CNN: “Multiple Republican lawmakers are working alongside Democrats to put forward legislation curtailing Trump’s existing national security tariff powers. They include Pennsylvania Republican Sen. Pat Toomey, who recently introduced a bill with Virginia Democratic Sen. Mark Warner that would require congressional approval to impose trade restrictions for national security reasons.”
New York Times editorial: “The economy is humming, and unemployment is at 4 percent. High-school graduation rates are at an all-time high, and teenage pregnancy rates are at an all-time low… And yet: Polls show that three in five Americans think the country is on the wrong track. A majority expect things to get worse in the coming year.”
“As President Trump prepares to deliver his delayed State of the Union address on Tuesday, he might want to ask himself why people are so unsettled.”
First Read: “You could argue that America has been in a political recession for a while — maybe going back to October 2013 (government shutdown, crash of the Obamacare website). But over the last two years, we’ve entered a political depression — when the overall state of the union is pretty strong.”
“Two years into Donald Trump’s presidency, the man who has profited most from the era is his foremost nemesis in the business world, Amazon.com founder Jeff Bezos,” Bloomberg reports.
“Trump has repeatedly vilified Bezos, threatening his company with tax increases, antitrust prosecution and higher shipping fees, attacking the Bezos-owned Washington Post as a ‘scam’ and even mocking the billionaire for his pending divorce. No figure in corporate America is attacked more often in Trump’s Twitter posts.”
“Yet no one has made more money than Bezos since Trump’s election. The president’s social-media huffing and puffing hasn’t hurt a solidly constructed business riding the rise of electronic commerce, web advertising and cloud computing.”
The Labor Department said that 304,000 jobs were added last month, as compared to an estimate by economists of about 172,000, the New York Times reports.
The unemployment rate rose to 4.0 percent.
“January’s growth means that American employers have added jobs for 100 consecutive months, extending a record run. The unemployment rate is near a multidecade low, and wages — long a weak point — are rising.”
“Foxconn Technology Group is reconsidering plans to make advanced liquid crystal display panels at a $10 billion Wisconsin campus, and said it intends to hire mostly engineers and researchers rather than the manufacturing workforce the project originally promised,” Reuters reports.
“Announced at a White House ceremony in 2017, the 20-million square foot campus marked the largest greenfield investment by a foreign-based company in U.S. history and was praised by President Donald Trump as proof of his ability to revive American manufacturing.”
“The federal government shutdown cost the economy $11 billion, according to a new analysis from the nonpartisan Congressional Budget Office, reflecting lost output from federal workers, delayed government spending and reduced demand,” CNBC reports.
“The report, which was released Monday, estimated a hit of $3 billion, or 0.1 percent, to economic activity during the fourth quarter of 2018. The impact was projected to be greater during the first quarter of 2019: $8 billion, or 0.2 percent of GDP.”
“Although most of the damage to the economy will be reversed as federal workers return to their jobs, the CBO estimated $3 billion in economic activity is permanently lost after a quarter of the government was closed for nearly 35 days.”
White House economic adviser Kevin Hassett said that the partial government shutdown “could suffocate the economy this quarter if it persists, leading to zero percent growth,” Politico reports.
Washington Post: “Fears are rising about the state of the world’s biggest economies, with China posting its worst annual growth in decades and the United States injecting more uncertainty with tariffs and a lengthy government shutdown.”
“China reported Monday that its economy expanded at 6.6 percent last year — a figure that would be good for many countries but represents the slowest growth for China in 28 years. Meanwhile, the International Monetary Fund downgraded its expectations for the global economy, highlighting sharp declines in Europe and warning that the risks of a major slowdown have increased.”
New York Times: “On Friday, the University of Michigan’s consumer sentiment index fell to the lowest point of the Trump presidency, well below forecasters’ expectations. Analysts attributed the drop largely to the partial government shutdown, which has entered its fifth week.”
“Economic confidence also fell, across nearly all demographic groups, in a poll conducted this month for The New York Times by the online research firm SurveyMonkey.”
“The partial government shutdown was supposed to be a brief non-event for the economy. Now it’s starting to look like a serious crisis that could nudge the U.S. toward recession and threaten President Trump’s economic message during his reelection campaign,” Politico reports.
“Across Wall Street, analysts are rushing out warnings that missed federal paychecks, dormant government contractors and shelved corporate stock offerings could push first-quarter growth close to or even below zero if the shutdown, which is wrapping up its fourth week, drags on much longer.”
