(What’s Left of) Our Economy: Automotive Plunge into Technical Recession Drags Down March US Manufacturing Output


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The Federal Reserve’s new industrial production report today showed that U.S. domestic manufacturing in March took its first monthly tumble (0.38 percent) since August and its biggest since winter-affected February, 2015 (0.49 percent). Revisions (which incorporate the latest annual revision results released last month) were negative, and undercut the strong preliminary readings reported for January and February.

March’s manufacturing output fall-off was led by the biggest sequential plunge in constant dollar automotive output (2.96 percent) since May’s 3.19 percent decrease. As a result, the combined vehicles and parts industry, which has led U.S. manufacturing’s comeback during most of the current recovery, fell into a technical recession. It’s real production is now down by 0.38 percent since last February. Vehicle output was especially weak in March, plummeting by 4.77 percent for its worst month since last May’s 4.94 percent shrinkage in real terms.

March’s poor numbers mean that real U.S. domestic manufacturing output is now down on net since January, 2006 (by 0.38 percent), and is 4.43 percent below its all-time high, hit in December, 2007. The weak March automotive numbers helped drive monthly durable goods output down by its greatest percentage (0.83 percent) since January, 2014’s winter-affected 0.99 percent sequential contraction.

Here are the manufacturing highlights of the Federal Reserve’s new release on March industrial production:

>U.S. real manufacturing output dropped in March on month for the first time since last August, and the 0.38 sequential fall-off of 0.38 percent was industry’s biggest since February, 2015’s 0.49 percent – which was affected by unusually cold weather.

>Just as discouraging, the revisions (which incorporated the latest annual industrial production revision released by the Fed in late March) weakened initially reported combined January and February growth estimates that were industry’s best two-month stretch since February and March, 2014.

>January’s 0.54 percent monthly gain – which was upgraded in last month’s industrial production report – was revised down to 0.39 percent. February’s initially reported 0.51 percent sequential growth was downgraded to 0.35 percent growth.

>The overall March manufacturing monthly production fall-off was led by the worst figures for the automotive sector since last May.

>Real output in vehicles and parts combined – which has led manufacturing’s comeback since the current economic recovery began in mid-2009 – sank by 2.96 percent on month in March, the biggest such drop since last May’s 3.19 percent.

>The results were bad enough to plunge the sector into a technical recession. After-inflation automotive output is off by 0.38 percent since February, 2016.

>Automotive’s poor March owed mainly to a huge 4.77 percent decrease in inflation-adjusted vehicles production – the worst such figure since last May’s 4.94 percent.

>Another consequence of the overall real manufacturing production decline in March – industry’s constant-dollar output is now down on net (by 0.38 percent) since January, 2006.

>And since its pre-recession (all-time) peak, reached in December, 2007, price-adjusted domestic manufacturing output has now fallen by 4.43 percent.

>Overall real U.S. manufacturing output was up 0.98 percent on year in March – faster than its 0.12 percent inflation-adjusted output increase between the previous Marches.

>Automotive’s poor March performance helped lead to an after-inflation 0.83 percent monthly drop in manufacturing’s durable goods super-sector. That decrease was its first since August, and its biggest such shrinkage since winter-affected January, 2014 (0.99 percent).

>Year-on-year, inflation-adjusted durable goods output was up 1.45 percent. Between March, 2015 and March, 2016, if fell by 0.98 percent.

>Since its pre-recession peak, hit in December, 2007, durable goods production after inflation is down by 0.25 percent.

>Real production in the non-durable goods super-sector edged up by 0.13 percent on month in March – its third straight sequential increase.

>Year-on-year, non-durables’ price-adjusted production inched up by only 0.45 percent in March – much slower than its 1.37 percent advance between the previous Marches.

>Since its pre-recession peak – in July, 2007 – output in the non-durables super-sector has shrunk by 9.59 percent.

Im-Politic: The Travel Industry’s Phony Trump Travel Ban Scare Stories


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The American travel industry clearly employs some great flacks (i.e., public relations specialists). We know this because they’ve sold two major global news organizations on the inane proposition that the Trump administration’s hostility to Muslims and foreigners in general is about to cripple their industry, and that – at least by implication – the U.S. economy will suffer grievously.

