Tag: economy

Breaking precedent, White House won’t release formal economic projections this summer that would forecast extent of downturn

White House officials have decided not to release updated economic projections this summer, opting against publishing forecasts that would almost certainly codify an administration assessment that the coronavirus pandemic has led to a severe economic downturn, according to three people with knowledge of the decision.

The White House is supposed to unveil a federal budget proposal every February and then typically provides a “mid-session review” in July or August with updated projections on economic trends such as unemployment, inflation and economic growth.

Budget experts said they were not aware of any previous White House opting against providing forecasts in this “mid-session review” document in any other year since at least the 1970s.

Two White House officials confirmed the decision had been made not to include the economic projections as part of the mid-session release. The officials, who spoke on the condition of anonymity to discuss internal deliberations, said that the novel coronavirus is causing extreme volatility in the U.S. economy, making it difficult to model economic trends.

The document would be slated for publication just a few months before the November elections.

“It gets them off the hook for having to say what the economic outlook looks like,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who served as an economic adviser to the late senator John McCain (R-Ariz.).

Both liberal and conservative critics said the White House should publish its economic projections in line with the precedent set by prior administrations, regardless of the uncertainty caused by the pandemic. The White House under President Barack Obama continued to release these numbers during the Great Recession, although they were unflattering.

This year’s White House budget report is expected to include data on federal spending, along with information on enacted legislation, but not an annual federal deficit projection, the White House officials said. The officials said the White House will release the annual deficit for the year by the end of the fiscal year in October.

A senior administration official said in a statement that it would be “foolish” to publish forecasting data when it “may mislead the public.”

“Given the unprecedented state of play in the economy at the moment, the data is also extremely fluid and would produce a less instructive forecast,” said senior administration official, who spoke on condition of anonymity to describe the White House’s decision. “Furthermore, we remain in complete accordance with the law as there is no statutory requirement to release this information, just precedent, which, when compared to our current economic situation, is dismissible.”

The magnitude of the economic impact has grown by the week. The Treasury Department said earlier this month it plans to borrow $3 trillion from April through June to finance spending in response to the pandemic, while the monthly deficit in April soared to $738 billion.

On Thursday, the Labor Department reported that Americans filed another 2.1 million jobless claims last week, bringing the 10-week total to more than 40 million.

The budget review will include a brief summary of economic conditions to date. One official said White House staff are also busy with implementing the $2 trillion Cares Act aid package approved by Congress in March.

The economic projections are jointly produced by a “troika” consisting of the director of OMB, the chair of the White House Council of Economic Advisers, and the treasury secretary.

Since the release of the White House budget in January, the unemployment rate has skyrocketed from about 3.5 percent to close to 15 percent. President Trump has repeatedly expressed confidence in a rapid economic rebound from the virus, but mainstream economists and Wall Street forecasters have predicted unemployment could remain north of 10 percent through 2020 and into 2021.

Budget experts say there is no reason the White House would be unable to release its own economic projections. The Congressional Budget Office, for instance, updated its economic projections in both April and May as the coronavirus rippled through the U.S. economy.

[Washington Post]

Trump calls Fed Chairman Jay Powell ‘enemy,’ compares him to Chinese President Xi

President Donald Trump significantly ramped up his criticism of Fed Board Chairman Jay Powell on Friday, describing his longtime target on economic issues as an “enemy” and likening him to Chinese President Xi Jinping.

“My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?,” Trump wrote, misspelling Powell’s name. 

Trump has repeatedly blasted the Fed, even before his election. But his long-standing dissatisfaction with the Fed, which he accuses of bungling the U.S. economy, has increased amid concerns over a global economic slowdown. Trump nominated Powell as chairman in 2017.

The president’s tweet came as he prepares to head to France on Friday for the G-7 meeting of world leaders, where trade and the economy will be atop the agenda. 

The Fed, an independent board whose members are appointed by the president, raises interest rates to cool down a hot economy and cuts them to stimulate a sluggish one. The rates affect how much it costs to use a credit card, sign a car loan or buy a home.

