Category: US Economy
The analysis published under this category are as follows.
Sunday, May 19, 2024
Important Economic And Geopolitical Questions And Their Answers! / Politics / US Economy
By: Raymond_Matison
Determining America’s economic trends and world leadership position is no longer difficult; all we need to do is to answer some simple but foundational questions – and the answer becomes startingly clear. Join in, and see if your own answer to these questions, if markedly different from the ones cited here, leads to a similar or a credible conclusion, giving you clarity on this important American citizen and investor issue.
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Thursday, September 07, 2023
Why US Annual Budget Deficits Are Getting Worse / Economics / US Economy
By: Nadeem_Walayat
The pandemic a once in a 100 year event sparked rampant deficit spending to bailout the economy, that was 2020, whilst 2021 was nearly as bad! And 2022 did show an improvement by reverting back to pre-pandemic deficit era extremes. However the 2023 deficit is once more ramping up and running at twice the pre-pandemic extreme rate.
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Thursday, March 03, 2022
America’s Trade Deficit: An Enormous Concern / Economics / US Economy
By: Antonius_Aquinas
Another milestone (or more accurately millstone) was recently passed by the U.S. economy as the January trade deficit surged to an all-time record high of $107.6 billion, up some $26 billion from December’s $80.7 billion imbalance.*
Like the gigantic federal budget deficit, the trade imbalance is no longer talked about by the financial press. There has been little criticism of President Biden on either matter nor are Administration officials questioned about how things can be reversed. In fact, some commentators bizarrely contend that trade deficits show how robust an economy actually is!
The trade deficit was supposed to be alleviated by former President Trump who vowed throughout the 2016 campaign that he would rectify the situation and repeatedly ridiculed U.S. trade negotiators for their lack of financial acumen. He touted that his “friendship” with world leaders, most notably Chinese President Xi Jinping, would result in favorable trade deals for the country.
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Wednesday, October 20, 2021
Shocking Numbers Show Government Crowding Out Real Economy / Economics / US Economy
By: MoneyMetals
The stampede of dollars into the gold and silver markets has not yet begun. There is record demand for coins, rounds, and bars, but institutional money is still ignoring precious metals, for the most part.
Anyone wondering why, can find a clue in the current makeup of the U.S. economy.
The large majority of the nation’s spending, and wealth, is handled by people who don’t have much in common with gold bugs – at least not yet.
Let’s start with some data.
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Tuesday, October 12, 2021
The Demand Shock of 2022 / Economics / US Economy
By: Michael_Pento
Investors are growing cautious as we approach the fourth quarter, and their trepidation is justified. Here’s a brief summary of the situation: there is a potential global financial crisis stemming from the Chinese property market meltdown, supply chain bottlenecks are growing worse, Q3 Earnings warnings are being reported from many large corporations, interest rates are rising, inflation is at a 40-year high, tax hikes are coming in ’22, and the threat of a U.S. debt default still hangs in the air until the end of November.The macroeconomic situation today is one of stagflation. Meaning, inflation rates are higher than normal at the same time GDP growth is slowing. To this point, the data shows that 6.2 million people lost their benefits in the week of September 11tt, as most government pandemic unemployment relief programs expired. These people all need to find a job, and quickly, to supplant that huge government weekly stipend that is now gone. Instead, we find that weekly layoffs are consistently higher than any other time since before the pandemic all the way back through 2015. And, we see that only 194k net new jobs were added during the month of September.
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Wednesday, September 15, 2021
Fed To Taper into Weakening Economy / Economics / US Economy
By: Michael_Pento
Fed Chair Jerome Powell will soon announce the date for tapering its record-setting QE program, despite weakening jobs data.
The Non-farm Payroll Report for August severely disappointed Wall Street's expectations by coming in at just 235,000 net new jobs. Many on Wall Street—because they always look for a silver lining—are now trying to twist the near half-million jobs miss into something beneficial for stocks. This is because they claim the Fed's tapering of its asset purchase program will be delayed.
Nevertheless, the Fed is growing uncomfortable with the pace of stock and home price appreciation. And, doesn't think ending QE equates to a tightening of monetary policy. Of course, the Fed doesn't want to kill the economy by raising interest rates too rapidly. However, they have become very much aware that continuing to print $120 billion each month and further inflating the stock and real estate market has become absolutely dangerous. Inflating asset prices further and boosting CPI from this point would likely soon force the Fed into a regime of rapidly raising interest rates, which would kill the recovery and engender a severe recession.