The first and perhaps most important failing in this Washington Post article and this Financial Times (FT) piece carrying this message was the glossing over of national security considerations. Both reports noted that the supposedly xenophobic impression was created by the president’s proposed temporary travel ban from six countries identified even by the Obama administration as major potential sources of terrorist threats, and by strengthened vetting procedures at the border. But neither mentioned the counter-argument (either from an administration official or from a non-government specialist supportive of Mr. Trump’s initiatives) that stronger protections for Americans quite naturally carry a price tag, or that any kinds of trade-offs between economic and national security goals are legitimate.

The closest that either piece came to communicating this kind of nuance was a statement in the FT article from Marriot’s CEO acknowledging the role that needs to be played by “some of these other issue [such as security risk]” in formulating policy. In fact, you need to read between the lines (specifically in the Post article) to get any sense that the nation has faced this kind of situation in the recent past – after the September 11 attacks – and that the losses incurred by the travel industry by no means came anywhere near derailing the economy.

One big reason is that the economic role of foreign travel and tourism in the United States simply isn’t very big. The industry itself says that it represented 8.10 percent of total American economic activity last year (a key context-setting fact that the Post completely ignored), when both its direct and indirect effects are included. Fair enough. The figure came out to about $1.5 trillion last year, but that total includes both foreign and domestic travel.

One way to back out the foreign portion of domestic travel and tourism is to use the trade statistics. They don’t provide perfectly apples to apples data, but they’re not way off, either, and show, according to the travel industry, that foreign tourists spent about $194 billion in the United States in 2014. These “travel exports” would have directly accounted for about 8.28 percent of the nation’s total goods and services exports that year, according to official U.S. trade data – and about 1.10 percent of the total economy. There are no statistics on the indirect effects and they of course deserve to be counted. But it’s inconceivable that they would justify even minor concern.

Further, the travel industry isn’t forecasting that all foreign travel to the United States will simply dry up, or even close. In fact, according to the industry, despite the Trump policies and intentions, travel and tourism in the United States (again, including purely domestic travel) will keep growing this year. It just won’t grow quite as fast (by 2.3 percent instead of 2.8 percent). In other words, the Trump effect would barely move the needle.

The implications couldn’t be more obvious. The Trump travel ban and related measures may be bad policy for any number of reasons, but damage to the economy – or even to the tourism industry – clearly isn’t one of them. It’s understandable that the industry itself is unhappy about the prospect of any losses – even moderately slower growth. But why is the media portraying this result as a catastrophe?

Im-Politic: Trump’s Sure Not Draining the Mainstream Media Swamp


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At this early stage in the Trump administration, my biggest disappointment doesn’t concern the gaps of varying sizes between the president’s campaign rhetoric and policy moves. Sure, I’m concerned – though less (so far) about his decision to use cruise missile strikes to punish Syria’s dictator for alleged chemical weapons use in that country’s chaotic civil war than about his linkage of China trade ties with Beijing’s willingness to help rein in North Korea’s nuclear weapons program. Instead, my biggest disappointment concerns Mr. Trump’s dealings with the Mainstream Media.

For the president gave his supporters and the nation at large every reason to believe that he was going to take badly needed steps to reduce the bloated and increasingly harmful role played in American democracy lately by political reporters for America’s leading national news organizations and the failed bipartisan ruling class they tend to shill for. Yet three months into his administration, it looks like same-old-same-old — at least regarding the fundamentals — even though there’s no shortage of unusually sharp-edged exchanges between individual reporters and individual administration officials.

The president and his aides looked to be off to a strong start, as I reported in this post on the mold-breaking press conference he held just before his inauguration. Moreover, Press Secretary Sean Spicer has followed through on his stated intention to enable new news organizations and voices to take part in his daily White House press briefings, rather than defer to the arguably self-serving standards of the White House Correspondents Association (WHCA). Perhaps most stinging to the establishment press, in terms of discrete events, the entire administration decided to skip the WHCA’s increasingly narcissistic, celebrity-drenched, and off-putting annual dinner. On an ongoing basis, the president kept slighting the press several times per day with tweets that went over their heads and directly to his tens of millions of followers.

But at least to date, the administration has missed two opportunities genuinely to cut the Mainstream Media down to size and thereby introduce some desperately needed accountability into their cosseted world. The first has to do with the daily press briefings. Spicer clearly has been more combative at these events than his predecessors – for a time, the sessions were treated by networks as must-see TV.