Trump this week has upped the ante in his year-long campaign to browbeat the Federal Reserve into slashing rates, calling for the central bank to lower its key short-term rate by “at least” a full percentage point “over a fairly short period of time.”

For good measure, he has added that the move should be accompanied by “perhaps some quantitative easing as well,” referring to the Fed’s massive bond purchases during and after the Great Recession to lower long-term rates. 

Trump again voiced frustration with the Fed on Wednesday, tweeting that Germany “is actually being paid to borrow money, while the U.S., a far stronger and more important credit, is paying interest.”

[USA Today]

Trump on Economy: ‘I Am the Chosen One’

President Donald Trump claimed “I am the chosen one” in attempting to tell reporters he will resolve an ongoing trade war with China that could potentially lead to a recession.

“The fake news of which many of you are members is trying to convince the public to have a recession. “Let’s have a recession!” the United States is doing phenomenally well. One thing I have to do is economically take on China. Because China has been ripping us off for many years,” Trump told reporters at the White House Wednesday.

“This isn’t my trade war, this is a trade war that should have taken place a long time ago, by a lot of other presidents. Over the last five or six years, China has made $500 billion. $500 billion. Ripped it out of the United States. Not only that — if you take a look, intellectual property theft. Add that to it. And at a lot of other things to it. Excuse me. Somebody had to do it. I am the chosen one. Somebody had to do it.”

“I’m taking on China on trade,” Trump said. “We are winning. We are the piggy bank. We are the ones the European Union wants to rob and take advantage of. The European Union, $200 billion. China, more than $500 billion. Sorry, I was put here by people to do a great job. And that’s what I’m doing. Nobody has done a job like I’ve done.”

[Mediaite]

‘You have no choice but to vote for me,’ Trump tells N.H. rally

Even as markets show signs of a coming recession, President Donald Trump told New Hampshire voters Thursday that they had to support his re-election campaign or suffer the economic consequences.

“I won the election, the markets went up thousands of points, things started happening,” Trump said at a rally here. “If, for some reason, I were not to have won the election, these markets would have crashed. That will happen even more so in 2020. You have no choice but to vote for me, because your 401(k), everything is going to be down the tubes.”

“Whether you love me or hate me, you have got to vote for me,” he added.

Trump, appearing at his first campaign stop in New Hampshire this year, delivered a wide-ranging speech lasting more than 90 minutes that addressed Hillary Clinton’s emails, eradicating the AIDS epidemic and the prospects of the nearly two dozen Democrats running for president against him.

“You’ve got Pocahontas is rising. You’ve got Kamala, Kamala is falling. You’ve got Beto, Beto is like, gone. We’ll see what happens. Whoever it is, I don’t know that it matters,” Trump said, referring to Sens. Elizabeth Warren and Kamala Harris and former Rep. Beto O’Rourke, before turning to former Vice President Joe Biden: “I think Sleepy Joe might be able to limp across the finish line, maybe. … I sort of hope it’s him.”

The president received his largest applause of the night when he pledged his support for gun ownership, even though he has repeatedly said he is seriously considering several changes to tighten gun restrictions following a police shooting in Pennsylvania, and two deadly mass shootings in Ohio and Texas in recent weeks.

“It’s not the gun that pulls the trigger. It’s the person holding the gun,” Trump said, receiving a standing ovation from the crowd of about 10,000 in the SNHU Arena when he called gun violence a mental health problem. “We can’t make it hard for good, solid, law-abiding citizens to protect themselves.”

Trump repeated his vows to use new scientific breakthroughs to end AIDS within the next decade, though some say his administration’s policies will make that goalmore difficult.

“We will achieve new breakthroughs in science and medicine, ending in the AIDS epidemic in America, and finding new cures for childhood cancer,” he said. “And something I never thought I’d be able to say: Within one decade, the AIDS epidemic in the United States will be gone. In 10 years, the AIDS epidemic will be eradicated. So great. Who thought that was going to be happening? Who thought I would be able to get to say that?”

When Trump briefly mentioned Rep. Ilhan Omar (D-Minn.), several members of the crowd began a chant of “send her back,” but it did not catch on. He has repeatedly clashed with Omar and a group of progressive, first-year lawmakers in recent weeks, after making racist statements about them. Earlier Thursday, Israeli leaders barred Omar from the country after Trump lobbied them to deny her entry.