Wednesday, June 30, 2021
The “Long COVID” Economy / Economics / US Economy
By: Patrick_Watson
According to some analysts, higher inflation is on its way. Americans will spend like crazy and drive prices higher as the pandemic recedes.That’s the theory. It may be right, for a while, but we also have other problems. For one, the pandemic hasn’t ended; it’s simply become optional.
Most US adults can now “opt out” by getting vaccinated. The shots, while not perfect, are proving highly effective. Unfortunately, many are opting to stay vulnerable. We also can’t yet vaccinate children under 12.
This may be an economically significant problem soon. But even if the virus disappears, we are going to spend years repairing the economic damage already done… and more may be coming.
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Thursday, May 06, 2021
Vaccine Economic Boom and Bust / Economics / US Economy
By: Stephen_McBride
By the numbers, the US looks much better than it did than a few months ago. Jobless claims dropped to their lowest levels of the pandemic; COVID-19 vaccine shots went into arms at a record rate.But we’ve seen how this goes. The virus spreads in waves that recede and then return, often stronger. Some areas of the US are experiencing their fourth wave of coronavirus cases.
Vaccinations are supposed to break this cycle. And maybe they will. Unfortunately, that looks less likely as vaccine demand shows signs of peaking.
That means some establishments have, or will soon, close their doors … to mass vaccinations.
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Thursday, March 11, 2021
Biden Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery / Economics / US Economy
By: Chris_Vermeulen
At this point in our lives, we are hoping the new COVID-19 vaccines will do their part to help move the world towards more normal consumer and economic activities. The US Senate recently a new $1.9 Trillion stimulus package that should continue to provide assistance to various levels of consumer, state governments, and corporate enterprises. The next question in our mind is “what will the recovery look like if/when it happens?”. We need to look at three critical components of the global economy to help answer this question: Consumer Activity, Debt, and Supply/Demand Functions.
Consumer activity makes up more than 60% of the US GDP. It also drives money flow as consumers engage in economic activity, create credit for new purchases and help to balance the supply/demand equilibrium functioning properly. The participation of the consumer within an economy is essential for a healthy growing economy.
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Monday, March 08, 2021
US Economy, GDP, Unemployment, Inflation Impact on House Prices Trend 2021 / Economics / US Economy
By: Nadeem_Walayat
The US economy is recovering fast from the corona crash with annualised GDP down just 2.8% for Q3, a remarkable performance and far better than most western nations.
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Thursday, December 31, 2020
US Economy GDP 2021 / Economics / US Economy
By: Michael_Pento
Wall Street is universally bullish on the economy and stock market for 2021. For example, Morgan Stanley is on record predicting the U.S. economy will expand by 5.9% next year. The stock market has front-run this optimism. The most important valuation metric, total market cap to GDP, currently stands at an unprecedented 185%. This absurd valuation only makes sense if investors believe corporate profits will skyrocket next year. No other bull market in history even comes close to this historic distortion between the price of stocks and the underlying economy.Read full article... Read full article...
Friday, December 04, 2020
Pre-COVID US Economy Wasn’t All That Great Either / Economics / US Economy
By: Michael_Pento
The stock market and economy appear to be doing ok for the moment, as the incredibly dangerous bubble inflates further. This optimism is predicated on a plethora of COVID-19 Vaccines, which are projected to bring the economy back to its pre-COVID state of health. However, the problem with this line of thinking is that 2019 was anything but normal and healthy. It was a messy combination of a Fed slashing interest rates and re-imposing QE in order to achieve a rather mundane GDP growth rate of just 2.2%. The truth is, the pre-virus economic construct was built on Silly Sand—erected on top of asset bubbles, artificial interest rates and an avalanche of new debt issuance.
Not only will a return to “normalcy” merely bring us back to an anemic and non-viable economy, I want to highlight three things I’m watching out for during 2021 that could upend the economy and markets.
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Friday, October 23, 2020
Sayonara U.S.A. / Economics / US Economy
By: Michael_Pento
The Japanese word for goodbye is Sayonara. But it doesn’t just mean goodbye, it means goodbye forever. Unfortunately, that is what our country is doing to American Capitalism.
In the quixotic fantasy world of Keynesian economics, the more money a government borrows and prints the healthier the economy will become. Those who adhere to this philosophy also believe such profligacy comes without any negative economic consequences in the long run. This specious dogma contends that it is ok for a government to dig further into a big deficit hole during a recession because massive public spending will help the economy to climb out faster. And then, a government can cut spending in the good times, which leads to big budget surpluses.
