FIG Topics of Interest

 

09/12/18

“The first place you’ll likely see it is in initial jobless claims,” Ryan Sweet, an economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in reference to Florence. At the same time, major storms’ effects on the broader economy tend to be “pretty small, on aggregate.”
https://www.bloomberg.com/news/articles/2018-09-12/florence-to-batter-u-s-data-but-harm-to-economy-likely-small?srnd=premium
That will be a challenge again with Florence, forecast to be the worst storm to hit North Carolina in 64 years, and the storm season is far from over. Data on employment, consumer spending and manufacturing may also become trickier to analyze as economists gauge impacts of tax cuts and a trade war.
Based on consumer purchases that won’t be made as a result of the storm -- such as canceled events and missed dinners out -- Florence may have a $700 million net negative impact on the U.S. economy, not counting insurance losses, according to weather-analytics company Planalytics’ initial estimate.

“If you’re a mom-and-pop and you happen to be in harm’s way, this could be devastating,” said Evan Gold, executive vice president at Planalytics. Florence is “going to be big, and it’s going to be notable, but I’m not sure it’s going to be as big as others” such as Sandy.

Click here to download a pdf of this article, Missile.pdf
 
 

09/11/18

“The small business engine continues to roar with the dramatic change in economic policies since November 2016,” survey authors William Dunkelberg and Holly Wade said in the report.
https://www.bloomberg.com/news/articles/2018-09-11/u-s-small-business-optimism-at-record-high-on-hiring-spending?srnd=premium
Small businesses are increasingly optimistic as the economic expansion enters its 10th year and the Trump administration prioritizes industry deregulation and tax cuts. Companies have been boosting inventories to match robust consumer demand for goods and services.
While the gauge of intent to hire reached a record, finding qualified workers remains a problem. Of companies trying to fill a position in the month, 89 percent reported finding few or no qualified applicants. At the same time, reports of higher compensation were unchanged at a net 32 percent of firms and plans to raise pay decreased 1 point to a net 21 percent.
Other Details

  • A record 25% of owners cited “quality of labor” as the single most important problem facing their company
  • 34% said now is a good time to expand business, up two points from prior month
  • Businesses that expect higher real sales down 3 points to 26

Six of 10 index components increased from the prior month

Click here to download a pdf of this article, Missile.pdf
 
 

09/11/18

“The small business engine continues to roar with the dramatic change in economic policies since November 2016,” survey authors William Dunkelberg and Holly Wade said in the report.
https://www.bloomberg.com/news/articles/2018-09-11/u-s-small-business-optimism-at-record-high-on-hiring-spending?srnd=premium
Small businesses are increasingly optimistic as the economic expansion enters its 10th year and the Trump administration prioritizes industry deregulation and tax cuts. Companies have been boosting inventories to match robust consumer demand for goods and services.
While the gauge of intent to hire reached a record, finding qualified workers remains a problem. Of companies trying to fill a position in the month, 89 percent reported finding few or no qualified applicants. At the same time, reports of higher compensation were unchanged at a net 32 percent of firms and plans to raise pay decreased 1 point to a net 21 percent.
Other Details

  • A record 25% of owners cited “quality of labor” as the single most important problem facing their company
  • 34% said now is a good time to expand business, up two points from prior month
  • Businesses that expect higher real sales down 3 points to 26%

Six of 10 index components increased from the prior month

Click here to download a pdf of this article, Missile.pdf
 
 

