Consumer Prices Rise Slightly In August

Due to the drop in the cost of gasoline and other energy products, causing the CPI for August of 2019 to rise. This still is nothing to the .3% increase we saw in July which was due to more increase in energy prices. Inflation has also risen .3% and 2.4% over the last yearn which the Federal Reserve has been worrying that it is not rising fast enough and citing this as one of the reasons they decided to cut interest rates in July.

https://www.cnbc.com/2019/09/12/us-consumer-price-index-august-2019.html

Global Economy "far" from Recession, IMF Official Says

The recent trade war between the Americans and the Chinese has caused global economic fear to intensify, over the current health of the global economy and the looming recession. The American and Chinese tariffs have weakened and taken its toll on the global economy, but “the International Monetary Fund is far from forecasting a global recession” in the immediate future. The expected global economic outlook, released by the IMF, reflects the belief that the impending economic recession is questionable. Even though the international economy has remained relatively strong, there are questions over the long-term resilience of the current economy and how long this resilience can last. The International Monetary Fund has, also, noted that the tariffs imposed (or threatened) by “the United States and China could shave 0.8% off the global economic output by 2020,” with further economic losses expected in the future.

https://www.reuters.com/article/us-imf-economy/global-economy-far-from-recession-imf-official-says-idUSKCN1VY2DT

China Announces Plan for New Cryptocurrency

Link: https://www.cnbc.com/2019/09/13/chinas-new-cryptocurrency-and-yuan-rmb-internationalization.html

China has just announced a proposal to release a cryptocurrency, basically an online version of their paper money, the yuan. This is a very interesting tactic by the Chinese government, as in the past they have been said to have been trying to make the yuan a more international currency, and maybe even a reserve currency. A reserve currency is one in which most of the international foreign reserves are held in that given currency, which has been primarily the US dollar for a significant amount of time. Besides increasing the international use of the yuan, this also has benefits for China in their quest to cut down on money laundering and corruption, as this would make it easier to track where money is flowing, and between whom. This of course has many implications on privacy, which will, without a doubt, cause a scandal at some point. That being said, having a cryptocurrency seems like it could potentially be the way of the future, with several large entities, such as Facebook, also announcing plans to roll out a new currency. This ties in very well to what we are talking about in class regarding money supply, and it begs the question, how will governments be able to control money supply if third party entities start creating new cryptocurrencies? And will these new currencies make the physical dollar obsolete?

Treasury is Seriously Considering Issuing a 50-Year Bond Next Year

The US is looking for more ways to finance their shenanigans and a 50-year bond might be the answer. The announcement comes a day after President Trump made a remark suggesting that we should refinance our $22.5 trillion debt load which recently caused our deficit to surpass $1 trillion. This recent scandal between Trump and The Fed has a lot of people wondering how it will end up playing out, especially after the ECB just cut rates to devalue the euro against our dollar which is not good for exports.

Do you think we should issue these extended bonds?

https://www.cnbc.com/2019/09/12/mnuchin-says-the-treasury-is-seriously-considering-issuing-a-50-year-bond-next-year.html

Trade Policy on Investment Decisions

Jerome Powell believes that investment decisions by companies throughout the country have been significantly effected by the China-U.S. trade predicament. It seems to have to companies holding back from investment decisions with the uncertainty regarding America's current trade policy. Expectations of a deal being made between the two countries is not high, and the Federal Reserve has implemented interest rate cuts with hope to counter the dwindling long term investment being made by companies. The Fed plans to do so again in coming months. With a seemingly endless trade war between China and the US, can the Fed continue to incite investment in order to keep the U.S. economy from falling into a recession?

Median U.S. Household Income Showed No Growth

According to statistics released by the Census Bureau, Median Household Income for 2018 was flat at $63,179  after three consecutive years of growth. A potential reason the author gives for why income growth hasn't been as strong as expected is that this 10 year expansion period has created one of the tightest labor markets in recent history. Some other reasons include that employers are holding down wages by using technology and also that unions, which push for worker pay raises, are declining steadily.

Apple accused of worker violations in Chinese factories by labor rights group

This discusses the allegations that have been pinned on Apple over their suspected violation of workers rights. Any kind of headline involving Apple is huge because of their enormous stake in the international economy. Albergotti points out the fact that Apple is leaps and bounds in terms of size compared to any of their competitor, he points out the fact that the new model of the iPhone sold 12 million more of them then the next closest. If Apple is ever to get in big trouble, than the entire technology sector of the economy is going to change drastically. If Apple is to avoid that, then they need to get in accordance with the Chinese labor laws which may cause an initial fuss but the problems that would be avoided are much more pressing.

Link to Article: https://www.washingtonpost.com/technology/2019/09/09/apple-accused-worker-violations-chinese-factories-by-labor-rights-group/

The disappointing jobs report would have been much worse without newly hired Census workers

The job report for August 2019 reported that an additional 130,000 jobs were added. This number, however, fell short of the 150,000 jobs that Wall Street estimated the report to be. In addition to felling short by 20,000 jobs, 25,000 of the 130,000 jobs added this month  was from temporary census workers. The retail sector saw a decline in 11,100 jobs while the trade, transportation, and utilities sector saw a decline of 11,000 jobs. Should this shortcoming of job growth be something to worry about, especially with the recent inverted yield curve?

Powell and the Fed on not expecting an upcoming recession

Federal Reserve Chairman Jerome Powell elaborates on the threat of a potential recession following an under-performing yield of the 10-year Treasury note, leading to an inverted yield curve in the bond market. Powell believes that the central bank's decision on lowering interest rates has helped prevent the recession from occurring by sustaining economic growth within the United States. Despite criticisms, representatives like Esther George and and Powell believe that the US is in a strong position and should not fear an upcoming recession.

Powell says the Fed is not forecasting or expecting a recession
Esther George says the Fed’s ‘large balance sheet’ may have helped cause the yield curve inversion