CNBC: The US economy suddenly looks like it's unstoppable

[Hydrogen]

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.

[First77]

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.

[davis196]

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.

[Kakmakr]

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. 

"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/

[The Sceptical Chymist]

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.

[spongegar]

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.

[stompix]

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  

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/

[befriendmywater]

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. 

[GangNamSK]

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.

[Jennifer_Elam]

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.

[UNOE]

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.

[StacksCity]

Despite different opinion on who's your favourite leader, the economy has actually been seeing a better day in the recent years.

[jjjfff]

Jobs data is based on jobless claims.

If people are finding cheap low wage jobs, jobless claims go down and government brags of lower unemployment.

What we saw yesterday has nothing to do with the economy, but with a handful of bankers who control the economy.

There is no supply/demand, there is no value, nothing, it's simply the FED printing money when they feel like it.

The markets no longer fluctuate according to performance but fluctuate according to the FED.

Unemployment is simply a blip, a small detail. The FED is the man behind the curtain.

The markets are rigged.

[avikz]

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.  

Yeh Sure! In this decade we have seen a rise of fascist powers across the world. Started with Xi Jinping in China, followed by Trump is USA and Modi in India - The top three economies of the world is now run by core centralized fascist powers is enough to start the third world war due to pure ego! However, Modi still looks little less aggressive compared to the rest two!

It's just that the time is favorable for these three leaders and we are seeing growth in the size of economy. However, below the belt, global debt is also increasing and reached a new 247 Trillion USD mark. That means each and every person on the earth, carries a personal debt of around $80k-$90k. If you see this as an indicator of great economy, may GOD bless you in 2019!

https://www.cnbc.com/2018/07/11/global-debt-hits-a-new-record-at-247-trillion.html

I sincerely hope this helps!

[Betwrong]

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.

I seriously doubt that this would happen to GDP in case of a flood. GDP measures the value of economic activity inside a country, and it is composed of consumer spending, business investment and government spending, including the net export, which is overall export minus overall import. Yes, the government spending inside a country would increase in case of a flood, but all the other things mentioned above would decrease dramatically and the GDP would definitely become lower than it was before.

Regarding the article, I believe in the numbers presented there and I'm glad that the economy is improving. And I understand that we'll always have those people around, who when hearing something good will necessarily say something negative about it. And maybe that's not a bad thing all in all, because the progress would stop without some healthy criticism.

[Supercrypt]

There is no point of discussing anything with a Trump supporter, as someone who is far away from USA the trouble he is making affecting even our children for the future, globally and not just domestically. He is trying to do his best on economy and what did that brought ?

More profits for some companies, more profits for the executives, bigger macro economy looking whereas a lot more people being unemployed or working under living conditions. Mark my words, by 2020 there will be a lot of financial troubles in USA and by 2022 there will be unrecoverable issues that is created under this administration.

Republicans around him are as guilty as him, he is an idiot who doesn't know better so he should have been advised properly but he wasn't because people around him wanted a share of the pie as well. It would be fine if USA only destroyed itself, after all we are not there so who cares let them be, however most of their policies affects the world like climate and pollution which indirectly affects us as well. I really really hope he doesn't get reelected and someone with anything above 10 IQ gets elected this time.

[bitmover]

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.

Even though there is a GDP grow, SP500 index had no gains this year. On the other hand bitcoin is recovering from a bad year and bottom is near or behind us now.

This situation may lead more people to invest in bitcoin as well, as sp500 looks already over priced, as gains from recent years were so big

[aad140386]

I don’t think everything is as good as CNBC wrote. I recently read a report from Moodys on US debt and growth prospects for the next 10 years. And here they are looking at the nearest future with great concern and they are not at all sure of the economic growth of the United States. The main problem is that the US debt is constantly growing, and with Trump it began to grow even faster than with its predecessors. The main problem of debt is that its service already takes on 10-13% of revenues, and by 2018 it may take 25-28% of revenues. These are monstrous numbers.

[1Referee]

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.

It's not to artificially keep the price down, but strictly because of how much more convenient it is to buy Gold derivatives rather than the actual asset itself. If you think logically, don't have governments more incentive than anyone else to keep the Gold price up high due to their insane physical and paper Gold reserves?

In the end, most people and investors aren't looking for anything other than the exposure it offers as safe haven during times of economical uncertainties. I don't think that Bitcoin is much different from Gold in that aspect, especially in the very long term where Bitcoin's spot volumes will be a joke compared to its derivate volumes.

I'm not sure how accurate it is today, but I read an article a couple of months ago that the ratio between spot and derivate volumes for Gold is approaching a ratio of 1:80. Crazy, right?

[historicalcoin]

Despite different opinion on who's your favourite leader, the economy has actually been seeing a better day in the recent years.

This is right. Despite the fact that people do not really like Mr. Trump, the economy is rising because he has been very inclined towards formulating policies that are better for the job creation and strengthen the economy.