A chant that did catch on with the crowd was “lock her up,” when Trump mentioned Clinton, the 2016 Democratic presidential nominee, and her emails, and took the crowd through the wins and losses on his 2016 electoral map.

As Trump was laying out his electoral map, he shared a story about Michigan, a state he narrowly won in 2016. Trump’s own polling has shown him falling behind in the battleground state.

“Five or six years before I even thought about running, for whatever reason, they named me man of the year in Michigan. I said how come? I didn’t even understand it myself,” Trump said. The president has previously used this anecdote in speeches, though it is unclear whether Trump ever received that award.

“I wasn’t even political,” Trump added. “But I was always complaining that our car business was being stolen. I mean it’s sort of obvious right? Mexico now has 32 percent of our car business. It all left. We are bringing it back at a level that nobody’s ever seen before.”

The Trump campaign views New Hampshire as another battleground state in the 2020 general election. Clinton won New Hampshire in 2016, and the president is making a play to turn it red in the next election.

“New Hampshire, you have a reputation. Very, very elegant state. You’re not acting it tonight, and that’s a good thing,” Trump said to the enthusiastic crowd. “New Hampshire was taken away from us [in 2016] but we did great in New Hampshire. We should’ve won in New Hampshire.”

The president also mentioned another race shaping up in New Hampshire. Corey Lewandowski, who was fired as Trump’s campaign manager but remains close to the president, may run for Senate in the Granite State. The two spoke about the race on Thursday, according to a person familiar with the conversation.

As he stood before the crowd, Trump lavished praise on Lewandowski, but he stopped short of outright endorsing him.

“I think he’d be tough to beat. I’ll tell you one thing: He’s gonna go into Washington and he’s gonna have you in mind,” Trump said, adding that Lewandowski would be “fantastic.”

But in the next breath, the president conveyed that he wasn’t yet making a declaration of support.

“People ask if I’ll support him and I say, ‘I don’t know if he’s running,’” the president said, before turning to his former aide. “Corey, let us know, please.”

Lewandowski greeted the president upon his arrival at the Manchester airport. He and his family briefly joined Trump on Air Force One. The president departed the airport with Gov. Chris Sununu, a Republican. Sununu, who faces a potentially competitive 2020 reelection bid, has relayed concerns about Lewandowski to party leadership.

During the rally, the president also gave a shout-out to Republican New Hampshire state Rep. Al Baldasaro, who has previously called for Clinton to face a firing squad.

Early on in his speech, the president briefly stopped his remarks when a protester interrupted him. “Go home, start exercising,” Trump taunted as police escorted the man out of the crowd. “That guy’s got a serious weight problem,” he said, though the protesters appeared to be thin.

In the next breath, the president said his campaign was part a movement “built on love.”

[Politico]

Trump accuses news media of trying to crash the economy

President Donald Trump on Thursday baselessly accused the press of trying to tank the American economy, shrugging off any blame for a prospective economic slowdown and possible recession heading into his reelection next year. 

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” he said in a tweet. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

The president offered no evidence to support his claim that the media, a frequent target of his ire, is working to weaken the U.S. economy.

Trump and his allies have signaled that the president intends to run on his economic record next year, hoping that record-low levels of unemployment and sustained growth building on recovery from the 2008 recession will persuade voters otherwise turned off by his more controversial policies and rhetoric to nonetheless cast their ballot for him. 

Trump’s outburst comes after the Dow Jones Industrial Average suffered its worst day of the year on Wednesday, sliding 800 points after one economic measure that has reliably preceded the last five recessions triggered alarm bells on Wall Street.

The White House has shrugged off concerns that another recession is looming, pointing to a strong jobs market and continued wage growth and echoing Trump’s rhetoric that the U.S. is not on a level playing field when it comes to monetary or trade policy. 

Despite the Trump administration’s insistence that the strong economy is on track to continue, many economists have warned of the potential of a recession amid a global economic slowdown. The president’s trade war with China and his threats to level tariffs on other U.S. allies and trade partners have created uncertainty in global markets and contributed to lower spending by businesses. 