As has become all too obvious, however, “combative” doesn’t necessarily mean “effective.” Indeed, Spicer’s numerous gaffes have made him an object of ridicule even among many outside national chattering class ranks. Yet what should be most upsetting about his performance – even for Americans who are not die-hard Trump-ers – is how plainly it shows the weakness of Spicer’s command of substantive issues and, at least as important, how slow he actually is on his rhetorical feet.

As a result, Spicer is conspicuously ill-equipped to carry out what should be one of the highest priority missions of Trump spokesman: using the press briefings to expose how politically partisan, childishly shallow, and downright ignorant so many Mainstream Media journalists and their breathlessly voiced questions tend to be.

The main purpose here wouldn’t be payback. The main purpose would be public education. Although the media’s poor trust and approval ratings indicate that few Americans still view them as reliable sources of information, the impact of daily broadcast humiliations can’t be overemphasized, especially given the matchless megaphone of social media. And because fostering the image of omniscience is obviously much more central to the Mainstream Media’s reputation (and profitability) than its by-now-shredded image of impartiality, a steady stream of comeuppances could well lead to the mass firings or demotions and infusion of new, untainted blood that the news business urgently needs.

The second media opportunity the Trump administration is missing has to do with access. Proximity to power is another key to the Mainstream Media’s disproportionate power (and pro-establishment bias). Love them or hate them, these journalists and the organizations they work for enjoy their still huge audiences largely because they can plausibly claim to be in the know. Because of the connections these correspondents and pundits have developed with America’s most important political leaders and other movers and shakers, they have nurtured the entirely credible impression that they’re privy to the real views of The Deciders and their advisers, and to the principal reasons (both genuine and those created for public consumption) behind their decisions. That is, following these news people was rightly seen as a good way to figure out both what American leaders were actually trying to do and why, and what these leaders wanted the public to think they were trying to do.

Unfortunately, as has been widely noted, the price for this access almost invariably has been independence that is all too easily compromised in far too many ways. Most obviously, a reporter who’s too difficult to manipulate, and/or too harshly critical, simply isn’t going to have the kind of contact with the figures that count the most as a reporter who eagerly plays this game.

More subtly, ongoing exposure to top leaders in government (and other spheres) tends to socialize journalists in innumerable ways that generate strong pro-establishment and status quo-oriented leanings. Understanding this process entails first and foremost understanding that journalists operate on the fringes of power. They lack the ability to shape events directly, but their choice of profession logically indicates a deeply felt interest in these events. Access to top leaders brings them tantalizingly close to this power – and to its biggest secrets (at least in theory).

Shrewd power-holders know how to capitalize on this journalistic weak spot by pretending to bring news people into their confidence, and on a regular basis actually doing so – usually in minor or superficial, but always self-serving, ways that at the same time can be dramatic and/or colorful enough to undergird an entire hard news story or feature. Sometimes, leaders also flatter journalists by asking for their counsel, and even acting as if it’s valued. After years of such treatment, it’s easy for a journalist to imagine that they and leading policymakers are ultimately on the same team.

Don’t forget that the aesthetics of Washington, D.C. (and other power centers) play a big role in this socialization process, too. It’s no accident that government office buildings, for example, are usually built at least in part from the same kind of marble favored by the Roman emperors and the classical Athenians. Nor is it an accident that individual offices at the uppermost levels of government are so beautifully and luxuriously appointed. Enter them and it’s difficult to imagine that anyone but the truly Best and the Brightest could occupy such regal quarters.

Access matters crucially to journalists in two other ways that disincline them to “afflict the comfortable.” First, by publishing leaks intended to advance certain policies or personalities, or block them or undermine them, media types can actually shape events themselves. In other words, they can actively engage in the arena, rather than simply observe it passively. Not surprisingly, many of these would-be movers and shakers regard these chances as prizes to be preserved at practically any and all cost.

Second, a reputation for enjoying big-time access to power-holders can translate into tremendous prestige both within the profession’s ranks and without. And the latter kind of prestige can easily turn into big bucks – in the form of lecture fees and book contracts. The bigger the bucks, moreover, the likelier a journalist is to gain entree to the power-holders’ social circles. As a result, the most successful mainstream journalists become even less inclined than ever to question in any fundamental way leaders who become neighbors, dinner-party companions, and even genuine friends. Moreover, although income levels are never sure-fire predictors of political and policy leanings, the rich rarely become populists, and considerable wealth and status surely don’t make journalists likelier to view promises to “drain the swamp” dispassionately.

