GDP Revised Down to 2%… Ultra-Long Bonds Under Consideration… CLAIM: Most Canadians Now Better Off Than Americans

U.S. Second-Quarter Growth Revised Down to 2% Pace From 2.1%

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U.S. economic growth decelerated in the second quarter by more than initially reported, suggesting President Donald Trump’s trade actions are weighing more heavily on the pace of expansion.

Inflation-adjusted gross domestic product grew at a 2% annualized rate, according to Commerce Department data Thursday that matched analyst estimates and compared with an initially reported 2.1%. Consumer spending, which makes up about two-thirds of the economy, grew 4.7%, topping all forecasts with the biggest gain since 2014.

The stronger consumption was offset by weaker readings across other categories, including exports, inventories, residential investment and state and local government spending.

Mnuchin Says Ultra-Long Bonds Under ‘Very Serious Consideration’

(Bloomberg) — Treasury Secretary Steven Mnuchin said issuing ultra-long U.S. bonds is “under very serious consideration” in the Trump administration, possibly setting up a move that would mark a historic revamp of the $16 trillion Treasuries market.

“If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin said Wednesday in a Bloomberg interview in Washington. He said officials held a meeting earlier in the day to review the possibility.

The concept of issuing 50- or 100-year bonds dates back to at least 2009 and has recently gained traction within Treasury. For the Trump administration, issuing extremely long-term debt would limit the cost to taxpayers of plugging a budget deficit that’s headed to $1 trillion annually. Pension funds would enjoy a few extra points of returns amid falling yields.

Mnuchin said his renewed interest in long bonds was unrelated to the drop in yields on shorter-term U.S. debt. The yield on 30-year Treasuries slid below 2% for the first time earlier this month, and they continued their decline to a new record 1.90% on Wednesday.

“It would be premature for me to comment on what our conclusion is,” Mnuchin said, adding that the department is “actively revisiting it, and it is something that is under very serious consideration.”

Most Canadians Are Now Better Off Than Most Americans

(Bloomberg Opinion) — Everybody knows that the U.S. version of capitalism is rougher and tougher than is the norm in other affluent countries. The rich are richer here, the poor poorer and the welfare state less exhaustive. Not surprisingly, the U.S. scores poorly versus other rich nations in terms of health outcomes, education levels and other such metrics.

Defenders of the U.S. approach can point, though, to the fact that per-capita gross domestic product has remained higher in the U.S. than in all but a few small nations with unique characteristics (Qatar, Luxembourg, Singapore, Switzerland, Norway, etc.) — so much higher that even with the less-equal income distribution here, most Americans continue to have higher incomes than their peers in other large, affluent countries.

Times may be changing, though, and international income comparisons are definitely getting more precise. Five years ago, David Leonhardt and Kevin Quealy of the New York Times showed using numbers from the Luxembourg Income Study Database that the median income in Canada had caught up with that of the U.S. as of 2010, and speculated that Canada had probably passed the U.S. since. (The median is the income of a person in the middle of the income distribution, with as many people earning more as earning less.)