Late last month, the Federal Reserve cut interest rates for the first time since the 2008 recession, a step the president had hammered the central bank for not taking earlier, and is set to slash them at least once more this year. That the Federal Reserve could cut interest rates again is seen by some as yet another warning of potential economic turmoil.

But despite widespread talk of a potential economic downturn, the stock market began to rebound Thursday, with the Dow Jones Industrial Average climbing slightly by mid-afternoon. The federal government, too, offered good news, reporting that consumer spending exceeded expectations last month.

[Politico]

Trump hammers Federal Reserve, cites commentary from Fox Business

President Trump on Wednesday spent a portion of the day at his New Jersey golf club blasting the Federal Reserve as stocks took a dive amid signs of a potential recession.

The president sent three tweets over a 90-minute span in which he quoted multiple Fox Business Network personalities who echoed Trump’s criticisms of the central bank and defended Trump’s tariff policy toward China.

Trump expressed agreement with Mark Grant, a guest on Stuart Varney’s show who suggested the Federal Reserve should act to boost the U.S. economy.

“Correct! The Federal Reserve acted far too quickly, and now is very, very late. Too bad, so much to gain on the upside!” Trump tweeted.

He later shared comments from Fox Business host Charles Payne, who criticized Federal Reserve Chairman Jerome Powell for his handling of the central bank.

“I agree (to put it mildly!)” Trump tweeted.

He also referenced a quote from Varney’s program which downplayed concerns over the ongoing trade war between the U.S. and China, arguing it had yet to negatively impact the American economy.

Stocks sank sharply Wednesday morning after the U.S. bond market signaled an impending recession. The dip came one day after Trump announced he would delay further tariffs on Chinese imports until after the bulk of the holiday shopping season, reflecting mounting fears that the trade war could derail the robust U.S. economy.

In a pair of tweets later in the afternoon, Trump emphasized that “China is not our problem,” saying the trouble lies with the Fed.

Trump is at his golf club in Bedminster, N.J., for the week, and he had no public events listed on his schedule for Wednesday. He has repeatedly hammered the Fed and Powell for its decisions to raise or lower interest rates, arguing that its decisions have held back the economy. 

“This guy has made a big mistake,” Trump said Tuesday at an event in Pennsylvania, referring to Powell. “He’s made a big mistake — the head of the Fed. That was another beauty that I chose.”

The constant critiques have worried critics, who note the central bank has historically been independent of politics.

[The Hill]

Trump doubles down on China tariffs, saying there is ‘no reason’ for US consumers to pay them

President Trump on Monday argued in a series of tweets that China will bear the brunt of the new tariffs his administration is imposing on the country, a day after one of his top economic advisers said both the U.S. and China would be hurt by the economic fight.

Trump wrote in the tweets that there was no “reason” for U.S. consumers to pay the tariffs, arguing in part that people in the United States could avoid paying the tariffs by buying products produced in other countries or in the United States.

“Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today,” Trump wrote in one of the posts on Twitter.

In a second tweet, he said a consumer could “buy the product inside the USA (the best idea).”

He said companies would leave China for other countries, such as Vietnam, to avoid the tariffs.

https://twitter.com/realDonaldTrump/status/1127886307118678016?ref_src=twsrc%5Etfw
https://twitter.com/realDonaldTrump/status/1127886307995336705?ref_src=twsrc%5Etfw

Trump’s comments come just a day after his top economic adviser, Larry Kudlow, in an interview on “Fox News Sunday” said both China and U.S. consumers would be hurt by the tariffs.

“In fact, both sides will pay in these things, and of course it depends,” Kudlow responded after host Chris Wallace pressed him on how importers of Chinese products hit by tariffs will pay those tariffs.

Most economists agree that the costs of the tariffs will be paid by U.S. consumers in the form of higher prices on imported products from China.

Kudlow did say that China would suffer, too, from the fight, saying they would be hit by gross domestic product losses and a diminishing export market.