So nothing would have dealt the Mainstream Media as damaging a blow as actions making clear that its access was going, going, and just about gone. As noted above, then-President-elect Trump and Press Secretary-designate Spicer were moving for a time in this direction. And few obstacles seemed to stand in their way. What, for example, could be easier than not returning phone calls from Trump-hating pundits like George Will or Charles Krauthammer, or comparably hostile beat reporters from The New York Times or Washington Post? Just as easy would have been to spread the word that these journalists actually are on the outs, and that their days of trafficking in inside information are over. Their remaining professional lives – at least at the national level – would have been measured in minutes. After all, it’s not as if their writing styles or expertise or analytical skills have ever been anything special.

Yet not only have at least some Trump loyalists and populists apparently been speaking with them on the sly. (What other explanation could there be for the sheer volume of reports about various personality and policy feuds inside the White House?) These figures have been speaking with them on the record – at length – not to mention showing up dutifully for those Sunday morning talk shows that have degenerated into little more than chortle-, sneer- and eyeroll-fests. Yet weirder, so has President Trump – even to New York Times correspondent Maggie Haberman, whose political reporting was considered so dependably biased toward Hillary Clinton that her Democratic party supporters labeled her a “surrogate.

This CNN story purports to explain Mr. Trump’s views of Haberman and his willingness to keep talking with her. In fact, it explains nothing – unless you think that the president is unaware of the hacked Democratic National Committee emails outing her prejudice. If he did, would it be remotely plausible to think that “he knows that she matters, that she will not treat him with kid gloves but not be unfair either, that she commands the respect of the political communities in both Washington and New York”?

I’ve heard other explanations for Trump’s views of The Times – that he believes he can gain or keep the upper hand through the force of his personality, that he has an out-of-control wish to be loved by all, that it’s his hometown paper, that no native New Yorkers can resist the impulse to court it. Those last arguments appeared especially convincing when, not two weeks after his election, Mr. Trump visited The New York Times‘ offices for a long interview with many staffers – including columnists and editorial writers – who had pilloried his presidential run. Was he trying to rub the paper’s hostility in its collective nose? Maybe. But in that case, shouldn’t he have demanded that the Times staff traipse over to Trump Tower if it wanted some of his precious time? Was Mr. Trump trying to kill the publication with kindness? Perhaps. But why bother – and inevitably convey the impression that it’s still in the loop?

With the president apparently tacking to the center on policy, it may be inevitable that he’ll continue treating the Mainstream Media ever more conventionally. In which case, his supporters’ best hopes for a revival of authentic Trump-ism — and the country’s best hopes for encouraging the Mainstream Media to play a genuine watchdog role — could be the chief executive’s richly deserved reputation for about-faces.

(What’s Left of) Our Economy: No Takeoff in Sight for Americans’ Real Wages


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If you, like former President Harry Truman, are sick of two-handed economic analysis (“on the one hand, one the other….”), then you’re really not going to like the latest government data on Americans’ wages adjusted for inflation. For they continue the pattern of an economic recovery that keeps giving and taking away and giving…and so forth.

The good news is that real wages for the entire private sector are no longer in recession – that is, they now haven’t been down on net for two consecutive quarters. Most of the credit goes to the March increase reported this morning by the Bureau of Labor Statistics (BLS). The 0.47 percent monthly gain (which is still preliminary) over February’s level (also still preliminary) was the biggest since January, 2015’s 1.05 percent.

Nonetheless (yes, cue that other hand!), U.S. real wages have still been flat since last July. Moreover, the March year-on-year change (+0.28 percent) is much smaller than the improvement between the previous two Marches (1.52 percent).

The picture gets no prettier when the focus turns to manufacturing. Its March monthly price-adjusted wage gain (preliminary, just as with overall private sector wages) was strong as well, with the 0.37 percent advance the best since last October’s 0.46 percent. (The still-preliminary February decline of 0.09 percent stayed unrevised, too.) But that boost wasn’t enough to end a recession on this front stretching back to last April.