09/10/18

“Tit-for-tat trade sanctions don’t benefit any country,” Abe told a gathering of lawmakers from the ruling Liberal Democratic Party on Monday, without mentioning Trump by name. “Now is the time for Japan to take the lead in creating the rules of the new era as a flag-bearer for free trade.”
https://www.bloomberg.com/news/articles/2018-09-10/japan-s-abe-pledges-to-defend-free-trade-after-trump-warning?srnd=premium
Japanese Prime Minister Shinzo Abe pledged to champion free trade in his first policy speech since U.S. President Donald Trump renewed pressure on the country to sign a bilateral trade deal.
Abe has urged Trump to reconsider his decision to quit the Trans-Pacific Partnership regional trade deal, while the U.S. leader has demanded a bilateral pact. Despite efforts to ingratiate himself with Trump, Abe has failed to secure an exemption from metals tariffs imposed earlier this year.
On domestic economic policy, Abe said he wanted to increase sales tax as planned to 10 percent in October 2019 from the current 8 percent, adding that he would introduce policies aimed at supporting sales of cars and houses in order to alleviate the economic impact. The hike has been delayed twice since Abe took office, after a previous increase to 8 percent caused a recession.

Click here to download a pdf of this article, Missile.pdf
 
 

09/07/18

With President Donald Trump expected to start implementing the next round of tariffs on $200 billion of Chinese goods within hours, it’s tempting to think the global economy is riding out the turmoil. Tempting, but mistaken. Look closely: The slowdown has begun.
https://www.bloomberg.com/view/articles/2018-09-07/the-global-trade-slowdown-is-happening-now?srnd=premium
Take trade volumes. It’s been extraordinarily unusual for the momentum of global commerce to head anywhere but up in recent decades. The only notable occasions when the world trade monitor compiled by the CPB Netherlands Bureau for Economic Policy Analysis has turned down in a sustained way since 2000 have been on the eve of the 2001 and 2008 recessions, and during the 2015 commodity slump.

Click here to download a pdf of this article, Missile.pdf
 
 

09/06/18

The United States and Canada have made progress in talks to revise the North American Free Trade Agreement, and officials from the two sides will work together into the night to flesh out areas for further discussion, Canadian Foreign Minister Chrystia Freeland said on Wednesday.
https://www.reuters.com/article/us-trade-nafta/nafta-talks-make-progress-u-s-canadian-officials-to-work-into-night-idUSKCN1LL0CM
“We sent them (the officials) a number of issues to work on and they will report back to us in the morning, and we will then continue our negotiations,” Freeland told reporters on leaving the U.S. Trade Representative’s office in Washington on Wednesday.

Freeland sounded upbeat as she emerged from a day of talks with top U.S. trade negotiator Robert Lighthizer, although she cautioned that no trade deal was done until the last issue was nailed down.
Canada wants a permanent exemption from Trump’s steel and aluminum tariffs and the threat of auto tariffs to be removed. It also wants to continue protections for its dairy industry and defend lumber exports to the United States, which have been hit with duties.

As the two sides met for talks, new economic data showed that the U.S. trade deficit with Canada grew to $3.1 billion in July. This could provide ammunition to Trump, who has accused Canada of “cheating” Americans.

Click here to download a pdf of this article, Missile.pdf
 
 

09/05/18

"There's not a farmer in America that would rather not have a good crop and a fair price than a government check," he added. "That's what they do. That's what they put their equity on the line every year for."
https://www.cnbc.com/2018/08/29/agriculture-secretary-sonny-perdue-farmers-want-trade-not-trump-aid.html?recirc=taboolainternal
The Agriculture Department has authorized up to $12 billion in relief to U.S. growers.

Soybean producers, in particular, have been hard hit by Chinese retaliatory tariffs and stand to get up to $3.6 billion in assistance under the Market Facilitation Program.

The payments to farmers will be based on "actual production ... not on any kind of average," Perdue said Wednesday. "It's going to be individual, by farmer."

The relief will not be able to make farmers "whole," but to ensure they don't have a disastrous season, he said.