The Trump administration announced it would hike tariffs on $200 billion in Chinese products on Friday. Tariffs that were 10 percent are jumping to 25 percent. 

It’s unclear how easy it would be for U.S. consumers to avoid higher prices coming because of the tariffs. It’s also not clear yet how prices will be effected, since the tariffs only went into effect on Chinese products leaving China on Friday.

[The Hill]

Trump retweets Jerry Falwell Jr. suggesting his term should be extended by two years

President Trump on Sunday retweeted a post from Liberty University President Jerry Falwell Jr. that said Trump’s first term should be extended by two years as payback “for time stolen by this corrupt failed coup.”

Falwell, an avid and vocal supporter of Trump, was alluding to the recently completed investigation into Russian interference in the 2016 election that special counsel Robert Mueller conducted.

“After the best week ever for @realDonaldTrump – no obstruction, no collusion, NYT admits @BarackObama did spy on his campaign, & the economy is soaring. I now support reparations-Trump should have 2 yrs added to his 1st term as pay back for time stolen by this corrupt failed coup,” Falwell tweeted.

Trump followed up the retweet with tweets of his own alleging two years of his presidency were “stollen” that “we will never be able to get back.”

https://twitter.com/realDonaldTrump/status/1125149867347718144?ref_src=twsrc%5Etfw

Trump’s retweet came after he slammed Democrats seeking to have Mueller testify about the report.

The president said Mueller shouldn’t testify because the report found that neither Trump nor his campaign conspired to collude with Russia to interfere in the 2016 election.

Trump’s retweet Sunday saying his term should be extended by two years comes as House Speaker Nancy Pelosi (D-Calif.) said she is worried Trump may not accept the results of the 2020 election if Democrats do not beat him by a wide margin.

[The Hill]

Trump’s latest boast about the economy isn’t even close to accurate

President Donald Trump spent the morning bragging about the economy. At least one of his claims didn’t come close to being true.

“The GDP Rate (4.2%) is higher than the Unemployment Rate (3.9%) for the first time in over 100 years!” the president said in a tweet.

The first two numbers are correct, although they measure completely different things, and in different ways.
The overall US economy grew at a 4.2% annual rate in the second quarter. Unemployment was between 3.8% and 4% during the quarter, and it came in at 3.9% in August.

That’s all good news.
“It’s definitely better when it’s true than when it’s not,” said Justin Wolfers, professor of economics at University of Michigan. “I like high GDP growth and low unemployment.”

But Trump got it wrong — way wrong — when he said it hasn’t happened in a century.

In the last 70 years, it’s happened in at least 62 quarters, most recently in 2006.

“He wasn’t even in the neighborhood of right,” Wolfers said in an interview.

Wolfers tweeted a response to Trump’s claim. In fact, it took him two tweets to list all the quarters in which economic growth was higher than the unemployment rate. He added a chart.

“It certainly not a natural comparison,” Wolfers said. “I’ve never seen it made before. It’s not one that a macroeconomist would make. They’re not comparable.”

That’s not just because lower unemployment is better, while higher GDP is preferable.

The unemployment rate is a monthly reading on the percentage of people in the labor force who are looking for work. It is a snapshot of a current condition.

GDP is a reading of the output of the overall economy. When economists talk about GDP growth, they’re not talking about a snapshot of a current condition. They are measuring the change compared with a year earlier. Quarterly GDP growth is also adjusted to come up with the annual rate.

The White House did not immediately respond to a request for comment.

[CNN]

Reality

This happened in 1941, 42, 43, 44, 48, 50, 51, 52, 53, 55, 59, 62, 64, 65, 66, 68, 72, 73, 98, 99, and 2000.

Trump tries to take credit for Obama’s accomplishments in Consumer Confidence

Trump tweeted the Consumer Confidence Index hit a 18 year high and the GDP is booming, taking credit for both.

Reality

Donald Trump thinks you are so stupid, you wouldn’t look at the Consumer Confidence Index or the GDP growth and see that he’s taking credit for the continuing trends of Barack Obama’s achievements.

Consumer Confidence has been growing since Obama turned the country around after The Great Recession.

And our GDP has been steadily growing over the past decade

1 2