Year-on-year, after-inflation manufacturing wage gains have slowed down considerably as well. The latest figure is 0.19 percent, compared with the March, 2015-March, 2016 increase of 1.50 percent.

Not surprisingly, the bottom line remains pretty grim:  Adjusting for inflation, American workers in the private sector as a whole, and especially in manufacturing, have seen their hourly paychecks rise only minimally since the current economic recovery began – nearly nine years ago. For the private sector, the increase has been only 3.97 percent. For manufacturing, it’s been a paltry 0.93 percent.

Of course, however ambiguous these real wage data look economically, the political message they’re sending looks clear enough: If Americans’ wage gains don’t start speeding up significantly, they’ll undercut the fortunes of President Trump and the Republican Congress as surely as they kneecapped their Democratic counterparts just last November.

Those Stubborn Facts: No American Exceptionalism in Employment


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U.S. employment rate*, 4Q 2016: 69.5%

Rank among members of Organization for Economic Cooperation and Development (OECD): 15

OECD average: 67.2%

*share of working-age population holding jobs

(Source: “Short-Term Labour Market Statistics,” Labour Force Statisics, OECD.Stat, Organization for Economic Cooperation and Development, http://stats.oecd.org/Index.aspx?DataSetCode=STLABOUR)

Making News: Thom Hartmann and John Batchelor Interviews Now On-Line!


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I’m pleased to report that the streaming video and podcast are now on-line of my two broadcast media interviews yesterday on President Trump’s China policy about-face.

Click here for my discussion with RT America’s Thom Hartmann on Mr. Trump’s decision to absolve China of charges that it manipulates its currency for trade advantage.  And click here for my segment on John Batchelor’s nationally syndicated radio show on the same subject. You can find the podcast by scrolling down the column on the right until you see “Xi Stalls Trump Trade Talks 100 Days.”

And keep checking back with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Trump’s Real China Currency Blunder


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What was worst about President Trump’s decision yesterday to let China off the currency manipulator hook (for now) was not the scrapping of a long-time campaign promise it represented. What was worst about the decision was its geopolitical rationale – that is, Mr. Trump’s judgment that major Chinese cooperation in reining in North Korea’s nuclear program could be secured if his administration moderates or delays various efforts to counter Beijing’s trade predation.

Nonetheless, some recent developments also presage reasons for modest optimism that a sounder approach to currency manipulation by China (and other countries), at least, will eventually emerge if it becomes clear Beijing is welshing on this deal.

The president’s new China policy makes least sense from a pure negotiating tactics standpoint. After all, what course of action could now be more tempting than for China to keep stringing America along with promises to get tough on North Korea, and even with token actions suggesting that meat is being put on these bones? Think “Charlie Brown,” “Lucy,” and “football.” And how will the president decide that his gamble has failed?

Moreover, Mr. Trump’s own views of China’s clout with North Korea seem confused, at best. On the one hand, the president must (logically) believe that China can make much more of a difference in resolving the North Korea situation than it’s so far chosen to. Why else would he offer China the valuable benefit of better terms of trade than it would otherwise receive? On the other hand, Mr. Trump said in an interview with The Wall Street Journal “After listening for 10 minutes [to Chinese leader Xi Jinping at their summit a week ago], I realized it’s not so easy. I felt pretty strongly that they had a tremendous power [over] North Korea. … But it’s not what you would think.” So here he’s indicating that Beijing can’t help decisively at all.

Related Trump statements point to another major negotiating No-No: Rewarding interlocutors for steps they would take anyway. The president is now on record as stating that Xi “means well and wants to help” on North Korea. But this confidence raises the question, “Why?” It’s of course possible that Chinese policy has entered a new, more charitable phase. It’s more likely, however, that Beijing is becoming increasingly worried about the situation in its next-door neighbor spinning out of control and triggering a conflict that could go nuclear right on its borders.

Indeed, a recent editorial from its own government-controlled press clearly signals that those dire concerns are China’s main motivator: “China…can no longer stand the continuous escalation of the North Korean nuclear issue at its doorstep. Instead of accepting a situation that continues to worsen, putting an end to this is more in line with the wish of the Chinese public.”

