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Author Topic: CNBC: The US economy suddenly looks like it's unstoppable  (Read 56 times)
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June 04, 2018, 02:00:46 AM
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In the face of persistent fears that the world could be facing a trade war and a synchronized slowdown, the U.S. economy enters June with a good deal of momentum.

Friday's data provided convincing evidence that domestic growth remains intact even if other developed economies are slowing. A better-than-expected nonfarm payrolls report coupled with a convincing uptick in manufacturing and construction activity showed that the second half approaches with a tail wind blowing.

"The fundamentals all look very solid right now," said Gus Faucher, chief economist at PNC. "You've got job growth and wage gains that are supporting consumer spending, and tax cuts as well. There's a little bit of a drag from higher energy prices, but the positives far outweigh that. Business incentives are in good shape."

The day started off with the payrolls report showing a gain of 223,000 in May, well above market expectations of 188,000, and the unemployment rate hitting an 18-year low of 3.8 percent.

Then, the ISM manufacturing index registered a 58.7 reading — representing the percentage of businesses that report expanding conditions — that also topped Wall Street estimates. Finally, the construction spending report showed a monthly gain of 1.8 percent, a full point higher than expectations.

Put together, the data helped fuel expectations that first-quarter growth of 2.2 percent will be the low-water point of 2018
.

"May's rebound in jobs together with yesterday's report of solid income growth and the rise in consumer confidence points to the economy functioning very well," the National Retail Federation's chief economist, Jack Kleinhenz, said in a statement. "Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending."

The most recent slate of widely followed barometers could see economists ratchet up growth expectations.

Already, the Atlanta Fed's GDPNow tracker sees the second quarter rising by 4.8 percent. While the measure also was strongly optimistic on the first quarter as well, at one point estimating 5.4 percent growth, other gauges are positive as well. CNBC's Rapid Update, for instance, puts the April-to-June period at 3.6 percent.

Andrew Hunter, U.S. economist at Capital Economics, said the ISM number alone is consistent with GDP growth of better than 4 percent, though he thinks the second quarter will be in the 3 percent to 3.5 percent range.


"With global growth set to hold up fairly well in the near term, this suggests that manufacturing activity should continue to expand at a solid pace," Hunter said in a note. "That said, if the Trump administration continues to pursue protectionist policies and provoke retaliation from other countries, the export-focused manufacturing sector would be most exposed."

Indeed, there are a spate of headwinds still out there, and trade continues to top the list.

The White House's decision this week to forge ahead with steel and aluminum tariffs stoked fears that the administration could be its own worst enemy on the road to 3 percent-plus growth. While the tariffs themselves are expected to have minimal economic impact on their own, fears remain that they could spark retaliatory measures and, ultimately, an all-out trade war.

Exports make up just 12.4 percent of the U.S. economy, but S&P 500 companies generate about 43 percent of their sales internationally. That's why markets tend to recoil every time the administration saber rattles about tariffs.

Still, manufacturers remain largely upbeat.

Respondents to the ISM survey released Friday relayed mostly positive sentiments. One typical statement, from an unidentified transportation equipment firm, said, "We are currently overselling our forecast and don't see an end to the upswing in business," while noting that "we are very concerned" about the tariff situation and "are focusing on alternatives to Chinese sourcing."

Others noted price pressures, while an index that tracks order backlogs hit its highest level since April 2004. The pricing index also registered its highest since April 2011, as firms noted that inflationary pressures are building heading into the second half.

That's consistent with news out of the trucking industry, which is reporting a shortage of drivers amid huge demand for delivery vehicles.

While inflation could prompt more aggressive action in the form of Federal Reserve interest rate hikes, PNC's Faucher sees an economy resilient enough to withstand that and other headwinds.

