://www.cnbc.com/2019/08/22/why-a-us-trade-war-with-europe-would-be-more-damaging-than-china.html