Even more revealing, the same editorial made plain as day that official Chinese nerves have been frayed further by Mr. Trump’s willingness to go-it-alone militarily in Syria (when he ordered airstrikes in the middle of his meetings with Xi), by his threat to take a similar course of action against North Korea, and by his dispatch of a powerful American naval force to Korean coastal waters. In other words, the president’s apparent comfort with using force already has caught China’s attention.

Better yet, some concrete evidence of this success has appeared. China seems to be reducing its imports of coal from North Korea – one of Pyongyang’s few major sources of foreign exchange – and it abstained yesterday from voting on a UN resolution condemning Syria’s government for the chemical weapons use that prompted the U.S. cruise missile attack. Until then, China had vetoed similar UN resolutions. Why, therefore, would Mr. Trump sweeten the supposed deal further with trade breaks?

At the same time, these latest Trump decisions are sending signs about the president’s national security strategy and overall priorities that are equally disturbing. Principally, during his campaign for the White House, Mr. Trump displayed a keen awareness of the burgeoning nuclear risks being run by the United States by maintaining its defense commitments in East Asia. In numerous remarks that were pilloried by an ossified bipartisan American foreign policy establishment, candidate Trump quite sensibly suggested that the United States should transfer much of this risk to the local countries (like China) most directly threatened by the North Korean nuclear program. Yesterday, Mr. Trump endorsed America’s longstanding Asia strategy even though the North can increasingly call the U.S. nuclear bluff on which regional deterrence has been based with forces of its own that can strike American targets.

Even more striking, Mr. Trump’s new quid pro quo has demoted policy options that can deliver major economic benefits to his core voters and the entire U.S. economy (more trade pressure on China) back to their longstanding position subordinate to national security strategies that primarily help other countries (the Asian allies covered by the American nuclear umbrella). Far from the type of America First strategy he touted during his campaign and especially in his Inaugural Address, these new Trump moves add up to an America Last strategy.

All the same, Trump’s new approach could set the stage for improved U.S. anti-currency manipulation strategies should circumstances require them. Although unmistakably disheartening to many trade policy critics, this latest American China currency decision was defensible on its own terms. It’s true that substantial evidence continues indicating that China’s yuan is significantly undervalued versus the U.S. dollar – and still enables producers in China (including those owned by or linked with U.S. and other foreign-headquartered companies) to offer their goods for artificially low prices in markets around the world. Nonetheless, it’s also true that China has permitted its (surely dollar-dominated) foreign currency reserves to drop by about 25 percent since 2011 – largely because it’s been selling those reserves and buying yuan in order to curb worrisome capital flight. In other words, Beijing has been trying to support the yuan versus the dollar, and keep its value higher than it would be were it freely traded.

Yet there’s absolutely no reason for trade policy critics – or the U.S. government – simply to conclude that ambiguous circumstances simply force America to accept the status quo. In fact, such shoulder-shrugging would amount to rewarding China currency cheating that the conventional wisdom now admits lasted for years, and whose cumulative effects continue to undercut the price competitiveness of domestic U.S. manufacturers and other producers.

So what to do? According to at least one press report, the Trump administration is considering revamping currency manipulation policy in ways that would appear to abandon the current, blinkered approach in favor of one that takes these cumulative effects into account. Specifically, a Reuters article last week suggested that one option that’s attracted the administration’s attention would involve lengthening “the time period for reviewing currency market interventions from 12 months to several years, capturing more past interventions by China….” At least logically, this shift would signal recognition that the impacts of these interventions (to suppress the yuan’s value) are dynamic, and long-lasting.

Even better, however, would be to recognize that, important as it’s been because of its effects on prices across the Chinese economy, currency manipulation is only one form of trade predation practiced by China, and that such individual policies can easily frustrate current legalistic countermeasures by virtue of the powerful and secretive Chinese bureaucracy’s ability to turn them on and off at will – often with little more than a phone call. More important, China has successfully used these ploys in the past. And P.S.: Other Asian economies are just as skilled as China’s at pulling off these scams.

In other words, the various mercantile measures used by China and others to distort markets are completely fungible. Dealing with them effectively therefore requires Washington to become much more agile and flexible in response. And the critics need to stop focusing so tightly on currency manipulation and keep the much bigger, more important China and global trade picture in mind.

For the entire U.S. economy has a big stake in the Trump administration putting these changes into effect before Chinese and other countries’ trade predation sucker punches even more of its most productive sectors – whether they interfere with the president’s new North Korea strategy or not. So, in all likelihood, does Mr. Trump’s political future.