The trouble with this theory is the time never arrives to bring the scales into balance. Case in point, during the pre-pandemic year 2019, the U.S. had a deficit that was equal to 5% of GDP—one of the worst figures since WWII. This deficit occurred during a time which was purported to be one of the best economies in history. Today, there are negotiations for yet another “stimulus” package after having already spending $3 trillion (15% of GDP) earlier this year. Speaker Pelosi and the Democrats want to spend another $2.2 trillion and Republican President Trump says, “I would like to see a bigger stimulus package, frankly, than either the democrats or Republicans are offering.”
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Friday, October 16, 2020
US Economic Recovery Is in Need of Some Rescue / Economics / US Economy
By: John_Mauldin
Recovery is coming because the economy has found a new equilibrium. That's what we are told. Except, that’s not what the data says.
Last week, I laid out the case that US government debt would be $50 trillion by 2030. That was using straight-line CBO projections along with the 2008 recovery pattern for government revenue.
I added in off-budget debt at its $269 billion yearly average. But now, USdebtclock.org projects off-budget deficit will rise by over $1 trillion this year.
With that in mind, it's not just that we'll have even higher debt by 2030. It's that this mounting debt will further slow the recovery.
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Thursday, October 15, 2020
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy / Economics / US Economy
By: MoneyMetals
Precious metals investors faced choppy market seas this week. Gold bobbed to a slight decline while silver essentially treaded water through Thursday’s close. Both are advancing strongly today.
Metals markets are being overshadowed by equities markets. The S&P 500 broke out to a 5-week high on Thursday. The rally comes on a rising tide of Federal Reserve liquidity coupled with on again, off again hopes for a stimulus deal in Washington.
More stimulus is definitely coming. The only question is how many trillions and whether they get dished out before or after the election.
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Saturday, October 03, 2020
Congressional Budget Office Tax Revenues Set to Surge! In 2 Years, That Is / Economics / US Economy
By: John_Mauldin
All debt shares one common characteristic. A bill comes due at some point and, if the borrower doesn’t pay, the lender either loses their money or finds someone else to pay.
I’ve warned for several years now that our growing global debt load is unpayable. We will eventually “reorganize” it in what I call The Great Reset, likely later in this decade.
Recent developments suggest debt will be even bigger than I expected, to the tune of $50 trillion in the US by 2030. That's double what I expected just one year ago.
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Sunday, August 30, 2020
3 Truths That Will Define This 3-Part US Economy / Economics / US Economy
By: John_Mauldin
The economy recovery, when it comes—and it will—is going to be uneven.
In some parts of the economy, it's already starting. Other parts will be in what can only be described as a depression for quite some time. And still others are going to take off like a rocket ship.
This three-part economy won't fit compactly into the V- or U-shaped recovery that some are predicting (read: hoping) for. More likely, it will look like a "K."
Whether it's K-shaped or some other to-be-determined letter, there are three truths that will define this economic recovery:
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Sunday, July 19, 2020
Help the Economy by Going Outside / Economics / US Economy
By: Patrick_Watson
COVID-19 cases are growing fast in large parts of the US. The same folks who said the virus would just go away now say not to worry because fewer people are dying.
A lower mortality rate helps, but it’s still too high. The sheer number of sick people is straining hospital capacity some places. Viruses don’t care what anyone thinks; they just spread until something stops them.
The economy can’t recover if people fear infection everywhere they go. We need to balance public health and economic necessity.
Fortunately, scientists are learning how to reduce risk with fewer economic side effects.
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Monday, July 06, 2020
The Beatings Will Continue Until the Economy Improves / Economics / US Economy
By: John_Mauldin
You can’t live without making certain presumptions. You presume your car will start, your refrigerator will stay cold, and the lights will turn on when you flip the switch.
In fact, you could argue this “predictability” is what separates advanced economies from primitive ones. Most of us don’t have to worry about being attacked in our sleep or having food tomorrow. That security frees us to do other things.
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Wednesday, May 06, 2020
Why Americans Don't Have Any Savings / Economics / US Economy
By: Frank_Hollenbeck
In response to a likely worldwide recession, governments have turned on full blast the fiscal and monetary spigots. A $2 trillion spending plan has just been approved in the USA, central banks are on a buying spree, and the $1200 stimulus payment is just helicopter money. Since the government does not have a magical tree of plenty and can only redistribute from the left pocket to the right by taxing, borrowing, or printing money, how does this make any economic sense or make any country better off? Government and Keynesian economists will tell you it’s to protect us from the coming dangers of hoarding; specifically, that banks will stop lending and just let funds sit. Keynes brought hoarding to the forefront of economics in his The General Theory of Employment, Interest, and Money; a concept that the classical economist considered to be irrelevant.
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