"The tight labor market is going to lead businesses to invest in capital that makes their workers more productive. Then you've got stronger government spending with the increase in discretionary spending caps," he said. "I think we'll see growth better than 3 percent in the final three quarters of the year."

https://www.cnbc.com/2018/06/01/the-us-economy-suddenly-looks-like-its-unstoppable.html

Seems like things are going well. Even the 3% economic/GDP growth near the bottom end of estimates for the latter half of the year would be massive. The higher estimates range around 5% economic/GDP growth which is ridiculously higher than the growth we've witnessed over the past 10-20 years. If the US economy is doing well, I hope people will buy bitcoin or invest in crypto currencies. That would be great.

Europe is definitely in worse shape economically than the USA due to leaders and analysts adopting and supporting poor policy. Not certain why the potential looming tariff war with china is mentioned. A settlement was reached awhile ago with only the finer details to be negotiated.

These economic numbers don't necessarily imply everything is perfect but it would seem conditions are improving and there has to be a significant upswing to brighter days ahead, rather than the opposite--as has been the trend for a long time now.

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June 04, 2018, 04:12:36 AM
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If US is getting the money Gold should go to $2100/ounce and Silver to $80/ounce. America has wars all over the world and Americans talk about Gold standard. Gold and Silver (bullion) protects people's wealth against wars, inflation/price rise.

In 2012, there were lots of internet talks "Buy one ounce silver. End the Fed" then silver fell to $9/ounce.

Mark Mobius is an emerging markets fund manager and founder of Mobius Capital Partners LLP. Mark Mobius says there will -30% fall in stock markets. The last time there was tariff wars (as stated by Donald Trump), S&P500 fell by -30%

The money will come to Gold and Silver.

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June 04, 2018, 06:12:56 AM
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The US economy is growing,so we have to expect the next big world financial crysis,just like 2007-2008.
There will be another big financial bubble,pumped by Wall Street and the Federal Reserve System and the people will start to make more risky investments than before.If the legislation becomes more crypto friendly,the moon is the limit for the btc price.

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June 04, 2018, 06:31:00 AM
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Yes, it might look good now, but the import restrictions by Donald Trump will anger the Chinese and they will not take this sitting down. These Trade wars are going to hurt the average American citizen more, if China is going to start playing the same game.  Angry

"The US and China have threatened tit-for-tat tariffs on goods worth up to $150bn each."
https://www.businesslive.co.za/bd/world/asia/2018-06-03-china-warns-trade-benefits-are-at-risk-if-us-imposes-tariffs/

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June 04, 2018, 06:53:27 AM
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We're definitely better than we were in 2012 or so, when everyone was unemployed (or so it seemed).  And much, much better than 2009 when the world economy almost crashed and banks had to get bailed out.  If you look at it from that perspective, everything looks pretty rosy.

I'm wondering if CNBC is pumping out this sugary-sweet report in response to all the news about Trump's sanctions--it wouldn't surprise me, but I wouldn't take this as BS news either, because the economy actually is doing pretty well.

Despite that, I've been concerned about a stock market correction/crash for some time now.  I think at present we're in the longest bull market the world has ever seen, and nothing keeps going up forever.  We haven't had a serious market correction in a while now in stocks, and gold & silver have been dead for years.  Usually the latter picks up when things start to go awry, but that hasn't happened lately.  I'm going to keep my fingers and toes crossed.

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June 04, 2018, 07:45:08 AM
 #6

Well, the conspiracy theorist in me is telling me that this is all a front so other mlre gullible investors will gove their money over to the US. I've seen this happen in stock. There are like PR people to convinience would be investors to invest because their stock is dying.i just hope that i am wrong for all our sakes.

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June 04, 2018, 08:27:39 AM
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It's mourning day in the zerohedge office...
The 38732316 crisis they've predicted that hasn't come true.

Just opened their site and I'm sure if you spend more than two hours there you will end up in a hospital with a tinfoil hat waiting for the end of the world. Job loss, bankruptcy in the car sector, trade going down, the EU breaking apart, Italy ditching the euro  Grin Grin Grin

The US economy is growing,so we have to expect the next big world financial crysis,just like 2007-2008.
There will be another big financial bubble,pumped by Wall Street and the Federal Reserve System and the people will start to make more risky investments than before.If the legislation becomes more crypto friendly,the moon is the limit for the btc price.