Click here to download a pdf of this article, Missile.pdf
 
 

09/04/18

“There’s going to be a lot of pressure to get a deal with Canada,” Mark Sobel, a former U.S. Treasury official and now American chairman of the research group OMFIF. “Canada’s the main trading partner for many states, quite a bit of our economic fortunes are entwined with Canada.”
https://www.bloomberg.com/news/articles/2018-09-04/trump-faces-fight-with-canada-over-nafta-as-china-duties-near
In an attempt to gain leverage over the government of Justin Trudeau, the president has threatened to leave Canada out of the revised Nafta and proceed with Mexico alone. The White House on Friday gave Congress the required 90-day notification that it would be signing a revised version of the quarter-century-old Nafta with Mexico and would include Canada “if it is willing.”
Both Canadian and U.S. negotiators insist they have been making progress with talks due to resume Wednesday. But they have also bogged down over sensitive issues related to Canada’s highly protected dairy sector and the Trump administration’s zeal to eliminate a dispute-resolution mechanism that Ottawa regards as crucial.

That mechanism – known as Chapter 19 – allows Nafta members to challenge each other’s trade remedy rulings, such as special tariffs levied in anti-dumping cases, before an independent panel. It is seen as a Canadian red line, dating back to 1980s negotiations over a bilateral U.S.-Canada pact that served as a precursor to Nafta as well as the early 1990s Nafta negotiations.

Click here to download a pdf of this article, Missile.pdf
 
 

08/31/18

Iran has given ballistic missiles to Shi'ite proxies in Iraq and is developing the capacity to build more there to deter attacks on its interests in the Middle East and to give it the means to hit regional foes, Iranian, Iraqi and Western sources said.
https://www.cnbc.com/2018/08/31/iran-moves-missiles-to-iraq-in-warning-to-enemies-report.html
Any sign that Iran is preparing a more aggressive missile policy in Iraq will exacerbate tensions between Tehran and Washington, already heightened by U.S. President Donald Trump's decision to pull out of a 2015 nuclear deal with world powers.
It would also embarrass France, Germany and the United Kingdom, the three European signatories to the nuclear deal, as they have been trying to salvage the agreement despite new U.S. sanctions against Tehran.
According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own.
"The logic was to have a backup plan if Iran was attacked," one senior Iranian official told Reuters. "The number of missiles is not high, just a couple of dozen, but it can be increased if necessary."

Click here to download a pdf of this article, Missile.pdf
 
 

08/30/18

“We’re seeing if we can get to the right place by Friday,” Trudeau said Wednesday. “We’re going to be thoughtful, constructive, creative around the table, but we are going to ensure that whatever deal gets agreed to is the right deal for Canada and the right deal for Canadians.”
Talks to update Nafta are edging toward their next deadline with signs of optimism from President Donald Trump and other key figures, as the U.S. and Canada push to resolve enough differences to trigger a countdown to sign a new deal.
https://www.bloomberg.com/news/articles/2018-08-30/nafta-talks-to-continue-as-trump-says-they-re-on-track-for-deal?srnd=premium
“I think there’s a really good chance” to get a “deal in principle” by Friday if both countries compromise, Bruce Heyman, a former U.S. ambassador to Canada, told Bloomberg Television on Wednesday. “What that means though is there’s a lot of blanks that will need to be filled in” quickly to meet congressional deadlines, he said.
Key U.S. and Canadian government figures met again Wednesday, book-ended by meetings of lower-level trade officials set to work through the night. Trump and Canadian Prime Minister Justin Trudeau signaled Wednesday an accord could be reached.
The talks are being held in Washington, led by U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland. The pair met Wednesday and instructed officials to continue negotiations throughout the night, Freeland said. They will meet again Thursday.

Both countries have “a lot of goodwill” in negotiations, Freeland said. “We understand each other’s positions and what both sides need very, very well,” she said, adding: “This is a very intense moment in the negotiations, and we’re trying to get a lot of things done very quickly.”
There are warnings that U.S. trade law will prevent, or impede, Trump from forging ahead on a quick timeline with only a two-country accord, and key figures in Congress are calling for Canada to be included. Lighthizer has said he believes he can proceed without Canada. The Friday deadline would allow a signing before Mexico’s president-elect, Andres Manuel Lopez Obrador, takes office on Dec. 1.
Commerce Secretary Wilbur Ross said Tuesday it’s likely the deal will be voted on next year after American midterm elections in November.

Click here to download a pdf of this article, Missile.pdf