Job Gains Help Extend U.S. Economic Growth

The U.S. economy has cooled but continues to expand with employers hiring, consumers spending and growth stabilizing. Employment grew by a seasonally adjusted 128,000 jobs in October, the Labor Department reported Friday, a solid performance considering a strike at GM plants and a decline in the federal workforce temporarily reduced payrolls by more than 50,000. The unemployment rate increased up from a 50-year low to 3.6% in October as hundreds of thousands of Americans joined the labor force. Wage growth remained steady, up 3% from a year earlier. Job growth remains strong in areas of the economy that serve U.S. consumers and are generally protected from global trends and trade disputes. Health care and social services added 34,200 jobs in October, business services added 22,000, and hospitality, including restaurants, added 61,000. The number of Americans working or searching for work has also increased and rose last month to the highest level since August 2013.

https://www.wsj.com/articles/u-s-payrolls-grew-by-128-000-in-october-despite-the-gm-strike-11572611632

Climate change will break the housing market, says David Burt, who predicted the 2008 financial crisis

David Burt claims that the changing climate will have significant adverse effects on the housing market in a similar manner to 2008 but much worse. Between 60 and 100 billion dollars worth of mortgages are issued every year for coastal homes. Much of the real estate in these coastal areas are mispriced as the risks are not fully realized. Within the next three decades, the Union of Concerned Scientists estimates that at least 311,000 homes will be at risk for flooding or total destruction due to rising sea levels. Additionally, since 2006 flood insurance policies have been decreasing.

David Burt states that "There’s a lot of parallels, it’s a big real estate mispricing issue. At its core that presents a lot of the same risks. A lot of real estate is massively overpriced and there’s a lot of risk associated with that and the big risk is another foreclosure crisis. Now, it’s a very different dynamic that’s creating the mispricing, but actually magnitude-wise it looks pretty similar, maybe even bigger."

What other sectors of the US economy may be faced with issues resulting from climate change?


https://www.marketwatch.com/story/climate-change-will-break-the-housing-market-says-david-burt-who-predicted-the-2008-financial-crisis-2019-11-01?mod=home-page

US Adds 128k Jobs in October

CNBC Article

Payrolls rose by 128k this October exceeding the expected 75k predicted by economists. Previous months also saw re-estimation that brought up their numbers. The unemployment rate did increase by 0.1%, from 3.5% to 3.6%. Hourly wage also rose by 0.1% to a 3% gain year-over-year. This comes in contrast with the 42k jobs lost in the automobile industry due to the GM strike that has since been settled. The losses here are also less than what economists expected, which was 50k. The unemployment rate still is at around the lowest in 50 years. These figures imply that the US economy is holding strong and steady and is set to reassure some of those with doubts on future economic growth, understandable in the face of the US-China trade war still looming. Also, those new estimates for previous months increased jobs gained by 96k. This information all supports Fed officials assessments that the US economy is yet to head to recession.

The GOP Tax Cut Didn’t Work

The tax cuts instituted by the Trump administration in 2017 were designed with the ultimate goal of growing the economy by up to 6% and stimulating business investment. However, these economic policies have failed to achieve their goal of sustained economic growth. These failed economic policies can be seen in the American economy today. The primary goal of these policies was to create sustained economic growth by encouraging business investment. However, business investment has declined for two straight quarters, and this has led to an average GDP growth of two percent. Also, according to the article, the ISM index, a key measure for the health of the U.S. manufacturing sector, “registered its lowest number in ten years.” 

https://www.theatlantic.com/ideas/archive/2019/10/why-donald-trumps-economic-dream-crumbled/601153/ 

U.S. Consumer Confidence

US Consumer Confidence Consumer confidence in America continues to fall short of expectations. It has fallen for the third straight month as the trade war continues between the U.S. and China. Lynn Franco, director of economic indicators of the Conference Board, claims that consumers feel good about present economic conditions but have "expressed some concerns about business conditions and job prospects" with expectations about the future. Though consumer confidence has lowered, especially in October, experts still believe that the upcoming holiday spending will not be curtailed. If this holds true, what kind of impacts could high consumer spending in the near months do for the economy?

Apple is laying the groundwork for an iPhone subscription

This past week Tim Cook, the CEO of Apple, was asked questions about the idea of a prime subscription. He answered that question by stating that they are aware that there are a lot of users out there who have wanted this type of payment system. He also stated that Apple views this transition as a major growth area. If Apple switched to a subscription payment method, consumers would then have to pay for their iPhones and other technology on a monthly basis. Im curious to see if we will see any other news about this in the near future.

Fiat-Chrysler and Peugeot set to merge in $50 bn total value deal

BBC Article

Though discussions are still in the early stages and there are still no guarantees of a deal, such a merge of the two groups would create the fourth largest manufacturer in the automobile industry. As car makers are looking to have to make huge investments to edge into the electrical market, especially as emission reduction regulations tighten, merging to increase economies of scale seems to be quite a viable and sound decision for these companies.This merger proposal comes only months after Fiat-Chrysler withdraws its bid for Renault. It will be interesting to see if the deal goes through, and if so, the ramifications on the auto industry, especially for technological innovation.