Yeah, yeah if everything is fine we should expect the worse, I wonder how long you're going to make it with this positive attitude.

I'm wondering if CNBC is pumping out this sugary-sweet report in response to all the news about Trump's sanctions--it wouldn't surprise me, but I wouldn't take this as BS news either, because the economy actually is doing pretty well.

Probably because is true and no matter what side they are on the whole political drama it's too big to ignore it.
WP is posting the same data about jobs:
https://www.washingtonpost.com/news/wonk/wp/2018/06/01/u-s-economy-continues-its-hiring-spree-and-is-projected-to-add-200000-jobs-in-may/



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June 04, 2018, 08:31:34 AM
 #8

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In the face of persistent fears that the world could be facing a trade war and a synchronized slowdown, the U.S. economy enters June with a good deal of momentum.

Friday's data provided convincing evidence that domestic growth remains intact even if other developed economies are slowing. A better-than-expected nonfarm payrolls report coupled with a convincing uptick in manufacturing and construction activity showed that the second half approaches with a tail wind blowing.

"The fundamentals all look very solid right now," said Gus Faucher, chief economist at PNC. "You've got job growth and wage gains that are supporting consumer spending, and tax cuts as well. There's a little bit of a drag from higher energy prices, but the positives far outweigh that. Business incentives are in good shape."

The day started off with the payrolls report showing a gain of 223,000 in May, well above market expectations of 188,000, and the unemployment rate hitting an 18-year low of 3.8 percent.

Then, the ISM manufacturing index registered a 58.7 reading — representing the percentage of businesses that report expanding conditions — that also topped Wall Street estimates. Finally, the construction spending report showed a monthly gain of 1.8 percent, a full point higher than expectations.

Put together, the data helped fuel expectations that first-quarter growth of 2.2 percent will be the low-water point of 2018
.

"May's rebound in jobs together with yesterday's report of solid income growth and the rise in consumer confidence points to the economy functioning very well," the National Retail Federation's chief economist, Jack Kleinhenz, said in a statement. "Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending."

The most recent slate of widely followed barometers could see economists ratchet up growth expectations.

Already, the Atlanta Fed's GDPNow tracker sees the second quarter rising by 4.8 percent. While the measure also was strongly optimistic on the first quarter as well, at one point estimating 5.4 percent growth, other gauges are positive as well. CNBC's Rapid Update, for instance, puts the April-to-June period at 3.6 percent.

Andrew Hunter, U.S. economist at Capital Economics, said the ISM number alone is consistent with GDP growth of better than 4 percent, though he thinks the second quarter will be in the 3 percent to 3.5 percent range.


"With global growth set to hold up fairly well in the near term, this suggests that manufacturing activity should continue to expand at a solid pace," Hunter said in a note. "That said, if the Trump administration continues to pursue protectionist policies and provoke retaliation from other countries, the export-focused manufacturing sector would be most exposed."

Indeed, there are a spate of headwinds still out there, and trade continues to top the list.

The White House's decision this week to forge ahead with steel and aluminum tariffs stoked fears that the administration could be its own worst enemy on the road to 3 percent-plus growth. While the tariffs themselves are expected to have minimal economic impact on their own, fears remain that they could spark retaliatory measures and, ultimately, an all-out trade war.

Exports make up just 12.4 percent of the U.S. economy, but S&P 500 companies generate about 43 percent of their sales internationally. That's why markets tend to recoil every time the administration saber rattles about tariffs.

Still, manufacturers remain largely upbeat.

Respondents to the ISM survey released Friday relayed mostly positive sentiments. One typical statement, from an unidentified transportation equipment firm, said, "We are currently overselling our forecast and don't see an end to the upswing in business," while noting that "we are very concerned" about the tariff situation and "are focusing on alternatives to Chinese sourcing."