“The Trump administration now estimates that the cost of the government shutdown will be twice as steep as originally forecast,” CNBC reports.
“The original estimate that the partial shutdown would subtract 0.1 percentage point from growth every two weeks has now been doubled to a 0.1 percentage point subtraction every week.”
Wall Street Journal: “The partial federal government shutdown that became the longest on record Sunday is curtailing infrastructure projects, food-processing inspections and economic data used by Wall Street. But on a more micro level, it is showing signs of disrupting commerce as hundreds of thousands of federal workers missed out on their first payday of the closure late last week.”
“While the economic gashes aren’t enough to derail the recovery, now in its 10th year, they appear to be at least temporarily diminishing the vigor of an expansion that was already projected to slow in 2019. Output is now expected to grow at a 2.2% pace in the first quarter, less than an estimated 3.1% growth recorded in 2018.”
“While 2018 was the year trade wars broke out, 2019 will be the year the global economy feels the pain. Bloomberg’s Global Trade Tracker is softening amid a fading rush to front-load export orders ahead of threatened tariffs. And volumes are tipped to slow further even as the U.S. and China seek to resolve their trade spat, with companies warning of ongoing disruption. Already there are casualties.”
“Recent data underscore concerns that trade will be a drag on American growth next year. U.S. consumers are feeling the least optimistic about the future economy in a year, while small business optimism about economic improvement fell to a two-year low and companies expect smaller profit gains in 2019.”
Washington Post: “A global economy that until recently was humming has broken down, a sharp contrast to the picture just a year ago when the world was experiencing its best growth since 2010 and seemed poised to do even better.”
First Read: “These numbers from our recent NBC/WSJ poll should be getting more attention: The percentage of Americans believing the economy will get worse in the next 12 months is at its highest point since 2013. Overall, 28% say the economy will get better in the next year, 33% think it will get worse and 37% believe it will stay the same.”
“Those numbers were essentially reversed last January: 35% said the economy would get better, 20% said it would get worse and 43% said it would stay the same.”
Associated Press: “The Dow Jones Industrial Average fell again Monday, the latest dip in the roller coaster markets amid the strain of Trump’s trade war, rising interest rates and worries about a slowing global economy.”
“Stocks fell sharply on Thursday as continuing fears over U.S.-China trade relations and concern over a possible global economic slowdown kept investors on edge,” CNBC reports.
NPR: “This week, the interest rate on some short-term U.S. Treasury securities rose above that of longer-term instruments. Known as an inversion of the yield curve, this unusual phenomenon is something that hasn’t occurred since 2007. Economists say it often signals a slowing of growth and perhaps even a recession.”
“Three days after Trump emerged from his dinner with Xi touting an ‘incredible’ deal, U.S. and Chinese officials were offering different accounts of whether there was a 90-day deadline for progress in new trade talks, the schedule for China to increase its purchases of American farm and industrial products, and Beijing’s plans to reduce or eliminate specific tariffs,” the Washington Post reports.
Said Trump on Twitter: “President Xi and I want this deal to happen, and it probably will. But if not remember… I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.”
First Read: “Remember, this trade/tariff standoff with China is a crisis that Trump created, and it’s a crisis that he ultimately might not be able to solve, because he doesn’t understand that tariffs mean higher prices for American business and consumers.”
Washington Post: “The whiplash nature of Trump’s economic policies and pronouncements bore tangible consequences on Tuesday, when U.S. stock markets cratered amid investor skepticism of Trump’s China talks. The Dow Jones industrial average dropped 799 points, or 3.1 percent, while the Standard & Poor’s 500-stock index fell 3.2 percent and the Nasdaq dropped 3.8 percent.”
“Global markets demand consistency and reliability, but Trump delivers neither. Instead, he makes knee-jerk announcements that surprise investors, lawmakers and even some of his own aides and advisers, who sometimes find themselves reversing course depending on the president’s whims.”
President Trump said that he “intends to formally notify Canada and Mexico of his intention to withdraw from the nearly 25-year-old North American Free Trade Agreement in six months. The move would put pressure on Congress to approve his new trade deal with the two U.S. neighbors,” Politico reports.
Said Trump: “I’ll be terminating it within a relatively short period of time. We get rid of NAFTA. It’s been a disaster for the United States.”