Last Thursday, Christine Lagarde, president of the European Central Bank, said the Coronavirus has succeeded the U.S.-China trade turmoil as Europe’s main risk to growth this year because China has closed factories, restricted travel, and quarantined cities due to the virus. Her comment followed news that German factory orders fell 2.1 percent in January from...
Category: TRENDS ON THE U.S. ECONOMIC FRONT
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MANUFACTURING: STEADY-SLOW
The U.S. economy probably won’t grow this year at the Trump administration’s 3.1-percent target rate, treasury secretary Steve Mnuchin admitted last week. Mnuchin blamed the Coronavirus outbreak and Boeing’s woes with its 737 Max jetliner. As of today, the U.S. Centers for Disease Control has reported, with great fanfare, the grand total of 13 confirmed...
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MARIJUANA: PAY HIGH TAXES TO GET HIGH
With the economy showing signs of slowing and government debt rising, more states and cities are looking to marijuana as a way to squeeze money from the public, in the name of taxes, to enrich government coffers. California’s counties, cities, and towns took in $1.86 billion in grass taxes in 2018 and about the same...
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DOW AND DOLLAR RIDING HIGH
The Dow Jones Industrial Average rose last week, despite a 277-point dip on Friday that was attributed to worries about the impact of the Coronavirus. The gain reversed the 600-point drop on 31 January and set a record intraday high of 29,407 on Thursday. As we go to press, the Dow hit a record high...
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INDIA: ECONOMIC DANGER AHEAD
India has suffered six consecutive quarters of slowing economic growth and disappearing jobs, causing layoffs, reduced household incomes, and, as we have noted in our Geopolitical section, rising public unrest. The economy grew by 4.8 percent in 2019, far below the 6.8-percent pace of 2018. Inflation accelerated and businesses all but stopped investing. And, among economists, there are...
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MEXICO: ECONOMY SHRINKS IN 2019
Mexico’s economy contracted by 0.3 percent in the final three months of 2019 compared to the same period in 2018. The contraction, the first in 10 years, occurred during the inaugural year in office of leftist president Andrés Manuel López Obrador. The number concerned analysts, many of whom expected a less severe shrinkage. The country’s...
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BRITAIN: BUSINESSES ON THE BRINK
Nearly 500,000 British businesses are teetering on the edge of financial collapse, according to Begbies Traynor, a firm that helps companies restructure to deal with insolvency. The number reached 494,000 in 2019’s fourth quarter, compared to 481,000 in the last three months of 2018. The number of British businesses in “significant distress” has risen 81...
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HARLEY SALES FALL
Harley Davidson reported its 2019 sales were 4.3 percent below sales in 2018. The decline was 5.3 percent in the U.S., the motorcycle company’s biggest market. The drop in sales is due in part to Baby Boomers aging out of the market and younger consumers having less interest in recreational vehicles. Harley’s share prices dropped...
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BUSINESS INVESTMENT SAGGED IN FOURTH QUARTER
The U.S. Commerce Department reported that orders for non-defense capital goods fell to $686 billion in December 2019, their lowest level in eight months and the third consecutive quarterly drop. When defense-related investment was factored into the calculation, business investment overall rose by 2.4 percent in December. Indeed, in his State of the Union address,...
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BRICK-AND-MORTAR RETAIL ON THE ROPES
About one in 10 retailers listed on stock exchanges have gone bankrupt since 2008, and 40 percent of retailers have seen their profit margins shrink during that time. The financial value of shopping malls as real estate has fallen by almost a third since 2016. Analysts predict that half of remaining shopping-mall department stores will...