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2020 Starting With Great News On The Economy

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Global stock markets have been on a torrid run in 2019 reports CNBC, adding more than $17 trillion in total value, according to Deutsche Bank calculations.

The value of global equities began the year just under $70 trillion but has now surpassed $85 trillion, according to a chart from Deutsche Bank’s Torsten Slok.

And as the Editors of the Washington Times pointed out, the U.S. economy is so good that even CNN, the monomanically anti-Trump television network, has been forced to admit it:

“As 2019 comes to a close, the US economy earns its highest ratings in almost two decades,” CNN reported, dourly relaying findings of a poll it commissioned. “Overall, 76% rate economic conditions in the US today as very or somewhat good, significantly more than those who said so at this time last year (67%). This is the highest share to say the economy is good since February 2001, when 80% said so. Almost all Republicans (97%) say economic conditions are good right now, as do 75% of independents and 62% of Democrats. Positive ratings are up across parties compared with August of this year, when 91% of Republicans, 62% of independents and 47% of Democrats said the economy was in good shape.”

What’s more, the 2019 holiday shopping season looks to have set a fresh record. And it’s not just Baby Yodas and backpacks: Americans are out in force applying for mortgages and viewing homes — hardly the kind of purchase you make if your confidence is “diminished,” as some forecasters predicted back in August.

Indeed, contracts to buy previously owned U.S. homes rose in November, driven by a surge in new contracts being signed in the country’s West, the National Association of Realtors said according to Reuters. The NAR’s pending home sales index, based on contracts signed last month, increased 1.2% to a reading of 108.5. The previous month’s reading was also revised upward Reuters reported.

Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later explained Reuters reporter Jason Lange.

Compared with one year ago, pending sales were up 7.4%.

“The winds have shifted in favor of the consumer when you have an economy at full employment,” said Jim Glassman, head economist for JPMorgan Chase Commercial Banking, in an interview with MarketWatch.

And the big story on the economy for 2019 may very well be the unemployment rate.

"Forget Star Wars, this year’s Christmas blockbuster is today’s nonfarm payrolls report," said Neil Wilson, chief market analyst for Markets.com in a December 6, 2019 interview with the BBC.

"A blowout jobs number sent equities higher along with the US dollar and Treasury yields as it shows the US economy is doing better than many corners of the market feared."

Indeed, the Federal Reserve has started to ask, “What is the lowest level of unemployment the US economy can sustain?”

According to the Fed, many estimates suggest that the long-run normal level of the unemployment rate--the level that the unemployment rate would be expected to converge to in the next 5 to 6 years in the absence of shocks to the economy--is in a range between 3.75 percent and 4.5 percent. Policymakers' judgments about the long-run normal rate of unemployment in the Summary of Economic Projections are generally in this range as well. For example, in the December 2019 projections, FOMC participants' estimates of the longer-run normal rate of unemployment ranged from 3.5 to 4.5 percent.

This is far below the definition of “full employment” held back in the 1970s and 1980s which was in the neighborhood of 6 percent.

Jennie Taer, writing for SaraCarter.com reports Assistant to President Donald Trump and Director of the Office of Trade and Manufacturing Policy Peter Navarro predicted that 2020 will be a ‘boom year… for the American economy’ as a result of the Trump Administration’s trade and pro-growth policies.”

“Were going to set a really good foundation on that deal and then that’s one of four other deals. We’ve got Japan, South Korea, Canada, Mexico, and the USMCA. Brian, that’s over 60 percent of total trade,” Navarro told Fox News’ Brian Kilmeade.

He continued, “It’s gonna be a boom year in 2020 for the American economy. I’m looking at growth closer to three percent to two percent. I’m looking at the Dow well over 30,000, I predicted that several months ago that if we got USMCA and interest rates down then we’d get over 30,000. It’s gonna be a great year for America.”

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