Making News: Talking China on Thom Hartmann TV & John Batchelor Radio Shows Tonight!


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I’m pleased to announce a media two-fer today!  At 7 PM EST, I’ll be returning to The Big Picture with Thom Hartmann on RT America to discuss President Trump’s landmark decision today to decline to label China as a currency cheater. Here’s the link that lets you watch live what’s sure to be a provocative segment on what Mr. Trump’s move means for both America’s economy and its national security.

And at 9:15 PM EST, I’ll be back on John Batchelor’s nationally syndicated radio program talking about the same subject with John and co-host Gordon Chang. You can listen live at this link.

As usual, if you can’t tune in to either, as soon they’re available, I’ll post the links to the streaming video of the Hartmann TV interview and to the podcast of the Batchelor segment.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Named a Columnist at IndustryToday


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I’m pleased to report that I’ve signed on with the manufacturing publication IndustryToday as a regular columnist.  My articles, which will appear every other month, will be original pieces exclusive for the magazine.  The publication will also be exclusively featuring some of my RealityChek material on a regular basis. Otherwise, however, I’ll be blogging as usual on economics, national security, politics, and other assorted subjects right here, as well as writing other pieces for other websites, newspapers, and magazines whenever the opportunity arises.

This will be my second stint for IndustryToday.  The first was derailed by some technical issues – you can access all those columns by punching my name into the search engine at its website.  But it’s great to be back and I’m grateful to Publisher Susan Poeton for her ongoing interest in my work.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: Murky Jobs Signals from the New JOLTS Report


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Economy-watchers just got another reminder today of how difficult it remains to figure out how healthy the current recovery is – from the data on employment turnover released by the Labor Department’s Bureau of Labor Statistics (BLS). The biggest surprise they delivered concerned the numbers of job openings reported (preliminarily) for February in the economy’s subsidized private sector.

Whereas the last few months of BLS data indicate that hiring in industries like healthcare services (which are heavily dependent on government support) hasn’t been quite so outsized as over the last decade, the new job turnover numbers (commonly known by their acronym JOLTS) suggest that they’re still punching above their weight.

If you think – as you should – that the real private sector should flat-out dominate job creation because it’s the economy’s leader in productivity and innovation, that’s not such a great development.

For the first three months of this year, the subsidized private sector accounted for 18.57 percent of the 533,000 total net new jobs America created. During the first three months of last year, this figure was 21.26 percent. These numbers will be revised several times more, but so far they signal that subsidized private sector jobs gains have lost some of their relative steam. (For more on the robust hiring in these industries during the current recovery, see this recent post.)

But the job turnover data appear to be sending the opposite message. Here we only have statistics going through February, and they’ll be revised down the road, too. But for the first two months of this year, 19.38 percent of the 11.368 million total job openings have come in the subsidized private sector. For the first two months of 2016, that figure was only 17.76 percent. In fact, the 1.138 million job openings estimated in the subsidized in February were the highest monthly total ever in absolute terms. (This data series started in 2000.)

To be sure, the subsidized private sector’s share of total job openings this year is a little below the levels that have held for most of the recovery. (See this post for more detail.) But its year-on-year rise is tough to square with the relative decline in actual job creation.

Another noteworthy result found in today’s job turnover report: The decline of retail job opportunities comes through plain as day. It’s not that the sector, whose bricks-and-mortars segment is under such tremendous pressure from on-line shopping, isn’t reporting any job openings at all. In fact, at 541,000 in February (on a preliminary basis), they were on the low end but still respectable by the standards of the last few years.

Look at the year-on-yer change, however, and you can see the retail employment problem. Reported job openings during January and February combined were down nearly ten percent. Those kinds of drops haven’t been seen since early in the recovery, in 2010.

These employment-related developments stand in especially stark contrast to the Federal Reserve’s apparent conclusion that the economy is just about fully recovered, and that the central bank’s new priority is sustaining “what we have achieved,” as chair Janet Yellen declared yesterday. This approach of course entails continuing to raise interest rates gradually, and reducing the immense amount of bonds the Fed bought as part of its stimulus program. Here’s hoping that the Fed’s confidence more accurately reflects the true state of the economy than these latest figures.