Retail Sales and Manufacturing Are Powering U.S. Growth This Summer.
Retail sales—a measure of spending at U.S. stores, websites and restaurants—rose a seasonally adjusted 0.5% in July from the prior month, the Commerce Department said Wednesday. That was well ahead of economists’ forecasts for a 0.1% increase.
Compared with a year earlier, they grew 6.4% in July. That’s more than double the pace of inflation, which increased 2.9% in the year to July, as measured by the Labor Department’s consumer-price index.
Robust hiring and low unemployment mean more households have income to spend. That is being amplified by tax cuts, which have resulted in less paycheck withholding.
With demand strong, production is also up. U.S. factory output rose 0.3% in July, the Federal Reserve said Wednesday, and was up 2.8% from a year earlier, largely on higher auto and computer production.
Nice.
MICHAEL BARONE: Either Trump is delivering on his economic promises, or he’s very lucky.
Is President Trump fulfilling candidate Trump’s promises?
You can make a case that he is, based on some surprising and widely unexpected economic developments. Vice President Mike Pence, writing in the Des Moines Register, put it succinctly: “The evidence is clear: America is back.” He adds, “It’s not an accident.”
Pence and other Trump enthusiasts can point to increasing macroeconomic growth. GDP growth ran at a hot annualized 4.1 percent in the second quarter, and for the year it’s up more than 3 percent. Unemployment was down to 3.9 percent in July. The S&P 500 stock index is up 6 percent during the Trump presidency while the rest of the world’s stock markets are down 6 percent. These are numbers any recent administration would boast about.
More notable are positive trends among subgroups who weren’t doing so well before Trump took office. Obama administration chief economic adviser Jason Furman, writing at Vox.com, notes that in the past three years “recent wage growth … at the lower end of the wage scale has been stronger” than among those higher paid. Similarly, Bloomberg columnist and portfolio manager Conor Sen makes the point that job growth has been greatest among “goods-producing workers and the least-educated workers.”
Both Furman and Sen contrast current trends with those in the 1998-2001 period of torrid economic growth, when income gains were concentrated at the top of the economic spectrum and employment gains were concentrated in office jobs and “meds and eds” — the government-financed or heavily regulated healthcare and education sectors.
So maybe growing income inequality isn’t inevitable after all. And maybe the economic prospects of groups clustered at the low end of the economic scale are not as dire as has long been assumed.
Go figure.
We need to get rid of this “income inequality” BS ASAP. Out here in the real world, it doesn’t mean anything. It’s also a Progressive dog-whistle that signals their operatives to increase government interference in the economy.
President Trump isn’t lucky: he understands well, as do most Americans, that excessive and unnecessary regulations put a giant boot on the neck of our economy, as evidenced by the previous decade of increasing regulations, many of which resulted in formerly thriving businesses becoming greatly reduced in value, which were bought up by Obama’s buddies.
SMART. VERY SMART. Ben Carson Calls Out Zoning Regulations for Driving Up Housing Costs.
Ben Carson, the secretary of Housing and Urban Development (HUD), wants to pare back Obama-era housing regulations that he says do not do enough to address the real driver of housing costs: zoning regulations.
On Monday, Carson announced that he was looking to revise the 2015 Affirmatively Furthering Fair Housing (AFFH) rule, which sought to combat housing segregation by requiring local governments to perform extensive (and expensive) reviews on how concentrated their neighborhoods were along class and racial lines, and then to develop action plans to create more “balanced and integrated living patterns.” Local governments that failed to fulfill either requirement would be cut off from a number of federal housing grant programs.
Carson said on Monday that he wants to replace the 2015 AFFH with new rules that focus on increasing the overall supply of housing.
“I want to encourage the development of mixed-income multifamily dwellings all over the place,” Carson told The Wall Street Journal, saying, “I would incentivize people who really would like to get a nice juicy government grant” to reform their zoning codes.
According to the Journal, Carson specifically called out Los Angeles for its strict single-family zoning rules that limit the number of housing units that can be built in the city. “Of course you’re going to have skyrocketing prices that no one can afford,” he said.
It’s as if increasing supply to meet demand might lower prices or something.
h/t SG