Others noted price pressures, while an index that tracks order backlogs hit its highest level since April 2004. The pricing index also registered its highest since April 2011, as firms noted that inflationary pressures are building heading into the second half.

That's consistent with news out of the trucking industry, which is reporting a shortage of drivers amid huge demand for delivery vehicles.

While inflation could prompt more aggressive action in the form of Federal Reserve interest rate hikes, PNC's Faucher sees an economy resilient enough to withstand that and other headwinds.

"The tight labor market is going to lead businesses to invest in capital that makes their workers more productive. Then you've got stronger government spending with the increase in discretionary spending caps," he said. "I think we'll see growth better than 3 percent in the final three quarters of the year."

https://www.cnbc.com/2018/06/01/the-us-economy-suddenly-looks-like-its-unstoppable.html

Seems like things are going well. Even the 3% economic/GDP growth near the bottom end of estimates for the latter half of the year would be massive. The higher estimates range around 5% economic/GDP growth which is ridiculously higher than the growth we've witnessed over the past 10-20 years. If the US economy is doing well, I hope people will buy bitcoin or invest in crypto currencies. That would be great.

Europe is definitely in worse shape economically than the USA due to leaders and analysts adopting and supporting poor policy. Not certain why the potential looming tariff war with china is mentioned. A settlement was reached awhile ago with only the finer details to be negotiated.

These economic numbers don't necessarily imply everything is perfect but it would seem conditions are improving and there has to be a significant upswing to brighter days ahead, rather than the opposite--as has been the trend for a long time now.
I think Donald Trump has done his job well with a great strategy that no one can understand. Many argue that Trump was mad at the economic war with China and introduced policies that prevented imports.
But I think Donald Trump has his own strategy, it seems he is concentrating on developing one of the strongest professions. Until now, I still support Donald Trump's strategies.  Grin

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August 08, 2018, 07:42:59 PM
 #9

The US economy is growing,so we have to expect the next big world financial crysis,just like 2007-2008.
There will be another big financial bubble,pumped by Wall Street and the Federal Reserve System and the people will start to make more risky investments than before.If the legislation becomes more crypto friendly,the moon is the limit for the btc price.
The fluctuation of the US economy has been many fluctuations. And their government will have to participate to navigate the market. It will be more perfect when their government recognizes electronic money, especially the digital age. There will be positive trends for the market, as well as the economy. In particular, e-money has been further enhanced for the nation.

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August 08, 2018, 07:48:21 PM
 #10

If US is getting the money Gold should go to $2100/ounce and Silver to $80/ounce. America has wars all over the world and Americans talk about Gold standard. Gold and Silver (bullion) protects people's wealth against wars, inflation/price rise.

In 2012, there were lots of internet talks "Buy one ounce silver. End the Fed" then silver fell to $9/ounce.

Mark Mobius is an emerging markets fund manager and founder of Mobius Capital Partners LLP. Mark Mobius says there will -30% fall in stock markets. The last time there was tariff wars (as stated by Donald Trump), S&P500 fell by -30%

The money will come to Gold and Silver.

Money will not go to Gold and Silver as long as future contracts exist to keep the price down. You are just trying to sell a product.

This is not a clear sign of improvement in the economy. Good numbers for one month are just a short term boost. Then we'll have regression and poor print outs for a few months, just wait. The US economy has absolutely no reason to be firing away like this.

Britain had a similar swing earlier this year to. Some of the best print outs followed by some of the worst. Fluctuations are fluctuations.
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August 08, 2018, 08:07:59 PM
 #11

I think that US economy is completely opposite of unstoppable. US government speaking about new jobs coming in, but most of the new jobs are actually part time jobs.
Also don't forget that GDP isn't trustworthy parameter for economic situation. For example, if country have flood, GDP will increase, because of new jobs that are in charge for remediation of the flooded field. Are the floods good for economy? Not.

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